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MLS LinkTM is a "set it and forrget it" feaature
table of
28
N A T I O N A L
Mortgage Bankers Association 2017 Annual Convention & Expo
O C T O B E R
50 NMP Mortgage Professional of the Month: John F. Cady, Senior Vice President of Production, Mountain West Financial Inc. By Phil Hall
2 0 1 7
M O R T G
l
V O L U
A SPECIAL FOCUS ON “THE WHOLESALE & CORRESPONDENT MARKETPLACE”
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Generations of Change By John F. Cady ..........................................52
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3
The Business of People: Establishing the Human Connection in the Digital Age By Casey Cunningham ..........................................56
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Three Things Lenders Need to Help Today’s Borrowers By Dan Miedema ................................................................................58
N
The Influence of Technology in Mortgage Banking By Curt Tegeler ..................................................................................60
C
Build Your Digital Toolbox for the eMortgage Future By Shannon Barrow ............................................................................62
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A
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Successful Mortgage Businesses Implement Diversity in Their Workforce By Desirée Patno ................................................64
80 Are You a Maestro or Violinist Loan Officer? By Brian Sacks
Going Mobile By Steve Lawrence......................................................66
T Y
Pipe Dreams By Eric Weinstein ........................................................68
T
The Future Is People By Michael Cooksey ......................................70
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Looking to the Future in Mortgage Servicing By Gagan Sharma ....72
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Managing Security Risks for Mortgage Lending Services By James V. Luisi ..............................................................................74
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Technological Innovations Transforming Mortgage Industry By Bhupender Singh ..........................................................................76
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Keeping Pace With Today’s Regulatory Changes By Susan Graham ..............................................................................78
C
N N H O N N
FEATURES Agency Lenders Often Exclude Wealthy Borrowers, Non-QM Products Offer Solutions By Tom Hutchens ........................8
86 Putting the Price on Lender Success By Rick Grant
The Elite Performer: Underdog? Overbite. By Andy W. Harris, CRMS ....................................................................8
V I S I T Company
Web Site
O U R
A D Page
5 Arch Funding Corp........................................... www.5arch.com ............................................................39 Angel Oak Mortgage Solutions ............................ www.angeloakms.com ..............................54 & Back Cover Athas Capital Group .......................................... www.athascapital.com ....................................................5 Brokers Compliance Group.................................. www.brokerscompliancegroup.com ..................................17 Caliber Home Loans.............................................. www.caliberwholesale.com ..............................................61 Carrington Mortgage Services, LLC ...................... www.carringtonwholesale.com ................................7 & 62 Citadel Servicing Corporation .............................. www.citadelservicing.com ..............................................69
Proceed With Caution:
The Raising of Appraisal Thresholds
88 Proceed With Caution: The Raising of Appraisal Thresholds By Jim Amorin, MAI, SRA, AI-GRS
DocMagic .......................................................... www.docmagic.com ......................................................11 Flagstar Bank .................................................... www.flagstar.com/why ..................................................27 Franklin American Mortgage Company ................ www.franklinamerican.com ............................................37 Gateway Mortgage Group, LLC ............................ www.gatewayloan.com ..................................................63 Greenbox Loans, Inc........................................... www.greenboxloans.com ..............................................IFC Lykken On Lending ............................................ www.lykkenonlending.com ............................................79 MBS Highway .................................................... www.mbshighway.com/MNN ..........................................71 Mortgage News Network (MNN) .......................... www.mortgagenewsnetwork.com ............................48 & 49
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NAMB+ ............................................................ www.nambplus.com ......................................................23
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of contents
R T G A G E
O L U M E
P R O F E S S I O N A L
9
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N U M B E R
1 0
Recruiting, Training and Mentoring Corner By Dave Hershman ....10
3 Points With Mat Ishbia ..................................................................16 The Future of Marketing and Mortgage Banking By Cherie Lynch ................................................................................18 The Future of Valuation in the Mortgage Business By Rob Walker, CMB, CMT ................................................................20 NAMB Perspective ............................................................................22 CFPB Updates HOEPA/QM Thresholds and Makes
Amendments to Regulation C By Gavin T. Ales ..............................26 The Extinction of Telemarketing ......................................................36 OrigiNation: Beware of Phishing E-mails! By Andy W. Harris, CRMS ..................................................................38
The missing piece p in your producct mix Ther h e’s an expanding market for the Home Equity q Conversion Mortgage (HECM), am more flexible loan option deesigned specifically foor homeowners and hoomebuyers age 62+. FH HA-insured* HECM products (commonly known as reverse mo mortgages) offer a great opportunity t it to t grow your business b i with ith hoome financing, line of credit, and refinaancing options that are oft ften more suitable for these customers.
The Mortgage Godfather: “Service” … Is That Really What You Want to Sell? By Ralph LoVuolo Sr. ..........................................42
Yoou can coount on:
The Long & Short: Why Loan Originators Should
Toop-flight training trainning
Use HUD-Approved Housing Counselors By Pam Marron ..............44
Business-building tools and strategies
Effective marketing materials
Cutting-edge technology platforms
A variety of service levels to meet your specific business needs
High-touch support from an industry-leeading team of experts
NMPU Campus Talk: What Do You Do for a Living? By Ron Vaimberg................................................................................46 Real Estate Talk: Braving the Winds of Change By Victoria Rivadeneira ......................................................................84 On Tina Turner and Goal Setting By Bubba Mills ............................90
COLUMNS New to Market...................................................................................12 News Flash: October 2017 ................................................................14 Heard on the Street...........................................................................40 Outstanding Places to Work.............................................................92 NMP Calendar of Events...................................................................93 NMP Resource Registry....................................................................94
A D V E R T I S E R S Company
Web Site
Wo with RMF F,, we have become truue experts and leaders “inWorking the field of reverse mortgages in our areea. RMF has had a profound impact on our overall business, aand we are ever grateful for the day we met.
”
—Laura K Kiiel Kiiel Mortgage, K g g , a Division off Mortgage g g Brokkers Services, Inc.
Page
NAPMW ............................................................ www.napmw.org ....................................................65 & 82 NAWRB ............................................................ www.nawrb.com ............................................................77 New American Funding ...................................... www.newamericanfunding.com ......................................96 NMP Holiday Networking Party .......................... signup.nmpmag.com/holidayparty ..........................24 & 25 NMP U .............................................................. www.nmpucoaching.com ..................................19, 55 & 73 NRMLA.............................................................. www.nrmlaonline.org ....................................................43 OSI Express........................................................ www.osiexpress.com/mlslink ............................................1 Paramount Residential Mortgage Group, Inc. ...... www.prmg.net ..........................13, 67 & Inside Back Cover Radian .............................................................. www.radian.biz ............................................................35 REMN................................................................ www.remnwholesale.com ..............................................15 ResMac, Inc. ...................................................... www.resmacb2b.com ......................................................9 Reverse Mortgage Funding LLC ............................ www.partners.reversefunding.com/learnmore ..................3 Ridgewood Savings Bank .................................... www.ridgewoodbank.com ..............................................57 TagQuest .......................................................... www.tagquest.com ........................................................83 The Bond Exchange............................................ www.thebondexchange.com ..........................................59
To get started, call 866.318.2981 or visit Partners.ReverseFunding.com/LearnMore.
OCTOBER 2017 Volume 9 • Number 10
FROM THE
publisher’s desk
Focus on the Future As we enter the fourth quarter each year, it has become our custom to begin looking 1220 Wantagh Avenue • Wantagh, NY 11793-2202 toward the year ahead, soliciting insights from industry experts to light the way into the Phone: (516) 409-5555 • Fax: (516) 409-4600 future we will share. As our world continues to become more complex, it has become more Web site: NationalMortgageProfessional.com difficult to predict what we should expect to visit us next. Perhaps, as recent events in Las STAFF Eric C. Peck Joel M. Berman Vegas suggest, that is just the human condition. Editor-in-Chief Publisher - CEO (516) 409-5555, ext. 312 (516) 409-5555, ext. 310 As we watched in horror, news reports began to fill in the blanks in the wake of the ericp@mortgagenewsnetwork.com joel@mortgagenewsnetwork.com deadliest mass shooting in U.S. history. Many of us, planning as we are to travel to Las Joey Arendt Beverly Bolnick Vegas and other various destinations within the next few weeks for conferences, couldn’t Art Director VP-Sales & Marketing (516) 409-5555, ext. 323 (516) 409-5555, ext. 316 help but wonder if we would be safe. Naturally, our thoughts and prayers go out to the joeya@mortgagenewsnetwork.com beverlyb@mortgagenewsnetwork.com victims and yes, unlike many would suggest on social media, prayer is an appropriate Scott Koondel Phil Hall VP of Operations Managing Editor response to this type of senseless violence. (516) 409-5555, ext. 324 (516) 409-5555, ext. 312 Many of us are also watching with great interest the events taking place in stormscottk@mortgagenewsnetwork.com philh@mortgagenewsnetwork.com ravaged parts of our country, especially in the Houston area and in Puerto Rico. The Richard Zyta Francine Miller Social Media Ambassador Advertising Coordinator hurricane season won’t end until Nov. 30, which leaves open the possibility of even more (516) 409-5555 (516) 409-5555, ext. 301 richardz@mortgagenewsnetwork.com francinem@mortgagenewsnetwork.com danger in the days ahead. We know many of you have already reached out to support the Rick Grant Dylan Pollock victims and it makes us proud to work beside you in this industry. Special Reports Editor Administrative Assistant It’s rarely possible to know what will happen next … the best we can do is be prepared. (570) 497-1026 (direct) (516) 409-5555, ext. 314 (516) 409-555, ext. 311 dylanp@mortgagenewsnetwork.com This is true in life and in the mortgage business, where a lack of preparation can lead to rickg@mortgagenewsnetwork.com compliance missteps that can put a company out of business. In this issue, we do our best ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact to give you the kinds of stories that will help you be prepare for the future. VP-Sales & Marketing Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail beverlyb@mortgageIn this issue, we begin at the core of our business, which has always been people. To newsnetwork.com. see our future borrowers more clearly, John F. Cady, Senior Vice President of Production at ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck Mountain West Financial Inc., brings us “Generations of Change” on page 52. Shedding at (516) 409-5555, ext. 312 or e-mail ericp@mortgagenewsnetwork.com. The deadline for submissions more light on the topic, we offer “The Future Is People” on page 70, by Michael Cooksey, is the first of the month prior to the target issue. Founder of The Cooksey Team branch of Mid America Mortgage Inc. Finally, because we SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@mortgagecannot separate technology from our relationships, see “The Business of People: newsnetwork.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. Establishing the Human Connection in the Digital Age,” by Casey Cunningham, Chief Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the Executive Officer and Founder of XINNIX on page 56. authors alone and do not imply the opinion or endorsement of Mortgage News Network Inc., or the offiWhen most of us think about the future, technology is what we see. Some of our expert cers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Consumer Reporting Association (NCRA) contributors agreed. See the article, “Build Your Digital Toolbox for the eMortgage Future,” and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activby Shannon Barrow, Director of Marketing for Docutech, on page 62 of this issue. Also, ities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement “Technological Innovations Transforming Mortgage Industry,” by Bhupender Singh, Chief of the product and/or services by Mortgage News Network Inc., NAMB, NAPMW, NCRA, and other state mortgage trade associations. Executive Officer of Intelenet Global Services, on page 76, and “The Influence of National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage Technology in Mortgage Banking” by Curt Tegeler, President of WebMax LLC, beginning on trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content contained in Mortgage page 60. News Network Inc. publications. National Mortgage Professional Magazine and Mortgage News Network Inc. reserve the right to edit, reject and/or postpone the publication of any articles, information or data. Many of our new technologies are helping us connect with our borrowers on their terms. That’s why “Going Mobile,” by Steve Lawrence, Systems Manager for Waterstone Mortgage, on page 66, is so timely. Ultimately, these tools should help us serve our borrowers better (see “Three Things Lenders Need to Help Today’s Borrowers” beginning on page 58 by Dan Miedema, Director of Marketing Operations at Guaranteed Rate) and better manage risk (see page 74 for the piece, “Managing Security Risks for Mortgage Lending Services,” by James V. Luisi, Chief Information Officer/Chief Technology Officer of KeyStoneB2B). No issue dedicated to the future of our industry could be complete without a look at compliance, so we bring you “Keeping Pace With Today’s Regulatory Changes” by Susan Graham, President and Chief Operating Officer of Financial Industry Computer Systems Inc. (FICS) on page 78. One such regulatory imperative has to do with diversity in the workplace. Be sure to read “Successful Mortgage Businesses Implement Diversity in their Workforce” by Desirée Patno, President and Chief Executive Officer of the National Association of Women in Real Estate Businesses (NAWRB), on page 64 for more on that. While we write a lot about the loan origination business, we don’t want to leave our readers on the servicing side out and so we’re proud to bring you “Looking to the Future in Mortgage Servicing” on page 72 by Gagan Sharma, President and Chief Executive Officer of Irving, Texas-based BSI Financial Services. As always, we bring you something different to think about in our feature from Eric Weinstein. This month, he brings us his take on the future of the industry with his “Pipe Dreams” on page 68. This issue also features our NMP Mortgage Professional of the Month on page 50, as we get to better know John F. Cady, Senior Vice President of Production for Mountain West Financial Inc., and Contributing Editor Rick Grant is back with a new tech feature, this time on Lender Price on page 86. We hope to see you this month in Las Vegas for the NAMB Annual Conference or in Denver for the Mortgage Bankers Association 2017 Annual Convention & Expo (see page 28 for more information on this event). Until then, stay safe and stay prepared. Sincerely,
Joel M. Berman, Publisher-CEO NMP Media Corp. Joel@MortgageNewsNetwork.com
National Mortgage Professional Magazine is published monthly by Mortgage News Network Inc. • Copyright © 2017 Mortgage News Network Inc.
5
NationalMortgageProfessional.com
n National Mortgage Professional Magazine n OCTOBER 2017
NAMB 2701 West 15th Street, Suite 536 l Plano, Texas 75075 l Phone: (972) 758-1151 l Fax: (530) 484-2906 l Web site: NAMB.org
NAMB 2016-2017 BOARD OF DIRECTORS E X E C U T I V E
Fred Kreger, CMC President American Pacific Mortgage 3000 Lava Ridge Court, Suite 200 Roseville, CA 95661 (916) 960-5824 Fred.Kreger@APMortgage.com
John G. Stevens, CRMS President-Elect RPM Mortgage Inc. 6045 West 10050 North Highland, UT 84003 (801) 427-7111 JohnGStevens@gmail.com
Valerie Saunders, CRMS Vice President RE Financial Services Inc. 25 Causeway Boulevard #101 Clearwater Beach, FL 33767 (727) 853-1000 Valerie@REFinServ.com
Olga Kucerak, CRMS Secretary Crown Lending Inc. 10 Broadway, Suite 110 San Antonio, TX 78205 (210) 828-3384 CrownLending@gmail.com
B O A R D
Andy W. Harris, CRMS Treasurer Vantage Mortgage Group Inc. 16325 SW Boones Ferry Road, Suite 100 Lake Oswego, OR 97035 (503) 496-0431, ext. 302 AHarris@VantageMortgageGroup.com
Harry H. Dinham, CMC NAMB COO Dinham Consulting 2701 West 15th Street, Suite 536 Plano, TX 75075 (972) 758-1151 Consulting@DinhamCompanies.com
Rocke Andrews, CMC, CRMS Immediate Past President Fairway Independent Mortgage Inc. 5151 East Broadway, #1700 Tucson, AZ 85711 (520) 886-7283 RAndrews@LendingArizona.net
D I R E C T O R S
Rick Bettencourt, CRMS Mortgage Network Inc. 52 Maple Street Danvers, MA 01923 (978) 304-0818 RBettencourt@MortgageNetwork.com
Chris Bettis Precision Capital 4710 Village Plaza Loop, Suite 140 Eugene, OR 97441 (541) 284-8098 Chris@PrecisionCapital.net
Linda McCoy, CRMS Mortgage Team 1 6336 Piccadilly Square Drive Mobile, AL 36609 (251) 650-0805 Linda@MortgageTeam1.com
Michele Velez, CMC Supreme Lending 1300 San Mateo, CA 94402 (650) 409-5347 Michelle.Velez@SupremeLending.com
Nathan Pierce, CRMS Advanced Funding Home Mortgage Loans 6589 South 1300 East, Suite 200 Salt Lake City, UT 84121 (801) 272-0600 NPierce@AdvFund.com
Robert Sweeney, CRMS Teachers Credit Union 600 East Carmel Drive, Suite 116 Carmel, IN 46032 (317) 625-3287 RSweeney@tcunet.com
Kimber White RE Financial Services Inc. 1620 West Oakland Park Boulevard #201 Oakland Park, FL 33311 (954) 306-3553 Kimber.LMT@gmail.com
National Association of Professional Mortgage Women 345 North Main Street, Suite 313 l West Hartford, CT 06117 l Phone: (800) 827-3034 l E-mail: NAPMW1@NAPMW.org l Web site: NAPMW.org
2017-2018 NAPMW NATIONAL BOARD OF DIRECTORS
OCTOBER 2017 n National Mortgage Professional Magazine n
NationalMortgageProfessional.com
6
Cathy Kantrowitz National President (845) 463-3011 President@NAPMW.org
Laurel Knight President-Elect (425) 426-2028 PresElect@NAPMW.org
Susan Kerr Vice President (703) 871-1310 NVP1@NAPMW.org
Glenda Mooney Secretary (314) 703-8714 NatSecretary@NAPMW.org
Judy Alderson Treasurer (918) 250-9080, ext. 300 NatTreasurer@NAPMW.org
Lynne Sparks Parliamentarian (678) 872-9000, ext. 10611 LSparks@SKWRLaw.com
Vincent Valvo Executive Director (860) 922-3441 NAPMW1@NAPMW.org
National Consumer Reporting Association 701 East Irving Park Road, Suite 306 l Roselle, IL 60172 l Phone: (630) 539-1525 l Fax: (630) 539-1526 l Web site: NCRAINC.org
2016-2017 BOARD OF DIRECTORS
Julie Wink President (901) 259-5105 Julie@DataFacts.com
Paul Wohkittel Vice President (410) 644-5020 PWohkittel@CISInfo.net
Gary Glucroft Director (800) 877-3908, ext. 100 GaryG@TheScreeningPros.com
William Bower Ex-Officio (800) 288-4757 WBower@Continfo.com
Scott Ledbetter Director (214) 833-3315 SLedbetter@LCGSolutions.net
Mike Thomas Treasurer (615) 386-2285, ext. 285 MThomas@CICCredit.com
Brian McKinney Director (706) 373-2200 McKinney@MCBUSA.com
Mary Campbell Director (701) 239-9977 Mary@AdvantageCreditBureau.com
Delia Zuniga Director (623) 889-8999 Delia@AdvantagePlusCredit.com
Janet Curtis Director (210) 224-6121 JCurtis@SARMA.com
Terry Clemans Executive Director (630) 539-1525 TClemans@NCRAInc.org
Maureen Devine Director (413) 736-4511 MDevine@StrategicInfo.com
Jan Gerber Office Manager/Member Services (630) 539-1525 JGerber@ NCRAInc.org
Big Things on the Horizon for ARMCP This year will bring some great new opportunities to the Association of Residential Mortgage Compliance Professionals™ (ARMCP™), currently consisting of nearly 1,600 members. ARMCP™ will soon be launching its own Web site to fulfill the needs of residential mortgage compliance professionals. ARMCP™ is the first and only independent, national organization in the U.S. devoted exclusively to residential mortgage compliance professionals. Our independence means we are not affiliated with any profit oriented corporation or enterprise. ARMCP™ membership consists solely of those members who have joined it on their own and were not solicited to join it via solicitations from third-party lists or subscriptions. Independence is the key to the value of our advocacy! There are currently two slots remaining for the Steering Committee. The Steering Committee will be drafting new by-laws, determining a nominating process, conference planning, and many other areas of interest relating to ARMCP™’s mission. If you are interested in joining the Steering Committee, email Info@ARMCP.org.
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52.8< 5? 9 94?-587<33;;) © Cop pyyright 2007 7--2017 Carring ton Mor tga tgag ge Ser vices, LLC headquar tered at 1600 South Douglass Road d,, Suittees 110 & 200 0A A , A n a h e im , C CA A 92806. 800 -561- 4567 7.. NMLS ID # #2 2600. Nationwide Mor ttggage Licensing SSyystteem ((N NMLS) S) Consumer Access website: w w w.nmllssconsumeraccess. orrgg. A Z: Mor ttggage Banker BK BKK- 09107 74 45. CA: Licensed b byy the Depar tment o off Business Oversiigght under the Califfo ornia Residential Mor ttggage Lending Ac t, t FFiile 413 0904 . CO: Check license status o off your mor ttggage loan oriigginator at w w w.dora.stta attee.co.us//rreal- estate//iindex.htm. GA: Georrggia Residential Mor ttggage Licensee 227 72 21. IL: Illinois Residential Mor ttggage Licensee. MN@?>=<;?<;?:98?7:?96 6554?889 9?5:854?<:89?7:?<:8545;8?4785?3921?70455/5:8?.:-54?,<::5;987?+7*)?MO@?,<;;9.4<?(9/'7: :&&?%50<;8478<9:?$# "$! !# # )? :" 8785? 25@?,<;;9.4<?%5;<-5:8<73?,94 80 8 0705? Loan Broker License 14 -174 746. 251 SW Noell,, Lees Summitt,, MO 64063. NV V:: Mor ttggage Broker License 4068 ((R Residential Mor ttgga gagge Origination//LLendingg)). NJ: Licensed b byy the N..JJ. Depar tment o off Banking and Insurance. NY Y:: Licensed Mor ttggage Bankerâ&#x20AC;&#x201D;NYSS Depar tment off Financial Ser vices. New YYo ork Mor ttggage Banker License B500980/107664 . OH@? =<9? ,94 8800705? +97:? 2 8? ( (554 8<< 278855? 9 9 ? %50<;8478<9:? ,) $ $! !) )? RI: Rhode Island Licensed Lenderr,, Lender License 20112809LL. VA: NMLS ID 2600 ((w w w w.nmllssconsumeraccess.orgg)). WA: Consumer Loan License CL2600. Allsso licensed in AL, AK K,, AR, CTT,, DE, E, DC C,, FFLL, HII,, ID, IN N,, IA , KS S, KY S, Y,, LA , ME E,, MD D,, MII,, MS, S, MTT,, NE E,, NH H,, NM M,, NC C,, OK K, OR, PA , SC K, C,, SD D,, TN, N, TX X,, UTT,, VTT,, WV V,, WI and WY Y.. NOTICE@ E@? 33?397:;?745?;. 52 8?889 9?245-<88 ?.:-54 *4<8<:0?7:-?'49'54 88&&?7''49 73?0.<-53<:5;)? 6 65545-? loan produc ttss ma ayy varryy by by stta ate. There is no guarantee that all borrowers will qualiffyy. Restric tions ma ayy apply. lyy. Th This is not a commitment to lend. Te Terms, conditions and programs are sub bjjec t to change without notice. Th This inf nffo ormation is ffo or industrryy proffeessionals onllyy and is not intteended ffo or distribution to consumers. Carring ton Mor ttggage Ser vices, LLC is not ac ting on behalf of of or at the direc tion o off HUD//FFHA or an nyy government agencyy.. All riigghttss reser ved.
n National Mortgage Professional Magazine n OCTOBER 2017
Unconventional loans for conventional client s
Carring ton is your go -to lender ffo o closing low F ICO government loans ffo or or the underser ved market and under writing complex convention na l lo a n s . W Wee have or under writing government and con nventional loans that developed processes ffo osing loans easierr and d ffa aster with our diig gital loan mana ag gement por tal â&#x20AC;&#x201D; make clo BrokerIQ. Q
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GOVE R NME N T LOAN PROGR AM A S
Carrington gives you the pow wer and technology to ma aster the toughest loans.
Agency Lenders Often Exclude Wealthy Borrowers, Non-QM Products Offer Solutions By Tom Hutchens
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any originators wrongly assume that marketing non-QM loans requires them to focus on people with previous financial problems. But tight post-recession lending rules can also make it difficult for high net worth individuals to obtain conventional loans. Yet, these are exactly the type of borrowers that should be coveted by every loan officer. The inability to document income is one of many criteria that disqualifies potential homebuyers from obtaining agency loans. That eliminates millions of investors, retirees, small business owners and others from obtaining loans underwritten by major financial institutions. These non-QM prospects may have spotless credit histories, plenty of cash, and verifiable assets that far exceed the value of the properties they want to buy. Yet, agency lenders just cannot qualify them based on QM rules. Innovative non-QM lenders are now offering products— sometimes known as “asset qualifier” loans—designed for people who have excellent credit histories, as well as significant cash, stock or other vested interests. These loans are needed by affluent consumers who do not have verifiable income as required by agency lending rules. Under these programs, ability to repay is based on borrowers’ liquid assets, not income. A few months ago, Janice was amazed when her personal banker told her that his company, one of America’s largest financial institutions, could not underwrite the loan for her new home. She had built a vastly successful business that she recently sold. She had more than $4 million in savings and equities, much of it deposited at the very bank that denied her loan request. Janice had started a new business, but the Consumer Financial Protection Bureau’s (CFPB) final “Ability-to-Repay and Qualified Mortgage Rule” of 2014 requires a longer self-employment history than she could demonstrate. Janice was stymied and frustrated. Fortunately, her real estate agent had attended a webinar on non-QM loans and knew that an asset qualifier loan was the solution. She met with a loan officer who specializes in helping wealthy people like Janice qualify for a mortgage. After determining that she had the equities necessary to be approved under an asset qualifier program, Janice was able to move into the house of her dreams. The future of mortgage banking is likely to favor originators who understand the ramifications of recent rules and can find solutions for consumers, like Janice, who are exceptions to them. The number of creditworthy homebuyers who need non-QM loans is significant and their stories are diverse. The most successful loan officers will be those who seek them out and serve them. Tom Hutchens is Senior Vice President of Sales and Marketing at Angel Oak Mortgage Solutions, an Atlanta-based wholesale/correspondent lender licensed in more than 35 states and operating in the non-QM space for over three years. Tom has been in the real estate lending business for nearly 20 years. He may be reached by phone at (855) 539-4910 or e-mail Info@AngelOakMS.com
SPONSORED EDITORIAL
elite performer the
Underdog? Overbite. BY ANDY W. HARRIS, CRMS
am typing this article from 30,000 feet in the air, flying back from Phoenix to Portland, Ore. Last night, our Oregon Ducks lost to the Arizona Sun Devils 37-35 for the first time in 13 years. As the opposing team sitting in the front row on the wrong side of the field, you can imagine it’s harder to watch without home field advantage. While the game was close and both teams clearly needed some improvement, the grit from the Sun Devils certainly showed on the field and they did not back down and would not give up as the assumed underdogs. I believe underdogs are placed in a position that reduces focus and expectations from others as the assumed winner. With focused placed on the opposing team, this allows the underdog to better read and understand its competitor and apply a strategy to win. In order to do what is not expected, you have to apply a plan and execute that plan with the element of surprise. Nothing can be more rewarding in business than surprising your competition. While this game may have been hard to watch as I was rooting for the losing team, the principals are the same in business as they are in sports … anything can happen. Many of us have this underdog mentality when competing for business against what may be viewed as a larger competitor, yet most of it is just mental. If your team outworks the other, no matter what odds you feel may be stacked against you, you can win. Your bite needs to be louder than your bark and you can’t back down. You must rally the troops and stay focused. If you get knocked down, get back up and press forward. Don’t make excuses and take accountability for your responsibilities as a team member. Some of the greatest victories are those won by what others believed to be impossible. Believe in yourself and your team, and anything truly can be possible.
I
Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and past president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 4960431, e-mail AHarris@VantageMortgageGroup.com or visit VantageMortgageGroup.com.
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Recruiting, Training and Mentoring Corner
The Future of Sales Management BY DAVE HERSHMAN
ith the topic of this month’s focus being “The Future of Mortgage Banking,” one would expect we will see many articles regarding technology, robots replacing workers and a host of other futuristic changes. I would like to deviate from this theme. As a matter of fact, I would like to do a 180 and say this: More of the same! Sure, there are going to be many changes in this industry, and the vast majority of these changes will be driven by technology. But when I look back, I realize that today’s industry is much closer to the business I saw 20 years ago than it was to the business I saw just a decade ago. Ten years ago, I taught a three-day mortgage school across the country. When I came to the topic of FHA loans, most of the students walked out and returned phone calls during that hour. They did not think they needed FHA training. Today, FHA is as important as it was 20 years ago. Granted, if they left my class today, they would be returning texts and emails and this is an example of how technology brings change. But a mortgage is much more traditional today than it was 10 years ago. I also have seen many indicate that Loan Officers won’t be needed in the future. I also disagree with that statement. Yes, each year, technology is a
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greater part of the process. Millennials love to surf the Web and look at houses. But when they purchase, they buy with the help of a real estate agent because they know little about the process and need leadership. They will listen to the advice of a real estate agent when they recommend a Loan Officer. Yes, the public is being inundated with national ads for online mortgage companies, and these companies have made great inroads into the refinance markets. But the purchase markets are still ruled by real estate agents and builders. As a matter of fact, real estate agents are scared to death when their clients go with a national lender whom they believe knows little about their local market. You see, in an agent’s mind, every one of their local areas are unique and special. Of course, these technologyfocused companies are going to penetrate even the purchase markets and Loan Officers are going to have to get better and better at delivering value and advice upfront. And they will need to continue delivering value after closing so that they continue getting repeat business and referrals. Twenty years ago, I advised Loan Officers that their opportunities for marketing are within their pipeline. Today, I give the same advice. In the future, this concept will be even more important as technology will bring the competition into your
“While most loan officers spend much of their time managing their pipelines, they also believe that the marketing opportunities lie completely in another direction.” previous customer’s homes each and every day. Ten years ago, we mostly worried about competition from the entity that was servicing their loan. Today, they are inundated from all directions. What do I mean that the opportunities are within their pipelines? While most loan officers spend much of their time managing their pipelines, they also believe that the marketing opportunities lie completely in another direction. Therefore, they have little time to market because, it takes them in that other direction and closing loans always is the number one priority. When Loan Officers see the opportunities that are right under their noses, marketing will not become bifurcated from everyday activities. Imagine, these
national companies have to market on the Web, TV, radio and more. And all Loan Officers have to do is open their eyes wider to see the opportunities staring them in the face. What does this all say about managing in the future? Certainly, managers will be teaching and managing technological systems as much as they will be managing sales personnel. On the other hand, their ability to coach and mentor Loan Officers will have to become more sophisticated if their Loan Officers are to ward off the threats from these technological giants. This is why today we should be focused, not only on Loan Officer training, but mentorship training as well.
Dave Hershman is a top author in this industry with seven books published, as well as the founder of the OriginationPro Marketing System and the OriginationPro’s online comprehensive mortgage school. Dave is also director of Branch Support for McLean Mortgage. He may be reached by e-mail at Dave@HershmanGroup.com or visit OriginationPro.com.
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newtomarket Caliber Home Loans Introduces New ARM Offering
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Caliber Home Loans Inc. has announced the introduction of a new 5/5 adjustable-rate mortgage (ARM) product to homebuyers, the Caliber 5-Star ARM. The Caliber 5Star ARM incorporates a lower initial interest rate–the main reason homeowners choose ARMs–with a longer, five-year period between rate adjustments. Unlike other ARM products with annual rate adjustments, Caliber’s 5-Star ARM has only one every five years. Limited rate changes are also built into the Caliber 5-Star ARM. Each five-year adjustment is limited to two percent, but can never increase more than six percent from the initial interest rate. Since rates can also decrease, Caliber 5-Star ARM borrowers may have five years of lower payments. “We are delighted to offer loans for a wider range of buyers, including Millennials and first-time buyers,” said Caliber’s Executive Vice President of Retail Lending John Bianchi. “The Caliber 5/5 ARM is a great solution for homebuyers who don’t want to commit to a 30-year fixed-rate loan, but want a lower starter rate. We look forward to continuing to address the unique financing needs of homeowners across the country.” Veros Announces VeroDATAFI Streamlined UCD Solution
Veros Real Estate Solutions has announced VeroDATAFI, a government-sponsored enterprise (GSE)-certified
platform to provide the mortgage industry a seamless Uniform Closing Dataset (UCD) solution to meet the Sept. 25th mandate by the GSEs. “We are pleased to announce our new VeroDATAFI for lenders to be able to comply with the new UCD requirements and address the system and process challenges that Sept. 25th will bring,” said Charles Rumfola, Senior Vice President Strategic Initiatives at Veros. “Veros played an integral part in successfully implementing the Uniform Collateral Data Portal (UCDP) for the GSEs, and we are looking to build on that success for UCD. VeroDATAFI is certified by both Fannie Mae and Freddie Mac for the UCD XML file delivery, which enables lenders to start immediately delivering the UCD XML file to the GSEs,” said Rumfola. “We are excited to continue to work with both our lender customers and the GSEs to expand upon our proven systems to continue to serve the mortgage industry’s compliance needs.” VeroDATAFI simplifies the predelivery UCD validation checks, and delivers alerts for potential issues. VeroDATAFI can accept UCD XML data, including the preembedded PDF, from any third parties and ensure secure delivery directly to the GSEs. In addition, VeroDATAFI gives lenders flexibility with two options for UCD-compliant delivery. The VeroDATAFI Web portal provides users the ability to upload the XML file on demand and instantly deliver it to one or both GSEs. And, for a seamless connection to the GSEs, the direct API integration with PATHWAY automates high volume delivery
that’s fast, reliable, and secured. The API solution seamlessly integrates into the lender’s current infrastructure. ARMCO Launches ACES Document Manager
ACES Risk Management (ARMCO) has announced the release of ACES Automated Document Manager (ADM). Available through ARMCO’s ACES Audit Technology and as a stand-alone product, ADM uses robust OCR (optical character recognition) technology to not only automatically identify, bookmark and organize loan documents, but also alert users of any missing documents associated with loan files—core activities for decreasing the risk of gross defects. ADM can parse hundreds of PDF files, identify each document in the file, and categorize them by document type or name. Users simply place the loan document files into a secure folder and ADM automatically organizes, names, and identifies the documents. ADM does in moments what can take upwards of an hour per loan file with manual processes. “Typical loan files can contain 500+ PDFs or imaged document pages—sorting through those can be time consuming and error-prone,” said Phil McCall, President of ARMCO. “At ARMCO, we’re not just focused on elevating loan quality. We want to give the industry’s businesses the tools to cut costs, reduce turn times and gain efficiency. ARMCO’s new
Automated Document Manager will be a huge time-saver, especially for large volume lenders and outsourced QC providers.” Chronos Solutions Announces Liens and Judgments Addendum to Its Credit Report Offerings
Chronos Solutions has announced a supplemental addendum to its suite of Funding Suite Credit Report offerings that provides the liens and civil judgments data that is no longer permitted in nationwide credit reporting agencies’ credit reports. The supplemental lien and judgment report is available either as a standalone service or as an add-on to the credit report. Liens and judgments information began being removed from credit reports in July 2017 following a ruling in a civil action suit that caused the majority of U.S. states to prohibit the information. Research presented in the civil case showed how this factor has negatively affected credit scores– sometimes wrongly–by up to 100 points. However, while the reform, part of a National Consumer Assistance Plan, protects consumers from erroneous changes to their scores, liens and civil judgment records remain vital indicators of creditworthiness and the loss of them has increased lender exposure to risk. Chronos Solutions now offers this information in a separate supplement ordered independently or in conjunction with its Funding Suite Credit Reports. Now, without any connection to the consumer’s credit scores, lenders–without having to research it manually– have access to the data they need to make a solid decision.
Built Integration Now Available Via Ellie Mae’s Encompass
transparent as possible. And LendingQB not only delivers that, but also allows us to provide even more homebuyers with the choice and ability to protect their hard-earned downpayment.” Stearns Lending Launches New Digital Platform
Stearns Lending LLC has announced the launch of Stearns Digital–a digital platform that puts customers in charge of the home
loan application process. With Stearns Digital customers are able to complete a loan application and submit the application for processing on a desktop through a Web site or on mobile devices through an app for Apple or Android. The new digital platform engages borrowers and gives Mortgage Loan Originators productivity tools that help them ensure a superior experience for their customers and business partners. continued on page 18
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LendingQB Adds Downpayment Protection Through Partnership With ValueInsured
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LendingQB has announced a partnership with ValueInsured, which embeds +Plus SM downpayment protection directly into its loan origination platform. By making +Plus downpayment protection a turnkey solution in the existing LendingQB system, lenders are able to add downpayment protection to their mortgage programs and provide borrowers with a greater choice when selecting a mortgage. +Plus SM downpayment protection enables homebuyers to buy with confidence knowing that recovery up to the full original downpayment should the need to sell their home in a down market arises. “At LendingQB, we’re dedicated to providing our customers with the best lending experience possible by enabling
n National Mortgage Professional Magazine n OCTOBER 2017
Built, a provider of construction lending software, has announced that its collaboration and draw management platform is now available through Ellie Mae’s Encompass all-in-one mortgage management solution. The live integration allows Encompass users to efficiently manage construction loans from preclosing through post-closing via Built’s construction lending automation software. Using Built’s platform, lenders can collaborate with borrowers, builders, and draw inspectors, accelerating the draw process and reducing risk for all involved. The Built platform empowers lenders to manage construction and remodeling loans with more transparency and reduced administrative burden, while also delivering their clients a best-inclass digital experience. “This integration makes it much easier for lenders to streamline construction loan administration,” said Chase Gilbert, President of Built. “Automatic draw management and online collaboration eliminates the need for delays, spreadsheets and paper files. We look forward to building a long-term relationship with Ellie Mae and helping our mutual clients succeed.”
them to continue to grow their businesses,” said Tim Nguyen, President of LendingQB. “The addition of +Plus into our existing LendingQB platform, instantly differentiates our loan originators’ mortgage services from their competitors, and enables them to provide homebuyers with the services they want with the ability to protect their downpayment.” Joe Melendez, CEO of ValueInsured, said, “ValueInsured’s focus from day one has been to make getting a mortgage with downpayment protection as simple and
WSFLASH y OCTOBER 2017 y NMP NEWSFLASH y OCTOBER 2017 y NMP NEWSFLASH y OCTOBER 20
NAMB Debuts New Branding Endeavor
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NAMB—The Association of Mortgage Professionals has announced a rebranding with a new name and logo. The association, which began in 1973 as the National Association of Mortgage Brokers, will now be known strictly as “NAMB.” The association will also be represented by a new logo consisting of a graphic of a house divided into five segments that symbolize the five regions of the country that align with NAMB’s bylaws and member representation. NAMB will retain the NAMB.org Web domain. NAMB President Fred Kreger noted that the new branding is designed to emphasize a diverse membership that incorporates a wide variety of mortgage industry professionals. “A lot of people don’t realize that NAMB is not limited to brokers,” said Kreger. “NAMB is an association for all state licensed and registered mortgage loan originators—as well as the small to midsize businesses that originate mortgages. This rebranding reflects the diversity of our member base.”
as the new Deputy Secretary for the U.S. Department of Housing & Urban Development (HUD). Following her confirmation by the U.S. Senate on Sept. 14th, U.S. Vice President Mike Pence administered the oath of office to Patenaude. As HUD’s second-ranking official, Deputy Secretary Patenaude will lead the Department’s Disaster Management Group (DMG) and will play a primary leadership and operational role in coordinating the long-term recovery efforts following Hurricanes Harvey, Irma and Maria. She will direct 16 program and support offices within HUD to help state and local governments design and execute their recovery plans to rebuild damaged housing, businesses and critical infrastructure. Deputy Secretary Patenaude has an extensive housing and community development background and served as HUD’s Assistant Secretary for Community Planning and Development during the George W. Bush Administration, providing leadership during the recovery efforts in the wake of Hurricanes Katrina, Rita and Wilma. PRMI Launches “PRMI Giving Network,” Partners With Kids In Need Foundation
Patenaude Sworn in as HUD Deputy Secretary Primary Residential Mortgage Inc. (PRMI) has announced the
Pam Patenaude has been sworn in
formation of the PRMI Giving Network–a service initiative aimed to help transform communities across the globe and to inspire and create real change through nutrition, service and education. Through this initiative, it recently partnered with The Kids In Need Foundation (KINF) to raise $150,000 in eight weeks to help children succeed in classrooms across America. “The PRMI Giving Network allows us to expand upon PRMI’s community service efforts and will provide a companywide opportunity to participate in our corporate giving,” said David Zitting, Chief Executive Officer of PRMI. “Last year, I was proud that our first-ever companywide fundraising competition raised more than $152,000 and provided 1.67 million meals to people in need through ‘Feeding America’. This year, I know our partnership with The Kids In Need Foundation will be a great success that will help thousands of students nationwide.” Sixteen million children in the U.S. come from families struggling with extreme poverty. The Kids In Need Foundation’s mission is to ensure that every child is prepared to learn and succeed by providing free school supplies nationally to students most in need. “Giving back has always been in our DNA and putting a name to our outreach is something our company is thrilled about,” said Steve Chapman, Chief Financial
Officer of PRMI. “Our hope for the PRMI Giving Network is to expand on our current efforts not just nationally, but globally.” PRMI kicked off the KINF Backpack Challenge at its 8th Annual National Conference in Las Vegas, Nevada. At the end of the eight-week campaign, each branch office will get the opportunity to participate in the “PRMI Week of Giving,” which will donate thousands of backpacks filled with supplies to local low-income school districts across the country. “It is tough for a student to learn without the appropriate tools in the classroom,” says Dave Smith, Executive Director of The Kids In Need Foundation. “We know that when kids have the school supplies they need, their interest in learning improves, and their selfesteem increases. Because of the generosity of the PRMI Giving Network, more students will have the school supplies they need to succeed this year. Most importantly, they will feel the intangible benefit of community support.” Equity Disparity Charted Between Harvey and Irma Housing Markets
The majority of mortgage buyers impacted by Hurricanes Harvey and Irma carries significant equity in their residential properties, according to a new data analysis by Black Knight Inc.
The Booyah Veteran Bus Project Teams With Clean the World to Support America’s Homeless Vets
The Booyah Veteran Bus Project and Clean the World have announced the launch of Hike Across America, powered by Booyah Veteran Bus Project and Clean the World, a three-month
initiative to raise awareness for homeless veterans and the difficulties they face going from active duty to civilian life. During the Hike Across America, Shane Johnson (pictured above left), Founder of the Booyah Veteran Bus Project, will walk 22 miles every day for 65 days—trekking coast-to-coast, from Florida to California, distributing Clean the World Veterans’ Hygiene Kits to homeless veterans in need. “This is a lead from the front initiative to not only bring awareness for but also, to take massive action across the nation
to eliminate veteran homelessness and transitional issues caused by going from military life to civilian life,” said Johnson. “This unified partnership between Clean the World and Booyah Veteran Bus Project is the first major step in this initiative. We will no longer sit by the wayside and allow our veterans to fall into the trap of isolation due to the lack of transitional resources. We will band together outside of the military to create a cohesive team—a unit—and will make a concentrated effort to help continued on page 16
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The average combined loanto-value ratio for homeowners with mortgages in Hurricane Harvey-related disaster areas in Texas and Louisiana is 53 percent, with an average of approximately $131,000 in equity per borrower. “Before Hurricane Harvey made landfall, the average combined loan-to-value ratio (CLTV) for homeowners with mortgages in what became FEMA-designated disaster areas was 53 percent,”. “Right on par with the national average, that’s the lowest we’ve seen since prior to 2004,” said Black Knight Data & Analytics Executive Vice President Ben Graboske. “That works out to a lot of skin in the game, and will likely serve as strong motivation for borrowers not to walk away from a stormdamaged home. In addition, over 75 percent of mortgages in the Hurricane Harvey footprint are held in Fannie Mae, Freddie Mac or Ginnie Mae securities. Therefore, the bulk of borrowers affected by the storm will be able to find assistance under the various foreclosure moratoriums and forbearance programs that have been instituted.” As for Hurricane Irma, Black Knight found fewer than four percent of homeowners in the areas impacted by Hurricane Irma have less than 10 percent equity. “The 48 FEMA-declared Hurricane Irma disaster areas include over 90 percent of the [Florida’s] mortgaged properties,” Graboske said. “To put this in perspective, that means that by balance, over five percent of all mortgages in the U.S. are included in Hurricane Irma’s disaster areas. Unlike Houston, though, where all-timehigh home prices have contributed to a significant reduction in negative equity, home prices in Florida remain 17 percent below their 2006 peak. On average, borrowers in Hurricane Irma-related disaster areas have a CLTV of 57 percent, somewhat higher than the national average.” Graboske also noted that out of the 3.2 million borrowers impacted by Irma, an estimated 170,000 were in negative equity before the storm, while another 180,000 having less than 10 percent equity in their homes. “Due to lackluster home price recovery since the housing crisis, the negative equity rate in Irma’s disaster area is nearly twice the national average,” Graboske said.
By Mat Ishbia
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here is a lot of talk in the industry right now about making sure lenders are doing right by veterans–making sure veterans aren’t being refinanced over and over again, when there isn’t a big benefit to them doing so. But is the correct way of handling this to stop veterans from refinancing? Or is the right move to focus on the lenders that aren’t giving veterans a great deal the first time? I think it’s the latter. We need to make sure that veterans–and all consumers–are shopping for mortgages and considering options. They should be talking to mortgage brokers and researching multiple lenders online. In flat-rate environment, the “churning” of veteran loans only becomes a problem if they don’t get a great deal the first time.
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FEMA disaster areas Looking at the recent hurricanes in Florida and Texas from a mortgage perspective, the Federal Emergency Management Agency (FEMA) is requiring entire counties of people to have re-inspections on their homes–even if only a small part of the county was hit. Is that really the correct way for us to handle the situation in the mortgage business? If the northern part of the county was hit by a hurricane, but nothing happened to the southern region, why do we have to make homeowners without any issues pay over $100 for an inspection? We’ve got to come up with a better way. Natural disasters will unfortunately continue to happen, and once FEMA designates a county for its Individual Assistance Program, inspections are required for all those borrowers–which delays a lot of closings from moving forward. Technology and innovation Following the Digital Mortgage Conference in San Francisco, it’s great to see all the new ideas and innovation that lenders are coming up with to make the mortgage process easier and faster for borrowers. Brokers have to be willing to jump into technology today. You need to understand that all of your clients are not going to want to get their mortgage the same way. Being open-minded to using data and innovative technology is a big key to success, now and in the future. Take advantage of it by working with lenders or vendors that can help you be successful in the digital mortgage world.
Mat Ishbia is president and CEO of United Wholesale Mortgage, a Troy, Mich.-based provider of mortgages for independent brokers nationwide. One of the nation’s leading advocates of independent mortgage brokers and wholesale lending, Mat has changed the lending platform, turning UWM into a $20 billion company and a top national workplace.
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transitioning veterans learn to dominate civilian life as they did in the military.” This is the second time Johnson and the Booyah Veteran Bus Project has hiked for veterans. In October of 2016, Johnson and his team completed a 360-plus mile trek from the Veteran’s Hospital in Lake Nona, Fla. to Panama City, Fla. This year, with Johnson teaming up with Clean the World, the initiative is even bigger and more intense as the walk will consist of 65 consecutive days and more than 3,000 miles. The Hike Across America, a first-of-its-kind walk, began Sept. 11 in Orlando, Fla. and end in Camp Pendleton, Calif. on Nov. 14. The hike will be segmented into 22-mile intervals, representing the number of veterans that commit suicide every day and consists of 20 different city stops including a Veterans Day stop in Las Vegas. “When we heard about the Booyah Veteran Bus Project, we knew Clean the World needed to be a part of this initiative,” said Shawn Seipler (pictured above right), Founder and Chief Executive Officer of Clean the World. “With over 47,000 homeless veterans in the United States, we want to directly connect these heroes, who gave the ultimate sacrifice to our country, to organizations and services that will help them get back on their feet. By creating an army of volunteers and supporters, we will fight for our homeless Veteran community, provide the necessary resources to get them back into the workforce, and give them a step up towards changing their situation for the better.” During the walk, Johnson will visit homeless shelters specializing in serving veterans, raise awareness for veteran homelessness, and hand out Clean the World Veterans’ Hygiene Kits to those in need. Veterans’ Hygiene Kits are specialized with items specifically with veterans in mind: Two bars of soap, repurposed shampoo, toothpaste, toothbrush, deodorant, shaving cream, razor, comb, socks, and an inspirational notecard. In addition, veterans will be connected to counselors, pastors, and organizations in their local communities to provide them with the support needed to transition to civilian life and into the work force.
Zillow Study Details Homebuying Struggle by Millennials
Millennials are finding their efforts to become homeowners stymied by financial pressures, according to a new data analysis released by Zillow. Although this demographic spent approximately $514 billion last year in the housing market, 53 percent of Millennial buyers needed to make multiple offers to buy their first home. However, only 39 percent were able to reach the downpayment level of 20 percent or more. For those who were able to make a downpayment, 29 percent got help from friends or family, while 31 percent managed to gather funds from multiple sources. Ultimately, 37 percent of Millennial buyers stated they went over their budget in homebuying, compared to 29 percent of all buyers, and 62 percent of Millennials admitted looking for rental housing at the same time they were trying to buy a house. “In many cities across the U.S., the housing market is extremely competitive, especially for first-time buyers who are looking to purchase a starter home,” said Zillow Chief Economist Svenja Gudell. “Young buyers often start their careers in fast-growing cities in which the market is particularly tough—and they’re trying to save for a downpayment while making record-high rent payments.” NAR Survey: It’s a Good Time to Buy a Home
Optimism among current and potential homeowners in the housing market continues to be solid, according to the National Association of Realtors (NAR) Q3 Housing Opportunities and Market Experience (HOME) Survey. The new HOME Survey found 80 continued on page 26
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The Future of Marketing and Mortgage Banking By Cherie Lynch
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ver the past century, the mortgage industry has transformed dramatically because of the implementation of the Federal Housing Administration (1934), Fannie Mae (1938), Freddie Mac (1970), and, most recently, the Dodd-Frank Act (2010). But what will the next century bring? Digital platforms will continue to innovate how we find, serve and delight our customers. Today, I am going to talk about my passion, marketing and how it will play an even more crucial role in the next century for the mortgage industry.
Establishing authenticity through accessibility Modern consumers interact with companies and brands they like. They expect organizations to have a purpose they can align themselves with, and it’s our job to communicate that purpose. Having a Web site with an exceptional user interface is great, but maintaining an active social media presence is even better! Data from HubSpot shows that consumers expect brands to be active on at least three to four social channels. And Flurry Analytics found that U.S. consumers spend an average of five hours a day on their mobile phones. So, optimizing your Web site for mobile access is key.
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Building credibility through education Generating educational content in the form of blogs, eBooks, white papers and more, creates value for your customers beyond your products or services. Don’t just educate people about your company. Teach them about the broader industry, share insightful stories and provide helpful tips. This not only establishes your credibility as a subject matter expert, but positions you as a thought leader in your industry. This also generates more sales opportunities. Research from the Aberdeen Group found that conversion rates are nearly six times higher for organizations utilizing content driven marketing. Inspiring quality service by developing company culture The two most powerful forms of marketing are having a great product or service and word-of-mouth referrals. The former often results in the latter, and they both require that customers receive exceptional customer service. According to Oracle, almost 75 percent of people cite friendly employees or customer service representatives as the main reasons for committing to a brand. That same research also stated that 89 percent of consumers will do business with a competitor after a poor customer experience. So focus heavily on offering outstanding customer service. Your team members are influenced by the company culture you create. Maintaining a healthy, fun and energetic culture will contribute to your company’s outstanding service levels. Developing an authentic voice, creating educational content for customers and investing in your company culture are all excellent marketing strategies that will lead your company through the next century of mortgage banking.
Cherie Lynch is the Marketing Manager at Class Appraisal. She combines her sales savvy and educational background in fine arts to manage marketing assets and develop high-growth strategies for the organization.
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“Stearns Digital is easy to use and delivers a smooth experience,” said David Schneider, Chief Executive Officer at Stearns Lending. “Best of all, this platform speeds up the loan process, which means our borrowers can move into their new home sooner.” Uday Devalla, Chief Information Officer at Stearns Lending, said, “These new digital platform enhancements save time, which means Mortgage Loan Originators can focus on the important personal aspects of their relationships with borrowers and business partners. New Mortgage Program Helps Pay Off Student Loan Debt
Eagle Home Mortgage, a division of the home builder Lennar Corp., is now offering a program designed to help borrowers address their student loan debt. With the company’s new Student Loan Debt Mortgage Program, borrowers are able to channel up to three percent of the purchase price on a Lennar home to pay their student loans. Lennar will contribute the three percent, and the home price and mortgage balance is not affected. Student loans up to $13,000 can be considered, and the maximum loan amount covered in the program is $424,000. “Americans are more burdened than ever by student loans, with $1.3 trillion in outstanding student loans spread out among 42 million borrowers,” said Jimmy Timmons, President of Eagle Home Mortgage. “Particularly with Millennial buyers, people who want to buy a home of their own are not feeling as though they can move forward. Our program is designed to relieve some of that burden and remove that barrier to owning a home.” MGIC Launches New Rate Quote Tools
Mortgage Guaranty Insurance Corporation (MGIC) has
announced enhancements to its rate quote tools, including Rate Finder, as well as the iOS and Android mobile apps. MGIC’s Rate Finder now displays a simpler layout, requiring less data entry. The new Rate Finder is designed for customers who need to quickly obtain accurate mortgage insurance rate quotes without disruption to their loan origination process. The iOS mobile app, called “MGIC MI,” also displays a clean layout with intuitive features designed to simplify the process of obtaining mortgage insurance rate quotes. Customers can get instant rate quotes, share the results and automatically contact their MGIC representatives. This automation reduces the time and increases the accuracy of the loan origination process. The mobile app also houses MIrelated tools and easy access to frequently-used resources. An Android version is also available. “We understand the mortgage industry’s need for accurate rate quotes on the fly,” said Margaret Crowley, Vice President of Marketing and Customer Experience at MGIC. “These enhancements streamline the loan origination experience in this competitive market.” Black Knight Financial Merges Title Search and Order Management Into One App
Black Knight Financial Services (BKFS) has announced the launch of TitlePoint Version 5.0, which merges the technology underlying TitlePoint and TitlePoint Xpress, Black Knight’s title search and order management applications. Delivering a single interface under the TitlePoint platform to access both applications eliminates the need to toggle between applications, which helps users save time and enhance efficiency. TitlePoint and TitlePoint Xpress provide title companies with the ability to easily conduct continued on page 20
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The Future of Valuation in the Mortgage Business By Rob Walker, CMB, CMT
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hen you are a carpenter, solutions start with a hammer and nails. When you are a residential appraiser, valuation solutions commence with a licensed appraiser. When you are an AVM developer, valuation solutions start with an AVM emanating from a cascade developed by Ivy League graduates. This last truth is the one that has begun to change. The future of valuation technology is already coming into focus. Currently, in select transactions, a phenomenon known as property inspection waivers are replacing traditional appraisals, much to the concern of appraiser organizations (among others). It is obvious that the massive technology and information resources that the GSEs employ are being used to manage both the cost and the risk side of home valuations. Soon, lenders will have viable AVM-based appraisal alternatives for purchase transactions. Most would agree that the value of a residential property is what a buyer and seller agree upon in the absence of fraud or duress. For years we have functioned with appraisers—equipped with the purchase price—providing their opinion of market values. In this scenario, the appraiser is acting on behalf of the lender to protect the consumer from overpaying. Enter AVM-based solutions—without the benefit of knowing the purchase price—can also support the purchase agreement, approximately 85 percent of the time. One of the leading authorities on AVM testing is often quoted as saying, “The best thing that I can tell you about an AVM is when not to use it!” A recently retired appraiser and senior banking regulator for the OCC was fond of asserting, “Tell me if the subject property is a good candidate for an AVM—yes or no.” AVMs represent the most cost-effective valuation solution for residential properties. The accuracy of these tools is welldocumented and readily available from a variety of sources. However, those familiar with these tools are the first to warn users about the dangers of misusing AVMs. To fulfill the current market need, the future of AVM valuations must be a form of disclosure from the AVM provider that tells the user if the subject property is a suitable candidate for AVM utilization. New AVM applications are coming that will disclose if the subject property is a viable AVM candidate. If yes, an AVM will be run. If no, the property will be valued by traditional valuation products. One thing on the valuation front is certain. Change will be constant and consumers will be provided with a new array of valuation options, that will continue to usher them into the digital age.
Rob Walker CMB, CMT, is Vice President of Analytics at Veros, an award-winning mortgage technology company. Rob is a 20-plus year veteran of the real estate data and analytics field. He may be reached by phone at (866) 458-3767 or e-mail Communications@Veros.com.
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title searches, create comprehensive search packages and manage orders. With TitlePoint, clients can create examiner-ready search packages; gain access to a network of geographically posted title plants; and search from an image repository consisting of one billion document images. TitlePoint Xpress enables quick, cost-effective searches of up to seven databases in a single query; produces legal and vesting reports from across the U.S.; and allows users to perform combination title, tax and image searches in one inquiry. In addition, Black Knight is providing clients with access to expanded title data as part of an ongoing plant modernization project in partnership with Fidelity National Financial Inc. (FNF). Title plants have already been modernized in several U.S. counties as part of this initiative, and additional ones are planned for the near future. “Black Knight is committed to delivering superior capabilities and modernizing title plants to continually enhance our clients’ product experience,” said Lisa Roessler, Vice President of Title Strategy for Black Knight Data & Analytics Division. “Combining our title search solutions onto one unified platform helps TitlePoint users more quickly obtain enhanced content and access time-saving functionality.” American Pacific Mortgage Announces LaunchPad LO Training Platform
American Pacific Mortgage Corporation (APMC) has announced the development of a unique training platform for newto-the-business loan originators called LaunchPad, an allinclusive, accelerated training platform that provides new-tothe-business mortgage professionals NMLS pre-license education, a working knowledge of mortgage industry basics and mentorship throughout. By helping to retool the mortgage workforce, APMC is serving the needs of the diverse, modern buyer. Through LaunchPad, APMC
has developed a strategy to partner with its branch managers to help better prepare for such changes in the industry. “We are fully committed to enabling our mortgage branches to be able to adapt to market shifts by training newto-the-business originators so they can serve their diverse communities of homebuyers better,” said Bill Lowman, Chief Executive Officer of APMC. “We are forward-thinking at APMC and are carving a new path for training originators that you won’t find anywhere else in the industry.” LaunchPad is a year-long program. The first 90-days is a paid, full-time intensive training program. Thereafter, the loan originator continues with success coaching and branch mentoring to ensure positive growth. The training highlights service to others and information on how the participants can propel themselves to their maximum income potential. Classes begin every few months. Upon completion, new loan originators have the fundamentals to build a successful career in the mortgage industry in a fraction of the time. “With LaunchPad, we are doing something no other company in the industry is doing–we’re providing new-tothe-business training for recent college graduates, seasoned sales professionals, or those currently in the industry, but not yet originating,” said APMC Director of Innovations Kyle Nicholas McCray. “This type of training is a must in today’s market if the mortgage industry wants to evolve with shifting market dynamics.” Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of: New to Market column Phone #: (516) 409-5555 E-mail: Newsroom@MortgageNewsNetwork.com
Note: Submissions sent via email are preferred. The deadline for submissions is the 1st of the month prior to the target issue.
The Early Pay-Off Penalty: The Bane of An Originator’s Existence By Brian Kent
“… what does not make sense to me is why more lenders do not including a six-month pre-payment penalty on the loan. That way, if the borrower chooses to refinance the loan early, the borrower–not the broker–can cover any Early Pay-Off (EPO) fee.”
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While that doesn’t really makes sense, that’s the regulation. For example … Let’s say you close a $300,000 loan for a borrower. If the borrower pays off that loan within six months, the penalty to the broker/LO would likely be about $6,000 (or two percent of $300,000). That would mean that under the three percent cap, you now only have one percent left which needs to include the Lender-Paid Comp (LPC)–your commission–plus any other fees which do not qualify for exclusion from the QM calculation (many third-party fees may be
excluded). That would likely mean your commission would only be maybe 0.5 points. Clearly, that’s a non-starter. No originator can make 0.5 points per deal and stay in business. While the author understands that many three-year pre-pay penalties were included on riskier loans before the 2007 crisis, and that pre-pay penalties got a bad reputation because of it, we urge the industry to work with regulators to allow wholesale lenders to include a six-month pre-payment on QM loans, and not include the penalty in the three percent cap calculation.
Brian Kent is General Manager of San Diego-based C2 Financial Corporation. He may be reached by e-mail at BKent@C2FinancialCorp.com.
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registering, lock, doc and funding, and likely selling the loan. So they need to keep it on their books for a minimum amount of time to “recover” the cost of doing the loan. Otherwise, they lose money. Fair enough. That makes sense. But what does not make sense to me is why more lenders do not including a six-month prepayment penalty on the loan. That way, if the borrower chooses to refinance the loan early, the borrower–not the broker–can cover any Early PayOff (EPO) fee. I asked around a bit and was told that pre-pay penalties are not allowed which is why lenders do not include them. But after Googling around for a bit, I found several Web sites that seemed to confirm my opinion that a prepay penalty is allowed on a QM loan. So which is it? Are pre-pay penalties allowed or not? I e-mailed our mortgage attorney, David Alt in Orange County, Calif., who quickly answered my question. Pre-pay penalties are allowed on QM loans under certain conditions. But the reason why lenders do not include a prepayment penalty is actually very simple: The regulations are written in such a way that the maximum potential pre-pay penalty must be factored into the three percent points/fees cap.
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ou just closed a loan for your client. The loan was bit rough, but you and your team overcame the obstacles to get it closed. Your client is happy, you are happy, and all is well. Four months later, you get a notice in the mail from the wholesale lender. You’re thinking, “What’s this? Maybe the lender is sending me a ‘thank you’ letter from the wholesale lender. When you open the envelope, there’s a notice inside entitled ‘Early Pay-Off’ Penalty.” The letter quotes the section of the lender’s contract which states that if any loans are paidoff within 180 days of funding, the lender is entitled to recover from the Broker/LO any LenderPaid Compensation (LPC), and in some cases, any “credit” that the borrower used to pay down closing costs. So, in good faith, you did a loan for a client, and the client, for some reason, decided to refinance the loan or sell their house within 180 days and suddenly you have to return the LPC and credit to the lender? That’s correct. Most lender’s contracts have a clause that assesses a penalty for loans that pay off, usually within 180 days. Why? The lender has put a lot of work and overhead into
Message From NAMB 2017-2018 President John G. Stevens, CRMS ears ago, when our industry was faced with an unprecedented level of proposed regulations, I met with a fellow mortgage professional, a person who I thought could make a great impact in shaping the future of our industry due to his firsthand experience in financial lending and deep understanding of the issues plaguing our industry. When I asked for his help, the response was short and to the point:
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“No. I want nothing to do with anyone else. I am focused on my own business, and if regulations change, then I guess I will just have to change as well.”
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I was shocked and appalled at the statement. What happened to the idea of working together to make things better? Where was the passion for the homeowners that they supposedly served? I found this unsettling because at NAMB (NAMB.org), we pride ourselves on being difference-makers and willing to help when our industry faces adversity. Every year, members of NAMB meet in Washington, D.C. and spend days meeting with our senators, representatives and their staff. Bills are discussed, bad regulation is defeated and improved bills are proposed. Our members work tirelessly to make sure that homeowners have an opportunity to purchase everything from their first home, all the way to their retirement home. These are the professionals who truly believe in what Mattie Stepanek meant when he said, “Unity is strength ... when there is teamwork and collaboration, wonderful things can be achieved.” NAMB’s focus is on education, advocacy and empowering mortgage professionals. We know that if we can raise the financial literacy in America and partner with lawmakers for the best interest of consumers, we can help make the American Dream more attainable. However, we cannot do this without your help. Our industry is changing on a daily basis, and we need your input and experience to help us fight for the right causes and regulation in Washington. This is not only key to the survival of our industry and dreams of homeownership, but to the survival and betterment of your career. As your President, I commit to you that I will do all that I can to help our industry and the homeowners that we represent. All I ask in return is that you engage in the conversation with us, so that we can create the best outcomes for your career, our industry and hopeful homebuyers.
John G. Stevens, CRMS President of NAMB
“NAMB’s focus is on education, advocacy and empowering mortgage professionals. We know that if we can raise the financial literacy in America and partner with lawmakers for the best interest of consumers, we can help make the American Dream more attainable.”
John G. Stevens, CRMS is President of NAMB and Vice President of Business Development for RPM Mortgage, the 17th-ranked retail nonbank lender in the U.S. He has been actively involved in NAMB and industry thought leadership since 2010. Stevens has been recognized as one of the most influential and connected mortgage professionals in the industry. Feel free to reach John by phone at (801) 427-7111 or e-mail JohnGStevens@gmail.com.
NAMB+ is an independent, wholly-owned, for-profit marketing subsidiary of NAMB, The Association of Mortgage Professionals. Dear Mortgage Professional, October is one of the biggest months of the year for industry events, with NAMB National and the MBA Annual Convention & Expo. I hope you had a chance to attend one or both of these tremendous annual conferences and trade shows. If you were at NAMB National, hopefully you stopped by our booth and were able to learn more about NAMB+ and all of the tremendous products, services and discounts available through our Endorsed Providers. For continual updates and announcements you can follow NAMB+ on social media, and you can always visit NAMBplus.com for additional information. On a personal note, October marks the end my two-year term as NAMB+ President. I want to thank everyone who has served with me on the NAMB+ Board
over the years, as well as all of our past and present Endorsed Providers who have helped us deliver added value to NAMB membership and hopefully have helped you improve your business in the process. NAMB+ has a fantastic new Board of Directors taking over this month and we are poised to continue introducing new initiatives, new Endorsed Providers, and delivering top-of-the-line products, services and savings to you in the coming months and year ahead. Sincerely,
Nathan Pierce, CRMS, CMP, President NAMB+, Inc. l npierce@advfund.com
See below for a complete listing of the current NAMB+ Endorsed Providers and visit NAMBPlus.com for more information. Full-service mortgage credit reporting company serving the nation’s financial community. Avantus provides custom mortgage credit reports, fraud and compliance solutions, and innovative lead generation products available exclusively to Avantus customers. Learn more at Avantus.com. NAMB members receive a discount off Brokers Compliance Group compliance support programs.
eEndorsements promotes your success by making it easy to capture customer reviews, control your content, and publish your testimonials where they matter to drive new business. Automatically share your reviews on Facebook, Twitter and Linkedin. Easily invite your clients to share reviews to sites like Yelp and Zillow. eEndorsements will also hosts a review profile page indexed and found in Google Search. eEndorsements offers a 34% discount to NAMB Members. For more info please visit http://eendorsements.com/namb. InfoSight, Inc. offers proven and affordable cyber security, risk management, IT Infrastructure and regulatory
MortgageHippo Swift allows loan originators of all sizes to deliver a modern borrowing experience, significantly improve borrower conversions, reduce origination costs and integrate with other innovative technologies in the mortgage industry. NAMB members will receive a 25% discount. Please visit www.mortgagehippo.com/swift/.
Sarma gives you access to their extensive resources including: merged reports from the three top credit bureaus, CreditXpert tools, AVM Reports, SocialValidate, TRV Verification, Interface with over 30 LOS, Fannie and Freddie connection, Verification of employment/deposit and much more. Please visit http://www.sarma.com/quickqual/ NAMB Members will receive a Twenty-Five Percent (25%) discount off of the regular price with their NAMB Membership. Simplii VOIP business phone solutions include all the features and functionality of a high end business phone system without the high costs. We offer all NAMB members a 10% discount off their phone services. For more information please e-mail stevew@simplii.net
SYNCRO connects mobile salespeople to their office website leads. NAMB Members receive a 10% discount off regular prices for monthly unlimited SYNCRO Web Chat packages.
23 The Bond Exchange is a national surety agency specializing in providing mortgage license bonds to thousands of mortgage professionals across the country.
USA Business Lending is the nation’s premier commercial brokerage firm representing over 3500 lenders.
NAMBPLUS Login Instructions Username = Member Number Password = First initial of your first name capitalized and your last name with the first letter of the last name capitalized (example = JStevens)
If you are not a NAMB member please visit NAMB.org and join today to gain access to NAMBPLUS.com and the many benefits NAMB members receive!
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NAMB members receive a 15% discount on all Custom Canvas Prints products and services!
MassMutual Disability Income Through an arrangement with Massachusetts Mutual Life Insurance Company (MassMutual), NAMB members have an opportunity to apply for individual disability income insurance (DI) at discounted rates. Learn more by calling Andrew Berman at 516-652-1819
If you want a social and mobile marketing strategy that gets noticed contact Social5 today for a FREE consultation and demo and to receive your NAMB member discount pricing.
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CalSurance® offers competitively priced Professional Liability Insurance for NAMB members. Multiple coverage options and an easy application process are available. Visit www.calsurance.com/namb for program details and to apply.
compliance solutions. Visit www.infosightinc.com or contact us at 305-828-1003 / 877-577-9703.
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CFPB Updates HOEPA/QM Thresholds and Makes Amendments to Regulation C By Gavin T. Ales
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n Aug. 30, 2017, the Consumer Financial Protection Bureau (CFPB) announced the annual adjustment to dollar thresholds under the Truth-in-Lending Act (TILA), including adjustments to the Home Ownership and Equity Protection Act (HOEPA) and Qualified Mortgage (QM) limits. These annual adjustments are required under the Dodd-Frank Act to coincide with the annual percentage change to the Consumer Price Index. As of Jan. 1, 2018, the adjusted total loan amount threshold for high-cost mortgages under HOEPA will be $21,032. Under 12 CFR 1026.32(a)(ii), loans with a total loan amount greater than or equal to this updated amount of $21,032 will be subject to a five percent limitation for points and fees. The adjusted points and fees total for loans with a total loan amount below the $21,032 threshold will be subject to a $1,052 limitation. Also, effective Jan. 1, 2018 are adjustments to the various points and fees thresholds applicable to the QM requirements. The three percent points and fees limitation will now be applicable to loans with an amount greater than or equal to $105,158, up from the 2017 amount of $102,894. Loans with an amount greater than or equal to $63,095, but less than $105,158, will now be subject to a points and fees limitation of no more than $3,155. Loan amounts greater than or equal to $21,032, but less than $63,095, will be subject to the five percent points and fees limitation. Loan amounts greater than or equal to $13,145, but less than $21,032, will be subject to the $1,052 points and fees limitation. In addition to the effects these updated thresholds will have on federal high-cost and QM tests, various states also refer and incorporate these thresholds into their state highcost requirements. On Aug. 24, 2017, the CFPB also issued a final rule that makes technical corrections, clarifications of certain requirements, and other amendments to the bureau’s Home Mortgage Disclosure (Regulation C) rule issued in October 2015, also known as the 2015 HMDA Final Rule. These changes include an increased reporting threshold for openend lines of credit, from 100 loans to 500 loans, and clarifies that a reporting institution must meet the threshold for two years in a row before becoming subject to the reporting requirement in subsequent years. The rule also includes updates to definitions, such as what constitutes a bona fide error and temporary financing, as well as adds transition rules for reporting loan purpose and an originator’s unique identifier for certain purchased loans. The rule also includes more clarity as to the reporting requirements for loans originated as a New York Consolidation, Extension and Modification Agreement. This rule is primarily effective with the rest of the 2015 HMDA Final Rule on Jan. 1, 2018.
Gavin T. Ales is chief compliance officer with Torrance, Calif.-based DocMagic Inc. He may be reached by phone at (800) 649-1362, ext. 6446 or e-mail Gavin@DocMagic.com.
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percent of respondent homeowners stating this is a good time to list their home for sale, a new high for this survey. This is up from 75 percent in the second quarter and up from 67 percent one year ago. Furthermore, 62 percent of respondent renters believed now is a good time to become homeowners, up from 52 percent in the previous quarter and 60 percent one year ago. The survey also found 57 percent of households believed the economy is improving, up from 54 percent in the second quarter and 48 percent a year ago. Lawrence Yun, NAR’s Chief Economist, was uncertain how this positive sentiment would translate into a challenging housing environment. “The housing market has been in a funk since early spring because of the ongoing scarcity of new and existing homes for sale,” Yun said. “The pace of new home construction has not meaningfully broken out this year, and not enough homeowners at this point have followed through with their belief that now is a good time to sell. As a result, home shoppers have seen limited options, stiff competition and weakening affordability conditions. Buyer demand is robust this fall, but the disappointing reality is that sales will continue to undershoot their full potential until supply levels significantly improve.” GSEs Completed 48K Foreclosure Preventions in Q2
Fannie Mae and Freddie Mac completed 48,760 foreclosure prevention actions in the second quarter, according to data released by the Federal Housing Finance Agency (FHFA). During the second quarter, the serious delinquency rate for the government-sponsored enterprises (GSEs) fell to 0.9 percent, the lowest level since January 2008. The number of GSE loans that were delinquent for 60 days or more dropped by six percent to 354,178. The GSEs’ REO inventory was also down, dropping by nine percent in the second quarter to 40,392. Since going into federal conservatorship nine years ago, the GSEs provided foreclosure prevention assistance for 3.9 million homeowners.
Seniors Experience Increased Home Equity in Q2
Homeowners who are 62-years-old and higher saw their home equity increase by a combined 2.4 percent to $6.42 trillion in the second quarter from $6.27 trillion in the first quarter, according to new data from the National Reverse Mortgage Lenders Association (NRMLA). The new NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI) is reporting the growth in housing wealth for retirement-aged homeowners was driven by an estimated 2.1 percent, or $162 billion, improvement in senior home values, which was offset by a 0.8 percent increase of senior-held mortgage debt that equaled $12 billion. The RMMI reached 230.17 in the second quarter, a new for the 17year-old index. However, NRMLA President and CEO Peter Bell questioned the political stalemate on the future of the Affordable Care Act will create uncertainty for this corner of the housing market. “It is unclear whether Congress and the President will come to an agreement on healthcare reform this year, but there is little doubt that healthcare spending per person will continue to increase,” Bell said. “This is a particularly sobering fact for older Americans who can expect to spend between $200,000 to $400,000 out-ofpocket for medical expenses during retirement. The question for them right now is not whether the Senate Majority Leader can get the votes to pass a bill, but how are they going to pay for the financial shocks of aging? Housing wealth provides older homeowners with an available source of funds to manage the costs of caregiving and other expenses incurred in the last third of life.” New Survey Finds Consumer Confusion on Interest Rates
More than half of potential homeowners prefer a 10 percent downpayment level over higher levels, but nearly one-quarter of continued on page 36
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requires a high-tech toolbox. For the last thirty years, Flagstar Bank has been an industry-leading mortgage lender. We are a top 10 correspondent investor1 and the #1 FHA wholesale lender2 in the country. Put our decades of experience to work for you today.
Est. 1987
Equal Housing Lender
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Some restrictions may apply. All borrowers are subject to credit approval. Programs subject to change. The information provided herein is for dissemination to and for real estate and financial business entities only, and is not an advertisement for the extension of credit to customers. 1 Source: Inside Mortgage (Q4 2016) 2 Source: FHA Neighborhood Watch (Q4 2016)
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Mortgage Bankers Association 2017 Annual Convention & Expo October 22-25, 2017 Colorado Convention Center l 700 14th Street l Denver
Schedule of events Agenda is subject to change
Saturday, October 21 11:00 a.m.-3:00 p.m. CMB Exam Headquarters Hyatt Regency Denver, Level 3, Granite A 1:00 p.m.-5:00 p.m. Registration Level 2, Street Level, Lobby D 28
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Sunday, October 22 7:30 a.m.-7:30 p.m. Registration Level 2, Street Level, Lobby D 9:00 a.m.-Noon Diversity and Inclusion Committee Meeting: Committee Members Only Level 2, Street Level, Room 610 9:00 a.m.-10:30 a.m. State Legislative & Regulatory Committee Meeting (Open to MBA Members/Closed to Media) Level 2, Street Level, Room 109 10:00 a.m.-11:30 a.m. CMB Society Meeting (Committee Members Only) Level 2, Street Level, Room 103 11:00 a.m.-5:00 p.m. Residential Future Leaders: Final Presentations (Open to MBA Members; Closed to Media) Level 2, Street Level, Room 502 11:45 a.m.-1:15 p.m. Legal Issues and Regulatory Compliance Committee Meeting (Open to MBA Members/Closed to Media) Level 2, Street Level, Room 104 1:00 p.m.-2:30 p.m. mPact Convention Kick-Off (Open to Members 35-years-old and Younger and mPact Members) Rock Bottom Restaurant & Brewery, 1001 16th Street, Denver Gear up for an action-packed MBA Annual Convention with a football-viewing happy hour at a local brewery in Downtown
Denver! Network with peers and reconnect with some familiar faces before the Convention. 1:00 p.m.-2:30 p.m. Secondary & Capital Markets Committee Meeting (Open to MBA Members/Closed to Media) Level 2, Street Level, Room 109 2:00 p.m.-3:30 p.m. Residential Technology Forum (Closed to Media) Level 2, Street Level, Room 108 2:30 p.m.-4:00 p.m. Loan Administration Committee Meeting (Opening to MBA Members/Closed to Media) Level 2, Street Level, Room 103 2:30 p.m.-4:00 p.m. Loan Production Committee Meeting (Open to MBA Members/Closed to Media) Level 2, Street Level, Room 104 3:00 p.m.-5:00 p.m. Press Room (Credentialed Media Only) Level 2, Street Level, Room 505 3:30 p.m.-5:00 p.m. Special Session: Digital Disruption-The Future of Work, Skills and Careers in a Digital World Level 3, Ballroom Level, Mile High Ballroom Learn how rapid changes in society and technology are revolutionizing the workforce and employment from Dr. Tracey Wilen, prominent researcher and expert on the impact of technology on society, and Mary Ann McGarry, President, Chief Executive Officer and Partner for Guild Mortgage Company. Dr. Wilenâ&#x20AC;&#x2122;s multimedia presentation focuses on 10 trends that impact jobs, 10 new skills that are needed to remain relevant today, and gives advice on how to manage your career and your workforce in a digital world. After her presentation, Wilen is joined by mortgage executives to discuss how her findings apply to our industry and how these leaders are preparing for the future. 5:15 p.m.-6:00 p.m. MBA Opening Ceremony: Installation of 2018 Officers, Graduation Ceremonies for CMBs and Future Leaders Level 3, Ballroom Level, Mile High Ballroom
6:00 p.m.-7:00 p.m. CMB/Future Leaders Reception (By Invitation Only) Level 2, Street Level, Room 610
10:00 a.m.-5:30 p.m. THE HUB is Open Level 1, Exhibit Level, Exhibit Hall D
6:00 p.m.-7:30 p.m. Opening Reception in The Hub: One Fun Night in Denver, Featuring Bernie and The Boomers Level 1, Exhibit Level, Exhibit Hall D
10:30 a.m.-11:00 a.m. Refreshment Break in The Hub Level 1, Exhibit Level, Exhibit Hall D
Monday, October 23 7:30 a.m.-5:30 p.m. Registration Level 2, Street Level, Lobby D 7:30 a.m.-8:30 a.m. VA Working Group (Open to MBA Members/Closed to Media) Level 2, Street Level, Room 108
8:00 a.m.- 5:00 PM Press Room (Credentialed Media Only) Level 2, Street Level, Room 505
After an industry welcome by MBA leadership, featured speaker Mohamed El-Erian, Chief Economic Advisor at Allianz, former CEO and Co-CIO of PIMCO, discusses our current economic path, underpinned by central bank policy experimentation, including the impact on the real estate sector both domestically and globally. He points to signposts around us –rising inequality, sluggish growth, political tensions–and their correlation to volatile financial markets. He dissects continued pressures that warrant radically different monetary policy, and then offers his vision for a renewed global economy, prosperity and financial stability. After his remarks, he is joined by Betty Liu, Anchor, Bloomberg Television and Chief Executive Officer, Radiate, for an on-stage interview. Also featuring MBA’s Rodrigo Lopez, CMB, 2017 MBA Chairman and Executive Chairman, NorthMarq Capital Finance; David Motley, CMB, 2017 MBA Chairman-Elect and President, Colonial Savings; and David H. Stevens, CMB, President and Chief Executive Officer of the Mortgage Bankers Association. 10:00 a.m.-4:30 p.m. Side Stage in The Hub, Featuring Live Demos and Quick Tips Level 1, Exhibit Level, Exhibit Hall D
10:30 a.m.-11:15 a.m. The Press Box: Q&A with Betty Liu Level 1, Exhibit Level, Exhibit Hall D
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Featuring Speaker Betty Liu, Anchor, Bloomberg Television and Chief Executive Officer, Radiate. 11:00 a.m.-11:45 a.m. General Session: A View From Washington Level 3, Ballroom Level, Mile High Ballroom Hear from two top voices for housing in Washington. The Honorable Benjamin S. Carson Sr., M.D., Secretary, U.S. Department of Housing and Urban Development (HUD) shares his priorities for the nation’s housing as they relate to the current administration’s domestic agenda. The Honorable Melvin L. Watt, Director of the Federal Housing Finance Agency (FHFA), who has extensive experience leading one of the key government agencies impacting housing, shares his perspective on the state of the industry. 11:45 a.m.-12:30 p.m. General Session: Secondary Market Perspectives Level 3, Ballroom Level, Mile High Ballroom Join in a discussion about doing business in today’s secondary mortgage market. Donald H. Layton, Chief Executive Officer of Freddie Mac and Timothy J. Mayopoulos, President and Chief Executive Officer of Fannie Mae, will provide updates on the priorities and initiatives within the enterprises and will address a number of industry hot topics, including technology and other trends. 12:15 p.m.-1:30 p.m. Education and Training Roundtable (RSVP Required) Level 2, Street Level, Room 111 To RSVP for the event, please contact Jeff Schummer at JSchummer@MBA.org. Seating is limited. Training in the “New” Mortgage Industry (A Roundtable Discussion for Executives, Department, Heads other Staff Development Stakeholders) The
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8:30 a.m.-10:30 a.m. Opening General Session: Industry Welcome, Followed by “What’s Ahead in the Global Economy?” Level 3, Ballroom Level, Mile High Ballroom
Featuring Speaker Dr. Mohamed A. El-Erian, Chief Economic Advisor at Allianz and former CEO and Co-CIO of PIMCO.
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8:00 a.m.-8:30 a.m. Continental Breakfast Level 3, Ballroom Level, Mile High Ballroom Foyer
10:30 a.m.-11:00 a.m. The Meeting Spot: Q&A With Mohamed El-Erian Level 1, Exhibit Level, Exhibit Hall D
Education Department of MBA along with MBA Conference Attendees will conduct a roundtable luncheon discussion on the measureable impact of mission critical training in the “new” mortgage industry. Attendees will share with other members the investments they are making to roll out the “must-have” training across key organization lines of business. 12:30 p.m.-12:40 p.m. Live Demo: ibml—Accelerated Mortgage Capture Software Level 1, Exhibit Level, Exhibit Halls C & D Social media is an excellent way to communicate to both clients and prospects to gain market share, but the risks can be perilous. It’s critical that financial institutions have a deep understanding of the pertinent regulatory obligations when creating a social media oversight program. We’ll demonstrate how using Optimal Blue’s Comergence Audits & Monitoring solution can help avoid expensive fines using our inexpensive solution.
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12:30 p.m.-1:30 p.m. Lunch in THE HUB Level 1, Exhibit Level, Exhibit Hall D 12:30 p.m.-2:00 p.m. MBA New Member Luncheon Level 2, Street Level, Room 109 12:30 p.m.-1:30 p.m. Press Luncheon (Credentialed Media Only) Level 2, Street Level, Room 107 12:45 p.m.-12:55 p.m. Live Demo: OnBase By Hyland Level 1, Exhibit Level, Exhibit Halls C & D Do you need a better solution for packaging and delivering loans? Do you need an easy solution for consolidating and delivering documents to your customers? Learn how OnBase makes it easy to bundle and deliver loans to outside entities. 1:00 p.m.-1:10 p.m. Live Demo: SimpleNexus Mobile App for Mortgage Lenders Level 1, Exhibit Level, Exhibit Halls C & D See how SimpleNexus has created a Mobile Originator, connecting lenders with their borrowers and real estate agents in a single, branded mobile platform that is being used by 13 out of the top 25 mortgage lenders today. 1:15 p.m.-1:25 p.m. Live Demo: Freddie Mac Loan Advisor Suite Level 1, Exhibit Level, Exhibit Halls C & D See Freddie Mac Loan Advisor Suite in Action. Learn how it can help you reimagine the mortgage experience to create a better origination process and customer experience. Get a direct view into Loan Product Advisor’s latest capability, ACE, and how it can
save you and your borrowers time and money. 1:30 p.m.-2:00 p.m. Quick Tip: Blockchain—Panacea, Fad or Potential? Level 1, Exhibit Level, Exhibit Halls C & D Separating fact from fiction, industry experts jump right to the heart of the matter with this point/counterpoint blockchain debate. 2:00 p.m.-3:00 p.m. One Resource: Business Solutions “Mortgage Servicing Rights–Retain or Release” Level 3, Ballroom Level, Four Seasons Ballroom 1 Learn about the latest market factors influencing whether lenders choose to retain or release mortgage servicing rights, and the related risks and returns. Discussion will include current best execution modes, MSR valuation and marketability, MSR financing options, regulatory issues and overall servicer liquidity and capital challenges. In addition, key operational considerations that are oftentimes unanticipated or overlooked will be discussed. Featuring speakers Kevin M. Brungardt, Chief Executive Officer of RoundPoint Mortgage Servicing Corporation; Ben J. Dempsey, CMB, CPA, Executive Vice President and Chief Executive Officer of Colonial Savings; Mark S. Garland, Executive Vice President of Analytics for MoutainView Financial Solutions; William Roehrenbeck, CMB, Managing Director of MSR Acquisitions and Senior Vice President at PNC Bank; and Seth D. Sprague, CMB, Executive Vice President of Phoenix Capital Inc. 2:00 p.m.-3:00 p.m. One Vision: Market Opportunities “Innovative Approaches to Expand Affordable Housing and Revitalize Communities” Level 3, Ballroom Level, Four Seasons Ballroom 4 Learn how lenders can partner with non-profits, government entities, and other community stakeholders to promote innovative strategies to revitalize communities, develop and preserve affordable housing, and create new business opportunities in previously underserved neighborhoods. Speakers include: Julia Gordon, Executive Vice President for National Community Stabilization Trust; Joseph Hanson, Chief Financial Officer and Executive Vice President of Strategic Initiatives for the Indianapolis Neighborhood Housing Partnership; Cliff Kellogg, Management Consultant for The Financial Services Consulting Group (TFSCG); Jay Plum, Executive Vice President of The Huntington National Bank; Alazne (Ali) Solis, President and Chief Executive Officer of Make Room Inc.; and Donovan Walsh, Management Consultant for The Financial Services Consulting Group (TFSCG). 2:00 p.m.-3:00 p.m. One Voice: Policy Priorities “Major Issues and Concerns for HMDA Rule Implementation” Level 3, Ballroom Level, Four Seasons Ballroom 2 On Jan. 1, 2018, just slightly more than two months from the convention, lenders will be expected to collect double the current
HMDA data points for mortgage actions under distinctly different requirements. Panelists provide an update on the current the big issues facing companies as they implement the rules and consider the regulatory implications of the new data going forward. Speaker for this session will be John Haring, Director of Compliance Enablement form Ellie Mae. 2:00 p.m.-4:30 p.m. RESBOG Meeting (Committee Members Only) Level 2, Street Level, Room 108 3:00 p.m.-3:30 p.m. Quick Tip: MBA Advocacy 1-2-3 for Easy and Effective (and FREE) Political Advocacy Level 1, Exhibit Level, Exhibit Halls C & D It’s can be easy to step up your political engagement locally with your elected officials and nationally by participating in MBA’s free grassroots network, the Mortgage Action Alliance (MAA). Learn to use the MAA mobile app, to recruit colleagues to join MAA, and to set up an effective site visit with your elected officials.
3:30 p.m.-4:30 p.m. One Resource: Business Solutions “Building a Culture and Staying Competitive” Level 3, Ballroom Level, Four Seasons Ballroom 1
3:30 p.m.-4:30 p.m. One Vision: Market Opportunities “The Future of Broker Wholesale and Mini-Correspondent Lending” Level 3, Ballroom Level, Four Seasons Ballroom 4 Originations between wholesale lenders and mortgage brokers waned in popularity following the mortgage crisis, but the channel never disappeared. Today, both independents and depositories foresee opportunity. Hear both the business and legal perspectives on the future of this channel, including practical guidance on crafting wholesale purchase and sale agreements and understanding nuances that will help lenders manage risk and make sound decisions on whether to pursue this market opportunity. Speaker Benjamin K. Olson, Partner with Buckley Sandler LLP will lead this session.
4:30 p.m.-5:30 p.m. Networking Reception in The Hub: Rocky Mountain Social, Featuring The Elegant Plums Level 1, Exhibit Level, Exhibit Hall D 5:00 p.m.-6:30 p.m. MBA Advocacy Reception (Current “active” MAA Members only, sign-up at the door) Level 1, Exhibit Level, Exhibit Hall D Foyer 5:30 p.m.-6:30 p.m. MBA Opens Doors Foundation Reception (By Invitation Only) Four Seasons Hotel; Grand Ballroom A; 1111 14th Street, Denver
Tuesday, October 24 7:30 a.m.-8:30 a.m. FHA Subcommittee Meeting (Open to MBA Members/Closed to Media) Level 2, Street Level, Room 107 7:30 a.m.-8:30 a.m. mPact Networking Breakfast (Open to members 35-yearsold and younger and mPact members) Level 2, Street Level, Room 112 Start your day with a hearty breakfast and a side of networking before an action-packed day of informative sessions on important issues featuring MBA staff, industry influencers and key political figures. 7:30 a.m.-4:00 p.m. Registration Level 2, Street Level, Lobby D 8:00 a.m.-8:30 a.m. Continental Breakfast Level 3, Ballroom Level, Mile High Ballroom Foyer 8:00 a.m.-5:00 p.m. Press Room (Credentialed Media Only) Level 2, Street Level, Room 505
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With the mortgage marketplace changing and workforce aging, companies know they need to make internal change to gain a competitive edge. Learn practical and strategic solutions to building, engaging and maintaining a viable and diverse workforce, including loan officers, underwriters, secondary market managers and servicing staff. Speakers include: Patricia Arvielo, President of New American Funding; Keith Polaski, Principal and COO of Radius Financial Group Inc.; and Dale Vermillion, President and Chief Executive Officer of Vermillion Consulting.
Since the CFPB was created, there has been considerable controversy about its operations including notably its use of “regulation through enforcement.” As the CFPB matures as an agency, and with a new Administration, change at the Bureau can be expected. In this session, an expert panel considers how in its next phase “CFPB 2.0” could be improved to better facilitate compliance and protect consumers.
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3:00 p.m.-3:30 p.m. Refreshment Break in The Hub Level 1, Exhibit Level, Exhibit Hall D
3:30 p.m.-4:30 p.m. One Voice: Policy Priorities “CFPB 2.0: Advancing Consumer Protection” Level 3, Ballroom Level, Four Seasons Ballroom 2
8:30 a.m.-9:45 a.m. General Session: The Goalposts of Leadership Are Shifting: Are You? Level 3, Ballroom Level, Mile High Ballroom
10:30 a.m.-12:30 p.m. mPact Introduction to Mortgage Banking (Open to members 35-years-old and younger and mPact Members) Level 2, Street Level, Room 112
Hear Peyton Manning share the real world leadership advice he picked up on the football field as a two time Super Bowl Champion and the NFL’s only five-time Most Valuable Player. Learn how you can translate that to your own business as he shares his stories about adapting to life’s ever changing circumstances. Peyton combines his trademark humor and real life examples to challenge and inspire you to reach higher, excel beyond your goals, and be more of a leader on your “field.”
If you’re new to this industry or would like to learn more about other lines of work within mortgage banking, please join this overview of the basic business model of residential mortgage lending and the three main phases of the loan life cycle: Loan Production, Secondary Marketing and Loan Servicing.
9:30 a.m.-4:00 p.m. Coffee Spot in The Hub Level 1, Exhibit Level, Exhibit Hall D
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9:30 a.m.-3:00 p.m. Side Stage in The Hub, Featuring Live Demos and Quick Tips Level 1, Exhibit Level, Exhibit Hall D
11:00 a.m.-3:00 p.m. COMBOG Meeting (Committee Members Only) Hyatt Regency Denver, Level 3, Centennial Ballroom F 11:15 a.m.-12:30 p.m. General Session: Economic and Mortgage Market Outlook for 2018 Level 3, Ballroom Level, Mile High Ballroom
10:00 a.m.-5:00 p.m. Commercial/Multifamily Future Leaders: Final Presentations (Open to MBA Members/Closed to Media) Hyatt Regency Denver, Level 3, Mineral Hall A
Hear MBA’s analysis of current economic, housing market and mortgage market trends, as well as lender profitability and other business metrics. Don’t miss our latest forecast on the various forces impacting the market and what they might mean as you develop your business strategy for 2018 and beyond. Speakers for this General Session include: Lynn M. Fisher, Ph.D., Vice President of Research and Economics for the Mortgage Bankers Association; Michael Fratantoni, Ph.D., Chief Economist and Senior Vice President of Research and Technology for the Mortgage Bankers Association; and Marina Walsh, Vice President of Industry Analysis for the Mortgage Bankers Association.
10:00 a.m.-10:30 a.m. Refreshment Break in The Hub Level 1, Exhibit Level, Exhibit Hall D
12:30 p.m.-12:40 p.m. Live Demo: Optimal Blue Social Media Oversight Level 1, Exhibit Level, Exhibit Halls C & D
10:15 a.m.-11:15 a.m. General Session: Mapping the Course Toward Housing Finance Reform Level 3, Ballroom Level, Mile High Ballroom
12:30 p.m.-1:30 p.m. Lunch in The Hub Level 1, Exhibit Level, Exhibit Hall D
9:30 a.m.-4:00 p.m. The Hub is Open Level 1, Exhibit Level, Exhibit Hall D
Policy analysts provide the latest insight on developments in housing finance reform. Attend to learn the probability of what lies ahead on the road to reform and how it may impact your business. Learn their views on the next steps toward MBA’s proposal and how changes in Congress or FHFA could impact its three goals: to provide responsible, sustainable access to credit for prospective homeowners, to provide liquidity for the development and preservation of affordable rental housing and to improve liquidity for underserved segments of the market. Speakers include: Isaac Boltansky, Director of Policy Research for Compass Point Research & Trading; Rodrigo Lopez, CMB, 2017 MBA Chairman and Executive Chairman of NorthMarq Capital Finance; Jaret Seiberg, Managing Director of Financial Services and Housing Policy Analyst for Cowen Washington Research Group; and Michael Stegman, Senior Fellow, Housing Finance Program, Center for Financial Markets at the Milken Institute.
12:45 p.m.-12:55 p.m. Live Demo: Accounting for Mortgage Bankers (AMB), From Advantage Systems Inc. Level 1, Exhibit Level, Exhibit Halls C & D Accounting for Mortgage Bankers (AMB) is a full-featured accounting system designed specifically for Mortgage Banking. AMB provides integrated web based reporting, dashboard, commission calculation, imaging, workflow and flexible financial analysis. 1:00 p.m.-1:30 p.m. Quick Tip: MISMO-It’s Not Just for Data Anymore! Level 1, Exhibit Level, Exhibit Halls C & D MISMO is actively working to build on the foundation of today’s standards and pave the way for new types of standards, tools, and
products to support tomorrow’s mortgage industry. Learn about several new initiatives including closing instructions, electronic and online notarization, the new business glossary, the business reference model and much, much more.
1:30 p.m.-2:30 p.m. One Voice: Policy Priorities “Examination and Enforcement: What’s Old is New Again” Level 3, Ballroom Level, Four Seasons Ballroom 1
1:00 p.m.-2:00 p.m. Women’s Networking Event: Maximize Your Success (Doors Open at 12:30 p.m.) Level 3, Ballroom Level, Four Seasons Ballroom 4
Examination and enforcement of mortgage lending activity by state regulators is increasing significantly, perhaps due to a predicted reduction in federal enforcement. In this session, experts from the government and the industry consider the recent supervisory and enforcement efforts to determine what companies might expect going forward.
Through riveting storytelling, Carla Harris, Vice Chairman of Wealth Management, Managing Director and Senior Client Advisor, Morgan Stanley, delivers a personal reflection of some of the most important intellectual and experiential lessons she has learned in her storied career on Wall Street and throughout her life. Known as “Carla’s pearls” of wisdom, she offers candid and actionable advice about identifying and owning your own power, being your authentic self, being unapologetic about your accomplishments and taking risks.
2:30 p.m.-2:45 p.m. Live Demo: Trinity Real Estate Solutions-Residential Construction Lending 2:30 p.m.-3:00 p.m. Refreshment Break in The Hub Level 1, Exhibit Level, Exhibit Hall D 33
1:30 p.m.-2:30 p.m. One Vision: Market Opportunities “Managing Your Origination Product Mix” Level 2, Street Level, Room 111 With overall volume down, lenders are looking to add to their product menu to increase business. Attend this session for the latest on a variety of products you may want to add to your offering, including non-QM, non-agency, construction lending, condo lending, and home equity lending. Speakers include: Tom Hutchens, Senior Vice President of Sales and Marketing for Angel Oak Mortgage Solutions; Beth Mlynarczyk, Senior Vice President of Wells Fargo Home Mortgage; James Morin, Senior Vice President of Retail Lending for Norcom Mortgage; Matthew Nichols, Chief Executive Officer of Deephaven Mortgage LLC; and Benjamin Wu, Executive Director of LoanScorecard.
2:45 p.m.-3:00 PM Live Demo: ISGN Corporation-Total Loan Servicing Tech Level 1, Exhibit Level, Exhibit Halls C & D 3:00 p.m.-4:00 p.m. Community Bank and Credit Union Network Meeting (Community Bank and Credit Union Members Only) Level 2, Street Level, Room 108 3:00 p.m.-4:00 p.m. One Resource: Business Solutions “Trends in Property Valuation” Level 3, Ballroom Level, Four Seasons Ballroom 1 Even with the addition of new technology and date, the property appraiser continues to fulfill a critical step in the mortgage process to ensure accurate valuation. However, appraisers face extinction as they retire without a younger generation entering the industry to replace them. This session will look at how rising home prices impact affordability and inventory, what the latest trends are in valuations, and how to leverage data and analytics to help streamline valuations. 3:00 p.m.-4:00 p.m. One Vision: Market Opportunities “The Digital Mortgage Revolution” Level 3, Ballroom Level, Four Seasons Ballroom 2 The thought of transforming your organization to support an online experience may at first glance appear overwhelming. But going digital is not an all or nothing experience. Get practical advice on how to take advantage of the unique strengths of your organization and offer digital services to improve the customer experience,
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Mortgage lending has experienced a very large increase in operational expenses in the past decade, largely due to labor costs in the workflow and compliance efforts after loan application to and through funding. The cost trajectory is unsustainable, and makes mortgage loans more costly for borrowers. Speakers include: Nathan J. Burch, CMB, Chief Executive Officer and Founder for Vellum Mortgage; Rose Marie David, Senior Executive Vice President, Mortgage Lending Director for HomeStreet Bank; James M. Deitch, CMB, CPA, Chief Executive Officer and Co-Founder of Teraverde Financial; Richard Lang, Vice President, Loan Advisor Suite, Strategy and Integration Single Family Division at Freddie Mac; Bill Packer, Chief Information Officer for American Financial Resources; and Susan T. Stewart, Chief Executive Officer of SWBC Mortgage Corporation.
2:30 p.m.-3:00 p.m. The Meeting Spot: Q&A With David H. Stevens, CMB Level 1, Exhibit Level, Exhibit Hall D NationalMortgageProfessional.com
1:30 p.m.-2:30 p.m. One Resource: Business Solutions “Technology Innovation to Improve Workflow, Improve Data Integrity and Reduce Costs Level 3, Ballroom Level, Four Seasons Ballroom 2
optimize data use for better business and streamline your operations. Speakers include: Nikolaos Athanasiou, Chief Operating Officer of Guaranteed Rate Inc.; Nima Ghamsari, Chief Executive Officer and Co-Founder of Blend; Cindy Keith, Director of Product Development, DU Validation Service for Fannie Mae; Mark McElroy, President and Chief Executive Officer of Pavaso Inc.; and Faith Schwartz, Principal, Housing Finance System Strategies LLC and Senior Advisor for Accenture. 3:00 p.m.-4:00 p.m. One Voice: Policy Priorities “Tax Reform: What You Need to Know” Level 2, Street Level, Room 111
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Tax reform is currently one of the top legislative priorities for the new administration and Congress. While specific details are still in formation, learn how politics and policies in Washington may influence tax reform and how reform may impact your business as lenders, including your relationships with clients and customers. Speakers include: Todd Metcalf, Principal, WNTS Tax Policy Services at PwC; Fran Mordi, Associate Vice President, Financial Management, Tax and Accounting Policy for the Mortgage Bankers Association; Deborah Ames Naylor, AMP, Executive Vice President of Mortgage Banking for Pentagon Federal Credit Union; and Peter R. Norden, Chief Executive Officer of HomeBridge Financial Services Inc. 6:00 p.m.-7:30 p.m. Concert MBA: Featuring John Legend (Doors Open at 5:30 PM) Level 3, Ballroom Level, Mile High Ballroom
Wednesday, October 25 8:00 a.m.-10:30 a.m. Press Room (Credentialed Media Only) Level 2, Street Level, Room 505
8:30 a.m.-9:00 a.m. Continental Breakfast Level 3, Ballroom Level, Four Seasons Ballroom Foyer 9:00 a.m.-10:30 a.m. Regulatory Super Session (Closed to Media) Level 3, Ballroom Level, Four Seasons Ballroom 4 While it may seem that Washington is in flux, there is in fact a lot going on with regulation and litigation that will impact your business. Come armed with your questions for this interactive session to learn what the current issues are, how experts recommend you address them now, and what MBA is doing on your behalf for future change. Topics will include Home Mortgage Disclosure Act implementation, new regulatory efforts for borrowers with limited English proficiency (LEP), ongoing litigation in RESPA and Servicing, and anything else the audience asks. Casual attire welcome. 9:00 a.m.-10:30 a.m. Technology Super Session: Fintech Solutions to Digital Mortgage Level 3, Ballroom Level, Four Seasons Ballroom 1 Fintech solutions exist to solve problems and create new business opportunities for lenders. Industry experts Garth Graham Senior Partner with STRATMOR Group and Craig Rebmann, Senior Vice President, Product Executive, Integrations Origination Solutions for Black Knight Financial Services, will guide attendees through a dynamic and interactive session featuring case studies on the disruptive promise of fintech: The intersection of technology and mortgage banking, Learn from providers, experts and peers about solutions to problems across the mortgage lifecycle, from lead management to post-closing. Take part by offering your own perspective, asking questions and participating in the interactive polling. With 90 minutes of nonstop action, you’ll leave inspired by the opportunities to digitally transform your operation. Casual attire welcome.
8:00 a.m.-10:30 a.m. Registration Level 2, Street Level, Lobby D
For more information, visit MBA.org.
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Guidance to help you transform your business.
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n National Mortgage Professional Magazine n OCTOBER 2017
The right partner can mean the difference between floating along and setting sail toward bigger opportunities. For 40 years, Radian has provided services and solutions that span the mortgage spectrum, as well as tools and resources to transform the way you think about your MI partnership. Let us help you finish the year stronger than ever and navigate your business toward future success. Learn more today at www.radian.biz/NMP.
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Think Bigger.
The Extinction of Telemarketing
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ith the end of the year and the holidays quickly approaching, you might be noticing a decrease in lead generation. It’s not uncommon for clients and vendors alike to encounter challenges with their lead generation goals this time of year. The lead results you get is not worth your investment. So, you’re spending a large portion of your budget on obtaining leads, but you’re not seeing any return. Does this mean that your investment isn’t worthwhile, or is the problem how you are obtaining those leads? In a fascinating article on Entrepreneur Magazine's Web site titled, “Ten Businesses Facing Extinction in 10 Years," talks about various industries that are going through a major change and are at-risk of being obsolete in 10 years. One of the types of businesses facing extinction is telemarketing. This explains one of the many reasons why it’s getting more difficult to produce live transfers leads. They were right to identify telemarketing as a business that is facing extinction, but are being overly optimistic as to how long the industry will continue to be even moderately relevant. Ask yourself this question: How many people do you think are still answering their phones and responding positively to telemarketing offers? The number is small. Vanishingly small. Why? Because people are increasingly using e-mail, instant messaging and other online channels for communication. Is it time to move on and reduce your spending on interruption marketing? The answer to that question is “NO.” What a lot of mortgage lenders are doing is combining ALL of their marketing efforts: A marketing platform targeting the same audience in several ways within the same marketing campaign. By combining marketing methods like direct mail, e-mail, social media, telemarketing, and re-marketing into one campaign, you get the compound benefit of each working together. Arizona Mortgage Lender Product: Mail campaign with voicemail messaging Volume: Five thousand pieces of VA leads. Results: More than 80 calls yielding a 1.67 percent response rate, 72 leads generating with qualifying data and $2.1M in potentially closed loans! Highlights of the campaign that they feel would appeal to other mortgage lenders: “Highlights of the campaign were the automated voicemails,” said Hayes. “My staff was completely surprised and caught off guard by how successful this approached worked, and how well it was received by the borrowers. Honestly, this was part of the campaign that I thought of as somewhat of a gimmick, and I am now a believer as I have seen how this works firsthand.” Hayes continued, “I think this approach would work well for any mortgage professional who has experience in working leads, or has strong support or sales training that will help them capitalize on these call-ins.”
TagQuest Inc. is a full-service marketing firm specializing in marketing for the mortgage industry. Call (888) 717-8980 or visit www.tagquest.com.
IMAGINE • INNOVATE • SUCCEED SPONSORED EDITORIAL
nmp news flash
continued from page 26
borrowers are confused over interest rates, according to the inaugural Mortgages in America Survey conducted by the Aurora, Colo.based mortgage banker American Financing. According to the study, 53 percent of respondents—including the majority of Millennials, Generation Xers, and Baby Boomers—prefer a 10 percent downpayment rather than a 15 percent, 20 percent or 30 percent downpayment. Fifty-six percent of respondents who are looking to purchase a home in the next five years claimed that they are following mortgage interest rates and their fluctuations over time. However, 23 percent stated that Americans do not understand how interest rates work, with 26 percent of Millennials professing ignorance on the subject. “For Millennial renters who are already concerned about college debt and the rising cost of living, lacking a fundamental understanding of mortgages can be a significant barrier to purchasing a first home,” said Carrie Niess, Business Analyst at American Financing. “That’s why it’s crucial for younger generations to educate themselves and learn about their options.” Civic Financial Services Lends Hand to Hurricane Harvey Recovery
Following the aftermath of Hurricane Harvey, Civic Financial Services held a company-wide relief effort to lend support and supplies to evacuees. CIVIC private money lending, headquartered in Redondo Beach, Calif., closed all operations on Sept. 14 to join together and give back to the Houston community. CIVIC’s 100-plus employees joined together for the assembly of 1,000 Dignity Backpacks for Hurricane Harvey evacuees. Each backpack includes essential supplies including towels, socks, toiletry items and snacks– along with a note of support and encouragement. The Dignity Backpacks have been delivered to evacuees at the BakerRipley Emergency Shelter at NRG Center in Houston, which is currently serving Texans from more than 100 cities in 16 languages. “Each backpack symbolizes the strength to carry on,” said William J. Tessar, CIVIC’s President and Chief Executive Officer. “Even though the
sun is shining and the cameras are gone, people are still displaced and it truly is our CIVIC Duty to step up and give back in this time of need.” BakerRipley is a non-profit organization providing a wide range of community-based programs in Houston and the Texas Gulf Coast. After the flood waters from Harvey recede, they are responsible for assistance with long-term recovery. Builder Confidence Takes a Hit
Builder confidence in the market for newly-built single-family homes dropped three points to a level of 64 in September from a downwardly revised August reading of 67, according to the latest data on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). All three HMI components declined in the latest report: The component gauging current sales conditions fell four points to 70 and the index charting sales expectations in the next six months also dipped by four points to 74. The component measuring buyer traffic saw a single point drop to 47. Two of the regional HMI scores were up—the West increased three points to 77 and the Northeast rose one point to 49—while the South dropped by one point to 66 and the Midwest fell three points to 63. “The recent hurricanes have intensified our members’ concerns about the availability of labor and the cost of building materials,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas. “Once the rebuilding process is underway, I expect builder confidence will return to the high levels we saw this spring.” Your turn National Mortgage Professional Magazine invites you to submit any information on regulatory changes, legislative updates, human interest stories or any other newsworthy items pertaining to the mortgage industry to the attention of: NMP News Flash column Phone #: (516) 409-5555 E-mail: Newsroom@MortgageNewsNetwork.com
Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.
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Beware of Phishing E-mails! By Andy W. Harris, CRMS
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38 ver the last several months, I have seen a significant increase in the number of phishing e-mails. More importantly, the concern is with how they are specifically targeting our industry. Hackers and others trying to install malware and other viruses into your computer (or accessing your private data) are getting smarter. Instead of getting the obvious phishing e-mail and deleting it, they send from legitimate escrow contact e-mails with specific instructions on reviewing and approving a Closing Disclosure (CD), including a borrowers name and the full sender signature contact, etc. Many are sent via PDF which, if opened, carry the link which you certainly do NOT want to click. Any hyperlink, zip file, image to click inside of a PDF or anywhere that seems odd from an e-mail is something you want to delete entirely and never click. These scammers want to either induce panic, or cause someone to work quickly and click through, by appearing to be a legitimate source which is a redirect. If you
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don’t recognize the sender, if it seems a little off or from a party outside of your area code, do not click and report to the Federal Trade Commission (FTC) or other Anti-Phishing Working Groups you can locate to try and put an end to this. Our industry is faced with “Spear Phishing” which is defined as follows: Phishing attacks directed at specific individuals, roles, or organizations are referred to as “spear phishing.” Since these attacks are so pointed, attackers may go to great lengths to gather specific personal or institutional information in the hope of making the attack more believable and increasing the likelihood of its success. The best defense against spear phishing is to carefully, securely discard information (i.e., using a cross-cut shredder) that could be used in such an attack. Further, be aware of data that may be relatively easily obtainable (e.g., your title at work, your favorite places, or where you bank), and think before acting on seemingly random requests via e-mail or phone. The biggest concern also is
with how these attacks are related to mirroring or mimicking closing e-mails. Many e-mails are sent between closers, originators, processors and escrow when balancing final Closing Disclosure (CD). After balanced, wiring instructions were a practice to be sent to the borrower at times by PDF which is a practice that should NOT be followed providing the ability to amend this data and lead a borrower to wire to a fraudulent account. All wiring instructions should be done by phone (verified) and provided by encrypted e-mail solely. Again, be on alert that these scammers are getting better and they are directly going after mortgage and real estate transactions (specifically around closing). Make sure to warn your clients also in the process
if we see this issue expand outside of the industry and into the consumers (buyer/seller) inbox. When you see e-mail addresses change on a reply or a redirect URL, odd attachment or something not right, pay attention. Don’t trust your eyes right away. They will even pose as someone you know, but don’t reply or engage and instead report and share with all staff and clients. Are you an originator? Send your stories! To have topics considered in future editions, please e-mail me with “OrigiNation” in the Subject Line at AHarris@VantageMortgageGroup. com. These can be confidential or your name and company can be referenced if you wish. You can also join the Facebook Group by searching for “OrigiNation.”
Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and past president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 4960431, e-mail AHarris@VantageMortgageGroup.com or visit VantageMortgageGroup.com.
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heard street on the
Our Heard on the Street column is a chronicle of events, changes and passages in the lives of the people and companies shaping the mortgage industry.
New American Honored in Orange County, Expands Southwest Presence
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For the third consecutive year, The Orange County Business Journal has ranked New American Funding as one of the fastest-growing private companies in Orange County. The Southern Californiabased mortgage lender landed on the 11th annual list at number six amongst large companies, which ranks businesses according to their annual revenue growth over a twoyear period from June 2015 to June 2017. Earlier this year, Inc. 5000 also ranked New American Funding on its list of fastest-growing private companies, an honor the lender has received five times. “It’s rewarding when your company is recognized once for its tremendous growth, but to be acknowledged three years in a row is no small feat and it absolutely speaks to the dedication our team puts in on a daily basis,” said New American Funding Chief Operating Officer Christy Bunce. “We believe in staying progressive and ahead of the curve so this challenges us to elevate the bar and continue forging ahead.” New American has also announced the opening of a new branch in Kennesaw, Ga. “We have an awesome portfolio of niche products that provides our homebuyers with options,” said Branch Manager Kim Arrington, who will oversee the new Kennesaw branch. “Our skilled staff handles everything in house, giving our customers the reassurance that they have a local team working on their side. We’re committed to making the loan process a remarkable experience they won’t
find anywhere else.” Arrington is a 15-year veteran of the mortgage industry and has been with New American Funding since 2016 as a top-performing Loan Originator. Earlier this year, she was named to the company’s President’s Council, an elite class of high-achieving originators nationwide. She’s also an industry expert, who has been featured on Atlanta’s Best New Homes TV. Mercury Network Partners With Orion Lending and EAST2WEST Valuation Services
Orion Lending has announced the deployment of Mercury Network to manage all of its appraisal pipelines. The company’s broker partners use Orion’s proprietary STAR portal to manage loans from one convenient location, including the entire appraisal process now powered by Mercury Network, now a part of CoreLogic. “In evaluating all of the platforms with our vendor oversight team, Mercury Network stood out in a number of different categories,” said Jeremy Stewart, President of Orion Lending. “Mercury’s team is technologically progressive and has very high satisfaction ratings. By offering the highest quality appraisal workflow, the platform will help Orion Lending in our mission to assist our network of originators develop their referral business and clientele.” Mercury Network connects Orion Lending to their preferred appraisal management companies (AMCs) for appraisal order fulfillment inside the
STAR portal, with one-stop access for broker partners. Orion’s broker partners have more visibility into order status, and a single location for all appraisal orders regardless of the vendor used. Mercury Network’s platform also gives Orion Lending enhanced reporting for effective vendor oversight and an easier process for placing appraisal orders. “We’re thrilled to welcome Orion Lending,” said Jennifer Miller, President of Mercury Network. “We will support their broker partners with a seamless appraisal process that accelerates closings, provides the easiest access to preferred valuation vendors, and dramatically reduces appraisal-related headaches.” EAST2WEST Valuation Services Inc. and Mercury Network have announced the completion of a technology integration. EAST2WEST joins the other AMCs available to receive orders from the nearly 900 lenders using Mercury Network, now a part of CoreLogic, as their appraisal management software platform. The EAST2WEST integration is fully functional allowing EAST2WEST and their lenders to stay signed into their software of record without the need to visit multiple Web sites. Lenders use Mercury Network as a single dashboard to manage appraisals across all vendors, rather than using individual AMC or appraiser Web sites. The platform connects lenders to more than 350 AMCs and more than 35,000 independent fee appraisers from a single location or even from an LOS integration. By completing a Mercury integration, EAST2WEST is
now exposed to these lenders and has the opportunity to expand their offering. “This integration allows lenders to connect to us much faster than before, which is crucial in today’s market where ‘Every Click Counts.’ Identifying the factors which have caused delays and directly impact the valuation process has been essential,” said Debbie Key, Chief Executive Officer of EAST2WEST. “EAST2WEST is committed to removing any technology barriers to better help lenders. The integration with Mercury provides more opportunity for EAST2WEST to deliver their concierge-level service and streamline order management for both clients and appraisers. The integration provides EAST2WEST another way to live up to our company mantra of, ‘Going the Distance for You.’” Equity Prime Forms Partnership With Social Survey
Equity Prime Mortgage has announced a partnership with Social Survey. Social Survey is passionate about enhancing and promoting a favorable reputation for their client’s brand, providing a system that meets compliance requirements, insuring prospects can quickly identify a client’s best professionals amidst the noise of competitors in all social media channels. “Company reputation is an important aspect with any business,” said Equity Prime Mortgage President Eddy Perez, CMB. “We at Equity Prime Mortgage want to showcase our sales team’s efforts in the field. Their hard work is a testament to how we run our company. We are
confident this partnership will allow our community to experience transparency in how we operate.” MLB Residential Lending Rebrands MLB Residential Lending LLC has announced the launch of a new corporate logo and brand identity. The goal of the new design is to better match MLB’s look with their core values and commitment to the community of putting families and their dream of homeownership first. The logo now incorporates a silhouette of a family walking toward a home in the horizon, with a deeper, brighter blue color and new accents of orange. The new brand identity also includes a refreshed Web site, colors and font. “Our new logo better communicates what MLB has always stood for,” said MLB Chief Executive Officer Samuel Lamparello. “We’ve kept the visual element of a roof and refreshed the colors, font and added additional visuals to reflect or commitment to help our community achieve homeownership that secures a family’s financial future.”
Matic Co-Founder and Chief Operating Officer Ben Madick. “We make the policy information simple to understand, and the entire process takes just minutes, alleviating unnecessary borrower stress and enabling loan officers to close loans faster.” Draper and Kramer Mortgage Moves Into New HQ
Draper and Kramer Mortgage has
opened its new Downers Grove, Ill. Headquarters, as more than 125 employees, area business professionals and government officials were in attendance for the event and ribbon cutting ceremony. The new 23,000-square-foot space is larger than the firm’s previous headquarters in nearby Lombard, Ill., accommodating additional core staff to support the growing lender’s nationwide business. “This is a small move for us in terms of distance but an important move in terms of impact,” said Paul Lueken, Chief Executive Officer of Draper and Kramer Mortgage Corp. “We needed a larger facility for our
growing support staff and wanted a more open, collaborative work environment. We now have all of that in a beautiful space with stateof-the-art equipment. It’s a happier, more productive place to come into every day and a great investment in the employees who support the company and our customers across the country.” The larger headquarters was necessitated by the mid-sized lender’s continued growth over recent years. Draper and Kramer Mortgage Corp. increased its annual loan production from continued on page 82
41 Matic Insurance Services Partners With Roostify
nominated
We are seeking nominations from our readers for National Mortgage Professional Magazine's "40 Under 40" feature, slated to appear in our December 2017 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 NMPMag.com/nominate40under40.
n National Mortgage Professional Magazine n OCTOBER 2017
?
are you
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Matic Insurance Services has forged a partnership with automated lending technology provider Roostify. “Homeowner’s insurance has long been a missing element in mortgage innovation,” said Matic Co-Founder and Chief Executive Officer Aaron Schiff. “By relocating the insurance purchase decision to where it belongs—within the mortgage transaction—Matic is bridging the gap between mortgage tech and insurtech and meaningfully improving the experience of borrowers and lenders alike.” Roostify’s digital mortgage platforms accelerate the mortgage process by eliminating unnecessary paperwork and making it easy for borrowers to apply for a loan, submit the required documentation and communicate with their loan officer and other loan participants from any Web-enabled device. “Our partnership with Roostify makes it as easy as the tap of a button for borrowers to purchase homeowner’s insurance during the loan application process,” said
“Servic What Y kay, I said it, or to be more correct, I wrote it. You can see it and make believe, hold it over me whenever you want. But I still contend that “service” is something that most salespeople, including most of you, talk about, worry about and try desperately to convince your prospective referral sources that you will deliver in truckloads. What is particularly amazing is that you still have bosses that pound it into your heads as the main reason prospective referral sources should be doing business with you. And you all do it … over and over and over! You meet a real estate agent and with no backup, nothing to point at, and nothing of substance that allows you to say it, but you still do it. Some companies have post-closing questionnaires that ask people how they did. Statistics are drawn and printed and that gives them something to show prospective referral sources. I’m sure it helps sway some people to refer business. But screw up one deal and you’ll have a war on your hands. Others keep records of when deals are registered, using various methods to determine when the deal started and closed. That’s a measure of service also. When I had my own business, I used to ask real estate agents whom I was doing business if they would give me letters of recommendation. That worked once in a while. I have a belief that there are three things that salespeople need to do to be successful:
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The
Mortgage
Godfather
1. Bring value by giving away information that helps other people do better; 2. Ask people to do business with you; and 3. Be persistent—beyond all
vice” … Is That Really You Want to Sell?
BY RALPH LOVUOLO SR.
things you could do, be persistent.
they’re not in the office when you get there, you’ll send them a text that says, “I’m in your office as I promised, and I have with me an idea that will help you do more business. I’ll be back later to discuss it, and if you’re not here, I’ll be back next week with another idea. All I want to do is help.” Everybody talks about “service, but do you want to be like everybody else? How many mechanics do you know like Dave? I never met one. It took years to establish his reputation with me. But he’s
the best I’ve ever met. You can do all the things that I mentioned above about selling service or you can make and keep a promise to establish trust. Which is quicker and more effective? Ideas have more power. Ideas have more substance. Ideas make you different than the others who do what you do. You want my ideas, I’ve got them all written out and the instructions that you can have that go with them. If you send an e-mail to Ralph@MortgageGodfather.com, I’ll send them to you.
Ralph LoVuolo Sr. has more than 50 years in the mortgage Industry, with the last 30 as a coach. He is Past President and Founder of the New York Association of Mortgage Brokers, and long-time member of NAMB— The Association of Mortgage Professionals. He can be reached by phone at (917) 576-1230 or e-mail Ralph@MortgageGodfather.com. 43
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November 13-15, 2017 The Palace Hotel • San Francisco, CA Taake advantage of a special non-member discount with Promo Code NRMLANMP for $75 off the current registration rate.
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n National Mortgage Professional Magazine n OCTOBER 2017
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I want to concentrate on these concepts, but I will get back to concept of “service.” Everything I read tells me that the most powerful thing in the universe that occurs between people is “ideas.” Things don’t happen until someone has an idea that they want something to happen. Companies don’t start until someone has an idea and begins to formulate a plan around that idea. It can be a physical product or a service. It can be a game or an argument. But ideas are what make our world change. Without ideas, we’d still be sitting in caves on rocks freezing our butts off when it got cold. Then, someone figured out how to get fire, a wheel, a rocket, a pen rather than a chisel … ideas move everything. My wife’s car recently died in a parking lot near where we live. She was alone and without a clue as to what to do. A stranger offered to jump her battery with cables from his car. It didn’t work. She called me and I had to go there, take her home, check with my insurance company and have a tow truck meet me to pick up the car and take it to my home. When the tow truck driver came, he said he’d try to start it with this very powerful battery pack he had. I couldn’t object so I said “sure.” Meanwhile, I called my mechanic, Dave, and asked if I could drop the car off on Monday. He said sure. Then, five minutes later he called me back and said because of the hurricane here in South Florida, he had no power and was staying with his sister who lived close to us. He asked if I would mind if he stopped at my house and take a look at the car. That seemed foolish to me because I knew he couldn’t bring any tools, but I wasn’t going to object, so I told him to come any time he wanted. I heard the front screen door open and close about 30 minutes later. Dave was standing at the bottom of my steps. “It’s the
battery, it’s dead,” he said. “How do you know,” I replied. “I’m sure. Listen, tomorrow I have to go back to my shop and do some paperwork. I’ll pick up a new battery and bring it back and put it in. It’ll be fine,” Dave said. “Okay … you sure it’s okay? About what time will you be back, so I can help,” I asked. “Somewhere around 4:00 p.m.,” Dave answered. “Ok, I’ll be here,” I shot back. Sunday at about 1:30 p.m., I was walking out of the gym and my wife calls me and says, “Dave was just here. He replaced the battery and the car is fine.” “No, that’s not possible, he’s done it already,” I asked. “Yep, he’s done,” she replied. I drove home, started the car and it’s been working fine ever since. Now to me, that’s service. How do you prove it? I’ve been taking my cars to him for more than 10 years, ever since I moved to Florida. He was recommended by an old friend I met on the plane when I flew down. My friend said he was the most honest man he’d ever met. He was right. I’ve been recommending Dave to people for 10 years now, and I won’t let anyone else touch my cars. Can you prove that service? I don’t think you can prove it to someone whom you’ve never done business with before. But here is what you can do and it will work every time. Make a promise and keep it. Tell your real estate agents that you’ll help them think about ideas, the most powerful thing that can occur between people. Tell them you’ll do it every time you see them. Tell them you’ll come to their office every week for four weeks in a row, and each time, you’ll bring them a new idea that will help them grow their business. Tell them that after four weeks, you can be trusted because that’s the reason they’ll do business with you in the first place. Trust takes making and keeping your word, your promise. And if
The Long & Short The Business of Short Sales
Why Loan Originators Should Use HUD-Approved Housing Counselors BY PAM MARRON he foreclosure code continues to show up on past mortgage credit for those who’ve had a short sale, modification, deed-in-lieu and even consumers who had excessive mortgage lates, but where none of the latter events exist. A growing number of these consumers have exceeded the required wait timeframes and are now ready to purchase a home again. Because of a continued problem where foreclosure code is applied to past mortgage credit even when a foreclosure did not happen, a “Caution” denial for a new conventional mortgage through Fannie Mae and Freddie Mac automated systems results. Further, the foreclosure code requires a seven-year wait to obtain a new conventional mortgage, rather than the fouryear wait after a short sale or deed-in-lieu and the two-year wait after a modification. Fannie Mae and Freddie Mac have the capability to approve a manual underwrite, but because there are no reps and warranties, most lenders don’t provide manual underwriting on conventional loans. An aggressive effort to assist affected clients ahead of a new mortgage purchase is underway thanks to the help of the National Foundation for Credit Counseling (NFCC) and member HUDapproved housing counseling agency, Navicore Solutions. This pre-purchase service runs a tri-merged credit report and a completed 1003 residential
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mortgage application through the Fannie Mae Desktop automated underwriting system to check if the foreclosure credit shows up on past mortgage credit. If a foreclosure shows up, careful attention is paid to the tri-merged credit report and to the individually broken out credit repositories of Experian, Equifax and TransUnion, where the problem can be spotted. This breakout of the three bureaus is not visible on the face of a trimerged credit report and not all credit reporting agencies provide the capability to visually see this. Navicore uses a tri-merged credit report where this breakout can be seen to target the problem. A second problem that originates from the foreclosure code is a “Date Reported” that shows up more recent than the derogatory mortgage credit closing date. If the derogatory mortgage credit has ever been investigated or disputed, the “Date Reported” is updated and can cause the Fannie Mae and Freddie Mac automated systems to believe the event occurred within the required wait timeframe. This can result in an automated denial and can only be fixed with proof of the derogatory credit event date. The “Date Reported” cannot be changed on a credit report. The purpose of this effort is to see if the foreclosure code shows up and get it fixed wherever possible to prepare the consumer for a new conventional mortgage. There is a fee for this service. Often, lenders attempt to assist these clients themselves.
While a lender can pull a trimerged credit, fill out an application and run the loan through the Fannie Mae automated system, most lenders don’t run potentially affected consumers through automated systems upfront. There is no urgency if you cannot see the problem with past derogatory mortgage credit and the consumer has passed the required wait timeframe. The foreclosure code is most often found mid-contract, when time needed to fix the problem is short due to contract deadlines. Affected consumers can check into this service themselves or referrals from lenders, loan originators, credit reporting agencies and real estate agents to Navicore Solutions can be made by calling (866) 702-4557 or e-mail Housing@NavicoreSolutions.org. Loan originators, you can retain these clients and even build a niche market to assist
them by offering a credit of the cost paid for HUD housing counselor services to correct the foreclosure code issue towards new mortgage closing costs when the client comes back to you for a new loan. Eight million consumers who are or will soon be eligible to come back into the housing market may have the foreclosure code issue, even though they worked with their lenders to ensure this was not the case. They have passed their required wait time. If you’re not sure how to correct foreclosure credit when a foreclosure never occurred, let HUD-approved housing counselors work one-onone with your client to get this foreclosure issue corrected and cultivate housing counselors as a resource to assist potential homebuyers with credit and home purchase help. For more information, visit ForeclosureCreditFix.com. Stay tuned …
Pam Marron (NMLS#: 246438) is Senior Loan Originator with Innovative Mortgage Services Inc. (NMLS#: 250769) in Tampa Bay, Fla. She may be reached by phone at (727) 375-8986, e-mail PMarron@InnovativeMortgage.onmicrosoft.com or visit HousingCrisisStories.com, CloseWithPam.com or 8Problems.com.
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What Do You Do for a Living? s I travel throughout the country and conduct live presentations, one of the questions I always ask my loan officer audiences, is: “What do you do for a living?” The most common responses I will receive are “Loan officer, “Mortgage professional,” “Financing expert”, “MLO,” and “I make housing dreams come true.” Believe it or not, these responses are in line with how most loan officers perceive their profession. However, it is this belief about what they do for a living that often creates limits in their ability to earn a significant income. Being a licensed or registered mortgage loan originator allows you to engage with consumers in
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discussion regarding mortgage programs, loan rates and a consumer’s ability to qualify for a home loan. The reality of the situation is that unless you have a prospect to speak with, you cannot engage in the activities in which you are licensed or registered. Unless you have referral partners, you most likely have a very limited supply of leads. Even if you consistently purchase or generate leads through online sources, you must still have the skills to convert these leads into loans. The point that I am trying to make is that before you can be a loan officer or mortgage professional, you must first be a marketing and sales professional. What I mean by this is that you have to know how to first generate leads of either home purchasers or existing homeowners for potential
refinancing. Unless you have leads to work with, it is not possible for you to engage with anyone regarding programs or rates. In addition, if you are an outside loan officer, you need to have the ability to develop relationships with potential referral partners so you will have a consistent supply of leads coming to you. What all of this means is that you MUST be a “marketer” and “sales professional” before you can ever be a “loan officer” or “mortgage originator.” What is very interesting is that oftentimes when I present this concept, an audience member will say something regarding once that a lead has been generated, then they can start speaking about programs rates and the items that are covered under their licensing. Although this is true, this brings us
to an entirely different challenge that exists and limits loan officer productivity. I have established that the first thing an originator must be is a marketer. Once there is an abundance of leads, then the odds of an originator being highly successful increases. However, unless you are focused on being a great sales professional and influencer, then once again a lot of money will be left on the table. Before I go any further, let me clarify one thing. I have used the terms “sales,” “sales professional,” and “influencer.” Time and time again, I find that many mortgage professionals struggle with the word “sales” or anything that implies selling for that matter. When I referred to any of these words, my perspective is that you are meeting the need of a
going through the qualifying process with a prospect. The challenge with this approach is that there is a very high chance that the prospect will speak with more than one very nice loan officer. Essentially, what is happening here, is that loan officers who engage in attempting to win business through this method end up actually commoditizing their product and service. To better explain what I mean, imagine you are a consumer shopping for a product or service. If you speak with three different companies, and they all treat you relatively the same way, your ability to differentiate them will ultimately be determined by whomever has the best price. How this translates in the mortgage industry is that borrowers will be rate shoppers until you can demonstrate that there is more to getting a mortgage than just qualifying. As
wanting to do business with you. Third, qualifying prospects to see if they are eligible to do business with you. Remember, once you have quoted a rate to a prospect, if you have not yet gotten them to want to do business with you because of who you are and how you work, getting them to recognize your value after already quoted a rate is very difficult. However, if you get a prospect to want to do business with you, although your rate needs to be competitive, if you have addressed emotional needs that they have in relation to obtaining mortgage financing, the mortgage rate you offer becomes a little less important. As human beings, we typically purchase emotionally, and then justify our decision to buy with logic. When you qualify a prospect without emotional connection, then you are bypassing the most critical part of the consumer’s decision-making process.
Ron Vaimberg is President and Head Coach for nmpU, a division of National Mortgage Professional Magazine. Ron is a leading Trainer and Coach to wholesale and retail mortgage professionals and the Creator of ForAEsOnly.com. Ron can be reached by phone at (888) 979-6678 (nmpu), ext. 801 or by e-mail at RonV@NMPMediaCorp.com.
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customer. I do not advocate in any way that you will convince or influence a borrower to accept financing that is not in their best interest. Selling products and services is what makes the world go ‘round. My belief is simply that if someone has the need for mortgage financing and they are going to obtain financing for either a purchase or refinance, then why shouldn’t it be you who assists them in meeting their needs? As long as you are providing a service that is in the customer’s best interests and helps them accomplish the goals they seek, then as a “sales professional,” it is your job to influence them to recognize that you are the best choice to do business with. What happens with many mortgage professionals is that because they have never studied the art of ethical influence, what they do is rely upon being nice and
By Ron Vaimberg
we all know, there are many nuances to getting loans approved and closed smoothly. If you do not engage in conversation that uncovers a prospect’s concerns and emotional needs related to the financing they are looking for, then you are not connecting with them on a different level than your competitors. This will default the prospect to making their decision based upon price, and less upon perceived value. So when you read through what I have written here, and you see that I reference influencing and selling, all I am referring to is assisting a prospect in recognizing that you bring more to the table in meeting their needs than anyone else they may speak with. In the final analysis, to succeed at the highest possible level as a mortgage professional, you want first become a master marketer to generate an abundance of leads. Second, become a master influencer to get more people
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NMP Mortgage Professiona John F. Cady Senior Vice President of Production Mountain West Financial Inc. BY PHIL HALL
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ohn F. Cady is Senior Vice President of Production at Mountain West Financial Inc. National Mortgage Professional Magazine recently sat down with John regarding his career and views on the state of the mortgage industry.
How did you first enter the mortgage profession? Was this your original career choice? It was not my original choice. I think very few people actually plan to go into the mortgage business. I was in retail sales, managing a branch of a Fortune 500 company and going to school to get my finance degree. But I had to travel about 150 miles round trip from my house to the job and then back in Los Angeles traffic, that’s about two-and-a-half to three hours a day. My girlfriend, eventually my wife, was working for a mortgage company and first introduced me to the industry and encouraged me to pursue the opportunity. The cherry on top was the company was located three blocks from my house. How did you come to work with Mountain West Financial? I’ve known the owners for many years … they’re icons in Southern California. I got to know Gary Martell, current Mountain West Financial President, about 12 to 15 years ago. When I left Stearns, we started talking. In addition to his other roles, he was heading up production. He was interested in bringing in a new head of production, but he said to me it was
not the right time. About three or four qualify. It is really a fun place to work. years ago, he was ready to give someone else the reins. Is it safe to say that the internal friendliness is directed to the What makes Mountain West client base? Financial different from its This isn’t the company where no competitors? The biggest difference we have is the one returns your calls. When someone calls here, we are on a culture of our company. It still very much runs as it has been for 27 years. first-name basis with them, whether they’re at another operations center, The ownership is very involved. My branch or one of our broker clients. first two months here were spent learning the culture of the company— not just one day at a department, but How would you categorize today’s housing and mortgage about one to two weeks, depending on the size of the department. When I markets? Inventory is hurting production all say the first two months, I mean the over the place. In some areas, it is first two months were completely focused on learning Mountain West, more difficult than others. As a result, I’ve noticed a lack of loans and I was not able to talk to a single for move-up buyers. There are a recruit during that time. That is why people who come stay lot of renovation loans like the 203k or HomeStyle products that here. Our average underwriter has been here for about 12 years, which is make it easier for borrowers to fix up current houses, instead of unheard of in the industry. This is a good-sized company where everyone moving to other houses. If moveup buyers can be helped, that will knows everyone’s name. When I go help the entire industry. down the hallway, it’s not “Hello, Mr. Cady.” It is “Hi, John!” This is the most friendly company I’ve ever worked for. Do you see the purchase market growing? I’m a big believer that, in the next You don’t hear that kind of remark five years, there will be a big very often from other companies, purchase market. A few months eh? Unless you experience it, it is hard to ago, I was thinking three years, but
as I analyze the market today, I think it will be closer to five. Does the industry have the technology to keep up with a potentially greater purchase market? With technology, the industry is confused. It seems like every time a new product or system hits the market, it’s an improvement, but in general, none of it is state-of-the-art when compared to other industries. There is a lot of talk about the next “big thing,” but everything I’ve seen so far misses the mark in being completely revolutionary. There will be a day that this changes. I don’t know if change will come in the next day, next month or next year. How has Mountain West Financial kept up with the many regulatory changes that occurred in recent years? We had no choice. Once the government put the regulations out, we did it. We have a phenomenal compliance group. When everything came out, we’d go through it. We meet weekly to stay on top of this. We explain to our loan officers and brokers the reason for these regulations and how it will better help them in the long run.
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Even with TRID? With TRID, a lot of people were upset. But, in retrospect, it hasn’t been that bad. It cut down on a lot of arguments with people signing loan documents and not knowing what they were getting themselves into. Our key with implementing TRID was getting out in front of the negativity and offering ongoing training and transparency with regards to how it affects and changes the processes. A lot of mortgage professionals have expressed concern that not enough younger people are coming into the industry. Do you share that concern? We are probably the mortgage company with the oldest loan originator training program. We started ours over five years ago and actually just graduated our 250th student. It’s one of the most thorough trainings I’ve ever seen. We’re now at approximately 250 hours of training and activities, which makes it one of the most in-depth loan originator academies out there. We also offer our program free or charge, and students have no obligation to come work for us. We feel that helps the industry.
“I continuously work to fully understand what branch managers and loan officers want, and to see what we can do better.” How many of your academy graduates wind up working for Mountain West Financial? About 40 percent work for us. We’re only licensed in 11 states, and we do a lot of training for people based outside of our markets or to people in related fields like real estate, escrow and title who are just looking to increase their knowledge base about our industry. Looking back on your career, what do you see as your greatest challenges and greatest accomplishments? For a challenge, I would say trying to develop companies that originators wanted to work for. I continuously work to fully understand what branch managers and loan officers want, and to see what we can do better. For accomplishments, my retention rate is one of the best in the industry. People who come work for me usually stay with me. Also, being able to grow a company. At Mountain West, I took a relatively small company that was just
operating in California and grew it into 11 states while doubling production. That was fun for me. What do you see as the near-term future state of the industry? Unfortunately, a lot of consolidation. The biggest companies will pick up more pieces, and we will see more companies go public. I hope that’s a good thing. Rates will eventually start to go up, which will slow down refinancing and increase the moves of primarily refinance guys who try and acclimate to the purchase market. The overall challenge of not being limited to the status quo of “how we’ve always done things” and being open to new technologies,
systems and processes will be an evolution. The companies who actually figure it out and put it into place will be in a really good position. Outside of work, how do you spend your leisure time? I have five kids–ages 24, 21, six, two and one, with one more coming. I coach sports, Pony Baseball and Pop Warner Football. I am always somewhere with my kids doing stuff. We also do charity work by going to a local mission and help in the feeding of others, and we work with the American Red Cross. And I play in an adult flag football league. In my mind, I still think I am young!
Phil Hall is Managing Editor of National Mortgage Professional Magazine. He may be reached by e-mail at PhilH@MortgageNewsNetwork.com
Generations of Change By John F. Cady
he mortgage banking industry doesn’t just need an evolution, it needs a full-on revolution. The way the industry does business today will not be the standard of the future. The cost to manufacture a loan, compressed margins and outdated technology is killing mortgage companies. We have to be willing to embrace and implement new ideas and new technology that are being harnessed in other industries. We live in an industry that changes consistently, whether it’s in the form of product, pricing or compliance, and we are forced to be responsive and adapt. However, when there isn’t a regulation or other outside influence forcing us to change, we don’t. Most companies out there are run for the most part the same they were five and 10 years ago. These companies will not survive in the long run. They will make themselves great acquisition targets. How do we change our thinking and embrace new ideas? Let’s look at the cost to manufacture a loan. By rethinking how processes and tasks are accomplished and whether they truly need to exist at all, companies can make huge strides to reduce costs. However, most do not. If change can be scary, changing an entire mindset of how business is done seems accomplishable. Companies have set every rule and procedure to the lowest common denominator. Items that one person was responsible for 10 years ago are often now checked by four people. Things that we use to assume our loan officers and processors knew was part of their jobs are now added conditions. There is check after check after check! This is fixed by hiring the best in your market and removing the employees who cannot do the job, and then leverage technology to verify. I’m as loyal as they come, but this is a business and everything that happens is a reflection on you and your company. The next phase is to hire a Six Sigma Black Belt or a Kaizen Facilitator to work with employees and find more efficient ways of during business. It’s critical to get some outside perspective. One of the biggest mistakes companies make is spending the time and money for process improvement planning but never implementing the plan. The next thing we want to look at is the compression of margins. Margins have continued to compress as rates have moved up. This is just the natural course of events in this type of environment. Companies that can reduce their cost of producing a loan will thrive. However, just reducing operations cost is not enough. Origination costs also need to be reduced, which could include adjusting originator compensation and reducing low producing sales staff. Already we have seen companies adding lower compensation tiers and lower max compensations. I believe the industry is also going to see more traditional expense management model companies moving towards the company-owned store model. Fewer companies will be willing to give up all of the branch’s profitability to the managers. This change, however may push more originators and managers back into the broker world. Technology is our real future. Here is where I believe I have a different view than most executives in the mortgage industry. My view of the industry has changed quite a bit over the last decade. During that time, I have built more than $10 billion in production, raised two Millennials who are in college and now have three Centennials at home. Observing how my employees, my older children and now my younger children use technology has been enlightening. For my employees, it’s a tool they use to make their day-to-day activities easier, but they could still do their job without it. During this age, Millennials are the topic of almost every conference and committee. It’s one of the largest generations and they expect companies they work with to have modern, easy-to-use technology. The problem is that the mortgage industry isn’t there yet. More than 80 percent of Millennials who apply for a mortgage start online, but only eight percent actually complete their application online. This is not expected to change anytime soon. Having looked at most of the consumer portals on the market, they appear to be great if one understands the mortgage process. However, if one is not an industry veteran or customer who has gone through the process a half-dozen times, then one is probably not going to find the process very easy or enjoyable. A lot can be gained in this area in both time and cost enhancements. These changes however need to be embraced quickly. As mentioned earlier, Millennials are always the topic of conversation, but the next generation may be even more important to us. Baby Boomers, Boomers and Generation X all began buying homes in their mid-
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20s. Millennials broke that trend with their first homebuying experience in their early 30s, and the consensus is this will be the new norm for future generations. However, there is another, less common forecast that says Centennials will be right back to buying in their mid-20s. Millennials’ buying habits changed partly because they started coming of age during the recession of 2007. Centennials do not have this baggage, therefore, they have been raised in an upwardtrending market. This is the generation that believes they can change anything, and that they can do anything. This generation will expect to be able to get a mortgage easily and in a way that relies on technology. They do everything on their phone and tablets— their lifeline to their world. They want their communication to be
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through text message or social media, and not by e-mail or phone call. We have to understand that it’s not going be the same as communicating with our other clients. The industry doesn’t have a lot of time to get our technology to the place it needs to be. Our success over the next decade will be as much influenced by Centennials as much as it will be by Millennials. It’s time to think past today and really start building for tomorrow. The future of the mortgage banking industry is what we decide to make of it. We can all fix our operational costs, origination cost, workflows, technology and mindset. The question is: Are we going to push forward or are we going to stay with the status quo. The companies that answer this question by continuing to do what they have always done will continue to lose market
“We can all fix our operational costs, origination cost, workflows, technology and mindset. The question is: Are we going to push forward or are we going to stay with the status quo.”
share. The companies that use their resources and brain power to stay ahead of the technology curve will thrive and set
themselves up for an amazing future. There is so much opportunity ahead of us. I’m truly excited for what is to come.
John F. Cady is Senior Vice President of Production at Mountain West Financial Inc. John brings more than 20 years of mortgage banking experience to his position and is responsible for the management of all retail and wholesale mortgage banking production activities.
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The Business of People: Establishing the Human Connection in the Digital Age By Casey Cunningham
he mortgage industry has entered the digital age. With the rise of online loan applications and social media marketing, many of us are spending less face-toface time with our customers and referral sources than ever before. In fact, some loan officers have structured their business so they never have to physically meet their clients. Every part of the process can be completed with modern technology. This technology has undoubtedly added a level of convenience that mortgage professionals need to be efficient and effective. The Internet has given us the power to reach more people than ever before and streamline many aspects of our routine. However, we must remember that it is meant to enhance, not replace, the fundamentals of our business. Success in this industry is dependent on many things, but none are more vital than relationship building. After all, we are first and foremost in the business of people. Our job is to help people get into homes. And to connect with those people, we depend on other people, our referral sources. The mortgage business favors the professional who knows how to builds solid relationships. According to a study conducted by Nielsen, 92 percent of consumers trust referrals from people they know. Today’s business is dependent on making connections with referral sources. In other words, to be successful, you need to meet people. But as any salesperson knows, this can be harder than it sounds. That is why it is vital that mortgage professionals leverage the opportunities that are readily available to them. The following are ways you can use the relationships you already have in your community to connect with new referral sources. If you want to build your pipeline, start building relationships.
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Today’s listing agents bring tomorrow’s business You might be tempted to ignore the listing agent. After all, they are representing the seller, not your client. Many times, they are the last ones to know what is happening during the transaction. They have become accustomed to feeling like they are “only the
Raving fans create raving fans When you identify the people who are the biggest fans of your business, you have identified a major opportunity to expand your pipeline. Ask yourself, “Who are my top five referral partners who absolutely love me?” These five people have the potential to
“The Internet has given us the power to reach more people than ever before and streamline many aspects of our routine. However, we must remember that it is meant to enhance, not replace, the fundamentals of our business.”
listing agent.” However, many mortgage professionals still do not realize that listing agents are an untapped business opportunity. Just because someone represents the seller today doesn’t mean they won’t be representing one of your buyers tomorrow. When you make an effort to communicate with the listing agent and keep them informed during the loan process, you are building the foundation for a positive relationship, one that could lead to a business partnership in the future.
introduce you to countless other relationships. You simply need to call them up and ask if they know anyone else that could use you as a partner to help their business. Your current partners hear the people in their offices who are having trouble with their loan officer relationships. They know who is in need of a dedicated mortgage professional, and they have the opportunity to refer this new business to you. Try this strategy. Invite an
important referral source who is a raving fan of your business to lunch. Ask them to bring a colleague who might be in need of your services. This is a perfect opportunity to meet a potential new partner in a comfortable environment, and when they see how beneficial your relationship is to their colleague’s business, they will want to start a partnership with you as well. Meet the whole crew Your current customers are another invaluable resource. While they can obviously send you business in the way of other homebuyers, they can also introduce you to referral partners. This is especially true of self-employed borrowers. These customers tend to be extremely busy considering they are simultaneously running a business and purchasing a house. Next time they need to provide you with tax returns and other documentation, say, “Rather than going through all that trouble, why don’t you let your CPA know that I’m going to reach out to them to get the documents you need?” This gives you the perfect opportunity to make a connection and begin building a relationship with someone who could refer business to you in the future. This same strategy works with insurance agents and financial planners. You are leveraging your existing customer’s contacts as potential referral sources for yourself. Become an ally If you work for a lender without a bank affiliation, you have a great opportunity to partner with the banks in your local community. Many smaller community banks and credit unions have the potential to refer your customers because they are not equipped to do the business that you can. For example, if a bank does not offer FHA loans, they want to bring value to their customers by recommending a source that does, but they want to ensure they are not in danger of losing the account. A bank’s number one concern is keeping their deposits. The last thing they want is for their customer to go to a larger bank to get the loan they need, because if they do, that bank will immediately begin
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cross-selling, trying to get the customer to open an account. If you are a mortgage lender that does not offer banking services, you can partner with a bank without the threat of taking their business. This is even true of banks that do have mortgage divisions. A smaller bank normally has tighter, more stringent guidelines. You can still likely offer services that community banks and credit unions cannot. By referring their customers to you, a bank knows that they have helped their client without putting their business at risk. Do they like you? No matter what new partnership you are trying to build, you must be sure they know you, like you and trust you. Your approach to the relationship should never be transactional. Instead, your goal needs to be gaining loyalty from sources that can bring you longterm business. Some loan officers feel like they are only as good as their last deal, but this mindset is focused on the
present, not the future. Mistakes will happen, both on your end and on your partner’s end. Do you have a relationship that can weather the difficult times? Put your energy into building a relationship so strong that when issues arise, your partner knows that you will resolve them because you always come through. You already have the strategies to get your name in front of potential referrals. Once they know you, they need to like you. To build a personal relationship, as opposed to a transactional one, you need to have in-depth conversations focused on more than just business. Find out about their family, hobbies and passions outside of work. Discover the common ground that you both share. People are much more likely to do business with someone they enjoy spending time with. And once they like you, they need to trust you. How many times has someone told you they were going to call at a
certain time only to leave you waiting by the phone? The foundation of any solid relationship is trust, and when you follow through on your promises to your partner, you are building this foundation by proving yourself as reliable. All of these practices can be assisted by modern technology. The Internet and smartphones have made establishing communication with referral partners easier than ever.
Before meeting a new real estate agent, CPA or financial advisor, add them on LinkedIn. Go to their Facebook to get a sense of who they are outside of the workplace. These are important tools for connecting with future business. But when you’re looking to increase your pipeline, the fundamentals are the same as they have always been. When you bring incredible value to your clients, they will bring incredible value to your business.
Casey Cunningham is the Chief Executive Officer and Founder of Alpharetta, Ga.-based XINNIX. XINNIX provides nationally-recognized leadership development and mortgage-sales training programs that enhance productivity, manage effectiveness and overall company profitability— transforming an organization while delivering real, measurable ROI. Casey may be reached by e-mail at Casey@XINNIX.com. 57
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Three Things Lenders Need to Help Today’s Borrowers By Dan Miedema f you’re looking for proof of how technology has changed our lives, look no further than your pocket. The last time the housing market was on the upswing, the smartphone barely existed. Today, more than 80 percent of Americans would be hard-pressed to live without one. Over the same period, technology has also revolutionized the way Americans approach the homebuying process, too. Before the iPhone era, most consumers who needed mortgages went to their local bank or called the broker who a friend or real estate agent recommended. Today, they are headed to the Internet, where anything goes. The bottom line? To adapt to new borrower behaviors, lenders must change, too. What follows are three things lenders probably didn’t need 10 years ago, but most definitely need today.
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Anytime, anyhow accessibility The Internet, social media and smartphones have brought consumers into a 24/7 world where the flow of information never stops. Here, consumers can access nearly everything they need without having to drive to an ATM or wait for the mall to open. That doesn’t mean lenders need a live person to answer the phone at 3:00 a.m. However, it does mean a lender’s services need to be accessible. A growing number of lenders are building Web sites that enable borrowers to start the mortgage process online at any time, without a loan officer’s assistance. That’s important. But lenders need to balance such efforts with the ability to respond when borrowers need more help. To truly be successful, lenders need to find a balance between providing borrowers with self-service options and holding their hands when they need it. The technology lenders provide should enable borrowers to
take the process as far as they are willing to go, but it should also be loan officer-driven. In terms of finding the right product for each borrower—and anticipating and responding to a borrower’s needs—it really takes somebody with skills and experience to lead the way. For example, many housing markets are very hot right now. A typical borrower may submit
that their request was received. Also, loan officers need the ability to communicate with borrowers the way borrowers prefer, whether it’s by phone, email or text message. Fewer consumers check their voicemail anymore—Millennials seem to loathe this approach. That doesn’t mean you shouldn’t ever leave a voicemail, but it does mean you should pay attention to
“Ten years ago, successful lenders could get by without a 24/7 presence or a detailed communications strategy or without integrating their sales and LOS solutions.”
offers two, three, or even five times before they get an offer accepted, which means that lenders are very busy with preapproval letters. When a new house comes on the market, a borrower will want a new preapproval letter right away. If you are that loan officer, you will need to know the moment a borrower submits such a request and respond immediately. At the very least, the borrower should receive an automated e-mail or text message acknowledging
how they want to do things. Listening and responding to your borrower’s needs is the best way to establish the tone of a successful mortgage experience. By the way, 24/7 accessibility is important to your real estate partners, too, since their own ability to provide great customer service relies on being informed about their client’s loan. A detailed, persistent communication strategy Communication is key in all
borrower scenarios, but it becomes 10 times more important when selling purchase loans, when compared to refis. The decision to refinance is based on how much money a borrower can save, which is an easy decision for a borrower to make. The decision to buy a home is much more difficult, which means that in a purchase scenario, the sales cycle is much longer. It requires nurturing at the front end of the transaction, usually months before the loan process begins. At our company, a growing portion of our purchase loan volume consists of Millennials who are first-time homebuyers. After being held back from the market for years, Millennials are starting to buy homes again. But for the average Millennial, it could take a while to find the right house and pull the trigger. To help them, we created a detailed nurturing strategy designed to build trust and educate the borrower so they can make the best decision. For example, we know that most leads are not going to turn into loans within the first 30 days after borrower contact. Some leads may take much longer, even up to a year before an application is submitted. In these situations, we use Velocify’s technology to send out automated marketing messages to borrowers and to remind our loan officers to reach out every couple of weeks while someone is in the process of shopping for a home. It should be noted, however, that a lenders’ strategy cannot rely too heavily on automation. It’s best to personalize messages in some way. Otherwise, messages may sound canned, which turns people off. This technology lets us personalize automated messages, so that the timing of all communication stays on point. It also ensures every message is reviewed for compliance and protects the lender’s brand—before being sent. The importance of using technology in a lender’s communication strategy cannot be understated. It’s not possible for a sales team to execute a communications strategy manually. It’s
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imperative that lenders have the right technology and tools in place to enable them to stay in touch with borrowers, because you never know when a borrower is going to come back and be ready to go. Integrating sales and production As the housing market continues to recover and loan volume increases, lenders find themselves increasingly fielding requests from borrowers, real estate agents, and other parties who want to know what’s going on with the loan. This requires loan officers to be able to track and report a loan’s given status at any time. The best way for lenders to do this is by integrating their marketing and sales software with their loan origination system (LOS), so that appropriate details about the loan can be communicated with borrowers and third parties whenever there is a change in status. In our case, we have Velocify
integrated with Ellie Mae’s Encompass. These two solutions work particularly well together. Through this integration, we can communicate milestones during the loan process and pass a lot of data back and forth between the two platforms, which makes communication both seamless and accurate. This integration is particularly important for lenders that want to provide a digital mortgage experience for their borrowers. Not only does the digital mortgage experience simplify the process for borrowers, it also helps lenders gain a more complete picture of each borrower, so they can develop the best approach. For example, borrowers can be asked questions like, “Have you found a home?” “When do you plan to close?” “When is the best time to contact you?” The responses to these questions will help lenders determine the right follow up. When a borrower submits their personal information on
our Web site, it is sent to both Velocify and Encompass, where our loan officers can review a borrower’s details and determine how motivated they are to buy. If the borrower didn’t fully complete the application, Velocify sends a signal to the loan officer to give the borrower a call, then follows up with targeted emails. Ten years ago, successful lenders could get by without a
24/7 presence or a detailed communications strategy or without integrating their sales and LOS solutions. Some lenders are still getting by without them today—but they won’t be able to for much longer. The shifts in consumer behaviors—particularly among Millennials—are too important to ignore. Not all lenders are going to change. Just the ones that want to survive.
Daniel Miedema is Director of Marketing Operations at Guaranteed Rate. Headquartered in Chicago, the company has approximately 195 offices across the U.S. and Washington, D.C., and is licensed in all 50 states. Dan can be reached by e-mail at Daniel.Miedema@Rate.com. 59
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The Influence of Technology in Mortgage Banking By Curt Tegeler Let’s consider the future of mortgage banking … hat once was an industry that thrived off paper, is today transforming into a paperless, digital process. The borrower demand for this change is rapidly increasing daily. Technology exists and is as convenient as being in the form of your mobile device. The ease and success of a mortgage company’s adaptation to this forthcoming truth means the transformation of moving forward as an adaptor. It is important for mortgage companies to listen to their borrowers and take the necessary steps to not only produce self-servicing platforms for everyone, but also keeping in mind the Millennial client base. The industry needs a determined effort to keep the overall process as accommodating as it can be. This exceeds generations and is an obvious obligation in many features of the mortgage banking process. Although some generations may not have the same outlook as Millennials, the incorporation of contributions such as phonebased loan applications and skilled call center employees that promote mobile and paperless choices are encouraged by all. Today, mortgage companies need to appeal to Millennials, but also still appeal to key borrower markets. This is exciting for an industry that has struggled to go paperless for some time. The mortgage industry has been apprehensive and considered it a risk to make such transitions during the credit crisis. Nevertheless, technology has proven that a larger quantity of deals closes at a much faster rate, and there is steady compliance after all. You would suppose that mortgage companies would be among the first to offer cuttingedge online solutions for their
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customers. Surprisingly, for the most part, they are not. However, mortgage lenders that have created state-of-theart online platforms for borrowers are seeing tremendous success. Just think of some of the fastest-growing lenders in the country, and you’ll see they all share one thing: An up-to-the-minute online offering that makes the process fast and easy for their borrowers. Some originators have already begun this progression. This innovative technology is key because it provides the consumer a faster and easier approach to the buying and selling experience. The mortgage industry needs a cohesive strategy to back a fullservice, online experience. Putting forth the need for innovative technology is crucial to provide clients a less stressful, more seamless home buying and borrowing experience. Today, a selfserving platform for every contract and part of the borrower process has the potential to make a significant impact on the future. This is going to be an obligatory feature to remain relevant in the industry. Often, firms tend to become absorbed in the cost of investing in the technology, but the key is to take a closer look at the consequences of not doing so. Taking a chance on timing the market and pushing significant changes to the side is a hazardous intention for buying and selling a home. The same applies to investing in important technology to remain competitive and up to date in the industry. An online lending platform can have hi-tech technology, but if it looks dated, borrowers are going to flee. To appeal to the current generation of borrowers, your platform must be mobile-friendly so the application can size and scroll accordingly if borrowers use their laptops or smartphones. A small malfunction can cause borrowers, especially Millennials, to lose trust. It is
important to make sure you have the right tools for the job. Companies such as Optimal Blue and Nylex provide convenient pricing engines. Others such as Velocify and Velma enable an effective customer relationship management system that is beneficial to the lender and the borrower. The mortgage feature of these systems is just one part of the borrowing experience. Some are convenient options being presented and others are more necessary, such as enabling access to documents and accepting electronic signatures. Mobile devices are at the core of most technology initiatives. As effective communication and connections improve the need for customer service and compliance, the mobile device is developing as the tool for enabling all contributors in the goal of communicating in a timely manner. The capability to be able to transmit forms at each phase guides the process to become more transparent and submissive. Some brokers are hesitant to these methods and look at them as more of a risk than an advantage. There is no question that mortgage brokers have certain rules and guidelines they are required to act on since TRID (TILA-RESPA Integrated Disclosure) came into place. TRID requires the need to accelerate timelines for acting on documents. Therefore, the initiation process needs to be moving at all hours. Online and mobile access to documentation is turning into a crucial and truthfully, the only option to meet these deadlines. There is opportunity to store, access and organize data in a much more accommodating process that could not be done using paper. There have been firms that have built technology teams
separate from creating loans. Every group should integrate a tech professional on their staff. Building the business takes technology skilled individuals, which is not in every case found in a loan officer’s skill set. Lending firms are building technology-friendly teams and providing a more tech-minded mission. They are not trusting their rank to make technology and vendor partner decisions. The tech team is beneficial and devoted to driving business through using objectives of a loan officer. If putting together a tech team is too difficult–the next best option is to establish a focus group of employees and customers. This provides an opportunity to determine the technology that is available for each group. Teams can research topics such as, the information they’d like to obtain from each other. It is evident that over the years, obstacles have been faced and boundaries have been removed. In the past, technology and mortgage banking lacked any sort of relationship. It became natural that each mortgage entailed hundreds of pieces of paper and that relying on stamps and office visits was the only possibility to complete a transaction. The mortgage banking industry has become driven to let technology handle more of the responsibility. Because of this, things have improved significantly. Online banking is our future and it is up to the mortgage industry to provide it to our users. Obtaining features and tools discussed here in lender digital platforms will benefit originators and guarantee that they are providing an exceptional online experience. This in turn will bring sales and increase referrals among both borrowers and Realtors.
Curt Tegeler is President of WebMax LLC. Curt founded WM MortgageWare LLC, d/b/a WebMax, a digital solution and software development firm, in 2015.
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Don’t take our word for it … here’s what brokers are saying about Caliber Wholesale
Wholesale Lending
Here at Caliber Home Loans, Inc., we make time to spend more time assisting our wholesale business partners, no matter how busy the markets may be. If you ever wished it was all about you, relax … at Caliber Wholesale, it is all about you. (And your clients, of course.)
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If you still haven’t discovered why we’re the nation’s #2 Wholesale Lender, contact us today at nmp@caliberhomeloans.com or visit us at www.caliberwholesale.com
Caliber Home Loans, Inc.,3701 Regent Boulevard, Irving, TX 75063. (NMLS #15622). 1-800-401-6587. Copyright©2017. All Rights Reserved. Equal Housing Lender. For real estate and lending professionals only and not for distribution to consumers. This communication may contain information that is privileged, confidential, legally privileged, and/or exempt from disclosure under applicable law. Distribution to the general public is prohibited.
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Coming soon … more of what you’re asking for. Earlier this year we introduced The Ultimate Home Buyer Experience. This high-tech digital mortgage toolkit enabled our business partners to fast-track homebuyers to closing with a lot less paperwork. Now we’re working on a mobile app that will help ensure loan pipelines are always flowing - even when you’re attending an Open House, closing or client meeting.
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Build Your Digital Toolbox for the eMortgage Future By Shannon Barrow
he mortgage industry is on the verge of a digital revolution that will change how lenders conduct business, much the same way mobile banking has rewritten the rules of traditional branch banking. The simple act of putting the power of everyday banking transactions into the hands of the consumer via a mobile device has changed the dynamic between customer and financial institution. Now, consumers expect to access their funds, pay bills, transfer money and conduct other daily banking tasks 24/7. The “ondemand” mentality also extends to other financial products–auto loans can be applied for and approved in as little as 10 minutes online, and personal loans can go from application to funding in as little as three days without speaking to a live person. Of course, mortgages are a
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much more complicated product. Many consumers still want some of the mortgage process to involve speaking with a loan officer– whether it is just to talk through the different loan options or to better understand the terms of the loan. But when it comes to driving the loan from application to closing table, consumers are increasingly demanding the same digital conveniences they enjoy in other financial services, including the ability to close a loan electronically. With recent technology advances and integrations, the industry is now able to offer a more complete end-to-end digital mortgage process. While certain aspects of the process have been more complex—eClose, in particular—we are now seeing eClose solutions enabling paperless closings. Transitioning from hybrid eClosings to fully digital The vast majority of eClosings that
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are taking place today are hybrid closings, incorporating a mix of paper-based and paperless processes. For example, a closing may enable the borrower to sign the closing documents electronically, but require paperbased title or recording documents or not be able to support the electronic submission of income verification documents. Each month, more lenders are able to complete more paperless closings, but they’re still the exception rather than the rule. There are many reasons why the next year promises to be a significant one for the adoption of more eClosings. The first is the support for eClosings given by the Consumer Financial Protection Bureau (CFPB), which studied eClosings in pilot programs conducted in 2016 and concluded that closing mortgage loans electronically was better for consumers. Additionally, while eClosings are not currently required by any regulations, the ease of sharing and reviewing electronic data means that regulators would likely welcome more electronic processes in the future. To build a proper eClosing environment, lenders are seeking platforms that include key capabilities–dynamic digital document engines, eSignature support, eRecording and eVaulting. This infrastructure enables lenders to generate electronic, data-driven documents through direct integration with their LOS (including eNotes) and deliver these documents electronically to the borrower and settlement agents while supporting electronic signatures and electronic notarizations from all parties. These digital loan packages can then be registered electronically through the MERS registry, electronically recorded with the county recorder and stored within a secure eVault. Start with the foundation: Dynamic eDocs The evolution to eClosings begins with the shift away from static loan forms and toward data driven loan documents integrated tightly with the lender’s LOS. With dynamic, data-driven loan documents, the documents needed to close the
loan are created as needed in a native digital environment utilizing robust rules-based intelligence. By combining only the necessary information for each loan program and borrower, the lender eliminates any need for paper forms to be manually adjusted. Changes are instead made electronically. From here, the documents can be delivered and signed electronically as well. Following the closing, dynamic digital docs are easy to send to post-closing electronically, checked for accuracy by quality assurance and then sent on for funding. With dynamic documents in the toolbox, lenders can rapidly assemble any combination of documents automatically, using regulations and investor guidelines to automate the data pulled from the LOS. This data can then be assembled into different eDoc formats for presentation to the borrower and online execution. Bring the loan to a close with eSignature and eNotarization The need to sign documents electronically requires a toolkit that also supports eSignatures and eNotarization. eSignature solutions have been around for several years, and the main challenge now is selecting the technology that best enables the borrower to easily view and sign their documents electronically but is also part of a more comprehensive platform. To that end, many lenders are embracing the borrower portal concept, where they manage their borrower’s loan experience through a consistent user interface (UI) via a Web site or mobile app. This approach can improve borrower satisfaction and efficiency, while reducing origination costs for the lender. Additionally, eSigning systems can easily integrate into these borrower portals, providing easy access to lender-generated disclosure and closing documents in a consistent, familiar interface and further tightening the borrower-lender connection. eNotarization, however, is still a complex step in the eClose process. This is primarily driven by uncertainty around the legal environment that enforces the
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connect lenders to the MERS eRegistry to support the delivery and registration of the loan. The capabilities exist today for lenders to make the leap into the quickly approaching future of eClosings. By utilizing platforms
that support each step of the process, the next year will be the first that could see digital surpass paper-based mortgages, and both lenders and borrowers will enjoy greater efficiency and convenience as a result.
Shannon Barrow is Director of Marketing for Docutech, a provider of document and compliance technology for the mortgage, home equity and consumer lending industries. Shannon may be reached by phone at (208) 535-9182 or e-mail SBarrow@Docutech.com.
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Finalize the eClose with digital post-closing tools The last essential eClose tool in the lenders tool belt is technology that supports the post-closing process. Primarily, the lender should have access to eRecording and eVaulting capabilities ideally integrated with the other functionalities needed to complete an eClose to optimize efficiency and security. Once the eClosing has been completed, the closing agent should be able to electronically submit documents for recording with the county recorder in their jurisdiction granted it is legally permissible. Currently, not all transactions will be eligible for eRecording, but now about 1,740 of the 3,585 recording jurisdictions accept some form of this practice, covering about 80 percent of the
total U.S. population. That being the case, a vast majority of transactions should be able to support eRecording. After documents have been officially recorded, they will need to be returned to the lender for safe storage. Their eClose solution should support the automatic transmission of the documents back to the lender and be equipped with a secure eVault where electronic documents can be stored. The eVault should also
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validity of eNotarizations. The uncertainty is a result of a patchwork of laws across states, making eNotarization difficult to navigate for lenders. While some states uphold the legality of electronic notarizations through existing ESIGN and UETA legal infrastructure, other states abide by their own specific laws. Some still have yet to declare whether or not theyâ&#x20AC;&#x2122;ll recognize electronic notarizations altogether. Further complicating the matter are the legal questions around remote eNotarization. During a standard eNotarization, the notary acts as an in-person witness and then notarizes the necessary documents electronically. A remote eNotarization, however, has the notary witness the ceremony and confirm identification via Webcam. Remote eNotarizations are beneficial from a customer experience standpoint as borrowers do not have to have an in-person meeting with the notary and can instead conveniently conduct the closing over a computer. However, most states have not yet created a clear environment to accommodate remote eNotarization. Luckily, the GSEs have been furthering remote eNotarization within the industry. Fannie Mae and Freddie Mac have actively supported this practice and taken steps to help the industry adopt it into their operations. Both of the GSEs have stated that they will accept remotely eNotarized mortgages from the handful of states where theyâ&#x20AC;&#x2122;re legally upheld.
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Successful Mortgage Businesses Implement Diversity in Their Workforce By Desirée Patno
oday’s homeowners are becoming incredibly diverse— immigrants coming to the United States are seeking the promise of the American dream of homeownership, and older Millennials, the largest and most diverse generational segment, are becoming interested in settling down and buying their first home. The diverse homeowner will most likely become the norm in the near future. Out of the 13.9 million to 15.9 million new households that are projected in 2024, the Mortgage Bankers Association (MBA) reports, more than one-third will be Hispanic households. As the characteristics of homeowners change, so will their interests and needs during the homebuying process. To be remain competitive in the housing finance industry, mortgage lending and banking businesses will have to adapt their products, services and practices to meet this changing landscape. In order to achieve this, they have to incorporate diversity and inclusion within their business models to accurately reflect, understand and serve the consumer demographic. Highlighting ways current companies are catering to future homebuyers and increasing diverse representation in their workforce, this article will discuss the business imperative for embracing diversity and inclusion in the mortgage industry.
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Catering to future homebuyers Understanding the changing demographics is pivotal to making sure one’s business is providing the best services and products to meet borrowers’ needs. Fannie Mac’s Senior Vice President and head of Customer Engagement Zach Oppenheimer, outlines the four main characteristics of the majority of future homeowners: l Ethnic and racial minorities will drive the formation of new households l Many of the future homeowners will be buying their first home l Future households will likely be comprised of more people
communicating with, diverse homebuyers. The following section will lists ways that businesses in the mortgage industry can successfully promote diversity within their company. Increasing diverse representation What are some of the best ways to facilitate more diversity in your workforce? In the spring of 2017, the Consumer Financial Protection Bureau (CFPB) released their Diversity and Inclusion in the Mortgage Industry report, which includes highlights from a roundtable of mortgage industry representatives who shared their organizations’ diversity and inclusion initiatives and practices. From the participants’ conversation, the CFPB pulled out some of the main innovative solutions that each organization supports.
“To be remain competitive in the housing finance industry, mortgage lending and banking businesses will have to adapt their products, services and practices to meet this changing landscape.” l These new households will be technologically-advanced Some mortgage companies are keeping these characteristics in mind as they gear their business activities and products to attract prospective homeowners. Below are a few examples programs that are providing solutions to these specific needs. l Focusing on households with extended family members, HomeReady allows borrowers to include the income of a nonborrower, who is a household member, as part of the household income considered in qualifying for a loan. l Some lenders are cognizant to hire a multi-lingual staff, and utilize collateral materials, in order to communicate effectively with the diverse market. Borrowers will feel more at ease, and will perhaps build a better sense of trust, if their lenders are able to speak with them in their native language.
l Making sure their workforce is prepared to meet the demands of a diverse demographic, a mortgage lender in Norwell, Mass. has initiated a diversity training program which trains candidates from various departments and levels at the organization. l To attract Millennial homebuyers, some companies are leveraging technology as a tool to make the homebuying process as fast and convenient as possible. Quicken Loans’ Rocket Mortgage, for example, offers online mortgage approvals that take about eight minutes of a consumer’s time. These are just a few examples that businesses in the housing finance industry can utilize in creating their own unique methods for incorporating diversity at the forefront of their business strategies and lending services. Half of these ideas, however, show the benefits of having a diverse workforce in reaching out to, and
Leadership accountability It’s important for top-level employees to embrace an organization’s diversity and inclusion initiatives in order set a tone that facilitates a program’s success. Companies need strong leaders who advocate for a work culture that values diversity in viewpoints and experiences. Their strong voices and influence will encourage other employees to embrace these fundamental principles as a pivotal part of the company’s ethos. Recruiting, hiring, retention and advancement practices Mortgage industry experts emphasize the importance of having inclusion principles in developing and sustaining diversity within a workforce over time. The organizations involved in these roundtables sought to boost their retention and advancement levels to achieve more viewpoints and backgrounds within their internal decisions and discussions. This requires providing more minorities and women a seat at the table, so that their ideas can be heard and implemented. To help support greater inclusion at all employment levels, managers need to make sure employees understand, and can participate in, the appropriate pathway to advancement within the organization. Clear communication about the ways one can acquire more responsibility or get involved in projects will help employees understand their options for taking the next step in their careers.
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Expanding consumer base with new products Participants agreed that a diverse workforce is better equipped to understand the diverse needs of the organization’s consumer demographic, and can help the business create new products to accommodate them. Of course, satisfying consumer needs is key to broadening and sustaining a loyal consumer base. People will gravitate to companies that understand their needs and provide products and services that will help them achieve their goals.
Desirée Patno is President and Chief Executive Officer of the National Association of Women in Real Estate Businesses (NAWRB). With more than 25 years in real estate and championing gender equality, Patno brings insider knowledge to NAWRB’s mission of advocating on behalf of women and women-owned and small businesses in the housing ecosystem. She may be reached by phone at (949) 559-9800 or e-mail Info@NAWRB.com.
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A note on workforce gender diversity There has been slow progress in female representation in the finance industry, especially for women in management and senior executive positions. Globally, women represent 20 percent in financial services boards and 16 percent in executive committees, according to the Oliver Wyman Women in Financial Services 2016 report. In
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Data analysis It is imperative to first understand how your workforce ranks in diversity in order to take the appropriate steps to improving it. In this respect, data collection and analysis are invaluable in providing a quantitative and qualitative assessment of your company’s diverse representations and related performance levels. Participants in the CFPB roundtable agreed that knowing the demographics of your workforce helps ensure that it reflects the available talent pools and remains competitive in the industry. The report shares the advantage of having employees involved in data collection by conducting internal surveys. Employees are better able to perceive how effective diversity and inclusion practices are within the workplace, thus they can help management monitor the progress and success of their efforts. Establishing employee focus groups is another effective means of acquiring an indepth analysis into employees’ perception of the efficacy of an organization’s efforts.
the United States, the financial industry has witnessed a decline in women at the management level— 49.1 percent to 47.3 percent between the years 2007 and 2011— as revealed by United States Government Accountability Office (GAO). Having more female board members can improve an organization’s overall performance. Studies show that a company with a gender-diverse board outperforms the competition with 42 percent higher returns in sales; 66 percent greater return on invested capital; and 53 percent higher return on equity. The National Association of Women in Real Estate Businesses (NAWRB)’s 2017 Women in Housing Ecosystem Report raises awareness of women entrepreneurs’ successes and obstacles, and analyzes the ramifications of workplace gender imbalances on women’s homeownership. NAWRB compared the status of female advancement in various industries in the housing ecosystem. Regarding conditions of women in finance, NAWRB analyzed data from the 2012 Survey of Business Owners (SBO) for women-owned businesses in finance and insurance firms. In 2012, women owned about 22.7 percent of all finance firms in the country. Of these, there is even greater disparity regarding women of color. Of women who owned finance firms, more than 75 percent were white, while African-American women, Asian women and Hispanic women comprised less than 25 percent combined. Moreover, the report highlights the greater gender gap for midcareer women in financial services due to inflexible working options. Limited support in household responsibilities; obscure inequitable promotion processes and pay parity; and subpar integration of diversity and inclusion in work culture are just a few of the obstacles women face in further advancement. Addressing these issues will require companies to implement innovative structural solutions that target their work culture and internal processes.
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Going Mobile For mortgage lenders, mobile apps are no longer the exception, but the rule By Steve Lawrence
s professional industries continue to move toward digital and mobile solutions, it’s becoming obvious that paperless business is no longer the way of the future–it’s the preferred method already. In the mortgage industry, many of us are now aware that Millennials are dominating the homebuying market. More than one-third of homebuyers are from the Millennial generation (individuals ages 18 to 36), according to the National Association of Realtors 2017 Home Buyers and Sellers Generational Trends Report. With the increase in Millennial business comes a higher demand for the development and implementation of mobile technology solutions. As a loan originator, if you conduct business with Millennials, you’ll quickly find that a mobile app is an essential tool. In fact, more than 50 percent of Millennials spend at least three hours on their smartphones each day, and 25 percent look at their phones 100-plus times per day, according to a Smartphone and IoT Consumer Trends 2017 study. As the mortgage industry adopts more mobile technologies, it becomes crucial for loan originators to determine which systems best fit their professional needs, and to align themselves with a mortgage lender whose systems will support those needs.
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Making it mobile For many loan originators, an effective mobile app is essential, especially when conducting business with tech-savvy homebuyers. An exceptional mobile app allows you to take the borrower through the home loan application process–from start to finish–entirely online. As technology becomes increasingly sophisticated and useful, it can be difficult to choose which mobile app may be right for your origination business. Regardless of which you choose, make sure your mobile app has a few key capabilities that will be beneficial to you, your customers, and your real estate agent partners:
1. Quick ways to connect An effective mobile app should give your customers quick, nofuss methods for contacting you. Phone numbers and e-mail addresses are great, but if you really want to cater to your Millennial customers, you need to have texting capabilities. When a homebuyer can quickly send a question to you or one of your team members via text, and receive a prompt response, that will speak volumes about your customer service levels. Remember, in many cases, you may only be working with a customer one time–make sure you leave a positive, lasting impression by utilizing preferred methods of communication. 2. Intuitive calculators and scenarios When you’re in the beginning phases of the home loan process with a customer, your mobile app will play an essential role in helping them develop an idea of how much “house” they can afford. As a result, your customer should be able to use calculators on the app that estimate monthly mortgage payments based on the loan amount, downpayment, etc. Amortization tables will also be helpful for individuals who are making decisions about how much they’d like to invest in a home. This technology is especially beneficial for homebuyers who like to come into the home loan process with a little bit of education/research (which, in many cases, this is a characteristic of Millennial homebuyers). They will still look to you–the loan originator–as the expert, but will feel better about the process if they can do some research upfront. 3. Digital documentation The days of paper documentation are numbered. With new technologies emerging on a daily basis, it’s becoming increasingly inefficient and unsafe for customers to fax their confidential financial information to loan processors. An exceptional mobile app will allow customers to upload photos of their documentation in just a few easy steps. Moreover, it will provide
“As a loan originator, if you conduct business with Millennials, you’ll quickly find that a mobile app is an essential tool. In fact, more than 50 percent of Millennials spend at least three hours on their smartphones each day …” direct access to the customers banking account (with the customer’s permission, of course) so that bank statements can be easily viewed and verified. Not only is this a more secure way of accessing confidential information, but it will also greatly reduce cases of fraud. Plus, because digital documentation technology allows a lender to collect the majority of relevant information up front, it will often make the overall loan process go smoothly and quickly. 4. Resources for real estate agents Although an effective mobile app will be especially useful for customers, it should also have impressive features for your business partners. Loan calculators can be as beneficial for real estate agents as they are for homebuyers, so this is an essential tool. In addition, technology that allows you to co-brand yourself with your business partners is an added bonus, from a marketing
perspective. Most importantly, the mobile app should give your real estate agent partners updates, in real-time, on their customers’ inprocess loans. This is especially helpful because it can encourage real estate agents to remind their customers to submit documentation or sign disclosures in a timely manner (which takes a little of the pressure off of you and your loan processing team). 5. A streamlined, all-in-one tool Perhaps the most powerful feature of a mobile app is simply this: It brings all aspects of the loan into one, easy-to-use tool. Customers no longer have to worry about remembering five different passwords for various online accounts. They can view and complete nearly all of their home loan paperwork from their mobile app. Even loan estimates and closing disclosures are easy to access, and eSignatures provide a quick way for customers to acknowledge the disclosures.
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Because everything can be completed via the mobile app, it eliminates much of the confusion a homebuyer might feel and empowers them to make informed decisions and to complete their loan paperwork in a timely manner. While innovative mobile apps have numerous benefits for loan originators, business partners, and their mutual customers, there are some challenges that may cause mortgage lenders to hesitate with the implementation of such technology. Yet, these challenges can be easily overcome, and the benefits–moving forward–will be well worth the effort.
instead. As a loan originator, you need to decide what your key needs are, and choose a product that matches those needs. Overall, you need to evaluate the product you have; if there are key pieces missing, find a mortgage lender
that integrates with various technology solutions that will make your home loan process seamless. Then, you will begin to see more success with homebuyers–and especially those in the Millennial generation.
Steve Lawrence is the Systems Manager for Waterstone Mortgage, based in Pewaukee, Wis. He may be reached by e-mail at SLawrence@WaterstoneMortgage.com.
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Overcoming mobile app obstacles When considering how to introduce and implement a mobile app into their current loan process, some lenders may feel that the integration process is daunting. There’s no doubt that the adoption of new technology can present challenges. Questions of how to integrate a mobile app with the LOS and other systems that are already in place may cause lenders some worry. What it comes down to is this … will the time and effort needed for the integration process be worth the long-term growth and success that a mobile app can bring to the mortgage lender? In almost all cases, the answer is yes. As long as a system (such as a mobile app) is compliant and secure, it can have innumerable benefits for the mortgage lender, including a streamlined loan process and more satisfied customers. The integration process needs to be planned carefully and thoughtfully–but it will certainly pay off, in the end. Another challenge that lenders may anticipate is introducing a mobile app solution to homebuyers who prefer the traditional (on paper) mortgage loan process. In this case, you have to find the balance of effectively serving your customer while sticking with the new technology. An easy way to address this is to invite your customer to your office (or meet them at a place of their choosing) and simply walk through the app with them. Showing them, in person, how to upload documents and use the loan calculators will make a huge difference. Also be sure to communicate how secure the technology is, and explain the advantages of using it.
Moving forward with mobile With Millennials now dominating the homebuying market, the implementation and use of a mobile app should no longer be viewed as an “optional” feature for mortgage lenders. If you want to conduct business with this generation, you will find that having innovative technology solutions is essential. So, it’s not a question of, “Should I use a mobile app?” but a question of, “Which one?”
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Pipe Dreams By Eric Weinstein
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was driving through Hawaii with a friend. I joked that the town ahead was called “Like Like.”
“No, bro,” he said, “It is pronounced ‘Leak- kay, Leakkay.’” “Oh,” I said, “Let me try the next one.” “Peep-Pay, Lean-ay Ahead,” I read on the next sign. “No, bro,” he said, that says, “Pipe Line Ahead!” That about exhausts my repertoire of Hawaiian pipeline humor. Pretty lame. That is because your pipeline is no laughing matter. Like me, I am sure you live and die based on your pipeline. Your pipeline means money. Money means feeding my family. Family means … well, you get the idea. I break my pipeline into three sections: 1. Loans I am working on; 2. Loans that closed; and 3. Leads for new loans. I am a bit obsessivecompulsive and have ADD. That means I look at it constantly, but only for brief glances. This may not be the way you do things but, to avoid injury at work, do not criticize the way I do things. Here is my system. When I am busy, I work on loans. When I am slow, I work on marketing and getting leads. There is never a time when I am not working. When you work for yourself, your boss can be a real jerk about that. If I have leisure time, I feel guilty about not working. There is always something to do. If not, that means I am not smart enough to think of something to do. It is a never-ending cycle. Working 40 hours a week is part-time for me. Now, of course, I am a one man show working out of his den in his pajamas. When I get a loan, I get a loan. They just seem to fall out of the sky mostly. A referral here, an advertisement there or a CPA I have not spoken to in years
“Like me, I am sure you live and die based on your pipeline. Your pipeline means money. Money means feeding my family. Family means … well, you get the idea.”
sends me a deal. I understand that you big shot executives in your fancy suits, $100 ties and brand new underwear managing a $10 billion dollar rocket pipeline might need better advice. This is what I did when I owned my own big shot company. The best you can do is build an Excel Spreadsheet using current volume, factoring in growth and seasonality. If you can’t do that, just pull a number out of your butt. It is pretty much the same. No one can tell the future. All you can do is guess the best you can. The most important thing is to remain flexible and have back up plans if things do not go the way you figured. There will always be things that you cannot imagine or plan for. A hurricane in Texas, wildfires in Oregon or your top producer leaving you go run off with his mistress to work on the
pipeline in Like Like, Hawaii. That is the thing about things … you cannot imagine. You cannot imagine them, so you cannot plan for them. You do this by keeping
fixed costs low and shifting expenses to variable costs as much as you can. Tie costs as you can to volume, so that when volume goes down, variable costs go down. Put administrative people on a salary/bonus compensation plan. When the company does well, they do well. When the company suffers, they share the same burden. There are a few things my minuscule shop and the big mortgage companies do have in common. The industry is like a roller coaster. There are going to be good times and bad times. Times when you are on top of your game and times when you screw up. Times of plenty and times of famine. Times of … well, you get the idea. This is what you do. Plan for the worst and hope for the best. When you are making a ton of money, set it aside, like fat on a grizzly. You will need it when it is time to hibernate. Budget money for what I call, “The X Factor.” Some variable will come up, believe me. It always does. You can’t imagine how helpful money can be in times like that. This is my prayer every night: “Give me one more mortgage boom. I swear I won’t waste the money this time.”
Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. Eric is semiretired, doing mortgages by referral only. He may be reached by phone at (703) 505-8692 or e-mail EWeinstein4U@gmail.com.
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The Future Is People By Michael Cooksey
ost assume that the future of the mortgage industry lies in technology, and they’re not wrong. The advances in mortgage technology over the past few years, coupled with growing investor acceptance of digitally produced mortgages and regulatory directives to improve the consumer lending experience, have eased the way for lenders to complete more of the loan origination process electronically. Furthermore, the advent of Rocket Mortgage has set the tone for how mortgage lending shops will have to operate, at least in part, moving forward, and as more tech-savvy Millennials enter the homebuying market, having digital tools to allow consumers to complete some or all of the mortgage process themselves is going to be a necessity in order to survive. However, the future of the mortgage industry won’t be driven just by technology. It will also be driven by people. No matter how advanced mortgage technology becomes, there is a human element to the mortgage process that cannot be ignored, and eschewing all human interaction and humandriven processes in favor of a completely automated, selfserve approach risks alienating consumers that would prefer a more consultative approach. For today’s mortgage lender, the future depends on striking the right balance between automation and consultation and focusing on people first. To be clear, technology is an important tool in a mortgage lender’s arsenal. Online loan applications are commonplace in today’s mortgage market, and many customers appreciate having the ability to start the mortgage process at their convenience. In addition, digital tools can also create connection points to key partners, like real estate agents and home builders, allowing them to gain a more
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immediate and clearer picture of a potential customer’s ability to purchase a home and their available cash-to-close, especially when trying to qualify multiple offer scenarios. Digital tools also remove a lot of the human error element out of the pre-qualification and preapproval process, which can be especially important for builders who may have their money on the line in the transaction. However, there is still a large percentage of customers that would prefer one-on-one interaction for a variety of reasons. Perhaps they have misgivings about entering their personal information in an online form, or maybe they are feeling apprehensive about the process. Whatever the reason, this type of customer wants to be able to pick up the phone or meeting face-to-face with a mortgage loan expert, and just like technology, one-on-one consultations are another tool lenders must have at their disposal. These consultations can be conducted over the phone or inperson, though, in our branch, we’ve seen a 300 percent increase in conversion rate on face-to-face consultations versus phone calls. What we’ve found is that the face-to-face interaction compels the consumer to stay engaged in the conversation, making them more likely to retain the information being presented, and it also provides our loan officers with the opportunity to read the consumer’s body language and adjust their explanations accordingly. Ultimately, what this does is allow the loan officer to set the consumer’s expectations early on in the process. The mortgage can be clunky, and the slightest hiccup can derail the process for days at a time. By sitting down with the consumer and fully explaining to them how the process works and what to expect—without trying to paint a pretty picture— the consumer enters the transaction with eyes wide open, and when issues do arise, they become less of a
“No matter how advanced mortgage technology becomes, there is a human element to the mortgage process that cannot be ignored, and eschewing all human interaction and human-driven processes in favor of a completely automated, self-serve approach risks alienating consumers that would prefer a more consultative approach.”
frustration because the consumer is prepared. When that explanation and expectation-setting doesn’t occur, that is when customer satisfaction starts to plummet. One drawback to one-on-one interaction with the consumer is the strain it can place on loan officers, who quite often are pressed for time as it is. These individuals’ livelihood is entirely dependent upon their ability to bring in new business, but in addition to prospecting, loan officers must also maintain the business they currently have and execute on the business in their pipeline to get loans closed—all while working a database, following up with current and potential customers and partners, chasing paperwork, etc. In many instances, there are
simply too many things for this one person to do at a high level and be efficient, which is why so many have tried to take their loan application process completely digital. The downside to this strategy, as previously discussed, is that not every consumer wants a digital experience, and a digitalonly strategy may hamper loan officers’ new business efforts. This is where team building becomes crucial to loan officers’ ability to provide oneon-one interaction with consumers. The goal of building out a team is to essentially transition the mortgage processing piece onto the assistants and have them handle collecting paperwork, putting together a prequalification on a loan and work the loan from contract to close.
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each piece of the process and ultimately delivering value to both the loan officer and the consumer. With a proper team in place, loan officers are much better equipped to provide the type of service their consumer desires. If the consumer is looking for a largely self-service process, a la Rocket, that can be facilitated with the click of a button in most cases. However, if the consumer wants a more
consultative experience, the loan officer has built an environment in which that can happen with relative ease. There’s no doubt that technology will drive the
mortgage lending organization of the future, but there also needs to be a driver behind the wheel to meet consumers where they are, not where the industry wishes they would be.
Michael Cooksey is Founder of The Cooksey Team (Dallas, Texas), one of the top performing branches of Mid America Mortgage Inc. He can be reached by phone at (972) 7675701 or e-mail Michael.Cooksey@MidAmericaMortgage.com.
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Building a team around the loan officer allows that individual to focus on what they do best— being an expert on the mortgage process and building relationships to generate referrals and new business— while delegating other tasks to loan officer assistants. These individuals are each assigned to a particular part of the mortgage process, which allows them to completely immerse themselves into the task and learn it top-to-bottom, inside-and-out. As a result, these processes tend to run much more smoothly and experience fewer errors, which ultimately translates into a better consumer experience. By having each assistant focus on one piece of the process, they are able as a group to move the loan through the origination process while maintaining a high-level of communication with the consumer and other parties to the transaction, and the loan officer is then able to focus on growing the business without jeopardizing customer service. Furthermore, loan officer assistants can also aid in adding a personal touch to the mortgage experience. True customer service and relationship building are based on going the extra mile and creating that “Wow” factor for your customers, which can be hard to do when one individual is responsible for executing the entire transaction. Having teams dedicated to just serving the consumer and ensuring they have a phenomenal experience provides the needed bandwidth to find ways to engage with the consumer on a more personal level. Maybe it’s sending a tea set or some chicken noodle soup to a customer that’s sick, or sending something to acknowledge a life event, like a baby or death in the family— really anything that goes above and beyond for that consumer in that moment, as it is often the little, personal touches that really make the big difference. Of course, this set-up only works if these assistants are serving a specific and predetermined purpose. Too often, loan officer assistants are used as catch-all’s for less desirable tasks, preventing them from being able to focus on learning
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Looking to the Future in Mortgage Servicing By Gagan Sharma
hile there are always plenty of stories in the mortgage industry about the latest “solution” or “enhancement” that promises to make originating or servicing a mortgage faster, better and cheaper, the sad fact is that the mortgage business lags far behind advancements in other data-intensive industries. Even worse, it seems like we’re always playing catch-up to what our customers want, instead of anticipating their needs. That leaves many in the industry vulnerable to competition from newer, more forward-thinking enterprises. It’s therefore time to look to the future. And good things are happening. In the mortgage servicing business, our focus is on creating new and better ways of servicing customers—while keeping our costs under control. To be profitable, we need to determine the right way to use technology to make better decisions faster, increase efficiency and improve compliance. There are several items we are focusing on that we believe will transform the way we deal with our borrower customers as well as our investor clients. Let’s look at each of them.
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Communications and customer service As a servicer, one of our most important jobs–besides the basic routine of receiving payments from borrowers and paying those who need to be paid–is mitigating risk, both for our borrowers and the investors who own the loans. And the most effective strategy to do that is staying in touch with our borrowers. For those most at risk, we must reach out to them as early as possible after the first signs of trouble. Establishing contact early in the process to determine the borrower’s situation, and offering them options to work out a solution,
are the best ways to ensure that the situation doesn’t spiral out of control. If the borrower reaches out to us first, we need to be able to quickly connect them with our loss mitigation team to see what can be done to help them. While that has pretty much always been true, the way customers communicate with us has changed radically in the past several years, and we must change with them. Customer contact has always been paperand phone-based, but now many if not most of our servicing customers prefer to deal with us through their mobile phones. This requires an integration of both phone and Web technology. Five years ago, it was all about using the Web to provide customers with updates in order to keep them informed. But now we have to enhance that with the mobile side as well. Servicers must be able to integrate that into the servicing function, such as through a mobile app. By “going mobile,” we will be able to enhance and accelerate our communication with borrowers. Rather than sending them a letter in the mail, we could instead send them a mobile alert using our app to let them know that there is a new communication ready for them in their inbox. We must also be able to provide borrowers with selfservice capabilities. Not only will this give customers the ability to do what they want when they want, it also reduces the need for telephone support, improving turn-times on requests and inquiries and reducing our costs. Greater transparency for investor clients Just as important is communication with our investor clients, who own the loans we service. Investors demand transparency so they can monitor their portfolios’ performance, and as servicers we must be able to provide it to them. We must offer investors access to the loan data as fast as possible so they can make
“For servicers, data is key to making better and faster decisions, and we now have more data to work with than ever before. As I’ve said, we have more than 10,000 standardized data points on each loan in our portfolio.”
better decisions on the loans they own. Most servicers could be doing a much better job at providing investors with greater transparency. Delivering data to the investor 15 days after the close of every month, which is typical in the industry, may not be enough. Investors want data much more frequently–if not daily, then weekly; twice a month at an absolute minimum. In order to be able to deliver that, technology will play an increasingly important role. At my firm, our investor clients have access to data from ASSET360, our life-of-loan analytics platform. Using more than 10,000 fields of data that are imported into the platform, we take a daily snapshot of every loan in our portfolio. Then we run hundreds of exception checks daily through a proprietary reporting engine that spots loans with potential
performance, compliance or customer documentation issues. As a result, we’re able to catch exceptions much earlier in the process, before they have a chance to escalate into something worse. At the end of the day, we are able to both stay compliant and handle things with speed and accuracy, while helping to avoid any impact on borrowers. By applying exception processing and a Big Data approach to loan management, we offer our clients a truly digital experience, which enables us to focus on strategies to maximize portfolio performance. Create a manufacturingtype environment As all of us in the industry know too well, complying with enhanced regulatory requirements has been the greatest source of increased expenses over the past 10
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to want or need, they’ll be better able to provide it when borrowers want it and through
the channel the customers prefer, whether it’s mobile, Web, e-mail or telephone.
Gagan Sharma is President and Chief Executive Officer of Irving, Texas-based BSI Financial Services, a provider of technology, loan subservicing and outsourcing services to banks and institutional investors in the residential mortgage sector. Gagan can be reached by e-mail at Gagan@BSIFinancial.com.
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Data analytics and predictive modeling This may be the most exciting area of all, and it will make all of the changes I’ve already described possible. Making better use of data is the only way services can get more efficient and compliant at the same time. For servicers, data is key to making better and faster decisions, and we now have more data to work with than ever before. As I’ve said, we have more than 10,000 standardized data points on each loan in our portfolio. When servicers use exception-based processes, issues can be identified and addressed earlier, which ultimately leads to fewer exceptions, fewer complaints and a better experience for everyone involved in the transaction, from borrowers to investors. Similarly, applying predictive analytics to this data gives us better forecasting capabilities
and allows us to identify risks earlier. If servicers know where an exception is likely going to occur, based on the portfolio’s history, they can identify and address it before it becomes an issue. They’ll be able to predict which borrowers are going to be delinquent, but also which ones are likely to prepay their loan, get a refinance or take out a home equity loan. And once they know what borrowers are likely
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years. But simply hiring an army of people to deal with this is not the most efficient approach. Rather, the best method to control these costs is to reengineer core processes, boost staff training and invest in new technology, with an eye toward automating core processes. While many servicers, and originators too, have done a lot to automate their processes, there’s still a lot of room for improvement. For lenders, that involves a change in mindset, not just a change in the operating model. We need to see our business as a manufacturing process, fundamentally no different than building automobiles or canning soup. And that means more automation. Think about it. To those of us in servicing, all the operations and processes that need to be done on the loan–receiving the payment from the borrower, posting it to their account, escrowing funds to pay taxes and insurance, paying investors their principal and interest, handling a customer communication–are all parts of a manufacturing process. And that process must be designed to maximize efficiency, speed, compliance and, perhaps most important of all, customer service.
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Managing Security Risks for Mortgage Lending Services By James V. Luisi he recent revelation from Equifax about two massive data breaches, one that occurred in May and another breach in July, is being seen as one of the most damaging and mismanaged security exposures in the financial services history. Equifax, a leading creditreporting agency, said private information from 143 million people may have been exposed– that’s nearly half of the U.S. population. The personal information leaked included names, Social Security Numbers, birthdates, addresses and, in some cases, driver’s license numbers and credit card information. Equifax said 209,000 credit card numbers were exposed in the May breach, which includes customers in Canada and the United Kingdom. One of the most troubling aspects of the stunning cyberhacking catastrophe is that Equifax is the agency many people use to guard against identity theft, and yet they only disclosed it months later after executives had sufficient time to unload their own shares of company stock. Even worse, the Chief Executive Officer, Chief Information Officer and Chief Security Officer all suddenly retired. This brazenness of Equifax executives adds a layer of securities fraud on top of the reputational damage of allowing a breach to occur by poorly protecting consumer credit information. What does this mean to mortgage lenders, banks and financial services providers? First, let’s look at the credit reporting industry. Next we’ll review the critical need for security in the mortgage lending process. Finally, we’ll define some steps to minimize security risks.
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Credit reporting industry Equifax is one of the three largest consumer reporting companies– including Experian and TransUnion. They track information about consumers, such as credit history, deposit account history and other
“Except for modifications within the Equifax organization, investigations, lawsuits and hearings, the mortgage industry itself will most likely continue with business as usual.” consumer transactions. We all know the importance of credit ratings and FICO scores that lenders use to determine credit risk and the interest rate for mortgage, auto and other loans. Those of us outside of the credit reporting industry will never completely understand their use of mysterious algorithms to produce report cards and scores. A recent New York Times article written by Ron Lieber, says these verdicts of credit risk become final, generally unappealable judgments that dictate the interest rates that consumers pay on mortgages, car loans and anything else that requires borrowing. Everyone from auto dealers to home loan officers sees the financial grades that Equifax and its counterparts bestow upon consumers. If you are not up to their algorithmic standard, a stranger at a desk or counter may inform you to your face that your dream house is out of reach or that you will not have
a car to drive to work. Conducting business with any financial services company requires agreement to allow the company to report your payment history to the credit-reporting agencies. The role of serving as a central repository of data played by credit-reporting agencies, on the surface, is to render ease and affordability of getting credit, though to the credit-reporting agency itself, it is also big business. That said, the information in credit reports can frequently have false information and errors stemming from a variety of sources that introduce data quality problems. For example, errors occur when people submit incomplete credit reports or use the wrong names, such as Bill Smith rather than William Smith. According to a March 2017 report from the Consumer Financial Protection Bureau (CFPB), errors in credit reports are very difficult to correct. The process of correcting the record
is difficult and not always successful; this is the case whether the error is accidental or the result of identity theft. Paradoxically, the credit reporting industry’s ironic response is to sell highly profitable monitoring services to people who are anxious about errors and identity theft. So what will change because of the Equifax data breach? Except for modifications within the Equifax organization, investigations, lawsuits and hearings, the mortgage industry itself will most likely continue with business as usual. A primary reason is that banks, credit card companies, mortgage lenders and other financial institutions heavily rely on credit reports from the three major credit-reporting companies to make lending decisions. In many cases, financial institutions check all three credit bureaus to determine the worthiness of borrowers and make certain they are not missing any issues that might influence credit risk. Additionally, despite the magnitude of these data breaches, credit bureaus will continue to benefit consumers and the financial services industry. Most of us in the financial services industry will agree that the economy would not function as efficiently without a credit reporting system in place. Getting credit is an essential component of the U.S. and global economy. Mortgage companies and threats Mortgage companies generally have less security than credit bureaus, and as such are an ideal target for cyber attackers. They collect more personal information than other types of organizations, including Social Security Numbers, employment information and credit card numbers. In addition, mortgage companies must collect and retain the sensitive information for the term of the loan. Cyber attackers will be attracted to all of the confidential documents stored on servers and data repositories. A borrower’s financial information is shared during various steps to create a loan. This includes notaries, loan processors, loan officers, underwriters, and lawyers, which provide opportunities for security threats while in transit to vendors
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l Protect Internet connection l Install and activate software firewalls on all business systems l Make secure backup copies of
IN THIS ISSUE:
Compliance Today & California Holiday Networking Party
Companies like ours go even further, including: l Internet traffic monitors that detect pre-attack probes of your infrastructure l Proactive automation that shuts down traffic from attacking IP-addresses l Encrypted security keys added to authenticate messages l Bot detection heuristics that reroute traffic to decoy infrastructure Also, employee training and testing about possible security threats is paramount to minimizing data breach risks. Financial institutions need to educate team members against sharing account access information, alert them about harmful phishing emails and popup windows, and train them on social engineering techniques. IT leaders must limit employee access to data by defining roles with specific tasks and appropriate levels of authority. An inventory and review of an organization’s hardware and software is necessary on a regular basis. With the January 2018 introduction of the new Home Mortgage Disclosure Act (HMDA) rule, even more fine-grained loan data about borrowers will be required. This makes the mortgage industry very attractive to cyberattacks and data breaches. By partnering with reliable service providers, lenders can avail themselves of the latest commonsense security to protect borrowers’ data, their reputation, and the reputation of the industry.
James V. Luisi is Chief Information Officer/Chief Technology Officer of KeyStoneB2B. He has more than 30 years of experience in business and IT focused on integrating diverse systems to best serve customers, shareholders, business and IT stakeholders. He may be reached by phone at (856) 282-1544 or e-mail James.Luisi@KeystoneB2B.us.
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Mortgage industry security What can market participants do to minimize security risks across the mortgage industry? The Mortgage Bankers Association provided guidance, “The Basic Components of an Information Security Program,” that highlights recognized components of a basic program for managing information security-related risks for the mortgage industry. The MBA recommends priority practices, including:
important business data/information l Control physical access to and encrypt computers and network components l Secure your wireless access points and networks, including smartphones with security l Create and enforce business policies related to information security
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outside the lender. Unfortunately, cyber hackers are not the only form of security risk. There is a tremendous internal threat when employees lose their laptops or smartphones. Team members can also mistakenly click on email attachments, become the victim of phishing attacks, and expose the company systems to ransomware. Employees are also prime targets for social engineering, an exposure that gains a team member’s trust so that they unknowingly reveal information to access sensitive data. One example provided by Teraverde Management Advisory describes an employee of a mortgage banker who was tricked into thinking that the CEO sent a request for a wire transfer of $21,000 into an account. The Ponemon Institute 2016 Cost of Insider Threats study found that internal threats cost companies an average of $4.3 million annually. Although there are some malicious insiders, employees frequently expose their companies to security risks because of ignorance and carelessness. Ponemon’s study states that negligence is the predominant cause of insider security risks.
DON’T MISS OUT! NOVEMBER 2017
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Technological Innovations Transforming Mortgage Industry By Bhupender Singh anks are operating in a challenging environment with increasing competition from agile fintech providers who are rapidly gaining market share and capturing the imagination of customers through their targeted and innovative product offerings. To thrive in this environment, digital adoption and innovation should be a top priority. It is essential that banks transform their products and services by leveraging emerging technologies like blockchain, artificial intelligence and cloud computing, while also upgrading their IT systems to be more integrated and nimble, as this will help them compete with the disrupters in the market. While the trials that banks are facing is well-documented, mortgage providers are also facing the same challenges. The mortgage market is currently entering a dramatic period of change, a wave of digital disruption has swept across the mortgage industry, with firms looking toward the latest technology to improve their offerings. The rise of online banking has seen traditional players shuttering branches to cut costs and make way for a more digital model (six percent of U.S. bank branches have been closed since the financial crisis nearly a decade ago), as well as to keep up with challenger banks and fintech players. Solely focusing on digital might be a simple solution, but traditional banks and mortgage providers need to pay more attention to what will differentiate them from their disruptive competitors. Across the U.S., some customers are opting for an online service. There has been an increased appetite for Internet banking, with nearly 60 percent of customers preferring a more digital and personal relationship with their bank. An expanding number of financial services is being completed without any personal interaction at all.
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New technologies enhancing customer journey At the moment, it may seem that disruptive fintech providers are racing ahead at a pace that will make it quite difficult for banks and mortgage providers to compete. However, a distinct advantage for financial service providers is their established customer base and access to capital, which most fintech providers lack. By truly embracing digital disruptions and emerging technologies, they can transform their own processes and enhance the customer experience for each step of the customer journey. This will help them increase customer retention and loyalty, thus increasing the barriers to entry for newer firms. A significant proportion of customers, however, maintain the desire for face-to-face interaction, particularly when choosing and applying for a mortgage. With this in mind, it is a concern that major banks are routinely closing branches. With market pressures to cut costs, many providers are reducing their front-end outlay as the first response, it is predicted that 20 percent of bank branches will have closed in the next three years. Disruptive players and emerging technologies should act as motivators, inspiring mortgage providers to enhance their own offerings. By digitally modernizing the back-end and core systems, banks and financial services firms can build on their strengths. Legacy systems put a strain on product and service innovation and hinder banksâ&#x20AC;&#x2122; ability to thrive in the digital world. But leveraging the massive and invaluable data on customer profiles and behavior, they can stay a step transaction ahead of the fintech firms by offering customized products and even predicting future customer behavior. Big Data offers a competitive advantage In addition to a more competitive environment, the mortgage industry is struggling
â&#x20AC;&#x153;The role that technology plays in this industry must be focused on empowering human service with digital innovations, in order to provide services that are sustainable and cost-efficient, and that get the most out of employee expertise.â&#x20AC;?
to manage the voluminous amounts of data in the processing of loans. However, those mortgage providers that use advanced data analytics to gain a better understanding of the market will give them a great edge against their competitors. For example, sophisticated data analytics can produce significant insights on market activity for appraisers analyzing large amounts of information during the property valuation process, such as getting detailed accounts of market conditions and tackling any possible inconsistencies in the data provided and shared among all parties involved in the processing of mortgages. This is made possible by Big Data technology collating all the various data sets, thus creating increased objectivity, transparency, and the ability to
produce more detailed content that makes the information easier to understand. Utilizing Big Data serves as a vital deterrent against potential risks, providing appraisers with valuable information that can flag negative financial trends that might not surface during the valuation process. While Big Data has significant benefits for valuations, it should not be viewed as a supplement rather than a replacement for human intelligence. In essence, appraisers using data analytics as a supplemental tool will experience increased efficiency and accuracy in their work. At times, the challenge is that banks and mortgage providers are not digitally proficient and need support to build solutions that help them to adopt swiftly to changes in market conditions. External partners with industry experience can
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business model, they can couple digital innovations with the
attractiveness of in-person expertise in the years ahead.
Bhupender Singh is Chief Executive Officer of Intelenet Global Services, responsible for managing the companyâ&#x20AC;&#x2122;s global business portfolio across the United States, United Kingdom, Europe, the Middle East, India and Philippines. Bhupender joined the company in 2007 as the Head of Strategy and M&A, upon the acquisition of his company Travelport India Operations, where he served as Chief Executive Officer.
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Conclusion In-person engagement between the customer and an advisor gives banks the opportunity to offer other value-adding services that reach beyond completing a specific account request. Digital should not be seen as a means to replace these interactions, but should be utilized as a way to facilitate outstanding customer service and to make face-to-face services more efficient and sustainable for banks. Companies should look for new technology which empowers
their advisors, encouraging a fruitful relationship between the customer and bank. The role that technology plays in this industry must be focused on empowering human service with digital innovations, in order to provide services that are sustainable and costefficient, and that get the most out of employee expertise. If mortgage providers and banks are willing to revise the underpinning rudiments of their
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offer tailored advice to banks and help customize or automate their processes, products and services. Partners with deep domain knowledge and proven track record in the industry possess the skills and solutions to help financial institutions stay ahead. Despite the surge in demand for online services, the majority of customers continue to desire face-to-face contact when making long-term financial decisions and large transactions, such as getting a mortgage. Online banking is routine for most customers, with the majority of transactions and queries completed without any human interaction. Banks have the opportunity to stand out by leveraging their experience of face-to-face service. Next-generation technology is heading in a direction where it will be possible to combine both the full benefits of online banking and face-to-face customer services. The industry could potentially make the move toward a mobile advisor-type workforce, maximizing the impact of customer- facing staff. This gives a new lease of life to the provision of in-person service, connecting roaming advisers to nearby customers. This all but eliminates the costly outlay on a branch network, without forcing a bank to sacrifice customer service. Importantly, it empowers traditional providers to stem the tide of mortgage services migrating wholly online. An offline, inperson offering will become a key differentiator which retains an appeal for a significant cross-section of potential customers.
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Keeping Pace With Today’s Regulatory Changes By Susan Graham iven how frequent and ongoing regulatory changes have become, keeping up with the regulatory environment is one of the biggest challenges facing mortgage industry professionals today. In fact, for today’s lenders and servicers, maintaining compliance has become a fulltime job. Not only does it require being vigilant about monitoring potential changes to ensure they can be accommodated in a timely manner, but even small changes can have a huge impact on lenders’ and servicers’ operations. Industry professionals must first understand the changes and how they may affect certain operational areas, then construct and test a plan to accommodate those changes, train their staff on the new practices and finally effectively implement those changes. Additionally, there’s an element of uncertainty that complicates compliance even further. While anticipating changes can help lenders and servicers accommodate them in a timely manner, there’s no guarantee that these changes will ever be enacted or on the original effective date. Lenders and servicers often have to use their best judgment to decide whether or not they should make steps to prepare for a potential change. If they decide to hold off, they may be late implementing the change and incur significant monetary and reputational costs. If they decide to move forward, they may expend the resources to accommodate a change that will never come to fruition, or be significantly delayed, also resulting in unnecessary costs and inefficiencies. Luckily, there are resources available that can help industry professionals accommodate these regulatory changes more efficiently, accurately and effectively. Advancing technology, vendor resources
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and strategic planning can all serve as excellent tools to help lenders and servicers ensure they’re keeping pace. Challenges that mortgage professionals face According to a recent survey conducted by Wolters Kluwer, about 63 percent of mortgage
delivered. The enactment of TRID is likely a huge factor in why nearly two-thirds of the lenders surveyed reported changing regulations as a concern in the same year. Likely fueling that concern even further was that lenders also saw new changes to the Home Mortgage Disclosure Act (HMDA)
“Lenders and servicers often have to use their best judgment to decide whether or not they should make steps to prepare for a potential change. If they decide to hold off, they may be late implementing the change and incur significant monetary and reputational costs.” professionals say that keeping track of changing regulations is a source of concern. While that’s still a significant number, the good news is that confidence seems to be rising; the number is down from 73 percent reported in 2015. This concern stems from many channels. For one, when it took effect in October 2015, TRID caused major changes to the industry—new rules about what information lenders must disclose to borrowers and when those disclosures must be
finalized in 2015. The first of these changes went into effect on the first of this year, but lenders are still working to accommodate the second round of changes set to take effect in January 2018. According to the same survey from Wolters Kluwer, about 64 percent of respondents still see accurately capturing new HMDA data fields as a source of concern. On the servicing side, servicers are likely feeling anxiety around changes to
investor reporting and CFPB’s servicing rules. The CFPB issued the 2016 Mortgage Servicing Rule and the 2016 Fair Debt Collection Practices Act (FDCPA) Interpretive Rule, which set forth additional changes to the servicing landscape, namely related to successors in interest and borrower delinquency. Servicers implemented Fannie Mae’s Future Changes to Investor Reporting early this year and now the implementation of Freddie Mac’s Investor Reporting Change Initiative has begun and will become effective in 2019. These changes set forth the goal of easing monthly reporting for servicers but still required significant changes to their operations with the goal to migrate both GSE’s to using an industry standard. For example, Fannie Mae’s changes eliminated the Single-Family MBS call-in requirement, in preparation for integration to the Common Securitization Platform, a new securitization infrastructure that both Fannie Mae and Freddie Mac will use. Although the call-in requirement was eliminated, servicers must now report activity more frequently. Up until recently, the limitations to integrations among platforms also presented a compliance challenge. Many lenders and servicers looked to their technology and vendors for compliance, but as both lending and servicing require the collaboration of many parties, it was difficult to maintain compliance across multiple disparate systems. MISMO standards have greatly helped to ensure that all parties are speaking the same language, and the use of Application Programming Interfaces (API’s) have become more common for collaboration across systems. If maintaining compliance weren’t difficult enough, implementing new regulations into their operations also requires additional time and expense for lenders and servicers. Since industry professionals are held to strict deadlines set out by legislators, investors and regulators for implementing changes, they must often rely on quick methods to meet those deadlines and ensure they maintain compliance. If quick
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inefficient processes were implemented, they could cost the lender or servicer both time and money and are often never replaced with better solutions as other initiatives and operations take priority.
regulatory landscape that is constantly shifting. Says Timothy R. Burniston, Executive Vice President of U.S. Advisory Services and Regulatory Relations for Wolters Kluwer, in a statement: “While the survey doesn’t measure why concerns have leveled off, a strong possibility is that respondents have been arming themselves with better tools, resources and programs to help navigate through the wide range of complex
challenges they face.” More and more industry professionals are realizing that, when it comes to maintaining compliance in an increasingly complex and frequently changing regulatory environment, they are not alone. With strategic preparation and the proper tools—well-communicated plans, robust technology and support from their vendors, to name just a few—they’ll be able to keep pace with regulatory changes with confidence and success.
Susan Graham is President and Chief Operating Officer of Financial Industry Computer Systems Inc. (FICS), a mortgage technology specialist. As President and COO, Susan is responsible for the overall management of the company’s day-to-day operations, strategic planning, customer relations and product development. Susan may be reached by phone at (972) 458-8583 or e-mail SusanGraham@FICS.com. 79
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Preparing for upcoming regulatory changes There are a few steps mortgage industry professionals can take to ensure they’ll be able to accommodate regulatory changes on time while minimizing costs and inefficiencies. The first step is to confirm the compliance resources available. Whether those resources are internal or external, the plan of action and timeline for implementing changes needs to be clearly communicated to all parties involved in the process. Technology is of the utmost importance and can be a key tool in maintaining compliance for both lenders and servicers alike. For example, when TRID went into effect, lenders relied heavily on document services providers for new dynamic disclosures that would help them maintain compliance. Similarly, industry professionals can leverage technology to automate and build new requirements into their operations for upcoming changes. The key to successfully leveraging technology to maintain optimal compliance with both new and existing regulations is adequate preparation. Backed by a team of regulatory experts, Leonard Ryan, President of QuestSoft, works with more than 2,500 lenders on HMDA compliance and has seen firsthand the importance of providing users with ample time to acclimate to upcoming regulatory changes well before they take effect. “While the new HMDA rules present a significant challenge for much of the industry, we continue to see lenders look to their LOS partners for guidance as the regulatory environment evolves,” said Ryan. “By staying on top of upcoming regulatory changes, providing compliance tools, and implementing the necessary updates as far out as possible, vendors can provide their customers with greater confidence in managing
compliance and ensure their ongoing success throughout the regulatory transition.” For the utmost success, industry professionals should select LOS and/or servicing software that includes compliance programs and interfaces. The system should also include tools to help institutions comply with regulatory requirements or internal business practices—for example, the ability to add userdefined fields to a system, create custom documents or reports or set up business or compliance rules. It’s also crucial that the system evolves with the regulatory landscape itself; software should be updated in a timely manner to enable lenders and servicers to meet new changes once they go into effect. Utilizing technology also provides lenders and servicers with another helpful tool for maintaining compliance: the guidance of their vendors. Many vendors offer additional resources to help their clients maintain compliance—for example, training options to help navigate new regulatory changes within the software—so lenders and servicers should be sure to take advantage of the compliance offerings from existing vendor relationships. Last, but certainly not least, while technology is an essential compliance tool, it’s only one part of the larger operational picture. Industry professionals must think about how that technology fits into the overall plan of action for accommodating the changes and address or update internal business processes affected by the new regulations. Many of these changes begin with a decision and logic based on the lender’s current business practices. While a significant percentage of lenders and servicers still perceive keeping pace with regulatory changes as a source of concern, the good news is that the industry seems to be gaining confidence. Per the Wolters Kluwer survey, the 10 percent decrease in the number of industry professionals reporting monitoring regulations as a concern suggests that lenders and servicers are beginning to feel better equipped to navigate a
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Are You a Maest or Violinist Loan Officer? By Brian Sack
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Maybe you are lucky enough to even have a marketing assistant or loan assistant. Then, of course, you have all of the external people involved. l Appraiser l Title company l Agents You must remember … you are a maestro, not a musician We all know that we are responsible for all of these people playing beautiful music that results in a smooth and speedy closing. The reality of course is that whether it’s our fault or not, and whether we made the mistake (played the wrong note or not), it’s always blamed on us. This reminds me of two funny stories that help illustrate this point. One day I was in my office and one of my realtors named Ruth called and
There is a lesson to learn from both of these situations The first lesson is that you should always be an offensive communicator. That means that you must meet with
your processor at least once a week and review all of your files to make sure that all of the other “musicians” are doing their job properly and on time. You should report to the client, the listing agents and selling agents to ensure that everyone knows what’s happening and what is still missing. The second lesson is that you must always keep in mind that you are a maestro and not a musician! That means you have a strong team and that each person is doing their job. You should never ever be setting up, processing or doing any of the other functions that go into getting a loan from application to closing. Your job is to be constantly bringing in new business and make sure that your team is playing beautiful music so you can be seen as the ultimate maestro. (Please go back and re-read that because all too often, I see originators getting way too involved in their files at the expense of bringing in new deals. The third lesson is perhaps the most important of them all. You must be a master of persuasion and manipulation. No, they are necessarily bad words because each and every day, we are either being persuaded and manipulated, or we are manipulating and persuading others. This is a topic I have studied and mastered for more than 30 years. Why? Because if you are not an expert at persuasion and manipulation, then you are being manipulated. You must know how to get other people to do what you want them to do, when you want them to, and still feel good about it. There are 22 persuasive tactics that I use to generate new deals, get referrals and get my staff to do what needs to be done. In fact it gives you an unfair advantage over your competition when you master these skills. There is also a very simple 27-word sentence I learned and share in the “LO Unfair Advantage Program” located at LOUnfairEdge.com/1-2/. Always keep in mind that you should always set realistic expectations. Never take responsibility for the mistakes of others. Make sure you have a great team of musicians and that you are leading them to play beautiful music. Integrate some of these ideas into your own mortgage business right now and watch your production grow. Feel free to pass on this article to anyone you think would benefit from it.
Brian Sacks is a nationally-renowned mortgage expert who has career closing of more than 5,924 transactions for more than $1 billion. He has trained, consulted and coached tens of thousands of loan officers and company owners over the past 31 years on how to close more loans, make more money, and still have a life. Brian is the host of “Top Originator Secrets,” which can be seen weekly on Mortgage News Network and on his blog. You can get more information and grab your free report on “How to Get Agents Chasing You” at TopOriginatorSecrets.com.
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before even saying hello and started screaming at me. She was screaming so loud that the other loan officers and processors in my office started gathering around my cubicle wondering what was happening. A few hours earlier, I had told her that we would not make closing since I did not have all of the items needed and to get the loan submitted. When she took a breath, I told her that I had asked for these items several times, but they had not been sent. She continued screaming asking why I still did not have them. Being quick on my feet, I replied, “Ruth … I have an idea, I will pick you up in 10 minutes and we will go over to their home. They are probably at work, so we’ll break in. You can go upstairs and I will go downstairs and I’m sure we can find the paystubs, W-2s and bank statements that we need to get the loan approved.” Funny right? I thought so, but this angered Ruth even more. She was literally furious and started screaming even louder until I finally had to hang up. The other story is very similar. The buyer was buying new construction, and his lock was about to expire in a market where rates were quickly rising. He called me and immediately started screaming, asking me why the home wasn’t ready yet. He demanded that I hold his rate since the home was not ready and demanded to know when it would be completed. He was also screaming loud enough to gather all of my fellow originators and staff who wanted to know what I had done this time to make someone call screaming that loud. So again, being fast on my feet, I told him that I would grab my hammer and ladder and that he should grab some nails and screwdriver, a pair of pliers, and I would pick him up in 10 minutes so we could drive over and immediately finish home so he could settle. Funny right? Thank goodness, unlike Ruth, this guy actually had a good sense of humor and started laughing and apologizing. He was furious and just needed someone to vent to.
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es, you probably want to re-read that title since I know it might sound a bit strange. You are probably wondering what the heck this has to do with the mortgage business or originating loans. Stay with me because this may be the best analogy of our industry and what we each do every day. First, I have to confess that I snore loudly, so I rarely attend the symphony, and worse, I truly don’t enjoy sitting in one place of hours upon end listening to music of any type. Let’s take a look at a symphony and compare it to our business. A symphony is composed of dozens of people playing various instruments and a maestro or conductor who leads them all in making beautiful music. The musicians must be proficient in playing their instruments. They don’t necessarily need to know how to play all of the instruments, they just need to make sure they play their own instrument correctly. The maestro, however, must be familiar with all of the instruments and must make sure that all of the musicians are playing their instruments in a way that collectively makes a beautiful song. If one or two of the musicians miss a note, or if the conductor delivers a bad signal, the song will not come out sounding the way it should. Guess who is always blamed? If you guessed the maestro/conductor you are correct. Looks easy doesn’t it? But it’s really not since there are so many personalities involved and so many moving parts. If you are set up like most mortgage companies, you will have one or more of these people touching your files.
heard on the street
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President and Chief Strategy Officer, approximately $1.5 billion to $2 billion where he will help lenders, credit from 2015 to 2016 and is on pace to unions and banks implement the add more than a dozen branches technology and advise different nationwide in 2017. The company is origination channels on executing now licensed in 42 states. their strategic technology initiatives. Staffed by more than 100 l Opus Capital Markets Consultants employees, the Downers Grove LLC, a wholly-owned subsidiary of headquarters features private and Wipro Ltd., has announced the team offices, an open-concept kitchen addition of Bruce Legan, who will and dining/gathering area, two join Opus CMC as Managing conference rooms and a dedicated Director of Business Development, training room. The headquarters is overseeing sales, marketing, client occupied by the company’s loan retention and business development processing, underwriting, closing, strategy at Opus CMC and Wipro’s training, information technology, Mortgage Solutions unit (BPS). secondary shipping, accounting and l Altisource Portfolio Solutions SA human resources departments. Staff has announced that Phil Huff has members were transitioned into the joined the company as Vice new space from the company’s President and Head of Valuations, previous Lombard location beginning where he will be responsible for the this spring. growth and advancement of Altisource’s Valuation Business, Mortgage Professionals including Springhouse, a full-service to Watch appraisal management company l HomeBridge Financial Services (AMC), where he will serve as has announced that Thomas President and CEO. Springhouse Gumb has joined the company in has expanded its sales team and the role of Branch Manager and has announced George Paquette Mortgage Loan Originator. as Manager of Valuations. Paquette l Informative Research has added has more than 15 years of valuation Renae Sherman as its Vice experience, having worked as Chief President of Business Development Appraiser, Compliance Officer and and Innovation. With more than 20 Manager of Review for nationwide years of experience, Sherman was AMCs and large lenders. formerly the Director of Mortgage l Factual Data has announced the Data Strategy and Business promotion of Jay Giesen to Development for Experian. President, having been with the l HomeBridge Financial Services company since January 2014, most has named Teresa Hale to the role recently serving as Senior Vice of Area Manager, with a focus on President. Northern Florida and based in l NewLeaf Wholesale has HomeBridge’s Jacksonville office. announced the addition of five new l The Mortgage Collaborative Account Executives with Michael (TMC) has promoted Rich Bedford covering the State of Swerbinsky to the role of Chief Colorado, Michelle Rossini Operating Officer, having served as covering the Northeast Territory, Executive Vice President of Monique Daily covering the National Sales and Strategic Southern California Region, Roy Alliances since 2015. McGregor covering the Central l Mortgage Network Inc. has Region, and Zenon Zorij covering announced that Jay Murphy has the Eastern Division. joined the company as a Loan Officer serving the Greater Boston Your turn area, based in the lender’s National Mortgage Professional Burlington, Mass. branch. Magazine invites its readers to submit l AmeriFirst Home Mortgage, a any information, events, passages, division of AmeriFirst Financial promotions, personal or professional Corporation, has announced the occurrences that seem appropriate addition of Joe Hufnagel as and/or other pertinent data to the Human Resources Director. attention of: l TRK Connection has promoted Colton Hansen to the role of Vice Heard on the Street/Mortgage President of Business Professionals to Watch column Development, responsible for Phone #: (516) 409-5555 leading and executing company E-mail: objectives for sales and marketing campaigns, implementing new Newsroom@MortgageNewsNetwork.com technologies, and analyzing new opportunities. Note: Submissions sent via e-mail are l MortgageHippo Inc. has named preferred. The deadline for mortgage industry veteran Joe submissions is the 1st of the month Dahleen as Executive Vice prior to the target issue.
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n the winds of change, we often find our direction. No truer words were spoken than in our real estate industry. Yet, we continue to stand against change as if we can build a wall and stop it from happening. This is because most of us fear change. Our imaginations create reasons why we should be afraid of the unknown because what we know is believed to be far safer. When I was trained in the business as a new agent, one of the first lessons taught was not to reveal the address of a listed property. The goal was to never provide an opportunity for a prospective purchaser to drive by an available property. Looking back, this is laughable. The very first thing an agent would do with an executed listing agreement in hand was put a sign on the lawn of the property like a beacon of light attracting as much attention to this house as possible. However, if a caller inquired on a property from a limited five-line newspaper ad seeking an address, agents treated that information as forbidden fruit. The mark of an expert salesperson was to get the prospect into the office without providing any information. Real estate agents were the proud gatekeepers of information. Imagine the fear instilled in an entire industry when
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the Internet threatened this routine by handing control to the consumer who now had access to all property information, including the address. The Internet caused a major paradigm shift in the way the real estate business was conducted. Real estate listings went from hard copy lists controlled by agents, to online listings on major portals. Business was doomed from the gusty winds of change and agents were shouting about the sky falling. Then the dust settled, the storm passed and real estate professionals who weathered the storm found a new direction through listing data compiled by local Multiple Listing Systems nationwide. Real estate agents found shelter through their own online portal by establishing REALTOR.com in the mid-1990s. REALTOR.com became the key to real estate listings and the “go to” place for everything real estate. The pot of gold at the end of the rainbow was real estate agents controlled the data again. All listings appearing on the site had to be listed with an agent. Although addresses, photos, virtual tours and other vital information specific to a property was now freely displayed for consumers, this nationwide pool of listings provided a safe haven for real estate agents. This false sense of
Braving the Win BY VICTORIA RI
controlling data was short lived, as consumers, with insatiable appetites for “everything real estate,” were swarming the Internet intrigued by the amount of information now available. They demanded more. Consumer needs and requirements will ultimately determine what wins in any marketplace. New technology companies became key drivers for consumer value. It appeared everyone was in the race to appeal to the demand of providing easy access to information. Companies like ForSaleByOwner.com, New HomeSource.com, Trulia, etc. were born. Some geared directly toward consumers and others with consumer facing information and lead generation with calls to action paid by real estate agent advertisers. Lead generation and Internet Data Exchange (IDX)
providers were developing Web sites for agents, not just the brokerages. Agents were controlling their own business destiny capturing leads on their own. New brokerages were popping up, promoting how to leverage technology for maximum lead generation. Keller Williams saw extreme growth with their “agent-centric” model, encouraging agents to build their own business under their branded model, which also offered capped commissions and profit sharing for helping grow the company. Discount brokerages offering 100 percent commission or transaction-fee only leveraged the agent in control of their own business and the technology boom. The traditional brands of yesteryear were no longer the only game in town. Keller Williams, EXIT Realty, Realty One, HomeSmart,
Winds of Change
IA RIVADENEIRA
Charles Rutenberg, EXP and NextHome, just to name a few, were attracting agents just as quickly. The real estate industry, as we knew it was not just experiencing a few winds of change, it was in a deadly tornado of change. Agents were advertising on their own, independent of their brokerage. They signed up with companies like CoreLogic & SmartZip Analytics and others to help identify and target homeowners most likely to sell. Automated marketing campaigns and CRM integration became tools agents used as they formed teams in an effort to monetize buyer and seller leads. Licensing rules and regulations had to be revised to keep up with the digital world of paperless transactions, esignatures and online advertising. Then, Zillow grabbed the
attention of online visitors with their “Zestimate” and a vast array of combined information from a variety of sources. The online real estate information business was booming. In 2016, Zillow Group said its Web sites—comprised of Zillow, Trulia, StreetEasy, HotPads and Naked Apartments—had nearly 165 million average monthly unique users. Consumers simply couldn’t get enough information. Agents happily paid for advertising spots on Zillow, and as Zillow continues to evolve with newer and better add-ons, other agents are furious. Keep in mind, although the data is public information, agents still want to control the data delivered to the consumer and feel Zillow is violating this agenda. But are they? This is a common debate heard among industry professionals. Agents not willing to go into the winds of change are
running for cover protesting about how to stop the informationsharing. Meanwhile, other real estate companies, like Redfin, not afraid of the storm, found a new direction after studying the trends. Redfin which began in 2004, combined the online consumer facing information with agents, employed by Redfin with a salary rather than commissions, to meet prospective purchasers at properties. They capture leads through their online model and consumers can browse homes and take virtual tours. Redfin owns its own brokerage software and engages with visitors by answering questions online. The site also provides marketing advice to sellers, as well as home value estimates. This new direction in building a real estate business worked well for them. In 2017, Redfin launched Redfin Mortgage and also raised approximately
$138 million in IPO. It is believed the company is now worth in excess of $1.5 billion. For added perspective, Zillow’s market cap currently sits at $8.6 billion. The one thing that will always remain is the need for real estate companies to lead generate with change being the one constant in life. Every day, real estate is bought and sold and the changes in how the industry gets the leads to transact will continue to change. There is usually a negative reaction to any change. In the words of Wayne Dyer, “Change the way you look at things, and the things you look at begin to change.” In the end, it’s how we react and how easily we can pivot that will determine the success in accepting change and finding the positive path of our business journey. For in the winds of change, we often find our direction.
Victoria Rivadeneira is currently a Business Development Officer for Stewart Title. She is also the Creator, President, Producer and Main Host of Real Estate Talk, a one-hour radio show from NY’s iHeart Studios which airs on AM710 WOR, live streams on the Web, live video streams on three social media platforms, and is carried on iTunes, Google Play, Spreaker and several other podcasts. Victoria is also a respected corporate consultant, published author, professional speaker & NYS licensed real estate broker, certified real estate instructor and the Executive Officer for the BeverlyCarterFoundation.org. She may be reached by e-mail at Victoriariva@gmail.com.
Putting the Pric hanks to new technologies that are actually making personal finance understandable to consumers, lenders find themselves driven by competitive pressures to provide more information to their customers, earlier in the process. In addition, consumers are demanding that this information be provided to them electronically and on a device of their choosing. This need on the part of lenders has led to increased technology development aimed at providing better information to lenders in ways that make it easy for lenders to share it with those they serve. It also opened the doors for Crea8tech Labs in Pasadena, Calif. to enter the space with a new offering it calls Lender Price. The company launched last October at the MBA’s Annual Convention in Boston. It made a splash both with the ambitious nature of its offering (promising everything from real-time, competitive analytics and reporting to secondary marketing management) and by rolling out a high-profile investor for the trade press by presenting Kevin Costner (see our video interview on MortgageNewsNetwork.com). After that, the company made significantly less noise. We wanted to find out why, so I reached out to Co-Founder and former Chief Executive Officer Dawar Alimi and the man he hand-picked to replace him in the role of CEO, Jerry Halbrook.
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An ambitious vision Lender Price launched in 2016 with the promise that the offering would allow wholesale and correspondent lenders, banks, and credit unions to knowledgeably manage product pricing for all mortgage types: Conforming, non-conforming, non-QM and specialty loans. In addition, it would deliver
“Lender Price was designed to optimize lenders’ ability to analyze pricing in real-time by removing blind spots across all loan programs and competitors, allowing lenders to optimize their strengths and improve market share.” —Dawar Alimi, Co-Founder, Lender Price
innovative features that include built-in compliance checks, capital market tools, margin management, lock desk, customized workflows and mobile functionality. In all, the company promised an impressive array of functionality (see sidebar). The goal of it all was to allow lenders to focus on what they do best by removing the burden of technology development and management. At the same time, the company would enable investors to manage origination partners in real-time, both to identify opportunities and close the gap on technology and customer service. The company offered an advanced analytics report on product search scenarios that told investors which products lenders were locking and which were being overlooked, allowing both loan originators and decision-makers to learn, adapt and be profitable in the fluid mortgage marketplace. “Traditionally, mortgage lenders have navigated pricing decisions with blinders on due to delays and lack of transparency,” said Alimi at the time the company was rolled out. “Lender Price was designed to optimize lenders’ ability to analyze pricing in real-time by removing blind spots across all loan programs and competitors, allowing lenders to optimize their strengths and improve market share.” Lender Price hoped that choosing the right pricing engine would be a missioncritical imperative for lenders. So it offered software architected for innovation and versatility in the form of a big
data, native mobile solution. But then, the consumer decided it was time for the digital mortgage. A new plan to disrupt the industry It became obvious to Alimi that with a slight adjustment, its PP&E software would make an incredible Point of Sale (POS) solution for lenders who wanted to offer borrowers the digital lending experience they craved. He also realized that any digital mortgage offering that didn’t include a powerful consumerfacing PP&E would fall short of meeting borrower expectations. “We knew we could provide an efficient Digital Lending Platform that provided an easier way for consumers to complete the loan application—and we could offer it in a way that would allow the lender to configure the application any way they wanted,” Alimi said. Lender Price isn’t the first company to look at the POS and see an opportunity. Other firms, both tech providers and lenders, are actively working on updating their borrower-facing technologies. But Lender Price’s new CEO believes his firm has an edge. “If you look at [the competition], they have taken a more traditional approach to Point of Sale marketing, and so they created their version of what a Point of Sale application would look like,” Halbrook said. “They created a coded application of the UI side, but none of our competitors built in Product, Pricing and Eligibility, which is a critical component of the origination process.”
And that’s where Alimi and his team have been for much of the past 12 months. He took his developers back to the lab with the goal of reconfiguring the firm’s technology using a platform framework approach. In this way, he hoped to give the mortgage company the ability to manage, modify and control the user experience without having to return to the developer for new code. “We set out to create a framework that allowed clients to really build a custom user experience without having to customize the code,” Alimi said. “This is very unique in the market.” Creating a new user experience at the POS Alimi knew that the timing was right for the development of the technology he had in mind. His new framework would make use of Application Programming Interfaces (APIs) provided by other industry firms, allowing his customers to access consumer information without asking the consumer to provide it. Alimi and his team set out to create a platform powerful enough to engage with these APIs and pull in all the data lenders would need. “We are very focused on being able to bring digital data sources to the application process,” Alimi said. “This way the consumer is validating data that is publicly available and not trying to type in a loan application on a mobile device. Our method provides a much better customer experience.” Lender Price can get consumer data, with the consumer’s permission, from a variety of sources, ranging from mortgage servicing systems, to credit bureaus, to government agencies. The data flows into the platform, which lenders can then use to complete the application. “This approach makes it much easier to integrate with the lender’s partners’ systems,”
rice on Lender Success By Rick Grant
Halbrook said. “It’s much more secure, much faster, much less costly to maintain. And it gives lenders the ability to solve some problems and do some things that were impossible just a few years ago.” One of those things, according to Halbrook, is cutting down on data errors. He points to the two biggest sources of loan application error, incorrectly calculating income and failure to ensure that documentation is upto-date and validated. Lender Price’s technology solves both of these problems, Halbrook said. Too often, the borrower’s circumstances change over the course of time it takes to process the mortgage. When QC/QA gets the loan at the end of the process, things don’t line up the same way and problems result. “By going to the digital framework, we can shrink the time from application to closing, dramatically reducing the lender’s risk of something happening in the middle of the process,” Halbrook said. “It also dramatically improves the economics of the deal for the lender because they are not exposed to interest rate risk for as long. The cost of hedging the pipeline falls and volumes become more predictable and stable. There are a lot of reasons to do this in addition to a better consumer experience.” Advantages that could spell success If Alimi and Halbrook were the only executives in the industry, or even the first, who had identified those advantages, winning in the digital space would be easy. As it is, many firms are pursuing the digital mortgage for exactly these reasons. But Halbrook still believes Lender Price has the advantage. Some evidence for that can be found in the fact that Halbrook is on the team. An industry veteran most recently with Black Knight Financial Services, Halbrook was a solid choice for CEO. But what’s impressive is that a new
“By going to the digital framework, we can shrink the time from application to closing, dramatically reducing the lender’s risk of something happening in the middle of the process,” —Jerry Halbrook, Chief Executive Officer, Lender Price
CEO was sought at all. Halbrook pointed out how difficult it can be for a Co-Founder to hand over the business side to an outsider. Alimi knew he had to get the platform ready and so made the decision to step down in order to lead the development team. As a result, Halbrook says Lender Price is well-positioned to lead the digital lending POS space. First, he points to the robust PP&E functionality, which he calls a huge differentiator. Second, the company’s staff is a good mix of technology expertise and industry expertise. Third, Halbrook says the platform Alimi and his team has built is excellent. Alimi didn’t disagree. “Older frameworks tie your hands behind your back and won’t allow you to do the kinds of things we wanted to do for lenders, investors and borrowers,” Alimi said. “Our platform is not constrained by a traditional [Microsoft] SQL Server back end. Ours is architected for big data, so the platform is wicked fast and very flexible. The whole architecture is a leapfrog ahead of anything that depends upon a ‘traditional relational database’ kind of structure.” Halbrook says the company is fortunate to have had the time to allow Alimi and his team to finish work on the platform before pushing it out into the market. “The mortgage industry is still working to recover and build back consumer confidence,” Halbrook said. “Dawar and his team were smart to build out the platform and get it solid and ready to go to market before they started selling it. With these kinds of technologies, if you roll them
out before they work you’ll destroy your reputation. Then, you may as well hang it up.” It’s not yet clear who will emerge as the leader in the digital space, but if Halbrook and Alimi remain true to the
goals they shared with National Mortgage Professional Magazine, it’s a safe bet to put them among the leaders. “The philosophy behind this application is that every lender customer on this platform can offer a unique experience for their borrowers … that fits their brand, their approach to the market— what’s important to them as an entity, highlighted in their application, without having to go change a single line of code in the application,” Halbrook said. That sounds like an opportunity many lenders may find hard to pass up.
Lender Price PPE functionality includes: l Real-time, competitive analytics and reporting; l Customizable loan programs and eligibility; l Full eligibility on all available products, prime and nonprime/non-QM; l Lock desk; l Historical pricing; l Pipeline manager; l Comp plan management; l Correspondent/holdback management; l Margin management; l Dynamic, live program creation and pricing; l Rate sheet generator; l Secondary buy/sell; l Rate alert triggers; and l Native mobile app.
Rick Grant is Special Reports Editor-Producer for Mortgage News Network. He may be reached by phone at (570) 4971026 or e-mail RickG@MortgageNewsNetwork.com.
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The Raising of Appraisal Thresholds
Proceed With Caution:
By Jim Amorin, MAI, SRA, AI-GRS
he nation’s banking regulatory agencies–the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve–proposed a rule on July 31, 2017, to increase the commercial real estate threshold level for appraisals, raising it from $250,000 to $400,000. The rule does not propose changes to the current residential real estate threshold level of $250,000 or the $1 million business (or owner-occupied) loan threshold level, although the agencies asked questions relating to those issues. In an Aug. 18, 2017 letter, the Appraisal Institute (AI) and the American Society of Farm Managers & Rural Appraisers (ASFRMA) jointly responded to the regulatory agencies’ request for comments. While expressing support of the agencies’ decision not to propose an increase to residential or business loan thresholds, the letter also stated the associations’ opposition to the proposed increases to the commercial appraisal thresholds. Appraisals can play a vital role in the prevention of risky real estate lending. Maintaining thresholds at their current levels can ultimately benefit lenders, borrowers and valuation professionals.
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this instance increasing the thresholds may allow financial institutions to close certain loans faster but taxpayers, consumers, etc., will have to bear the cost if things go badly. The solution to the perceived problem should not just involve taking steps to close a loan faster, it should involve taking steps to close a loan better. l Appraisal regulations will become more complex. Increased thresholds will likely increase the complexity of the appraisal regulations, raising more questions from the banking community, particularly small community banks. As an example, many of the loans that would be impacted by a proposed increase in the business loan threshold level are guaranteed by the Small Business Administration (SBA). Currently, the SBA requires an appraisal for all loans above $250,000. Many of the business loans that could be impacted by the business loan threshold are eligible for SBA financing, and the SBA rules are different from those of the agencies.
Objections to raising thresholds In its letter to the agencies, AI and ASFRMA responded to issues raised in support of increasing appraisal thresholds, including: l Use of evaluations reduces costs, but also increases risks. Evaluations are not typically performed by valuation professionals in today’s regulatory
Jim Amorin, MAI, SRA, AI-GRS, is the 2017 President and Action Chief Executive Officer of the Appraisal Institute, the nation’s largest professional association of real estate appraisers. Based in Chicago, the Appraisal Institute has nearly 19,000 professionals in almost 60 countries.
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Appraisal Institute research shows that the majority of bank appraisers opposes any changes to the threshold levels. In a survey of AI professionals conducted in November 2015, more than 80 percent of bank appraisers said reducing the number of loans requiring an appraisal could increase risk to borrowers. Nearly 90 percent of chief appraisers and appraisal managers surveyed said raising the threshold level of loans that require an appraisal could increase risk to lenders. These individuals understand collateral risks of financial institutions better than anyone. Overall, AI’s research found that more than three-fourths of chief appraisers and appraisal managers surveyed disagree with raising the $250,000 threshold for real estate financial transactions, and nearly nine out of 10 with raising the $1 million threshold level for certain business loans. The proposed increase to the commercial real estate appraisal threshold level is particularly concerning given the recent prices increases in the commercial real estate market and issues with risk management in commercial real estate, particularly among community banks. The nation’s banking regulatory agencies’ proposal sends the wrong message at the worst time: when concerns about a commercial real estate bubble have increased, supported by significant price increases. If anything, the bank regulators should be emphasizing stronger risk management activities–not loosening a fundamental risk management obligation.
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Background The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) was enacted in response to the savings and loan crisis of the 1980s. It authorized federal bank regulators to require appraisals for real estate loans made by federally regulated financial institutions. In 1994, the bank regulators exempted wide swaths of loans from appraisal requirements, including real estate loans below $250,000 and owner-occupied business loans below $1 million. More than 20 years later, a majority of residential real estate loans still do not require an appraisal under the existing exemption. The recent financial crisis witnessed widespread problems with bank management of appraisal requirements, including adherence with the 1994 regulations. A vast majority of failed banks from the financial crisis were shown to have been cited by federal bank regulatory agencies for lax appraisal management.
environment. Usually they are completed by real estate brokers or real estate agents who are trained to obtain the highest price. This is very different from an appraiser, who is trained to give an unbiased opinion of value. Unidentified increased risk is a burden on the lender. Loan officers, due to their role, are not neutral parties to the transaction and they don’t have fiduciary responsibility. Appraisers are the sole neutral party to a transaction. They are only advocates for their opinions. To remove a disinterested third party (the appraiser) or to decrease the reliability of the value opinion reporting only serves to increase risk. l Increase of appraisal threshold undermines both consumer protection, and safety and soundness. This is particularly true of smaller community and regional banks, which, it has been reported, may be less likely to have robust collateral risk management policies, practices and procedures. While most large banks with established commercial lending operations have internal appraisal departments that are staffed by qualified appraisers and appraisal reviewers (often professionally designated by organizations like the Appraisal Institute and the American Society of Farm Managers and Rural Appraisers), many smaller banks might not be paying as close attention to risk management and collateral valuation. This is illustrated by bank failures over the past decade, which overwhelmingly occur amongst smaller institutions and, in large part, due to poor commercial lending decisions. Such failures can have a devastating ripple effect on the local communities, employees, business owners, vendors, the general public, taxpayers, etc. In smaller markets the failure of a community bank can lead to less competition and higher rates for consumers. l The creation of a national policy around one particular market. While the organizations understand concerns about from some community banks about the availability of appraisers in some rural parts of the United States, caution should be used against tailoring a national policy around one particular market condition. Any one real estate market may experience rapid growth, but that growth actually may increase the importance of appraisals, as real estate is prone to market fluctuations. In addition, increasing the threshold level to address the issue of appraiser availability is a very shortsighted way to address the perceived problem. In
On Tina Turner and Goal Setting How a simple question can change your life–and your sales numbers! By Bubba Mills
n her famed song, Tina Turner asks, “What’s love got to do with it?”
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Turns out, everything. Let me share a sentence that may very well change your life: If you don’t love your job, you’ll likely never achieve meaningful goals. The truth is … before you pull out your pen to jot down your first goal, you need passion for your profession. In other words, it’s highly probable that you won’t go after your goals if you don’t like what you’ll have to do to reach them. We’ve all heard how important it is to delay gratification to be successful— that many folks set goals to achieve delayed, long-term benefits, such as career advancement or improved health—but it’s just as important to have immediate satisfaction as you go about the work of achieving your goals. And researchers at the University of Chicago’s Booth School of Business have proven this to be the case. In one study, they asked people about their goals and how enjoyable it was to go after those goals, as well as how important their goals were. They also asked subjects whether they were still working on their goals two months after setting them. The finding: Enjoyment predicted people’s goal persistence two months after setting the goal far more than how important they rated their goal to be. In fact, the researchers found this pattern—immediate benefits are a stronger predictor of persistence than delayed benefits—in goals related to fitness and nutrition. People who like running on a treadmill, for example, exercise longer than those who care more about the delayed health benefits. And people who like the taste of vegetables eat more servings than those who think it’s good for their long-term health. So, with this research in mind, how can you ensure you follow through with your goals? The researchers and I think these three items will help you: 1. Consider how much you’ll enjoy it when you reach your goals. So if your goal is to help 300 homebuyers in 2018, choose todo items that you view as enjoyable and even fun. Sure, you’ll likely have some tasks that aren’t your favorites–maybe like making phone calls–but if you work to make those calls more fun, you’ll be much more likely to make the needed calls. 2. Think about immediate benefits as you work toward your goals. The University of Chicago researchers found that high school students worked longer on math homework when they listened to music, ate snacks, and used colored pens while working. Immediate benefits make the more difficult tasks seem more fun. 3. Seek out positive experiences while working on your to-dos that lead you toward your goals. The researchers found that people ate almost 50 percent more healthy food when they focused on the positive taste, compared with another group that focused on the health benefits. The bottom line … love what you do. If you don’t, figure out ways to love it. It all comes down to doing what has to be done–and you’re a heck of lot more likely to do those tasks if you enjoy doing them. Bubba Mills is Chief Executive Officer and Owner of Corcoran Consulting & Coaching Inc. He may be reached by phone at (800) 957-8353 or visit CorcoranCoaching.com.
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calendar of events
OCTOBER 2017 Saturday-Monday, October 14-16 NAMB National 2017 Rio All-Suite Las Vegas Hotel and Casino 3700 West Flamingo Road Las Vegas For more information, visit NAMB.org.
Sunday-Wednesday, February 11-14 Mortgage Bankers Association CREF/Multifamily Housing Convention & Expo Marriott Marquis San Diego Marina 333 West Harbor Drive San Diego For more information, visit MBA.org.
Saturday, October 21 MPowering You: MBAâ&#x20AC;&#x2122;s Summit For Women in Real Estate Finance Mile High Ballroom Colorado Convention Center 700 14th Street Denver For more information, visit MBA.org.
Tuesday, December 5 2017 California Holiday Networking Party The Atrium Hotel 18700 Macarthur Boulevard Irvine, Calif. For more information, call (516) 409-5555.
Sunday-Wednesday, October 22-25 Mortgage Bankers Association 2017 Annual Conference & Trade Show Colorado Convention Center 700 14th Street Denver For more information, visit MBA.org.
JANUARY 2018 Friday, January 12 New England Mortgage Expo 2018 Mohegan Sun 1 Mohegan Sun Boulevard Uncasvile, Conn. For more information, visit TheWarrenGroup.com.
Monday-Wednesday, November 13-15 Mortgage Bankers Association 2017 Accounting and Financial Management Conference Grand Hyatt San Antonio 600 East Market Street San Antonio, Texas For more information, visit MBA.org. DECEMBER 2017 Monday-Tuesday, December 4-5 Mortgage Bankers Association Summit On Diversity and Inclusion 2017 Capital Hilton 1001 16th Street NW Washington, D.C. For more information, visit MBA.org.
Monday-Thursday, January 22-25 Mortgage Bankers Association Independent Mortgage Bankers Conference 2018 The Ritz Carlton, Amelia Island 4750 Amelia Island Parkway Fernandina Beach, Fla. For more information, visit MBA.org. FEBRUARY 2018 Tuesday, February 6 Florida Association of Mortgage Professionals Central Florida Chapter 2018 Trade Show Hilton Orlando/Altamonte Springs 350 Northlake Boulevard Altamonte Springs, Fla. For more information, visit MyFAMP.org. Tuesday-Friday, February 6-9 Mortgage Bankers Association National Mortgage Servicing Conference & Expo 2018 Gaylord Texan 1501 Gaylord Trail Grapevine, Texas For more information, visit MBA.org.
Monday-Tuesday, April 23-24 Mortgage Bankers Association 2018 State and Local Workshop Capital Hilton 1001 16th Street NW Washington, D.C. For more information, visit MBA.org. Tuesday-Wednesday, April 24-25 Mortgage Bankers Association National Advocacy Conference 2018 Capital Hilton 1001 16th Street NW Washington, D.C. For more information, visit MBA.org. April 29-May 2 Mortgage Bankers Association Legal Issues & Regulatory Compliance Conference 2018 JW Marriott Los Angeles L.A. Live 900 West Olympic Boulevard Los Angeles For more information, visit MBA.org.
Mortgage Bankers Association National Secondary Market Conference & Expo 2018 New York Marriott Marquis 1535 Broadway New York, N.Y. For more information, visit MBA.org. AUGUST 2018 Wednesday-Saturday, August 15-18 Florida Association of Mortgage Professionals 2018 Annual Convention & Trade Show Walt Disney World Dolphin 1500 Epcot Resorts Boulevard Lake Buena Vista, Fla. For more information, visit MyFAMP.org. OCTOBER 2018 Sunday-Wednesday, October 14-17 Mortgage Bankers Association 2018 Annual Conference & Trade Show Walter E. Washington Convention Center 801 Mt. Vernon Place NW Washington, D.C. For more information, visit MBA.org. DECEMBER 2018 Saturday-Monday, December 8-10 NAMB National 2018 Caesars Palace 3570 South Las Vegas Boulevard Las Vegas For more information, visit NAMB.org.
Monday-Wednesday, April 30-May 2 American Mortgage Conference 2018 Pinehurst Resort 80 Carolina Vista Drive Pinehurst, N.C. For more information, visit NCBankers.org.
To submit your entry for inclusion in the National Mortgage Professional Calendar of Events, please e-mail the details of your event, along with contact information, to newsroom@mortgagenewsnetwork.com. *Looking for additional exposure at key industry events? Call 516.409.5555, ext. 4 to discover how to maximize your event coverage.
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Monday-Wednesday, November 13-15 2017 NRMLA Annual Meeting & Expo The Palace Hotel 2 New Montgomery Street San Francisco, Calif. For more information, visit NRMLAOnline.org.
Thursday-Friday, January 18-19 NEXT 2018 InterContinental Dallas 15201 Dallas Parkway Addison, Texas For more information, visit NEXTMortgageEvents.com.
APRIL 2018 Sunday-Wednesday, April 15-18 Mortgage Bankers Association 2018 National Technology Conference in Mortgage Banking Conference & Expo Detroit Marriott at the Renaissance Center 400 Renaissance Drive, Renaissance Center Detroit For more information, visit MBA.org.
Sunday-Wednesday, May 20-23 Mortgage Bankers Association Commercial/Multifamily Servicing & Technology Conference 2018 InterContinental Miami 100 Chopin Plaza Miami For more information, visit MBA.org.
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NOVEMBER 2017 Wednesday, November 8 Florida Association of Mortgage Professionals Miami Chapter Mortgage Gameday 2017 University of Miami Watsco Center 1245 Dauer Drive Coral Gables, Fla. For more information, visit MiamiFAMP.org.
MARCH 2018 Sunday-Wednesday, March 4-7 Mortgage Bankers Association 2018 Mid-Winter Housing Finance Conference The Ritz-Carlton, Bachelor Gulch 130 Daybreak Ridge Road Avon, Colo. For more information, visit MBA.org.
MAY 2018 Thursday, May 10 Maryland Mortgage Bankers and Brokers Association Annual Conference 2018 Loews Annapolis Hotel 126 West Street Annapolis, Md. For more information, visit MMBBA.org.
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& CLIENT SATISFACTION Contact Us: nmp@classappraisal.com (866) 333-8311
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!
www.classappraisal.com
CHURCH FINANCING
AUDIT DEFENSE AND RESPONSE
LENDERS COMPLIANCE GROUP 167 West Hudson Street - Suite 200 Long Beach | NY | 11561 | (516) 442-3456 www.LendersComplianceGroup.com The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance. Pioneers in outsourcing solutions for mortgage compliance. Our Compliance Team Will: Leverage your existing employees. Improve your productivity. Collaborate on projects. Make the most of your current technology. Bring innovation to your company. Be a strong cultural fit. Free you to focus on your core competencies. Give you access to world-class expertise. Lower your total operational costs.
EDUCATION
MORTGAGE BROKER AND LENDER COMPLIANCE
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AUDIT, MLO POLICIES and UPDATES Our fees are less than the big national firms
Concord Church Lenders www.concordchurchfinance.com 800-926-0399
that don’t call you back. Program includes all Manuals
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including QC, MLO Policies and Comp Plans, AML, GLB, Social Media and Web audits, on-line training sessions, governance documents, and our audit protection plan. Available in all 50 states. We have hands-on experience with regulators and audits. No theories here; we were Bankers. If you find yourself in federal court, we can handle that as well. Contact Nelson Locke at (800) 656-4584. Or you may e-mail us at nl@lockelaw.us All inquiries will be kept strictly confidential. This is not an offer for legal services, but rather for his expert review and opinion about your particular compliance situation. All fact patterns are different so the results will vary. No guarantees are expressed or implied. Licensed by California and Federal Bar. NMLS 149450.
AUDIT TECHNOLOGY
ACES Risk Management (ARMCO) 1000 West McNab Rd. Pompano Beach, FL 33069 (800) 858-1598 www.armco.us
● ● ● ●
$100,000 to $5 mil - 75% LTV - Fixed Rate No personal guarantees & no prepayment penalties TEMPLES, SYNAGOGUES, ALL PLACES OF WORSHIP Originator Quote protected against circumvention for 45 days ● BONUS: A loan to a place of worship opens the door to residential mortgages for the congregation members
Visit our website to pre-qualify and request a FREE QUOTE
COMPLIANCE CONSULTANTS
BROKERS COMPLIANCE GROUP 167 West Hudson Street – Suite 200 Long Beach | NY | 11561 members@brokerscompliancegroup.com www.BrokersComplianceGroup.com Division of Lenders Compliance Group, BCG is the first and only mortgage risk management firm in the U.S. devoted to supporting the unique compliance needs of residential mortgage brokers. Leveling the Playing Field for Mortgage Brokers
ACES Risk Management delivers web-based audit technology solutions, as well as powerful data and analytics, to the nation’s top mortgage lenders, servicers, investors and outsourcing professionals. A trusted partner devoted to client relationships, ARMCO offers best-in-class quality control and compliance software that provides U.S. banks, mortgage companies and service providers the technology and data needed to support loan integrity, meet regulatory requirements, reduce risk and drive positive business decisions.
Low Cost Monthly Membership Includes: • Free Weekly Hotline • Access to Subject Matter Experts • Policies and Procedures • Webinars *Special Pricing* • Quality Control • Exam Readiness • Licensing • Legal Reviews
BOOTS ACROSS AMERICA TOUR 2016-2017 Beverly@BootsAcrossAmerica.org Certified Military Home Specialist Beverly Ray Frase "Training Boots on the Ground" Since 2009 • Trained 3,000 CMHS course grads • Trained for Depts of HUD, Treasury & more • 20+ years' experience in real estate & finance, military life COMING TO YOUR CITY!
EDUCATION
HARD MONEY/PRIVATE LENDING
PUBLICATIONS
WHOLESALE LENDERS
Direct Private Money and Bridge Lender specializing in Stated Loans in CA 866-668-2663 Send Scenarios to info@CalHardMoney.com 5 Park Plaza, 10th Floor Irvine, CA 92614 www..HomeBridgeWholesale.com m
LENDING CRITERIA · Collateral: Stated 1st and 2nd position loans on N/O/O invest. properties (SFR, Condo, 1-4 units), Mixed-use, 5+ units, Retail, Industrial, Warehouse and Etc. · Fix & Flip program up to 70%-80% of the Purchase price on all types of properties · Loan amounts/Terms: $50,000 up to $5,000,000 and loans from 6 months to 10 years. · LTV: Purchases up to 70%-80% LTV; Refinances up to 60-65% LTV; 2nd Position up to 65% CLTV · BROKERS ALWAYS PROTECTED AND RATES STARTING AS LOW AS 8.50%
MARKETING
TagQuest is a full service marketing firm created specifically for the ever changing mortgage business. We have tested and proven campaigns for FHA -VA - HARP - CONVENTIONAL loan types. TagQuest knows what it takes to generate quality leads whether through direct mail marketing, telemarketing, internet leads, data lists, tracking systems, or any combination thereof. TagQuest will brand your company, prepare targeted marketing campaigns that generate interest in your company, and most importantly, show you how to turn sales leads into repeat customers.
REVERSE MORTGAGES
WHOLESALE LENDERS
866-318-2981 Partners.ReverseFunding.com/LearnMore
REMN Wholesale www.remnwholesale.com 866-933-6342
Reverse Mortgage Funding LLC (RMF), one of the 5 Park Plaza, 10th Floor nation's top Home Equity Conversion Mortgage (HECM) Irvine, CA 92614 lenders, delivers industry-leading products, top-quality www..HomeBridgeWholesale.com m service, and advanced technology platforms to help originators grow their business by adding reverse mortHomeBridge Wholesale iis a national wholesale lender offeering Conventional, gages to their mix. G J b product dR i Loans. L W are comm mitted to providing Government, Jumbo, and Renovation We ng, unique product the highest value to our clients through competitive pricin Weofferings, offer line-of-credit, and home purchase art technology. superior customer refinancing service, and state-of-the-
REMN has FHA, USDA, 203k, VA and Conventional solutions to fit the needs of your customers. But, at REMN, our most valuable product is our people. The REMN Sales and Operations Teams give you - and your loans - the time and attention that you deserve. Even better, at REMN, same-day approvals are guaranteed.* You can rely on us to get the little, yet vital, things taken care of on time. Interested in joining our Wholesale Division? Send your resume to aerecruiting@remn.com
options with flexible repayment for homeowners and buyers age 62+, plus service and support to help faciliNow Wholesale Sales Managers/Account Executives Nationwide tateHiring the transaction. send resumes to Marketing@HomeBrridge.com (NMLSPlease ID: #1019941)
WHOLESALE/CORRESPONDENT LENDERS
Greenbox Loans, Inc 3250 Wilshire Blvd., Suite 1900 Los Angeles, CA, 90010 (800) 600-9198 www.greenboxloans.com Greenbox Loans, Inc. is a proven leader in the Non-QM & Non-Prime lending environment offering bank statement programs, foreign national lending solutions, along with programs allowing for recent short sale, foreclosure, bankruptcy for borrowers as low as 500 Fico Score. Greenbox Loans, Inc. is a national lender offering its programs through a multiple of channels including Retail, Wholesale, and Investor Specialty division.
WHOLESALE LENDERS
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n National Mortgage Professional Magazine n OCTOBER 2017
PRIVATE FINANCING
Now Hiring Wholesale Sales Managers/Account Executives Nationwide Please send resumes to Marketing@HomeBrridge.com
NationalMortgageProfessional.com
TagQuest www.tagquest.com 888-717-8980
HomeBridge Wholesale iis a national wholesale lender offeering Conventional, Government, Jumbo, Renovation We G J b and dR i Loans. L W are comm mitted to providing the highest value to our clients through competitive pricin ng, unique product offerings, superior customer service, and state-of-the-art technology.
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WE Vis ’RE G it J oin RO Ang WI N elO ak. G! co m
Looking for more?
There’s Only One Name to Remember:
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Get MORE with Angel Oak Mortgage Solutions. © Angel Oak Mortgage Solutions LLC NMLS #1160240, Corporate office, 980 Hammond Drive, Suite 850, Atlanta, GA, 30328. This communication is sent only by Angel Oak Mortgage Solutions LLC and is not intended to imply that any of our loan products will be offered by or in conjunction with HUD, FHA, VA, the U.S. government or any federal, state or local governmental body. This is a business-to-business communication and is intended for licensed mortgage professionals only and is not intended to be distributed to the consumer or the general public. Each application is reviewed independently for approval and not all applicants will qualify for the program. Angel Oak Mortgage Solutions LLC is an Equal Opportunity Lender and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, other classifications protected under Fair Housing Act of 1968. Angel Oak Mortgage Solutions LLC is an Equal Opportunity Employer and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status and other classifications protected under the law. MS075 0817