National Mortgage Professional Magazine October 2018 by ambizmedia

MORTGAGE NEWS NETWORK INC. 1220 WANTAGH AVENUE WANTAGH, NEW YORK 11793

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N A T I O N A L

Meet Your New MBA President and CEO: Robert Broeksmit By Rick Grant

O C T O B E R

24 NMP’s Legends of Lending: Citadel Servicing Corp. By Phil Hall

2 0 1 8

M O R T G

V O L U

A SPECIAL FOCUS ON “THE FUTURE OF MORTGAGE BANKING”

Why LO’s Can Win Big by Switching From Retail to Wholesale By Mat Ishbia ......................................................................78 Get the Gig and the House By Ray Brousseau ......................................82

Predictions and Insights on the 2019 Housing Market By Stanley C. Middleman ..........................................................................84

Retaining Millennials By Adam Thorpe....................................................86

Stopping Fraud Requires State-of-the-Art Technology and Skilled Staff By Greg Holmes ..................................................................88

44 NMP Mortgage Professional of the Month: Jonathan Tallinger, Chief Growth Officer, Class Appraisal By Rick Grant

52 National Mortgage Professional Magazine Presents … Mortgage Banking’s Most Powerful Women 2018

How to Successfully Transition From Broker to Lender By Bob Dougherty......................................................................................90

Remaining Ahead of the Technology Curve in Mortgage Lending By Paul Doman ..........................................................................................92

Six Key Components to Becoming as “E” as You Can Be By Shannon Barrow ..................................................................................94

Digital Mortgage Technology … Who Is It Really Benefiting? By Mary Kamelle ........................................................................................96

Finding the Right Fit in a Challenging Market By Jeff McGuiness ......98 Yesterday’s Automation Won’t Help Cut Loan Costs By Joe Langner ........................................................................................100

The Time for a Digital Loan Exchange Is Now By William Decker, CFA ..........................................................................102

Keeping Up With Continued Mortgage Technology Changes By Matt Seu..............................................................................................104

The Future of Lending Relies on Data By Mike Eshelman ..................106

Transforming Mortgage Risk and Compliance Through Automation By Chris Huff ......................................................................108

V I S I T Company

Web Site

O U R

A D Page

5 Arch Funding Corp. ........................................5arch.com/NMP ........................................................60-61 Angel Oak Mortgage Solutions ............................ www.angeloakms.com ......................................Back Cover Avantus ............................................................ www.avantus.com ........................................................95 Brokers Compliance Group.................................. www.brokerscompliancegroup.com ................................103 Caliber Home Loans.............................................. www.caliberwholesale.com ..............................................23 Capital One.......................................................... www.capital.one/financialinstitutions ..................................9 Carrington Mortgage Services, LLC ...................... www.carringtonwholesale.com ..............................17 & 110 Citadel Servicing Corporation .............................. www.citadelservicing.com ................................................5

62 National Mortgage Professional Magazine Presents ... Mortgage Banking’s Most Powerful Women Roundtable Discussion

Class Appraisal .................................................. www.classappraisal.com ................................................41 DocMagic .......................................................... www.docmagic.com ......................................................11 FAMP-Miami ...................................................... www.miamifamp.org ....................................................16 Flagstar Bank .................................................... www.flagstar.com/why ....................................................7 Fund Loans........................................................ www.fundloans.com ......................................................19 Greenbox Loans, Inc........................................... www.greenboxloans.com ..............................................IFC Lykken On Lending ............................................ www.lykkenonlending.com ..........................................113 MBS Highway .................................................... www.mbshighway.com/MNN ..........................................85

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R T G A G E

L U M E

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

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The Impact AI Brings to Origination By Noel Riddle............................110 Getting Ahead of the Technology Curve By Linda Verardi..................112

FEATURES ARMCP Membership Hits the 1,600 Mark ..............................................6 One Buyer, Two Loan Deals? Chances High in Non-QM Market By Tom Hutchens ........................................................................................8 The Elite Performer By Andy W. Harris, CRMS ........................................8 Recruiting, Training and Mentoring Corner By Dave Hershman ..........10 Mortgage Lenders Change Lives............................................................16 The Role of Supervisory Guidance By Gavin T. Ales ............................18 NAMB Perspective ..................................................................................26 Compliance Management System for Mortgage Brokers By Alan Cicchetti, MBA..............................................................................34 The Mortgage Godfather By Ralph LoVuolo Sr. ....................................36 NAPMW in the News ................................................................................39 BrokerNATION: Philadelphia Mortgage Brokers, Evan Wade By Andy W. Harris, CRMS ........................................................................42 MBAâ&#x20AC;&#x2122;s Mortgage Action Alliance ............................................................46 Millennials â&#x20AC;Ś We Need and Want You! By Pam Marron ......................47 Credit Committees: The Central Hub of Mortgage Banking By Jonathan Foxx, Ph.D., MBA ................................................................48 Why Do Rate Shoppers Shop? By Brian Sacks......................................72 Financing the Financial Invisible Borrower By Tom Gillen....................74 Maintaining a Compliant Ecosystem in a Tech-Driven Market ..........76 Rules of Acquisition By Eric Weinstein..................................................114

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

Web Site

Page

Mortgage Assurance, Inc. .................................. www.maibroker.com ......................................................35 Mortgage Bankers Association ............................ www.mba.org/believe ....................................................81 Mortgage News Network (MNN) .......................... www.mortgagenewsnetwork.com ............................32 & 33 NAMB+ ............................................................ www.nambplus.com ......................................................31 NAMMBA ..........................................................www.nammbaconnect.org ............................................ 105 NAPMW ............................................................ www.napmw.org ..................................................93 & 100 NAWRB ............................................................ www.nawrb.com ..........................................................109 New American Funding ...................................... www.newamericanfunding.com ....................................120 NMP U .............................................................. www.nmpucoaching.com ................................51, 99 & 107 NRMLA.............................................................. www.nrmlaonline.org ....................................................43 OSI Express........................................................ www.osiexpress.com/mlslink ............................................1 Paramount Residential Mortgage Group, Inc. ...... www.prmg.net ..........................13, 89 & Inside Back Cover REMN................................................................ www.remnwholesale.com ..............................................15 Ridgewood ........................................................ www.ridgewoodbank.com ..............................................83 TagQuest .......................................................... www.tagquest.com ........................................................91

are you nominated? We are seeking nominations from our readers for National Mortgage Professional Magazine's "40 Under 40" feature, slated to appear in our December 2018 edition. Anyone who is under the age of 40 and has had a major impact on the industry can qualify for this feature. This could be through innovation, association participation, sales force automation, community activism, management techniques, technology or any other significant method that has influenced our industry. We would need a short, three-line bio on the nominee, along with a color photo and company contact info to complete the profile. To nominate yourself or someone else, visit https://nationalmortgageprofessional.com/under-2018.

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

OCTOBER 2018 Volume 10 • Number 10

FROM THE

publisher’s desk

Finding the Future of Mortgage Banking There exists a group of professionals who go to work every day to search for the future. 1220 Wantagh Avenue • Wantagh, NY 11793-2202 They study trends and listen to the speeches of influential people in the hope of finding Phone: (516) 409-5555 • Fax: (516) 409-4600 clues that will tell them what will happen next. Some are very good at their jobs and can Web site: NationalMortgageProfessional.com tell you when interest rates will rise or when population will change and how much. The STAFF Eric C. Peck Joel M. Berman very best futurists realize that the future isn’t something that you find, it’s something that Editor-in-Chief Publisher - CEO (516) 409-5555, ext. 312 (516) 409-5555, ext. 310 we create. ericp@mortgagenewsnetwork.com joel@mortgagenewsnetwork.com This is the issue each year for which we put on our “Futurist Hats” and look, not into Joey Arendt Beverly Bolnick the future (which is something none of us can do), but rather, at the work our industry’s Art Director VP-Sales & Marketing (516) 409-5555, ext. 323 (516) 409-5555, ext. 316 leaders are doing today. That’s where the future is made; it’s the actions we take today joeya@mortgagenewsnetwork.com beverlyb@mortgagenewsnetwork.com that determines what tomorrow will be like. In this issue, we highlight many of these Scott Koondel Phil Hall VP of Operations Managing Editor leaders. By reading their stories, you will have a much better idea of the environment (516) 409-5555, ext. 324 (516) 409-5555, ext. 312 you’ll be competing in tomorrow. scottk@mortgagenewsnetwork.com philh@mortgagenewsnetwork.com Many of you are reading this issue at the Mortgage Bankers Association’s 2018 Annual Richard Zyta Francine Miller Social Media Ambassador Advertising Coordinator Convention and Expo in Washington, D.C. As you look around you, you’ll see many of (516) 409-5555 (516) 409-5555, ext. 301 richardz@mortgagenewsnetwork.com francinem@mortgagenewsnetwork.com the industry’s top movers and shakers. We think of them as future creators, and you are Rick Grant Dylan Pollock one of them. But even if you are reading this in your home office, you should know that Special Reports Editor Administrative Assistant you will also be called upon to create the future of the Mortgage Banking industry. (570) 497-1026 (direct) (516) 409-5555, ext. 314 (516) 409-555, ext. 311 dylanp@mortgagenewsnetwork.com This issue will help. Inside, you’ll find no less than 15 feature articles that shed light on rickg@mortgagenewsnetwork.com the future of our business. In addition, we’ll shine a bright spotlight on some of our ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact industry’s best leaders. VP-Sales & Marketing Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail beverlyb@mortgageA good place to start is with our inaugural list of “Mortgage Banking’s Most Powerful newsnetwork.com. Women.” It’s time we started bringing you the stories of the best female executives ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck working in our industry today. As you peruse our list, I hope you feel as fortunate as I do at (516) 409-5555, ext. 312 or e-mail ericp@mortgagenewsnetwork.com. The deadline for submissions that we have so many powerful women working among us. Be thinking of those we is the first of the month prior to the target issue. missed because we will certainly update this list in the future. And don’t miss our SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@mortgageMortgage Banking’s Most Powerful Women Roundtable Discussion to see what you can newsnetwork.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. learn from these executives. Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the We also bring you an intimate look at our October Legends of Lending company, authors alone and do not imply the opinion or endorsement of Mortgage News Network Inc., or the offiCitadel Mortgage, and our October Mortgage Professional of the Month, John Tallinger 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) of Class Appraisal. Read their stories to see how they are taking control of their and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activcompanies futures. ities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement We also offer a feature on the new Chair and CEO of the Mortgage Bankers of the product and/or services by Mortgage News Network Inc., NAMB, NAPMW, NCRA, and other state mortgage trade associations. Association, Robert Broeksmit. If you don’t already know him, you will. We’re proud to National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage bring you this profile. 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 After reading these inspiring stories, you’ll be ready to get back to work creating your 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. own company’s future. We offer you our special focus section to aid you in that task. We like to start with the strategic view before we get tactical. So, look first to “Predictions and Insights on the 2019 Housing Market,” by Stanley C. Middleman, Founder and Chief Executive Officer of Freedom Mortgage Corporation. Also, “The Future of Lending Relies on Data,” by Mike Eshelman, Head of Consumer Finance at Jornaya, because even though we do create the future, the data shows us how we’re doing it. Because our front line Loan Officers will be such a critical component of the future we create together, we bring you three excellent features that speak directly to these sales professionals. First, “No Contest: Why LO’s Can Win Big by Switching From Retail to Wholesale” by Mat Ishbia, President and Chief Executive Officer of United Wholesale Mortgage. Then, “How to Successfully Transition From Broker to Lender” by Bob Dougherty, Executive Vice President of Business Development at Calyx Software. And finally, “Finding the Right Fit in a Challenging Market” by Jeff McGuiness, Chief Sales Officer for Embrace Home Loans. Because many of these LOs, as well as staff in all of our departments, will be coming from a new generation, don’t miss “Retaining Millennials: The Opportunity of a Generation” by Adam Thorpe, Chief Executive Officer of Castle & Cooke Mortgage LLC.Currently, the rush to digital has dominated the technology discussion for many Loan Originators. You help to plot your own course into the future, and this month, we bring you “Six Key Components to Becoming as ‘E’ as You Can Be” by Shannon Barrow, Director of Marketing for Docutech. Digital will go beyond origination in the primary market and will impact secondary as well. See “The Time for a Digital Loan Exchange Is Now” by William Decker, CFA, President and Chief Operating Officer of MAXEX, a residential mortgage loan trading platform and exchange company, for more on this. Finally, the marketing team should read “Digital Mortgage Technology … Who Is It Really Benefiting?” by Mary Kamelle, Marketing Manager at Mortgage Equity Partners. Digital is only one hot topic that tomorrow’s mortgage lenders will be dealing with. “The Impact AI Brings to Origination,” by Noel Riddle, former President of Mortgage Training Group Inc., the National Association of Mortgage Training and author of numerous mortgage-related books, introduces you to another. And, of course, you’ll find additional articles on the future of mortgage banking, compliance information, trade association news, and general thought leadership we always bring you in this issue. We hope this special issue helps you do the work of creating your best possible future so that you wake up to find yourself even more successful tomorrow. Sincerely,

Joel M. Berman, Publisher-CEO Mortgage News Network Joel@MortgageNewsNetwork.com

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

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

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

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

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

B O A R D

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

Rocke Andrews, CMC, CRMS Treasurer Rocke.Andrews@NAMB.org

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

D I R E C T O R S

Linda McCoy, CRMS Linda.McCoy@NAMB.org

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

Wayne King, CMC, CRMS Wayne.King@NAMB.org

Michael DeSantis Mike.DeSantis@NAMB.org

Olga Kucerak, CRMS Olga.Kucerak@NAMB.org

George Burkley, CRMS George.Burkley@NAMB.org

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

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

National Association of Professional Mortgage Women 6000 Gisholt Drive, Suite 200 l Madison, WI 53713 l Phone: (608) 886-9817 l E-mail: Admin@NAPMW.org l Web site: NAPMW.org

2018-2019 NAPMW NATIONAL BOARD OF DIRECTORS

Laurel Knight-Keane National President President@NAPMW.org

Glenda Mooney President-Elect PresElect@NAPMW.org

Tobi Libbra Vice President NVP1@NAPMW.org

Rolanda Legg Vice President NVP2@NAPMW.org

Jaclyn Weedin Secretary NatSecretary@NAPMW.org

Nicole Shea Treasurer NatTreasurer@NAPMW.org

Robin Hart Parliamentarian Parliamentarian@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

OCTOBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

2017-2018 BOARD OF DIRECTORS

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

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

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

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

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

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

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

Helen Meyers Director (800) 782-9094 Helen@CreditInfoSystems.com

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

Debbie Loyning Director (425) 264-1024 Debbie@Alliance2020.com

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

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

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

Roy Goodwin Compliance Services Director (630) 539-1525 RGoodwin@ NCRAInc.org

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

ARMCP Hits 1,600 Mark, Nears Official Site Launch Having just reached the milestone of 1,600 members, the Association of Residential Mortgage Compliance Professionals (ARMCP) is now also nearing completion of its new Web site, a state-of-the-art site designed specifically to fulfill the needs of residential mortgage compliance professionals. The design and development have taken several years to bring to the point of launch. This is just what our organization needs. If you have not yet joined the ARMCP, please contact Jonathan Foxx, ARMCP Founder and President, at Info@ARMCP.org and you will be sent an invitation. ARMCP’s current digital abode is on LinkedIn. The LinkedIn group will be kept while also moving to the larger new home at the brand new site. The association be sending announcements your way soon, via LinkedIn and other media resources, with the membership link. The site is expected to launch officially within the next 90 days. ARMCP is the first and only independent, national organization in the country devoted exclusively to residential mortgage compliance professionals. The association’s independence means it is not affiliated with any profit-oriented enterprise. Membership consists solely of those members who have joined it on their own and were not solicited to join via solicitations from third-party lists or subscriptions. Regular members pay no membership fee … independence is the key to the value of ARMCP’s advocacy! Want to join or create a committee? ARMCP would like to hear from you! For more information, visit ARMCP.org.

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FHA Neighborhood Watch, Q4 2017 Inside Mortgage Finance, Q4 2017 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.

n National Mortgage Professional Magazine n OCTOBER 2018

Visit f lagstar.com/why to learn more.

NationalMortgageProfessional.com

#1 National FHA Wholesaler1 Top 10 TPO2 3x Fannie Mae Star Performer Servicing Award

One Buyer, Two Loan Deals? Chances High in Non-QM Market By Tom Hutchens

OCTOBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

oan Officers love when they can originate a purchase mortgage, then help the buyer refinance within a couple of years. Originators kept busy with that kind of repeat business when interest rates kept dropping. But, it is not so easy today, as rates rise and are forecast to continue increasing into the foreseeable future. For non-QM specialists, those opportunities remain potent. Non-QM loans enable people to buy homes who–for any number of reasons–are unable to qualify for agency loans. Because rates for these manually underwritten loans can be higher than agency loans, most non-QM buyers are able to refinance and lower their payments within a few years after moving in. To take advantage of this shifting marketplace, Originators need to demonstrate to their industry partners and consumers that buying a home sooner rather than later is the best option. But, many one-time homeowners have become resigned to long-term renting. The losses suffered 10 years ago, along with new regulations, have caused millions of hard-working Americans to believe they are shut out of homeownership. Loan Officers who find and engage these wrongly pessimistic prospects are likely to earn multiple returns on their efforts. Consider this all-to-common situation. Andrew lost his home to foreclosure several years ago and made other mistakes that torpedoed his credit. Working two jobs, he both settled his debts and accrued savings, but his credit scores remained in the low 600s. For Andrew, a home purchase loan seemed a long way off. Then, a Loan Officer representing Angel Oak products met Andrew’s credit counselor. Sixty days later, Andrew moved into a $250,000 home bought with an Angel Oak non-prime mortgage. Less than two years later–with significant home equity and muchimproved credit ratings–Andrew qualified for an agency loan and refinanced. Here’s how the numbers worked out for him. Andrew had been paying around $2,000 in rent. With his nonQM loan at 7.5 percent, his total monthly payment became $1,570. During the first year of ownership, the value of Andrew’s home went up three percent ($7,500) and that year’s mortgage interest deduction earned him a nice tax refund. Once he refinanced at 4.5 percent, his monthly payment became $1,350 and the value of his home continued to rise. As for the Loan Officer, he originated both loans. And, he built a rich pipeline of referrals from Andrew and the credit counselor. Andrew is just one example of potential buyers who do not know how close they are to owning their own home. Your Angel Oak Mortgage Solutions Account Executive can tell you who they are and help you find them. Call (866) 837-6312 or learn more at AngelOakMS.com/MAP.

Tom Hutchens is Executive Vice President, Production at Angel Oak Mortgage Solutions, an Atlanta-based wholesale and correspondent lender leading the non-QM space for four years and licensed in over 35 states. Tom has been in the real estate lending business for nearly 20 years. He may be reached by phone at (855) 5394910 or e-mail Info@AngelOakMS.com.

SPONSORED EDITORIAL

new to market

continued from page 13

are shopping for a home,” said Jeff Leinan, Senior Vice President of National Wholesale Production of Plaza Home Mortgage. “This innovative program gives these borrowers the flexibility of buying less expensive homes that may need work, and financing the purchase and the upgrades in one affordable loan.” TRK Connection Enhances Its QC Platform

TRK Connection (TRK) has announced it has added functionality to its flagship QC audit platform Insight Risk & Defect Management (RDM) to help lenders digitally manage the re-verification process, including eSign and automated bulk document indexing. Using Insight RDM’s eSign capabilities, external sources (employers, financial institutions, etc.) can electronically complete re-verification documents, eliminating the need to print and mail (or fax) outbound documents and scan and attach inbound documents while also providing a more secure method of document delivery, completion and return. “Lenders’ digital mortgage efforts shouldn’t stop at the closing table,” said Teri Sundh, Chief Executive Officer of TRK Connection. “Insight RDM is the first mortgage QC platform to offer its users full eSign capabilities so that they can continue to operate electronically and take advantage of the efficiency and cost-savings benefits inherent in a digital mortgage environment.” Total Expert Announces Premium Content Marketing Library

Total Expert has announced the release of Expert Content, a comprehensive set of marketing content designed to help lenders and banks increase marketing and sales velocity. Expert Content is a robust collection of customizable content and campaigns that marries targeted Web, social, e-mail, print and video with best practices and cutting-edge automation. Expert Content is available through the

Total Expert MOS, the financial services industry’s only centralized platform for managing brands at an enterprise level, attracting and retaining customers and partners and driving revenue. “Today’s lenders are dealing with a market climate in which margin compression is straining resources,” said Joe Welu, Founder and Chief Executive Officer at Total Expert. “Our mission has always been to innovate quickly to help our customers solve their most pressing marketing challenges. Expert Content gives our customers access to the very best marketing content along with automated delivery through multiple channels, so they can grow business effectively, compliantly and cost-effectively.” Expert Content empowers salespeople to increase production by enabling best-ofbreed content and campaigns that deliver the right message at the right time to the right person. It contains subject matter expertise, compelling messages and multi-media tools that help producers acquire and convert leads, capture repeat business and develop and maintain business relationships with partners. PromonTech Debuts New AI Engine

PromonTech has announced the debut of a new income engine, Income AI. Income AI follows the company’s Point of Sale (POS) release—Borrower Wallet—and leverages augmented intelligence to learn from underwriters, resulting in faster, more compliant credit decisions. “The cost to originate a loan has doubled over the last 10 years, and mortgage lenders need truly-innovative solutions to realize meaningful costs savings and productivity improvements. Our Income AI technology will produce accurate, reproducible, documented results and is the gateway to significantly reducing costs in the lending process,” said Tony Pietrocola, Head of Sales at PromonTech. Income AI utilizes intelligent continued on page 35

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n National Mortgage Professional Magazine n OCTOBER 2018

OCTOBER 2018 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Meet Your New MBA President and CEO: Robert Broeksmit By Rick Grant

—Robert Broeksmit, MBA President and CEO

has lived and worked in or near Washington, D.C. While he was not directly involved in policymaking in the political process, he follows it and

recently led a consulting team that focused, in part, on those issues. That was when Broeksmit served as President and Chief

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Preparation for a difficult job For the past 29 years, Broeksmit

“I’m very grateful to Dave Stevens and for the great work he did at this association. I’m fortunate to come into this job when the association has a really strong, reliable staff committed to our industry and to our members. Also, we’re in very good shape financially.”

Operating Officer of Treliant, the position he left to join MBA. The privately-owned firm offers consulting for clients relating to compliance, risk management and operational landscape. The intent is to help bankers, lenders, FinTech firms, and mortgage and brokerage companies grow and serve consumer, small business, and capital markets clients while navigating the changing policies, rules, and agencies influencing financial services providers. In that role, Broeksmit led a team focused on the industry’s most pressing concerns, including consumer regulatory compliance, mortgage operations, financial crimes, financial markets conduct and compliance, fair lending, litigation support and operational risk. “My role primarily had to do with legal and regulatory compliance on the mortgage side,” Broeksmit said of his experience at Treliant. “I was very deeply involved in the lender’s struggles with legal and regulatory compliance issues including, for instance, helping lenders combat allegations that they had violated the False

NationalMortgageProfessional.com

his month, the Mortgage Bankers Association (MBA) welcomes a new executive to the top position in the industry’s leading trade organization. Mortgage industry veteran Robert Broeksmit has been selected to serve as MBA President and Chief Executive Officer. While many of our readers are already familiar with this leader, we wanted to sit down with him to find out more about what he brings to this position and where he hopes to lead the mortgage business from here. Our first question, of course, was why he wanted the job. “For me, this role is the culmination of a 33-year career in the mortgage banking business,” Broeksmit said. “I was very attracted to the prospect of leading our industry and being a spokesperson after spending so many years in the various positions I’ve held around the industry.”

Meet Your New MBA President and CEO: Robert Broeksmit continued from page 21

Claims Act, which remains a big issue in the industry and a hindrance for FHA lenders.” Prior to Treliant, Broeksmit was President of B.F. Saul Mortgage Company, a division of Chevy Chase Bank; Executive Vice President of Mortgage Lending for Capital One; and Vice President of Direct Consumer Marketing and Sales for Prudential Home Mortgage Company.

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A platform for listening to the membership Given his experience in the industry, we wanted to find out what he felt were the most important issues he would focus on as head of the MBA. A few points sprang to his mind immediately. “As we approach the 10th anniversary of the GSE conservatorship, I feel that GSE reform must remain a top priority,” he said. “I also believe that there are ways that some of the Dodd-Frank era regulations can be improved. We are working with the CFPB on its review of the rules, and we will stay actively involved.” But Broeksmit stopped short of laying out a detailed platform for his administration instead taking a step back, saying, “I would love our members to determine what is most important to work on next. I’m doing a lot of listening and we’ll continue to do that throughout my tenure.” Broeksmit was careful to point out that he is not coming into the new position with a “signature issue” that he wants to make his focus. “I want to understand the concerns of our members and then be a vehicle for amplifying that concern. That’s how I plan to effectively advocate on the industry’s behalf with the administration, the regulators and legislators. Keeping the industry’s voice strong While Broeksmit says he wants to stay open to leading the industry in the direction the MBA’s members feel is most important, he also said he has

concerns of our members.” But it won’t be like he’ll be walking into a cold room. After 33 years in the mortgage industry, Broeksmit plans to see a great many old friends at this year’s show. “I have friends and colleagues from all over the country whom I’ve met through the many roles I’ve held in this business,” he said. “It’s just great to see old friends and renew acquaintances. In this industry, we all work together in whatever roles we happen to be in at the moment. And we have a little fun as well.”

“For me, this role is the culmination of a 33-year career in the mortgage banking business. I was very attracted to the prospect of leading our industry and being a spokesperson after spending so many years in the various positions I’ve held around the industry.” —Robert Broeksmit, MBA President and CEO

no plans to step back from the work his predecessor did. “I’m very grateful to Dave Stevens and for the great work he did at this association,” he said. “I’m fortunate to come into this job when the association has a really strong, reliable staff committed to our industry and to our members. Also, we’re in very good shape financially.” Broeksmit said he was also grateful that Stevens had taught the industry to speak with “One Voice,” and that he would continue to support that approach during his tenure. “That ‘One Voice’ theme will continue through my time here,” Broeksmit said. “It’s critically important.” To that end, Broeksmit has already begun spending time with other housing-related trade organizations, including those serving builders and real estate agents. “When we convinced 28 other institutions to sign onto our GSE reform letter, including the homebuilders and Realtors, that demonstrated real

cooperation among the many voices in the housing debate,” said Broeksmit. His first big meeting with the membership We asked Broeksmit what he was looking forward to at this year’s MBA Annual Convention in his home town of Washington, D.C. It will, after all, be his first big meeting with his new membership. “I think the Annual Convention is a great venue for industry dialogue and a great way for me to see a large number of our members in person over an intense few day period,” he said. “We need to keep the conversations going and learn more about the

A new home close to home Ending up in the nation’s capital working for the leading trade group in one of our most important industries may seem like a far distance to travel for a kid who grew up the youngest of six children born to a minister and his wife in Illinois. But Broeksmit got started on this path early on. After graduating from Yale, he took a temporary job typing up forms in The Money Store in Union, N.J. “I’ve been in the business ever since,” Broeksmit said. Today, he lives near Washington with his wife Susan and their three kids, all of whom were born in Georgetown Hospital. The best part, he says, is that his new business home in the MBA’s national headquarters is located about six miles from his house, so his family didn’t have to move. To find out more about what Broeksmit plans for the MBA in the year ahead, attend the MBA’s Annual Convention in Washington later this month or watch for our coverage in the November 2018 issue.

Rick Grant is Special Reports Editor for National Mortgage Professional Magazine and Mortgage News Network. He may be reached by phone at (570) 497-1026 or e-mail RickG@MortgageNewsNetwork.com.

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national mortgage professional magazine’s

Legends of Lending Citadel Servicing Corporation

hen Citadel Servicing Corporation (CSC) opened for business in 2011, the non-QM and nonprime market was miniscule. Today, however, things are quite different. CSC originated $389.3 million during the second quarter, up 32.3 percent from the first quarter—and all with nonQM mortgages. The company is forecasting that it will fund as much as $1.8 billion before the year runs its course. The privately-held Irvine, Calif.-based company is licensed by the National Mortgage Licensing System (NMLS) in 38 states and offers programs and services through the wholesale, retail and correspondent lending sectors. According to the company’s Web site, it also “Specializes in alternative income products, such as bank statements, asset depletion and verification of employment. Our products include fixed and adjustable-rate mortgages (ARMs) for residential properties on both an owner-occupied and non-owned occupied basis.” To learn more about CSC’s place in the industry and what makes it stand out from its competitors, National Mortgage Professional Magazine spoke with Chairman and Chief Executive Officer Daniel L. Perl, President and Chief Operating Officer Kyle Gunderlock, and Senior Vice President of Loan Origination (Sales) and Marketing William B. Fisher.

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What differentiates Citadel Servicing Corporation from its competitors? Daniel L. Perl: There are a few differentiating factors that come to mind, but two really stand out. As a product innovator, CSC has first mover status, as we started originating loans in 2011 under the new designation non-QM derived from the 2010 Dodd-Frank Act. This led to naming rights, as we coined the term “Non-Prime” shortly thereafter to distance this segment of the residential lending area from the old pejorative and horrible designator of “sub-prime.” It also led to CSC filling an existing void in product innovation. We have created and brought to market many of the loan products currently in wide industry use such as the 24-Month Business and Personal Bank Statement programs, ATR-in-Full, Asset Depletion, and now the One Month Bank Statement Program. We continue to shine a spotlight with no diffusion on this market segment. And the second differentiator is that CSC is the only vertically integrated company in the nonQM/non-prime lending area solely dedicated to this market segment. We do not traffic in any agency or jumbo “A” loans or HUD/VA programs. And finally, we are the only one that is completely vertically integrated. Out of all the competition, we are the only mortgage lender that services directly in-house 100 percent of the loans that we originate, fund, or buy. Kyle Gunderlock: We are the only non-QM lender that is also a rated servicer for this product line. Looking over competitor’s PPMs, I often see pages upon pages of exceptions and spiking delinquencies. CSC has designed a strong set of products and as the servicer is also able to manage those loans. William B. Fisher: We see ourselves as innovators. We were the first to enter this market and we’ve been firing on all cylinders ever since. Still, the notion of anything that is less-than-prime can create issues for many longtime

“Sales has a large role in what we do, but the defining function of Citadel Servicing Corporation is producing accurate and consistent loan quality.” —Daniel L. Perl, Chairman and Chief Executive Officer, Citadel Servicing Corporation

mortgage professionals. Does non-prime still carry the same risks that people associate with sub-prime? William B. Fisher: In order for people to purchase or refinance with non-prime loans, they need to have skin in the game. That greatly reduces the possibility of having to foreclose or having a short sale. If home values fall or there is a recession, borrowers need to be willing to get out of the property, it’s easier if they have equity. We don’t want to make the same mistake of the past. We’ve created risk tolerances that we’re happy with, and our loans are among the lowest delinquency rate of all other like product we’ve seen in securities. We know we were doing something right. One of the more interesting products that CSC unveiled this year was a 5/1 Hybrid Adjustable Rate Mortgage (ARM) and 5/25 Interest Only (IO) term. Why did you decide to introduce those offerings? Kyle Gunderlock: It comes down to math. CSC has been originating 7/1 Hybrid ARMs and coupled with an Interest-Only product with a seven-year IO period shifting to a 23-year fully amortized period. Moving to a five-year allowed for a more consistent approach to qualification and also enhanced to product in a upward moving market by shortening up the time frame to adjustment by two years. Last month, the Orange County Business Journal has named CSC the eighth fastest growing private midsize company in California’s Orange County, with 185 employees—up from 123 in 2017 and 92 in 2016. What do you look for when recruiting new employees? Daniel L. Perl: We are interested in motivation and intellectual capacity. Moral character counts and is further defined by what a candidate has done in their history. Unlike many finance firms we are a process-driven company. Sales has a large role in what we do, but the defining function of Citadel Servicing Corporation is producing accurate and consistent loan quality. Sales is one of the easiest areas to recruit and/or educate potential employees. It is interesting to note that barely 20 percent of our employee base is in sales. Also, we have comprehensive training programs for all facets of our business, which allows us to bring in employment candidates who are not educated in the

“We are the only non-QM lender that is also a rated servicer for this product line.” —Kyle Gunderlock, President and Chief Operating Officer, Citadel Servicing Corporation

mortgage finance industry. CSC makes a substantial time investment in teaching new employees not only our systems, but also about lending and compliance to a large degree. Kyle Gunderlock: We host monthly underwriter training that teaches the techniques of that responsibility. We provide education on the loan process and what to be wary of when underwriting. We are also still in a high growth mode and value honesty, intelligence, a positive attitude, and work ethics. These attributes go a long way to making CSC a leader. Obviously, CSC stands out in the non-prime space. But I am sure you are always looking for the next wave of clients. How do you spread the word to attract new business? William B. Fisher: We’re very active in trade journals. In 2013, Scotsman Guide had not been covering the non-QM section. I got a phone call from them and agreed to open up that section. It was called sub-prime, but then we began calling it non-prime. We are also an active participant in the trade shows: We’ve done more than 30 trade shows this year. On social media, LinkedIn is the biggest draw for social media outreach because it is aimed at the B2B market. What are some of the major challenges that Citadel faces in today’s market, and how does it address these challenges? Daniel L. Perl: Really, there is only one and that is from competitors. We are experts in disregarding all the noise and hyperbole in this market segment. We do what we know, in the manner known to us and to the best of our ability. What all others are doing is interesting to a certain degree, but ultimately irrelevant. The risk-reward equation that we are solving for is materially different and directly related to not repeating the past history in this segment. To that extent, we are profit-oriented and that is defined by the processes we have play. Where do you see the wholesale lending market today? William B. Fisher: It is a big driver of our

“In order for people to purchase or refinance with non-prime loans, they need to have skin in the game. That greatly reduces the possibility of having to foreclose or having a short sale.” —William B. Fisher, Senior Vice President of Loan Origination (Sales) and Marketing, Citadel Servicing Corporation

business. We came out with a wholesale product in 2012. For years, large mortgage banks dominated wholesale because of the low interest rate environment. But now with interest rates rising, we’re seeing downsizing and those downsized folks are starting to open their own shops. Now, we are seeing wholesale grow at a pretty big clip. One of the big concerns impacting the financial services world has been cybersecurity. How does CSC approach this issue? Kyle Gunderlock: Beyond having a robust set of technological tools, we realize that employees after often one of the biggest threats to exposing a company to cyber danger by clicking on a Web site or downloading a file. We educate our employees on being alert to phishing sites and malware downloads. What do you see as the near-future for the mortgage industry? Daniel L. Perl: Price in relationship to demand has created expectations of increased values that will be difficult to maintain. In other markets, the exact opposite has occurred with a glut of residences—primarily condos—that could foretell a steep decline in values. Either event is not wonderful for market stability. On the whole, the continued rise of interest rates could create a buyer’s market, and this is despite reduced inventory in some metro areas. Finally, if you could define the company in a single word, what would that word be, and why? Daniel L. Perl: “Focus” is the word and it is used often here at CSC. We want to make money and have fun, but can never lose sight of the business imperatives. We want to treat all who interact with our company in an appropriate manner and internally do the same. And that takes focus. Focus implies that we don’t dilute or diffuse our mission which is to bring out the best products, pricing, and service to the nonQM/non-prime market segment.

Phil Hall is Managing Editor of National Mortgage Professional Magazine. He may be reached by e-mail at PhilH@MortgageNewsNetwork.com.

A Message From NAMB 2018-2019 President Richard M. Bettencourt Jr., CRMS, CMHS Who am I and where would I like to go … I can’t even begin to put into words how incredibly excited I am to be your NAMB 2018-2019 President. Sitting in the captain’s chair, overseeing a rock star team, and guiding an incredible organization like NAMB into the future was never an idea; let alone a goal, when my mentor and dearest friend Denise Leonard lit my mortgage advocacy fire. For those of you who don’t know Denise, she is probably the sole reason why Mortgage Brokers are still operating in my state of Massachusetts. She played a pivotal role in NAMB’s Government Affairs team and legislative fights to preserve our great industry. Denise, I cannot thank you enough for inspiring me to play a greater role in an industry that I love and has graciously provided for me and my family. You are the epitome of a leader and a true mentor. Thank you! I think it’s important that you all learn a little about me,

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where we are as an organization and where I truly believe we can go. I was raised in Peabody, Mass. by two incredible parents. Dad is a Vietnam veteran and retired Peabody Police Officer with 35-plus years on the job and retired as a captain. My mom gave up a career to spend our early years as a stayat-home mom, and eventually returned to the workforce to have an incredibly successful career in our local school system. I am who I am because of them … plain and simple! I graduated the University of New Hampshire with a bachelor of science in Water Resource Management and a minor in Earth Science, with a focus in Hydrology. I mean really, who actually goes to college to join this crazy business! In 2003, my wife had this crazy idea to become a “Loan Officer” and I quickly asked her, “What the hell do they do?” Who would have figured that in 2018, I’d be honored with the opportunity to be your President? I have been a producing Mortgage Originator my entire career and as many of you may know, specialize in the VA Home Loan Benefit! I know what it feels like to see ill-prepared legislation, unintended consequences and adverse impacts on not only my peers in the business, but also consumers. I know the struggles of finding new ways to continually adapt to an ever-changing regulatory environment, and I know firsthand you are all relying on me and NAMB to do what we can to alleviate some of those concerns and struggles. NAMB has been around for more than 45 years, and we’ll be around for a lot longer than 45 more! Where we are today as an organization is incredibly impressive, considering the meltdown we all faced. Over the last 10 years, we have been slowly rebuilding, adapting, changing and growing. Hopefully, you all watched Immediate Past President John Stevens’ “Thank You” video and saw firsthand the astounding growth NAMB has had in just these past 12 months. We are going to continue building on those solid foundations and initiatives, while adding a few more that I believe can truly push NAMB to heights we never imagined were possible. Much of our focus over the next 12 months is going to focus on membership growth via a variety of action items designed to attract new members, and at the same time,

“The relationships we build opens doors … doors we perhaps never knew existed, yet lead us in a direction we never knew was there, but produces incredibly positive results.”

N A M B

P E R S P E C T I V E

My friends … When I took over the reins of the NAMB from Past President Fred Kreger, I knew that I had some large shoes to fill. NAMB was heading in a positive and upwards trajectory. And I knew that we needed every hand on deck to continue what he had started, and to be able to grow what we needed to over the next 12 months. We not only achieved our goals, but exceeded expectations on what could be accomplished in such a short amount of time. Before I list out our year in review, I want to first and foremost say “THANK YOU” to everyone who made this last year such a tremendous success! Without you, we could have never accomplished all that we have. There were many on the Board of Directors and throughout our state affiliates that were instrumental in helping the NAMB be better today than it was. We were able to increase membership at a roughly 10 percent increase since this time last year, as well as had the most successful NAMB National since pre-2008! Over the past year, NAMB has had many outstanding accomplishments … starting with the launch of our new logo and branding campaign at NAMB National 2017. October 2017 l Introduced new, updated logo and transitioned from “NAMB–The Association of Mortgage Professionals” back to the “National Association of Mortgage Brokers.” l NAMB National 2017 was the largest-attended trade show since pre2008. l Hired an Executive Director to manage the day-to-day activities of the association. l Created “@NAMB.org” e-mail addresses and e-mail signatures for all Board members in order to create a consistent method of communication. l Created a paperless system of electronic storage for all association records and communication tools. November 2017 l Created “NAMB Association Services,” an association management arm of NAMB, which currently manages more than 2,500 members of various state-affiliated associations. l Held the first NAMB State Leadership Conference which brought together state affiliates for two days of meaningful discussion and information-sharing. January 2018 l Formation of the NAMB Education Foundation, which will have a focus on developing continuing education and career enrichment courses for use by NAMB members. l Currently developing strategic partnerships for discounted online prelicensing and continuing education, a VA certification and more. February 2018 l NAMB Focus with its first event, held in Destin, Fla., focusing on sales and marketing. March 2018 l Launched a new Legislative Advocacy Center, featuring easy-to-use Calls to Action, state and federal bill tracking and election information.

Richard M. Bettencourt Jr., CRMS, CMHS is President of NAMB and Branch Manager of Mortgage Network Inc. in Danvers, Mass. Rick may be reached by phone at (978) 979-0883 or e-mail Rick.Bettencourt@NAMB.org.

April 2018 l Launched our NAMB Swarm Seminar Series, which provided a daylong session focused on resources and tools for Loan Originators and small business owners in locations including Phoenix, Ariz.; Ft. Lauderdale, Fla.; Nashville, Tenn.; Boston and Des Moines, Iowa.

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Richard M. Bettencourt Jr., CRMS, CMHS, President National Association of Mortgage Brokers

A Farewell Message From NAMB 2017-2018 President John G. Stevens, CRMS

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expanding NAMB’s advocacy, empowerment and education within our industry. A cohesive unit working together is always the most efficient means to accomplishing a set of goals and tasks. There are numerous sister organizations operating in the United States, and it is my belief that we can all benefit from one another. The relationships we build opens doors … doors we perhaps never knew existed, yet lead us in a direction we never knew was there, but produces incredibly positive results. There are numerous states currently without a mortgage trade group to advocate for their industry professionals. Whether there used to be one and it folded or there never was one to begin with; NAMB now has the capabilities to facilitate state or region affiliate groups to help the Mortgage Brokers and Originators within those states! Pay close attention, some great things are just around the corner. One aspect I truly hope to capitalize on is NAMB’s Non-Profit Status and our ability to assist in the education of not just Mortgage Originators, but also consumers and our veterans. We have begun fostering some incredible relationships with State Directors of Veteran Affairs, and even as I write this, I’m preparing for an NAMB Webinar for the New York State Directors of Veteran’s Affairs on VA Home Loan Utilization or lack thereof. NAMB was recently a keynote speaker at the National Association of State Directors of Veteran’s Affairs, and we’ve already received several invitations to speak with representatives on creating educational resources and tools to help our military heroes. Building on these relationships only helps our members create new relationships in those states. NAMB is a collective of some of the most professional and educated housing experts in the U.S. Our Mortgage Brokers are growing and we need to grow with them so that we’re able to aid in compliance, education, business management, retention, and of course, profitability. Whatever we can do to help our Mortgage Broker members and partners will always be a focal point of NAMB. But, we must not also forget that there are numerous geographic areas not serviced by Mortgage Brokers and those Loan Originators in those hard-to-reach places working for small mortgage non-depositories often need assistance as well. Those Mortgage Originators, just like our Mortgage Broker members, rely on NAMB for education, legislative and regulatory updates, so they’re better equipped to service the one common piece of this incredible puzzle: The consumer! I mean, that’s the ultimate goal, right? To ethically, morally and professionally represent the consumer. By the time you read this, Oct. 1 will have come and gone, thus putting me at the helm of an incredible vessel created and designed to bring about positive change through a series of initiatives for a variety of people. The U.S.S. Constitution is the oldest floating commissioned warship in the world! It has stood the test of time and numerous attacks, yet it always came out on top. NAMB has been here for 45 years, suffered some setbacks, yet we’ve always come out on top and will continue to do so long after I’ve given up the seat. In closing, I’d like to simply say that a ship may have a captain, a navigator, quartermaster, officers, and others that make up the crew; but unless they all work together, that vessel will never move an inch. I’m looking forward to working with all of you to move NAMB to newer and greater heights! Sincerely,

N A M B

P E R S P E C T I V E

May 2018 l NAMB’s Legislative & Regulatory Conference was held in Washington, D.C., featuring a diverse group of speakers, including reps from ALTA, FTC, NMLS, VA, the White House and congressional leaders. l More than $30,000 raised towards NAMB’s Political Action Committee (PAC).

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waiting for the next deal to be handed to them. Last month, I was at a sales conference and had the privilege of hearing one of my all-time favorite sales trainers, Tom Hopkins, give an hour-long presentation on his Seven-Step Sales System. After Tom’s presentation, I got five minutes with him and shared that I read his book, How to Master the Art of Selling, in 1988. I got a great picture with him and an autographed copy of his book. It was, hands down, the best sales training book I have July 2018 ever read, and I still use his Seven Step Sales Process every day for the last l NAMB plays a pivotal role in HR 2570 successfully passing the House 30 years. His material is more relevant today than ever. I recommend it Financial Services Committee. HR 2570–The Mortgage Fairness Act of today to anyone who is serious about being a top producer in the mortgage 2017–seeks to amend the Qualified Mortgage (QM) Rule by removing industry or any other sales related business. lender-paid compensation from the three percent points and fees calculation. The Seven Fundamental Steps of the Sales Process 1. Prospecting August 2018 2. The initial contact l NAMB was proud to celebrate its 45th anniversary on Aug. 23, 2018. 3. Qualification For more information, visit our dedicated Web site at NAMB45.org. 4. Presentation 5. Handling objections With so many wonderful things having happened, I am personally 6. Closing the sale looking forward to what the next year will bring. 7. Getting referrals Thank you! These seven sales fundamentals are the core skills that make up a successful sales process. Mortgage company business owners know that they and their sales team need to master these skills to be successful and John G. Stevens, CRMS, Immediate Past President top producers in the mortgage origination business. Every member of your National Association of Mortgage Brokers sales team, including yourself, needs to work on becoming increasingly competent in these seven fundamentals. You can never go wrong by John G. Stevens, CRMS is Immediate Past President of reviewing and strengthening these seven sales process fundamentals. NAMB and Vice President of Cornerstone Mortgage The following Seven Steps come directly from Tom’s training. You can Group. John has been actively involved in NAMB and read up on them in more detail in his best-seller, How to Master the Art of mortgage industry thought leadership since 2010. Feel Selling. free to reach John by phone at (801) 427-7111 or e-mail JohnGStevens@gmail.com. 1. Prospecting: If you’re like most people, just hearing the word “prospecting” makes you a little nervous. Don’t think that way. If you don’t like to prospect, it’s because no one has taught you the professional way to do it. 2. Initial contact/making original contact the professional way: We meet new people all the time—in social situations, at events for our children, at church, in non-sales business settings, etc. The key to success in selling is to refine your skills during these initial contacts to become memorable to the other folks and to remember as much about them as possible so Seven Steps to Successful Selling you can impress them even more on your second meeting—which, By George W. Burkley III, CRMS hopefully, will be a selling situation. For the last 33-and-a-half years, my professional career has consisted 3. Qualification: Many salespeople spend most of their time talking to the wrong people. If you do that, it doesn’t matter how eloquently you of 11-and-a-half years in the retail automotive industry as a sales present your service or product. Your earnings are going to be low. professional and Sales Manager, followed by 22 years as an Invest your time with the right people who can make “yes decisions,” Independent Mortgage Broker/Owner, working for myself with 100 instead of expending it on the wrong people who can only make “no percent skin in the game every day. I walked away from a 60-hourdecisions.” Building relationships is key to this step. plus week, six-figure-a-year retail automotive sales management job 4. Presentation: After you qualify and know that this person has a need for to start a mortgage company out of an upstairs bedroom of my home your product or service, it’s now time to move on to the fourth basic, in October of 1996. My mortgage company just celebrated our 22nd which is the presentation or demonstration. You must present your anniversary on Oct. 1, 2018. For 22 years, our business and revenue product in such a way that they see that it’s just what they had in mind has been based on my sales ability and sales performance. all along. Now is your time to get your client the right mortgage product, I come from a Baby Boomer background with the work ethic of the the best rates and fees, and sell your service as the professional traditionalist who are our greatest generation. No entitlements … no free mortgage expert/industry guru. lunches! I worked to pay for my college education. No awards for 5. Handling objections: The fifth basic method of developing your participation here! I subscribe to the old school philosophy of “You kill competence is to learn how to handle objections effectively. Maybe what you eat” and “You have skin in the game.” I earned a Ph.D. in the you’ve had prospects who want to wait and think it over; prospects who “School of Hard Knocks,” and I am not afraid to ask for the sale when already have one of whatever it is you’re selling; prospects who’ve been value exceeds price. doing business with your competitor for years. Have you ever heard any Back in the old days of triplicate forms and carbon paper, my boss in of these things? If you’ve been in sales longer than a week, you the next office knew I was closing a sale when he heard, “Press hard, undoubtedly have. Read on. You know all the possible objections there are three copies” when the client was signing on the dotted line of already. Be prepared to talk about objections with options to close your ownership. deal. It will make you smile the next time you hear these objections. You may ask yourself, “How does this relate to the mortgage You’ll smile, bore in—and close a delightful number of such sales. But business?” As an independent professional Mortgage there’s a price to pay for that smile: You’ve got to learn the concept, Broker/Originator, we are all salespeople. Some salespeople are just a adapt the idea to your offering, and learn the words that make it work. whole lot better than others and have a system in place that is much Perfect Practice makes Perfect. better than your typical bank Loan Officer, who is an order-taker

NAMB’s Membership Minute: October 2018

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6. Closing the sale: Many average to good salespeople prospect, make contacts, qualify, present, and handle objections so well that they manage to get by without learning to close competently. And that, of course, is what keeps them from being great. Closing contains elements of both art and science, and those elements can be learned. Just like in the movie “Glengarry Glennross,” ABC = Always Be Closing. 7. Referrals: After you’ve satisfied the needs of your client and closed the sale, you have earned the right to your next prospect. By that, I mean getting referral business from each and every client. That is the seventh and final basic. If they’re happy, they’ll want someone else to be happy, too. If you want qualified referrals every time, ask your client if they are willing to help you with an introduction to people who they know in their sphere of influence. Write down their names and contact information and ask your client if they can call them to set up an introduction or get their permission to say they asked you to call them. The system works if you use it and become proficient. Go to Amazon and get your copy of How to Master the Art of Selling by Tom Hopkins. More than one million copies have been sold. It can increase your performance, productivity and income. George W. Burkley III, CRMS is Owner and Founder of Goshen, Ind.-based American Mortgage & Financial Services, and NAMB Treasurer, as well as Chairman of the Membership Committee. He may be reached by e-mail at George.Burkley@NAMB.org.

Cyber-Attacks, Are You At Risk Of Getting Hacked? By Michelle Velez, CMC

1. The use of unsecured e-mail (Yahoo or G-mail) by at least one of the parties of the transaction–either the buyer, seller, Realtor, Title Company, and of course, the lender. 2. No communication with the borrower to verify the wiring instructions. This is not the only kind of fraud that the industry is facing currently. There is also E-mail Spoofing. According to Wikipedia, E-mail Spoofing is the creation of e-mail messages with a forged sender address. Since core e-mail protocols do not have any mechanism for authentication, it is common for spam and phishing e-mails to use spoofing to mislead the recipient about the origin of the message. Once your computer is infected with malware, the hacker gets into your contacts and the malware sends an e-mail from “you” to all your contacts. Many times if they are asking you for money, or to pay with to pay with iTunes or Wal-Mart cards, this is an indicator that something “phishy” is going on. In case you are wondering, there are other scams as well. The IRS will not call you to demand you pay a bogus tax bill but a scammer might. They may claim they are from the IRS, become very aggressive and threaten to call the police if you do not pay the bogus tax bill. They will try to convince you into sending cash, a prepaid debit card or a wire transfer. The IRS will never:

Did you get a card, e-mail or phone call telling you that you won the lottery, a sweepstakes or some other prize from someone who cannot contain their excitement and want you to get your winnings to you as soon as possible? They will probably ask for your bank account information and tell you there is a small fee, tax or customs duties that need to be paid before they send you the money. Remember, if it sounds too good to be true, it probably is. Lastly, make sure your grandparents do not fall for scammers. A typical grandparent scam happens when a scammer calls or e-mails an elderly person posing as a relative in distress or they may even pose as an attorney or law enforcement agent to let them know their relative is in trouble. The scammer asks their grandparent to wire them funds for bail, lawyer’s fees, hospital bills, or any other fictitious expense. Make sure your elderly family members know that you will not ask them for money but if they get a call from a scammer, make sure they follow these steps: l Beware of urgent solicitations of money. l Make sure they verify the story is correct with another family member before sending to anyone. l Scam artists typically request a wire transfer, make sure any request for

n National Mortgage Professional Magazine n OCTOBER 2018

l Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill. l Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe. l Require you to use a specific payment method for your taxes, such as a prepaid debit card. l Ask for credit or debit card numbers over the phone. l Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

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More and more, the “F” word is creeping into our industry and daily conversations. Did you know that “Mortgage Fraud” is in the top 10 of all fraud in the U.S.? Mortgage fraud is the intent to materially misrepresent or omit information on a mortgage application to obtain a loan or even a larger loan than if the lender had known the truth. But are you aware of the ways you could be putting your borrowers at risk for wire fraud or other scams? Have you heard of PHishing? (No, I spelled it correctly…and it doesn’t include water) “Phishing” is when a hacker takes over an agent’s e-mail account in order to steal the borrower’s wire. It’s called Phishing due to the long time hacker tradition of using “PH” instead of “F.” The hacker will hack into your e-mail (Yahoo mail or G-mail are easier to get into) and will look for keywords, such as approval, contract, wiring instructions or new home that will let them know there is a purchase or refinance. Once they’ve located these terms, they send an e-mail to the borrower to make it seem like it came from you. They can change one letter or use another bogus e-mail address. Borrowers expect an e-mail from you, therefore they wouldn’t think to check the e-mail source. However, given most people check from their phones, which in some formats do not emphasize the sender’s address, it subjects borrowers to interpreting the e-mail as legitimate when it is actually a hacker. If you send out wiring instructions via e-mail, the hacker intercepts your e-mail, changes your return e-mail address and the routing number to their account on that same e-mail. By the time you have figured out the wire has been stolen, the money would have been bounced around to so many banks, it will most likely never be found. But don’t get Phishing confused with Spear-Phishing …there is a difference. Phishing is a broad, automated attack and is less sophisticated than Spear-Phishing, which is more of a customized attack on a specific company or employee. Realtors, title or escrow companies, attorneys and Loan Officers can fall prey to Spear-Phishing scams. Similar to Phishing, the hacker will target a company using social media and other Internet data. They will search your contacts and friends lists to see who you know and then hack into your e-mail to send a fake personalized e-mail to everyone in your company. This e-mail is opened because it came from a

“known” contact, but if there is an attachment (and you click on it) the hacker can then get that persons credentials and install malware on your computer, laptop, smartphone or network. Unfortunately, 91 percent of all cyber-attacks and the resulting data breach start with Spear-Phishing. If that’s not bad enough, one in five people will click the link! Think you’ve heard it all? Think again ... 52 percent of clicks occurred with one hour of receiving the e-mail! To prevent Phishing, make sure your company establishes a great IT Department with strong firewalls and training programs for you or your team to be aware of how cyber-attacks occur and notify the FBI if it happens to you. You can contact them at IC3.gov. Additionally, train your team to call the borrower with the wiring instructions. If you e-mail them, call the borrower to make sure they read back the account and routing numbers to you. Confirm, verify, confirm ... make sure you verify with your closer to make sure the instructions you have are correct. The top two mistakes people in our industry make are the following:

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a wire transfer is to be verified with another family member. l Most scammers call late at night to confuse potential victims. If you get a scammer calls you from any of these scams, you can report the incident online using the FTC Complaint Assistant on FTC.gov, or call (800) 366-4484 or (877) 382-4357. Okay, so what can you do to protect yourself from hackers? Well, first of all, make sure you have a strong distinct password. Do NOT use your pet or kid’s names, your company name or anything personal that makes it too easy for the hacker to crack your password. Make sure you use a combination of upper and lower case letters, numbers and special characters. The harder it is, the better for you. You should also remember to change your password frequently. I would not recommend any kind of password storage on your computer. It would be too easy to get your passwords if your computer was stolen. Many people like to keep a word document or an Excel Spreadsheet, even password-protected, to store their passwords. Do not print them out and leave them on your desk either (don’t laugh, I know people who have done that). Finally, I recommend downloading an anti-malware protection program. I would check with your IT person to see what is best for you but if you don’t know a guy, I would consider some other options to protect your computer. While I was doing research on cyber-security issues, I came across a great tool which can help you choose the best anti-malware tool to use for your protection. You can check that out at TechRadar.com/News/The-Best-Free-Malware-Removal-Tools. Michelle Velez, CMC of Supreme Lending is Secretary of NAMB. She may be reached by e-mail at Michelle.Velez@NAMB.org.

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NAMB Education Foundation Update: October 2018 NMLS: By the Numbers By Rocke Andrews, CMC, CRMS

The NMLS compiles and publishes quarterly data they collect from registrations and Mortgage Call Reports. The most recent data released was for Q2-2018. Numbers are increasing gradually. As a backdrop to these numbers, Q2-2018 mortgage volumes were the lowest in four years and profit-per-loan was down substantially for wholesale and correspondent lenders. The number of state-licensed entities was 16,866 and federallyregistered entities were at 9,122. The numbers of individual state-licensed MLOs increased to 156,273 and federally-registered individuals to 414,900. Of the state-licensed MLOs approximately 1/3 were licensed in more than one state. The states with the largest percentage increase in state-licensed entities were South Carolina (approximately 30 percent), Guam-okay a territory at 20 percent, and Maine at 17 percent. The largest increase in numbers that were actually located in the state were California at 6,643; Florida with 1,369; and Texas with 1,130. The states with the largest percentage increase in MLOs were South Carolina (approximately 55 percent), South Dakota at 23.3 percent and Florida at 18.8 percent. The largest number of licensed MLOs was California at 55,360, of which 32,081 were located in the state, followed by Florida at 34,070, of which 10,405 were located in the state and Texas with 28,454 of which 10,199 were located in the state. The state with the most MLOs per entity was Indiana at 23. Nationally, 1,648 new entity licenses were issued, while 568 were terminated, surrendered or revoked. MLO licenses approved were 40,888, with 7,001 revoked terminated or surrendered. While overall loan volumes were the lowest in four years, state-licensed entities actually increased volume 18.8 percent from the first quarter of 2018, reflecting the bank’s shift away from the mortgage business. The second quarter volume was 4.1 percent higher than the same period 2017

for purchases, but 23.35 percent lower for refinances. The number of active MLOs (originating at least one loan) in 2018 Q2 decreased by 1.1 percent nationwide over 2017 Q2, and increased 16.6 percent for the top 10 state-licensed companies (by origination volume) year-over-year. The number of federally-registered Loan Originators stood at 414,888 nationwide, but no breakout of how many of those actually originated a loan versus just being registered. The takeaways from these numbers indicate there is definitely consolidation of companies taking place while the state-licensed share of loans and is increasing. More and more MLOs are licensed in multiple states as are many companies. The implementation of transitional loan originator licensing will be an interesting influence on all these numbers next year. It will certainly increase the number of MLO licenses nationally while probably effecting a decrease in overall licensed entities. Rocke Andrews, CMC, CRMS is Treasurer of NAMB. He may be reached by e-mail at Rocke.Andrews@NAMB.org.

NAMB National 2018 Saturday-Monday, December 8-10 Caesar’s Palace 3570 South Las Vegas Boulevard • Las Vegas NAMB is excited to announce that NAMB National 2018 will be held at the Caesar’s Palace in Las Vegas, from Saturday-Monday, Dec. 8-10. As famous as Las Vegas itself, Caesar’s Palace is the best-known casino resort in the world—and with good reason. What began as a grand casino honoring the indulgent luxuries of ancient Rome has somehow evolved into something even more spectacular. Caesar’s Palace is renowned for impeccable service and attention to detail, and conference exhibitors and attendees can rightly expect the same. In fact, the only thing that can ever surpass their commitment to provide an extraordinary experience for their guests is their commitment to make planning it simple and effortless for you. Just announced … Keynote Luncheon Speaker Larry King and End of Event Party featuring Boyz II Men! Limited space is available ... sign up today! For more information, visit NAMB.org.

Save the Date … NAMB 2019 Legislative & Conference Thank you to all who attended the 2018 NAMB Legislative & Regulatory Conference in Washington, D.C. Be sure to mark your calendar for Saturday-Tuesday, May 4-7, 2019 at the Liaison Capitol Hill Hotel, 415 New Jersey Avenue NW in Washington, D.C. for the NAMB 2019 Legislative & Regulatory Conference! Details will be made available in the coming months on NAMB.org.

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NAMB+ is an independent, wholly-owned, for-profit marketing subsidiary of NAMB, P EAssociation R S P E ofCMortgage T I V E Professionals. The

Dear Mortgage Professional, Have you made your reservations yet for NAMB National? Believe it or not, we are less than two months away from the must-attend event of the year for mortgage professionals, and NAMB National 2018 is going to be HUGE! NAMB takes over the world-famous Caesars Palace in Las Vegas, Nevada December 8 – 10, 2018 and NAMB+ is more excited than ever to connect with the thousands of mortgage professionals from across the country who will be there. This year we are working on some very cool ideas for our trade show booth that you won’t want to miss, and we are planning a totally new track of minibreakouts that feature product and service provider showcases and demonstrations from a number of our fantastic NAMB+ Endorsed Providers.

Last, but certainly not least, we are targeting NAMB National to rollout two massive new initiatives that we believe will be absolute game changers, particularly for small business mortgage professionals. You definitely want to be in Las Vegas December 8 – 10 to learn first-hand how NAMB and NAMB+ continue to be all about you and continue to enhance the value of your NAMB Membership. I look forward to seeing you there! Sincerely,

Mike DeSantis President, NAMB+, Inc. mike.desantis@namb.org

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

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

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.

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

CIC Credit - Tri-merge Credit, Employment Screening, & Much More. Businesses have looked to CIC Credit for expertise on Business Screening, Credit Reports, Mortgage Credit Reports, and Employment Screening for decades. With over 100 years of credit related experience, it's no surprise that CIC Credit is a leader in providing quality products to help clients qualify borrowers, mitigate risk, and ensure compliance.

MySMARTblog.com The way your prospects think has changed and that is where the massive shift occurred. At MySMARTblog.com we build a complete, dynamic and Profitable Online Presence™ in order to protect you and your valuable repeat and referral business from your competition. 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.

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. If you want a social and mobile marketing strategy31 that gets noticed contact Social5 today for a FREE consultation and demo and to receive your NAMB member discount pricing SYNCRO connects mobile salespeople to their office website leads. NAMB Members receive a 10% discount off regular prices for monthly unlimited SYNCRO Web Chat packages.

USA Business Lending, Inc. USA Business Lending is your complete resource for everything commercial lending. With our extensive network of funding sources and specialized loan programs, you can be sure that your clients have access to the most competitive rates and terms available on the market.

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For over fifteen years, Camber Marketing Group has been the premier lead generation, data solutions and direct mail marketing company for the mortgage and financial services industry. From this perspective our goal is to help NAMB members generate profitable response and maximize their return on investment.

Moso provides Brokers and LOs with customized websites, online application generation, rate alerts, borrower portal, CRM and Cloudbased Document Management at an affordable price of $50 per month, plus $15 per funded loan. A 3 month free trial along with the first 5 free funded loans is extended to NAMB+ members.

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

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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.

Universal Credit Services is a Top Ranked, National Credit Reporting Agency and Authorized Report Supplier for Fannie Mae Day 1 Certainty® offering products and services from origination to closing. Universal provides Tri-Merged Credit Reports, Verification of Employment Reports, VOD's, 4506T's, Marketing Services, Flood, Fraud, and Appraisal Management Services.

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!

OCTOBER 2018 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

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By Alan Cicchetti, MBA

Compliance Management System for Mortgage Brokers Questions Q: I am interested in compliance services for a small broker shop. What do I need to finish the CFPB requirements and how long will it take to complete? Q: I am a one-person Broker shop and want to make sure that I have what is necessary to comply with all rules issued by CFPB. What do I need? Q: I am a four-MLO company that will not likely exceed 15 Originators. I would like to have ongoing communications available to me with regard to questions that occur during our business routine to help us stay compliant. What do you recommend? Q: Can you review what we currently have in place and tell me if everything required is in place? Answers The questions posed are actual questions from independent mortgage professionals trying to determine the requirement for Brokers in this complex CFPB environment. The good news is that they are asking questions that reflect their concern over understanding what the actual requirements are. Many Brokers have decided to do nothing and take the chance that they will not be the target of any regulatory examinations or inquiries. They have totally disregarded the relatively new CFPB mandates except for the

requirements that are being imposed on them by their lenders. So, what are the CFPB and state regulatory requirements? As a former Banking Department Regulator, I have stayed in touch with many of my colleagues presently with State Banking Departments and the CFPB. They all take a similar position as to what is required. The primary requirement is to develop and implement a Compliance Management System (CMS). In fact, the states are working hand-in-glove with the CFPB and will be coordinating their efforts to adhere to a single examination protocol. In a recent e-mail from one of our clients, we read about a first-day letter from one of the state examiners stating that part of the exam scope would include providing evidence of a CMS. A CMS is a system that creates a culture of compliance within your company. It consists of policies and procedures, training and testing. You may say that you have all of your policies and procedures or that you do not need the consumer complaints policy and procedures because you do not receive any complaints. The point here is that the days of dusting off a notebook full of policies and procedures and handing it to the examiner are over. There needs to be a process in place that causes you to treat policies and procedures as living documents in a continuous state of improvement and change. Examiners

will question your mortgage loan originators as part of the examination process to determine if they are aware of the specific policies and procedures that are in place. Therefore, it is much more than a policy notebook. It requires training, some of which is mandatory, and periodic testing to ensure that your employees understand the policies and are adhering to them. Compliance is also more expensive now. You need to have the mindset that you should be willing to spend on risk management services as you would on your electricity bill. And, the fact that you are a one-person shop does not relieve you of adhering to the above stated requirements. Itâ&#x20AC;&#x2122;s like being a little bit pregnant! So maybe you should run out and purchase a set of policies and procedures and get started. There is really no need to do this either. The CFPB recognizes the fact that independent mortgage professionals may not have the financial resources to meet all of the requirements up front. The key here is to be able to demonstrate that you are making a good faith effort to comply.

There are roughly 25 policies and procedures that cover the various subject matters, but there are 10 or 12 policies and procedures that are deemed â&#x20AC;&#x153;essential.â&#x20AC;? One way of easing the financial burden, and at the same time, create a culture of compliance, is to select one essential policy per month to fully implement. After six months, you will be halfway home and well on your way of building a CMS. There is little value in purchasing all of your policies at once since you will not have the time to fully implement them. One of the other keys to success is to associate with a group of independent subject matter experts, such as we provide in Brokers Compliance Group, so that you have a resource for all of the questions that come up in the normal course of doing business. You can begin to build your program now or you can wait and catch up later. Remember that compliance or lack of compliance leaves a trail. The choice is yours! Information contained in this article is not intended to be and is not a source of legal advice.

Alan Cicchetti, MBA is Executive Director of Brokers Compliance Group and Director/Agency Relations of Lenders Compliance Group. Brokers Compliance Group is a mortgage risk management firm, specializing exclusively in mortgage compliance and offering a full suite of services to independent mortgage professionals. Alan may be reached by e-mail at Compliance@BrokersComplianceGroup.com.

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data captured through Borrower Wallet to automatically calculate qualified income using industrystandard formulas—resulting in up to 20 percent time/cost savings on complex credit decisions. When utilized with PromonTech’s product suite, lenders can realize significant cost savings, while gaining unparalleled compliance throughout the loan process. “Income AI is the next step towards realizing the near-term opportunities for augmented intelligence. PromonTech has created a platform that enriches data to be leveraged by AI and machine learning to help lenders continue to evolve to compete in the challenging market ahead,” says Michael Kolbrener, PromonTech’s Chief Technology Officer.

Smart technology to ask customers questions relevant to their individual situation and loan application; a Transparent Process that tracks current loan status 24/7, automatically showing next steps for the consumer; and its eco-friendly that electronically delivers disclosures and loan documents and allows digital signatures. “We believe in making the home loan experience personal

and transparent, and employing best-in-class technology to improve the home loan journey for our customers,” said Planet Executive Vice President of National Sales, Michael Lee, said. “Skymore by Planet Home Lending speeds borrowers through the process, freeing our mortgage loan originators to focus on giving advice and counsel. We’ll get you home is more than just our motto; it’s what we do.” 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 e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

Planet Home Lending Launches New Digital Mortgage Assistant

Financing has often been difﬁcult for self-employed borrowers and investors due to issues documenting income. MAIs Income Express Loan looks to change that. Using either 12 or 24 months of bank statements rather than tax returns, Income Express allows self-employment borrowers to purchase a home that matches their income. Additionally ﬂexibility for investors now includes purchasing of Non-Warrantable Condos.

Loan Amounts: LTVs: FICOs: DTI:

Between $75k - $1.5mm up to 90% down to 580 up to 50%

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Between $75 - $1.5mm up to 85% down to 620 up to 43%

Call today: 770-238-1565 Visit Us: MAIBroker.com Email: aes@maibroker.com

n National Mortgage Professional Magazine n OCTOBER 2018

24 Month Personal Or Business Bank Statements

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Planet Home Lending has launched a new digital mortgage assistant, Skymore by Planet Home Lending, leveraging artificial intelligence (AI) to make home loans easy, convenient and fast. “Consumers want smart technology, and they want access to smart home loan professionals,” said Planet Financial Group Chief Executive Officer and President Michael Dubeck. “Skymore by Planet Home Lending makes applying for a loan much easier and is enhanced by our Mortgage Loan Originators. They have an equally important role as experienced advisors who can explain home loan options clearly and help customers make advantageous choices.” Skymore by Planet Home Lending features: Mobilefriendly options where customers apply and upload documents securely from any device, including their phones; Co-pilot Navigation Assistance where borrowers can share their screen with Planet Home Lending Mortgage Loan Originators or processors to get help when they need it; Easy Asset Statement Collection to securely connects to thousands of financial institutions making it easy to provide documentation;

What Are What Sho Have We BY RALPH LOVUOLO SR.

quality, proper representation, understanding, diversity, education and what we’ve always said should be “A level playing field.” That’s what we all want. And all I see is more and more divisiveness … more hills and valleys. Serve the public. That is our purpose. But we seem to have forgotten that. Yet all I see is more and more individualism for the purpose of serving ourselves. After I started to think about the subject of equality, the purpose that organizations exist and something that I predicted in 1989, my head started to spin. Then I began to research the number of organizations that are spread across our nation and I began to laugh out loud, especially after I read the description of the purpose of the various organizations that exist. In 1989, I was the second President of the New York Association of Mortgage Brokers, the brainchild of Don Henig, who went on to become the first member of the Board of Directors of the MBA and had been the first President of the NYAMB. It had been my pleasure to work with him on the formation of the NYAMB. I was so proud and thought that the purpose for which we were formed was so principled. It was about that time that a regional meeting of members of about three or four states were getting together to exchange ideas and their wares. I was honored to be asked to be on a panel of speakers in Atlantic City, N.J. and was asked to comment on the state of the industry from my point of view. I was excited to be part of this panel, but had a definite opinion as to the divisions I saw starting to spring up. You see, I was also a member of the board of directors of the National

OCTOBER 2018 n National Mortgage Professional Magazine n

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The

Mortgage

Godfather

Are We Doing? Should We be Doing? We Forgotten WHY We Exist? Association of Mortgage Brokers, headquartered at that time in Arizona. There was a kerfuffle brewing in California by someone who would become one of my very close friends. I came to admire him and listen to his sage advice, one of which was to begin to do what I do today. Chris Salazar had decided that the NAMB was off on a bad path, making decisions that he didn’t agree with, so his reaction was that he was going to start his own organization to represent Mortgage Brokers and he could do it better than it was being done. Our national president, Tony Davis, a very successful Mortgage Broker from Chicago conferred with his Board and thought it would be a good idea to have someone go to visit Chris and see what we could do to prevent a splintering of the NAMB. With my outsized ego and love of confrontation, I jumped at the chance to confront Chris, find out what was really on his mind and try to prevent the divorce. You’ll have to ask me personally what happened when we met, but it was not pleasant. Chris could give as good as he could take. If you’ve been in the business long enough, you’ll remember that Chis started his own magazine, Mortgage Originator, that went on to become a top source of information for anyone associated with the industry for many years. He also became a prominent philanthropic member of the Southern California Latin American community, spending countless hours giving not just money, but his own time and personal help. In any case, he decided that he would join us and we made concessions that only better served the public, along with the members of the brokerage community across the U.S. My speech in Atlantic City predicted that if we all didn’t start to become closer and clearer in our goal to serve the public, there would soon be a National Association of Mortgage

Professionals for Single-Family Wide Trailers. It had some effect, I think, because the NAMB and MBA became closer and the business thrived for quite some time. It appears that the time of equanimity of thought and purpose has long past and now we have so many “National” groups, all of which have the seemingly same set of goals we’re approaching laughability. Instead of finding a way of working together, we’re becoming more and more divided and divisive. I propose we put a stop to this and come together at a roundtable and air our similarities and how we can serve “everyone.” I truly believe we can if only someone would just start the ball rolling and explain to all that the end result will be to cause the government to step in and force us to do it. And if that happens, we won’t like the result. We are all here to serve the public, reduce costs, work together with an ethical, informed, integrity-filled purpose, with equality of understanding the needs of the entire population. It didn’t take me long to find out what you’re about to read. And when I read the Web sites of each organization, my heart sank. I put these in no certain order, because it seemed useless to try, but when you read what I took directly from the site of each organization, it became clear that we have lost our purpose and direction. The National Association of Professional Mortgage Women The NAPMW is not just an organization for women. But since women make up the majority of professionals in the mortgage/banking profession, our purpose is to help them advance in business, personal and leadership development. We believe this is a cause everyone can stand behind. We also believe by providing the highest quality and most comprehensive education to our members–both men and women–they will be able

to best serve their customers and succeed in their careers. NAPMW that says on its homepage “The National Association of Professional Mortgage Women (NAPMW) champions the advancement of women in mortgage related professions by providing business, personal, and leadership development to all professionals within the mortgage industry.” The National Association of Professional Mortgage Women (NAPMW) is a community of professionals who engage in the mortgage/banking industry. Men and women from all backgrounds have joined NAPMW because they want to excel at what they do” Mortgage Bankers Association According to Michael Fratanoni, Ph.D. Chief Economist of the Mortgage Bankers Association (MBA), the organization was formed in 1914. If you check Wikipedia, it says the MBA ”is the United States National Association representing all facets of the real estate finance industry. “Headquartered in Washington, D.C., the MBA represents more than 2,200 member companies. As the leading voice for our industry, we offer a comprehensive view of policy implications in the real estate finance space. We rely on our diverse membership to provide the practical knowledge that makes a real difference on the issues that matter most to the economy, real estate finance industry and its customers.” National Association of Mortgage Brokers According to Wikipedia ,the National Association of Mortgage Brokers describes itself as the “Only national trade association representing the mortgage broker industry in the United States.” It has a membership of 27,000 and was founded in 1973. The Association is committed to promoting the highest degree of professionalism and ethical standards for its members. In

addition to mandating members adhere to a professional Code of Ethics, NAMB provides Mortgage Brokers with professional education opportunities, and offers rigorous certification programs to recognize members with the highest levels of professional knowledge and education. Membership in NAMB will benefit you in so many ways. NAMB will keep you educated, trained and well-informed on everything happening in the mortgage origination industry. It will be the best business decision you make all year! Help NAMB protect your industry. Association of Independent Mortgage Experts According to its Web site, “The Association of Independent Mortgage Experts (AIME) was formed to unite, empower and champion the people who we believe are the best option for homebuyers: Independent mortgage experts. Uniting independent mortgage experts from across the country to strengthen our professional community and support the advancement of the independent mortgage channel.” National Association of Minority Mortgage Bankers of America The National Association of Minority Mortgage Bankers of America’s (NAMMBA) home page says, “The National Association of Minority Mortgage Bankers of America (NAMMBA) is a national trade association dedicated to the enrichment and betterment of minorities and women who work in the mortgage industry.” Further, “NAMMBA’s mission is to provide training, education and professional development to women and minorities in the real estate finance industry, while introducing high school and college students to careers in the real estate industry, while providing financial literacy education.” continued on page 38

Save the Date!

NCRA 26th Annual Conference 2018 Tuesday-Thursday, November 6-8, 2018 Atlantis Casino Resort Spa 3800 South Virginia Street • Reno, Nev. oin the National Consumer Reporting Association for its three-day National Conference at the Atlantis Casino Resort Spa in Reno, Nev. NCRA’s 26th Annual Conference will begin Tuesday evening, Nov. 6 with a Welcome Reception and Marketplace, followed on Wednesday and Thursday, November 7-8 with full days of motivational and educational sessions! NCRA’s fabulous feature event, sponsored by Meridian Link, will be held Wednesday evening at the National Automobile Museum: The Harrah Collection.

NCRA 26th Annual Conference 2018 Schedule of Events 38

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Monday, November 5 l Board of Directors Meeting & Dinner Tuesday, November 6 l Member Meetings and TP Training l Evening Welcome Reception Wednesday, November 7 l Breakout Sessions l Reception at the National Auto Museum Thursday, November 8 l Breakout Sessions

For more information on the NCRA 26th Annual Conference 2018 and volunteering opportunities, call NCRA at (630) 539-1525 or visit NCRAInc.org.

the mortgage godfather

National Reverse Mortgage Lenders Association Established in 1997, the National Reverse Mortgage Lenders Association (NRMLA) is the national voice of the reverse mortgage industry, serving as an educational resource, policy advocate and public affairs center for lenders, as well as related professionals … Over 90 percent of the reverse mortgages in the United States today are originated or purchased by NRMLA members, and over 95 percent of the reverse mortgages originated in the United States at this time are home equity conversion mortgage (HECM) loans insured by the FHA. National Mortgage Servicing Association The National Mortgage Servicing Association (NMSA) operates with a simple philosophy: Unity. By bringing together decisionmaking executives from across the nation, NMSA drives the conversation on shaping the American housing industry into something better for homeowners. NMSA places an emphasis on transparency and open dialogue, to encourage servicers to work together on creating solutions to the real world issues that face the mortgage industry. National Association of Hispanic Real Estate Professionals The National Association of Hispanic Real Estate Professionals (NAHREP) was formed in 1999 and it currently has 30,000 members. NAHREP is an amalgamation of real estate and mortgage professionals. NAHREP is a purpose-driven organization propelled by a passionate combination of entrepreneurial spirit, cultural heritage and the advocacy of its members. NAHREP’s mission is to advance sustainable homeownership for all Latinos. NAHREP members are comprised of 65 percent real estate agents, 25 percent Mortgage Originators and 10 percent are other

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industry-related occupations such as escrow, legal, title, home inspectors, etc. National Association of Mortgage Underwriters According to its site, the National Association of Mortgage Underwriters (NAMU) is a onestop online venue for everything and anything mortgage underwriting. NAMU offers a variety of comprehensive online “professional development” training and certification programs for both in-house residential and commercial mortgage loan underwriters, as well as contract mortgage underwriters. Launched in January of 2010 by our sister organization, the National Association of Mortgage Processors (NAMP)—which was formed in 2006—NAMU is a separate ‘for profit’ company striving to become the voice of today’s mortgage underwriter.” National Association of Mortgage Processors According to its Web site, “Founded in 2006, we view the National Association of Mortgage Processors (NAMP) as the voice of today’s mortgage processor. NAMP is a one-stop online venue for aspiring loan processors to obtain networking opportunities, training classes, helpful articles, thought-leader professional development certification and more. NAMP is a ‘for profit’ company dedicated to assisting mortgage loan processors, contract processors and in-house loan processors, in all aspects of their business Which one of the leaders is willing to discuss their point of view concerning the concepts of better serving the public by: l Realizing that, together, we are stronger in our dealings with our government. l Realizing that divided, all we’re doing is serving a small segment of the ultimate user, the public. Let’s hear from all of you.

Ralph LoVuolo Sr. has nearly 60 years history in the mortgage business. He was a Co-Founder/President of the NYAMB and a long-term member of the Board of Directors of NAMB. The Mortgage Godfather is available to help your salespeople do more business. He does sales rallies, Webinars, personal coaching. Call, text or e-mail (917) 5761230 or e-mail Ralph@MortgageGodfather.com.

NAPMW in the

News

NAPMW 2019 Annual Education Conference

advance online at NAPMW.org. After registering, you will receive a confirmation e-mail containing information about joining the Webinar. For questions regarding National Board Calls, please contact Admin@NAPMW.org.

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NAPMW’s National Board of Directors Meetings National Board Meetings for the 2018-2019 NAPMW Board of Directors will be held the second Wednesday of the month at 2:00 p.m. Pacific time. The call is open to all NAPMW members! To attend, please register in

NationalMortgageProfessional.com

The NAPMW 2019 Annual Education Conference “Jazzin’ Up Mortgage in the Big Easy,” will be held Wednesday-Saturday, May 15-18, 2019 at the historic Hotel Monteleone in New Orleans. The Hotel Monteleone is one of the last great family-owned-andoperated hotels in New Orleans. Since 1886, five generations of Monteleones have dedicated themselves to making their hotel what it was—and still is—a sparkling destination in the heart of the French Quarter. The Hotel Monteleone has long been a favorite haunt of distinguished Southern authors. Many of them immortalized the venue in their works. Ernest Hemingway, Tennessee Williams and William Faulkner always made The Hotel Monteleone their address while in the Big Easy. In June of 1999, due to Hotel Monteleone’s distinction among the literary elite, the Hotel was designated an official literary landmark by the Friends of the Library Association. Details on the NAPMW 2019 Annual Education Conference will be made available as they are finalized. For preliminary information, call (608) 886-9817 or e-mail Admin@NAPMW.org.

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.

United Wholesale Mortgage Named Top Non-Bank Purchase Lender

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United Wholesale Mortgage (UWM) has passed Quicken Loans to become the top-ranked non-bank purchase lender in America, according to a report by Inside Mortgage Finance. UWM produced $11.2 billion in loan volume during the second quarter, with $8.3 billion of its business (74 percent) being attributed to new home purchases–compared to Quicken Loans, which purchase loans made up only 31.6 percent of its second quarter loan volume. “This is a major accomplishment for us at UWM, and highlights the efforts of more than 2,700 team members here who are dedicated to helping our mortgage broker clients be the hero to their borrowers and the Realtors they work with,” said Mat Ishbia, President and Chief Executive Officer of UWM. “The high amount of purchases going through the Mortgage Broker channel reinforces that borrowers don’t want to communicate with a call center Loan Officer that is 1,000 miles away, or use an app that is more sizzle than substance. They prefer local, they want an expert, and they want the process to be fast and easy–and that’s what Mortgage Brokers provide.” UWM’s overall loan volume through the midway point of 2018 is a 68 percent year-over-year increase compared to the sixmonth mark of 2017, which is by far the highest growth clip among any of the top 25 mortgage lenders overall in the country.

UWM’s ranking as the top nonbank purchase lender in America– and number two purchase lender overall behind Wells Fargo–is especially notable because the company is a wholesale lender. That means that UWM solely operates by working with Independent Mortgage Brokers throughout the country who take borrower applications, but then UWM underwrites, closes and funds the loan through its technology and partnership with brokers. The overall top five purchase lenders in the second quarter were: 1) Wells Fargo ($15.4 billion); 2) UWM ($8.3 billion); 3) Bank of America ($7.9 billion); 4) JP Morgan Chase ($7.86 billion); and 5) Quicken Loans ($7.80 billion). UWM forecasts year-end loan volume surpassing $40 billion, which would exceed the company’s all-time high mark of $29.5 billion (set in 2017) by 36 percent. NAMB+ Adds Two New Endorsed Providers

NAMB+ Inc., the for-profit marketing and communications subsidiary of NAMB, has announced that Universal Credit Services and Camber Marketing Group have been named Endorsed Providers for NAMB+. Based in Broomall, Pa., Universal Credit Services was established in 1992 as a provider of mortgage services, lending services and tri-merge credit reports, helping industry leaders mitigate risk, close loans faster, overcome underwriting

challenges, save on costs, and provide professional assistance. “We are proud to be designated as a NAMB+ Endorsed Provider,” said Anthony Fulginiti, Executive Director and Chief Marketing Officer at Universal Credit Services. “What makes Universal stand out is our relentless focus on supporting our customers … it’s in our DNA. Every day we save our customer’s money while increasing their productivity.” Atlanta-based Camber Marketing Group assists mortgage professionals and financial service companies maximize their profits via integrated marketing solutions. Via targeted lead generation, Camber Marketing Group primarily utilizes direct mail as a vehicle to deliver leads. “Camber Marketing Group is proud to be designated as a NAMB+ Endorsed Provider. This enables us to extend our expertise in direct marketing to NAMB and its members,” said Christopher Cammack, Sales and Administration Executive of Camber Marketing Group. “For more than 15 years, Camber Marketing Group has been the premier lead generation, data solutions and direct mail marketing company for the mortgage and financial services industry. From this perspective, our goal is to help NAMB members generate a profitable response and maximize their return on investment.” NAMB+ connects NAMB members with an array of Endorsed Providers aimed at helping mortgage professionals gain a competitive advantage in today’s marketplace with discounts and special programs only available to NAMB

members. NAMB+ brings everything from compliance, digital mortgage platforms, lead generation, insurance services, social media and much more to NAMB members as part of the NAMB+ program. Sunset Equity Moves to Silicon Beach

Sunset Equity has relocated their headquarters to a new office in Silicon Beach to accommodate the company’s rapid growth. “We have double the growth of our employees in the past year and are pleased that the new space will accommodate our unprecedented growing presence nationwide,” said Ben Donel, Sunset Equity CEO. The new facility features contemporary, high-tech design with designer modern interiors, an open floor plan and a rooftop patio penthouse. Amenities include a landscaped courtyard, state-of-art gym and life-sized board games. “We are excited for the demand of our loan products that meets investors needs and enable them to leverage their capital and build their portfolio,” said Donel. The company lends nationwide in 50 states, from loans $50K to $50 million in size. Sunset Equity lends up to 90 percent of cost/100 percent of the rehab, no interest on construction holdback, and same-day auction financing. Sunset has also launched a Wholesale Division, offering a white label product for correspondent lenders to close more deals with their clients direct.

Stearns Lending Closes Shared Equity Partnership Deal With Certainty Home Loans

LendingQB and BNTouch have announced a full integration between their two platforms, offering mortgage lenders a solution to grow their businesses from lead generation through loan origination and funding, seamlessly connecting all parts of a lender’s business. The systems communicate through a custom API integration that passes more than 300 points of data between the two systems.

LendingQB and BNTouch allows for real-time automated marketing to take place between the Loan Officer and their borrowers without the LO having to lift a finger. “BNTouch has been a great partner of ours because they understood how LendingQB is different,” said David Colwell, Vice President of Strategy at LendingQB. “When we showed them our API they took full advantage of it and as a result, their product adds more value when used in conjunction with LendingQB. Their platform pulls continued on page 43

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BNTouch and LendingQB Announce Integration Between Platforms

their loan via e-mail or SMS text messaging. “One of the biggest gaps that lenders tell us is the inability of their LOS to work in tandem with their CRM,” said Aidan Paringer, Director of Marketing at BNTouch. “We worked closely with LendingQB to identify those gaps and create an integration that connects the lead generation process with the underwriting and closing process. We believe that our integration allows mortgage lenders to improve both the speed and the quality of the mortgage experience.” Communication between

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Stearns Lending has announced the close of its shared equity partnership deal with Certainty Home Loans, an Independent Mortgage Banker. “Today’s successful mortgage companies understand the power of economies of scale and combined resources. Certainty Home Loans’ strong retail, consumer-centric model along with our wholesale, retail and strategic alliance sectors, allows us to provide our employees, customers, and partners with industry-leading technology and resources that help the dream of homeownership become a reality,” said David Schneider, Chief Executive Officer of Stearns Lending. “For Stearns Lending, the partnership helps accelerate the growth of Stearns’ retail sales channel and broadens our geographic footprint.” This partnership launches Stearns’ new Preferred Partner Platform, which leverages Stearns’ experience with its current Joint Venture business model which currently operates under 10 different brands across the country. As the first Preferred Partner, Certainty Home Loans has access to Stearns’ technology, direct access to capital markets expertise, and operational excellence. “By leveraging Stearns’ advanced technology platform to streamline and improve interactions with partners, customers and each other, this partnership allows Certainty Home Loans to accelerate growth plans,” said Jim Clapp, President of Certainty Home Loans.

A potential borrower completes an online loan application on a Loan Officer’s Web site and the 1003 is placed as a lead into the Loan Officer’s BNTouch CRM. Once the Loan Officer initiates the loan process in LendingQB, the API integration kicks in. LendingQB synchronizes data with the BNTouch CRM as the borrower’s loan initiates and completes each step of the loan process, ensuring real-time consistency of data between the two platforms. Unique messaging capabilities of BNTouch allow loan officers to automatically notify their borrowers of any updates on

Independent Mortgage Originators By Andy W. Harris, CRMS

Evan Wade Philadelphia Mortgage Brokers NMLS 1706247/NMLS 671974 PhillyMB.com

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This month, I’m interviewing Evan Wade from Philadelphia. Evan is a Co-Founder and Mortgage Consultant at Philadelphia Mortgage Brokers, an independently-owned mortgage brokerage, serving borrowers in the greater Philadelphia region. A 10-year veteran in the financial services industry, Evan specializes in VA loans, and is involved with numerous veteran service organizations, including VAREP, Operation Safe Haven, and No Dog Gets Left Behind. Evan, tell us a little about yourself and your career. I started out in the financial services industry as a Bank Teller at TD Bank, and worked my way up to becoming an Assistant Manager at the age of 22. During that time, the bank allowed us to originate mortgages in the branches. In hindsight, it was probably a terrible idea because there was virtually no training–and we all know how complicated mortgages can be. I dove head first into learning the business and was hooked immediately. I became a full-time Loan Officer in May of 2015, and haven’t looked back. We understand you recently became a Mortgage Broker from the banker world. What motivated you to make the change? I am an entrepreneur at heart, so starting my own mortgage company was always at the back of my mind. I love the idea of creating and growing my own brand. Couple that with the wholesale channel being the best option for consumers to obtain a mortgage, it really became a no-brainer. What would you say so far are the biggest differences you’ve experienced coming from the retail side? Choice and pricing are the main differences. I can sign up with any lender I choose to place a loan, and I’m not confined to one single lender’s risk appetite. And of course being able to offer better rates is a huge win in my book, especially on VA loans. How would you compare pricing when compared to the Mortgage Banker world? For the most part, it’s not even close. Broker rates are significantly better. What are you seeing in your local market on trends, inventory and consumer/Realtor mortgage education? The market in the Philadelphia region is very healthy. We are experiencing inventory problems like much of the country, but appreciation isn’t out of control, and I find the market to be very

sustainable for the foreseeable future. I’m a firm believer in that there’s never enough education in respect to mortgages. We can all be learning more both as professionals and consumers—professionals to ensure we are guiding our clients in the right direction, and for consumers to set themselves up to succeed financially, not just now—but well into their future. I know the myth of losing control as a Mortgage Broker is finally being exposed to the market and quite the opposite. What are your experiences on controlling the process? Out of all the arguments against becoming a Mortgage Broker, this myth frustrates me more than anything else. I’ve never felt more empowered in this industry than working as a Broker. I find that most of the lenders I am signed up with will bend over backwards for me to ensure I will send them future business. What would you say are your best forms of marketing today to generate new business? Referrals are and will always be the most sustainable business model to generate new business. However–it does not always need to come from Realtors. Get creative about it–anyone with a sphere of influence has the potential to refer business. As a matter of fact, I probably receive more referrals from other Loan Officers than any other source because I don’t view them as competitors. Just recently, one of the security officers at the entrance of my office building knows I own a mortgage brokerage. He asked me about a particular program I’m not able to offer, but I have a friend who works for a bank who can provide that product. So instead of trying to sell him to go with me, I talked up my friend and made him look like a rock star. I’ve never been a big fan of the “Always Be Closing” “ABC” mentality–it’s about developing relationships and helping other people out where you can, and it will pay dividends over time. Anything you would choose to share with Retail Loan Officers considering the change to becoming an independent broker? Look at the numbers. The first thing I did when I was considering becoming a broker was build out a financial forecast with realistic numbers. Underestimate your volume/margins, and overestimate your expenses. Numbers don’t lie—you’ll see in almost all cases, becoming an Independent Mortgage Broker makes more sense. Are you an Independent Mortgage Broker? Do you have something you’d like to share? Reach out to me at AHarris@VantageMortgageGroup.com for future article considerations. 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.

heard on the street

more data from our LOS than any other CRM product, allowing for greater automation and easier access to the information that lenders and borrowers need. Ensuring your LOS and CRM are deeply integrated can give lenders the advantage they need to survive in today’s tough environment.”

Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail:

On Sale Noww NATIONA AL REVE V RSE MORTGAG GE LENDE N RS S ASSOCIATION

2018 Annual Meeeting & Expo

October 28-30, 2018 8

Hilton San Diego Bayfront • San D Diego, CA

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.

Learn m more at NRMLA Aonline.or o rg Use Prro omo Code NRMLAN NMP for a $75 Discount Offff the e Non-Member Rate

n National Mortgage Professional Magazine n OCTOBER 2018

and training for mortgage lenders. l Better Mortgage, a New Yorkbased digital mortgage lender, has hired Sean Hundtofte, former Financial Economist at the Federal Reserve Bank of New York, as its Head of Credit Risk and Chief Economist. l LERETA LLC has tapped Tiffany Stringfellow as Vice President of Business Development, responsible for maintaining and growing the relationships with LERETA’s largest clients. l Primary Residential Mortgage Inc. (PRMI) has added Senior Loan Officer Jack Ellison to its Guilford, Conn. office. Ellison has more than 18 years of financial and mortgage industry experience. l Mortgage Guaranty Insurance Corporation (MGIC) has announced that Michael E. Jacobson joined the company as Vice President of Corporate Development where he will lead the development of mortgage credit enhancement solutions. l Norcom Mortgage has welcomed Branch Manager Jeff Heidtmann and his team back to the company as one of its Connecticut branch locations in Columbia. l First Community Mortgage (FCM) has announced a new Renovation Lending Initiative with the hiring of Cathy Bishop as FCM’s new Renovation Lending Manager and Jeff Talman as a Renovation Lending Specialist. l WFG National Title Insurance Company has named Theresa Williamson as Senior Vice President, Compliance and National Training Manager, where she will manage the company’s existing learning management platform, WFG Scholar, as well as overseeing the transition to a new platform in the near future. Your turn National Mortgage Professional Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of:

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Mortgage Professionals to Watch l Angel Oak Mortgage Solutions has announced the addition of seven new Account Executives, including Kendra Cutuli in Los Angeles, John Jernigan in North Carolina, Armando Aviles and Diane Hardgrove in Dallas, Otto Oliva in Inside Sales with John Macedo covering Monterey Bay to the South Bay and Vee Elmazaj covering the South Bay in California. l Applied Business Software (ABS) has announced the appointment of Elizabeth Morales as Chief Marketing Officer. l Mortgage Network Inc. has announced that Marc Walz has joined the company as a Loan Officer in the company’s Providence, R.I. branch, serving Rhode Island and Massachusetts. l Planet Home Lending has announced that Kimberley Veeder-Caffrey has joined the company as Regional Sales Manager for the northwestern United States, where she will serve lenders in Washington, Oregon, Idaho, Montana, Wyoming, Alaska, and Northern California. l Sierra Pacific Mortgage Company has announced that Mike Cass has joined the company as a Regional Manager. Based out of Minneapolis, Cass will oversee the company’s retail sales teams in the northern and mid-western states. l Pavaso has announced that Brenda B. Clem has been named Executive Vice President of Capital Markets. Clem is a mortgage industry veteran with more than 30 years of experience in operations and secondary markets. l Paladin Advisory Services has announced that mortgage loan quality subject matter expert John Gray, CFE, CAMS, has joined its team to drive the company’s forensic loan file review programs and enhance its offerings in strategic guidance

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M A G A Z I N E â&#x20AC;&#x2122; S

Mortgage Professional of the Month

Jonathan Tallinger Chief Growth Officer Class Appraisal By Rick Grant

“Brokers may really like a specific lender, but they will take their business to the lender that offers the right product for their borrower.” —Jonathan Tallinger, Chief Growth Officer, Class Appraisal company’s Chief Appraiser, its National Sales Director, its Vice President of Sales and Marketing, and currently, Chief Growth Officer. At the time he was hired, he ran his own appraisal company, which he had been doing since he graduated from college. You read that right. When it comes to the valuation business, Tallinger has one speed: Fast.

Learning an entirely new industry Tallinger admits that when Class Appraisal first started, he was still a bit green. In his words: “When we first started the company, I was still pretty young at the time, I was a little bit nervous and, frankly, I

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A quick start in the mortgage business Getting into the residential appraisal business is not easy. Federal regulators have set a high standard, and the requirements include some college experience and a long training period during which the new appraiser must work under another licensed appraiser. So how was Tallinger able to skip the apprenticeship and move right into his own business? He didn’t. “I started appraising residential homes when I was 18,” Tallinger said. After growing up in metro Detroit, he “went away to Michigan State after high school to get an advertising degree. But every summer, I would come home and work at my brother-in-law’s appraisal management company.” Tallinger worked hard every summer, and when he graduated from Michigan State with his degree, he was also a fully licensed residential appraiser. He was only 22-years-old.

It turned out that this was a very good thing. “The job market in 2002, at least for the advertising industry, wasn’t very good,” Tallinger recalled. “I was able to move right into appraising houses full-time. I spent the next seven years or so appraising homes in the Detroit metro area full-time, and I enjoyed doing it.” Tallinger recalls that his appraisal business turned out to be a great job. “No two days were ever the same. It was a great experience,” he said. When the housing industry began to crash in 2008, many things changed. “We started seeing declining values, people defaulting on their mortgages, and mortgage fraud was on the rise,” he recalled. “We all know what happened next. There were drastic changes in the regulation of the appraisal industry.” That’s when Tallinger got the call from a yet-to-be-formed AMC. Tallinger’s ability to learn fast was about to become very important.

realized quickly that I had a lot to learn still.” Just about to enter his 30s, he may not have seemed like the obvious choice to run a brand-new company in a brand new industry. However, as it turned out, he was the perfect guy for the job. “I had to learn on the fly,” Tallinger said. “I had a number of mentors, and that helped. One of the first things I learned was that I’m a decent manager, but I’m a much better salesperson.” While Tallinger was able to set up the systems and recruit the operations team it would take to run the new AMC, he said, “I didn’t enjoy doing it nearly as much as I did working with the clients and building relationships and seeking out new opportunities to grow the company.” One of those early relationships was with United Wholesale Mortgage (UWM). At the time, the lender was the relatively small mortgage division of a metro Detroit based retail lender, just getting deep into the wholesale lending business. They had just cracked the top 75 for wholesale lenders and they were headquartered in what used to be a grocery store in a shopping center. “When we opened the doors in September of 2009, we had literally zero orders,” Tallinger said. “We had to build it from the ground up. So, I started putting together a team of people, and the first big client we started working with was UWM. They were a great client for us then, but they were substantially smaller at the time.” Even so, UWM had plans to make it big, and that meant they needed an AMC that could work as fast and hard as they did. “UWM held us to a very high standard. So, that’s the pace that we got used to operating at. When

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s our regular readers know, this column is normally dedicated to front line Loan Originators, the people who are directly responsible for getting new borrowers into the lender’s pipeline and keeping the business going. But from time to time, we focus your attention on some great executives working in support roles. These are the people without which no loan would ever make it to the closing table. This month, we focus on the collateral valuation segment of the business, and our Mortgage Professional of the Month is Jonathan Tallinger, Chief Growth Officer for Michigan-based Class Appraisal, an Appraisal Management Company (AMC). When Dodd-Frank passed in 2010, it created a new cottage industry for firms that could provide a compliant, arm’s-length valuation transaction for mortgage lenders. The original investors who came together to form Class Appraisal read the writing on the wall and launched their AMC in 2009. Today, Class Appraisal is one of the largest and fastest-growing AMCs in the country. The company has partnered with 400-plus mortgage lenders and more than 10,000 of the highest performing residential appraisers in the nation to serve a client base that includes over half of the top 50 mortgage lenders in the country. Over the years, Class has consistently been ranked number one in client service by several of the nation’s top mortgage lenders and has been recognized as a top place to work, along with receiving many industry awards from trade groups and publications. A big part of the reason for that is Jon Tallinger. Tallinger was Class Appraisal’s first employee. He was handpicked to help start the company. Over the years, he has served as the

MBA’s Mortgage Action Alliance A Message From MAA Chairman Gene M. Lugat continued on page 84

The 2018 “Join MAA Campaign!” With election season upon us, it is only fitting that the Mortgage Action Alliance (MAA) hold a campaign of its own. Please join us this October in the 2018 “Join MAA Campaign Month.” Why join MAA? Our policymakers need to understand the potential benefits and consequences legislation could have on the real estate finance industry, and that starts with involvement from industry professionals like you. They need to hear directly from you to explain how their actions affect you, your company, and the consumers you serve. MAA is FREE to join and gives the mortgage finance industry a voice in Congress.

OCTOBER 2018 n National Mortgage Professional Magazine n

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MAA In Action MAA isn’t just for show. Take a look at some of our 2017-2018 election cycle highlights l MAA has increased its membership by more than 76 percent with over 27,135 industry-wide active members. l Four MBA member companies have more than 1,000 employees enrolled and two companies now have 2,000-plus employees enrolled in MAA after successful execution. l Through Calls to Action, MAA has increased its communications to Congress by 350 percent, sending more than 50,000 letters and tweets to Congress this election cycle, reaching 95 percent of Senators and Representatives. l MAA launched a mobile advocacy App and expanded eadvocacy activities. More than 3,000 individuals have downloaded the App in its first year and 4,000 individuals follow MAA’s social media channels. How can we make a difference? The more MAA members we have, the stronger our voice will be as we play an active role in how laws and regulations that affect our businesses and customers are created and carried out by lobbying and building relationships with policymakers. l Sign up for MAA: Signing up for MAA takes no time at all. Go to MBA.org/JoinMAA and fill out the form. l Download the App: Have access to industry updates with the touch of a button. The MAA App can be found in the App Store and Google Play. l Run your own campaign: Help MAA continue to grow its grassroots ranks by running an MAA enrollment campaign at your company or office. Check out the Campaign Kit for everything you need to encourage your industry colleagues to join and participate in MAA. Thank you for your help and support! Together we are able to amplify our voice and drive positive change for our industry in Washington, D.C. and across the nation.

Gene M. Lugat is Chairman of the Mortgage Bankers Association’s Mortgage Action Alliance. Gene is Executive Vice President, National Industry and Political Relations for PrimeLending Inc.

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we started to work with new wholesale lenders, our standard service level that we had grown accustomed to was faster and more efficient than what our new lender clients were used to seeing,” Tallinger said. As Tallinger added clients, Class Appraisal continued to deliver the quality and speed that their first client demanded. New clients reacted with surprise, and then satisfaction. “It’s like we started out in a higher gear on the treadmill and we just maintained that high service level for all of our clients,” Tallinger said. “We got used to it, and that’s how we’ve always run.”

“The competitors I talk to are always puzzled as to how we’ve been able to be so successful in wholesale,” Tallinger said. “It’s generally thought of as being more difficult than the retail side. For us, it was just that we started building relationships with the Brokers, and the Brokers all liked working with us. So, that’s how we grew.”

Adapting to a changing business Despite the company’s success, Tallinger says Class has no plans to rest. Tallinger offered some insight into the changing mortgage and valuation landscapes and how Class is adapting. “We’ve undergone some big Becoming a wholesale changes as a company this year,” lending powerhouse said Tallinger. “We sold to a private When Tallinger began putting equity firm in early 2018 and our together the team that would ownership and leadership are in eventually lead Class Appraisal, he lockstep on the fact that we are just didn’t do it with any particular beginning to write the Class story. specialization in mind. AMCs We will continue our commitment to generally find it more difficult to dominating the wholesale channel, penetrate the wholesale space but we’re equally committed to because pleasing thousands of building our presence as a leader in Independent Mortgage Brokers the retail, credit union and non-QM seemed to be more difficult than segments as well. The valuation trying to build relationships with space is changing at a rapid pace. As Appraisal Desk Managers at retail mortgage lenders. But Tallinger saw a company, we are embracing this shift and creating unique valuation it differently. solutions to help our lender partners “Wholesale lending and dealing close more loans faster and more with brokers is such a relationshipefficiently.” based business,” Tallinger said. Much of that work, for Tallinger in “We ended up deep in the weeds his new role as Chief Growth Officer, with these Brokers on many will be sharing the company’s story. transactions, but we made it our “I’m out there building relationships. mission to give world-class service It’s almost like being a storyteller.” to every Broker.” It’s a job Tallinger says he’ll stick By building out a platform that with. could serve Brokers in a reliable “I’ve been with Class Appraisal manner, they won the loyalty of a since day one, and I hope that it’s the large segment of the TPO last company I ever work for,” he community. “Brokers may really like a specific wrote on his LinkedIn profile. “Being the first employee gives me a unique lender, but they will take their perspective from a sales perspective; business to the lender that offers the right product for their borrower,” I rarely focus on ‘selling,’ and instead, dedicate my time to simply building Tallinger said. “That meant that we relationships, being available for our have Mortgage Brokers who were clients, and telling the Class used to working with us at one Appraisal story.” lender going to another lender and So far, it’s been a story that has asking them why they weren’t been well-received by the industry. working with Class Appraisal.” In a market where purchase Tallinger recalls that new money business has locked down prospects would tell him that lender timelines and the speed of brokers were spreading the word collateral valuation has become that, “Class is killing it!” This extremely important, Tallinger is positive word of mouth was the confident that Class Appraisal can catalyst that led to the company’s keep up. growth. Rick Grant is Special Reports Editor for National Mortgage Professional Magazine and Mortgage News Network. He may be reached by phone at (570) 497-1026 or e-mail RickG@MortgageNewsNetwork.com.

Addressing Post-Housing Crisis Issues

Business Is Up and Experienced Mortgage Professionals Are Sending a Message: Millennials … We Need and Want You! BY PAM MARRON

FHA, VA, conventional Fannie Mae and Freddie Mac, VA and USDA programs. Historically, a greater number of older, seasoned loan professionals can be found at these companies. The reason is that independent mortgage companies don’t originate mortgages that all go to one place, so the differences in individual wholesale mortgage company processes and guidelines must be studied and catalogued. But with newer technology that can help keep track of differences, bringing less experienced loan professionals into the independent loan originator side of our business has never been better. The mortgage industry is bombarding us daily with new tools and systems that promise to make our work streamlined, compliance friendly and able to be integrated with almost all loan operating systems. As an Independent Loan Originator, we can pick and choose which systems are easiest to use. But it really helps to get the opinion of another generation of mortgage professionals, whose age group of consumers is the business we also want to capture. You can’t teach an old dog new tricks Sometimes mortgage companies

prefer to bring older experienced loan originators on board thinking these folks will require less oversight and training. But sometimes it’s harder to break old habits and perceptions that mature loan professionals have. Don’t get me wrong—I’m one of them! Those of us in the same generation have been through similar situations and it is great to compare and problem solve with our long-time peers. And, yes, bringing in younger, less experienced Loan Officers who are willing to learn will require more time to train. Consider this the investment to bring diversity of ideas, implementation of newer technology and a crop of new mortgage professionals into our industry. It’s important to get comfortable with what’s coming up right behind us … and then be delighted when younger mortgage professionals want to learn from seasoned mortgage professionals. Millennials, we welcome you to the mortgage industry! Disclaimer: While I am a member of the HUD Housing Counseling Federal Advisory Committee, the opinions noted are those of the author only.

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) 3758986, e-mail PMarron@InnovativeMortgage.onmicrosoft.com or visit HousingCrisisStories.com, CloseWithPam.com or 8Problems.com.

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each problem customized for specific offices was shown. The second time was in June 2018. I pondered how to bring together a panel of 14 people connected to an effort for a Webinar through Zoom.US. I worked with Millennial Loan Originator Daniel Hughes on this effort to show how Loan Originators could connect consumers to HUD-approved housing counselors for help to get the consumer “mortgage ready.” The 14 presenters were from across the U.S. included HUD-approved housing and credit counselors, colleagues from the Housing Counseling Federal Advisory Committee (HCFAC), a credit reporting agency, a vendor credit company and Realtors. I presented the Webinar and Daniel took care of the technical part. There were two silver linings: Daniel understood this effort and how it could help him with clients by the end and I became comfortable with the tech side, while providing the message. Both Daniel Hughes and I belong to the Florida Association of Mortgage Professionals (FAMP). I am Communications Co-Chair and Daniel is the Technology Chair. We teamed up again and one committee cannot work without the other. Currently, the mortgage industry is seeing an increase in the number of Loan Originators that are migrating to independent mortgage companies that provide diverse mortgage products in addition to the best

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he average age of Independent Loan Originators, often called “Mortgage Brokers,” is 52years-old. A growing number of mortgage companies across the nation are emphasizing training for younger, less-experienced loan professionals. The silver lining is that there’s a lot to learn on both sides when seasoned mortgage professionals and Millennials team up. In personal quests to get an important message out, this 59year-old Loan Originator in the business for 33 years turned to Millennials twice for help. The first time was in 2013 prior to a visit to Washington, D.C. to meet with the U.S. Treasury, lawmakers, the Consumer Financial Protection Bureau (CFPB) and the press regarding a problem where short sale credit code was showing up as a foreclosure. The problem was boring, hard to explain quickly and was causing additional problems. My son Jake, then 18-years-old, recommended a moving visual PowerPoint for each problem on a Web site he created and named “8Problems.” The learning experience came when I explained each problem to Jake and he stated back to me how he understood it. His version was the “understandable” one and he made the moving PowerPoint. Jake went to Washington with me and a short PowerPoint for

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Credit Committees: By Jonathan Foxx, Ph.D., MBA

: The Central Hub of Mortgage Banking any clients have Credit Risk Management Committees, sometimes referred to as Loan Committees, Lending Committees, or Credit Committees. Let’s just call them “Credit Committees” or, for the purposes of this article, “Committees.” For small mortgage lenders, the Committees wind up consisting of the owner and perhaps a second company official. Howsoever this internal entity is configured, it is very important to ensure continuity between the origination process flow and, where possible, the interaction with a Loan Committee that sets policy standards and, as needed, makes decisions on whether to approve a risky loan transaction. When we are retained by a client to review its departments and functions–for instance, to conduct an internal audit or a GSE readiness audit–one of the factors we consider is the lending function itself. This activity is in fact actually distributed over many departments. But the loan flow process must come under a set of review criteria which, when challenged, often requires resolution by a committee constituted to manage the loan transaction’s risk. First and foremost, it is important to emphasize that an institution’s quality control, compliance, and audit procedures should focus on mortgage lending activities that pose high risk. Controls to monitor compliance with underwriting standards and exceptions to those standards are especially important. To break this down further, the quality control function should regularly review a sample of loans from all origination channels. A representative sample of underwriters should be subject to quality control auditing in order to confirm that policies are being followed. When control systems or operating practices are found deficient, business-line managers should be held accountable for correcting deficiencies in a timely manner. This means, in effect, that

the deficiency should be identified, mitigated through system and training solutions, monitored and periodically tested. Since some loans permit a borrower to defer principal and, in some cases, interest payments for extended periods, institutions should have strong controls over accruals, customer service and collections. Servicing must be an intrinsic part of the Loan Committee’s considerations. The exceptions made by servicing and collections personnel should be carefully monitored to confirm that practices such as re-aging, payment deferrals, and loan modifications are not inadvertently increasing risk. One suggestion would be to have servicing and collection personnel involved in the Committee. At the very least, servicing should be informed of credit decisions that affect its purview. Customer service and collections personnel should receive product-specific training on the features and potential customer issues with these products. Third-party originators (TPOs) are always a challenge for financial institutions. In this group, I place such TPOs as Mortgage Brokers and correspondents. Institutions should have strong systems and controls in place for establishing and maintaining relationships with third parties, including procedures for performing due diligence. Oversight of third parties should involve monitoring the quality of originations so that they reflect the institution’s lending standards and compliance with applicable laws and regulations. Monitoring procedures should track the quality of loans by both origination source and key borrower characteristics. This will help institutions identify problems such as early payment defaults, incomplete documentation, and fraud. If appraisal, loan documentation, credit problems or consumer complaints are discovered, the institution should take immediate action. Remedial action could include more thorough loan application reviews, more frequent re-underwriting, or even termination

of the third-party relationship. For the balance of this article, I will describe some primary vectors that require the Committee’s attention. Comprehensive procedures should be utilized to evaluate credit risk on a bulk or transactional basis. Important in drafting such procedures is taking into consideration a financial institution’s size, complexity and risk profile. Credit committees and secondary market activity The interface between credit risk and secondary market management pertains to several factors, most prominently that the procedures should be commensurate with the nature of the loan products and volume of loan origination activity. When Lenders Compliance Group reviews for secondary market compliance, we always look to ensure that the client has comprehensive, formally ratified strategies for managing risks. Also, I recommend that various “contingency plans” be included in how the institution will respond to reduced demand in the secondary market. Third-party loan sales are never without some metric that reflects the measurement of risk: Even if a company transfers a portion of the credit risk, it remains exposed to reputation risk when credit losses on sold loans or securitization transactions exceed expectations. As a result, promulgate possible contingency plans for instances where an institution may deem it necessary to repurchase defaulted mortgage loans to protect its reputation and maintain access to the markets. From the point of view of a regulator, the repurchase of loans beyond the selling institution’s contractual obligation is an implicit recourse. Under risk-based capital rules, a repurchasing institution would be required to maintain riskbased capital against the entire pool or securitization. Institutions should familiarize themselves with these guidelines before deciding to support loan pools or buying back loans in default.

Credit committees and management reporting I can’t overstress the importance of management reporting and the periodic testing of the reporting systems. Know the risk profiles of all loan products and provide full accounting of any changes to such risk! For instance, if the company originates non-traditional mortgages, reporting systems should allow management to detect any subtle changes in the risk of this product’s loan portfolio. Among the metrics that should be reported to management are the elaboration of key loan products, risk-layering loan features, and certainly borrower characteristics. Reports should also provide metrics that show the statistical delta for deteriorating performance in any of the foregoing areas, surely before any such deterioration has progressed to a point of substantial impact to the portfolio’s or the company’s financial stability. Here’s a brief outline of the types of information that should be set forth in detail in the management report for risk. As an example, the report would include, but not be limited to: l Loan type (i.e., interest-only loans and payment option ARMs); l Risk-layering features (i.e., payment option ARMs with stated income and interest-only loans with simultaneous secondlien loans); l Underwriting characteristics (i.e., LTV, DTI, credit score); and, l Borrower performance (i.e., payment patterns, delinquencies, interest accruals). A good report would contain portfolio volume and performance metrics that track forecasts, internal lending standards and policy limits. The construct of the report should dig deep into the volume and performance metrics, even to the sub-portfolio and aggregate portfolio levels. Many Committees do not know how to evaluate statistical findings, such as regression analysis. continued on page 50

credit committees

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However, most people seem to have an intuitive feel for variance analyses, which should be performed regularly to identify exceptions to policies and prescribed thresholds. So, the Committee should be given a report with variance analysis, inasmuch as it is critical to the monitoring of portfolio risk characteristics and is an integral part of establishing and adjusting risk tolerance levels. Without careful review of such analyses, it is really a lost cause to try to determine how actual performance deviates from established policies and thresholds.

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Credit committees and stress testing Since the huge mortgage meltdown a few years ago, there has been much banter about stress tests. But, if you think about it, these tests are just a form of sensitivity analysis. There is no good reason why competent management would not want to conduct a sensitivity analysis! The fact is, a financial institution shouldn’t skate away from such analytics. Based on the size and complexity of the lending operations, banks and non-banks should perform sensitivity analysis on key portfolio segments to identify and quantify events that may lead to an increased risk in a segment or the entire loan portfolio. The typical drivers to sensitivity analyses can be based on many factors, but for lenders in particular the following metrics would be contained in a stress test report: l Interest rates; l Employment levels; l Economic growth; l Housing value fluctuations, and l Other factors beyond the institution’s immediate control. If one or more of these metrics deteriorate–especially if they deteriorate rapidly–there might be an immediate need to assess the potential influence on default rates and loss severity. Where sensitivity evaluation is ongoing, the company is in a better position to identify, monitor and manage risk, and, mutatis mutandis, move assertively to develop appropriate and costeffective loss mitigation strategies. The stress testing results should provide direct feedback in determining underwriting standards, product terms, portfolio concentration limits, and capital levels. Credit committees and ALLL Our bank clients are familiar with

ALLL, which stands for “Allowance for Loan and Lease Losses.” But non-banks would be wise to make ALLL part of their Committee reviews. Put simply, all financial institutions, to the extent applicable, should establish an appropriate allowance for loan and lease losses for the estimated credit losses inherent in their loan portfolios. I tell our bank and non-bank clients to consider the higher risk of loss posed by layered risks when establishing their ALLL parameters. In preparing the layered risk metrics, financial institutions must realize that a limited performance history with any loan products, particularly in a stressed environment, increases performance uncertainty. Capital levels should be commensurate with the risk characteristics of the loan portfolios. Sloppy or overly malleable underwriting standards or poor portfolio performance may warrant higher capital levels. In coordination with the company’s Board of Directors or Management, the Committee should establish an appropriate ALLL that takes into consideration the adequacy of capital, and, where needed, loan portfolios should be segmented into pools with similar credit risk characteristics. The basic segments typically include: l Collateral and loan characteristics, l Geographic concentrations, and l Borrower qualifying attributes. But, segmentation should not stop there. Many institutions differentiate loans by payment and portfolio characteristics, such as: l Loans on which borrowers usually make only minimum payments, l Loans with existing balances above original balances, and l Loans subject to sizable payment shock. The ideal objective is to identify credit quality indicators that affect the gathering of information for ALLL measurement purposes. If future loss exposure is to be mitigated adequately, thereby leading to adjustments in the capital levels, deriving the characteristics which influence expected performance is an exercise that must be undertaken. My firm is retained by financial institutions with material mortgage banking activities and mortgage servicing assets. We guide them through the maze of applying sound practices in valuing the mortgage

servicing rights for virtually all mortgage loan products. This valuation should also not be neglected in ALLL and should follow generally accepted accounting principles, using reasonable and supportable assumptions. Credit committees and consumer protection Fundamentally, the Committee is not only a bulwark for the institution but also acts as a means by which the mortgage loans can be evaluated for responsiveness to consumer needs as well as flexibility with respect to borrower eligibility. I can tell you from experience that regulators are very concerned that consumers may enter into loan transactions without fully understanding a loan product’s terms. If you think you can rely on disclosures alone to fulfill your obligations to consumer protection, you couldn’t be more mistaken. For instance, certain loan products have been advertised and promoted based on their lower initial monthly payments compared with other types of loans. In this case, the Committee should be reviewing the advertisements for the loan products. In a year’s time, my firm receives hundreds of advertisements for review before initiating any contact with the public. Our clients submit the advertisements for our guidance as a critical component of their new and existing loan product reviews. For instance, the Committee should task itself with evaluating promotional materials and other product descriptions to ensure that information about the costs, terms, features, and risks can assist consumers in their product selection decisions. The Committee should be vetting all modalities involving consumer protection, on a product by product basis. Indeed, any relevant loan product information relating to consumer protection should be provided to the Committee in a “timely manner,” which I would describe as a timeframe before disclosures may be required under any federal or state regulatory framework. In light of these risks, institutions should implement the following communications directives: l Communications with consumers, including advertisements, oral statements, promotional materials, and monthly statements, should provide clear and balanced information about the relative benefits and risks of these products, including the risk of payment shock and any other

foreseeable risks. l Clear, balanced, and timely communication to consumers of the risks of loan products will provide consumers with useful information at crucial decisionmaking points, such as when they are shopping for loans or deciding which monthly payment amount to make. l The minimization of potential consumer confusion and complaints, the fostering of good customer relations, and the reduction of legal and other risks to the institution. It bears stating that every loan product review must ensure that all facets of its structure and origination process comply with all applicable laws and regulations. Federal and state laws, including laws regarding unfair, deceptive or abusive acts or practices, may apply. The Committee’s purview is strengthened when the learning curve keeps narrowing based on experience. If a promotion leads to an incidence of potential concern to consumer protection, the Committee can use the knowledge thus gained by being more attentive to providing consumers with information that is designed to help them make informed decisions when selecting and using the loan products. Meeting this objective requires appropriate attention to the timing, content, and clarity of information presented to consumers. For example, if the Committee learns that there are better timeframes for providing consumers with information that will help them in selecting products and choosing among payment options, an adjustment in such notification can be made when a consumer is shopping for a mortgage or at the point of sale. In other words, consumer protection is active when the consumer makes an inquiry to the institution about a loan product and receives information about it, or when marketing relating to loan products is provided by the institution to the consumer–not just upon the submission of a loan application or at consummation. I have noticed certain consumer protection issues coming up time and again in Credit Committee meetings. I have sat on bank Audit and Examination Committee Meetings and, where my firm has been retained to conduct an internal audit, I include these incidences in my report. Here are but a few incidences that our audits have

shown as being reported to the Committee: l Giving consumers unwarranted assurances or predictions about the future direction of interest rates (and, consequently, the borrower’s future obligations); l Making one-sided representations about the cash savings or expanded buying power to be realized from certain loan products; l Suggesting that initial minimum payments will cover accrued interest (or principal and interest) charges; and, l Making misleading claims that interest rates or payment obligations are “fixed.”

l Establishing procedures and systems to monitor compliance with applicable agreements, institution policies, federal and state regulations and laws; and, l Implementing appropriate corrective actions in the event that the third party fails to comply with applicable agreements, institution policies, or laws.

The Credit Committee should be considered the point of convergence and central hub of the management function. All departmental roads should lead to it! A financial institution that simply relies on the loan origination process to move along like cakes on a conveyor belt is sooner or later going to be caught up in its own complacency.

Jonathan Foxx, Ph.D., MBA, is Chairman and Managing Director of Lenders Compliance Group, the first and only fullservice, mortgage risk management firm in the United States, specializing exclusively in mortgage compliance, offering a suite of services in residential mortgage banking for banks and non-banks. If you would like to contact Jonathan, please email Compliance@LendersComplianceGroup.com.

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Credit committees and administration Virtually all parts of the loan flow process, from point of sale to securitization, should come under the Committee’s purview, where it can develop and use strong control systems to monitor that actual practices are consistent with the policies and procedures relating to the loan products–which brings me to the subject of the range of control systems and pathways needed to address compliance and consumer information concerns as well as safety and soundness considerations. The Committee must ensure that lending personnel are trained so that they are able to convey information to consumers about product terms and risks in a timely, accurate, and balanced manner. As products evolve and new products are introduced, lending personnel should receive additional training, as necessary, to continue to be able to convey information to consumers in this manner. Lending personnel should be monitored to determine whether they are following these policies and procedures. In addition, the Committee should receive real-time and periodic reports of any reviews relating to consumer complaints. Without such information, the institution has no internal group that is centrally able to identify potential compliance, reputation, and other risks involving the extension of credit. Attention should be paid to appropriate legal review and to evaluating compensation programs to ensure that they do not improperly encourage lending personnel to direct consumers to particular products. With respect to loans that an institution makes, purchases, or services using a third party, such as a mortgage broker, correspondent, or other intermediary, the institution should take appropriate steps to mitigate risks relating to compliance

and consumer information. Therefore, the Committee should be empowered to take steps to manage third-party originations risks, such as: l Conducting due diligence and establishing other criteria for entering into and maintaining relationships with such third parties; l Establishing criteria for thirdparty compensation designed to avoid providing incentives for originations inconsistent with this guidance; l Setting requirements for agreements with such third parties;

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National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women 2018 his month, we present to you our inaugural list of “Mortgage Banking’s Most Powerful Women.” Honorees were selected based on their accomplishments where they were instrumental to a major industry innovation, the number of social media followers, or have overcome some seemingly insurmountable obstacle in their career to rise to the top. When narrowing down our list of “Mortgage Banking’s Most Powerful Women,” we took three key words into consideration, “Pioneer, Leader and Innovator” in compiling our list of today’s top female leaders in the mortgage profession. National Mortgage Professional Magazine congratulates all of the women who continue to blaze new trails and lead the way for a brighter future in today’s mortgage profession.

Mary Aston Director of Corporate Initiatives, Angel Oak, Atlanta Mary Aston serves as Director of Corporate Initiatives at Angel Oak. She is an accomplished mortgage executive with more than 30 years of experience in mortgage operations. Mary’s strategic focus is on process analytics, workflow efficiencies and development of robust infrastructures to include operational and technological support. Mary is often described as a “Get Stuff Done” executive, who brings out the best in teams. Her broad background helps her improve productivity and profit, as she applies her knowledge to help grow the company. She works hard to achieve collaborative teamwork to build in quality, efficiency and profitability into the lending process. Mary has 40 years of experience in the mortgage banking industry, and is the proud mother of two children and is grandmother to six grandchildren.

Ginger Bell President, Go2training, Portland, Ore. Best-selling author Ginger Bell is an “edumarketing specialist,” who helps companies develop and implement training programs to position themselves as experts in their fields. Her most recent book, Success Breakthroughs, which she co-authored with Jack Canfield, explains the power companies can have by using education in their marketing. As President of Go2training, Ginger’s clients include companies like Motto Mortgage, Finance of America, Arch MI, First American Title, RE/MAX, Nike, Fidelity National Title, Mentor Graphics and FirstFunding. Rosalie Berg President of Strategic Vantage Marketing & Public Relations Rosalie Berg is President of Strategic Vantage, a marketing, public relations and social media agency that specializes in the mortgage industry. She has close to 20 years of experience doing marketing and publicity for companies involved in the world of real estate finance. Since 2002, her agency has served more than 100 companies in this industry, from lenders to technology companies, service providers and start-ups.

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Nancy Alley Vice President of Strategic Planning, Simplifile, Provo, Utah Nancy Alley brings more than 27 years of financial services and mortgage industry experience to her role as the Vice President of Strategic Planning at Simplifile. She has dedicated her career to driving innovation and leveraging technology in the mortgage industry. As a Co-Chair of the eMortgage Workgroup at the Mortgage Industry Standards Maintenance Organization (MISMO), Nancy is actively involved in driving adoption of industry standards. Prior to joining Simplifile, Nancy led the product strategy for ISGN, architecting a strategic vision for a suite of technology offerings, spanning the mortgage lifecycle from origination to default. She brings an extensive knowledge of cloud-based offerings through her experience running Xerox Mortgage Services, the provider of the of the BlitzDocs intelligent collaborative network. Nancy also led the product management and engineering efforts of eSignSystems, an

Christine Beckwith National VP of Realtor and Sales Management, AnnieMac Home Mortgage & President, 20/20 Vision for Success Coaching, Bedford, N.H. Christine Beckwith became a 30-year mortgage industry veteran in 2018. Over the course of three decades, she has consistently won in mortgage sales originations at all ranks, from the Loan Officer seat and up the ranks all the way to her Regional Sales Management roles at the top five percent consistently. Due to her consistent and exceptional sales credibility and a natural penchant for leadership, she would do the unthinkable and bring team after team to great success at the very top ranks of the firms she worked for and as a minority in her field with women executive level leaders only representing two percent of the mortgage banking industry. For the past 18 years, she has run mortgage companies at a senior and executive level. During that time, she has continued to win public awards for breaking several glass ceilings. She would become a sought after public speaker on the mortgage circuit and this year has won numerous awards, including being named a “Most Connected Mortgage Professional” by national mortgage publications. She has written and released two best-selling books in early 2018, and writes in many mortgage publications.

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Nicole Abraham Senior Vice President of Operations, Academy Mortgage Corporation, Portland, Ore. Nicole Abraham started in the mortgage business right out of high school as a receptionist, eventually rising through the ranks first as a Processor and then an Underwriter. Abraham joined Academy Mortgage Corporation in 2012 and became Senior Vice President of Operations in 2016. In this role, she oversees operations for 11 regions consisting of more than 400 employees. She also oversees the Field Support Teams, which are responsible for ensuring that Academy has the most streamlined and efficient processes in the industry. In addition, her responsibilities include coaching and growing individuals throughout the organization. Abraham is a licensed Loan Officer, and she holds DE and SAR underwriting certifications.

eSign and eVaulting provider, and spent eight years at GE Capital Corporation evolving her product management and business development skills in mortgage banking technology.

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women 2018 Prior to founding Strategic Vantage, Rosalie worked as VP of Marketing for mortgage technology provider OpenClose Technologies. She has held executive marketing positions at Oracle consulting firm Dataforce Corporation and packaged software provider Expert Software (now Activision). At the public relations agency Publicis Sanchez & Levitan, her clients included Lennar Homes, Absolut Vodka and Seagram’s. Rosalie has also worked at Mercer Management Consulting doing business analysis for Fortune 500 companies. She received her bachelor of arts degree in economics from Brown University.

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Tricia Boss-Parker Chief Financial Officer, My Credit Guy Restoration, Mesa, Ariz. Tricia Boss-Parker was born and raised in the small town of Charles City, Iowa. The daughter of a school teacher and the owner of a construction company, she developed a passion for teaching and helping people as well as a passion for building something, from nothing. Tricia first found her way into the credit restoration field 13 years ago and has helped 10’s of thousands of people and Loan Officers during her career. She Co-Founded My Credit Guy Credit Restoration in 2015. In that time, My Credit Guy has grown to become of the most trusted and recommended credit restoration firms in the country. Tricia has grown the company from two members to more than 20 employees and reps in less than four years. In addition to running My Credit Guy, Tricia is a mother to two beautiful daughters (six-year-old Paige and four-yearold Quinn). She recently celebrated her 10th anniversary with her husband and My Credit Guy Credit Restoration Co-Founder. Building a well-respected company in an industry that hasn’t always had the best reputation is something that Tricia takes great pride in. Her co-workers say “Her leadership and work ethic have made her ‘The Heart’ of the company.” Laura Brandao President, American Financial Resources Inc., Parsippany, N.J. Laura Brandao’s vision of bringing families home has become the foundation of the culture at American Financial Resources (AFR). For the past 11 years, she has developed a mindset within the company to make it the personal responsibility of each employee to bring the families of AFR’s lending partners home. This is an unconventional, yet effective way to do business within the wholesale lending market. With more than two decades of experience in the mortgage industry, Laura brought the Wholesale Division to AFR in 2007 and became an AFR partner in 2009. She began as Director of Operations in 2007, moved to Executive Vice President, followed by Chief Operations Officer, and is now AFR President. She is a driving force that has catapulted AFR Wholesale to the top of manufactured home, one-time close and renovation lending market. She has seamlessly rolled out new products based on market demand, including VA renovation, USDA repair escrow, and one-time close construction to permanent loans for FHA, VA and USDA. Laura’s hands-on approach also propels AFR to remain on the cutting-edge of technology with mobile-friendly applications that cohesively integrate the borrower, Realtor, broker and AFR. Lori Brewer Chief Executive Officer & Founder, LBA Ware, Macon, Ga. Lori Brewer is Chief Executive Officer and Founder of LBA Ware. An accomplished entrepreneur and technology leader, Lori has dedicated her career to developing innovative business process optimization tools for mortgage lenders. At LBA Ware, Brewer has developed a suite of more than 25 financial applications–including the automated compensation platform CompenSafe and mortgage systems integration solution LOS Talker–that have become essential to the way mortgage lenders operate by helping

them contain costs and improve productivity. As an officer in the U.S. Air Force, Lori wrote the first Web site for the C130 Hercules System Program Office. Following the conclusion of her military service, she developed her first lender in-house Intranet, automating all things possible pertaining to the manufacturing of a mortgage loan. Lori serves as a board member for the Technology Association of Georgia (TAG), Technology Chair on the Stratford Academy Board of Trustees, a Board advisor to the Middle Georgia State College School of Information Technology and is a member of the Greater Macon Chamber of Commerce. Casey Cunningham Founder & Chief Executive Officer, XINNIX, Alpharetta, Ga. With more than 30 years of mortgage experience, Casey Cunningham is one of the most influential visionaries in the industry today. In 2002, she founded XINNIX, a sales and leadership development academy providing training, coaching and accountability for the nation’s top mortgage lenders. For nearly 17 years, Casey has fostered a culture of excellence that has attracted a diverse team with deep knowledge of the industry to join XINNIX. To date, the company boasts a total of 16 culture awards, including “Atlanta’s Best and Brightest Places to Work” and “Best and Brightest Companies to Work for in the Nation.” Casey has been recognized as one of “Atlanta’s Most Influential Female Business Owners” by the Atlanta Women’s Pacesetters, a “Top Female Entrepreneur” by Atlanta Woman Magazine and a “Roaring Twenty” award winner by the National Association of Women in Real Estate Business. In addition to leading a thriving company, Casey is a sought-after national keynote speaker whose extensive knowledge and experience allows her to inspire and enrich others by speaking firsthand about leadership and business growth. Marcia Davies Chief Operating Officer, Mortgage Bankers Association, Washington, D.C. Marcia Davies is Chief Operating Officer for the Mortgage Bankers Association (MBA). As COO, Marcia is responsible for ensuring cross-organizational alignment and facilitating the implementation of strategic initiatives, as well as maintaining oversight of key organizational priorities. She is also the lead strategist for MBA’s external activities, providing leadership, guidance and overall management to the public affairs and marketing divisions. In addition, Marcia provides strategic direction and management of MBA’s Conferences, Membership, Education, Information Technology and Office Services divisions. She also provides management oversight to and is a Board member of MBA’s Opens Doors Foundation. Marcia is the Founder of mPower (MBA Promoting Opportunities for Women to Extend their Reach), MBA’s networking platform for women in the real estate finance industry. Under her leadership, mPower has grown into an engaged community of more than 4,000, providing best-in-class conference and Webinar programming, networking events and online opportunities to stay engaged. Through mPower, more women are positioned to achieve leadership positions and are well-represented in all segments of the industry. Marcia is also a member of the NAWRB Diversity and Inclusion Leadership Council (NDILC). She is also a member of Women in Housing Finance and the International Women’s Leadership Association. Kristy W. Fercho Executive Vice President, President of Mortgage, Flagstar Bank, Troy, Mich. Kristy Fercho joined Flagstar Bank in 2017 as Executive Vice President and President of Mortgage. In this role, Fercho is responsible for the direction and oversight of all aspects of mortgage and secondary marketing and for the continued expansion of Flagstar’s mortgage business. Prior to Flagstar, Fercho

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Mortgage Banking’s Most Powerful Women 2018 spent 15 years with Fannie Mae, ultimately serving as Senior Vice President, Customer Delivery Executive, responsible for the end-to-end strategy and business performance of all single-family customers in the western United States, representing an acquisition volume of more than $300 billion. Her experience in the mortgage industry is broad and deep, covering mortgage originations, fulfillment, risk management, secondary marketing, servicing, technology initiatives and regulation. Fercho serves on the Board of Directors of the Mortgage Bankers Association (MBA), and previously served as President of the Board of Habitat for Humanity, Chicago. Gloria Fillmon Chief Compliance and Risk Officer, American Pacific Mortgage, Roseville, Calif. Gloria Fillmon joined American Pacific Mortgage in 2015 as Chief Compliance Officer, after many years’ experience in several areas of the mortgage lending industry. Her expertise has ranged from production to compliance, but her concentration for the past 25 years has solely been on managing and directing regulatory compliance for national mortgage banking operations. In addition, Gloria has authored numerous fair lending, consumer protection and regulatory compliance training programs and has consulted with lenders to develop their own fair lending training and monitoring programs. Gloria has become a go-to industry expert on both a local and national level. As a Toastmaster, Gloria is highly sought after by lending institutions, regulatory agencies, Realtor and lender trade groups, to provide presentations, workshops, and training on RESPA, ECOA, HMDA, and fair lending guidelines. Gloria was honored in 2017-2018 as an inductee into the VIP Woman of the Year Circle for the National Association of Professional Women (NAPW). Gloria is Past President of Dallas North Toastmasters and Founding President of Richardson Toastmasters.

Katie Simmons Hickey Sales Manager, Caliber Home Loans, Reston, Va. Katie Simmons Hickey is the Founder and senior member of “The Simmons Team,” residential mortgage loans. Her team is in the top three percent of the Loan Officers in the nation. The Simmons Team runs a team of nine members and two Loan Officers. Katie was born at Sibley Hospital in Washington, D.C. and grew up in Great Falls, Va., having graduated from Clemson University in South Carolina. After college, she went to St. Thomas in the U.S Virgin Islands, working her way up to Director of Concierge Services for the Ritz-Carlton Hotel and Resort. After two years, she returned to Great Falls to begin her career as a Mortgage Loan Officer. “Women often have a hard time asking for things. I have found a passion I believe in and when you feel like you make a difference in people’s lives, it becomes so much more than a job,” said Katie. “I take advantage of all opportunities and step out of my comfort zone. I have found that the key to balancing work and family is to be present and focus on what is in front of you—be it a conversation with your kids or husband or working on a business case. Don’t feel guilty about enjoying your work—your kids are getting a great role model in shaping their future happiness.” Stephanie Hickman National Processing Operations Manager, The Federal Savings Bank, Chicago Stephanie Hickman is the National Processing Operations Manager of Chicago-based The Federal Savings Bank, and a founding member of the Bank’s management team. She serves as a mentor and role model to many other young aspiring executives, both within and outside of the Federal Savings Bank family. She leads all processing team members, nationally. Stephanie holds a Bachelor’s Degree in Journalism & Marketing, with a minor in Women’s Studies from Northern Illinois University. She received the Martha Cooper Scholarship for Women in Journalism. She received this prestigious recognition for authoring

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Twyla R. Hankins Executive Vice President of Operations, American Financial Network Inc., Brea, Calif. Twyla R. Hankins is an integral part of American Financial Network’s (AFN) Executive Management Team, which consistently builds success upon success year after year. Twyla has more than three decades of solid mortgage lending experience, and has overseen total retail Operations for more than 20 years. She is seasoned, with unrivaled experience in all types of retail and wholesale lending, including conventional, FHA, VA, USDA, jumbo, and non-QM. Twyla has an excellent reputation in the Southern California mortgage lending community, and is well-known for her big-picture oversight and ability to embrace technology and put processes in place to maximize efficiencies and minimize turn times. Under Twyla’s leadership AFN has

Leslie Heimer Orlando Market President, American Liberty Mortgage, Orlando, Fla. A sixth generation native to Central Florida, Leslie Heimer earned her undergraduate degree from the University of Florida and is third generation Loan Officer after her mother and grandmother. Leslie is the Agent/Owner with American Liberty Mortgage Inc., where she provides a high-touch lending experience for Orlando’s most distinguished homeowners, while overseeing the Florida branch offices for the nationwide lending firm. Leslie has been recognized on the cover of FOCUS magazine, The Orlando Business Journal and Orange Appeal Magazine for successful corporate growth strategies implemented at her residential lending business. A Central Florida leader in volume of transactions, Leslie coowned Premier Home Mortgage, a multi-faceted operation including divisions dedicated to correspondent lending, new construction development and title insurance. Leslie currently sits on the Board of Directors for Orlando Inc., as well as the Junior League of Greater Orlando and is a member of Commercial Real Estate Women Orlando. A graduate of Leadership Bartow and Leadership Southern Maryland, Leslie completed her MBA and is most proud of her role of mother to two rambunctious boys.

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Cathleen Schreiner Gates Executive Vice President of Sales and Marketing, Ellie Mae, Pleasanton, Calif. Cathleen Schreiner Gates has served as Executive Vice President of Sales and Marketing at Ellie Mae since March 2015, overseeing all sales, marketing, client management, professional services and customer support and training. Previously, she served as Ellie Mae’s Senior Vice President of Sales and Client Services from February 2012-March 2015. From January 2010-December 2011 Cathleen served as Senior Vice President of Sales and Client Services for Bersin & Associates, and from October 2008December 2010, she served as Vice President of Sales, Business Development, and Client Success for Clickability Inc. She has held various senior management positions with MarketTools Inc. and Keynote Systems/Vividence Inc. Cathleen holds an MBA in Finance from the Rutgers Graduate School of Management and a BA in French Literature from Douglass College-Rutgers University.

experienced exponential growth in its sales force, loan volume, and net worth over the last eight years, and has succeeded in becoming a FNMA and FHLMC Seller/Servicer and GNMA Issuer. Twyla was instrumental in directing the customization of AFN’s LOS, building a compliance team, a post-closing team, underwriting teams, and operations centers in the corporate office and offices across the country. Twyla’s accomplishments will expand AFN’s footprint for years to come.

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women 2018 impactful news stories related to women’s issues and community service. Stephanie has leveraged her attention to detail and personal integrity into creating and supporting the best and highest quality loan manufacturing process in modern banking. Stephanie knows that integrity in the loan manufacturing process is paramount to the success of not only The Federal Savings Bank, but the entire home lending industry. She understands and is passionate about the impact the lending process can have on customer experience and satisfaction. Stephanie is proud about “Powering the American Dream” and the difference homeownership can make in the lives of the Bank’s customers.

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Elizabeth Karwowski Chief Executive Officer, Get Credit Healthy, Sunrise, Fla. Elizabeth Karwowski is Chief Executive Officer of BEMG, t/b/k as MBO Holdings Corp. BEMG, through its operating subsidiary Get Credit Healthy, utilizes its proprietary processes, platform and software which seamlessly integrates with the lenders’ loan origination software (LOS) and customer relationship management software (CRM) in order to create new loan opportunities and recapture leads. Get Credit Healthy’s platform has already facilitated more than $200 million in new loan closings for its partners. Elizabeth is a leading credit expert, has been featured on FOX News, MSNBC, NBC, The Miami Herald, and Chicago Tribune and has been published in a number of leading industry publications. Get Credit Healthy is a Fintech company that provides an awardwinning technology platform that delivers a proven methodology to maximize business opportunities for lenders, financial advisors, municipalities and consumers. Kara Lamphere Chief Operating Officer, Mid America Mortgage, Addison, Texas Kara Lamphere manages Mid America Mortgage’s corporate operations. During her 20-plus-year career, her largest area of focus has been as Chief Compliance Officer. However, her extensive experience includes operations, quality control, audit and sales. Kara has an enduring passion for team-building, mentoring, communication and finding simple effective solutions to complex problems. These passions are the key to her progression and ability to transcend the normal career pattern by successfully growing in several different arenas of the mortgage space. Kara has been an avid yogi for more than 10 years and enjoys kayaking and traveling. Pam Marron Loan Originator, Innovative Mortgage Services, New Port Richey, Fla. Loan Originator Pamela Marron has been a Loan Originator since March 1985 in the Tampa Bay area. Pam currently works for Innovative Mortgage Services Inc. in New Port Richey, Fla. Pam worked with the National Consumer Reporting Association (NCRA), the Consumer Financial Protection Bureau and U.S. Senator Bill Nelson’s (FL-D) office and other lawmakers in 2013-2014 to get a fix for the erroneous foreclosure credit code that is applied to short sale credit code. In 2016, Pam was appointed to the HUD Housing Counseling Federal Advisory Committee (HCFAC) under then HUD Secretary Julian Castro for three years. Pam currently serves as Vice President of the Gulf Coast Chapter of the Florida Association of Mortgage Professionals and is the Communications Co-Chair for the Florida Association of Mortgage Professionals. Pam’s current quest is to show Loan Originators the benefits of working with HUD-approved housing and credit counseling agencies.

“Many mortgage colleagues are not aware of how housing and credit counselors can help,” said Pam. “Making a bridge that connects Loan Originators to housing and credit counselors to assist consumers get ‘mortgage ready’ is a primary goal.” Desteni Mason Owner/Loan Officer, Mason Knows Mortgage Team of KTL Performance Mortgage, Greenville, Ohio Following her life-long passion of helping people “be better and do more than they thought they could ever do,” Desteni Mason Co-Founded KTL Performance Mortgage in Greenville, Ohio in 2003. Desteni and her “Mason Knows Mortgages” team have been helping people achieve their individual dreams of homeownership for 15 years. Desteni completed her undergraduate studies at Urbana University, achieving dual Bachelor’s Degrees in Business Management and Human Service Leadership. She also earned her Master’s Degree in Business, while growing her company to one of the top achievers in Ohio and Indiana. In 2017, she launched her own personal development site, DesteniMason.com. Her programs are designed to break through the perceived mental barriers that hold women back, and guide them in the development of step-by-step plans for gaining control over their lives. Jennifer Miller Branch Manager, Hancock Mortgage Partners LLC, Greenville, S.C. Jennifer Miller has been working in the mortgage industry since 2006, beginning as a Loan Processor and then moving in to originating. She loves working with all homebuyers, but has a special passion for first-time homebuyers. “Buying a home is quite an accomplishment and I love being part of such a big event in my clients lives,” said Jennifer. “Communication is key in ensuring a smooth transaction. From our first phone call until we are sitting at the closing table, you’ll find that I’m never more than a quick call or text away. I pride myself on making the transaction as seamless as possible for my clients and Realtors.” Jennifer is originally from Seattle and relocated to Greenville, S.C. in 1999. In her spare time, she enjoys cooking, quilting, traveling and volunteering with local non-profit organizations. Claudia Mobilia Senior Vice President of Operations, Embrace Home Loans, Providence, R.I. Claudia Mobilia has had a dramatic impact on the success of Embrace Home Loans and has been involved in several historic events in her 28 years with the company. She began her career in Embrace’s Closing Department and quickly worked her way up the ranks. She became an Underwriting Manager before managing Embrace’s Sales Team for the company’s Direct-to-Consumer Division. As SVP of Operations, she currently manages all processing, underwriting and closing operations. Claudia has played a leading role in getting the company certified to sell FHA loans and launching its FHA business six months ahead of most of the market. Claudia also led the integration of Retail Loan Officers following Embrace’s acquisition of Mason Dixon Funding in 2009. Later, she oversaw companywide efforts to eliminate paper loan files in favor of electronic files and is today helping the company transition to a digital mortgage environment. Claudia also helped craft Embrace’s approved-tomove program, the company’s on-time closing guarantee, an assisted Correspondent Department and started the company’s Renovation Department.

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women 2018 Beth O’Brien Chief Executive Officer & President, CoreVest Finance, New York, N.Y. Beth O’Brien is the Founder and Chief Executive Officer of CoreVest Finance, a private lender to residential real estate investors. CoreVest was founded in 2014 to address the unique needs of investors in the single-family rental and bridge loan space who were not served well by either commercial or residential products. Under Beth’s leadership, CoreVest has closed more than $3.5 billion in loans in that market and have issued $1 billion-plus in single-family rental bonds. Previously, Beth was Executive Vice President at Auction.com, where she ran Residential Capital Markets, and was President of AuctionFinance.com, where she ran the Financing Strategy for the platform. In that capacity, she managed single-family and multi-family loan sales, and founded a proprietary private money lender also geared at the investor market. Beth also held prior positions at Citigroup and Goldman Sachs. Combined, with more than 25 years of experience in almost every aspect of the mortgage industry, as both a principal and an advisor. She has overseen more than $18 billion in transactions and is a member of the Forbes’ Real Estate Council. She holds degrees from the University of Pennsylvania and Georgetown University Law Center.

Kortney Rollinger Senior Vice President of Program Management, RoundPoint Mortgage Servicing Corporation, Charlotte, N.C. Kortney Rollinger serves as Senior Vice President of Program Management for RoundPoint Mortgage Servicing Corporation. She is responsible for the management of strategic initiatives and programs that impact organizational change through technology and process improvements. During her tenure at RoundPoint, Kortney has been responsible for managing loan boarding, escrow and special loans. Prior to joining RoundPoint in 2008, she was the Vice President of Resource Planning and Financial Analysis for Loan Servicing and Capital Markets at HomeBanc Mortgage. In addition, she also held positions managing escrow and loan transfers while at HomeBanc Mortgage. Kortney obtained her B.B.A from Georgia State University. Chito Schnupp Executive Vice President of Capital Markets, American Pacific Mortgage, Roseville, Calif. Chito Schnupp joined American Pacific Mortgage in 2009 and was promoted to Executive Vice President of Capital Markets shortly thereafter. In her role, she oversees all elements of pricing, including hedging, agency relationships, pipeline management, warehouse line supervision, and the sale of closed loans. She has worked tirelessly to bring a wealth of new products to originators, including expanded access loans, Alt-A and non-QM options. Chito has a true passion for the mortgage industry and excels at building relationships, both internally with her team and externally at the investor and agency levels. She has a keen “sixth sense” as to what top producers are in need of, and works to develop innovative solutions that benefit homebuyers, homeowners, originators and the company as a whole.

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Heather Harlan Price Managing Partner, Modern Mortgage, Austin, Texas Heather Harlan Price, Managing Partner of Modern Mortgage, is a Senior Mortgage Banker, wife, mother of two, runner, chef and someone who truly believes empowering women in this field is as much of her calling as putting people in homes. Heather has been instrumental in Austin as the Vice President of Education for the National Association of Professional Mortgage Women (NAPMW), where her talents were used in the mortgage community in Austin from 20122015. Heather was also nationally-recognized and awarded as an Education Innovator in Mortgage Education. As Malala Yousafzai said, “I raise up my voice—not so I can shout, but so that those without a voice can be heard ... we cannot succeed when half of us are held back.” Heather believes this with all of her heart. Women should not only “be heard” ... we should always be invited to the meeting. Let us support one another in all we do. Heather serves her community and is a voice for women in her field.

Kelly Rice Branch Manager, Hancock Mortgage Partners LLC, Bourbonnais, Ill. Kelly Rice, Branch Manager of Hancock Mortgage Partners, is dedicated to providing the highest level of service and care. With hundreds of loan programs available, Kelly finds the best one for her clients at the lowest rate possible. At Hancock Mortgage Partners, Kelly specializes in construction loans, home improvement loans, new home purchases, and cash-out/debt consolidation refinances.

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Wendy Peel Vice President of Sales and Marketing, ReverseVision, San Diego Wendy Peel is a highly-seasoned technology sales and marketing executive who, as Vice President of Sales and Marketing at ReverseVision, has reimagined and redirected how Home Equity Conversion Mortgages (HECMs) are viewed by lenders and consumers. Wendy’s innovative “Generational Lending” approach to serving borrower needs across the consumer lifecycle has entrenched ReverseVision as one of the HECM market’s most dynamic and leading origination platforms, while simultaneously winning over lender’s hearts and minds on the benefits of HECM. Since Wendy joined ReverseVision, more than 2,500 lenders and brokers have joined its flagship loan origination system, RV Exchange (RVX), which serves all top-10 HECM lenders, including more than 10,000 active users. She previously served in executivelevel sales and marketing roles for several cloud-based softwareas-a-service (SaaS) providers, and is a graduate of the University of West Florida.

Kimberly K. Ricci Branch Manager, Hancock Mortgage Partners, Stow, Ohio Kimberly K. Ricci has been in the mortgage industry for more than 30 years. She has grown her share by tripling her business over the past three years. Being in the Ohio markets since 2007 has been a challenge, and she has overcome and has risen to the challenge of the industry’s market changes. Kim is extremely knowledgeable about the entire industry, from starting in banking at an early age, trading secondary, to running both big companies and having her own company for many years. She is and incredible partner and moreover a friend to her clients, Realtors and the members of her team. Kim is a true community leader and works with many organizations including the VA to help America’s veterans purchase homes.

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women 2018 Faith Schwartz Principal and Founder, Housing Finance System Strategies, Washington, D.C. Among the most influential leaders in the mortgage industry, Faith Schwartz has played a firsthand role in shaping housing finance best practices and public policy. She is Principal and Founder of Housing Finance System Strategies, a housing finance strategic advisory firm located in Washington, D.C. She also serves on many industry boards, and is the acting President of fintech asset verification provider FormFree. In 2007, Faith was recruited to lead HOPE NOW, an alliance formed by the U.S. Secretary of the Treasury in response to the housing market crisis. As HOPE NOW’s Executive Director, a position she refers to as a “career highlight,” Faith assembled a coalition of government agencies, lending institutions, non-profits and housing trades. Schwartz has also held executive-level roles at CoreLogic and Freddie Mac and served as a strategic advisor at Accenture. Faith is a recipient of a lifetime achievement award from the Five Star Institute. She actively serves on the boards of Hope LoanPort, the National Fair Housing Alliance, Riskspan, Class Appraisal, and Saint Anselm’s Abbey School. She holds a Master’s Degree in Business Administration from the University of Pittsburgh and a Bachelor’s Degree in Accounting from Shippensburg State College.

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Danyel Shipley Regional Sales Director, Mortgage Capital Trading Inc. (MCT), San Diego Danyel Shipley has extensive experience in mortgage lending, with an emphasis in capital markets. She has been in the mortgage industry since the very beginning of her career, possessing nearly 14 years of experience. Throughout her career, Danyel has worked her way up the ladder as a Loan Officer, Team Lead and Trainer, Branch Manager, Secondary Marketing Trading Analyst, Sales Executive and currently holds the role of Regional Sales Director at Mortgage Capital Trading, Inc. (MCT). At MCT, she has been successful in significantly expanding the West Coast territory bringing on new lender clients, training hedging strategies, working internally to promote process improvement in the client onboarding process, and effectively communicating MCT’s offering of integrated hedging advisory services, secondary marketing software, business intelligence, MSR services and more. She is known for her willingness to mentor and help her peers be as successful as possible. Danyel is very active in her local community, active with the Mortgage Bankers Association (MBA), and regularly attends national and regional trade shows. She holds a Bachelor of Arts in Management from the University of Redlands. Jane Stathas Branch Manager, Hancock Mortgage Partners LLC, Richardson, Texas Jane Stathas has been successful throughout her entire career, and will do whatever she can to provide support and encouragement to help other women be just as successful. Jane has been in the real estate and mortgage business since 1982. She is very active in her Church (Holy Trinity Greek Orthodox Church), and is one of the Directors of the Greek Food Festival of Dallas. She belongs to Philoptochos, a group of women at her Church, who volunteer at various charities to help the poor and the sick. She is originally from Milwaukee, Wis., but has lived in Dallas for more than 30 years.

Corey Tess Trujillo Chief Maven, Synergy Maven LLC, Anaheim, Calif. Corey Tess Trujillo has been in the mortgage and real estate marketing space for 15 years. Her boutique marketing agency, Synergy Maven, serves top lenders in the industry nationally, and she is a well-known social media speaker and event planner in the finance space. Described as a “Needle-Mover” and “Creative Powerhouse” for companies looking to solidify their brand, her expertise allows companies to grow more efficiently. Corey is passionate about creativity and the endless possibilities of embracing change as a pathway to securing her clients’ success well into the future. She has been an early adopter of leading-edge tech, computing and new media since the outset of her career, and remains an advocate for bold innovation in the art of marketing, event management and branding. Her steadfastness through the industry’s ups and downs is indicative of who she is as a business owner, a maker, an industry educator and a person. Sarah White Marketing Director, Class Appraisal Sarah White serves as Marketing Director at Class Appraisal, where she oversees all marketing efforts, strengthening brand identity through thought leadership, industry participation and guerilla marketing efforts. She began her mortgage technology and services career in 2008 at Mortgage Cadence. There, she spent nearly a decade leveraging evolving marketing tactics to take the company from a Denver-based startup to a leading loan origination technology provider through both organic and inorganic growth. Sarah has also held marketing leadership roles at The Money Source and Docutech. She has won Midas and MarCom awards for her brand work, and is a regular contributor to industry publications. Sarah earned her Bachelor of Arts degree in Communications from the University of Colorado. Joyce Wilkins Pollison Director, Legal and Regulatory Compliance, Lenders Compliance Group and Brokers Compliance Group, Succasunna, N.J. Joyce Wilkins Pollison is Director of Legal and Regulatory Compliance for Lenders Compliance Group and Brokers Compliance Group, the country’s first full-service, mortgage risk management firms in the nation devoted to offering a full suite of services in residential mortgage banking to banks, non-banks, independent mortgage professionals, mortgage servicers and service providers. Joyce has more than 20 years of experience counseling clients on federal and state industry laws and regulations with respect to mortgage acts and practices. Joyce is a frequent contributor to National Mortgage Professional Magazine’s Compliance Q&A’s. Joyce is also a practicing attorney, having received her Juris Doctorate from Boston University School of Law and is admitted to practice law in the States of New York and New Jersey. Melinda Wilner Chief Operating Officer, United Wholesale Mortgage (UWM) Melinda Wilner is Chief Operating Officer at United Wholesale Mortgage (UWM), leading more than 1,200 employees in underwriting, operations and Information Technology. She has set a new standard for excellence by focusing on efficiency, accessibility and service, making the lending process easier for Mortgage Brokers and borrowers nationwide.

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women 2018 Carla Wise President, Residential Servicing, Freedom Mortgage, Longboat Key, Fla. Carla Wise was named President of Residential Servicing for Freedom Mortgage in April 2017, responsible for providing executive oversight and management of a rapidly growing $117 billion servicing portfolio of residential mortgage loans. Prior to assuming this role, Carla served as the Executive Vice President of Residential Servicing for Freedom Mortgage since joining the organization in September 2012. During Carla’s time with Freedom Mortgage, she has launched a national in-house servicing platform and has significantly further developed the company’s relationships with Fannie Mae and Ginnie Mae. Prior to joining Freedom, Carla held a number of different executive leadership roles in residential and master servicing within leading organizations, such as Aurora Bank FSB, Carrington Mortgage, One West/IndyMac Bank and Irwin Mortgage. She attended Indiana University/Purdue University of Indianapolis (IUPUI) and has attended the MBA School of Mortgage Banking. She is Past President of the Indiana Mortgage Bankers Association and serves on the Loan Administration Committee for the national Mortgage Bankers Association (MBA). Carla is a Certified Mortgage Banker (CMB) and has her Certified Residential Mortgage Professional (CRMP) state designation.

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Serena Yang Vice President of Marketing and Business Development, Sunset Equity Funding, Culver City, Calif. Serena Yang, VP of Marketing and Business Development for Culver City, Calif.-based Sunset Equity Funding, is a results-driven MBA marketing executive with extensive experience in private lending and commercial mortgages. Serena consistently achieves business objectives, providing breakthrough solutions, quality, cost savings and proven results. She was a four-time national awards recipient in the real estate housing finance industry in 2016.

Jeri Yoshida Co-Founder of NEXT, the Mortgage Technology Summit for Women Executives, NEXT Mortgage Events, Santa Monica, Calif. Jeri Yoshida is Co-Founder of NEXT, the mortgage industry’s only technology summit for women executives. Jeri co-conceptualized NEXT in 2017 and was instrumental in developing the event’s unique structure, which combines quality executive content with an intimate, collaborative environment. NEXT’s inaugural event took place in January 2018, and in less than one year, it has become recognized by its numerous loyal supporters and attendees—both male and female alike—as a one-of-a-kind career furthering opportunity and the preeminent educational destination for the mortgage industry’s top women senior executives. Jeri is also Founder and Principal of Yosh Communications, a public relations and marketing consultancy specializing in the mortgage industry. Prior to her current endeavors, she was SVP of Marketing for mortgage technology provider Platinum Data Solutions, where she successfully positioned the company for acquisition in less than 20 months. Prior to her work with the company, she spent a decade as an independent PR and marketing consultant in the mortgage sector, during which time she positioned dozens of organizations to achieve goals that include industry brand recognition, acquisition and triple-digit revenue growth.

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Sue Woodard Chief Customer Officer, Total Expert, Minneapolis Sue Woodard serves as Chief Customer Officer of Total Expert, where she focuses on helping customers achieve greater productivity and long-term success. Sue has more than 25 years of experience in the mortgage industry that includes originations, management and mortgage technology. She is renowned in the industry as a speaker, subject matter expert and thought leader. She has won numerous mortgage industry awards and honors. Sue is passionate about the housing industry and serves on multiple committees. She currently serves on the MORPAC Steering Committee, a leadership subset for the Mortgage Bankers Association’s Political Action Committee and has served on the Technology Committee for the California Mortgage Bankers Association Realtors. Sue also serves as the Chair of the Board at HOPE4Youth, a local non-profit working to end youth homelessness. Mentoring has also been an important part of Sue’s career, whether in-person or through her speaking engagements. Drawing on her career as a successful mortgage originator and executive, Sue provides sound, actionable, realistic advice and motivation to loan officers and leaders around the country. Sue was also nominated by Sigma Sigma Sigma to be an honorary alumnae sister, to mentor and guide the young collegiate women who are members.

Barbara Yolles Chief Strategy Officer, TMS Barbara Yolles, Chief Strategy Officer of TMS, is a 25-year advertising agency veteran. She has architected the brand and growth strategy for TMS, re-launching and re-positioning the brand in January this year with its “Grow Happiness” campaign. Prior to joining TMS last year, Yolles was the brains behind the brand and growth strategies for United Wholesale Mortgage (UWM), where she was instrumental in putting their brand on the map and helped grow the company to the position of the number one wholesale lender in America. Yolles is known for her ability to disrupt category conventions and accelerate growth for the companies she has worked. Her career spans corporate marketing at McDonalds, where she launched the Dollar Menu, to global advertising agencies like McCann and Campbell Ewald.

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National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women Roundtable Discussion n addition to featuring our list of “Mortgage Banking’s Most Powerful Women” in this month’s issue, we also thought it would be a prime opportunity to hear from some of these honorees and get their views on the industry. We ran through a number of topics, and in roundtable discussion format, present the thoughts and perspectives of some of “Mortgage Banking’s Most Powerful Women.” Some of the words that come to mind when selecting our panel were “Pioneer, Leader, Innovator,” and we are proud to present their thoughts on some of the industry’s most pressing topics, from catering to emerging markets, to the Milliennial marketplace, to making in it a maledominated profession. Join us as today’s female leaders in the mortgage profession share their perspective in this exclusive feature in National Mortgage Professional Magazine.

Roundtable participants

Rosalie Berg President Strategic Vantage Marketing & Public Relations Rosalie Berg is the President of Strategic Vantage, a marketing, public relations and social media agency that specializes in the mortgage industry. She has close to 20 years of experience doing marketing and publicity for companies involved in the world of real estate finance. Since 2002, her agency has served more than 100 companies in this industry, from lenders to technology companies, service providers and start-ups. Prior to founding Strategic Vantage, Rosalie worked as VP of Marketing for mortgage technology provider OpenClose Technologies. She has held executive marketing positions at Oracle consulting firm Dataforce Corporation and packaged software provider Expert Software (now Activision). At the public relations agency Publicis Sanchez & Levitan, her clients included Lennar Homes, Absolut Vodka and Seagram’s. Rosalie has also worked at Mercer Management Consulting doing business analysis for Fortune 500 companies. She received her bachelor of arts degree in economics from Brown University. Laura Brandao President American Financial Resources Inc. (AFR) Laura Brandao is President of American Financial Resources Inc. (AFR), one of the leading FHA 203(k) lenders for sponsored originations in the country, and an innovator in the construction and renovation lending area. AFR utilizes the latest technology and delivers educational resources to Mortgage Brokers, Loan Originators and their customers.

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Christine Beckwith National VP of Realtor and Sales Management AnnieMac Home Mortgage President 20/20 Vision for Success Coaching Christine Beckwith became a 30-year mortgage industry veteran in 2018. Over the course of three decades, she has consistently won in mortgage sales originations at all ranks, from the Loan Officer seat and up the ranks all the way to her Regional Sales Management roles at the top five percent consistently. Due to her consistent and exceptional sales credibility and a natural penchant for leadership, she would do the unthinkable and bring team after team to great success at the very top ranks of the firms she worked for and as a minority in her field with women executive level leaders only representing two percent of the mortgage banking industry. For the past 18 years, she has run mortgage companies at a senior and executive level. During that time, she has continued to win public awards for breaking several glass ceilings. She would become a sought after public speaker on the mortgage circuit and this year has won numerous awards, including being named a “Most Connected Mortgage Professional” by national mortgage publications. She has written and released two best-selling books in early 2018, and writes in many mortgage publications.

Ginger Bell President Go2training Best-selling author Ginger Bell is an “edumarketing specialist,” who helps companies develop and implement training programs to position themselves as experts in their fields. Her most recent book, Success Breakthroughs, which she co-authored with Jack Canfield, explains the power companies can have by using education in their marketing. As President of Go2training, Ginger’s clients include companies like Motto Mortgage, Finance of America, Arch MI, First American Title, RE/MAX, Nike, Fidelity National Title, Mentor Graphics and FirstFunding.

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Mary Aston Director of Corporate Initiatives Angel Oak Mary Aston serves as Director of Corporate Initiatives at Angel Oak. She is an accomplished mortgage executive with more than 30 years of experience in mortgage operations. Mary’s strategic focus is on process analytics, workflow efficiencies and development of robust infrastructures to include operational and technological support. Mary is often described as a “Get Stuff Done” executive, who brings out the best in teams. Her broad background helps her improve productivity and profit, as she applies her knowledge to help grow the company. She works hard to achieve collaborative teamwork to build in quality, efficiency and profitability into the lending process. Mary has 40 years of experience in the mortgage banking industry, and is the proud mother of two children and is grandmother to six grandchildren.

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women Roundtable Discussion Marcia Davies Chief Operating Officer Mortgage Bankers Association Marcia Davies is Chief Operating Officer for the Mortgage Bankers Association (MBA). As COO, Marcia is responsible for ensuring crossorganizational alignment and facilitating the implementation of strategic initiatives, as well as maintaining oversight of key organizational priorities. She is also the lead strategist for MBA’s external activities, providing leadership, guidance and overall management to the public affairs and marketing divisions. In addition, Marcia provides strategic direction and management of MBA’s Conferences, Membership, Education, Information Technology and Office Services divisions. She also provides management oversight to and is a Board member of MBA’s Opens Doors Foundation. Marcia is the Founder of mPower (MBA Promoting Opportunities for Women to Extend their Reach), MBA’s networking platform for women in the real estate finance industry. Under her leadership, mPower has grown into an engaged community of more than 4,000, providing best-in-class conference and Webinar programming, networking events and online opportunities to stay engaged. Through mPower, more women are positioned to achieve leadership positions and are well-represented in all segments of the industry. Marcia is also a member of the NAWRB Diversity and Inclusion Leadership Council (NDILC). She is also a member of Women in Housing Finance and the International Women’s Leadership Association.

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Kristy W. Fercho Executive Vice President, President of Mortgage Flagstar Bank Kristy Fercho joined Flagstar Bank in 2017 as Executive Vice President and President of Mortgage. In this role, Fercho is responsible for the direction and oversight of all aspects of mortgage and secondary marketing and for the continued expansion of Flagstar’s mortgage business. Prior to Flagstar, Fercho spent 15 years with Fannie Mae, ultimately serving as Senior Vice President, Customer Delivery Executive, responsible for the end-to-end strategy and business performance of all singlefamily customers in the western United States, representing an acquisition volume of more than $300 billion. Her experience in the mortgage industry is broad and deep, covering mortgage originations, fulfillment, risk management, secondary marketing, servicing, technology initiatives and regulation. Fercho serves on the Board of Directors of the Mortgage Bankers Association (MBA), and previously served as President of the Board of Habitat for Humanity, Chicago. Sarah White Marketing Director Class Appraisal Sarah White serves as Marketing Director at Class Appraisal, where she oversees all marketing efforts, strengthening brand identity through thought leadership, industry participation and guerilla marketing efforts. She began her mortgage technology and services career in 2008 at Mortgage Cadence. There, she spent nearly a decade leveraging evolving marketing tactics to take the company from a Denver-based startup to a leading loan origination technology provider through both organic and inorganic growth. Sarah has also held marketing leadership roles at The Money Source and Docutech. She has won Midas and MarCom awards for her brand work, and is a regular contributor to industry publications. Sarah earned her Bachelor of Arts degree in Communications from the University of Colorado.

Joyce Wilkins Pollison Director, Legal and Regulatory Compliance Lenders Compliance Group and Brokers Compliance Group Joyce Wilkins Pollison is Director of Legal and Regulatory Compliance for Lenders Compliance Group and Brokers Compliance Group, the country’s first full-service, mortgage risk management firms in the nation devoted to offering a full suite of services in residential mortgage banking to banks, non-banks, independent mortgage professionals, mortgage servicers and service providers. Joyce has more than 20 years of experience counseling clients on federal and state industry laws and regulations with respect to mortgage acts and practices. Joyce is a frequent contributor to National Mortgage Professional Magazine’s Compliance Q&A’s. Joyce is also a practicing attorney, having received her Juris Doctorate from Boston University School of Law and is admitted to practice law in the States of New York and New Jersey. Melinda Wilner Chief Operating Officer United Wholesale Mortgage (UWM) Melinda Wilner is Chief Operating Officer at United Wholesale Mortgage (UWM), leading more than 1,200 employees in underwriting, operations and Information Technology. She has set a new standard for excellence by focusing on efficiency, accessibility and service, making the lending process easier for Mortgage Brokers and borrowers nationwide. Sue Woodard Chief Customer Officer Total Expert Sue Woodard brings more than 25 years of mortgage industry experience, strategic vision and leadership to her role as Chief Customer Officer at Total Expert. Her focus is on helping lenders achieve greater productivity and longterm success. Sue started her career as a processor, became a top originator, then leveraged her knowledge to become a highly acclaimed industry speaker, subject matter expert and technology executive. In addition to having hosted a successful financial radio program and making guest appearances on CNBC, Sue has been awarded numerous industry honors. She also serves on the Board of HOPE4Youth, a local non-profit working to end youth homelessness. As a bit of a thrill-seeker, she has sky-dived over Las Vegas, firewalked on hot coals, Harleyed down Route 66, ran a Ragnar through the desert and cage-dived with great white sharks. Barbara Yolles Chief Strategy Officer TMS Barbara Yolles, Chief Strategy Officer of TMS, is a 25-year advertising agency veteran. She has architected the brand and growth strategy for TMS, re-launching and re-positioning the brand in January this year with its “Grow Happiness” campaign. Prior to joining TMS last year, Yolles was the brains behind the brand and growth strategies for United Wholesale Mortgage (UWM), where she was instrumental in putting their brand on the map and helped grow the company to the position of the number one wholesale lender in America. Yolles is known for her ability to disrupt category conventions and accelerate growth for the companies she has worked. Her career spans corporate marketing at McDonalds, where she launched the Dollar Menu, to global advertising agencies like McCann and Campbell Ewald.

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women Roundtable Discussion What are your feelings on the current state of the mortgage marketplace? Ginger Bell: Changes in the marketplace are common in the mortgage industry, and the current state of our marketplace today is one of opportunity for those who wish to stand out as an expert in their field. Today’s borrower is smarter and looking for someone who stands out, is knowledgeable, and can provide them with the information they need. I feel that the Loan Originator who uses education to build their business will succeed in this changing market. Laura Brandao: In my 25 years in the industry, the current shift in the mortgage marketplace is the most unique I’ve seen. Eleven years ago, during the sub-prime loan crisis, it was obvious what was happening. The news had gone mainstream and homeowners were feeling the fallout. This time, the shift is not mainstream and is percolating outside of the public’s radar. We are watching mid- to large-sized lenders face a number of challenges. The combination of the current rising rate environment, a lack of housing inventory, and the lowest refi market in 18 years is making it difficult to compete, and only compounds the current compression in the margins. The cost of originating a loan today is astronomical for large national lenders; the overhead for licensing in 50 states, for example, versus a smaller mortgage broker licensed in the one state they serve. Unlike 11 years ago, the current shift in the market is a lender problem, not a borrower problem. However, the current environment provides tremendous opportunity for the smaller-sized players. For a small lender to be positioned well, they may not have the overhead costs of the large companies, but instead have the ability to be nimble and work with any number of lenders to offer the right program to bring more customers home. A smaller Mortgage Broker can come in with more of a community connection, to the local Realtors and housing market, and provide options of loan programs and the ability to service every type of loan scenario that may come up.

Have you faced any obstacles as a female in a male-dominated profession? Is the playing field being leveled? Mary Aston: I have been fortunate to work with leaders that have been a mentor to me. They have given me opportunities to go outside my comfort zone and continue to grow within the mortgage banking industry. Ginger Bell: Personally, I never look at male or female differences in anything I do. I think the mortgage industry provides many great opportunities for those who seek to learn, grow and work hard … it doesn’t matter your sex or your nationality. I have been blessed to work with many great men and women over the course of my career, and the number one thing I look for is the desire to work together. Christine Beckwith: Over the past 30 years, the obstacles I have faced in a male-dominated field were primarily related to “voice” and “pay.” Voice being challenged with the being taken as seriously as a woman, which I grew into. Age and results dictated a higher

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Joyce Wilkins Pollison: The mortgage marketplace is everchanging always presenting new challenges. As the marketplace evolves, the governing rules must also adjust to accommodate this evolution. For instance, in our current market, there are many potential applicants who derive part or all of their earnings as independent contractors or freelancers, such as Uber drivers or by renting out rooms in their homes via Airbnb. Such activities being dubbed the “gig economy.” I have heard statistics that approximately 30 percent of the workforce derives some or all of their earnings from the gig economy or are self-employed. Although earnings from such activities can be substantial, it is often unpredictable and less stable. Individuals who appear to be otherwise viable mortgage candidates with acceptable credit are being turned down by lenders for traditional mortgage loans as their earnings do not qualify as “income” under the traditional ATR Appendix Q standards, as they cannot document their earnings via

Sue Woodard: It’s a really unique market. The cost to produce a loan continues to climb, and with the low inventory situation impacting purchases and higher rates impacting refinances–fewer opportunities are filling pipelines. The good news is that lenders are seeking innovative ways to inject new life into their business. At the top of that list is reimagining the customer experience. When business was booming, many lenders and producers became somewhat transaction-focused and just worked to get their customer to closing so they could move onto the next customer, but that mindset is shifting as producers and organizations aim to develop customers who will keep coming back … for life. Much of the “Digital Mortgage” revolution has been aimed at improving the customer experience during the transaction process itself, which admittedly was very long overdue. But renewing your focus on post-closing customer experience to build repeat and referral business is a critical strategy. Additionally, lenders are starting to utilize customer experience technology to avoid losing opportunities entirely–you must capture a higher percentage of applications. For example, many lenders do a great job of following up with a lead or a preapproval for a short time, but what happens to that contact when that lead appears to go cold? Prospective clients are sitting in your lead pipeline longer than ever, so it’s important to stay in touch at the right time, with the right message, in order to keep that lead nurtured over time and win the deal–and you must put intelligent automation in place to do so. Finally, there’s a huge opportunity for organizations to personalize the customer experience. Mortgage professionals should look to deliver marketing across channels that leverage data to create a personalized message–one that builds confidence and trust.

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Marcia Davies: Loan performance is as good today as it’s been in decades. Home prices have recovered from the housing crisis. Looking forward, housing demand is strong. The Millennials are coming and people are forming new households. MBA’s Builder Applications Survey, which projects new home sales, points to more first-time homebuyers getting into the market. In the near term, however, we’re suffering from a serious lack of housing supply. Builders are not yet keeping pace, and the affordability issues that follow will keep purchase lending down. And purchase lending will have to carry most lenders forward. We are on a rising rate path for the foreseeable future, and MBA’s economists forecast that refinance originations will continue to decline through 2020. Keep in mind that many borrowers have already refinanced in lower rate periods back in 2012-2013 and 2014-2016. There is a much lower incentive to refinance at current rates, unless there is a desire for a cash out refinance.

pay stubs or W-2s or show two years of steady income plus the likelihood it will continue. As our workforce continues to transform, with many workers, and particularly Millennials, preferring the flexibility the gig economy and self-employment offers, so must the rules and regulations. One step in the right direction is the recently introduced SB 3401, the “Self-Employed Mortgage Access Act of 2018,” which aims to make it easier for creditworthy self-employed borrowers, small business owners and those participating in the “gig economy” to obtain a traditional QM mortgage loans. S.B. 3401would expand the standards by which a lender may qualify the applicant’s income. Freddie Mac and Fannie Mae are also exploring new tools and emerging technologies to assess income stability and predictability of the self-employed. All of these efforts are welcomed and necessary in order to address the credit needs of the ever-increasing non-traditional workforce, and particularly Millennials who constitute the crux of current first-time homebuyers.

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women Roundtable Discussion respect level, but I had to work hard to get that voice. I wasn’t given it immediately and long after I even had results, there still could be times when ideas would be dismissed and later introduced by a male counterpart and reveled upon as innovative as if I had never been heard. The frequency of that declined over time, but was a real thing. Pay-wise, I crossed intersections where advocacy for fair pay came into play, knowing full well my job description merited equal or even greater pay than a male counterpart. I believe that this is an area that women are still battling and will continue to battle for decades to come.

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Rosalie Berg: I really don’t feel that I have faced many obstacles in this male-dominated industry. The important part of my saying that though is that I have stated how I feel, and not what’s actually transpired. Yes, there have been times over the years when I’ve faced gender bias, but I’m one of the many women who have chosen not to focus on the career obstacles we face as a result of being a woman. Instead, I’ve focused on the benefits of being a woman in business. As the owner of a public relations and marketing agency, I’d like to believe that for every company that chose not to work with me because I am female, just as many, if not more, chose my agency because we were female-owned. While there will be executives that still discriminate against women, there are also those who seek women out. They’ve witnessed what women can bring to the table. I know many male industry leaders who prefer to work with women as they find them disciplined, thoughtful, attentive to detail and very hard-working. I do see a change upon us. In my almost 20 years of doing marketing and publicity for this industry, I have witnessed more women committing themselves to the mortgage industry and rise to the top, the likes of Sue Woodard, Regina Lowrie and Claudia Merkle just to name a few. It’s going to take time, but as more women dedicate their careers to working in this industry, they will continue to climb up the career ladder—and we’ll be leveling the playing field. Laura Brandao: I think the biggest struggle women have today in this industry is ourselves. We limit ourselves; we hold back from using our voice and taking a leadership role because it is a maledominated field. The only person who can limit me is me … and I was recently named President of AFR. I encourage women to step up, step in and take control. We are excellent multi-taskers, we are empathetic and we are passionate. We need to use our voice to assist in bringing families home. In the mortgage industry, the opportunities for women are the same as for any other person. The playing field is level, but we need to go on the field. Our mothers, grandmothers and certainly greatgrandmothers didn’t have the same opportunities that we do today. We owe it to them to step up and it’s our responsibility to the next generation to show them how to step up. Marcia Davies: One of my primary roles at the MBA addresses this very topic with sensible and direct solutions. With MBA’s support, I founded mPower, which is a platform for women to strengthen their networks, achieve professional growth and development, and to exchange ideas and information about our industry and the broader economy. So far, we have been extremely successful in growing our platform. October marks the two-year anniversary and what started small has grown into nearly 2,000 members as part of the online network. In fact, this past year alone, we have had 20-plus events across the country, and hosted more than 5,000 attendees. This year, we began providing ways to spread mPower’s message by reaching out to those who may not have the flexibility or funds to travel to our in-person networking events. This will include a professional development Webinar and video series, “mPower Your Career” and “mPower Moments.” Kristy Fercho: As a woman in a male-dominated profession, I have definitely encountered obstacles and try to see them as opportunities to learn. I always ask myself, how can I navigate around them? What

has been successful in the past? Who can I solicit for help? I’ve been very fortunate to have had great mentors who have helped me navigate these challenges. It’s also helped to have worked for organizations like Fannie Mae and Flagstar, where diversity and inclusion is a priority. This means people are actively engaged in leveling the playing field. Many times, I’m the only woman or only African-American in the room, so people aren’t sure what to expect or how to take me. My approach is to be strong without being tough and kind without being soft. Sarah White: This is a tricky question. As I sit here, I find myself conflicted with how to answer as I know the readership of this will be male-dominated. Ironic, isn’t it? I’m thinking of how to sensor myself so as not to offend. With that said, there are so many outstanding men that recognize we’re stronger together. These men are focused on helping their counterparts, regardless of gender, to succeed and grow to achieve their goals. In other words, I strongly believe we are at a turning point in our history where the few “exceptions” will be tested and will ultimately find their dominating ways to fall on deaf ears. While there’s no question I’ve personally felt that my gender has, in the past, restricted me from moving to the next level, I’ve always been of the mindset that any glass ceiling can be shattered. A philosophy that’s gotten me through some of these times is, “Do not let circumstances control you. You change your circumstances.” So, while there have been roadblocks that have seemed to be gender-specific, I’ve simply moved on and changed my circumstances. Instead of playing the victim, I prefer to take matters into my own hands. Thanks to the “Me Too” movement, I absolutely believe women are starting to find their voice and equal footing amongst the top men. Joyce Wilkins Pollison: Women have and will continue to face obstacles. Among these is the ongoing balancing act that many women endure, especially those working full-time, in trying to manage a career, children and a home. Admittedly, many men face this obstacle as well. However, societal expectations as to mothering as well as our own internal, and often unrealistic, expectation that we “Can Do It All,” finds women shouldering the brunt of the child-rearing and homemaking duties. We find ourselves in a struggle to meet work deadlines, get the child to soccer practice on time, as well as get dinner on the table! As to leveling the playing field, although strides have been made in this regard, including some states’ recent enactments of laws that prohibit employers from asking applicants about past salary or require employers to justify disparities in pay among similarly situated employees, the very enactment of such laws demonstrates the obstacles women continue to face with respect to wage parity. Melinda Wilner: I haven’t faced many obstacles throughout my mortgage career, certainly not here at United Wholesale Mortgage. UWM is a very female-friendly company, and a strong percentage of our senior leaders and captains throughout the company are women. The opportunity is there for everyone who works here to grow their role and climb the proverbial company ladder, especially with the priority that our CEO Mat Ishbia places on promoting from within. I think that plays a big part in creating a level playing field across the board, as well. If we’re looking to fill some kind of leadership position, we look internally to fill the spot with someone who has worked hard and delivered strong results, regardless of whether they’re a man or woman. If you care about what you do, you work hard, and you have the ability to lead a group of people to be the best versions of themselves, you’ll find success regardless of gender. Sue Woodard: I don’t feel that my opportunities have been limited because I’m a woman, but there are some unique challenges, just as there are in many industries. As an example, where male executives can take other male executives out for a weekend fishing trip or golf outing–it becomes extremely tricky, if not

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women Roundtable Discussion impossible, to initiate or participate in those same “relationshipbuilding” moves as a woman working with male colleagues. Some may point to the uneven balance of male executives versus female executives in our industry, but I do see that changing. Research has shown that companies that invest in leadership teams balanced with men and women typically are more productive. In fact, organizations with a strong mix of men and women in leadership tend to show better growth and higher profits. While there are definitely still areas for some stumbling blocks for women to advance and succeed in the mortgage business, today I believe the playing field is leveling, and women have the opportunity to step up and create their own success. Again, I think success in the mortgage industry–for men or women–really comes down to possessing a fearless, entrepreneurial, customer-focused mindset, and the desire to consistently learn and seek out better strategies to grow. Barbara Yolles: When I have enough time on my hands to see that the playing field may be tilted, I even it out. I came from advertising, where the glass ceiling was lower. Is it always fair? No, but sometimes you just have to smash through it and not let it get in your way. At TMS and my last company UWM, I’m proud to say the leadership teams tilted towards females.

Sarah White: The good news … while refis have taken a back seat, the purchase market is still doing well thanks to a thriving economy and interest rates staying relatively low. The bad news … the cost to originate a loan is higher than ever and the market is once again shifting. Fortunately, there are an increasing number of innovators in our space who want to see technology do more than it is today. There is a huge opportunity to connect each step of the origination process through data and APIs in order to streamline the process, eliminate human error, and maximize visibility and compliance throughout the process. The key here is to forget “all-in-one,” and instead, focus on “best-of-breed” providers who have the right technology and APIs to easily connect to the other players that make the origination process possible. When the origination process is powered by data and not reliant on manual processes, major cost savings can be achieved. Joyce Wilkins Pollison: Despite the new administration and the change in regime at the CFPB, one of the most pressing issues faced by the industry continues to be a lack of clear guidance from the Bureau with respect to its own rules. The Bureau’s prior regime primarily ruled through enforcement, leaving industry players to weave through fact-sensitive consent orders to draw their own conclusions as to what may and may not be permissible under the rules and, should one draw the wrong conclusion, what the ensuing penalties may be. The result–varying opinions, in many ways, guesstimates, as to permissible actions under the rules, resulting in diverse practices throughout the industry. These diverse practices often being a reflection of the company’s appetite for risk–those

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Rosalie Berg: While we all know that rising origination costs and declining volumes are big issues today, there’s another issue that many companies are surprisingly unaware of: Image. It’s a huge obstacle to growth. So many companies in our industry have outdated or unprofessional looking Web sites, brochures, presentations and branding—all of which can turn off prospects and potential new hires. On the other hand, image is a huge opportunity, too. Companies like Rocket Mortgage and Blend.com stand out with their modern messaging and marketing. Through a modern image, they make it clear they are not doing business the old way. These companies have intelligently created a big divide between them and companies that look like they are stuck in the early 2000s, or even the 1990s. Executives looking to survive and indeed thrive in the current market need to remember that people often do judge a book by its cover. This is no time to look like a has-been company. If your Web site, brochure, logo and/or business card are more than three or

Kristy Fercho: I see four key issues impacting the industry at this time. The first is the shift in production mix. With interest rates steadily increasing, there has been a shift to a purchase market. Refinances are at their lowest levels since 2014 and are now less than 30 percent of the market. Two-thirds of all refinances are cash-out, as existing homeowners tap equity, and higher interest rates have all but dried up rate/term refinances. Refinances are falling off more quickly than purchases are picking up, driven primarily by the second issue–lack of housing supply. While there is certainly demand for housing, lack of inventory is a challenge. Many boomers are staying in their homes instead of selling and downsizing. It’s true that new home construction is picking up, but builders still face lack of skilled labor, higher cost of materials and stricter regulations on development. According to the MBA, mortgage volume is expected to finish 2018 at $1.6 trillion and remain flat into 2019, which would be the lowest level since 2014. This has led to the third issue, overcapacity in the market, which, in turn, has created irrational pricing and lower margins. While some lenders have cut staff to right-size costs, others are trying to ride out the storm before making changes to their staffing or adjusting commissions. As we exit the purchase-money season and head into winter, we will have to see more steps to right-size because today’s margins are not sustainable at the volumes we’re now experiencing. The fourth issue is really an opportunity and that is the shift to digital technology. Consumers want a fully-integrated digital ecosystem to improve their overall mortgage experience and match transactions they are accustomed to in other aspects of their lives—the so-called Amazon effect. That said, the mortgage transaction still remains very complex due to the number of providers that are involved—Originator, Appraiser, Title/Escrow Agent, Real Estate Agent, Warehouse Bank, end Investor, etc. Today, those providers are siloed in their own systems and are not easily brought together in a single platform. This will be critically important as Millennials, who are key to the first-time homebuyer segment, enter the market. Contrary to some beliefs, the majority of Millennials want to own versus rent, although many face obstacles such as lack of affordable housing and high student loan debt.

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What are some of the industry’s most pressing issues at this time? What can be done to solve them? Christine Beckwith: Men need to realize that all women who are fighting for rights do not need labels, like “Me Too” or “Feminist,” as may just be women who are trying to work, survive, and maybe even thrive in a professional industry they chose and are great at. I have seen 30 years of being a minority in sales in the mortgage profession. As such, I have sat at all my tables held mainly by male seats. I have had pressures as a result to perform the same, and in my case, I desired to outperform my male counterparts, lending what I experienced to my greater respect of both peer and subordinate level employees. That said, I don’t like to be labeled a “Feminist” because I chose a job in a male-dominated field. I am for women, but I didn’t choose my career because I wanted to be a token example, or be a token anything. I chose it because I was good at it, great in fact, and I just so happen to be outnumbered. The demands of executive level or senior level banking leadership is not for everyone man or woman, but especially women who play a dual role as homemaker. The support required to support a leading woman can far outweigh that of a man, thus leaving many women unable to take on these roles. I am not sure we can solve these issues. As long as I am not discriminated against in the process of getting a job, doing my job or being paid for my job, then I am good with where we are going and evolving. I don’t think women should be hired to meet a status quo unless they are the best person for the job. I am an advocate for fairness, so I don’t wave flags or banners … I show up, put up results and then and only then demand the respect I have earned.

four years old, chances are you’re losing business as a result.

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women Roundtable Discussion with a greater risk appetite, and in most cases, more resources to pay penalties should an inaccurate assessment of permissible actions under the rule have been made, being more willing and able to push the envelope than those who, often due to resources, take a more cautious approach as the incurrence of the high civil monetary penalty would effectively put them out of business. Industry participants are entitled to know up-front the rules to which they are subjected to. They should not be put in the position of second-guessing whether their interpretation of the Bureau’s ruling as set forth in an enforcement or consent order based upon a specific fact situation is correct, especially in light of the high monetary penalties involved. Clear, effective, and binding guidelines will help level and make the playing field fairer for all – both small and large firms, and everyone in between. It is noteworthy that a recent bill introduced in the United States House of Representatives, the “Give Useful Information to Define Effective Compliance Act,” H.R. 5534, is a step in the right direction. It requires the Bureau to issue binding guidance on Federal consumer financial laws and provide a framework for civil penalties.

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Sue Woodard: We’re in an extremely competitive market, as originations fall and margins compress. Inflation and rising interest rates are also concerns for lenders today. Compliance continues to be front and center. Technology—including the move to a digital mortgage—is a huge ongoing priority as more and more touchpoints are online. There are a few themes I often come back to when considering which tactics lenders can employ for success, including accelerating innovation, integration, personalization and going beyond transactional thinking. In terms of accelerating innovation … technology vendors are building products at light-speed to help mortgage professionals get more done with less time and money. If you feel your organization’s tech stack trails your competition, that gap will only widen if ignored. Technology is not an expense, it’s an investment in your future. With all the technology innovation comes the necessity (and responsibility) to offer seamless integrations. The amount of data being mined, collected and used is massive–and ensuring that your technology solutions are aligned is key. With all the noise coming at your clients, you must improve the customer experience and elevate your brand with personalization– both personalized to your client and elevating the personal brand of your MLO. The only way to break through the mass of information and noise coming at your client and partners is to the right message at the right time to the right person, while reinforcing the MLOs personal brand. In going beyond transactional thinking, nurturing leads through what may be a long process, and the customer for life concept should be table stakes in your business. If you let leads slip through your fingers, or ignore borrowers after close, you’re missing out on the opportunities you need to succeed. You’ve already hurdled the biggest obstacle of trust by getting their attention and winning their business—nurture the relationship and gain more opportunities to win. Barbara Yolles: Too often, this industry doesn’t focus on the most pressing issue–that is helping people achieve the dream of homeownership–no matter the market condition. With the average age of a mortgage professional as 50- to 53years of age, what is being done to attract Millennials to the mortgage industry to replenish an aging workforce? Mary Aston: Millennials are interested in more than a paycheck … they want to join an organization with purpose. They want to work for an organization that will help them grow and provide opportunities for advancement while allowing them to prioritize their families. At Angel Oak, our purpose is clear. We serve our clients and communities by creating value in unconventional markets. We create products and services that provide our borrowers with

alternatives to help them make the right decisions when faced with real-life opportunities and challenges. We invest in state-of-the-art technology that provides our employees with the flexibility they need to balance work and home life. At Angel Oak, we aren’t content with the “status quo.” We challenge our employees to be a part of something bigger and encourage them to take ownership in a safe environment where the fear of making a mistake doesn’t limit their ability to try. Christine Beckwith: I see a lot of young professionals coming into our industry. I think the past decade has been rough on existing veterans who have had to migrate through a stringent system that was at the start a reaction to the down fall of our industry from 2006, but over time, the professional Mortgage Loan Originator that emerged and with regulations and licensing systems growing tenure now more younger finance professionals are coming our way. Also, with the economic irregularity of the past decade, this industry was not an attraction for long-term career-seekers. We are now seeing the positive signs of the next decade and a return to that confidence and with it we are seeing young professionals come. My company and many others are now doing on-boarding with greater education and retention, through internal coaching platforms and mentoring that is attracting the newer MLO. Ginger Bell: The average age of a mortgage professional has actually dropped in recent years from 53 to about 46. I believe this is because of the efforts of many of us who have been working to change the perception of our industry. Associations like the Young Mortgage Professionals Association (YMPA) has helped to unite young professionals together and I’ve personally worked with several groups including a Focus Group we did with Pepperdine University to discuss why young professionals are not entering our industry and the number one cause is perception. We must continue to work to let young professionals know of the many job opportunities we have in our industry. From technology, to finance, to marketing, there are many incredible opportunities to be had. Rosalie Berg: Actively recruiting and nurturing Millennials is going to be key to replenishing our aging workforce. There are many ways to go about this, including recruiting from colleges and posting jobs where Millennials will see them. When recruiting Millennials, it’s particularly important to speak to them in language they understand and through devices they use daily. Don’t expect them to respond to recruiting materials and tactics people were using 20 years ago. Be sure to have a Careers Page on your Web site that reflects positively on your company’s culture, not just through well-written text, but also through compelling photos and videos of your staff. Leverage social media as well. Respond to reviews and comments posted about your company on Glassdoor.com, and make sure your company has a Careers Facebook Page and posts regularly on it. Social media is a key vehicle to reaching Millennials. Sarah White: While I straddle the line between Generation X and Millennial, my birth year puts me at the precipice of the Millennial generation. It’s no secret that my generation’s perception of the mortgage industry has historically been negative. Many of us were just entering the workforce, and the younger Millennials were in their most formative years when the financial crisis hit. We saw firsthand the impact on our careers and on our family’s livelihood … we were rocked hard. Fortunately, with a booming economy, those trepidations are subsiding. Within the past five years, I’ve seen more friends and acquaintances find careers in our industry than ever before thanks in large part to the right market conditions. Those conditions, as we all know, will not last forever. One key way to attract more Millennials is to get out into the community. Support local charities and events. Instead of

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women Roundtable Discussion focusing on your business, focus on the impacts you are seeking to have on your target audience. Millennials love having a cause to fight for–a rallying cry of sorts. By seeking to differentiate through a commitment to people, Millennials will likely be drawn in. Melinda Wilner: UWM is already part of that youth movement, if you want to call it that, because we have a lot of young professionals already. Around 70 percent of our team members are Millennials. That demographic, especially, loves to be hands-on and do work that makes a real difference, and they like the challenge of working in an innovative, fast-paced business. The mortgage industry checks those boxes. Looking at IT as an example, because technology is so prevalent, an app developer can write code that not only improves business at their specific company, but has a wider impact on how business is done throughout the industry. That opportunity for individuals to put their individual stamp on the business is real and Millennials love it. Another positive that the mortgage industry has going for it, as far as attracting Millennials, is that it appeals to the entrepreneurial drive that a lot of young people have. A lot of Millennials want to be their own boss, running their own business, and that’s a real possibility in the mortgage industry. There is an opportunity for people to get experience under their belt, get the licensing that is required, and open up their own broker shop. We love that. We’re all about encouraging more people to become Loan Officers, to become Mortgage Brokers, and our company does everything we can to help them grow and maintain successful businesses.

69 Barbara Yolles: We are on a mission to help ALL homeowners achieve and maintain the dream of homeownership. That’s why we repositioned our brand. Simply put, we speak a different language and we do business in a different way, and we want to help everyone grow happiness. Can you discuss your business model and what it takes to make it in today’s marketplace? Laura Brandao: AFR decided years ago to be a niche player, a specialty lender, if you will. We do not try to compete in the rate wars to be the cheapest in the traditional lending game. We focus on providing an array of specialty financing programs–we focus on renovation loans, manufactured homes, and construction-topermanent or “one-time close” financing. And we’ve grown, actually, by doing that. Rather than competing with megabanks for a share of the standard 15- and 30-year fixed rate mortgage market, wholesale lenders can differentiate themselves by specializing in specialty loans. Being able to guide each and every borrow toward the right specialty program for their particular situation, and match them with the best lender to entrust their specific financing, can provide growth opportunities in new markets. Renovation, manufactured housing and one-time close (OTC) are among the more challenging lending specialties. Each with diverse delivery options including FHA, VA, USDA, Fannie Mae and Freddie Mac. With insufficient inventory of traditional stick-built singlefamily homes expected to persist, the nation is experiencing a dramatic increase in manufactured housing, for example. Fortunately, we are also seeing an increase in financing options especially suited for the purchase of manufactured homes. In addition to offering a variety of specialized loan programs, we also provide tools to help Mortgage Originators be prepared and confident in their day-to-day operations. Empowering partners with product Webinars and white-labeled marketing materials for borrowers is needed, of course, but providing convenient access to educational resources and technology solutions for today’s fastpaced environment is vital to grow as a niche lender.

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Kristy Fercho: At Flagstar, we have a commitment to emerging markets, especially in Detroit and a city near our corporate headquarters, Pontiac, Mich. Our efforts fall in three categories: Product Development, Community Outreach/Engagement and Business Development. In terms of product development, we developed a portfolio product that allows a credit score of 600 and no PMI to help lowto moderate-income and minority borrowers become homeowners. The product was created for the Detroit Land Bank, but has traveled well to other communities. We responded to the need to address the appraisal gap in cities such as Detroit and Pontiac with special loan programs that provide financing to purchase and renovate properties that would not qualify for mortgage financing under traditional guidelines. In the community outreach department, we are working with our Employee Resource Groups to help identify communities and emerging markets where we can offer our products and services. We hired a CRA Loan Officer to focus primarily on emerging markets, including low- to moderateincome borrowers in underserved and distressed communities. We increased marketing of our products in predominately minority and low- to moderateincome communities, using vehicles like billboards, and local and neighborhood publications to reach our target market. We are also implementing a community impact initiative where we identify underserved communities to create collaboratives that address community development issues, such as affordable housing, small business financing and financial literacy. The premise of the

Marcia Davies: MBA’s focus is providing an open, transparent market its members, of all different sizes and business models, to compete for business and innovate to cut costs. Our number one priority remains GSE Reform. We’re pushing for necessary legislative changes, and pushing to ensure the administration locks in some of the operational changes that have already done so much to level the playing field. We are focused on technological innovation, the digital mortgage, blockchain, remote online notarization, and other improvements that will cut costs and enhance the user experience of borrowers. We’re focused on the health of the overall real estate finance ecosystem, including in commercial and multifamily. We are helping members focus on new strategic markets by sharing best practices through our diversity and inclusion efforts, highlighting successful programs with our annual awards program, and producing other practical advice to share directly with CEOs and other C-Suite leaders. Expanding our efforts to serve the current rising generation of Americans, the most diverse in American history, is the absolute future of the industry. Only the firms working on this deliberately and intentionally will succeed.

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What are you doing to support lenders as they reach out to and attract homebuyers in emerging markets? Mary Aston: Angel Oak is a leading originator of proprietary products aimed at helping homebuyers achieve the dream of homeownership. Our products are fully documented, but use real world documentation for emerging market homebuyers. One example is a bank statement loan that is used to verify both assets and income. This product serves homebuyers who can demonstrate steady cash flow, but do not meet the restrictive income documentation requirements of the GSEs. We offer these products through our retail, wholesale and correspondent channels to have the broadest impact. Since Angel Oak is the investor, we control the product requirements to provide the best experience to the homebuyer.

initiative is to collaborate with community organizations, government and residents to coordinate and leverage financial and human resources to accelerate economic development in distressed areas. And finally, in terms of business development, we work with minority depository institutions by responding to their need for long-term deposits and technical assistance through Flagstar’s participation in the OCC’s Minority Depository Institutions initiative. Last year, we invested deposits in two minority banks, and we plan to expand our investments in 2019 to women-owned financial institutions.

National Mortgage Professional Magazine Presents …

Mortgage Banking’s Most Powerful Women Roundtable Discussion Sarah White: Class Appraisal is known for providing stellar levels of customer service while getting appraisals done accurately and on time. Couple that with in-house quality control staff and certified appraisers, and we are designed to take the burden of managing compliant appraisals off the hands of the lender. This model has served the company well for the past nine years, realizing steady growth year-over-year. The way we plan to go to the next level is by adding strategic technology solutions that improve the appraisal experience for both our clients and appraisers. By innovating and creating an appraisal process that enables faster, more transparent appraisals, our clients will realize lower costs, and we will be able to scale to even greater heights. Melinda Wilner: A dedication to innovation, collaboration and being nimble are more of a philosophy than a business model, but that’s how we operate at UWM, and that would go a long way in helping any mortgage company be successful. We take great care of our team members, and our business is incredibly client-focused and relationship-driven. From the standpoint of making high-level, strategic decisions on how to run our business, we’re constantly asking for feedback and ideas from our team members and our Mortgage Broker clients, so the company is always finding better ways to do things. We have a relentless desire to get better every day and our team members are encouraged to innovate and put their ideas into motion. Ideas without implementation ultimately don’t accomplish anything. The key is to be nimble enough to put ideas into action and make necessary changes in real-time. We make it a point to listen to our clients’ needs and adapt our business accordingly, and that’s why we’ve been so successful.

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Barbara Yolles: I can’t give you our secret sauce, but you can watch the link at https://TheMoneySource.com/Happinest. Do you think larger or smaller firms have the potential for greater growth in 2019? Ginger Bell: I believe that the Independent Originator will have the potential for greatest growth in 2019. People want to work with someone local. They may begin their search online, but ultimately, they prefer to work with someone local in their market and the Independent Originator offers just that. Many Originators went to the safety of larger companies, like net branches, when everything changed in 2009-2010, but today, they are wanting their independence back. Smaller companies stand to gain if they position themselves as experts in their field and build educational programs around what they do. I call it “edumarketing.” Consumers are searching for information and Millennials especially want to be educated. That is usually their number one complaint, is not understanding the process. Expert positioning, educating and follow up programs are what companies should be focusing on right now to build their business. Laura Brandao: Given the current environment, smaller firms definitely have the greater growth potential going into 2019. The smaller, locally-centralized, relationship-driven lenders who are welleducated in a broad menu of loan programs have the greatest potential. When the market is driving a refi boom when homeowners are shopping around for low interest rates, the Internet works great because there is not a lot of hand-holding required. But in a 70 percent purchase market like we have now, with limited inventory, homebuyers want a local partner to help them look for the best program for their family. Consumers want a personal coach who is not only familiar with their marketplace, but who can be a partner to help identify different loan options, and can help them make the strongest offer and realize their dream of homeownership. Marcia Davies: The firms that will grow in 2019 are the firms that will be best-positioned to compete for purchase originations. As volume

declines from the refinance market drying up, lenders of all sizes will be faced with increasing costs per loan that really could impact profits. MBA’s Quarterly Performance Report, which surveys Independent Mortgage Banks (IMBs), shows that that we just experienced the weakest second quarter since the report began in 2008. Net production income per loan was at $580, up from a reported loss of $118 per loan in the first quarter. Cost-cutting measures taken on by IMBs saved more than $1,000 per loan in production expenses compared to the first quarter, but production revenues declined sharply because of increasing competition. Data from MBA’s Peer Group Roundtables show depository firms aren’t faring better. Ultimately, there is less potential business in 2019 than there has been the past few years, and the firms that are best positioned to take the business will fare well. Joyce Wilkins Pollison: Currently, margins are tight and potential for growth appears to be tied to resources. In this age of digital technology and the growth of fintech, bearing in mind the techsavvy Millennial audience, it is the investment of capital in new technology that will give a firm an advantage over competitors. In this regard, it would appear that larger firms may have the advantage, not only in terms of a larger budget, but also in terms of other resources to develop platforms, such as larger IT teams and compliance personnel. What do you feel will be the big breakthrough product in the industry in 2019? Mary Aston: The non-QM space is where the most innovation is being achieved. Angel Oak and its competitors in the non-QM space provide product alternatives for the significant portion of homebuyers who don’t meet the ‘traditional’ homebuyer preferred by the GSEs. Christine Beckwith: Non-QM and renovation/builder products are going to take front and center stage in a market that is reemerging, riddled with inventory issues and with still a strengthening economy that is slowly rising interest rates. These are all signs of growth, but growth that will test our MLO’s patience, time, long-term business plans and ability to fish with a different bait. They will need these niche products to serve the clients finding the homes in dire need of repair, home improvements, new developments and construction, as well as outlier product guidelines. Kristy Fercho: I see four key products that will be instrumental in the industry in 2019. First, non-agency. More than 80 percent of all loans today are still Fannie/Freddie/FHA/VA. However, with an open question on the future structure of Fannie/Freddie, there’s been more action in the non-agency sector, particularly on higher balance loans in certain high-cost markets. Since the housing crisis, large banks doing jumbo loans for their own portfolios have accounted for the majority of non-agency lending. Recently, though, we’ve seen an increase in securitizations focusing on a combination of non-agency and high-balance agency loans where execution is better versus direct sale. Flagstar has completed five RMBS deals this year, and we plan on expanding our program. Second, non-QM. This isn’t the loose lending of the crisis. This is A-quality with non-traditional credit that still meets the ability-torepay standards. There is a right way to do this business and truly get borrowers who are locked out of the market off the sidelines. Third, new construction. The need for housing should lead to a higher demand for new construction loans. At Flagstar, we have a suite of construction-to-permanent loans which allow borrowers to build a new home and transition to their permanent end loan with one closing. And finally HELOCs. With home values increasing, borrowers want to tap their equity for a number of reasons such as home improvement, college tuition, etc., but they don’t want to refinance their existing low-interest-rate first mortgage. This group is finding the flexibility of an equity line of credit an attractive option.

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Mortgage Banking’s Most Powerful Women Roundtable Discussion Melinda Wilner: I don’t know if there will be an actual product, like the next ARM, fixed-rate or non-QM product, that is going to be a major breakthrough in the industry next year. I think the big breakthrough or enhancement will be related to the digitization of the mortgage process, in terms of new ways to take applications, simplifying closings, or other ways of making the process easier for borrowers and mortgage brokers. Sue Woodard: I don’t know if there’s a single Holy Grail product that will shake the foundation of what we do in 2019, and that is sort of how I feel LOs should mentally prepare: don’t let your business foundation prevent innovation; don’t let innovation overrun your business foundation. What I mean by that is with every new facet you bring into your workflow, you must think carefully about how the product helps your day-to-day and whether it “plays nice” with your other systems and processes. Would a compliance rollback or regulatory tightening suddenly leave you with tons of manual work? Does the product easily align across all your efforts? Does this new product bolster a

great customer experience, or consumer trust in your brand? While I don’t think there’s only one big breakthrough product, I do believe that there is one emerging technology that will have a very positive impact on the work that lenders do. At Total Expert, we have created the first enterprise-grade Marketing Operating System (MOS) specifically for banks and lenders (and yes, I’m biased!). By aligning marketing, sales and compliance in a single platform, Total Expert’s MOS empowers Loan Officers to grow their marketing and sales efforts while ensuring they stay compliant with complex regulations. In an industry where regulatory directives are constantly evolving and the cost of non-compliance is high, that’s important. Overall, I would say the most important thing when considering new technology solutions in 2019 is finding a partner that strikes the right balance of evolving technologically to improve cost to produce margins while also supporting the specific demands of mortgage lending. We’re in a high-touch industry where borrowers make life-changing decisions—a product that helps foster trust and create customers for life should be a top priority.

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Why Do Rate Shoppers Shop? By Brian Sacks

ne of the biggest frustrations we all have as Loan Officers is the constant bombardment of callers who want to know our rates, points and fees. In this article, I will explain to you why they ask these questions and some strategies you can use to deal with them, and more importantly, drive prospects to you who will not ask this question. Whether you realize it or not, we are selling money and have become a commodity, very much like the insurance, automobile and other commodity-type businesses. Look around at your newspapers, listen to the TV and radio commercials, and open your mail every day and you will see numerous ads for mortgages. Just the other day, I was walking by an H & R Block office and saw a big ad in their window for mortgages. If you ever have a chance to drive up I-95, you will see sign after sign offering mortgage loans with some actually having the rates on them in lights. It’s no wonder that when a buyer calls you, the only question they know to ask is: “What are your rates and fees?” There are numerous scripts and detailed ways to handle this question; however, I would like to devote this article to attracting buyers who never ask this question to begin with. While I travel the country speaking and training Loan Officers, I always ask the question: “What do you do for a living?” The common responses are: “I am a Loan Officer,” “I lend people money to buy a

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home,” “I help people achieve their dream of homeownership,” etc. If you were to ask me what I do for a living, my response would be, “I help buyers who have had a bankruptcy or other credit issue get into a home with very little money down and low single-digit rates.” This illustrates one of the keys to attracting serious clients instead of simply rate shoppers. The key of course is to pick a niche and become known as the expert. Take a minute to think about this. Suppose you have a toothache and are advised by your dentist to go to an oral surgeon as soon as possible. Now remember you are in a lot of pain, so you have a problem and need to get it solved immediately. I would guess that you are expecting to pay more for the services of the oral surgeon than the dentist. I would also guess that you are not going to call three oral surgeons and try to find the one who charges the least or expect to meet that oral surgeon on Sunday afternoon or Wednesday evening at 8:30 p.m. Instead of being a generalist, you must strive to pick an area where people have a problem and need your help to solve it. Some of these niches could be construction loans, reverse mortgages, alt-doc loans and renovation loans. You also may be able to work with first-time buyers who can take advantage of local grant products. One of the other responses I hear from Loan Officers is that they provide excellent service and that is what sets them apart from everyone else. Honestly, people do not know if your service is good or bad until after the transaction closes. Good service is expected or

you should not be in this servicerelated business. Going above and beyond with excellent service and over-delivering and underpromising are the things that will provide you with referrals. When you go to buy a car and the salesman says we have the highest ratings around for our service department. Do you really care, or are you more focused on the bottom line price of the vehicle? Staying with this idea for a moment longer think about what happened when Volkswagen came out with the new Bug or Acura came out with their new SUV? These cars where in such demand that when you went to the dealership, the salesman came out with a clipboard and said, “You can put your name on the waiting list with a $1,000 nonrefundable deposit.” “Your car should be in within the next three months.” “Oh, by the way, we cannot guarantee you the color you want.” Well people did give their deposits and waited for these cars. More importantly, there was no negotiation and people were actually buying these cars for over the list price. When you are a specialist with the ability to

solve someone’s problem than the price issue disappears. To illustrate this point further with an example from my recent past, I will share a story with you that happened with my daughter. She needed to have surgery on her ankles. So, like good parents, we set out to find the best doctor for the job. What we found was an orthopedic, pediatric surgeon who’s specialty was ankles. Did we shop his price? Did we take off work to meet him? Did we travel 90 minutes each way to his office? Now I know you are saying this really isn’t a good example because insurance paid for it. Well, I am here to tell you that the insurance only covered a small portion because we went out of network and had to pay a considerable sum out of pocket. Even if we had to pay 100 percent out of pocket, there really was no other choice in our minds. So start by picking your niche, becoming the expert and letting everyone know about it. You will soon start getting calls from applicants interested in having you solve their problems, instead of rate shoppers who will only waste your time.

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 and learn more about the Top Originator Mastermind at TopOriginatorMastermind.com/MNN.

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Financing the Financial Invisible Borrower Having no credit score is not the same as having a low credit score By Tom Gillen

Search for quality The trick for savvy Loan Officers (with the backing of a shrewd lender) is to identify these highquality, no-score borrowers and help them secure the rates and terms their strong credit backgrounds deserve. There are three strong indicators to look for in a low-risk, no-score borrower: l Low debt to income (DTI) ratio: The typical mortgage loan goes to a borrower with a 28 percent loan to income ratio and a 36 percent total DTI, which includes all of that borrower’s monthly debts. Here is the rub, though, high-quality, no-score borrowers have zero debt, so their loan to income ratio and DTI are the same. A good benchmark for these types of borrowers is a 25 percent loan to income ratio, which is still three percentage points below the 28 percent on standard, prime loans.

l High cash reserves: These individuals are great savers. Often, as soon as they paid off their last mortgage, they started putting that monthly payment into savings, so these borrowers typically have quite large financial reserves. A strong parameter for minimum reserves on these borrowers is about 20 months of payments. If a borrower has saved up nearly two years of payments, that loan is a pretty safe bet. Many of these borrowers actually have upward of 70 to 80 months of reserves in the bank, but this is on the outer end of the spectrum. l Strong pre-financial-peace credit history: The final parameter to look for in a highquality, no-score borrower is a strong credit history in the years before they paid off all their debts. So, when you pull a credit report, even though there’s no score, look to see that the borrower had a mortgage prior to 2015 and paid it off. Check for car payments and credit card payments made on time before paying them off. If they were a good risk then, chances are, they are a good risk now. Using these three parameters helps identify the strong no-score borrowers, so you, as a loan officer, can give them all the preferences that should be available to high-quality borrowers.

Risk and reward Of course, there is still a certain level of risk that comes with writing mortgage loans for these high-quality, no-score borrowers. If the loans do not pass through Fannie Mae’s or Freddie Mac’s automated underwriting systems and end up being manually underwritten instead, the GSEs will charge a 3.25 percent fee to account for the added risk. If that loan then defaults, the GSEs will very likely require a buyback of the loan. The fee is a bigger issue than the potential of a buyback. Keep in mind, these are high-quality borrowers who have paid off all their debts in the past. They are much more likely to pay off this mortgage than the average borrower—and potentially pay if off early. As for the fee, most lenders will likely try to pass that on to borrowers, but at that point they are really no better off than if they had a low FICO score to begin with. Instead, lenders should reward borrowers for their intelligent use of credit and try to avoid pushing such additional costs onto the borrower–which further entices them to bring all future financing needs to that company. Who doesn’t want high-quality borrowers like these returning in the future, not to mention referring their friends and family. As a lender it makes sense to reward clients for being debt free instead of punishing them for it.

Tom Gillen is Senior Vice President of Capital Markets for Churchill Mortgage. He brings more than 20 years of experience as a financial services executive, with expertise in business development, product innovation and organizational leadership. For more information, visit ChurchillMortgage.com or follow the company on Twitter @ChurchillMtg, LinkedIn at LinkedIn.com/Company/Churchill-Mortgage and Facebook at Facebook.com/ChurchillMortgage.

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The price of financial peace There is a growing trend in this country to revisit the “Financial Peace” that Millennials seem to naturally trend toward. These are not necessarily Millennials, but can be consumers who have used credit in the past—and did so responsibly—but for whatever reason have decided transition to a debt-free lifestyle. Subsequently, a large number of these financial peace-inclined individuals paid off their mortgages, car loans and credit cards years ago and have been paying for everything in cash ever since. So, after not making installment payments on any revolving debt accounts for sometimes as few as six months, their FICO score disappears shortly after. This quite literally makes them no-score borrowers. Unlike many millennials who

have no credit score because they tend to be inexperienced credit users and have literally never bought anything on credit, those achieving financial peace are very experienced with credit and are thus highly qualified to borrow again. They are so experienced with credit, in fact, that they eliminated their use of it entirely. But look at what happens when these highly qualified borrowers find they need or want a mortgage again. If these “Financial Invisibles” decide to pursue a mortgage or loan, they often find their lack of a credit score lumps them in with all those Millennials who are just starting out in their homebuying careers, or worse, with all those borrowers who have low credit scores due to their misuse of credit. Either way, they are typically looking at mortgage terms consistent with low-FICO score borrowers.

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y some estimates, as many as 45 million adults in the United States have no FICO credit score. At first glance, this may seem like a huge untapped market, but it is important to understand that a large portion of these so-called “Financial Invisibles” are Millennials who have avoided credit throughout most of their young lives, for a variety of reasons. In fact, according to a Bankrate study a few years ago, about 63 percent of young people aged 18 to 29 did not own a single credit card at that time. Not all financial invisibles are equal, however. In many cases, having no credit score can be far different that having a low credit score—even though many Loan Officers and mortgage lenders tend to paint both groups with the same thick brush. The trick to unlocking this untapped market is to find the diamonds in the rough.

Maintaining a Compliant Ecosystem in a Tech-Driven Market A sit down with Jim Vaca, Senior Vice President of Vendor Management Operations at Altisource

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im Vaca is Senior Vice President of Vendor Management Operations at Altisource, a provider of real estate, mortgage and technology services, where he is responsible for the sourcing and oversight of the company’s extensive network of qualified vendors supporting Altisource’s business units including Servicer Solutions, Origination Solutions, as well as vendors to support internal operations. In 2016, Vaca launched Altisource’s Vendorly offering, a vendor oversight solution targeted for the financial services industry, tailored most specifically for the needs of Mortgage Bankers. National Mortgage Professional Magazine recently interviewed Vaca to get his take on how lenders should approach compliance and risk management in today’s technologydriven market. As SVP of Vendor Management Operations, Vaca is responsible for the sourcing and oversight of Altisource’s network of qualified vendors supporting Altisource’s business units, including Servicer Solutions and Origination Solutions, as well as vendors used to support internal operations. In 2016, Mr. Vaca launched Altisource’s Vendorly offering, an innovative vendor oversight solution targeted for the financial services industry, tailored most specifically for the needs of Mortgage Bankers. Since Vendorly’s launch, Vaca has overseen more than 14,000 vendors added to the platform and has led the business to become a vendor risk management solution for over 90 financial institutions.

How has the proliferation of technology influenced the overall mortgage origination and compliance process? Vaca: The adoption of technology and introduction of new technology, particularly in the mortgage and real estate industry, is moving at a faster pace than the actual regulations can keep up with or adapt to. We have reached the point where vendors who offer technology solutions have to follow the regulatory compliance requirements of their clients’ multiple regulators. Post-financial crisis, with lower volumes, tighter margins and the increased cost of production, thanks in part to the increased regulatory compliance requirements brought about by the Dodd-Frank Act, lenders recognized that outsourcing to technology providers would help them close loans while trying to manage the rising costs of manufacturing a mortgage loan. Notwithstanding the recent passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act,

announcements of data breaches. In their 2017 Annual Data Breach Year-End Review, the Identity Theft Resource Center reported that there were 1,579 total data breaches, compromising approximately 179 million records. That’s 45 percent more breaches than 2016 and this trend isn’t supposed to slow in 2018. This leads into the greater importance of cybersecurity for financial services and their thirdparty vendors. There are three areas worth mentioning: the New York State Department of Financial Services (NYDFS) requirement around cybersecurity, the fact that all 50 states now have an iteration of a data breach notification requirement and that data privacy has officially become a global issue and regulatory concern with the introduction of the General Data Protection Regulation (GDPR). GDPR is focused on the data protection and privacy for all individuals within the European Union. If an originator is processing a loan for a foreign national, there may be concerns that GDPR could have an impact—notwithstanding the fact that U.S. regulators likely will not be far behind in enacting a similar regulation. With that said, increasing cybersecurity continues to be of paramount importance for lenders and solution providers alike.

What are some of the pitfalls of a greater reliance on technology specifically to compliance and third-party risk? Vaca: There is a risk that we could over-rely on technology and go on autopilot. Compliance bots, automated questionnaire scoring, financial risk scoring and cyber risk scoring are all provided in the marketplace. All these factors make it very easy to simply say pass or fail without taking a step back to holistically evaluate the service provider and understand which risk parameters are being impacted. Just like no two loans are the same, every borrower is unique, no two service providers are the same and each one will have different capabilities, presenting different levels of risk. It all goes back to lenders looking at the data on its individual merits and writing the story behind a lending decision. If technology puts your decision-making in a box without the ability to question it or edit it, then there could be a risk. Keeping on the third-party risk track, what red flags are you seeing in the use of technology providers? Vaca: My background in thirdparty risk management (TPRM) has exposed me to many of the large national and not-so-large third-party vendors who serve the mortgage industry. While some are sufficiently buttoned-up, there is no such thing as a perfect vendor. And that’s okay. As a TPRM professional, my role is to highlight risk, mitigate and express those identified risks to executive leadership and the Board of Directors.

At the vendor level, there needs to be a greater education and understanding about adhering to a regulatory compliance framework as well as acknowledgement that, given the risks their operation may present to a lender, any remediation action from audit findings or otherwise will be addressed. Take, for example, the SSAE 18 requirements, which state that a vendor must manage their own vendors. Some vendors may actually outsource some of the services they provide to another vendor. This then becomes a lender’s fourth-party vendor, which is a whole other layer of risk added to the many other risks the lender has to manage and potentially mitigate. From a regulatory compliance perspective, what should we be looking out for as far as regulations impacting technology providers? Vaca: Over the past decade, financial service providers have come to understand that thirdparty oversight is of paramount importance and should not be taken lightly. Third-party oversight needs to be backed by policy, procedure, documentation and proof of operationalization. The CFPB’s regulation supports this exact expectation from service providers to the financial services industry. Additionally, while the bite of the CFPB may have diminished somewhat under the new leadership of Acting Director Mick Mulvaney, who started in 2017, the bureau did announce that they intend to perform vendor due diligence on third-party technology providers to better understand their role and potential impact to the consumer. It would not be surprising if other regulators follow suit and come to expect a multifaceted vendor oversight program is in place for key service providers to the industry. To help implement a multifaceted vendor oversight program, we should be looking to RegTech SaaS-based solutions that have led the way in bringing experience, efficiency and control to the process, which many financial institutions have adopted. It’s time the industry’s key technology service providers do the same or, at a minimum, review data breach notification laws, their information regarding security policy and procedures, and the NYDFS Cybersecurity Regulation as well as have a strong grasp on the standards under which the vendors they utilize are operating.

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Is technology a threat to the human factor in the loan manufacturing process? Vaca: We have to acknowledge that technology isn’t going away. From experience, I have used an online lender in which document uploads and SMS text messaging were the primary communication routes, and I absolutely preferred it from a consumer point of view. While easy and efficient, a mortgage is one of the largest financial decisions a consumer will navigate and, in my opinion, lenders should, and need to, provide a human touch. To provide this all-inclusive customer service, there has to be a voice at the end of the line—i.e., an expert to explain the nuances of why the closing disclosure has XYZ detail or perhaps why the appraisal value didn’t come in as expected. Technology cannot currently fill that void. While human interaction may not be going away, technology is still essential. In this competitive market, we do not have shortage of lenders who promote how fast they can close a purchase loan. In lending, it is win or fail by the turn times and quality of service, so

leveraging technology to get documents sent to underwriting on time can make the difference between hitting key dates within the purchase and sale agreement or otherwise losing the customer. Technology, used properly, also helps make an organization more efficient and allows loan officers and operations staff to focus on customer service. Having a wellinformed loan officer to explain the loan estimate or various closing disclosure documents does not lend itself well to technology automation although artificial intelligence is making significant strides in this regard, too. In 10 years, it will be interesting to see where, as an industry, we have landed, but for now and the foreseeable future, technology will help streamline the loan process and help staff work in a more efficient manner but not replace them on a one-to-one ratio.

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regulators’ expectations still remain high. Technology providers brought to market systems that now automate simple procedures and calculations to help move loans along the production line. As an industry, we are all interested in making the internal and external process as frictionless as possible for the consumer. The industry has come a long way since the financial crisis and many regulatory agencies such as the OCC, FDIC, FFIEC, and CFPB have all acknowledged that financial services firms have outsourced many key functions of the traditional mortgage lender. From the regulatory perspective, as well as the concern about consumer harm in financial services, there is an overarching pain point centered on data privacy. Considering the amount of consumer nonpublic personal information (NPI) data shared with third-party technology providers, the growing concern is simply described as “Who has access to data and what are the ramifications of a breach.” Often, it is assumed that a data breach is centered around a hacker located halfway around the world, but, in truth, data breaches may likely be caused by internal staff just as much as the bad actors who are trying to obtain the vast amount of private financial and identity-related information sitting on various institutions’ systems or in the cloud. One of the main influencers of technology and mortgage origination is that of the smartphone—our digital footprint is literally captured on a device that is no bigger than a pocket calculator. June 29, 2018 marked 11 years after the first iPhone release, and while the features and functionality of the first iPhone now look dated, it set the financial services and online retail industry on a blazing trail of new means to conduct business. Overall, the mortgage industry has been a little behind adopting technology in ways that other industries have, but we are witnessing the snowball effect as more companies recognize the value-add of greater efficiencies. There is also an increased demand for technology-driven solutions from tech-savvy consumers—not just millennials, by the way—and we are seeing sectors like lending continue to adapt to meet the needs of the modern-day customer. From a compliance and risk perspective, we cannot ignore that privacy standards are at a premium given the propensity and regular news breaking

a special focus on THE FUTURE OF MORTGAGE BANKING special focus on THE FUTURE

The Future of Mortgage Banking No Contest: Why LO’s Can Win Big by Switching From Retail to Wholesale ortgage Brokers are the future of the residential origination business. They are the best option for a borrower to get a mortgage, the best partner for a Real Estate Agent, and broker shops are the best place for a Loan Originator to work. With those three things in mind, you’d have to wonder why everybody isn’t getting a mortgage through a Mortgage Broker. It wasn’t long ago that most people did. In 2006, more than half of borrowers looking to refinance or purchase a home went through wholesale Mortgage Brokers. But after the mortgage crisis, everything changed. Big lenders that had a voice tried to blame Brokers, who then fell to less than 10 percent market share. Even as Mortgage Brokers started to make a comeback in recent years, the doubters thought they would fail. But here’s the thing—all of the changes within the mortgage industry postcrisis were designed to help consumers. And what’s best for consumers? Mortgage Brokers. The changes made by the CFPB actually helped Mortgage Brokers succeed and differentiate themselves. Still, the doubters said Brokers can’t compete: “They can’t handle compliance, they don’t have the technology, and they don’t have the marketing capabilities.” But the doubters didn’t bet on lenders supporting Mortgage Brokers with compliance, IT, marketing and technology. With those resources in place, there has never been a better time for Loan Originators to make the switch from retail to wholesale.

Better rates, better comp When it comes down to dollars and cents, wholesale makes the most sense.

Independent Mortgage Brokers have access to better rates than retail Loan Officers because they can shop around on behalf of their borrowers. Because Mortgage Brokers have relationships with several lenders, they can pair borrowers with programs and low rates that fit their specific need. Then there’s the issue of compensation. When margins are tight, big banks and megaretail lenders respond by reducing their Loan Officers’ compensation. It’s an unfortunate reality of the retail business. The good news is that Independent Mortgage Brokers aren’t susceptible to this. Broker-Owners can set compensation at desired levels and pay their Loan Officers more because the coststructure of wholesale is cheaper. Mortgage Brokers don’t need to have an underwriter, a closer, a marketing team or a compliance expert on their payroll. Wholesale lenders can take care of that for them. It all adds up to more money in the pocket of the Independent Mortgage Broker and their Loan Originators. More options equals more business The mortgage process is not a ‘one-size-fitsall’ experience. It’s different for every homebuyer or homeowner because everyone has a different set of financial circumstances. Loan Officers at Mortgage Broker shops have an advantage over those at big banks and mega-retail lenders because they have access to hundreds of lending options. LO’s on the retail side are limited to the products, prices, and programs they have in-house. On the other hand, Mortgage Brokers have access to dozens of lenders, which gives them the ability to offer more options when it comes to product lines to their borrowers and buyers. When you have more products, you continued on page 80

By Mat Ishbia

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no contest

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have the flexibility to match clients with the right lender, program, price and guidelines for their specific needs. This means Brokers can help more consumers, give them a better deal than they would get in retail, and have a better chance of getting their clients approved for a mortgage. Having options as a Loan Officer is a big deal. Wholesale clearly gives Loan Officers more choices when it comes to pairing clients with the best mortgage that fits their individual situation. Holding lenders accountable Being independent gives Brokers the flexibility to actually work for their clients, and not be tied to just one lender—their employer. In wholesale, Brokers can hold lenders accountable for turn times, pricing, technology, and so much more. Since Mortgage

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Brokers have more options when it comes to where to send their loans, lenders have to deliver results or it will cost them business. Wholesale lenders have to earn their business on every single loan. If they don’t, Brokers can just move on to another lender for the next loan. In retail, Loan Officers are tied to the same lender, so if rates are high or turn times are long, business could be lost. The accountability factor on the wholesale side is a win for the Independent Mortgage Broker and for their clients. Opportunity through independence There’s always a bit of uncertainty that comes with going out on your own in business. But for retail Loan Originators who truly want to invest in their future, becoming a Mortgage Broker is well worth it. Fact is, it can be better–much

better–than what they currently have in retail. Becoming a Mortgage Broker provides retail Loan Originators the opportunity to be their own boss, the flexibility to make their own hours, and gives them the opportunity to generate new business through referrals. This type of independence is something that Loan Originators simply cannot find in the retail world. While becoming an Independent Mortgage Broker means going out on your own, you’re not doing it alone. There are lenders out there who support Loan Officers by making the transition simple and easy to the wholesale side and also give them access to tools, marketing and resources to succeed once they’re up and running. Busting old myths about mortgage brokers There are plenty of people out there using tactics to scare Loan Originators away from the wholesale channel. Being on the Broker side, compliance is too complex. You have to come up with a huge monetary investment to even get into it. That’s the old and outdated way of thinking when it comes to wholesale. Everything is different now. By partnering with wholesale lenders that handle loan-level compliance and table-funding of the transaction, Mortgage Brokers have the support system in place that they need. This allows Broker/Owners to focus on running and growing their business. Retail Loan Officers may think that they’ll lose control over the process if they become Brokers and have to depend on somebody else’s underwriting, process, turn times, etc. The truth is that Independent Mortgage Brokers can actually provide better service by partnering with wholesale lenders. By assisting clients in selecting the best mortgage for their individual situation, Mortgage Brokers are setting up

borrowers for a smoother loan process. Wholesale lenders offer tools that provide transparency for brokers, their borrowers, and their real estate partners. Mortgage Brokers know exactly what the turn times are with the wholesale lenders they work with. This gives Brokers the ability to tell everyone associated with the loan what’s going on at every step of the loan process. Better technology means a better process Wholesale lenders are nimble and so are the Brokers who partner with them. In an industry where change is inevitable, it’s important for Loan Originators to be able to adapt while continuing to deliver elite service to all of their clients. The best way to accomplish that is through a fast and smooth process. By partnering with a wholesale lender who has cutting-edge technology, Brokers have the upper hand because they have access to the best process without having to build or pay for the tools themselves. This is especially important as the industry shifts more towards an all-digital mortgage experience. Borrowers want the speed, convenience, and transparency that technology has to offer. Mortgage Brokers can deliver it. In an ever-changing marketplace, Loan Originators need to ask themselves how they can best position themselves for success now and in the future. With the best technology, partnership tools, and process at their fingertips, Independent Mortgage Brokers can provide the best experience for borrowers. The comeback story of the Broker is just beginning. You can be a part of it by making the transition from retail to wholesale. The only question now is, what are you waiting for?

Mat Ishbia is President and Chief Executive Officer of United Wholesale Mortgage (UWM). One of the nation’s leading advocates for Mortgage Brokers, Mat has changed the lending platform, turning UWM into a $29 billion company and the top wholesale lender in the country.

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The strength of what we do every day for millions of Americans and our nation’s economy lies not with each of us, but with all of us as we unite as a collective group. Together, we are able to amplify our voice and drive change for our industry in Washington and across the nation. We lead strong as one. United, we create the future of our industry.

TO LEARN MORE, VISIT MBA.ORG/BELIEVE 19456

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From single-family to commercial and multifamily; from loan originators to investors, we are the force that ensures a safe and sustainable real estate ﬁnance system.

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WE BELIEVE …Unity is our strength.

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Get the Gig and the House Mortgage financing solutions are here for part-time and gig-economy workers

art-time employment reached an all-time high in 2013, and it remains high as more people participate in the “gig” economy.1 According to research from Intuit, gig workers made up roughly 34 percent of the labor force in 2017, and that number is expected to increase to as high as 43 percent by 2020.2 Although some people are looking for fulltime work, many have deliberately chosen the variety and flexibility of part-time and contract jobs. Without the standard paystubs and W-2s that come with full-time employment, these borrowers can often be hard-pressed to qualify for a home loan, despite meeting income requirements or having quality credit. But there’s hope for these potential homebuyers. Both Fannie Mae and Freddie Mac are examining what it would mean to have credit be more accessible for self-employed and gig workers. Earlier this year, Fannie Mae surveyed lending executives and found that 95 percent reported that using gig income to approve applications is difficult under current guidelines. Freddie Mac, as part of its “Borrower of the Future” campaign, is studying automated ways to validate nonstandard income sources.3 And the mortgage giants aren’t the only ones looking at the issue. Recently, the bipartisan “SelfEmployed Mortgage Access Act” was put forth by Sens. Mark Warner (D-VA) and Mike Rounds (R-SD). This bill would allow lenders to verify borrowers’ income using non-W-2 documentation, helping borrowers with non-traditional forms of income more easily qualify for a mortgage.4 However, all of these are just possibilities in the future and are centered around conventional mortgage products.

For mortgage professionals working with investors, alternative mortgage programs are also available. For investment properties, some lenders offer programs that don’t require any traditional income documents. Instead, the lender simply requires the subject property’s rents exceed the monthly mortgage payment, so a simple rental agreement or appraiser’s rental survey is all they need to qualify.

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Documents, documents, documents Although many consider Millennials to be the driving force behind the gig economy, these workers do cross generational

By Ray Brousseau

“The kind of documentation requirements prescribed by qualified or conventional mortgages are often the first problem for gig workers seeking a home mortgage. Many lenders are hesitant to lend to borrowers whose income isn’t easily verified or steadily reproduced year after year.” lines, and encompass Millennials, who are often looking for flexibility in the early years of their career, as well as older workers who want to supplement their income or take control of their careers. The main issue with this work is the kind of variable income it can produce. The kind of documentation requirements prescribed by qualified or conventional mortgages are often the first problem for gig workers seeking a home mortgage. Many lenders are hesitant to lend to borrowers whose income isn’t easily verified or steadily reproduced year after year. Because these borrowers don’t fit into the conventional credit profile—despite being creditworthy—they have been forced to sit on the sidelines of the housing market. Solutions are at hand Fortunately, there are solutions available for those who want to buy a home now. Some lenders

have expanded their offerings to better serve those with alternative employment, and the alternative documentation that comes with it. Although these are nonconventional mortgages, they represent a welcome path to homeownership for the growing number of self-employed and gigeconomy workers. Potential homebuyers whose income sources include work as an independent contractor or gig work like driving Lyft or Uber don’t have the kind of documentation conventional lenders require. Lenders offering alternative mortgages will still want documentation, but they are willing to accept income validation from sources other than a W-2. Some lenders will ask for bank statements going back 12 or 24 months for self-employed borrowers. Borrowers who do earn traditional wages (even if only part-time) can expect to provide any applicable W-2 forms and at least one year of tax returns.

Credit issues These types of alternative loans can not only help borrowers with documentation issues, they can also help borrowers who may have a ding or two on their credit report. Because these loans are often manually underwritten, lenders have the ability to look at the whole of a borrower’s financial profile—not just the score on their credit report. With a wider range of mortgage options available from lenders lending outside the conventional mortgage box, borrowers with a poor credit history, a foreclosure or bankruptcy in their recent past, or higher debt ratios, may now qualify for financing. But because borrowers with these issues represent additional risk, lenders often will have different loan guidelines to compensate. They will likely limit loan-to-value ratios, so borrowers should be prepared for what that will mean. In purchase scenarios, borrowers may need to come up with additional funds for their down payment to qualify. For refinances, borrowers will need to have sufficient equity to meet those ratios. In addition, lenders may have lower debt-to-income ratios for these borrowers in certain circumstances, and if excessive debts are an issue, some borrowers may not qualify. Again, mortgage lenders who offer these products will often be looking at the entirety of the borrower’s credit profile to ensure responsible lending practices. If borrowers have credit problems, lenders will want to see that the events or situations that caused any credit issues have been resolved. Any financial mismanagement that continues to impact recent credit history may

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loans, but also the different mindset required for working with borrowers with documentation or credit challenges. Mortgage Brokers and originators need to understand how to look at borrowers with credit challenges differently. Some may think borrowers with a few late mortgage payments or a recent bankruptcy simply wonâ&#x20AC;&#x2122;t qualify for a loan. Or they may think the rates on an alternative loan are too high to make it worthwhile for the borrower. But by learning about these loan programs and the options they provide for borrowers who have been sidelined by credit issues or their income sources, mortgage professionals will find they can get borrowers qualified with rate options that provide significant benefits. Itâ&#x20AC;&#x2122;s important to set expectations on both sides of the transaction, however. Mortgage professionals should prepare their clients and themselves for the additional documentation, time and cost that often accompanies alternative mortgages.

demonstrate the borrower is not ready for homeownership or take on a larger mortgage to get cash out refi. Because allowing for credit issues and alternative documentation represents additional risk for lenders, borrowers can expect some additional cost, depending on their credit situation. For borrowers with significant credit issues, including late payments and a recent foreclosure or bankruptcy, the interest rate is often about 2.5 to 3.0 percentage points higher than a Federal Housing Administration (FHA) loan or conforming conventional loan. Borrowers with a more favorable credit history, however, may see better pricing, with interest rates just 1.0 to 1.5 points higher than FHA or conventional loans. Expectations for brokers and borrowers For mortgage professionals just starting to work with alternativedocumentation loans, they must learn not only the different requirements of these kinds of

As part-time and gig work continues to increase, the mortgage industry must be prepared to include these borrowers in the lending pool. Just as workers in the gig economy represent a different kind of workforce, they also represent a different kind of borrower: one that needs the same kind of flexibility in their lending as they enjoy in their

career. Mortgage professionals who understand the requirements and benefits of alternative lending can help more borrowers get what they need, whether thatâ&#x20AC;&#x2122;s paying down high interest rate debts with the money from a cash-out refinance, or finally getting a first-time homebuyer with some credit challenges into a home they can afford.

Footnotes 1â&#x20AC;&#x201D;https://data.bls.gov/timeseries/LNS12600000 2â&#x20AC;&#x201D;https://money.cnn.com/2017/05/24/news/economy/gig-economy-intuit/index.html 3â&#x20AC;&#x201D;https://www.washingtonpost.com/realestate/mortgage-investors-want-to-make-iteasier-for-gig-economy-workers-to-get-loans/2018/05/29/082e7eb2-634b-11e8-a768ed043e33f1dc_story.html?utm_term=.f2fad3ec947a 4â&#x20AC;&#x201D;https://www.housingwire.com/articles/46630-bipartisan-push-begins-in-senate-toexpand-mortgage-access-for-self-employed-borrowers

As President of Carrington Mortgage Services, Ray Brousseau is responsible for overseeing all aspects of Carringtonâ&#x20AC;&#x2122;s lending and servicing businesses, from origination through fulfillment, as well as servicing operations, for the fast-growing enterprise. Under his leadership, both Carringtonâ&#x20AC;&#x2122;s full-service mortgage lending business with wholesale, retail and centralized sales and operations, as well as its high-touch specialty servicing businesses have experienced unprecedented growth and operational results. Ray has nearly 35 years of experience in the mortgage banking and consumer finance industry. 83

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Predictions and Insights on the 2019 Housing Market By Stanley C. Middleman

he mortgage landscape is experiencing dramatic changes right now—and there are many more to come. The good news is there are plenty of reasons to feel good about today’s housing market. Unemployment is at record lows, wages are up, home values continue to climb and demand for housing remains strong. Cash-out refinance and non-QM loan volumes are growing. Homebuilder confidence is high and the homeownership rate continues to rise. All that being said, the market faces significant challenges. Interest rates are nearing the five percent level for the first time in years and refi activity is at the lowest level since 2000. Housing inventory remains anemic and there are not enough new homes being built to meet buyer demand. Mortgage applications have been dropping all summer long, and the Mortgage Bankers Association (MBA) has revised its forecast for next year to reflect what we all know–the housing market is slowing down. Yes, we will see some dramatic changes to the mortgage industry. And yes, companies will go out of business and no doubt more mortgage professionals will be looking for other forms of work. However, despite the challenges the industry faced this year, and some bumps in the road that still remain, I remain bullish on the mortgage market as I see a very encouraging environment taking shape.

and supply cycle. More homes need to be built and I believe they will. Builder confidence is strong. The NAHB’s homebuilder confidence index is currently at 68, and the National Association of Home Builders (NAHB) expects single-family home construction to grow by seven percent in 2019 and five percent in 2020. It’s decreasing growth, but it still is growth. And as jobs grow in the construction sector, we will see higher wages and more jobs among skilled and unskilled laborers, which will further fuel the demand for housing as well as the overall economy.

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The economy In today’s housing market, there are a number of challenges to point to. Housing inventories are low, which is holding back sales. Home values have fully recovered since the housing crisis in some areas, but in many markets, the gains have not been so strong that homeowners can profit sufficiently from the sales of their homes to put a deposit on a new home. Rising interest rates are effectively killing off the refi market. And loan production costs are at an all-time high.

“It’s true that refi activity is almost done for–but that’s not the case for cash-out refinancing, which is likely to increase as values continue to rise.”

All summer long, the MBA reported mortgage application volume was dropping. Recently, the group revised its forecasts and now anticipates a total of $1.15 trillion in purchase loans this year, down from $1.19 trillion. If 2018’s number holds, however, it still represents a 3.5 percent jump from last year. From a purchase loan standpoint, it would be the best year since 2006 for purchase loan origination volume. The MBA expects purchase originations to grow more slowly in the years ahead, but its projections of a four percent gain next year and a three percent rise in 2020 are not exactly bad news. Even if the housing market headlines haven’t ignited many cheers, we have plenty of positive economic news taking place. Unemployment is under four percent, the lowest it’s been in 50 years. Wages are up nearly three percent over the past year, and the nation’s GDP grew by 4.2 percent in the second quarter. Inflation is growing, but remains close to the two percent target

the Fed is aiming for. Consumer confidence remains very healthy. And in addition to higher incomes, consumers will benefit when new tax cuts go into effect next year. Demand for housing I believe the MBA’s projections are on track and that we will see the growth in origination volume begin to ebb, but the strong economy will continue to fuel demand for housing. Wages are growing, and when that happens, consumer debt rises, the economy grows and the value of properties goes up. The shortage of inventory will continue to drive up prices further. Even though homes will not become more affordable, housing demand will increase. As values rise, people become more excited about spending their money on an asset that appreciates rather than standing on the sidelines. In fact, while affordability is an issue, rising wages will support higher home prices, and that creates a self-fulfilling demand

Interest rates By the end of next year, the MBA expects the 30-year fixed mortgage rate to hit 5.2 percent, which seems rather shocking compared to recent years. As for rising rates–yes, they make homes less affordable, but as long as wages are rising, increasing rates are not necessarily an impetus or an inhibitor to the buying and selling of homes. Indeed, the homeownership rate has been growing for the past two years, and the current pace of sales points to growth and increased homeownership. We are entering an inverted yield curve environment, which will have a negative impact on liquidity and the economy in general. However, I don’t think it will slow down the growth in housing values. We have full or nearly full employment levels and consumer spending is growing stronger every year, which is driving the economy. Indeed, the increases in interest rates, consumer prices and home values are all signs of a healthy economy. Loan products It’s true that refi activity is almost done for–but that’s not the case for cash-out refinancing, which is likely to increase as values continue to rise. Another reason for optimism is the non-QM market, which has given borrowers with higher incomes the opportunity to discover more options for purchasing a home. I believe this will continue as the credit box expands and non-QM

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loans gain more credibility in the private label securitization market. Currently, the performance of non-QM loans has been excellent.

everything we can to take advantage of the opportunities in front of us.

Stanley C. Middleman is the Founder and Chief Executive Officer of Freedom Mortgage Corporation, a national, fullservice mortgage bank he founded in 1990. Since that time, Middleman has grown the company to become one of the 10 largest mortgage lenders in the country and is a prominent business strategist in the mortgage industry. He is an active member of the Mortgage Bankers Association (MBA) where he serves on the Residential Board of Governors (RESBOG).

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

EASILY SHAREABLE CONTENT With a touch of a button members are able to share charts showing the latest economic and housing data.

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Advice for loan officers As for Loan Officers, my advice is to save your money, cut your expenses and don’t blame your company for whatever happens. Understand that a downturn is part of the economic cycle. The housing market, just like the economy, is either moving up or moving down. It’s an unfortunate fact of this business, but sometimes you have to work twice as hard to make half as much. The bottom line is that housing demand is strong, and more than ever, consumers need

do not. We should all be grateful for how well the market is doing, and we should always do

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Sink or swim for lenders Of course, lagging originations, the loss of refi business and increasing production costs will continue to take a toll on lenders, especially those that did not plan for a slower-growth market. We are already seeing the results of lenders that either did not plan for a more challenging market or were unable to leverage other channels after the refi business dried up. A number of banks have let go of their mortgage businesses or laid off staff. I think that will continue. At the end of the day, I believe we will see more consolidation and fewer companies in the market. Many Mortgage Bankers cannot handle the lower margins that came with the flattening yield curve. Not every company has the ability to expand, which means many will need to make hard choices going forward. In an era of shrinking margins and volumes, this will create a lot of upsidedown companies. Regardless of the environment, the success of any Mortgage Banker rests in its ability to grow and generate revenue. That never changes. Lenders must find ways to stop the bleeding and find ways to reach the large numbers of underserved borrowers who want to own homes or upsize or downsize into a new home. Mortgage companies will need to resize their business accordingly, or grow through acquisition, expanding their reach into different marketplaces or into new product areas. The more successful a lender is at achieving these goals, the greater likelihood they will put themselves in the best position to win.

high quality mortgage experts they can trust. First-time, move-up and move-down homebuyers are out there. Now is the best time to help them finance the home of their dreams. “Difficulties mastered are opportunities won,” Winston Churchill famously once said. He was right, but he was speaking to a nation in the grips of war, who surely had plenty to complain about. We

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Retaining Millennials: The Opportunity of a Generation By Adam Thorpe

lthough the Millennial generation is often maligned in the media—for being overly lazy or for “killing” everything from napkins to department stores—for the mortgage industry, they present a unique and an un-ignorable opportunity. Millennials, commonly defined as those born between about 1982 and 1996, now hold the largest shares of both the U.S. labor force and homebuyer pool. And with the eldest of the generation now in their mid-30s, their experience in the workforce cannot be neglected. Recruiting these talented and motivated professionals certainly poses a challenge for mortgage companies. A potentially even more significant question is how to retain Millennial Loan Officers—and their valuable

books of business. But these obstacles are not insurmountable. Prioritizing Millennials: A recipe for retention success It would be a mistake to look at stories about Millennials and think that Millennial Loan Officer recruitment isn’t worth the effort. But with a current average age somewhere between 46 and 54, Loan Officers are an aging bunch. In addition, as mortgage professionals begin to retire more frequently, it’s imperative for mortgage businesses to recruit talent from all generations. But it’s not just a number game. In fact, hiring—and retaining— Millennials makes sense for many other reasons. Bringing in fresh and diverse perspectives can revitalize organizations where tradition is the default. And as technology and communication methods constantly evolve,

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The NMP Daily Email Newsletter is your source for breaking news, insights and tips. Get free access to full articles including the hottest industry headlines, featured articles and other mission critical mortgage industry stories delivered to your inbox each day. The NMP Mortgage News Ticker is a daily news feed that gives you a snapshot of the hottest mortgage news stories from around the web. Stay informed of the most recent headlines and blogs, all compiled into one convenient daily email. Your State Speciﬁc Digital Edition Want to stay informed on a more local level? The contents of our state e-editions include all of the content from our national publication plus state-specific mortgage association information, including the President's Message, which highlights local issues, such as regulatory and legislative matters, along with the state calendar of events. Mortgage News Network (MNN) features regularly scheduled and special event video programming with industry experts sharing insights that impact your business today and in the future. MNN provides market forecasts, proven sales and marketing strategies, interviews with industry leaders and more.

organizations that can adapt to change will have an advantage. Millennials tend to be uniquely equipped to help businesses grow alongside them. So what does it take to build and maintain loyalty? Particularly, what can be done to help retain a valuable population of professionals who are at risk of skipping town when faced with a clash of values? A few, relatively simple solutions exist. First, it is important for a company to understand the unique perspectives, desires and expectations of Millennial professionals. Second, a company should focus on creating an inclusive workplace that lives up to the values that people of all generations will appreciate. Third, a company must create opportunities and leverage technology to bring people together for work, learning and communication.

Millennial loyalty and values: The challenge ahead A 2015 Deloitte survey of nearly 7,700 college-educated Millennials working full-time revealed that workers in the generation show lower employer loyalty. Two-thirds of those surveyed had plans to leave their current employer within the next five years. Although this decided lack of loyalty should certainly concern employers, it’s important to understand the reasons that Millennials cite for planning near-term exits. Less loyal workers reported feeling underutilized by their employers and said that the companies did not spend enough time developing them as leaders. They also cited gaps between their personal values and the ambitions of their employers as reasons for feeling unsatisfied. In addition, many Millennials said they would shirk

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Expectations meet reality: Satisfying Millennial demands Millennials who have grown accustomed to markets that provide what they want, when they want it, come to the workplace with certain exceptions. This generation is more likely to demand flexible working arrangements, relaxed and open office environments and additional company “perks.” That’s why many employers have started offering certain employee benefits like free snacks and beverages, onsite massages and child care, or gym and fitness incentives. But as the Deloitte survey revealed, Millennials also want their organizations to invest more time in them professionally. They want help with building their careers and becoming leaders. Here is a significant opportunity: Millennials who said that their employers supported their ambitions were considerably more likely to stay with their employers for more than five years.

Reverse mentorship: All backs get scratched One way to develop an inclusive and vibrant workplace for people of all backgrounds is through mentorship. Pairing newer hires with seasoned professionals to “learn the ropes” helps to develop relationships and build skills from those with the knowledge and experience to provide it. Some companies may want to create specific teams, staffed with Loan Officer Assistants and Marketing Assistants, to provide support and resources to employees in the field. These teams can be useful for helping seasoned Loan Officers learn and adapt to technology and new styles of communication. But mentorship doesn’t have to move in one only direction. Reverse mentorship provides an opportunity for the vets to learn from the new recruits. Millennials can help Loan Officers use new technology, social media and marketing tools to build business. Additionally, they may offer insights on how to better communicate and build relationships and trust with the growing Millennial homebuyer population. Ultimately, it makes sense to encourage mentorship in all directions. It can help satisfy the

Walk the walk: Creating positive and welcoming workplaces Although not unique to any one generation, Millennials have the propensity to expect their employers to foster positive, diverse and inclusive workplace cultures. Ensuring high standards

“… mentorship doesn’t have to move in one only direction. Reverse mentorship provides an opportunity for the vets to learn from the new recruits. Millennials can help Loan Officers use new technology, social media and marketing tools to build business.” millennial need for deep and personalized professional development while strengthening the skills of loan officers of earlier generations. More alike than apart: Bringing it all together The truth is that despite a few statistical differences, Millennial Loan Officers expect essentially the same things from their employers as any other Loan Officer. They want to feel supported and they want their loans to close smoothly and efficiently. Companies that invest in programs, services and technology that support Millennial desires will drive loyalty and success across the generational spectrum. What’s more, streamlining point-of-sale and loan origination systems and providing effective marketing resources, online content and mobile applications help will distinguish lenders from those who lag behind.

87 Millennials are just like any of us. Millennial borrowers want a home they’ll enjoy and can afford. Millennial Loan Officers want to feel successful and fulfilled at work. That’s no different from Gen Xers, Boomers, or anyone else. Investing in company culture and leveraging technology helps every loan officer find valuable clients and build value for the company. The information contained in this article does not constitute legal, financial or other professional advice or services and should not be used as a substitute for professional advice. The purpose of the article is to provide the opinions of Castle & Cooke Mortgage, LLC (NMLS #1251, Equal Housing Lender) and general guidance on certain matters related to mortgages. The reader accepts full responsibility for the use of the information contained herein.

Adam Thorpe is Chief Executive Officer of Castle & Cooke Mortgage LLC (NMLS #1251), an independent mortgage lender recently named by Fortune as one of the “2018 Best WorkPlaces for Millennials.” Adam oversees corporate operations and loan production, while administering the company’s relationships with key counterparties. He may be reached by e-mail at AThorpe@CastleCookeMortgage.com.

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of transparency and fairness in everything from hiring processes to approval guidelines can make a difference in creating an environment where Millennials will thrive. Developing consistent values and guiding principles—and then living up to them—also contributes to a welcoming workplace. As the Deloitte study showed, Millennials are wary of organizations that put profit above all else. So companies that prioritize employee satisfaction and development, product and service reliability and superior customer care will have the edge in employee retention. Employers in the mortgage industry should have the goal to be some of the best places to work. Fostering cultures of service, collaboration and accountability go a long way to building such workplaces. Providing community service opportunities, bringing diverse teams together for activities and ensuring high standards of service are just some ways that organizations can increase their desirability for Millennial eyes.

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work assignments or job offers from companies that don’t behave in alignment with their personal beliefs. What are the values Millennials think companies should espouse to? The Deloitte survey showed that folks from the generation prioritize employee satisfaction and fair treatment, ethics and integrity, focus on customers and reliable products and services above most other values. The good news is these values are shared by many companies, and Millennials have increasingly optimistic views of the business industry. Unfortunately, businesses often fall short in the eyes of Millennials. According to the survey respondents, most businesses put profit above all other ambitions— something this generation tends to loathe. And many remain suspicious of the motivations of business leaders’ ability to behave ethically and improve society. Still, despite Millennials’ sometimes negative outlook on the business community, their unique experiences, values and skills present an undeniable opportunity.

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Stopping Fraud Requires State-of-the-Art Technology and Skilled Staff By Greg Holmes hile the stock market hums along, GDP growth remains robust, and the economy is nearly at full employment, the housing and mortgage markets face significant challenges in 2018 and beyond. According to Freddie Mac, average monthly interest rates have risen by more than half a point since January, and continue to trend upwards. Meanwhile, the refi boom is a distant memory and the growth in the purchase loans hasn’t been nearly enough to compensate. Many lenders have lost money this year, and face stiff competition (for fewer loans) and the threat of consolidation. However, 2018 has also seen dramatic growth in the rise of the “Digital Mortgage,” as technology-driven lenders are finding innovative solutions to make the mortgage process more accessible and conducive for the next generation of borrowers. To pick two major developments that are key to the continued growth of the digital mortgage, let’s look at the role that Application Programming Interfaces (APIs) play in lender systems, and the introduction of the new Uniform Residential Loan Application and Uniform Loan Application Dataset (ULAD). APIs are not necessarily new, but their rapid adoption by lenders is helping to speed up the evolution of the mortgage process. If you’re not familiar with APIs, here’s a quick primer: TechTerms.com defines an API as follows: “An API is a set of commands, functions, protocols, and objects that programmers can use to create software or interact with an external system.” In short, APIs give programmers shortcuts to make building new software possible. In the mortgage business, this is particularly important, as APIs allow industry vendors to build automated programs that seamlessly fit in with existing systems and programs. Today’s mortgage lenders utilize multiple vendors, and without communication between vendor

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industry? What about new technologies – aren’t they a viable solution? The answer is both yes and no. Here’s how automation, in particular, is helping attack the problem (without being a silver bullet): l Assets can be validated electronically. Borrower simply gives bank account information and automated systems can verify deposits and assets. l Credit histories are now significantly more data-rich, with analytically friendly trended credit data now a fixture in credit reports l Undisclosed debt verifications are also a way for lenders to automatically monitor an applicant’s credit throughout the buying process–lenders can be notified if potential borrowers make a big purchase.

“However, 2018 has also seen dramatic growth in the rise of the ‘Digital Mortgage,’ as technology-driven lenders are finding innovative solutions to make the mortgage process more accessible and conducive for the next generation of borrowers.”

programs, loans don’t process on time or without error. APIs are simply an integral part of the changing landscape of mortgage lending’s digital future. In addition to the increasing use of APIs, at the direction of the Federal Housing Finance Agency (FHFA), and in collaboration with industry partners and government agencies, Freddie Mac and Fannie Mae (the GSEs) have updated the Uniform Residential Loan Application (URLA) (Freddie Mac Form 65/Fannie Mae Form 1003) and created a corresponding standardized dataset–the Uniform Loan Application Dataset (ULAD). The ULAD maps each data field on the redesigned URLA to equivalent data point(s) in the corresponding Mortgage Industry Standards Maintenance Organization (MISMO) v3.4 Reference Model. The redesigned URLA form provides lenders and borrowers with greater clarity and an

easier, more consumer-friendly loan application. The results represent the culmination of extensive industry collaboration. The standardization will make it easier to gather and share data, thus helping shift mortgage lenders further towards a digital future. As exciting as the advent of the digital mortgage is, there are clouds gathering in the form of increasing mortgage fraud. CoreLogic reports that its Mortgage Application Fraud Index has increased 12.4 percent from one year earlier, an alarming jump. This fraud is typically committed by borrowers and most often (but not limited to) has a direct correlation to the information they provide on their 1003 declaration. These misrepresentations can be in the form of employment/income falsifications, undisclosed debt, previous derogatory property event, and more. Does this rising tide of fraud threaten the

Mortgage fraud tools give lenders tremendous ability to spot red flags early, empowering lending teams to stop fraud before funding and the associated costs and problems that go along with that. The alerts the system provides include: l Borrower detail information including inconsistencies with name, address, Social Security Number, birthdate and phone number. l SSN issue date and state l Use of SSN in correlation to name and address reporting. Keep in mind, valid identities typically always have an existence of file record data showing the use of such key information in correlation to each other. l Loans recorded with no current status or inactive. This should prompt the question: Does the borrower still own the property? l Address records inconsistent with borrower employment or rental/mortgage history. This could signal multi-level applicant misrepresentation. l AKA’s: Name, SSN, address variances–these are all potential indicators of fraud. l Property ownership with no associated mortgage. Ask: Is there private financing involved? Did the borrower disclose the debt obligation? l Distance calculation out of range. The distance calculator

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serves as an occupancy indicator, and could reveal that the subject property and employer address are not within a reasonable commuting distance (some exclusions may apply for remote workers). l Other real estate-owned (REO) recordings with significant value reduction. This could be an indicator of a significant financial loss, under foreclosure or short sale proceedings.

l Recent or multiple credit inquiries. Beyond the assumption the borrower is rate shopping, these inquiries may be signals that the borrower had failed previous financing attempts or may be looking for multiple financing channels. Clearly, lenders need to tackle fraud risk with both humans and technology. Building a team that understands how to spot fraud is

critical, but lenders have a great opportunity to take advantage of technologies that utilize automation and API infrastructure to decrease fraud risk and help lenders stay profitable during challenging market conditions. Fraud is a risk that lenders will always be challenged with; the

good news is that the development of new tools, processes, and technologies, they now have better ways to catch fraud sooner. The digital mortgage is upon us, and lenders must be ready to meet the demands of consumers with a safe and secure product.

Greg Holmes is Managing Partner at Credit Plus Inc., a third-party verifications company serving the mortgage industry. He can be reached by e-mail at GHolmes@CreditPlus.com.

While increasing automation will absolutely help lenders track down and eliminate instances of fraud in the origination process, lenders still need the benefit of well-trained staff to check for potential fraud. Here are just a few items to keep an eye out for:

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l Lack of overall credit or significant gaps in trade line history. Ask: Could the borrower be using another consumer’s SSN? Does the gap indicate a bankruptcy that isn’t being reported? l All or most credit was established at the same time or recently. Is there the possibility of improper use of identity credentials? l Repositories report multiple SSN’s associated to the borrower. The credit bureaus will post all associated SSN’s linked to the borrower’s profile; though sometimes these additional SSN’s are discounted as repository data collection errors, they can be a significant clue to identify misrepresentation. l Bureau-supplied fraud alerts. These are common tools found on most credit files but frequently overlooked by automated systems. Often, credit reports are pulled through LOS integrations and the file data is immediately imported into the system reflecting monthly debt calculations, and the borrower’s FICO score. If the PDF is not being reviewed in detail these items can be missed. l The existence of a bankruptcy. Is it possible that a mortgage may not have been included? In some incidences a mortgage may be included in a bankruptcy, but it will not populate as a trade line and subsequently the corresponding REO or foreclosure may be missed.

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How to Successfully Transition From Broker to Lender By Bob Dougherty

t is no secret the origination market is shrinking, competition is increasing, profits are decreasing, and homebuyers who expect instant gratification are taking on tasks once reserved for mortgage and real estate professionals. These tasks include researching listed properties on websites like Trulia or Zillow and completing online applications for approval or preapproval for a loan. In addition, homebuyers (and almost everyone else involved in the real estate and mortgage process) expect a loan to close in 14 to 21 days, instead of 30 to 45 days. This expectation has proven challenging for everyone in the mortgage industry. All of this is leading to more brokers considering making the transition to lenders. The benefits of being a lender make this idea even more attractive. Some of these benefits include greater autonomy: A lender has the ability to push one file in front of another because they control the process from beginning to end. There is also increased profitability due to lenders receive additional income from selling loans to aggregators in the secondary market. Finally, lenders are perceived as stronger strategic players in the mortgage market. Thus, providing the lender more opportunities—such as the potential to open a correspondent and/or wholesale channel. However, the transition from broker to lender comes with its own set of challenges. One of the biggest challenges is keeping abreast of everchanging federal and state regulations impacting everything from advertising, to disclosing change of circumstance, to reporting Home Mortgage Disclosure Act (HMDA) data. These rules not only impact workflows and processes but also the bottom line. Noncompliance may result in hefty fines, a cease and desist, or possibly both. These scary outcomes are situations a new lender cannot afford when

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starting out. So, what should brokers know if they want to successfully transition into lenders? Be prepared Before becoming a lender, a broker should audit their book of business for at least a year. This will help the broker to better understand areas of proficiency and deficiency, which is missioncritical to demonstrating how they conduct business. In addition, any broker considering becoming a lender should develop multiple contingency plans. For example, what is the backup if a loan cannot be sold to a particular aggregator? Having a Plan B (and C and D) reduces risk and keeps business running smoothly. Finally, lenders should be prepared to originate only agency mortgages in the beginning. Warehouse standards may dictate that only conventional loans may be originated and sold off of the warehouse line. As lenders grow and prove themselves, there will be opportunities to add more products. New lenders wanting to take part in the non-agency market still have the ability to broker those loans as they have in the past. Technology is a must-have Becoming a lender requires laser focus on every process from beginning to end. This makes it critical to have reliable technology that helps not only maintain a system of checks and balances but also improves borrower engagement and satisfaction. Adopting a mobile-friendly point-of-sale (POS) solution allows lenders to easily reach borrowers at the beginning of the mortgage process. This is particularly important if they want to attract Millennials, who have been the most active homebuyers for five consecutive years. Last year, Millennials accounted for 36 percent of home purchases, surpassing Baby Boomers (32 percent) and Generation X (26 percent), according to the National Association of Realtors (NAR). Unlike previous generations,

Millennials have come to expect an easy digital mortgage process because they have been told that they can simply push a button and get a mortgage. Millennials are also very tech-dependent. A recent survey from GlobalWebIndex reported 68 percent of Millennials consider their smartphone their most important device. Laptops were a distant second (16 percent) and desktop PCs third (14 percent). In addition, research from the Center for Generational Kinetics found Millennials spend nearly four hours a day online and prefer to communicate via text, e-mail and social media (in that order). A good POS solution will lead to greater success with Millennial borrowers. A good POS begins with intuitive loan applications, prompting potential borrowers with questions applying to their unique situation and loan inquiry. This enhances the borrower experience and helps lenders understand how far along the borrower is in the mortgage process. Furthermore, a good POS lets borrowers verify assets, exchange and e-sign documents, and track loan progress. POSs should seamlessly connect to pricing and decision engines, automated underwriting systems, and loan origination systems (LOSs)—making the mortgage process easier, quicker and more efficient for everyone involved. That said, adopting a sophisticated LOS is critical. Data-driven LOSs enable lenders to input all borrower and property information once, in a logical progression, and use those data fields to populate forms. This approach eliminates the need for multiple data entry for various forms, and creates

the building blocks for a highly efficient and completely digital mortgage process. Work with the right people Investing in technology is important; however, it is equally important to invest in having the right team. Lenders should know exactly who is working inside their shop. This means completing background checks and ensuring staff is properly licensed. Lenders should also have strong vendor partners—such as appraisers, automated quality control and compliance technology, title companies, document generation, etc.—that help serve their borrowers efficiently, enabling them to make quicker decisions. It is critical to have written processes and guidelines on how vendor partners are approved and overseen. This provides safety and soundness to warehouse providers that the vendor partners are fully vetted and equipped to handle the job. Working with the right people allows lenders to focus less on process and technology and more on generating business. Becoming a lender is just the beginning Winston Churchill once said, “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” Brokers looking to transition into lenders should keep this quote in mind. Once brokers become lenders, they must constantly evolve to exceed customer expectations, comply in an ever-changing regulatory environment, and ultimately be successful in a highly competitive mortgage market.

Bob Dougherty is Executive Vice President of Business Development at Calyx Software, a provider of comprehensive mortgage software solutions for banks, credit unions, mortgage bankers, wholesale and correspondent lenders and brokers. He has more than 25 years of operations and business development experience in the mortgage industry.

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Remaining Ahead of the Technology Curve in Mortgage Lending By Paul Doman

ortgage loan profitability has always had its ups and downs, but the first quarter of 2018 was the worst quarter for profitability in years for mortgage lenders. Lenders showed just how difficult the rising mortgage rate environment is, reporting negative profits for the first time since Dodd-Frank compliance brought down profits in 2014. In the current market environment, it is more important than ever for mortgage lenders to seek out innovative ways to reduce costs, accelerate loan cycle times and provide a best-inclass consumer experience. The lenders who are faring the best in terms of efficiency and borrower satisfaction are those that have kept pace with and implemented new technologies across multiple facets of the loan process. For example, a March 2018 J.D. Power Survey revealed a digital loan experience to be a key factor in determining customer satisfaction for younger borrowers. To attract these borrowers, lenders need to increase digital and mobile offerings and revamp processes to accelerate turn times. Then in July 2018, the U.S. Department of the Treasury released a comprehensive report titled: “A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation.” In its findings on Mortgage Lending and Servicing, a prominent theme is the need to accelerate technology innovation and adoption in order to address the rising costs and cycle times associated with mortgage loans. To maximize the impact of technology investments, lenders need to consider each stage of the mortgage loan process. There are

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opportunities for digitization in both the back- and front-office that mortgage lenders can leverage to achieve greater efficiencies, lower costs and gain a strategic advantage. Lenders who are able to stay ahead of the game across multiple technology curves will likely emerge as the market leaders. Loan origination technology curve The area that lenders have focused most heavily on to date is leveraging technology for loan origination. Nearly every lender has a loan origination system in place, and many lenders are extending that platform to provide a digital experience for the consumer. The J.D. Power Survey showed a significant increase in digital mortgage originations last year–43 percent of borrowers applied online in 2017. But surprisingly, despite this increase in automation, the same J.D. Power survey stated that the mortgage loan cycle actually grew longer, taking an average of 36 days–an increase of almost a week from the previous year. This increase in loan cycle time means lenders need to look at streamlining and applying technology to other areas of the mortgage process in order to improve profitability and borrower satisfaction. Appraisal management technology curve The July 2018 U.S. Department of the Treasury Report we referenced earlier encourages lenders to consider new technologies and solutions to improve how they handle property appraisals and appraisal management. It cites the opportunity to shave up to 10 days off appraisal turnaround times through the use of alternative appraisal methods, including waivers, AVMs and hybrid/desktop appraisals. While AVMs and desktop

“There is currently no single technology platform for digitizing the entire loan process, so lenders will have to carefully evaluate where the greatest inefficiencies lie and tackle those areas first.”

valuations have been around for quite some time, there are now stronger and more innovative appraisal technologies available. For example, the current market-leading desktop appraisal technology platform goes beyond a basic valuation. It delivers a true technologydriven appraisal that incorporates an interior inspection option, is certified to be compliant for all loan sizes and can actually replace a traditional appraisal for home equity and portfolio mortgage loans. It combines the best of both worlds–technology-driven efficiency with a licensed or certified appraiser quality review. In addition, new mobile technologies leverage crowdsourcing to find the most qualified property inspectors for each local area and then enable the inspector to create a full property inspection report

from a mobile device while onsite at the property location– greatly improving both turnaround times and accuracy. The business benefits of moving to technology-enabled appraisals are significant– including a better borrower experience, reduced costs, greater efficiency, improved productivity and greater transparency. Title review technology curve In evaluating title companies, lenders should factor in the level of technology sophistication offered. The most innovative title companies have invested in technology platforms designed to improve efficiency, streamline lending process requirements, enhance existing credit underwriting and reduce risk. Some of these technology platforms can also accelerate the title search and automate

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the review of lien and vesting history using both public and non-public data sources for a more accurate and useful title report. We’re also starting to see the emergence of “insurtech” companies that leverage technology to evaluate and issue title insurance based on an automated risk review. Given that the title process is often time-consuming and unpredictable, these technologies offer a significant opportunity for both cost and time savings, as well as risk reduction. Loan closing technology curve The concept of e-closing is not new, but recent changes in regulations and more innovation on the technology front are leading more lenders to evaluate the benefit of adding e-closings to their business. Loan closing technologies range from basic e-signature capabilities to full online closing rooms to digital deed recording.

Another technology area to watch closely is the emergence of e-notary solutions–including those that enable borrowers to engage in a remote notary loan closing via video from anywhere in the world. A strong e-closing solution should combine closing documentation, process workflows, e-signature technology and a remote enotary solution in a Web-based bundle. Loan closing technologies have the power to transform the consumer experience and help lenders truly differentiate themselves in an increasingly competitive real estate lending environment. Full-lifecycle digital mortgage The latest buzz phrase in the mortgage industry is “digital mortgage.” But few lenders are truly delivering a full-lifecycle digital mortgage experience. To do so requires investing in innovative technology to automate the full mortgage lifecycle–including all of the

elements described above. There is currently no single technology platform for digitizing the entire loan process, so lenders will have to carefully evaluate where the greatest inefficiencies lie and tackle those areas first. In addition, lenders should look for vendors who offer technology solutions that address multiple areas to ensure more cohesive integration. For example, a vendor who delivers appraisal management, title review and loan closing technologies could

provide the critical elements needed to automate more than half of the loan process–saving you valuable time and lowering overall risk. Conclusion By staying ahead of the technology curve across all steps in the mortgage process, lenders can deliver higher profitability, shorter loan cycle times and a better borrower experience while also achieving a level of innovation that enables them to gain a competitive advantage and accelerate business growth.

Paul Doman is President and Chief Executive Officer of Accurate Group, a nationwide provider of technologydriven appraisal management, title data, compliance and closing solutions whose mission is to help real estate finance professionals deliver business growth. For more information, visit AccurateGroup.com. 93

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Six Key Components to Becoming as “E” as You Can Be By Shannon Barrow y now, most lenders have embraced the philosophical concept of eDocs, eSigning and the evolution to a digital mortgage. The benefits are many–reduced time spent in production, a better borrower experience and reduced costs to move the loan from application to closing. However, today’s “Digital Mortgage” has primarily been focused on streamlining the front end of the origination process with the increasing adoption of Point-of-Sale (POS) portals, optimizing borrower communications, verifications, and loan underwriting. But when it comes to the back end of the process, nearly all digital mortgages still result in paper closings. As lenders evolve processes to become as electronic (“e”) and integrated as possible, there are six key components that should be considered in the loan origination workflow to achieve a hybrid or ultimately a true end-to-end electronic document framework: dynamic document generation, digital document customization, digital compliance audit trail, eDelivery, integrated eSign and eClosing, and secure eVault storage.

integrated with the lender’s loan document engine, do not allow the upload and customization of independent documents, and are limited in their ability to truly provide an efficient and connected process for the lender and the borrower. This often requires the lender to send multiple, individual e-mails to the borrower with separate documents that then need to be printed, wet signed, scanned and e-mailed back to the lender. Once the documents are received back by the lender, the ability to ensure that those documents are attached to the borrower’s complete loan package is critical.

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1. Generate loan documents dynamically The most critical component for lenders in the digital age is the selection and implementation of an LOS-integrated document engine that can serve to generate dynamic, electronic documents to replace static, paper forms, as well as incorporate electronic signatures throughout the process. Document integration is more than just being able to order specific doc packages from within the LOS. True integration requires that loan data be directly ingested into the relevant documents based on the information in the loan application. Rather than utilizing

“The most critical component for lenders in the digital age is the selection and implementation of an LOS-integrated document engine that can serve to generate dynamic, electronic documents to replace static, paper forms as well as incorporate electronic signatures throughout the process.”

a static library of forms, with dynamic document generation, every appropriate data field is imported, defaulted, or automatically populated through rules-based intelligence and calculations to meet specific loan criteria. It also means that compliance checks are built in and that the technology can push back real-time information to the lender’s loan origination system. 2. Digitize and customize additional documents According to data recently published by the Consumer Financial Protection Bureau (CFPB), borrowers still report that their biggest frustrations during their loan application were too much paper, difficulty locating who to turn to for additional information and a general sense of being overwhelmed by the process. Lenders are seeking solutions

to not only streamline operations, but to also provide borrowers the convenience of being able to read and understand the terms of their loan and related documents, and to ensure that the they have a consistent and easy experience with their brand throughout the process. Solutions that enable the lender to upload their own documents, easily customize and enable those documents for eDelivery and eSign, and then attach those documents to the loan package is of top concern. This is especially apparent for lenders when sending additional documents beyond those included in the standard loan doc package, such as appraisal acknowledgments, change of address addendums and explanatory letters, to name a few. However, many eSigning technologies are not directly

3. Generate digital audit trail While not an official regulatory mandate, lenders are collectively well aware that the CFPB is strongly encouraging a shift away from paper-based practices and more toward a completely digital lending workflow, to provide the borrower with more transparency, efficiency and convenience. For example, with electronic document delivery, borrowers are able to review loan documents ahead of closing to better understand the terms of their loan and clear up any questions before closing. When document software is integrated with a lender’s LOS and related workflow, compliance can be automated and conducted electronically. Compliant documents rely on accurate data. Building the strong integration between the doc prep provider and LOS allows the doc provider to automatically pull the correct loan data to generate the right documentation for that specific loan. This data is pulled based on complex algorithms that use rules-based logic to populate and validate all necessary data fields within the document, ensuring greater quality and accuracy. 4. Deliver documents electronically True end-to-end doc platforms

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have made the digital delivery of loan documents simple and efficient. Electronic delivery is not only more convenient for borrowers since they can review and sign loan documents from virtually anywhere, but it also benefits lenders as thereâ&#x20AC;&#x2122;s a complete audit trail of generating and delivering disclosures that they can use to prove compliance if itâ&#x20AC;&#x2122;s ever called into question. This trail provides a detailed history of the loan, including data such as when the disclosure was distributed, when the borrower provided consent for receipt, how long the borrower viewed disclosures, when and where the disclosures were signed and much more.

Shannon Barrow is Director of Marketing for Docutech, a provider of document, eSign, eClose, and print fulfillment technology. Shannon has 20-plus years of experience optimizing growth as a strategic, creative and effective leader in B2B and B2C integrated marketing.

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6. Store docs in a secure eVault Once the loan is closed, the final step in the digital mortgage process is the electronic storage and electronic registration of the completed loan. Lenders need the convenience and security of being able to securely close and register electronic notes on the MERS eRegistry and deliver them with full confidence that each mortgage satisfies investor requirements. Lenders can also securely and automatically store eNotes, register them on the MERS eRegistry and transfer control to investors via direct VPN connectivity. Lenders are increasingly embracing the transition to a digital to compete in the mortgage marketplace in the coming years. As they evaluate their loan document technology solution options, addressing these six core components is fundamental to success.

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5. Utilize integrated eSign and eClosing capabilities While many lenders can generate and deliver documents digitally, demand for integrated eSign and eClose solutions is gaining increasing momentum. In an effort to optimize operations, minimizing the amount of additional work needed to connect separate systems and processes is vital. Ideally, lenders should strive to utilize technologies integrated with their LOS where the doc gen engine, eSignature, eClose and eVault platforms are already seamlessly connected. Lenders should also utilize eEligiblity engines to analyze each closing package to be as â&#x20AC;&#x153;eâ&#x20AC;? as it can be, according to state, county, and investor variations. Hybrid options include eSigning of ancillary documents, plus options for SMART Doc eNotes, eNotarization and eRecording. Strong security and compliance with the foundational laws (ESIGN and UETA) are critical, of course. Beyond that, lenders should question how many disparate systems must be integrated

together in order to fulfill all components of an eClosing solution? In some solutions, there are individual vendors and systems integration points for document production, eSignatures, the SMART Doc eNote, eVaulting, eNotarization, and eRecording. This can make it difficult to track down a problem if something isnâ&#x20AC;&#x2122;t working right. And what about the integration back to the lenderâ&#x20AC;&#x2122;s LOS and Document Repository for post-closing, eSigned documents? Lenders should look for a strong ability to push back eSigned documents (and other post-closing docs and data) without manual effort. Finally, lenders should seek solutions offering an easy way to ingest and tag external documents, to make them a seamless part of the full eClosing package and streamline the borrowerâ&#x20AC;&#x2122;s experience as much as possible.

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Digital Mortgage Technology … Who Is It Really Benefiting? By Mary Kamelle

or some time, advances in digital technology have been driving change in customer acquisition and experience in practically every sector of the economy. Among these, the mortgage industry appears ready for some of the most comprehensive updates, particularly with regards to the sales approach and process. New tools, like online user platforms and machine learning, will make it easier for lenders to guide borrowers through the origination process and discover additional opportunities within the data they collect from their borrowers. Not long ago, the most

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common way of taking a loan application was to set an appointment with a customer and meet with them in person to go through the piles of paper and documents needed to process and underwrite a loan. Today, there are varying ways to take an application depending on the needs of your customer. It should be noted the there are three distinct groups of consumers today. Ellie Mae completed a study of more than 500 consumers who took out mortgage loans over the past 10 years and broke the groups down as follows: l Baby Boomers: 28 percent l Generation X: 43 percent l Millennials: 29 percent These groups are important

when considering how they use technology. While many Baby Boomers are technologysavvy, many more prefer to speak with someone in person or at least on the phone. Generation X borrowers would fall somewhere in the middle. Preferring the speed and efficiency of digital solutions, but still valuing the expertise of a Loan Officer to discuss and verify information. The habits of the Millennial buyer are well-documented, as they are the fastest-growing group of potential homeowners. Studies have shown that Millennials prefer a digital mortgage application and wouldn’t mind if they never met their Loan Officer in person at all during the loan process. A text or interactive app to simplify the process would be welcomed and even expected. So, what does this mean? In order to satisfy all of your borrowers, you need a strategy that addresses all their needs. You have to supply a fast, efficient online solution for your Millennials, but you cannot force a technology-resistant borrower into your digital, interactive mortgage application if they don’t want to use it. The key to customer satisfaction now, as it has always been, is to know your borrowers. The convenience offered by digital solutions seems to be welcomed by all age demographics at least to some degree. Ellie Mae’s survey concluded that 92 percent of borrowers did online research prior to reaching out to a lender. So, some borrowers may do the leg work online prior to applying, but later, want to meet or speak with someone. Others may go straight to the digital application on a Web site if provided. How are borrowers finding lenders? They are still finding them from Realtor partners and referrals. They are also finding them from online sources namely, Google. The top SEO

searches for keyword remain connected with finding the best mortgage rates. According to Neil Patel, who runs an amazing SEO search engine on his Web site, Ubersuggest, the top five SEO keywords for the mortgage industry are as follows: 1. 2. 3. 4.

Mortgage Mortgage Calculator Mortgage Rates Mortgage Payment Calculator 5. Loans The take home message for Loan Officers and mortgage companies is that if you want to provide a valued-added service to your prospects and customers, you should be educating them on what goes into determining rates, what goes into how much they will qualify for, and why they should trust you and your company when there is so much competition for their business. The application process is just the first step in what is an intense process of data collection and management. Forward-thinking lenders are looking for efficient ways to bring the entire process into the digital world. Based on borrower feedback, they would welcome online applications that guide them through the entire process from application to post close and beyond. They want to know the status of their loan, without needing to wait for a call back from their LO or processing team. Borrowers would welcome an online portal that is secure and easy to use that would work across all devices. The ideal platform would allow them to respond to e-sign requests, document sharing and disclosure reviews. There are benefits for the customer when lenders adopt such a process: 1. Speed up the process as a whole 2. Steam line the experience for customers 3. Improve the quality of the data required for underwriters 4. Allow customers to work at their own pace on their own schedule There are also many benefits for the lender by going digital: 1. Making customer happy with

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2. 3. 4.

5. 6.

added convenience Reduced costs of origination for consumers Reduced costs of origination for lenders Increased attention to data will help lenders handled customer data more efficiently Help customers by providing more customized solutions Increased efficiency

“Studies have shown that Millennials prefer a digital mortgage application and wouldn’t mind if they never met their Loan Officer in person at all during the loan process. A text or interactive app to simplify the process would be welcomed and even expected

“Technology used the right way will make the eMortgage process easier for consumers to facilitate the never-ending request for information and will help our team to receive and analyze the information to provide a loan decision in a fast-paced environment,” said Dave Holding, Vice President of Secondary Markets at Mortgage Equity Partners. “We are in the process of implementing a customer facing engagement protocol that will revolutionize the way we work with and service our customers. We are deploying a strategy that will simplify the entire process from prospect to funding and beyond. But, there was a lot of information to go through before we made our choice. There is no shortage of technology-based solutions for Mortgage Lenders. The challenge is to see beyond

Mary Kamelle is Marketing Manager at Mortgage Equity Partners and a content writer based out of Lynnfield, Mass. She can be reached by phone at (781) 309-1773 or e-mail MKamelle@MEPLoans.com.

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Electronic documentation has leveraged speed and convenience for the borrower. It is expanding to various registries and investor systems making a previously tedious paper intensive process more streamlined. Mortgage lenders can use customer survey software systems to reach out to customers and referral partners to get a feel for how they feel about the Loan Officer, the company and the process. Using technology to collect this data makes the process easier for the individual completing the survey to be more honest about their experience. The list above doesn’t even scratch the surface of all the amazing innovative applications available to digitize the mortgage process. But what is a lender supposed to do once they start using all these different apps? They need to embrace API technology. What is that? Literally, API stands for “Application Programming Interface,” which is a communication channel that helps to talk between your apps and database.

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So how are lenders going to do this? They need to adapt rapidly to the emerging technologies and make informed decisions about what the apps can do for their company and their customers. If you consider the mortgage industry sales funnel, it starts with prospecting and marketing. There are multiple products that can be used by loan officers to interact with prospects and referrals partners. Digital business cards can be texted to referral partners and prospects. The cards will track the user’s activity. This allows a Loan Officer to see who their most active referral partners are and to see which borrowers were given their contact information. Lead generations companies can feed contact information directly into a lenders’ Customer Relationship Management (CRM) program. A Loan Officer who is maximizing the CRM will have a campaign assigned immediately that will run automatically. Most mortgage lenders at this point have an enterprise level CRM product that interfaces with the LOS, used correctly this product can follow a borrower from prospect to closing and beyond. Another emerging technology which capitalizes on mobile flexibility is mobile prequalification. The speed with which a Loan Officer can provide a pre-qualification is amazing. No more going back to the office and writing out a letter, LOs can now send it via their mobile device. Improvements in the processing and underwriting areas can’t be overstated in terms of the accuracy of data and speed of collection. Tasks that used to take multiple phone calls and require quotes from several vendors can now be done by use of a single pricing tool that can interface with most pricing engines.

the sales pitch to find the solutions that work best for customers, operations staff and Loan Officers.” The ultimate challenge of the industry will be to leverage this technology with the human aspect of the emotional process of buying a home. All these streamlined, efficient tools are fabulous unless there is an issue that doesn’t align perfectly with one of the digital boxes on the digital form. You will still need that personal interaction to explain why your borrower may have had a 30-day late payment last year, or why they have a large cash deposit on their bank statement. “I think the biggest thing is that as an organization or industry we need to adapt and be amendable to the way in which our consumers want to communicate, send and receive the information,” said Shirene Hodgson, Loan Officer and Corporate Trainer for Mortgage Equity Partners. “That consists of the ‘old school’ methods of meeting borrowers in person, taking applications over the phone and now providing a digital format to them. However, even with the digital formats, most consumers still want to know that there is a Loan Officer, a real person on the other side they can contact at any time. Technology for now, while it facilitates the process and helps expedite the process, it does not replace the knowledge, experience and expertise of the Loan Officer.” The enormous growth of digital technology carries both opportunity and risk in every business, but mortgage lenders have more at stake than most. With a booming economy and a housing market in which the main problem is the inability of supply to meet demand, there should be no shortage of prospective homeowners in search of financing. It remains to be seen which companies and solutions will determine the shape of the mortgage industry.

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Finding the Right Fit in a Challenging Market By Jeff McGuiness o doubt, 2018 has proven to be a challenging year for the mortgage industry. The common themes of margin compression, increasing costs to produce, and low housing inventory, along with industrywide lay-offs are some of the driving factors causing fear and uncertainty in the market; a subtle reminder of what happened in 2008. That year alone, more than 2.5 million jobs were lost nationwide as a result of the housing market’s collapse. Today, volume is down, and many independent lenders are cutting costs, acquiring, or selling to competitors. In these uncertain times, many Loan Officers are not only questioning their own resilience but that of their employer’s. The mortgage industry has always been fairly transient in nature. The market goes through cycles and the players are always evolving. Changing employers can feel daunting in any industry. However, in the mortgage industry, making the wrong choice can have negative consequences to a Loan Officer’s ability to serve their customers and business partners. The trouble is choosing to work for another lender is not like buying a new car. “Testdriving” a new employer is not a realistic option. A Loan Officer will never know exactly what it’s like to work for another company until they are there. And yet, some lenders often “sell” the job opportunity the same way car dealers sell cars. Pressure tactics are common, especially for loan officers who have a track record of success. Recruiters tend to embellish the truth and over promise.

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Why loan officers choose the wrong lenders Too often, Loan Officers who move their business from one lender to another do not spend enough time thinking about what type of company is best for them. The same can be said for lenders that recruit Loan

Officers. Oftentimes, lenders are focused more on hiring successful Loan Officers than they are on hiring Loan Officers who best represent the organization and its values. When it does not work out, both sides lose. From the Loan Officer’s standpoint, the decision to join a particular lender is often a reactive one. Many lenders actually rely on this fact. When recruiting talent, they will leverage a current pain point a candidate is experiencing and present an attractive solution. For example, if your current company does a poor job at processing loans, they will sell you on how much better they are at it. This is often effective because Loan Officers have not taken the time to understand what they want, or what they want out of their employer. Defining the right fit is critical for long-term success for all parties. Asking the right questions The quest for a new lender to call home should always begin with Loan Officers asking themselves the right questions. What is important to them personally? What are their values? The questions are really quite simple, but the answers may not be. After asking and answering these initial questions, the next step is to consider how a potential organization’s value proposition and values are congruent to their own. Is it the relative certainty and book of business that a bank has to offer? Or do they want to go down the independent mortgage or non-bank path? The construct of a lender is a critical element as it often reveals that organization’s short- and longterm objectives. It’s important that a Loan Officer understand what they really want. A statement such as, “I want to grow my business” can mean different things from one Loan Officer to another. What does that actually mean and what does that look like? A better question to ask is, “What are you willing to say ‘yes’ to, and what are you saying ‘no’ to?” Loan

Officers should examine the types of tradeoffs they are willing to make to determine the best organizational fit. When looking to join a lender, it’s critical to ask why retail mortgage banking is an important part of the company’s strategy. The answers will convey how committed they are to the space. Does the company’s reasoning sound solid, or does that commitment appear to be fleeting? When talking with other lenders, pay attention to red flags—don’t simply drive past them. At the end of the process, can a fact-based case be made to support what a Loan Officer is looking for? Keep in perspective that the recruiter’s sole motivation is to get the candidate on board. Once that is achieved, the recruiter’s job is complete and is no longer involved in that candidate’s career path. Loan Officers willing to base a career move on one pain point are a recruiter’s most attractive prospect. Make sure the values fit, too Once a Loan Officer knows what they really want, they are a better equipped to choose a company that best reflects their values and will help them attain their personal and professional goals. When thinking about joining a company, Loan Officers should determine whether that company lives up to its values. Do the company’s values resonate? And do they extend to everyone in the organization? For example, if giving back to the community is important, a Loan Officer may be happiest with a company that provides paid time off for volunteering for a cause they care about, or will match any donations they give to a charitable group. For Loan Officers with families, a company that offers a range of medical and dental plans, employee assistance plans, and a choice of insurance plans such as shortand long-term disability and paid holidays may be ideal. For those

looking for career development, a company with educational programs, training and coaching resources may be worth seeking. Loan Officers with my company find that the marketing support and technology solutions we offer them at no charge are a very valuable benefit. That includes our new custom mobile app for iOS and Android devices that our salespeople use to originate and manage pipelines, as well as other tools such as MBS Highway, Salesforce, Social Survey and Embrace Perks. And while we work hard to fulfill all the things that a Loan Officer could possibly desire in a company, ultimately, it’s about finding the right fit. We researched the cost and return-on-investment (ROI) of hiring qualified Loan Officers. When someone joins our company, we expect them to be with us for years, so we do not mind making a long-term investment in their career success. The time and resources a company spends on a bad hire could have been spent toward someone who was a better fit. A poor choice could be equally detrimental to a Loan Officer’s personal income. For this reason, we make a point to ask each candidate why they chose to come to us. We really probe candidates, too. It’s sort of a gut check. Even though we offer great compensation, a great product selection, the newest technology, training and benefits, these things should not be the sole reason. It’s important that our values are in alignment and the Loan Officer is truly getting what they need out of the relationship. The bottom line is that making a reactive career decision without thorough research can be a gamble. Loan Officers would be wise to be more circumspect about such decisions, and to think hard about what they want and what values are most important to them.

Jeff McGuiness is Chief Sales Officer for Embrace Home Loans, a direct and retail mortgage lender licensed in 46 states and Washington, D.C. Embrace has been recognized seven times as one of the “Best Medium-sized Companies to Work for in America” by Fortune and five times as one of the Fastest Growing Companies in America by Inc. Jeff can be reached by e-mail at JMcGuiness@EmbraceHomeLoans.com.

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Yesterday’s Automation Won’t Help Cut Loan Costs By Joe Langner

ver the past several years, the idea that many American workers will someday be replaced by robotics has gone from science fiction to, well, actual science. Last year, a McKinsey Global Institute looked at 800 occupations around the globe and determined that 800 million workers—roughly one-fifth of the world’s workforce—will be replaced by automation by the year 2030. In fact, automation is already transforming the retail supply chain through automated material and inventory management, while robotics are being used for prefabricated construction and 3D printing. That the mortgage industry could ever be entirely run by robots seems a bit unlikely. But

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something that is not science fiction is how expensive it has become to originate loans. The costs for manufacturing mortgage loans is at a record high–topping $8,900 for every purchase loan, according to the latest numbers from the Mortgage Bankers Association (MBA). Over the past two decades, we have plenty of evidence that technology is really the only defense for lenders who are trying to make a dent into higher costs. The key isn’t building robots, however. The answer lies in process automation, which entails automating every possible process that does not absolutely require or truly benefit from human involvement. Achieving process automation will entail trading in complex legacy systems and redundant tasks in favor of higher

efficiency. And ultimately, it means changing everything about how consumers get mortgages and how Loan Officers sell them. Why today’s technology isn’t saving lenders money With all the technological advancements happening in our industry, one might think that the mortgage process is already rife with automated processes. Certainly, the potential for massive process automation exists. But a closer examination of how technology is actually being implemented throughout the mortgage process reveals a host of missed opportunities and extra costs that lenders never anticipated. For example, most loan origination systems (LOSs) lenders are using today are founded on technologies that were built decades ago, before cloud computing and online applications became commonplace. To provide a better consumer experience by letting borrowers apply for loans online, a lender that relies on one of these older platforms has the option of bolting on a third party’s consumer-facing online loan application. Problem solved, right? Wrong. Unfortunately, most online application software products typically enable only a one-way data flow to the lender’s origination platform. This means that if the borrower runs into trouble with the application or makes a mistake while filling in data, there’s no way for the lender or the loan officer to know. This is why we hear so many accounts of how borrowers try to apply for mortgages online only to end up on the phone with a loan officer when things don’t go right. It’s also why borrowers so frequently submit the financial documents their lenders require online, only to find out later that the documents never made it into the loan file. Because of this situation, most lenders that think they are saving money by introducing new technologies are actually spending more money. Those

costs come from either having to re-enter data manually, or collecting the borrower’s information by phone or email, or paying large sums for thirdparty integration “experts” to patch together technologies that were never originally meant to work together in the first place. True process automation can never be attained by continuing to rely on the same technologies that created this situation. The only way it can be achieved is by having lenders and borrowers use the same system—one that was built from the ground up to be operated by both loan officers and borrowers, and that takes all the heavy lifting out of the process for both parties. Redefining the borrower’s experience The key to establishing process automation in the mortgage process is to transform the LOS into a freeflowing, fully digital customercentric—not a lender-centric— experience. It’s important to keep in mind that today’s borrower knows more about their own financial profiles than they ever did before. Most have already done some research about the mortgage process before ever contacting a lender, and if they don’t know exactly how much house they can afford, they certainly know what rates are available and the basic information they need to fill out an application. In other words, they have very high expectations. They know their financial information exists online in digital form, and they have fairly easy access to it. That includes their credit scores, their incomes, assets and debts. They don’t see any reason why the lender will have any trouble obtaining it, either. The more tech-savvy borrowers wonder what possible good a phone call with a loan officer will do when the problem is simply getting this information into the loan file. On the other hand, if the platform exists in the cloud and

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Where the savings takes place With all the technological advancements we’ve been reading about in the mortgage industry, one might get the idea that lenders are already process automation experts. But as long as they continue to rely on technology that was originally built more than 15 to 20-plus years ago, they simply cannot provide a truly end-toend digital mortgage experience that today’s borrowers are clamoring for— nor will they ever truly be able to get a handle on rising costs. In spite of our industry’s technology advancements, lenders have not achieved cycle time improvements, which is the real key to

“In spite of our industry’s technology advancements, lenders have not achieved cycle time improvements, which is the real key to lowering costs.” 101 lowering costs. According to the MBA’s estimates, most underwriters are reviewing between 30 to 35 loan files every month, which is roughly the same amount that they did five years ago. Because process automation enables a cleaner, more efficient collection of data, giving borrowers access to the same platform Loan Officers use, it could easily double the amount of loan files an underwriter reviews in a month. If lenders truly want to cut costs–and we all know they do– the only way is to rethink the way they produce loans and to use the right technology. In this case, the right technology is a platform in which everyone involved in

creating a mortgage–lender, Loan Officer, underwriter, and consumer–is able to use. In other words, the technology lenders use to manufacture loans needs to be same technology consumers use to start the mortgage process, as well as the same technology that the Loan Officer uses to connect with and serve the consumer. The bottom line is that process automation is not a matter of leaving the mortgage experience up to robots. It’s simply a matter of common sense and focusing on the entire customer experience. I think that’s the kind of future we can all get behind.

Joe Langner is Chief Executive Officer of Blue Sage. Joe is responsible for establishing the Blue Sage platform as the technology choice for direct lenders, retail lenders, wholesale lenders and correspondent lenders. Joe is a mortgage technology veteran with more than 25 years of executive experience in the financial services and software industries, and former Chief Operations Officer at Ellie Mae. He can be reached by e-mail at Joe@BlueSageUSA.com.

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The loan officer’s evolving role So what does this mean for the Loan Officer? Do borrowers really prefer working with a robotic version of a mortgage expert? Not at all—but it does mean Loan Officers will have to make adjustments. In fact, when process automation is highly leveraged, Loan Officers have the most to gain. In a mortgage environment driven by process automation, the Loan Officer is able to get a much clearer picture of customers they are working with and how to best serve the customer’s needs. All the paper shuffling and data gathering problems are essentially solved, so instead

of wasting time collecting paper, the Loan Officer can refocus their energies on making sure the borrower gets the best possible financing and has everything in place to ensure a smooth, efficient closing. Even when process automation is leveraged, most borrowers are grateful to have a human expert along for the ride to make sure they choose the right product and to answer any questions they may have about the process. The key for Loan Officers is to be able to help borrowers in the way that each borrower chooses. By leveraging a mortgage platform that is built in the cloud, the loan officer can more easily engage and serve borrowers through any platform or device the borrower chooses, including smartphones. Even in a heavily automated environment, there’s still a chance a borrower could make a mistake, such as filling out the incorrect field or clicking on the wrong button or icon. In most current systems, if something goes wrong the borrower either doesn’t know it or becomes frustrated with the whole process. But when both Loan Officers and borrowers are using the same system, the Loan Officer is often able to spot such missteps immediately, often before the borrower realizes it, and can step in to correct the situation immediately.

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both borrower and Loan Officer have access to it, the problem is solved, and process automation can flourish. This enables both parties to access a multitude of web-based systems to enable a smoother collection of information and third-party services. This lets the borrower shop, price and apply for loans on their own, while the platform automatically orders the borrower’s credit, calculates loan fees and assigns conditions for underwriting. From here, process automation enables more efficient back-end processes, including underwriting, running compliance checks and delivering initial disclosures that are ready for the borrower’s digital signature— all without ever having to talk to a Loan Officer. All of this can happen quite literally within minutes of the borrower submitting an application. Of course, some borrowers may not be ready for this much automation. But there is nothing lost and everything to gain by providing them this capability. That’s especially true considering that young homebuyers that are driving into today’s market do not remember what life was like before the Internet–in fact, they spend most if not all of their waking hours online and are more comfortable interacting with technology than talking to a Loan Officer on the phone. And if they have to wait for a Loan Officer to call them back, forget it.

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The Time for a Digital Loan Exchange Is Now By William Decker, CFA f anyone in the mortgage industry isn’t yet convinced that the future lies with digital mortgages, they just got a major wake-up call—from Fannie Mae, no less. The GSE’s recent National Housing Survey, which included responses from 3,000 homebuyers, found that twothirds of homebuyers are interested in a fully digital mortgage process, and the majority wants to see the process take no more than a month. Of course, most originators get the message. In an era of increasing loan costs and regulations, offering digital mortgages to the next generation of homebuyers is really the only way for lenders to stay profitable. Behind the scenes, however, there exists an equally strong need – and opportunity–to digitize and automate more of lenders’ internal underwriting and investor loan sales processes. Right now, the secondary market is beset with outdated processes and is more than ready for a digital transformation. While there are numerous software companies working on creating a true digital experience for the consumer on the front end, virtually all mortgage loans still require a physical note to finalize the transaction. Innovation in the secondary market isn’t being driven by consumer demand but by the need to reduce inefficiencies – and there are plenty of those to tackle. A standardized digital trading platform where sellers and buyers can easily connect, especially one with a single counterparty, provides better efficiency and profitability, while meeting loan quality and settlement requirements.

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The trouble with the secondary market For too long, the secondary mortgage market has been plagued with decades-old, inefficient practices, such as emailing spreadsheets, uploading document images, shipping physical collateral and dealing

with firmly entrenched third parties that make buying and trading loans both expensive and time-consuming. Yet for decades, buyers and sellers of loans on the secondary market have clung to these methods for lack of a better choice. They have been forced to navigate a web of very different counterparties, each with different legal contracts, underwriting guidelines, loan review and settlement processes. And as the number of counterparties increases, so does the risk. Buyers and sellers are limited to working with a finite number of counterparties since the transactional chain is rife with middlemen. Community lenders in particular have found themselves at the bottom of this chain, where their particular needs are often ignored, and they are unable to get optimum pricing. However, that was the old way of doing business. Truth be told, it’s still the way many secondary market participants operate today. But it doesn’t have to be this way. New technologies have emerged to replace these old methods, and their potential to transform the secondary market is unlimited. Thanks to digital trading platforms, loan buyers and sellers are already transitioning from paper to images and data, which will have a revolutionary impact on the secondary market, not unlike the one happening on the mortgage origination side. Moving the secondary market to a digital trading platform enables both parties to leverage legal and data standards, resulting in a more efficient process where each party can review and download image documents and data from a common standard. Instead of dealing with trading partners in separate, one-to-one environments, a standardized digital platform opens up trading to an unlimited number of originators and investors. With one platform, buyers and sellers of loans can source, price, purchase, sell, review and settle loan trades with preferred

partners—or even anonymously through a single counterparty and platform. A digital platform enables sellers to import loans individually or in bulk and quickly retrieve executable best pricing from buyers. Buyers can upload rate sheets, screen for loans that meet specific parameters, and bid on individual loans as well as pools of loans. Both buyers and sellers have access to a centralized clearinghouse that enables multiple originators to sell loans to multiple investors while only needing to work through a single counterparty. The ability to implement rulebased loan audits and automated waterfall reviews improves confidence in trades by ensuring loan quality and compliance. With such tools, both buyers and sellers can classify images on a granular level and conduct document inclusion checks, data extraction and validation, and program product eligibility tests on any loan file, so that defects can be detected before the sale. They also enable independent audits in order to further mitigate risk. Improved quality assurance Secondary market participants have historically struggled under the weight of compliance, whether it’s meeting regulatory requirements or an investor’s guidelines. Even when a lender believes they have all potential problems addressed in a loan file, there is the real potential for an issue to arise that prevents one investor from purchasing the loan versus other investors who do not see the issue as a problem. A digital platform enhances compliance and loan quality and improves trading confidence. With digital trading technology, buyers and sellers access upfront rule-based stipulations that flag overlays prior to committing to transactions. The more data that

is provided at the onset of the transaction the more rules that can be run, which will detect red flags much more quickly than spreadsheets ever could. In other words, potential guideline issues can be identified prior to committing to the transaction. Independent audits of each loan are then performed to mitigate risk. The result is a highly automated, scalable and repeatable loan review process that ends with extremely accurate user-friendly condition clearing. Reviews and audits on loan trades can slow the trading process down by several days. By utilizing a single platform and using digital formats, entire pools can be priced, sold, reviewed and audited in the same day. Even the communication that takes place between parties happens in real time through the same platform—completely eliminating the need for time-consuming emails and phone calls, as well as the typical back and forth that takes place between third party middlemen. Change is long overdue Secondary market participants have endured manual operations dealing with many inconvenient and expensive relationships for too long. That process is easily streamlined with the right technology, and thankfully, that technology already exists. While digital trading in the secondary market may still be in its infancy, the dye has already been cast. Digital platforms are already impacting secondary markets that are more than ready for major technology disruption. The number of originators and investors trading billions in loans online continues to grow every day. Indeed, it’s not an exaggeration to say that digital trading platforms will revolutionize the secondary market. It’s already happening. The question for today’s secondary market participants is no longer when to embrace this technology. It is: why haven’t they already?

William Decker, CFA, is President and Chief Operating Officer of MAXEX, a residential mortgage loan trading platform and exchange company. Decker has 31 years of mortgage banking, capital markets, information technology and portfolio management experience. He can be reached by e-mail at WilliamDecker@MAXEX.com.

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Keeping Up With Continued Mortgage Technology Changes By Matt Seu ortgage Bankers, including business and technology leaders, know how to run a business and weather the storms of regulatory pressure and increasing rates, but staying ahead of the technology curve is a huge challenge in today’s mortgage industry. It changes so fast that it is nearly impossible to know what is real and what is just marketing. As recently as five years ago, nobody knew what Fintech was, and now, we have Regtech too. Is it important to jump to blockchain as a solution that cures all ills, or is it Artificial Intelligence (AI) and machine learning? I will explain a framework that will allow you to make order out of chaos and give you some thoughts around how to make informed decisions as you run your business. The framework is very simple and includes these four components: l Understand your business priorities; l Get involved in the industry; l Build a business case and roadmap for change; and l Select the right vendors and service providers.

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Understand your business priorities To know what to think of new technologies, it is imperative that one first looks at the business priorities and challenges that your company faces and how technology can drive change. You probably already have business goals and objectives, but one suggestion is to look at the business in terms of a series of measure related to revenue, cost, regulatory compliance and customer experience. On the business side there could be priorities related to revenue such as increasing market share, geographic expansion, and penetrating the young borrower market. Cost containment may be important, and one should consider strategies such as consolidation of business functions, eliminating non-valueadded processes, and how automation can reduce variable costs. Regulatory compliance is

“As recently as five years ago, nobody knew what Fintech was, and now, we have Regtech too. Is it important to jump to blockchain as a solution that cures all ills, or is it artificial intelligence (AI) and machine learning?” certainly top of mind, and even if a Republican administration appears to be softer on hardline regulations we have not seen a huge pendulum swing after almost two years since the change. Understanding how much or how little regulatory pressure continues will allow you to weigh the amount of importance given. Finally, look at how much the customer matters to your organization. We are moving into a very different era where the customer will drive most transactions, as opposed to the Realtor and Loan Officer in a more traditional model. An approach that is very effective is to create a scorecard for your business. Many companies already have this in place as part of a corporate governance structure, but surprisingly many do not. If your company does not have a scorecard or measures you should create one across the four areas discussed earlier. Create a scorecard with goals related to revenue, cost, regulatory pressure, and customer experience. In the scorecard you can include

You can get an enormous amount of information about emerging technologies from the industry itself. Each year, the Mortgage Bankers Association (MBA) holds a Technology Conference in the spring. More than 100 speakers and exhibitors attend, and panels and breakout sessions allow for a lot of knowledge transfer over four days. You may want to get involved with ongoing industry groups such as the MBA and their Residential Technology Forum which has regular meetings and takes on specific focus areas. MISMO has launched an Emerging Technology community of practice with face to face meetings three times per year and regularly scheduled meetings over the phone. Another strategy is to pay attention to what the biggest players are doing. Fannie Mae and Freddie Mac have Web sites posting which vendors are compliant across the lending lifecycle. It is an easy way to see the vendor network that integrates with them. These vendors have been vetted and must pass a series of questions and tests to be on their Web sites.

Create a business case and roadmap At this point, you have a good North Star to follow with your scorecard and have an measures that are important to understanding of the players in the your organization and remember to industry. Now you should look at make them measurable and what you have currently in terms of achievable over a reasonable business and technical capabilities. period of time, perhaps two or In doing so, you should identify three years. Rank and weight them where your capabilities limit the and socialize the scorecard with ability to reach your scorecard your peers and team. The goals. These are candidates for scorecard should be the basis for upgrade or replacement. This may decision making on any technology include replacing people with change going forward. technology. Line up some new and emerging technologies with Get involved in the industry business value. Understand how a Now that you have a scorecard in new borrower portal could attract place, you should have some and retain customers in the loan transparency as to what buttons application process through could be pushed to deliver closing. Identify where robotic changes in your organization. The processing can perform rote tasks problem is that technology change traditionally done by humans. Ask in the mortgage industry is whether Artificial Intelligence can happening so fast that you may be augment call centers or even create overwhelmed with all the new better credit decision models. buzzwords and the new entrants in Explore ideas around machine both Fintech and Regtech. learning to see if synergies across Questions that many people ask lending types and product lines themselves include ones like: exist. These are only some “What is blockchain, and how will thoughts on how new technologies it solve my problems?” “Is artificial may assist your business. intelligence just science fiction or Once you have a better grasp on can it really replace human emerging technologies you should decisioning?” lay out the future state view and

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create a business case complete with ROI analysis or whatever method is used in your organization to measure cost versus benefit. Next, based on the business case and dependencies identify the key projects and changes required to achieve the business case and scorecard. The projects should be defined by scope, schedule, cost and subject matter expert commitment. They may require a specific sequence based on dependencies. Finally, you should have a project plan, list of projects across a timeline, and identified costs per period of time.

the selection of a trusted consultant to help you set up and manage the framework. There are a lot of landmines out there and leveraging a company who has done this over and over could be an important first step towards your transformation.

Matt Seu is a Partner at Actualize Consulting, specializing in mortgage and fixed income in the management and automation of financial functions and corporate financial events. He may be reached by e-mail at MSeu@ActualizeConsulting.com.

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In summary, the technology landscape is changing rapidly, and it is very difficult to know what real solutions can be and what may be

procuring vendors creating a level playing fields and using a metricsbased selection process will significantly reduce the chance of procuring a solution that meets your needs. In closing, some of the concepts in this article may be new or seem daunting. Consider

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Select the right vendors and service providers Now you have a road map that you can use as your blueprint for change. The next step is to select a series of vendors to see if they can help you achieve your goals and objectives. As you do so, I suggest strongly that you look at traditional, well-known vendors and some new entrants. Many of the new entrants have very viable products and are often very willing to negotiate good deals to gain market share. When you have talked to the vendors you should solicit the business with a formal Request for Proposal (RFP). In it, you should include very specific business, technical and information security requirements. When they respond, it is time to bring the scorecard and business case back to the table. Use those as reference points when determining how to score the responses. At this point, you can probably narrow down the field to those who you would like to provide demonstrations. One specific thing to do in the demo request is to be very specific about what you want to see. Include things that they need to do on the fly as opposed to creating something ahead of time that very well may not be actual functionality. When you have seen them all, you should conclude your selection activities with two or three finalists. Tell them to provide pricing and then begin the negotiations. Remember to keep the one or two backup vendors warm in case negotiations with the top choice fall through or donâ&#x20AC;&#x2122;t progress. You should now be in the first stages of your roadmap with confidence that you are on the right path.

just fluff. Understanding your business priorities and seeing the gaps is first and foremost. Surveying the landscape of technology in the mortgage business can be accelerated by leveraging industry groups and events. Using a specific framework like the one that I have outlined will give you confidence that you are both moving in the right direction while knowing the business benefit that will be realized. A robust process for

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The Future of Lending Relies on Data By Mike Eshelman

Before digital marketing and In each of these instances, the campaign tracking technologies, marketer is only able to action on a brands would advertise in small subset of data to either retain newspapers, billboards, television, or grow the relationship. These and radio without the ability to track triggers have serious limitations, performance and return on putting lenders in a late-stage s the mortgage and put enormous effort into investment for each making it reactive position based on “pointindustry continues to optimizing lead management challenging to optimize. This in-time” insight. What the lender evolve, we’re starting strategies for maximum returns. resulted in the old adage, “Half of doesn’t see is the extensive to see lenders Studies have analyzed performance the money I spend on marketing is research prior to that point-in-time redefine their purpose relative to speed-to-contact attempt, event. In fact, our research wasted, the problem is I don’t know and identity. This shift and the quickest mortgage lenders which half.” indicates that the average in focus, spurred by digital achieve a mind-blowing four The likelihood that you, as a consumer begins shopping for a disruption, has lenders working to seconds between the time they lender, are over-marketing to some mortgage 6 months before gain a better understanding of their receive the consumer inquiry and consumers and under-marketing securing a loan. Often times, a prospects and existing customers. when they dial the consumer. In others is very high, the challenge is consumer’s credit has been pulled They know technology has given some instances, the consumer’s knowing which consumers fit into when they are in the final stage of consumers more control of the home browser has not yet loaded the which bucket. As Yogi Berra cleverly their journey—and it’s typically too purchase process. As Quicken “Thank You” page when their phone late for another lender to intervene said, “It’s deja vu all over again.” Loans Vice Chair Bill Emerson said in begins to ring. Talk about impressive! in a positive way that saves that Leading marketers are still utilizing a recent presentation, “Ninety This unprecedented need for “point-in-time” indicators, but also relationship. percent to 95 percent of people start speed-to-contact has caused connecting new data sets that paint Leveraging early stage indicators their home search online, similarly industry marketers to optimize their a more fluid picture of the entire and monitoring for new in-market with the mortgage process. If we’re outreach around the likelihood a end-to-end journey the consumer activity provides a clearer picture of not thinking about how to integrate person will respond positively. takes for their next mortgage the entire mortgage shopping those two things then the consumer Whether timing phone calls, e-mails, journey. These indicators create the transaction, as well as, for future of today and tomorrow will text messages or serving targeted competitive edge needed for lenders transactions. disintermediate us for the people ad units, understanding when and to act as a trusted advisor, execute who are.” how to deliver your marketing or proper nurturing of the consumer, Tailored outreach To get ahead of the technology sales engagement is essential to and be in position to initiate and Data is the key to the future of curve mortgage lenders will have to generating valuable consumer support the application process lending by gaining a more holistic target customers at the right time in interactions. when they are ready. view of a consumer’s unique their consumer journey with the most preferences. It helps us, as lenders, relevant message. As loanDepot Right time, right message Gaining valuable insights unlock valuable insights to better Chief Executive Officer Anthony Servicers cannot grow a successful Data-as-a-service (DaaS) time our outreach, leverage moreHsieh said, “Smart companies business by sitting back and organizations possess an ocean of effective engagement mediums, and understand that we must delight the collecting mortgage payments. information and are transforming our maximize efficiency. customer. Our core customer is a Knowing when customers are at-risk engagement strategies. Behavioral Industry-leading marketers are U.S. homeowner, the mortgage is of leaving the portfolio for a new insights can help lenders deliver now focusing on the people behind simply just one flavor of what that mortgage lender and proactively hyper-personalized experiences at the lead and thinking of them as a core customer desires. We must attempting to retain their business is the ideal moments. customer for life, not simply as a move fast to offer what customers vital to profitability. Acquiring early DaaS companies, especially transaction. They are tailoring their want in order to keep them.” indicators of in-market activity those that focus specifically in outreach optimized to the likelihood shines a spotlight on customers consumer finance, understand the a person will respond positively to Working in new expressing interest in a new unique challenges and regulations the engagement because of the and better ways mortgage before they talk to another lenders face and have built relevancy to them at that moment. As an industry, we’ve moved digitally lender, and creates opportunities to platforms catered to their needs. Attitudinal and behavioral data, from a simple short form landing maintain profit margin goals while Their popularity has exploded in which I wrote about in the August page with minimal fields, to robust improving portfolio retention rates. 2018 edition of National Mortgage recent years due to their ability to applications leveraging APIs to link There are three key variables Professional Magazine, are sort through massive amounts of bank accounts, tax returns, pricing marketers control when designing leveraged by lenders to create these complex data. They provide a engines, lead management, loan outreach campaigns: valuable experiences, in a scalable simple solution for lenders to origination systems and more. And l The audience and automated way and is worth the compliantly access valuable insights we’re fast-approaching realistic use l The timing effort. in a privacy-friendly manner. With cases of blockchain to speed the l The message Leveraging data to learn more this information, lenders are able to: entire mortgage process. l Drive marketing automation and about each consumer will paint a This technology is helping us—or, The key is connecting with the contact strategies on-demand clearer picture about how and when some might say forcing us—to work consumer as early in the funnel as l Identify which consumers are those consumers will want to in new and better ways to deliver an possible, ideally when they are just displaying in-market activity transact. Once that picture comes improved customer experience to starting their shopping journey. signals into focus and you provide help differentiate ourselves in the These early conversations will help l Determine which consumers are consumers with the experience they market. But we also know there’s you become a trusted advisor to “window shopping” vs. “readyprefer, your conversions will more to a great customer experience guide the consumer through the rest to-buy” skyrocket. than providing a smooth digital of their journey. Today, marketers mortgage process. Survival hinges on are using a few different solutions or gaining a better understanding of in-house analysis to help alert them Mike Eshelman is Head of Consumer Finance at Jornaya, consumers further up the funnel and to this type of shopping behavior: a data-as-a-service platform that delivers consumer to reach them at the optimal time l Credit triggers journey insights to publishers, marketers, analytics and during their buying journey. l MLS triggers compliance professionals with the highest-resolution view Lenders spend a fortune l Internal analysis (mix of behavior of the consumer buying journey. Mike can be reached by marketing to potential customers, data and modeling efforts) e-mail at MEshelman@Jornaya.com.

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Transforming Mortgage Risk and Compliance Through Automation RPA (not APR) is the industry’s most useful acronym

ortgage origination and processing are prime areas targeted by mortgage professionals eager to realize the promise of digital transformation. The focus of course differs depending on the priorities of each mortgage organization–for example, loan processors may want to speed processing and eliminate paper, while retail mortgage firms may want to accelerate and streamline onboarding through a smart mobile strategy. Whatever your team defines as its digital priorities, it’s almost certain that Robotic Process Automation (RPA) will play an important role in achieving them. Transforming both the front and back office, RPA is helping mortgage providers meet and exceed customer expectations, eliminate the costs of manual processing, and become increasingly digital businesses. Unlike human workers, software robots work 24/7, are 100 percent accurate, and introduce no human bias or error into the equation. Customer data is aggregated from websites, legacy systems, and other hard-to-reach sources, in real time on an ongoing basis. Banks are protected with detailed audit trails, and customers receive account decisions much faster and more efficiently.

By Chris Huff

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Embracing RPA at the heart of the mortgage industry RPA is a software application that creates a digital workforce of software robots, working side by side with your human staff. Many tasks where a human today interacts with a software application or data source can instead be handled entirely by a software bot. And many human workers can become more productive when assisted in their work by software robots. While RPA products differ in their technical approach, they all handle the repetitive, rules-based activity that can drain critical employee time, brainpower, and morale. Software robots mimic specific

“Transforming both the front and back office, RPA is helping mortgage providers meet and exceed customer expectations, eliminate the costs of manual processing, and become increasingly digital businesses.” human actions, such as logging into a supplier portal to gather information or copying and entering data between applications, sometimes called “Swivel Chair” operations. The robots become, in effect, a digital workforce that takes care of these repetitive tasks—freeing your human team from time-consuming and errorprone activities such as transferring data from one screen to another, or repeatedly performing the same compliance checks for each and every mortgage. What’s more, the robots execute their work faster and more reliably, so mortgage work is completed more quickly, at lower cost and without those human errors. In mortgage businesses, RPA provides a proactive approach to meeting loan quality, compliance and cost concerns, along with keeping front and back office teams and processes in sync. When repetitive manual tasks become automated, loan originators and processors can focus on more important responsibilities and strategies. Data accuracy improves,

of the most successful financial institutions. In a use case with a leading European bank, the organization automated the extraction of loan-application data from a third-party portal. The information was then connected to the bank’s internal systems and processes. The bank was able to shorten response time to borrowers from 14 days to just minutes, dramatically improving its speed and efficiency in presenting offers to prospective customers. In another institution, RPA deployment drove improvement in loan-processing timelines as well as overall efficiency. While growth meant the bank faced increased demand for lending services, operational issues caused electronic file conversion of loan documents to be delayed by as many as 15 days. Manual work flows were slow and the subsequent delays often resulted in lost sales, slower time to revenue, and a negative impact on cash flow. After implementing RPA, turnaround time for digitizing loan documents was reduced to five days, accelerating the start-to-finish borrower journey. More than 800,000 documents were migrated to an enterprise content management system in a matter of days, cutting costs and supporting better compliance.

RPA improves borrower journeys, step-by-step To apply RPA that makes sense for your organization, consider streamlining and accelerating processes that support high-priority borrower journeys, such as the initial borrower application. Focus on the entire journey and all its supporting processes, mapping the complete customer experience from beginning to end. Aim to meet borrower engagement goals that keep originators, partners and RPA in action processing personnel informed and Mortgage Originators naturally in sync, all while adhering to prioritize an improved customer auditability and compliance experience, increased revenues, reduced costs, and less risk. Yet to requirements. A step-by-step digital provide an excellent borrower transformation approach starts by experience, a strategic digital vision must in practice impact both studying the borrower journey and the potential impact process front- and back-office operations. After all, reducing latency in back- changes may have on your prospective customer. Seek out office processing helps reduce redundancy and manual verification, time and cost for the overall especially in information gathering borrower journey, while more and compliance-related processes. efficient back-office work is Locate and define opportunities to required to reduce the cost of eliminate data entry, verification and compliance with regulations and manual document processing. internal policies. Determine where you can leverage RPA may be new to you, but is opportunities to digitally engage already proving its worth in some reporting metrics are more trackable, and operational costs and loan timelines can be condensed. RPA is proving its potential to strengthen the management of risk and compliance, as well as enhance customer service. Return on investment is fast, with some mortgage lending services demonstrating value within six months.

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customers by allowing self-service. Be sure to personalize wherever possible, tapping into customer data to deliver tailored offers and communication. Maximize straightthrough processing (STP) by applying robots to fully automate repetitive tasks. And deploy robots as a digital workforce that assists your human workforce and your borrowers as they complete successful their business journey with you.

place automatically, using RPA to fortify your compliance capabilities Customers expect more from mortgage businesses than ever before. Yet the systems still running many banks simply weren’t designed for the speed,

scalability, and self-service capabilities required to satisfy today’s digitally connected customers. RPA is not only proven in multiple loan operations–it is essential to the digital mortgage industry now emerging.

Chris Huff develops and drives Kofax’s strategic initiatives in Intelligent Automation, tapping into expertise honed leading Deloitte Consulting’s U.S. Public Sector Robotics and Cognitive Automation practice during the emergence of Robotic Process Automation (RPA). Chris can be reached by e-mail at Chris.Huff@Kofax.com.

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Realizing new expectations with RPA In a recent Bonova Advisory survey, financial firms said they expected double-digit increases in the use of RPA across numerous compliance functions, from document gathering (+41 percent) to customer offboarding (+32 percent). As one of the most promising new technologies for accelerating data intensive processes, RPA saves staff time and improves the customer experience in a wide range of borrower journeys, throughout the borrower’s lifetime as your customer. What can you expect from RPA? As an example, a typical compliance officer spends more than 15 percent of his or her time tracking new regulations and requirements. New compliance initiatives can consume financial services organizations in an overwhelming process of collecting, classifying, and delivering content to multiple banking teams. With RPA, software robots work in tandem with a bank’s employees to monitor Web sites—from stock exchanges (NYSE, Euronext) to federal regulatory agencies—to reduce the time spent tracking down information and ease their due-diligence burden. Intelligent software robots deliver critical data to staff in near real time for compliance reporting via dashboards, databases, Excel spreadsheets, and specialty reporting applications in any format required. This eliminates days of delays and reduces the risk of hefty fines and reputational damage for noncompliance. As the digital workforce of robots shoulders the “busy work” of monitoring regulatory changes and informing relevant people, institutions should expect roles and responsibilities of their human workforce to shift upward. Employees are positioned to handle higher level work, and better enabled to focus on strategic initiatives.

To preempt time-consuming audit cycles and reduce the effort needed to comply to audit requirements, RPA can automatically access and integrate audit trail data for regulatory purposes; this includes any information that might potentially fall under an audit. Robots can complement data available in systems that banks already have in place–consolidating all data into prepared audit statements as needed. These actions all take

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The Impact AI Brings to Origination By Noel Riddle

and each of your keywords represent a baited hook in the Internet pond. How much of the bait must you lose before you get a nibble? Even if they nibble, most get away (85 percent to 95 percent). oes your mortgage The rest just vanish and you hope How about Facebook? With company have the they find you again. Facebook, your baited hooks are capacity to handle Now, ask yourself this: â&#x20AC;&#x153;At what based on demographicsâ&#x20AC;&#x201D;college the additional point in acquiring a new customer or grads between the ages of 30 and volume Artificial client would you like to begin 45, married with two dependents, Intelligence (AI) can engaging with that potential retired professionals buying a do for your origination business? customer or client?â&#x20AC;? second home, senior citizens trying Can you process an increase of 30, to find out about a reverse 40, 50 or even triple digit percent in 1. When they just start looking? mortgage, or whatever demographic volume? Do you want to become the 2. When they are seriously you are trying to get to sample your dominant mortgage company in your looking? bait. Again, you have to lose a lot of market? If this is you, you may 3. When they are ready to engage bait in order to catch a fish. qualify to subscribe to an Artificial or buy? Technology is expanding at Intelligence, behavioral-targeted 4. All of the above. lightning speed. It often feels hard to advertising program available to the even try to keep up. As mortgage mortgage industry? My guess is Number 4, â&#x20AC;&#x153;All of the company owners, we have to be So, what does AI have to do with above.â&#x20AC;? Thatâ&#x20AC;&#x2122;s what AI gives you. concerned about lead flow and then your advertising? Letâ&#x20AC;&#x2122;s take a look â&#x20AC;Ś Instead of marketing to the masses, do a balancing act to be sure we Think about your business online AI presents the opportunity to only have enough processors to process as it is now. Is your marketing market to â&#x20AC;&#x153;All of the above.â&#x20AC;? the loans and/or enough Loan focused on keywords, demographics First, letâ&#x20AC;&#x2122;s look at Google and Officers to originate the loans, but, or a combination of both? What their keywords. You know how that somehow, we make it work. percentage of the people that come works. You add every word you can Some of us decide what we have to your Web site actually take the think of that might get you noticed is enough. We have well-established time to complete a brief contact by a potential client. The more the relationships with real estate agents. form? In the mortgage industry, that better, but donâ&#x20AC;&#x2122;t exceed 200 or so. Weâ&#x20AC;&#x2122;ve paid our dues and are number is five percent to 15 percent. What you have there is a large pond comfortable. Hereâ&#x20AC;&#x2122;s the news: AI is not for us. It would upset our comfort zone. We would have to hire and train Loan Officers again. Then, weâ&#x20AC;&#x2122;d be worried about the processing, packaging and shipping. Lastly, we would have to worry about how we were going to invest all the extra profit we would be making! However, there is a select group of us who think just the opposite. We are not satisfied where we are. We put more hooks in the water. We market harder on the streets. We are L O A N O F F I C E R S | B R AN C H MANA G E R S | T E A M S hustlers. We are hungry to excel. We IN S ID E & O U T S ID E S A L E S P O S I T I O N S AVA IL A B L E are always looking for that something extra to get more loans and provide the best service Contact us to learn l more about Carrington is expanding possible. Cutting-edge â&#x20AC;Ś thatâ&#x20AC;&#x2122;s us! Carrington and make the move to The technology I am about to nationwide. Itâ&#x20AC;&#x2122;s time to expand d yourr business b and d careerr.. describe is unimaginably powerful make your move! John Cervantes RECRUITER because it is actively learning all the WE OFFER: John.Cervantes@CarringtonMH.com timeâ&#x20AC;&#x201D;billions of times each dayâ&#x20AC;&#x201D; 949-517-7127 exponentially growing. This

technological breakthrough, this AI Carlos Fernandez RECRUITER Operations focused on quality Carlos.Fernandez@CarringtonMH.com is called â&#x20AC;&#x153;Behaviorally-Targeted & speed of closing 949-517-7204 Marketing.â&#x20AC;? Marketing support and lead Artificial Intelligence takes generation marketing to a new level, so pay close attention â&#x20AC;Ś Licensingg & compliance support Today, more than ever, when Agent co-marketing programs someone starts thinking about

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homeownership, they display a certain set of online behavioral patterns. AI algorithms identify that person as a customer entering the arena of homeownership. Perhaps they are just looking to see what the rates are. Maybe they are trying to determine what kind of downpayment they will need. Suppose they are just beginning to look, but donâ&#x20AC;&#x2122;t know what price house they can afford. Regardless of what question they may have, they all do one thing: They display a recognizable behavioral pattern. Think about this â&#x20AC;Ś what if you knew they were, as described at the beginning of this article, in Category 1 when they first started looking? Could you just happen to send them a â&#x20AC;&#x153;Behaviorally-Targetedâ&#x20AC;? ad that addresses their issue instead of hoping they will stumble upon your keyword or that they are college grads between the ages of 30 and 45, married with two dependents? The early bird catches the worm. You know where they are before anyone else does. You start building a relationship of trust, so that when they do become a two or a three, it is your mortgage company they look to. By addressing them where they are and providing helpful feedback, you are creating the bond of trust they need when making such a large investment. The same pattern holds true in stages two and three. Behaviorallytargeting what you know they will be needing at each stage of the homebuying process. Now, letâ&#x20AC;&#x2122;s go back to your keyword/demographic method and your five percent to 15 percent visitor capture rate. Do you know who has the largest Behavioral Database? The answer is â&#x20AC;&#x153;Google and Facebook.â&#x20AC;? Again, let me shout it to you, â&#x20AC;&#x153;If you market over the Internet using keywords and/or demographics, but are not running as fast as you can, get on board with AI. You will not want to miss an enormous opportunity to dramatically increase your profit. Iâ&#x20AC;&#x2122;ve spent more than 30 years in the finance and marketing arena. Iâ&#x20AC;&#x2122;ve never been more excited about technology than I am today. Are you are ready for AI and are you ready to integrate it into your online advertising?

Noel Riddle is the former president of Mortgage Training Group Inc., the National Association of Mortgage Training and author of numerous mortgage-related books. He may be reached by e-mail at NRiddle@PaybackDigital.net, call (800) 256-6487, ext. 705 or visit PaybackDigital.net/0005.

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Getting Ahead of the Technology Curve By Linda Verardi

etting ahead of the technology curve is about breaking the code to your organization’s digital success. The digital lending focus has been and is largely on the consumer. We are hearing about how consumers are expecting a branded digital experience. They want personalized Netflix recommendations that fit their unique financial needs. They need Amazon-trusted-ease-ofuse to keep them moving forward. And, they want a clickand-go Uber-frictionless-pickupand-delivery from application to funded. Lenders want to give the consumer what they want to stay competitive and they want to reap the return on their investments. A key factor in reaping a return on tech investment is for lenders to understand their customer’s digital journey within the context of their organization’s digital workplace. It’s about remodeling and reimagining roles and responsibilities of the Loan Officers and the entire lending team. It’s about removing outdated excuses. People have to work really hard at avoiding technology. Lending teams don’t have to embrace technology because technology embraces each of us during every facet of daily life. There is no single IT solution for most business needs any more. Today’s organizations have exponentially more technology options available than ever before to create value for their stakeholders including but not limited to the consumer. Importantly, they have more technology options available to improve the way their workplace digitally operates. Many lenders have taken the time to come to a clear and decided business imperative. They have made technology decisions based on their governing principals. But, lenders still struggle with low usage and adoption, resulting in unrealized returns on technology investments. While much has been talked about in terms of the consumer journey and the

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brands above have laid the groundwork for the consumer digital experience. Lenders are encouraged to look within their organizations and industry as whole to map out their lending team’s digital journey. Lenders don’t need to harbor all of the responsibility of providing a digital workplace and consumer experience. Fintech innovators have to work together and invest the necessary time and resources now to support their customers and their customers’ customer digital journey. It isn’t enough for the fintech innovators to come together to create an exceptional digital experience or for lenders to make the new technology spend, if the lending teams are going to stick old processes that dilute the value and impede the efficiencies of new technology. It is time to change the roles and responsibilities of the lending team to reap the technology rewards. As the lending space grows more complex, it drives workplace complexity and influences rapid change. We have to design today’s digital workplace for a high level of diversity, frequent change, and lack of control. Lenders will need to consider the technology that is vetted and managed organizationally and “shadow” technology that arrives in the workplace via the lending team’s “own” devices often becoming miniature application ecosystems in their own right. They will need to understand how the lending team is using and benefiting from technology and to access the gaps, blocks and unrealized resistance to successful use of technology to vision cast a remodel that follows good design principles. Good design principles are the culmination of user insights both from the borrower team, lender’s team, along with brand values. Consider all of your customer touchpoints and who on your team provides, or in this changing landscape, who or what needs to provide that touch. Include both technology’s hightech touch and the lending team’s personal touch needs. Keep in mind that, from an individual worker’s perspective, an ideal

scheduling and payment of appraisal and inspections, automated product recommendation and selection from the lenders PPE, instant conditional approval, and initial and final disclosures. The digital digital workplace would be workplace provides efficiencies significantly more usable and that are compliant following the effective than what they have business rules within the platform. today. It would be easy, intuitive This does not mean that human and simple to navigate. Start by touch is absent. Built-in mapping out the current journey notifications, and transaction and begin to understand the coordinators support and future journey. Apply design orchestrate communications that principles to each phase of the journey and make sure that those require a specialized personal phases are connected to provide touch. The remodeled digital loan process moves from application a personalized, rich home to underwriting and then to financing shopping experience processing and e-closing with that will drive engagement and measurable ROI when lenders conversion. Bring together the reimagine the roles and Information Officer, Compliance responsibilities of the lending Officer, Lending Officer, Production Manager, Processors team. Lenders need to put some and Underwriters. Include leaders careful thought into how they’ll at all levels. Marketing and stay ahead of the rapid pace of human resource personnel ensures the completeness of the technological change while ensuring that the business as a journey being mapped and whole doesn’t continue picking up understood. This level of the IT reins and driving the transparency creates a trust– agenda. When the lender knows performance relationship which functionalities are relevant necessary for rapid usage and adoption resulting in measurable per journey phase, it’s time to implement the digital workplace to profitability. ensure that the touchpoints are Implementing a digital orchestrated into your workflow. workplace that supports Build systems and processes to consumer self-service coupled align with and support your with highly-skilled lending experts is essential. When digital business imperative and lending solutions work in concert, customer-centric strategy. It’s they collectively provide the type about managing change. Turn to technology that fits. Look for wellof experience the consumer has architected solutions that are come to know and trust. highly configurable, and that Borrowers engage simply and provide customization that easily from “Hello” to “Here’s support brand continuity. Look to your money.” They are empowered to make the best use provide personalization and selfservice that taps into today’s doof their time during the financing it-yourself consumer and the phase because digitization newly remodeled lending team. doesn’t keep nine to five hours. Create an effective and highly Real-time, meaningful statusing inclusive vision with an adaptable and automated processes provide transparency that fosters plan that is sustainable for longterm digital workplace success. a trusted brand experience. In Empower individuals to become the digital workspace, Loan effective change agents to Officers will benefit from a achieve operational goals. When transaction coordinator who will done with careful thought, manage the services that have achieving tech nirvana would be moved up in the loan process, so enabling that the tech gets out including verification, credit of the way. \ authorization and scoring,

Linda Verardi is Vice President of Business Development for MortgageHippo. During her career in the mortgage industry, Linda has worked for six technology startup companies. Her recent move to MortgageHippo grew out of a passion for artificial intelligence, machine learning, RPA (robotic process automation), big data, and of course, voice. She may be reached by e-mail at Linda@MortgageHippo.com.

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NAMMBA CONNECT ORLANDO The CONNECT 2018 Tour is a one-day conference held in six cities across the country, bringing all of the great educational content you’re used to from NAMMBA CONNECT to a city near you. NAMMBA is the mortgage industry’s premiere educational, networking and professional development experience. These conferences are designed to engage, enlighten and empower real estate and finance professionals from across the country. Come connect with some of the mortgage industry’s most diverse women and minority talent!

NAMMBA CONNECT DALLAS

Thursday, November 15 Doubletree by Hilton Orlando Seaworld 10100 International Drive • Orlando, Fla. 9:00 a.m.-5:00 p.m. Highlights of NAMMBA CONNECT Orlando … l An Introduction from Tony Thompson, CEO/Founder, NAMMBA l Building Your Brand With Social Media featuring Ben Smidt, MGIC, Digital Marketing Program Manager l Realtor Panel featuring Juliana Boseli-Neves, Glasstone Group, Broker/Owner and Veronica Figueroa, RE/MAX Innovation, Owner l The Coaches Corner featuring Kevin McGovern, Fairway Independent Mortgage Corporation, Mentor Coach/Area Manager and Tobi Moyle, Life is a Ladder Inc., President l LO Top Producer Panel featuring Rocio Portella, Annie Mac Home Loans, Loan Officer and Dario Jimenez, Union Home Mortgage, Luxury Home Lending Specialist

For more information on all NAMMBA CONNECT

Wednesday, November 7 Irvine Marriott 18000 Von Karman Avenue • Irvine, Calif. 9:00 a.m.-5:00 p.m. Highlights of NAMMBA CONNECT Irvine … l An Introduction from Tony Thompson, CEO/Founder, NAMMBA l Building Your Brand With Social Media featuring Andrea Kozak, MGIC, Digital Marketing Program Specialist l Keynote Luncheon featuring Casey Cunningham, XINNIX, The Mortgage Academy, Founder/CEO

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Wednesday, October 24 Addison Conference Center 15650 Addison Road • Addison, Texas 9:00 a.m.-5:00 p.m. Highlights of NAMMBA CONNECT Dallas … l An Introduction from Tony Thompson, CEO/Founder, NAMMBA l Building Your Brand With Social Media featuring Zak Stoiber, MGIC, Digital Marketing Specialist l Realtor Panel featuring Tenesha Lusk, Keller Williams, Realtor and Alicia Vasquez, RE/MAX Best Choice, Associate l A presentation from Linda Davidson, Fairway Independent Mortgage Corporation, Branch Manager l LO Top Producer Panel featuring Pandian Kumar, Mortgage Financial Services, Loan Officer; Jed Anantasomboon, LoanStar Home Lending, Branch Manager; Dee Dee Culpepper, DHI Mortgage, Senior Loan Officer; Alex Varela, Primelending, Branch Manager; and Gracie Morrow, Georgetown Mortgage, Branch Manager

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By Eric Weinstein

Ferengi Rule of Acquisition #248: “Deep down, everyone’s a Ferengi.” Working from home, a slow business summer and a Netflix account combine to make a very lazy two months. I have been binge watching “Star Trek: Deep Space Nine” to increase my business profitability. Also, so I can write off my cable bill as an “educational expense.” In case you are not a Trekkie, in the Star Trek universe, “The Ferengi Rules of Acquisition” are a collection of 285 sayings that form the basis of Ferengi philosophy and business profitability.

Ferengi Rule of Acquisition #109: “Dignity and an empty sack is worth the sack” Ferengi Rule of Acquisition #106: “There is no honor in poverty.” Once, one of my Realtors made a big mistake on deal. I fell on my sword for her and took all the blame for it. The truth of the matter is that the borrower is not really your customer, the Realtor is. You will get a deal every five years from that borrower, but a good Realtor can feed you a few deals a month. Ferengi Rule of Acquisition #5: “Always exaggerate your estimates.” When I do an LE, I always make sure to overestimate and pad costs. This way, at closing, when it is lower, they love me. Conversely, if it is just one

Ferengi Rule of Acquisition #217: “You can’t free a fish from water.” Ferengi Rule of Acquisition #280: “If it ain’t broke, don’t fix it.” I once had a 45-year-old top producing, self-medicating Loan Officer who lived in Florida. He smoked marijuana every day. He even had a special room in his luxury home made with high capacity industrial strength ventilation system so his kids would not find out. I was under a lot of pressure from my managers to fire him, send him to rehab or just talk to him about his indulging. But, he was a wonderful person to be around, I never got a complaint about him, he was a terrific Loan Officer and it never seemed to interfere with his business. Right or wrong, I just turned a blind eye to all of it. Ferengi Rule of Acquisition #285: “No good deed goes unpunished.” Ferengi Rule of Acquisition #236: “You can’t buy fate.” I have found that telling the truth is a better business strategy than the short term profit of lying to get a deal. Both will get you a reputation, but the honest way is the better long-term business model to get more transactions. If you do good job, you customer will tell 10 people. If you cheat them, they will tell 100. It is not necessarily that I am a particularly altruistic fellow, I just find it better for business and profitability. Still, don’t expect it to work every 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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Ferengi Rule of Acquisition #48: “The bigger the smile, the sharper the knife.” Ferengi Rule of Acquisition #212” “A good lie is easier to believe than the truth.” After my company closed, I worked as a Loan Officer for a competitor, neither hating it nor loving it. Then, an old acquaintance contacted me and offered me a tremendous producing manager position. There were promises of joint control, riches beyond belief and a myriad of other things that were total lies. The truth was soon evident, he just wanted me to be a loan officer and fed me a

Ferengi Rule of Acquisition #6: “Never allow family to stand in the way of opportunity.” Back in the day, I once made four points off a couple, and at closing, they gave me a thank you note and a gift, because they never thought they could ever buy a house with their credit. Recently, I did a loan for my wife’s sister for FREE. I made no money on the deal. They complained the entire time that the rate was too high. I could have easily made two points on that deal. They did not have a clue what real interest rates were.

dollar higher than I estimated, they want to kill me. Always under-promise and over-deliver.

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Ferengi Rule of Acquisition #9: “Opportunity plus instinct equals profit.” Ferengi Rule of Acquisition #22: “A wise man can hear profit in the wind.” Back in the 1990s when I started in the mortgage industry, I had to schlep to the office every day in my suit and tie for that one in a million time when a customer would actually visit the office. When I started my own company, it was my instinct that other Loan Officers were like me and would much prefer doing everything from their home. Not only that, this way I could hire tons of Loan Officers without having the cost of providing desk space, phones, etc. This allowed me to pay higher than my mortgage company competitors.

bunch of flattery to my ego. And I fell for it.

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REMN Wholesale 732-738-7100 www.remnwholesale.com Although REMN Wholesale is part of a large corporation, it feels like a “Mom and Pop”-style company. We encourage our team members to grow and we train and promote each individual to their full potential. As a national company, REMN provides many opportunities for employment from coast to coast.

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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S

calendar of events 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. Wednesday, October 24 NAMMBA Connect 2018 Dallas Addison Conference Center 15650 Addison Road Addison, Texas For more information, visit Connect2018.org.

Tuesday-Thursday, November 6-8 NCRA 26th Annual Conference 2018 Atlantis Casino Resort Spa 3800 South Virginia Street Reno, Nev. For more information, visit NCRAInc.org.

Thursday, November 15 NAMMBA Connect 2018 Orlando Doubletree by Hilton Orlando Seaworld 10100 International Drive Orlando, Fla. For more information, visit Connect2018.org. Tuesday-Wednesday, November 27-28 MBA’s Summit On Diversity and Inclusion Capital Hilton 1001 16th Street 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.

FEBRUARY 2019 Sunday-Wednesday, February 10-13 MBA’s CREF/Multifamily Housing Convention & Expo 2019 Manchester Grand Hyatt San Diego 1 Market Place San Diego, Calif. For more information, visit MBA.org. Monday-Thursday, February 25-28 MBA’s National Mortgage Servicing Conference & Expo 2019 Hyatt Regency Orlando 9801 International Drive Orlando, Fla. For more information, visit MBA.org. MARCH 2019 Sunday-Wednesday, March 10-13 MBA’s Mid-Winter Housing Finance Conference 2019 Ritz-Carlton, Bachelor Gulch 0130 Daybreak Ridge Avon, Colo. For more information, visit MBA.org.

Sunday-Wednesday, March 24-27 MBA’s Technology Solutions Conference & Expo 2019 Hyatt Regency Dallas 300 Reunion Blvd E Dallas For more information, visit MBA.org. Sunday-Thursday, March 24-28 2019 Regional Conference of MBAs Harrah’s Resort & Convention Center 777 Harrah’s Boulevard Atlantic City, N.J. For more information, visit MBANJ.com. MAY 2019 Saturday-Tuesday, May 4-7 NAMB 2019 Legislative & Conference Liaison Capitol Hill Hotel 415 New Jersey Avenue NW Washington, D.C. For more information, visit NAMB.org. Wednesday-Saturday, May 15-18 NAPMW 2019 Annual Education Conference “Jazzin’ Up Mortgage in the Big Easy” Hotel Monteleone 214 Royal Street New Orleans For more information, visit NAPMW.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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NOVEMBER 2018 Thursday, November 1 FAMP Miami Chapter Annual Mortgage Convention The Miami Airport Convention Center (MACC) 711 NW 72nd Avenue Miami For more information, visit MiamiFAMP.org.

Monday-Wednesday, November 12-14 MBA’s 2018 Accounting and Financial Management Conference Hyatt Regency Orlando 9801 International Drive Orlando, Fla. For more information, visit MBA.org.

JANUARY 2019 Monday-Thursday, January 28-31 MBA’s Independent Mortgage Bankers Conference 2019 Hyatt Regency San Francisco 5 Embarcadero Center San Francisco, Calif. For more information, visit MBA.org.

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Sunday-Tuesday, October 28-30 2018 NRMLA Annual Meeting & Expo Hilton San Diego Bayfront 1 Park Boulevard San Diego For more information, visit NRMLAOnline.org.

Wednesday, November 7 NAMMBA Connect 2018 Irvine Irvine Marriott 18000 Von Karman Avenue Irvine, Calif. For more information, visit Connect2018.org.

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

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

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Don’tt Gett Left in the Dust D Angel Oak Mortgage Solutions Visit www.Ang gelOakMS.com/NMP orr call 855.631.9943. Grow With the Leader in Non-QM Wholesale and Correspondent Lending. © Angel Oak Mortgage Solutions LLC NMLS #1160240, Corporate office, 980 Hammond Drive, Suite 850, Atlanta, G 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, V 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 qualiffyy 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. MS264_0518