National Mortgage Professional Magazine September 2018 by ambizmedia

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

PRESORTED STANDARD U.S. POSTAGE PAID MORTGAGE NEWS NETWORK INC.

Imagine NEVER logging c house fl flyers h g gg g in to create r u o Y ng ci i r P ine g En t e s Ra S L M a

Your Corporate Compliance

IIn nd t ndustry U d t Updates

Loan Officer Saved Calcs, Layouts, Etc.

ta a D

MLS Data, your pricing enginee rates, your corporrate compliance, ind dustry updates & your o saved preferencces Yo our Corp porate Compliance Con C trol your corporate

+.% ) '+ ) -$,) ( )'% +) + ) &" & )&% +&) price chaanges or open houses scheduled.

compliancce... ce costs, ts disclaimers, s licensing and much .-,+*)('+&+)%,+)%$#-.%" % )$&+ ) -,)'-$&+) +,&*

) %#%) $ ) )'-$&+) '-#-&) &)%$#-.%" % ) $ -% + *) -$&+) +,&)%,+) ,+%#+ )%$#-.%" % )% ) &+ #)#-) -$,) ( ) '-)'% +)#'+ ,)- ) - *

Real-Time e Industry Updates % +)".+)% ) -,, *) )

# " " # # ! ! ! ".% ) $+ )% ) -,#+ ' ) #+ ,%"- *) ( ) -% ) amount,, loan type, term, FICO, etc. are used to get YOUR ,%#+&) -,)%$#-.%" )'-$&+) +,&) '+ ) -$,) ( ) '% +) + ) &" &*) -% &)%,+)+ + )%$#-),+ % $ %#+ ) #') ) ) ) ) ) ) )

$&#, )$ %#+&)% ) -. % +)%,+)%$#-.%" *)

$#"! #! # " ! Save pr p eferences $&+ ) -,)%$#-.%" ) +,&*) +#)#'+) -- )% ) ++ ) ) '--& )) )'-$&+) '-#-& ) ( ) ,- + % +.+ # ) % ,-$ ) - -,& ) .% +&)-,) -, +,&*

# # $ $ ! custom mercare@osiexpress.com o

n National Mortgage Professional Magazine n SEPTEMBER 2018

$ " " #! # ! $#-.%" )% +,#&)&+ #)#-) -$,)

NationalMortgageProfessional.com

FU ULLY Automa o te Hou use Flyers.... Even Up pdates!

table o

N A T I O N A L

20 David H. Stevens: Mortgage Professional of the Year By Rick Grant

S E P T E M B E R

32 Mortgage Fraud Challenges: How to Catch a Crook By Jonathan Foxx, Ph.D., MBA

2 0 1 8

M O R T G

V O L

A SPECIAL FOCUS ON “THE WHOLESALE, TPO & CORRESPONDENT MARKETS”

Brokers’ Time to Shine By Brian Vieaux, CMB ................................62

Growth Opportunities in the Wholesale Arena By Laura Brandao ..66 Actions Lenders Can Take Now That Will Increase Their Millennial Market Share in 2019 By Julie Wink ......................68

R W

A Roadmap for Success With Non-QM Originations By Steve Skolnik ................................................................................70

Five Reasons Millennials Aren’t Purchasing Homes and Five Ways to Reach Them By Steven Kaufman ................................72

TPO or TOP Originator? By Eric Weinstein ......................................74

How to Capture the Wholesale Market in This Competitive

46 Who’s Who in the 2018 Wholesale Marketplace

58 Acres of Diamonds for Loan Officers By Brian Sacks

Industry By Tracy Marks ....................................................................76

Millennials: The Underestimated Generation By Brooke Mulder ....78

C H N

Wholesale Strategy Insights: A Chat With Jim Wickham, VP of Third-Party Originations at Union Home Mortgage By Alice Alvey ....................................................................................80

Broker Business: Risk Management and Partnerships By Raymond LaFave III ......................................................................82

M C

How to Take Advantage of the Growing Non-Agency Market By Ben Wu..........................................................................................84

Is It Time to Upgrade Your Stable of Correspondent Investors? By Jim Loving ....................................................................................86

Marketing to the Millennial Homebuyer: Have a Solid Digital Mortgage Strategy By Mike Eshelman ..............................................88

V I S I T Company

Web Site

O U R

A D Page

Angel Oak Mortgage Solutions ............................ www.angeloakms.com ......................................Back Cover Brokers Compliance Group.................................. www.brokerscompliancegroup.com ..................................17 Caliber Home Loans.............................................. www.caliberwholesale.com ..............................................29 Carrington Mortgage Services, LLC ...................... www.carringtonwholesale.com ..............................41 & 65 Citadel Servicing Corporation .............................. www.citadelservicing.com ................................................5 Colonial Savings ................................................ www.gocolonial.com ......................................................85 Deephaven Mortgage, LLC .................................. www.deephavenmortgage.com ........................................9 DocMagic .......................................................... www.docmagic.com ......................................................11

92 Why Homebuyers Should be Shopping for Customer Service Instead of Low Rates By Michael Faulkner

FAMP-Miami ...................................................... www.miamifamp.org ....................................................80 Flagstar Bank .................................................... www.flagstar.com/why ..................................................19 Fund Loans........................................................ www.fundloans.com ........................................................7 Greenbox Loans, Inc........................................... www.greenboxloans.com ..............................................IFC Lykken On Lending ............................................ www.lykkenonlending.com ............................................76 MBS Highway .................................................... www.mbshighway.com/MNN ..........................................69 Mortgage Assurance, Inc. .................................. www.maibroker.com ......................................................35

of content

R T G A G E

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

V O L U M E

1 0

N U M B E R

FEATURES

Don’t Be Left Behind as Non-QM Market Surges By Tom Hutchens ................................................................................8 The Elite Performer: Do Your Homework By Andy W. Harris, CRMS ....................................................................8 Recruiting, Training and Mentoring Corner: Alternative Wholesale By Dave Hershman ..........................................................10 Who’s Winning in Today’s Market?..................................................16 California Passes Enhanced Consumer Protections By Gavin T. Ales ................................................................................18 NAMB Perspective ............................................................................24 The Mortgage Godfather: Everyone Is a Genius By Ralph LoVuolo Sr...........................................................................30 BrokerNATION: Tammy Serafini By Andy W. Harris, CRMS ............36 Connecting Independent Mortgage Loan Originators With HUD-Approved Housing Counselors Can be Bridge of New Business By Pam Marron ..........................................................40 Cracking the 2018 Inc. 5000 List ......................................................54 MBA's Mortgage Action Alliance: A Message From MAA Chairman Gene M. Lugat..................................................................56 Complete Property Management By Kathy Fettke ..........................60 Tips for Getting More Positive Online Reviews By Andrea Obston ..............................................................................90 What to Expect When HECM Expected Interest Rates Change By Jeffrey M. Birdsell, CMB................................................................94 Compliance Matters By Jonathan Foxx ............................................97

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

Web Site

Page

Mortgage Bankers Association ............................ www.mba.org/believe ....................................................37 Mortgage News Network (MNN) .......................... www.mortgagenewsnetwork.com ............................44 & 45 NAMB+ ............................................................ www.nambplus.com ......................................................27 NAMMBA ..........................................................www.nammbaconnect.org .............................................. 39 NAPMW ............................................................ www.napmw.org ....................................................79 & 84 NAWRB ............................................................ www.nawrb.com ............................................................73 New American Funding ...................................... www.newamericanfunding.com ....................................104 NMP U .............................................................. www.nmpucoaching.com ........................................83 & 89 NRMLA.............................................................. www.nrmlaonline.org ....................................................41 OSI Express........................................................ www.osiexpress.com/mlslink ............................................1

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.

Paramount Residential Mortgage Group, Inc. ...... www.prmg.net ..........................13, 67 & Inside Back Cover

NMP Media Corp.

REMN................................................................ www.remnwholesale.com ..............................................15

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

Ridgewood ........................................................ www.ridgewoodbank.com ..............................................71 TagQuest .......................................................... www.tagquest.com ........................................................75 United Wholesale Mortgage ................................ www.uwm.com ........................................................52-53

SEPTEMBER 2018 Volume 10 • Number 9

FROM THE

publisher’s desk

Presenting the leaders in the wholesale business By now it’s clear to everyone working in the mortgage industry that the wholesale lending 1220 Wantagh Avenue • Wantagh, NY 11793-2202 business is back. The business is now growing well today, thanks to the efforts of some very Phone: (516) 409-5555 • Fax: (516) 409-4600 innovative independent mortgage banks, a growing cadre of professional Mortgage Brokers and Web site: NationalMortgageProfessional.com the organizations that support them both. In this issue, we shine a spotlight on the efforts of all of STAFF Eric C. Peck Joel M. Berman those working in the wholesale, third-party origination (TPO) and correspondent markets. Editor-in-Chief Publisher - CEO (516) 409-5555, ext. 312 (516) 409-5555, ext. 310 So many talented executives have contributed to our industry over the last decade. The ericp@mortgagenewsnetwork.com joel@mortgagenewsnetwork.com comeback from the recession was hard-fought and we’re very lucky to have all of the talented Joey Arendt Beverly Bolnick people that helped make that happen. In that group, one person stands above the rest, in my Art Director VP-Sales & Marketing (516) 409-5555, ext. 323 (516) 409-5555, ext. 316 mind. So much so, that we have done something in this issue that we have never done before. joeya@mortgagenewsnetwork.com beverlyb@mortgagenewsnetwork.com Each month, our readers enjoy stories that showcase our industry’s top leaders. Now, for the Scott Koondel Phil Hall VP of Operations Managing Editor first time in our publication’s history, we bring you our first ever “Mortgage Professional of the (516) 409-5555, ext. 324 (516) 409-5555, ext. 312 Year.” scottk@mortgagenewsnetwork.com philh@mortgagenewsnetwork.com As our industry worked to recover, industry veteran and former government official David H. Richard Zyta Francine Miller Social Media Ambassador Advertising Coordinator Stevens provided the leadership that pulled our industry together. He, more than any other, (516) 409-5555 (516) 409-5555, ext. 301 richardz@mortgagenewsnetwork.com francinem@mortgagenewsnetwork.com helped our industry find it’s “One Voice,” and that made all the difference. I’m very proud to be Rick Grant Dylan Pollock bringing you his story in this issue. It is one of the most in-depth stories we have ever run in this Special Reports Editor Administrative Assistant publication. (570) 497-1026 (direct) (516) 409-5555, ext. 314 (516) 409-555, ext. 311 dylanp@mortgagenewsnetwork.com Dave retires this month, handing over the work to another strong leader (watch for his profile rickg@mortgagenewsnetwork.com in our October issue) and to the rest of us. To get that job done, we have to be the best we can ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact at this business. Fortunately, we have assembled a fantastic collection of features related to the VP-Sales & Marketing Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail beverlyb@mortgagewholesale lending business in this issue, not the least of which is our annual “Who’s Who in newsnetwork.com. Wholesale” directory. Our annual wholesale directory is the place to go to find out what ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck companies are innovating in ways that will help you build your business and what leaders are at (516) 409-5555, ext. 312 or e-mail ericp@mortgagenewsnetwork.com. The deadline for submissions driving those changes. It’s one of the best features we offer each year, and I hope you enjoy it is the first of the month prior to the target issue. and that it provides the connections you need to build a stronger business. SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@mortgageLike success in every other business, success in wholesale starts with a strong strategy. To newsnetwork.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. help with that, we provide some great features that will help you get your business off on the Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the right foot, or rethink it before you take your next step. authors alone and do not imply the opinion or endorsement of Mortgage News Network Inc., or the offiStart with "Wholesale Strategy Insights: A Chat With Jim Wickham, VP of Third-Party 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) Originations at Union Home Mortgage," written by Alice Alvey, Vice President of Partner and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activEducation and Training for Strongsville, Ohio-based Union Home Mortgage. ities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement For more information about how industry leaders are working to grow the wholesale lending of the product and/or services by Mortgage News Network Inc., NAMB, NAPMW, NCRA, and other state mortgage trade associations. business, read "Growth Opportunities in the Wholesale Arena," by Laura Brandao, Chief National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage Operating Officer at American Financial Resources Inc. 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 For many, success will involve moving into the non-QM space. To help you formulate a 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. winning strategy there, we bring you two great articles. First, "A Roadmap for Success With NonQM Originations” by Steve Skolnik, CEO of ClearEdge Lending. And don’t miss "How to Take Advantage of the Growing Non-Agency Market," by Ben Wu, Executive Director of LoanScorecard. Regardless of how you choose to approach this business, the companies you partner with will make all the difference. But how do you choose? To help, we bring you "Is It Time to Upgrade Your Stable of Correspondent Investors?" by Jim Loving, National Sales Director for Planet Home Lending. Being the broker that wholesale lenders want to work with is important if you hope to grow. To find out more about what they expect, check out "Broker Business: Risk Management and Partnerships,” by Raymond LaFave III, Deputy Director of Wholesale at Towne Mortgage Company, and "Brokers’ Time to Shine," from Brian Vieaux, CMB, Senior Vice President of Third-Party Originations for Flagstar Bank. Finally, everyone’s success depends upon our ability to market our loan products effectively. For some great insight, read "How to Capture the Wholesale Market in This Competitive Industry," by Tracy Marks, President of LenderSelect Mortgage Group. Are you interested in the Millennial market? You’d better be. They can be tricky, but they are the future of our industry. To help you make the connection, we bring you four great pieces in this issue. l "Marketing to the Millennial Homebuyer: Have a Solid Digital Mortgage Strategy," by Mike Eshelman, Head of Consumer Finance at Jornaya l "Five Reasons Millennials Aren’t Purchasing Homes and Five Ways to Reach Them," by Steven Kaufman, Founder and Chief Acceleration Officer of ZeusLending.com l "Millennials: The Underestimated Generation ... Capturing the Millennial Homebuyer Market," by Brooke Mulder, Marketing and Communications Manager for MortgageHippo l "Actions Lenders Can Take Now That Will Increase Their Millennial Market Share in 2019," by Julie Wink, Executive Vice President of Data Facts If you’ve been planning to build your business by serving more Millennial homebuyers, this is definitely the issue you’ve been waiting for. Finally, Eric Weinstein wonders whether some of you have fallen victim to a typographical error in his piece, "TPO or TOP Originator?" You can always count on Eric to ask the right questions! And for the risk managers in our audience, don’t miss this month’s compliance feature, as Jonathan Foxx goes into great detail in his wonderful piece, "Mortgage Fraud Challenges: How to Catch a Crook." Learning the lessons Jon shares this month could literally save your business. And, of course, you’ll find all of the trade association news, compliance information and general thought leadership you’ve come to expect. As always, our hope is that the information we bring you will help you grow the very best mortgage firms. I wish you the best of luck with that and hope you enjoy this issue. Sincerely, Joel M. Berman, Publisher-CEO Mortgage News Network Joel@MortgageNewsNetwork.com

FIRS RS ST TO MARKET T.. FIRS ST TO INNO ST OV VATE. FIRS IRS ST T TO LEAD. !+! "# )

en â&#x20AC;˘ 244 mo. f rom credit event e year W W2 or 1040 to â&#x20AC;˘ On 80% LT LT TV V â&#x20AC;˘ 90% LTTVV, no MI

on bank statements â&#x20AC;˘ 12ffoorminonth come â&#x20AC;˘ Interest only available

â&#x20AC;˘ Foroeign nationalals e/DSCR â&#x20AC;˘ Statteed incomme/DS B ess purpose/No se/No T TRID â&#x20AC;˘ Busin

â&#x20AC;˘ Interest oonly available Be w 50 500 credit score â&#x20AC;˘ Belo on n exception e

-,+ +*)('*)&%&$+##)("+! )! &!+! "# )&*)! ! $ &$ &( &!

949-90 00-6630

ÂŽ

citadelservicing.com

For mortgage professionals only. This information is intended for the exclusive use of licensed real estate and mortgage lending professionals in accordance with local laws and regulations. Distribution to the general public is prohibited. Rates and programs are subject to change without notice. Citadel Servicing Corporation is an Equal Opportunitty g y Employer and does not discriminate against individuals on the basis

n National Mortgage Professional Magazine n SEPTEMBER 2018

+ ÂŽ &+ ( ( ) + #'!

O e mont onth bank nk statement â&#x20AC;˘ On ffo or incom me â&#x20AC;˘ Noo reseserves wn to 500 creditt score, â&#x20AC;˘ Do O & N/O O/O O

NationalMortgageProfessional.com

' &"* (& & ,)&!)-&'* * '

e, short sale and â&#x20AC;˘ FBKorecoklosur ay â&#x20AC;˘ Up to $5 millionn loan amounts 0% L LT TV T V, no MI â&#x20AC;˘ 90%

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 6

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

SEPTEMBER 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 Membership Hits the 1,600 Mark The Association of Residential Mortgage Compliance Professionals (ARMCP) has reported that its membership is now at approximately 1,600 members. ARMCP is the first and only independent, national organization in the United States devoted exclusively to residential mortgage compliance professionals. “This year will be special for us, because we will be launching our very own Web site, a state-of-the-art site designed specifically to fulfill the needs of residential mortgage compliance professionals,” said Jonathan Foxx, Ph.D., MBA, Founder and President of ARMCP. “Our independence means we are not affiliated with any profit-oriented corporation or enterprise. Our membership consists solely of those members who have joined it on their own and were not solicited to join it via solicitations from third-party lists or subscriptions. Our independence is the key to the value of our advocacy!” If you would like to refer an individual for membership in ARMCP, please use the ARMCP LinkedIn Group to invite them to join. There is no cost for membership and all new members are welcomed. If you want to join directly, send an e-mail to Info@ARMCP.org.

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n SEPTEMBER 2018

Don’t Be Left Behind as Non-QM Market Surges By Tom Hutchens

his year, non-QM lending is surpassing the most ambitious expectations of boosters like me. Volume is surging, loan performance has been stunning, and originators are much less skeptical.

the

elite performer

Yet, most Loan Officers have never submitted a non-QM loan application. Why do so many mortgage pros remain on the sidelines? What will convince you to get in the game? Your overall business plan must consider the following: First: This year’s non-QM loan volume will more than double that of 2017. As an industry leader, Angel Oak is on track to originate $2 billion in loans in 2018. After three years of steady consistent growth, the non-QM production is surging at a time when originations are way down in every other sector. Second: We’re still in the early adopter stage of non-QM acceptance by originators. This is the time when visionaries and market leaders recognize that an innovative product has proven its potential even though the majority is still unaware or skeptical. Now is the time to learn how non-QM top producers are building their businesses and bring those tactics to your local market. This is when new empires are born.

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Third: To succeed in a new arena, follow the leader. Doing new and different things presents challenges. The best way forward is to rely on an expert to teach you and offer resources that cannot be found elsewhere. Angel Oak pioneered non-QM loans and we remain the market’s prime mover. We lead by offering personal assistance, high-tech tools and marketing support to Loan Officers. Make sure that you work with a non-QM lender who delivers great experiences from application through closing. Be aware that your first non-QM deals may be auditions for Realtors, closing attorneys and influencers, as well as the borrower, all of whom you need in order to build your non-QM pipeline. Fourth: Learn who the non-QM borrowers are in your area and figure out how to reach them. Non-QM borrowers are diverse. Their profiles will vary from place to place. In one city, there may be more foreign nationals and self-employed people. In another, retirees and investors may be your best prospects. By reaching out to Realtors, agency-only lenders and financial consultants, you will find out where your opportunity is greatest. After the right people know that you are the non-QM specialist, this business will come in the door. Non-QM loans can enable creditworthy consumers to own homes. Our purpose at Angel Oak is to empower originators to reach and serve those potential borrowers. Your Account Executive will help you profit in this rapidly growing market. 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

launching nationally, with enhanced photography and drone footage features available in more than 300 neighborhoods in San Francisco, Oakland, San Jose, Austin, and Chicago. More than 1,100 additional enhanced neighborhoods will be introduced later this year. “Prior to Trulia Neighborhoods, there wasn’t a resource that showed consumers what life is really like in a neighborhood,” said Tim Correia, Senior Vice President and General Manager at Trulia. “Our research found consumers were determined to find this type of information and even developed a series of hacks to source these valuable insights. It was clear it was time to rebuild the home and neighborhood discovery experience from the ground up and empower consumers w Accurate Group Enhances Its NotaryWorks Solution With Remote Services

NotaryCam has announced that it has partnered with Accurate Group to provide remote online notarization services for NotaryWorks, Accurate Group’s complete notary solution. NotaryCam brings individuals and businesses together from anywhere in the world to securely sign and notarize documents in the virtual presence of a licensed notary public. To date, NotaryCam has completed more than 100,000 remote online notarizations. The company holds the industry’s highest Net Promoter Score and a customer satisfaction rating of 99.8 percent. “Lenders are ready to embrace electronic notarization in full force,” said Dave Samson, Vice President of NotaryWorks Signing Solutions at Accurate Group. “Our NotaryWorks solution, powered in part by NotaryCam, provides us the scale to meet the growing demand for this service and ensures that all types of notarizations are delivered with an outstanding customer experience.” NotaryWorks by Accurate Group enables lenders to offer a range of real estate e-closing options that accelerate loan closings and better serve borrower needs. It offers remote online notarization powered by NotaryCam as well as mobile notaries for borrowers who prefer a more traditional approach. All notaries are certified and pre-

screened by Accurate Group. “Supporting more than 100,000 transactions has given NotaryCam the deep expertise necessary to execute flawless online real estate closings,” said NotaryCam Founder Rick Triola. “We are experts with mortgage and escrow documents, and we understand the emotional aspect of buying a home. It’s the most important transaction in many consumers’ lives, so it’s essential to make it professional, personable and perfect.” Verus Mortgage Capital Increases Loan Amounts

Verus Mortgage Capital (VMC) has announced that it has made updates to its Investor Solutions loan program. Loan amounts for all four of its Investor Programs increased from $2 million to $5 million. In addition, Verus’ bank statement programs and debt service coverage ratio now go up to 80 percent from 75 percent and its debt-to-income ratios have increased from 43 percent to 50 percent. All Verus Investor Solutions loans feature: DSCR/Property cash flow underwrites available; interest-only availability; cash-out options; closing as a corporation or LLC; unlimited number of finance properties; and Foreign Nationals allowed. “At Verus Mortgage Capital, we’re committed to providing lenders with solutions for their investment property borrowers that are underwritten to borrower or property income,” said Dane Smith, President of VMC. “Our focus is to offer lenders expansive options to meet the needs of unconventional borrowers.” 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.

CORRESPONDENT · WHOLESALE · WAREHOUSE · SUBSERVICING

Award-winning lending solutions

crafted just for you.

Visit f lagstar.com/why to learn more.

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 SEPTEMBER 2018

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

NationalMortgageProfessional.com

We understand that details and timing matter the most. For the past 30 years, our award-winning team has surpassed the highest standard in quality, consistency, and customer service, all backed by Flagstar Bank, one of the nation’s leading mortgage providers.

SEPTEMBER 2018 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

David H. Stevens Mortgage Professional of the Year By Rick Grant

Over the years, readers of this publication have enjoyed many monthly features dedicated to putting the spotlight on industry leaders. We have enjoyed giving these professional men and women some recognition for their efforts, which have created a better industry for all of us and the borrowers our readers serve. In this issue, for the first time in our publication’s history, we are featuring a leader that exceeds even our high standards for a monthly mortgage leader. David H. Stevens, as those of you have do not already know will learn below, brought our industry together at a critical time. Mortgage Brokers, Mortgage Bankers, Independent Mortgage Bankers, regulators and politicians all sat down together, thanks to his leadership. David is our very first Mortgage Professional of the Year. It is my hope that he will not be the last, but anyone who follows him into this position will find the bar set extraordinarily high. I hope you enjoy this view into the life and lessons of this great leader. 21 Joel M. Berman, Publisher-CEO, Mortgage News Network

In search of a leader Anyone who was working in the financial services industry during the first years of this century can tell you just how quickly things can go from triumphant to tragic. By the end of the first decade the home finance industry was reeling, and one in every 10 mortgages was in default. After a run-up that saw the industry originating over $3 trillion in home mortgage loans by 2007, the financial crisis threatened to take the entire system down and millions of American homeowners with it. While there were a number of industry trade groups active at the time, none of them seemed to have the ability to pull the diverse industry together in order to mount a unified response to the crisis. The Mortgage Bankers Association (MBA) was in the best position, if it could find the right leader. “Our industry needed someone to pull it together,” recalls Daniel Arrigoni, who was at the time

President and CEO of US Bank Home Mortgage, one of the industry’s largest loan originators. “We were disjointed as a membership. I was having conversations with other people who recognized the need to have someone bring us all together to become one voice in Washington and to help shape policy. We all looked at each other and realized that there was only one guy. So, we went to talk to Dave.” At the time, David H. Stevens was finishing up his term as President Obama’s Assistant Secretary of Housing and FHA Commissioner, a post he had held since early 2009. With a midterm change in Congress that threatened to logjam his efforts, he was considering ending his tenure at HUD. To industry leaders at the time, Stevens looked like the man to lead the MBA. At that time, Hank Cunningham was Chairman of the MBA’s continued on page 22

n National Mortgage Professional Magazine n SEPTEMBER 2018

operating at any level of leadership. While great leaders may be hard to find, they are easy to recognize. Bill Bradley once wrote that leadership is about unlocking people’s potential to be better. If your industry is fortunate enough to have attracted one of these, you’ll know it, because even during the most difficult times, those working there will never lose hope. That is a sign of great leadership. The mortgage lending industry has been home to just such a leader for over 35 years now. His name is David H. Stevens, and he retires from the industry this month. In this article, we will attempt to tell his story as it relates to the business of home finance. We will not truly get that job done, but perhaps we can share enough for our readers to understand how much we should value this important leader and all that he has done for the mortgage industry.

NationalMortgageProfessional.com

eadership, like any other important quality, exists on a number of levels. This begins with personal leadership: The bedrock upon which every other level is built. In the business world, there are those who can lead small businesses and others who can lead larger ones. Another level of leadership is then required to manage our largest businesses, and above all of these is the leadership that allows people to manage entire industries, either as government officials or trade group executives. Woven throughout all of these is that quality of leadership that allows a person to influence others, oneto-one. People who want to succeed in the business world typically find their leadership level and settle into it to earn their living and, with luck, leave their mark. And then there are those rare individuals who seem capable of

David H. Stevens, Mortgage Professional of the Year continued from page 21

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Residential/Single-Family Board of Governors (RESBOG) and a member of the organization’s Board of Directors. “David had played a lot of different roles in the industry by that time,” Cunningham recalled. “I thought that would really give him great insight, because he wasn’t coming from just one perspective. He had been on the origination side, he’d worked for the GSEs, been a correspondent lender. I think that served him well and served the industry well.” Of course, Stevens didn’t set out to become the well-rounded industry leader others saw him as in 2011. “Most people don’t plan a career in mortgage banking,” Stevens said. “I was actually a political organizer in Colorado and was planning to get my law degree. I thought I would end up going to law school or coming to Washington and working for a member of Congress.” Instead, he met Mary while working on a campaign in Colorado and married her in 1985. Over the next 33 years, while Stevens worked his way up in the mortgage industry, they would raise four kids together and welcome a grandson into the family. In the process, he would become the executive judged by his peers to be most likely to lead the mortgage industry out of the great recession. Becoming the leader the industry needed Stevens entered the mortgage industry in 1983 at the suggestion of Brad Blackwell, a college roommate who would later become Executive Vice President at Wells Fargo, a bank he served for 17 years. Blackwell also retires from the industry this month. “[Brad] and I had run against each other for student body president in college,” Stevens said. “He had just started out as a Loan Officer and called me.” Stevens joined the same firm, World Savings, an upstart Savings & Loan Association licensed in only two states at the time. Even with that small footprint, the company was the third largest in the country at the time. It wasn’t long before the growing company had identified Stevens as a leader and sent him

on the road to set up new branches. After the Savings & Loan crisis, a number of institutions came up for sale and World Savings was ready to acquire. Suddenly, Stevens found himself moving all over the eastern seaboard, opening up new branches. “My wife and I moved to New Jersey, and I had to open up offices throughout the state and Pennsylvania and Connecticut, as well as New York,” said Stevens. “Then we continued to move to Virginia and we expanded all the way down through the southeast to the Carolinas, Georgia and Florida.” Over the course of the next few years, Stevens and his wife would relocate 10 times, opening up new branch offices for World Savings. Stevens performed so well that the company continued to promote him. “Ultimately, I became the company’s Senior Vice President and basically ran the majority of the institution’s mortgage operations,” he said. It was during this time that Stevens was learning what the home finance business was all about. Building new branches from the ground up gave him experience in every aspect of the mortgage business. As he tells it: “It’s an interesting process you go through when you do that,” he said. “You have to find a facility, scouting out locations and dealing with contractors. Then you recruit people—even before

you have office space—working out of hotel rooms. We would run ads in newspapers back in those days. We would recruit people and then we had to develop the training programs required to teach the business to people who had never been in this industry before.” His experience at World taught him everything there was to learn about the origination side of the mortgage business. He worked his way up to branch, regional, divisional, and finally national management roles in the company over the course of the 16 years he spent with the company. But Stevens was just getting started. After that, he spent seven years as the Senior Vice President and Head of the Single Family Business at Freddie Mac before going to Wells Fargo to run the bank’s Wholesale Lending Business nationally as Executive Vice President. By July of 2006, he had accepted a position as President and Chief Operating Officer of the Long & Foster Companies, including the core real estate company and all affiliated businesses of mortgage, settlement services and insurance. Three years later, the President tapped him for his role at the FHA. “I took the job at HUD because we were in the middle of the housing crisis and the President was organizing what became known as the Housing Team,” Stevens recalls. Tim Geithner and

Shaun Donovan were also on the team. “We would work on policies to stem a collapse of the housing market. It all seems like long ago and far in the rear view mirror to many people.” At the time, nothing was certain. “We were concerned about whether there would even be warehouse lending for Loan Originators. That was one of my first tasks. In fact, my first meeting with the President was to explain what a warehouse line was and how that system operated,” noted Stevens. While the previous Administration had taken great pains to avoid revealing the seriousness of the nation’s economic condition from the general public, Stevens had a front row seat. “From the moment I came in, I saw that we were in the thick of the recession.” He would serve as President Obama’s Assistant Secretary of Housing and FHA Commissioner for the next three years. By April of 2011, Stevens was ready to take the highest leadership position in the mortgage industry as President and Chief Executive Officer of the MBA. Leading an industry Stevens walked into a national trade association in free fall. As he calls, it was “in terrible shape. We had a negative net worth, a huge debt load for a building that had been purchased years earlier, an underfunded pension plan and literally no money. I wasn’t sure we’d make payroll. We were essentially financially bankrupt.” Despite all of that, Stevens remembers his first days at the MBA as an “exciting time.” He said, “It was exciting to deal with an industry in disarray and an organization that needed to be rebuilt.” Hank Cunningham remembers the organization that Stevens walked into. “We have a lot of different constituents, from independent mortgage bankers, to banks, to residential lenders, to commercial lenders. Dave did a great job creating a bridge between all of those different constituents and that was an important job during that important time.”

David H. Stevens, Mortgage Professional of the Year Daniel Arrigoni agrees. “He was a D.C. guy, but he had worked in the industry, at Freddie Mac and World Savings. He had spent many years as an originator and a mortgage banker. So, whenever you would work with him and talk with him, he knew exactly what you were talking about. He had empathy for what you were trying to do, which was a great trait to have from a customer’s perspective.” From Stevens’ perspective, it all came down to a shared view. “My way of approaching it was to try to create, as best as I could convey it, a vision for those in our industry to follow. We needed to have a much louder, more organized voice. I called it ‘One Voice.’” The industry embraced Stevens’ message. But would getting everyone on the same page and speaking with the same voice be enough? As Stevens recalls, “We had to tackle everything, and all of the regulatory issues were coming into play.” But Stevens approached that from a communications perspective as well. “It doesn’t matter where you fall on the political spectrum; we need to recognize that our issues in the housing industry are nonpartisan. This is not a partisan issue. Housing is an economic issue. If you approach it that way, and do it with integrity backed by data, and you build your mission around it, you can exert influence. And I think we’ve done that.” It worked. The industry embraced Stevens’ message. He took what started as “a financially bankrupt, unreliable, confused entity and pulled our whole team together to create a powerful, financially strong, influential voice. We created an influential revolution in our organization—a complete renaissance.” Last year was the most successful in the MBA’s 104-year history. “MBA is the strongest it has ever been. I am proud of the success we have accomplished working for you in 2017,” Stevens wrote in last year’s annual report. The next challenge In 2016, just as Stevens was preparing to lead the MBA into

the most successful year in its history, his doctor delivered a crushing blow to him and his family. Stevens was diagnosed with stage four prostate cancer. Fortunately, nationally-renowned Dr. Ken Pienta at the Brady Urological Institute at Johns Hopkins put his cancer into remission in February of 2017. But this summer, it returned. “I found a great medical team who put my cancer into remission once,” Stevens said. “I was in remission for a year and a half. I’m confident they’ll be able to stick it in remission again.” For many, this is the kind of blow that would take them out of the fight. No one would blame them for backing away from their careers and focusing on regaining their health. Stevens looked into the disease, studied his new adversary and chose a different approach. “Prostate cancer affects more men than breast cancer affects women,” Stevens said. “It’s the number one killer of men. A high percentage of men are going to have it at some point in their life, typically older than me, but they’re going to get it. Stevens learned that about one in nine males will be diagnosed with prostate cancer during their lifetime. Just under 30,000 men die each year from prostate cancer–enough to fill a stadium. There will be approximately 165,000 new cases this year alone. Over 3.1 million men have prostate cancer in the U.S. right

now. As he looked around the industry at the many friends he had made over the years, he found that many were about his age and faced the same risk. He decided to go public. Last September, during National Prostate Cancer Awareness Month, Stevens appeared in a video with Todd Duncan, a well-known industry veteran and coach. He spoke about his illness and urged every man over the age of 40 to be tested—and every woman married to a man over 40 to see that her husband got the test. The video was seen by thousands in the mortgage industry, including industry marketing and public relations expert Joe Bowerbank. “I’ve only met him once and he probably doesn’t remember me,” Bowerbank said. “But David’s message just got through to me. David basically sent a wellarticulated and crafted message that resonated very strongly and clearly with me. Just the way he looked into the camera and told us he didn’t care whether our doctors thought we needed the test or whether our insurance would cover it. Just get the test. So, I did.” Bowerbank insists that Stevens’ message saved his life.

After fighting with two doctors and his HMO, Bowerbank finally got a PSA test. Prostate Specific Antigen or “PSA,” is a protein produced by the prostate and found mostly in semen, with very small amounts released into the bloodstream. PSA levels increase when there is a problem with the prostate, and so it has become a reliable method of pre-screening for prostate cancer. Most doctors don’t suggest a PSA screen for patients under the age of 50, but Bowerbank was much younger than that when he was tested and when a problem was discovered. After the lab work was concluded, doctors found two precancerous sites and a third that was troubling but benign. Bowerbank immediately began encouraging his friends to get tested and one close friend was also treated for early stage cancer as a result. “The bottom line is that David’s efforts likely saved several lives, and without a doubt resulted in early detection in at least two people that I know of, thus preventing any progression,” Bowerbank said. “David basically gave me a scared straight program that got me in gear. And there is no telling how many other people listened to him and went in and got checked, preventing something horrible from potentially advancing.” Ultimately, Stevens made the decision to hand over the reins to a new leader for the MBA and after a year-long executive search the MBA Board chose 33year industry veteran Robert D Broeksmit, who takes over next month. As for his new challenge, Stevens has already formulated his strategy: “I’m going to keep fighting and just kick the crap out of it.” Of his old friend Arrigoni says, “He’s a terrific person that has terrific energy and a fabulous reputation. He’s going to be sorely missed, and I think everybody knows that.” continued on page 42

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.

N A M B

P E R S P E C T I V E

NAMB’s Membership Minute: September 2018 By George W. Burkley III, CRMS

In the ultra-competitive world of mortgage lending, sales skills are more important to a salesperson/Mortgage Loan Originator than ever before. There are lot of great Mortgage Originators out there. Unfortunately, very few of them are good at what they do because they are superior salespeople. Being a top-notch salesperson/Mortgage Originator requires much more than just having the ability to fill out a 1003 or waiting for the phone to ring with the next mortgage prospect calling for your interest rates. Being a mortgage professional and a member of NAMB, we hold ourselves to a higher standard for our clients and we must always be working on improving the client experience and relationshipbuilding. Here are some sales tips that will separate you from the pack and help you become a great salesperson/Mortgage Originator and not just another mortgage lender. This is an ultimate list of tips, facts and philosophies to help you on raise your own bar and put you on a path to becoming the best salesperson/Mortgage Originator you can be. There are no short cuts in the sales process or path of least resistance to become your client’s trusted mortgage advisor and your client for life.

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Your ideal borrower requires top sales skills If you’re only looking for easy or desperate borrowers, you probably won’t need amazing sales skills. Unfortunately, the borrowers that offer you the best opportunity to close their sale, make a nice commission and build a long-term relationship referring new clients to you are going to have options. To sell to these people, you’re going to need real sale skills. Understanding this fact and having a multi-step sales system will keep you motivated and help develop those top producer sales techniques that can be effective and allow you to win in competitive situations. IUs Type A personalities are sore losers and don’t very often lose mortgage business to other originators who have inferior skills. We do what it takes and think outside the box to win our client’s business. Relationship-building, fact-finding and good listening skills are essential to this success. Putting our client’s needs ahead of our lender compensation is a must. You take care of your clients and your lender compensation will take care of itself. Find out what is important to your clients and build value for your clients. Your client will choses to do business with you when the value exceeds the price, rate/fees and they like and trust you. People buy people not interest rates. You can’t close if you are not building a relationship. A sale gets made every time you work with a mortgage prospect. You either sell them on you, your product, service, relationship and value or someone else sells does. Like in the movie “Glengarry Glenross,” ABC: Always Be Closing. Order-takers only ever win the steak knives. They never win the Cadillacs or the incentive trips. You need to better than your competition. It is not hard to do with the right training, skills, mindset and attitude. Building a personal relationship with your clients is the most important skill you can have to be successful in this business. Honesty wins the day and your client’s business Some people think that being a great salesperson/Mortgage Originator means strategically lying to mortgage prospects. That couldn’t be further from the truth. In fact, being 100 percent honest and transparent about rates, fees, mortgage programs and other issues and problems that happen during the mortgage process can be one of the most valuable sales tools in your arsenal. Honesty wins trust and confidence that will close your mortgage deal and put dollars in your pocket. Keeping all your discussions with borrowers positive and fun is an often-overlooked strategy by salespeople/Mortgage Originators. Yes, this is serious business when you’re dealing with mortgage clients. But that makes it more

important for you to focus on making the borrower feel happy and comfortable with their decision. Stay positive and confident with your conversations and don’t resort to disparaging other lenders. Top mortgage producers never worry about their competition. When an issue or problem pops up, be proactive with multiple options to get the deal closed and funded working in client’s best interest. Don’t be afraid to ask for the business You can’t just hand over a Calyx rate and fee sheet to your mortgage prospect and wait for the borrower to come to you. That’s not being a salesperson/Mortgage Originator. We call that being an order-taker and you usually must give away the store because you didn’t build a relationship or value. The old cliché really is true: you must ask for the business to make a sale. In this case, you must ask for their mortgage business. If they aren’t prepared to make a decision, you have not done your job or you shortcut the sales process. It is hard to overcome objections if your mortgage prospect is not sold on you, your mortgage product and whether you are worth being their mortgage advisor and building a long-term relationship. Top Mortgage Originators work for and know when to ask for the mortgage business and get it. Understand your mortgage prospect’s schedule and life Salespeople/Mortgage Originators often get so caught up in their own schedule that they forget to put themselves in the shoes of their potential borrowers. Many prospects are probably going to be easier to reach outside of typical business hours. Whether it’s earlier, later, or on weekends, get to know your borrower well enough to know when they are available to give you their full attention. This little secret can be your most powerful sales tool. Make it easy for your mortgage clients to do business with you. The banks close at 5:00 p.m. Successful Mortgage Brokers/Originators have an advantage by meeting with your clients when they are available, and your clients are not all stressed out by having to take time off their jobs and rush to a bank at 5:00 p.m. when the bank is closing. It is an easy selling point on why you should get their mortgage business. Always know the next step Link each borrower meeting with a set of next steps in the mortgage process. Don’t hang up or say goodbye before confirming the action items that you and your mortgage client are responsible for. Give them a customized timeline and loan closing document checklist to keep them on the right path and keep you at the top of their mind. Reach out in writing After taking your client’s loan application and closing their mortgage deal, send out a handwritten thank you note to your mortgage client. Following up with a handwritten thank you note mailed to your client can go a long way in building client satisfaction and long-term relationships which lead to client referrals. This is a simple effort that can go a long way to building your mortgage practice. Selling does not have to be hard Making the sales process easier on yourself isn’t all about crafty sales techniques. Qualifying prospects is a great way to lighten your load. Selling gets a lot easier when you’re going after the right borrowers. Whether it’s building a referral network or finding a quality mortgage lead generation system that works, filling your pipeline with quality prospects is the best thing you can do to improve the quality and quantity of your mortgage sales. It doesn’t hurt your wallet either. Ask for referrals when you speak with a client or referral partner It’s vital that you build an effective referral network successful top performing salesperson/mortgage originator. Having call reluctance

N A M B

P E R S P E C T I V E

is the biggest barrier and issue that holds mortgage originators from ever reaching their top potential. What is the worst thing a potential referral partner/Realtor can tell you? “No” or “I have another lender relationship.” Most of the time that is just a line to brush you off. Think outside the box. Make up a big list of Realtors in your community. Call them and invite them out for a cup of coffee for 30 minutes to hear about how they are getting such amazing results. Let them talk about their business and their life. They talk you listen and take some notes. It is a lead in to building a relationship with you for their real estate clients. Relationships generate business. Realtors are just one potential avenue for finding partners in your community. Building relationships with other professionals show you can be a valuable strategic partner for them. This is actually another avenue of building relationships that lead to more mortgage business. In the end, it is just as important to your bottom line as being good at selling and closing directly to borrowers. Build deep relationships Building deeper relationships with prospects and referral partners is one of the salesperson/Mortgage Originator sales tips you cannot overlook. Relationship-building means getting to know your client’s and prospect’s families, hobbies, profession or favorite sports team. You earn their trust and build relationships by showing genuine interest in them as a person. Doing this will build personal friendships and relationships that will generate new and repeat business as well as make you the mortgage guru and trusted industry professional in your community. You may also pick up some new lifelong friends in the process.

Become a member of the National Association of Mortgage Brokers (NAMB) Our NAMB members hold themselves to a higher standard and help professional Mortgage Originators take their mortgage practice to the next level. We educate, advocate, and empower the mortgage professional and help them take their mortgage practice to the next level. See what NAMB can do for you and add great value to your mortgage practice. Go to NAMB.org and become part of the best of the best in mortgage industry. George W. Burkley III, CRMS is Owner and Founder of Goshen, Ind.-based American Mortgage & Financial Services, and NAMB Director, as well as Chairman of the Membership Committee. He may be reached by email at George.Burkley@NAMB.org.

NAMB recently attended the 2018 Annual AARMR Conference on your behalf. Members of AARMR (the American Association of Residential Mortgage Regulators) annually get together with the industry to discuss topics and policies of individual states in order to better the procedures for all. News item number one … NMLS 2.0, the new and improved Web site is indefinitely delayed due to complexities of features requested by all participants—states, industry and NMLS. Big news item number two is Minnesota has approved the Uniform State Test (UST) so all states now have the same testing requirements for LO licensing. Those of you that previously took the UST addendum exam are now eligible in all states for testing purposes. Mortgage Call Reports will stay as is until NMLS 2.0 is rolled out. Concerns are arising from industry that with a less severe CFPB/BCFP that states will pass more individual regulations that will make it tougher for large lenders and wholesalers operating in multiple states. This concern has already come up with New York passing their own cybersecurity regulation. It will be obviously easier for all if there was a uniform national security requirement. The big topic of discussion was implementation of the transitional licensing bill that was passed recently. The bill states unless implemented sooner it will become effective in all states 18 months after passage without any changes made by the state. This bill allowed for a transitional license for nationally registered Loan Originators for 120 days while they meet their education, testing and licensing requirements. The bill also provided a transitional license for other states for state licensed Loan Originators. While the bill had a heading title relocation, the actual verbiage of the section mentions no such requirement so it appears to apply to any LO attempting to get licensed in another state. The company sponsoring would be responsible/liable for any actions by the LO while attempting licensing. There was no clear consensus on how any of this would be implemented but there was hope CFPB/BCFP would issue some sort of guidance. There are many questions and interpretations but no clear answers at this time other than it will take effect November 2019. There was a breakout session on hot concerns of state audits. These include: 1. Mortgage Call Reports not matching up with loan logs. 2. Change of Circumstances being used any time a fee changed whether valid or not and not containing valid evidence of that COC. 3. Loan Originators signing consumer disclosure documentsforging. 4. Increasing violations concerning the use of MSA’s (Marketing Service Agreements) where fees for rents paid are not reflecting the fair market. 5. Unlicensed person taking the loan application—LO starting the app and having an unlicensed assistant finishing it—or admin, marketing or business development. 6. Upfront fees being collected by LO before disclosures are received. 7. Brokers refunding portion of fees to borrowers in violation of LO comp. 8. Cut and Paste of consumers signature—not electronically but actual cutting and pasting and leaving in the loan file for audit! Also there were actual borrower signature practice pages left in the file when LO’s where signing borrowers’ names to

n National Mortgage Professional Magazine n SEPTEMBER 2018

Always build value How should you define great client service? Strive for excellence. Add value at every step in the process. That could mean giving your potential borrowers deeper insights into the national economy and mortgage rate trends. Connect them to other professionals (Home Inspectors, Real Estate Agents, Title Companies, Insurance Agents, etc.) that are awesome at what they do and reflect well on you. In general, make the borrower’s experience easier and better at every step. They will take notice. This will set you apart from the rest of the mortgage industry in your community. Be the dealmaker that puts people together with other businesses in your community.

By Rocke Andrews, CMC, CRMS

NationalMortgageProfessional.com

Deliver excellent service To reiterate one of our earlier points, a successful mortgage origination practice isn’t about tricky, underhanded tactics. It’s in your duty and responsibility to be transparent and above reproach. It’s also in your best interest to deliver overall great client service. You will never be able to overcome bad customer service with incredible sales process and relationship building.

NAMB Education Foundation Update: September 2018 2018 AARMR Update

N A M B

P E R S P E C T I V E

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

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

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

For detailed information, visit NAMB.org.

Are You an NAMB Lending Integrity Seal of Approval Holder? (No additional costs to NAMB members)

How to Apply for your National Lending Integrity Seal

disclosures. These cases are being referred for criminal prosecution. 9. No Anti-Mortgage Lending (AML) policies in place and no annual review and evidence of employee continuing education. 10. Not including documentation that the “Know Before You Owe Booklet” is being delivered to borrowers. 11. Third-party invoices not being kept in the file. So, here is some valuable advice to be prepared for your state audit. Take care of it now and avoid a potential fine down the road. Just another benefit of being a member of NAMB. 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.

LendingIntegrity.org Click on EARN the Seal NAMB members ONLY–Log in to the Lending Integrity site with your NAMB User ID and Password (If you do not know your User ID and Password, type in your e-mail and click log-in and the system will send you a password. If you have any issues, please call (202) 434-8250 or e-mail Membership@NAMB.org). Lending Integrity Requirements The Lending Integrity Seal of Approval is awarded only to mortgage originators who meet specific requirements. To earn the privilege to display the Seal, mortgage brokers and loan officers must: l Be an NAMB member l Meet the requirements of the SAFE Act l Pass a national criminal background check l Attend eight hours (or equivalent) of professional development education each year l Attend two hours (or equivalent) of ethics training every other year or each license renewal cycle l Provide professional references l Subscribe to NAMB’s Best Business Practices l Agree to NAMB’s Code of Ethics l Must be renewed annually

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.

NAMB+ is an independent, wholly-owned, for-profit marketing subsidiary of NAMB, The Association of Mortgage Professionals. Dear Mortgage Professional, Now that Summer has (unofficially at least) drawn to a close and we’ve moved into the “home stretch” of 2018, I want to take this opportunity to introduce you to a few of our newest Endorsed Providers, invite you to shop the brand new NAMB Store, and hopefully peak your interest about some exciting new initiatives we are planning to launch in the coming months. First, let me welcome our newest NAMB+ Endorsed Providers to the program. We’ve recently added Moso Software, Universal Credit, Camber Marketing and CIC Credit to our growing list of NAMB+ Endorsed Providers and we are very excited to have each of them onboard! Next, anyone looking for high-quality, embroidered shirts, jackets or bags for your company can now look no further than NAMBplus.com. We’ve launched our NAMB Store in partnership with iBrand in Texas, and you can

customize orders with your company’s logo on apparel from brands such as Nike, OGIO, Eddie Bauer, Port Authority and Sport-Tek. No order is too large or too small, and every order helps support your Association. Finally, please watch your inbox for emails from NAMB+ and follow us on social media over the coming months to learn about two new and gamechanging initiatives that we will be rolling out as additional value-added benefits for NAMB Members! 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. 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. NAMB members receive a discount off Brokers Compliance Group compliance support programs.

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

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. 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.

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. 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. PreApp 1003 Founded in 2015, Houston-based PreApp 1003 was created to fill a growing need for mortgage loan originators to easily and securely prequalify mortgage prospects from the convenience of their mobile devices. 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. NAMB Members will receive a TwentyFive Percent (25%) discount off of the regular price with their NAMB Membership.

Simplii VOIP business phone solutions include all the features and functionality of a high end business phone system without the high costs. We offer all NAMB members a 10% discount off their phone services. If you want a social and mobile marketing strategy that gets noticed contact Social5 today for a FREE consultation and demo and to receive your NAMB member discount pricing 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. 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 TriMerged 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!

NAMMBA CONNECT 2018 TOUR C O M I N G

T O

C I T Y

N E A R

Y O U !

Officer; Alex Varela, Primelending, Branch Manager; and Gracie Morrow, Georgetown Mortgage, Branch Manager

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 GREENSBORO Wednesday, October 3 Sheraton Greensboro at Four Seasons 3121 West Gate City Boulevard • Greensboro, N.C. 9:00 a.m.-5:00 p.m. Highlights of NAMMBA CONNECT Greensboro … 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 Patty Gillespie, Keller Williams, Realtor; Valarie Brooks, Love Charlotte Homes, Realtor; and Angie Cole, A Cole Realty, Broker-in-Charge l Keynote Luncheon featuring Tol Broome, BB&T Home Mortgage, President l LO Top Producer Panel featuring Rita Hazell, Movement Mortgage, Loan Officer; Wes Sellew, Renasant Mortgage Lending, Loan Officer; and Chris Roberts, Regions Bank, VP/Senior Loan Officer

NAMMBA CONNECT DALLAS 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

NAMMBA CONNECT IRVINE 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

NAMMBA CONNECT ORLANDO 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 NAMMBA visits The Big Apple for Networking Event In addition to its current CONNECT 2018 tour, NAMMBA is traveling the nation to spread the word about the work of the association. Tony Thompson, CMB, NAMMBA Founder and CEO, took the message of NAMMBA to the Melville Marriott on Long Island for its New York Chapter Meeting and Networking Event. Attendees came out to meet new people, learn more about NAMMBA and make new connections via the event. The event is a forum for association members to share ideas, experiences and shared challenges. An upcoming regional NAMMBA networking event will be held Thursday, October 4 with the Dallas NAMMBA Chapter Meeting and Networking Event at the Blue Mesa Grill, located at 14866 Montfort Drive in Dallas, Texas. For more information, visit NAMMBA.org, or call Kesha Hall at (972) 365-3035, James McGee at (469) 371-5487 or Tony Thompson at (980) 722-8079.

For more information on all NAMMBA CONNECT Tour events, visit CONNECT2018.org.

Caliber Portfolio Lending

Introducing Elite Access... Caliber’s latest Portfolio offering. As home prices continue to rise, Caliber Home Loans Inc. continues to rise to the occasion. That’s why we’re thrilled to tell you about our newest Portfolio product: Caliber Elite Access. We designed Elite Access to meet the demands of your borrowers in high-cost areas. Features include:

Purchase loans and rate/term reﬁnances to $2 million with a 740 FICO, 95% LTV and 9 months’ reserves, no MI. Purchase loans and rate/term reﬁnances to $3 million with a 700 FICO, 90% LTV and 9 months’ reserves, no MI. Interest-Only ARM loans up to $3 million with a 75% 90% LTV ratio.

DTI ratios up to 45%.

Cash-out reﬁnancing to $500,000 ($750,000 for debt

Asset depletion qualifying allowed.

100% gift funds permitted from family members. Gifts not allowed on loans >90% LTV.

1-4 unit properties, 1-unit Co-operative units, PUDs, warrantable and non-warrantable condos allowed.

Unlimited primary financed properties allowed. Caliberprovided financing for up to five properties with a max unpaid principal balance of $3 million is allowed.

consolidation).

Visit us at www.caliberwholesale.com to learn more.

Wholesale Lending

Caliber Home Loans, Inc., 1525 S. Beltline Rd., Coppell, TX 75019 (NMLS #15622). 1-800-401-6587. Copyright © 2018. All Rights Reserved. Equal Housing Lender. For real estate and lending professionals only and not for distribution to consumers. All loans will be required to meet ATR requirements to be Eligible. Not all products offered in states of NY, ME, MA. #24982_NMP

Everyo hat is your genius? You have one, you know that, right? You have a skill that others don’t have. Everyone has one, everyone everywhere can do something better than everyone else. The problem is that most people don’t look for it, and as I’m writing this, I’m thinking that most people don’t even know that they have one. They’re so busy doing stuff that they think is fun that won’t stop for even a minute to look at themselves to see what it is that they can do better than anyone else. As I listen to “The Strangest Secret,” the famous and overwhelmingly watched and listened-to talk that Earl Nightingale gave back in the 1950s, I’m remembering his reference to this subject. I’m remembering that he talks about how special we all are if only we would realize it. I just looked at YouTube.com and added up every video that has been published there that refers to “The Strangest Secret.” To my amazement, it looks like only about three million times that someone has looked at one of the videos. This amazed me. I would have thought, I’m sure because I’m such a fan, that the number would have been closer to one billion. But then it proves my point … people just don’t think about what they do or most of all, why they do it. To them, when I ask people why they do what they do, I get the dumbest answers. Answers like, “Well as a salesperson, I have a lot of flexibility” or “I want to make a lot of money,” or “I don’t like being tied to a chair all day, so I want to be able to wander out of the office,” or “I like people.” When I challenge these thoughts and try to get them to look inside themselves, the resistance I get is massive. My most recent foray into this subject is to read and

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

The

Mortgage

Godfather

yone Is a Genius watch almost anything I can find that Simon Sinek is disseminating. On my desk is his first book Start With Why. The stories he tells about exceptional people, people who have made billions of dollars is that they concentrated on what they do better than anyone else. It doesn’t make them a genius. But to me, I see that they can do things in a way that makes them so special, they draw people to them and convince people that the way they are acting is what everyone should do. Let me make a comparison. One story comes from something I read many years ago about the former Mayor of New York City, Michael Bloomberg. You might not know that in New York City Hall, there is an office for the Mayor. I’ll bet that surprises you. Ever since the building was built, the Mayor occupied that space. I bet you’re also not surprised that the office is bigger than any other office in the building. Mayor Bloomberg rejected the office space and told the construction people that his office was going to be in the bullpen. You know the bullpen, it’s where everyone who is a “worker” works. There are offices up against the windows and outside the offices is where the assistants, secretaries and minions sat and worked. Mayor Bloomberg made them reconstruct the floor so that the entire space would be cubicles and do you know where his was? It was in the center of the room. No door, no ceiling, just like everyone else, he was within an earshot of everyone. He was part of the workforce. He knew why he was doing that. He wanted everyone to know what was going on. In the book I mention above by Sinek, he tells the story of Continental Airlines and I’ll summarize it here. The company had problems, serious problems through the 1980s and early 1990s. They went through 10 CEOs in a decade. Before Gordon Bethune became the head of the company in 1994,

they were a mess. But he changed things like this: He fired 39 of the top 60 people because they didn’t like his “open door” policy. Before he became CEO, if you didn’t have a special card that would get you on the 20th floor, you couldn’t get to the 20th floor. He stopped all that. He brought a team concept to the company. If certain metrics were met concerning being on time, arrivals and departures, every single person in the company received a separate check for $65, not as part of their paycheck, but a separate check. He proved the concept of being a team was more important than any one person. He knew, I’m guessing that someone had taught him … he established trust. The employees knew he had their backs. Bethune knew that to have happy customers, the employees had to be happy. Over my lifetime, I’ve said too many times to count that I have no competition, none … that I’m special and there is no one like me. That’s not ego, that’s not narcissism or over-exaggerated self-love, it’s a true feeling and fact, and so are you … the key is to find it. Yesterday, a young man in his late 30s came to my office to interview me to see if he wanted to have me coach him. I was also trying to decide whether or not I wanted to coach him. I don’t want to work with people who don’t at least consider that the ideas I give them are worthy of thinking about. I could be wrong about what I’m telling people, but when I coach a client, I treat them special. I look for their special qualities. You have no competition. There is no one on the face of this Earth who is exactly like you. There might be people who are kind of like you. I’ve heard that all my life. I’ll bet you did also. But there is something about you that is so special that you want to discover and capitalize on it. When you do, you’ll achieve the most remarkable and outstanding accomplishments you’ve only dreamed of.

BY RALPH LOVUOLO SR.

Maybe you are a great sales opener. Maybe you’re a better closer. Maybe you should partner with someone. Maybe together you’ll triple production. Maybe you’re great on the phone. Maybe you’re great face to face. Maybe you need the right script, maybe what you’re selling is wrong for you. Most of you sell rates, programs and service. Maybe what you should do is learn a new skill that will separate you from the others who do what you do. Maybe you’re a great teacher and can help your referral sources do more business. Maybe you’re like the guy I wrote about a month or so ago who loves to call people on the day before their birthday. Maybe that fits your personality. What is the purpose of these stories and how does it fit with my original premise of you having a part of you that could be called “genius?” To me, it’s so simple: They all asked and continued to pursue the simplest question you can imagine: They asked why? Why is it done that way? Why do you do that? Why do you do what you do? Why can’t it be done better? They all seemed so dissatisfied with the answer “Well, that’s the

way we’ve always done it.” Personally, I hate those words, I have all my working career. There is almost always a better way. All you need to do is search for it. You need to ask “Why?” The more you ask “Why,” the closer you’re going to find yourself at the true and best answer. One more story … Henry Kissinger had a consulting business. He tasked one of his employees to write a report and gave him a deadline to finish it. The employee did as he was asked, presented it to Mr. Kissinger who asked him the following question: “Is this the best you can do?” And the response was, “No, I could do better if I had a bit more time to put more effort into it.” This happened, as I have read, seven times before the employee told Mr. Kissinger that it was the best job he had ever done. The work was “genius.” Stop and talk to an expert who can help you find your genius. Find out where you fit on this beautiful planet. When you find it, you’ll be much better, much happier and more productive, because it won’t seem like work anymore. I can’t find your genius, but WE can. You just have to take some time to stop doing and start examining.

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.

Mortgage Fraud Challeng How to Catch a wo of our Directors will be attending the MBA’s “Risk Management, QA & Fraud Prevention Forum,” held in Los Angeles in September. Attending this venue will be Brandy George, who is the Executive Director of LCG Quality Control and Michael Pfeifer, who is a Director of Legal and Regulatory Compliance. I remember attending the first forum many years ago. The attendance was modest. Although risk management was strengthening, I felt the term risk management was much too broad, as it could be (and was) applied to many industries. So, I coined the term “Mortgage Risk Management” and it caught on! My view has been that mortgage banking poses a unique set of risks that require significant knowledge, experience, and expertise. Turns out, this insight has been reinforced over the years. Now, this event is highly attended and is brimming with new ways to handle quality assurance, mortgage fraud prevention, and risk management oversight. As I contemplated this forthcoming conference, I thought of the difficulties that mortgage originators have in handling the challenges of mortgage fraud in particular. This is a nasty business and not for the faint hearted! When my firm conducts audits of the loan flow process, it is not unusual to find gaps–perhaps ‘chasms’ is a better word–in a company’s procedures for managing mortgage fraud risk. It still surprises me, after so many decades in mortgage banking compliance and financial institution management, that the fraudsters seem to have no limit to their scheming, conniving, crafty, wily, and underhanded cunning. These guys are as slippery as a darkly oleaginous grease slick. Maybe I can’t stop these swindlers and shysters from doing what they do, but I can let you know some of the lessons my firm,

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Lenders Compliance Group, has learned in knowing how to identify and trap them. I may not have all the answers, but I sure do have a lot of experience in hooking the crook. So, come with me on a brief walk through the mortgage fraud maze, as I jot down some of my reflections, and perhaps you should consider using some of my ideas to fine-tune your own mortgage fraud prevention procedures. Let’ start with a simple outline of what fraudsters do! Committing fraud During the mortgage lending process, a fraudster is a person who knowingly does any of the following: l Makes, uses, or facilitates any deliberate misstatement, misrepresentation, or omission with the intention that it be relied upon by a mortgage lender, borrower, or any other party to the mortgage lending process; l Receives any proceeds or any other funds in connection with a closing involving mortgage fraud; or l Files or causes to be filed with the county recorder, any document that contains a deliberate misstatement, misrepresentation, or omission. In my view, there are two types of mortgage fraud: The first is fraud for property, and the second is fraud for profit. The first type is where fraud occurs for property (i.e., housing) and usually entails some kind of misrepresentations (for instance, employment history, claimed income) by the applicant solely to purchase property for a primary residence, generally. Schemes usually involve a single loan. Although applicants may embellish income and conceal debt, their intent is to repay the loan. The second type is even more

pernicious. Fraud for profit causes much concern to law enforcement and the mortgage industry. Often, this type of fraud involves multiple loans and elaborate schemes to gain illicit proceeds from property sales. Gross misrepresentations of appraisals and loan documents are most common, and loan applicants are frequently paid for their participation. You may not like to read this, but FinCEN long ago reported that perpetrators are often industry professionals who are familiar with the mortgage loan process and know how to exploit vulnerabilities in the system. These professionals can include accountants, mortgage brokers and lenders. When my firm conducts audits, we do not assume that the fraudsters are only external actors. Unfortunately, there are numerous instances of internal actors who know how to game the procedures, often leading to injurious outcomes. To commit fraud, industry professionals often misrepresent factors in multiple loan transactions, such as borrower income, debt, assets, and employment. Indeed, fraud for profit often impacts more than one financial institution and involves coconspirators who corroborate fabricated information. Think of such examples as documenting their misrepresentations through inflated appraisals and inaccurate employment histories. Here is a very brief list of malevolent stratagems that fraudsters employ to carry out their schemes: l False claims l Omission of information l Inflated credit scores (authorized user scam) l Fraudulent warranty deeds l Fraudulent quitclaim deeds l Falsified tax returns l Bogus bank statements l Phony company l Collusion

l Pyramiding to conceal misappropriation l Rented assets l Purchased false documentation l Mortgage loan from another lender or seller held second l Limited verification programs (NIV, No Ratio, NINA, No Doc) Reporting fraud So, what do you do if you catch a crook? Mortgage fraud is investigated by the Federal Bureau of Investigation (FBI) and can be punishable by up to 30 years in federal prison or $1 million fine, or both. It is illegal for a person to make any false statement regarding income, assets, debt, or matters of identification, or to willfully overvalue any land or property in a loan and credit application, for the purpose of influencing in any way the action of a financial institution. There are specific statutes that get triggered. Applicable federal criminal statutes include: l Statements or entries generally;1 l HUD and Federal Housing Administration transactions;2 l Loan and credit applications, generally;3 l Fraud and related activity in connection with identification documents;4 l Frauds and swindles by mail;5 l Fictitious name or address;6 l Fraud by wire;7 l Bank fraud;8 and l False social security number.9 When mortgage fraud is suspected, criminal charges can include identity theft, grand theft, wire fraud, money laundering, and forgery, to name a few, each of which carries its own brand of civil monetary and criminal penalties. Because of the growth in mortgage fraud, some states have moved to establish their own mortgage fraud laws. To pick but one, the Georgia Residential Mortgage Fraud Act,

ges: a Crook

By Jonathan Foxx, Ph.D., MBA

continued on page 51

n National Mortgage Professional Magazine n SEPTEMBER 2018

l Requiring a person convicted of mortgage fraud to pay restitution to the victim; l Creating a mortgage lending fraud protection fund; l Requiring the Attorney General to develop mortgage fraud prosecution guidelines; l Creating optional disclosures to borrowers and third parties (i.e., stating mortgage fraud is a criminal offense); l Incorporating mortgage fraud into existing criminal or civil statutes; l Narrowing mortgage fraud to apply only to certain mortgage professionals or acts; and

NationalMortgageProfessional.com

for instance, provides a definition of residential mortgage fraud and outlines terms of punishment for violation of the law.10 This state law amends the Georgia Racketeer Influenced and Corrupt Organizations Act (RICO) to include residential mortgage fraud within the definition of racketeering activity. Under the statute, the crime of residential mortgage fraud is committed when people make deliberate misstatements or omissions during the mortgage lending process, with the intention that it will be relied on or, if they receive proceeds from a closing that they knew resulted from these types of omissions or lies. The Georgia law provides for felony penalties of one to 10 years in jail and/or a $5,000 fine. If a pattern of fraud is found, the penalties become three to 20 years in jail and/or a fine of $100,000. The law also provides that property that comes under the billâ&#x20AC;&#x2122;s provisions is subject to forfeiture. Some states are following Georgiaâ&#x20AC;&#x2122;s example, while others are working on variations of what Georgia enacted. Some of these variations, nevertheless, set forth some common features, such as:

heard street on the

Our Heard on the Street column is a chronicle of events, changes and passages in the lives of the people and companies shaping the mortgage industry.

New American Funding Opens Two New Western Branches

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

New American Funding has expanded its Mid-Pacific territory to include a new branch in Elko, Nev. The new Elko location will be a fullservice home loan provider that’s equipped to meet the mortgage needs of local consumers and Real Estate Agents by offering a complete spectrum of purchase and refinance loan options. The new Elko branch is the fifth Northern Nevada branch under the leadership of Patrick Winchell. “We look forward to servicing this region and helping people achieve their dreams of homeownership,” said Elko Branch Manager Lynne Myrick. “The Elko community is familyoriented and we work with a lot of first-time homebuyers. Not only do we do our best to make the loan process comfortable, but we strive to ensure the entire experience is as easy as possible for our borrowers.” Myrick, who will oversee the location as a Branch Manager, is a 20-year veteran of the mortgage industry and has been with New American Funding since 2017. She has worked in a variety of capacities including Processor, Licensed Loan Originator and Branch Manager. “We’re excited to have Lynne be a part of the New American Funding family,” said Chris Garza, New American Funding Regional Vice President. “She is a great addition to our Nevada branch growth and we look forward to serving the Elko community.”

New American has also opened a new Camarillo branch in the heart of Ventura County, Calif. The Camarillo location will be a full-service branch, providing a range of purchase and refinance loan product, and will work with all borrower types, from first-time homebuyers to experienced investors. “We’re excited to bring New American Funding’s presence to Camarillo,” said New American’s Camarillo Branch Manager Todd King, a 21-year industry veteran. “Not only do we offer industryleading close times for our customers but we offer a variety of different loan programs for homebuyers. I came onboard with New American Funding because we have the latest marketing and technology that will enable us to serve our customers with the most upto-date and efficient home loan process in the industry.” Non-QM Drives Angel Oak to Record Q2

Angel Oak Companies has set a record for non-qualified mortgage (non-QM) lending in the second quarter of 2018, as the affiliated lenders, Angel Oak Mortgage Solutions, Angel Oak Home Loans and Angel Oak Prime Bridge, combined for more than $512 million in non-QM originations.

That figure represents a 52 percent increase in volume from the first quarter of 2018 (the previous record for originations in a single quarter) and a 90 percent increase over the second quarter of 2017. When this total is broken out by unit, each affiliate produced its own record origination numbers this quarter. In addition to recordsetting volume, the company also grew its staff by 25 percent, opened new offices and completed a major acquisition. “Our growth over the past few quarters has been incredible, but Q2 stands out as a true milestone for our company and the industry,” said Mike Fierman, Co-Chief Executive Officer of Angel Oak Companies. “It’s not just industry insiders who recognize the growth of non-QM anymore. Loan Officers, borrowers and Realtors across the country are seeking out Angel Oak because they know we offer the best non-QM products and service in the industry.” In addition to record lending volume, Angel Oak Capital Advisors, the investment management affiliate of Angel Oak Companies, ended the quarter with approximately $9.1 billion in assets under management (AUM). It also completed the largest non-QM securitization in company history–a $402 million securitization almost entirely comprised of non-QM residential mortgages sourced through affiliated mortgage

lenders, Angel Oak Mortgage Solutions, Angel Oak Home Loans and Angel Oak Prime Bridge. Since 2015, Angel Oak Capital Advisors has successfully completed seven non-QM securitizations, accounting for approximately $1.6 billion in total securitized residential loans largely backed by mortgages originated through its affiliated mortgage lenders. Angel Oak Companies’ recordsetting performance has also led to growth across all affiliates, both in staff and geographic reach. Angel Oak affiliates added 104 new employees in Q2 and now employ 527 staff members. Angel Oak Mortgage Solutions completely filled its new operations center in Dallas, Texas, and is searching for additional space to support the fast-growing demand for its products. Retail affiliate Angel Oak Home Loans opened new offices in North Carolina, expanding its presence in one of the hottest markets in the country. Similarly, Angel Oak Prime Bridge expanded its footprint to 16 states. Finally, Angel Oak Commercial Lending completed the acquisition of Los Angeles-based Cherrywood Mortgage, further expanding the wholesale small-balance commercial lending arm of Angel Oak Companies. The recent success has earned notable accolades for Angel Oak Companies and its employees. National Mortgage Professional Magazine named Angel Oak Companies a “Legend of Lending” and presented wholesale executive Steve Arnold a 2018 Account Executive MVP Award. “We’re growing in every aspect of our business,” said Fierman. “We don’t see that slowing

anytime soon. In fact, we believe this is only the beginning.” Stearns Lending Buys Stake in Certainty Home Loans

Cloudvirga has announced the closing of a $50-million Series C funding round led by privateequity firm Riverwood Capital with ongoing participation from Upfront Ventures. The new funding will support Cloudvirga’s mission to help lenders reduce record-high loan production costs via automation and empower borrowers with greater transparency and engagement in the mortgage transaction. “We believe the material opportunity in the $1.6 trillion

are also grateful for Upfront Ventures’ ongoing confidence in our company.” Total Expert and Mortgage Coach Partner on Enhancing Client Relationships

Total Expert has announced a partnership with Mortgage Coach, the developer of the Total Cost Analysis (TCA). The Total Expert and Mortgage Coach integration is a unique offering to continued on page 38

n National Mortgage Professional Magazine n SEPTEMBER 2018

Cloudvirga Raises $50 Million in Latest Round of Funding

raised over $27 million, including a nearly $20 million Series B led by Blackstone Group portfolio company Incenter and a $7.5 million Series A led by Upfront Ventures, Tribeca Angels and Dallas Capital. Cloudvirga’s total investment support now exceeds $77 million. “Ultimately, we found our ideal capital partner in Riverwood Capital, whose unique experience supporting rapidly growing fintech firms from both Silicon Valley and New York is a perfect fit for Cloudvirga,” said Schreck. “We

NationalMortgageProfessional.com

Stearns Lending LLC, an independent mortgage bank headquartered in Santa Ana, Calif., has announced it will acquire an equity interest in Certainty Home Loans LLC, an independent mortgage lender headquartered in Plano, Texas. Under the terms of this agreement, Certainty’s executive team will remain in place and its current ownership will continue to hold what the companies called “a significant share of the equity.” Certainty, which originated $1.4 billion in residential mortgages in 2017, had changed its name last October from WR Starkey Mortgage LLP and will continue to operate under its current brand. “Certainty has a long track record of success and has a retail profile that is a strong complement to the existing Stearns retail platform,” said David Schneider, CEO of Stearns Lending. “We believe that combining the retail platform of Certainty with Stearns’ industryleading technology, direct access to capital markets expertise, and operational excellence will produce tremendous synergies that benefit both companies. This structure leverages the experience Stearns has with its current joint venture business model which currently operates under ten different brands across the country.”

U.S. mortgage market lies in digitizing and automating not just the loan application, but the mortgage factory,” said Cloudvirga Chief Executive Officer Michael Schreck. “Our industry’s current ‘shiny object syndrome’ has resulted in a preoccupation with the digital application. Instead, Cloudvirga’s technology uniquely tackles the mortgage cost problem, which has helped us garner tremendous interest from many of the country’s top private-equity funds.” Cloudvirga had previously

Independent Mortgage Originators By Andy W. Harris, CRMS

Tammy Serafini Detailed Mortgage Solutions NMLS#: 1769900/NMLS#: 930632 This month, I’m interviewing Tammy Serafini from Pennsylvania. Tammy recently came to the brokering side as so many have recently and I wanted to get her insight.

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

“To find yourself, think for yourself.” –Socrates

Tammy, tell me a little about yourself and your career. I’ve actually worked with the public my whole life. I owned a nail salon for more than 20 years and decided to do real estate part time. I loved it, but while doing real estate, I discovered the position of a Mortgage Loan Originator. I worked with a great originator who helped me and I love numbers, so I took the class, passed my tests, and became licensed to originate myself. I worked as a Loan Officer Assistant initially, and then worked as a Loan Officer inside of a team for about six years before entering the broker world.

earlier and much faster underwriting. It is faster than the lender world and some of the technology that the wholesale lenders have is far superior.

I understand you recently became a Mortgage Broker from the Mortgage Banker world. What motivated you to make the change? I wanted to have more control and have more options. I had a ton of offers from retail as most Loan Officers do, but I couldn’t help seeing what brokers were doing. I wanted access to better pricing and helping people in a transparent matter. It’s definitely better on this side, and you have much more control.

Anything you would choose to share with Retail Loan Officers considering the change to becoming an Independent Mortgage Broker? It is an awesome change and the potential is endless if you commit to it.

What would you say so far are the biggest differences you’ve experienced coming from the retail side? There are a lot of systems to learn (different lenders, pricing, our own LOS, etc.) ... thank goodness I learn quickly, but that was challenging to say the least.

What would you say are your best forms of marketing today to generate new business? I have always received my leads by past referrals and Realtors … and being able to close deals fast has been helping with new Realtors that want to work with me.

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.

How would you compare pricing when compared to the Mortgage Banker world? Pricing is the best, we always beat the competition. What are you seeing in your local market in terms of trends, inventory and consumer/Realtor mortgage education? The market is still hot and the inventory goes fast, very fast if priced right with multiple offers. 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? I feel we have complete control over the process as I mentioned

level of the corporate ladder, and we know that if we continue down the path of hiring the right people, what comes next can only be positive. That’s why we need to continue to invest in our future and our people moving forward. Join us on our mission to ensure that young professionals in the real estate ﬁnance industry have the skills and experiences they need to succeed.

TO LEARN MORE, VISIT MBA.ORG/mPact 19246

n National Mortgage Professional Magazine n SEPTEMBER 2018

The foundation of our industry is strong. There is talent and innovation at every

NationalMortgageProfessional.com

WE BELIEVE …in a bright future.

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 threeday 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 is looking for volunteers to be helpers and ambassadors! All volunteers will have their picture, name and company name listed on a Thank You Page in NCRA’s Conference Binder. Each volunteer will have a two-hour pre-determined time slot and job. Pick the job you feel most comfortable with. l Welcome Bag Preparation: Seeking two volunteers on Monday responsible for assisting in stuffing Conference Welcome Bags with additional items and preparing ready for registration. l Welcome Ambassador: Seeking six responsible volunteers for warmly welcoming attendees as they check in and give them a map to the hotel, directing them to the registration table and conference meeting rooms. l Registration Table: Seeking 14 responsible volunteers for helping out with the registration table, handing out conference materials and checking in attendees, speakers and guests. l Event Sponsor Signs: Seeking 12 responsible volunteers for making sure the sponsor signs are up at designated events. l Tent Cards: Seeking two responsible volunteers for making sure Sponsor Thank You Tent Cards are placed on session tables before the start of the first morning sessions or special event. l Banners: Seeking one responsible volunteer for making sure the banners have been taken down after the Conference and brought to the Conference office for packing. l Packing: Seeking two responsible volunteers for assisting NCRA Office Manager Jan Gerber in packing up materials for return shipping. l Photography: Seeking responsible volunteers for taking candid shots with your smartphone of each session/speakers and special events (lunches, breaks, parties). Each volunteer will be responsible for submitting five to 10 clear shots of each session or 10 to 15 clear shots of an event, deleting blurry shots and/or duplicates before submitting. Special events such as Feature Event, Keynote Speaker Book Signing, Welcome Reception and Awards Luncheon need to make sure you have clear shots of the “Stars” and each exhibitor company.

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

heard on the street

Loan Officers, positioning them to create customers for life by pairing the Total Expert marketing automation capabilities with Mortgage Coach’s loan comparison, Total Cost Analysis. The partnership further expands the ability for lenders to centralize all marketing assets created and deployed into Total Expert has announced a partnership with Mortgage Coach, the developer of the Total Cost Analysis (TCA) the Total Expert MOS for full oversight and on-demand reporting. “Mortgage Loan Officers are working every day to stay front and center with their clients–and our integration with Mortgage Coach makes this a seamless, automated process with beautiful, userfriendly client deliverables,” said Joe Welu, Founder and Chief Executive Officer of Total Expert. “We aim to empower Loan Officers to build their personal brand within their respective enterprises, grow their business and ultimately create lifelong relationships with their customers. Mortgage Coach is a best-of-breed partner, and together, we can provide lenders with solutions for long-term success.” Dave Savage, Chief Executive Officer of Mortgage Coach, said, “Mortgage lending is a relationship-business and our integration will give loan officers the tools they need to create customers for life. We are impressed with how Total Expert’s MOS continues to push the boundaries of what’s possible in financial services digital transformation, and we look forward to our partnership with a true industry innovator.” Alterra Adds Branches to Build Homeownership Among African-Americans

Las Vegas-based Alterra Home Loans has announced that its Legacy Division is opening branches in Atlanta, Dallas and Baton Rouge, La., as part of an effort to increase homeownership among African-Americans. Ben Slayton, President of Alterra’s Legacy Division, stated that Alterra plans to open branches in all major cities with an AfricanAmerican population of 25 percent or more. He also aligned this endeavor with a recent initiative

continued from page 35

announced by the National Association of Real Estate Brokers to attain two million new AfricanAmerican homeowners over the next five years. “The African-American homeownership percentage rate today is only 43 percent and this is 20 percent below the national average,” said Slayton. “Today, less than one percent of all mortgage originators in America are AfricanAmericans. This is a problem that cries out for a solution and I’m honored to lead that effort through Alterra’s Legacy Division.” Gateway Mortgage Group Buys Oklahoma Bank

Gateway Mortgage Group, a wholly-owned Jenks, Okla.-based subsidiary of the Stitt Family Trusts, has acquired Farmers Exchange Bank through purchasing more than 85 percent of the stock of the Cherokee, Okla.-based financial institution. Upon the completion of the transaction, the Stitt Family Trusts plans to merge Gateway Mortgage Group into Farmers Exchange. This is the first acquisition for Gateway Mortgage Group, which is licensed in 41 states and the District of Columbia, while Farmers Exchange operates five branches in Oklahoma and holds $300 million in deposits. “We believe this acquisition is an important next step for Gateway Mortgage Group that will allow for growth, providing greater opportunity for employees and the communities they serve,” said Stephen Curry, CEO at Gateway Mortgage Group. “Through this acquisition, both Farmers Exchange Bank and Gateway Mortgage Group can expect to gain improved products and technology that will enhance their ability to strengthen the families in their communities. We’re excited about this new venture and the benefits it will provide to our customers.” Promontory MortgagePath’s Fulfillment Services Unit Integrates With Street Solutions Inc.

Promontory MortgagePath has announced that its Promontory

CIT Group Inc. has completed the sale of its Financial Freedom reverse mortgage servicing business and the related reverse mortgage portfolio to an undisclosed buyer. According to the New Yorkbased company, the transaction covered mortgage servicing rights (MSRs) and $879 million of reverse mortgage whole loans and other real estate owned assets as of April 30. CIT also outsourced the payment, servicing and administration of duties of its ongoing $5.2 billion mortgage

remains focused on growing our core commercial and consumer operations, and these actions allow us to apply greater focus in those areas of the business.” Old Republic Title Acquires the San Antonio Division of Trinity Title of Texas

Old Republic National Title Insurance Company has purchased the operating assets

of the San Antonio division of Trinity Title of Texas LLC. Established in 2009 as a partnership with ET Investments, the San Antonio division of Trinity Title of Texas is a title insurance agency that researches title for real property and handles real estate closing transactions in Texas. A long-standing, successful agent of Old Republic National Title Insurance Company, Trinity Title’s San Antonio division is recognized for its exceptional customer service continued on page 41

n National Mortgage Professional Magazine n SEPTEMBER 2018

CIT Group Exits the Reverse Mortgage Space

portfolio to an unnamed residential servicer. CIT’s exit from the reverse mortgage space will enable it to focus on the singlefamily home loan market. “These efforts support our plan to simplify CIT and gain greater efficiency in our business,” said CIT Chairwoman and Chief Executive Officer Ellen R. Alemany. “We have addressed another legacy issue by exiting the reverse mortgage business, and we have created greater efficiency in our ongoing mortgage operation by partnering with an industry leader to service our portfolio. CIT

NationalMortgageProfessional.com

Fulfillment Services (PFS) unit has integrated its loan review services with Street Solutions Inc. (SSI) Loan Management System (LMS). SSI is a provider of product, pricing and loan management systems for hedge funds and investors buying correspondent loans. With the integration, correspondent sellers can effortlessly upload and submit credit packages for pre-close eligibility review all within the LMS portal. Loan data and documents are automatically transferred to PFS improving data accuracy and expediting review turn-times. The companies said that joint clients are already using the new integration to deliver pre-approval eligibility reviews to non-agency originators. The eligibility results are based on investor guidelines and conditions that are seamlessly posted to LMS. Originators can clear conditions with ease, and ultimately download a Clear to Close form giving them the confidence the loan will close in accordance with the guidelines. PFS can also provide underwriting for non-delegated submissions and post-close credit and compliance reviews to accelerate the due diligence process. “The quest for yield is creating renewed interest among hedge funds and institutional investors in directly acquiring mortgage assets,” said Bruce Witherell, Chief Executive Officer of Promontory MortgagePath. “Many of these new entrants are looking to deploy capital with only a minimal investment in infrastructure, which makes our combination of technology, capital markets, agency and non-agency expertise, along with our tailored review services particularly attractive.”

Addressing Post-Housing Crisis Issues

Connecting Independent Mortgage Loan Originators With HUD-Approved Housing Counselors Can be Bridge of New Business BY PAM MARRON ore than 562,000 Independent Mortgage Loan Originators across the U.S. see all types of mortgage needs in the housing market and find loans for unique situations. Housing counselors deal with consumers on housing issues daily. Why is making a good connection between Independent Loan Originators and Housing Counselors important now more than ever? Credit issues exist now that did not prior to the past housing crisis. Millions of past homeowners who were affected by the housing crisis are now eligible to re-enter the housing market, but still find difficulty in getting a new mortgage when past derogatory credit is reported incorrectly. A plan that connects trained HUD-approved housing counselors with Independent Loan Originators to get help for potentially affected consumers ahead of a contract is a needed avenue of business. Lenders and banks don’t always delve into details of the issues or they may have mortgage overlays (additional underwriting criteria) that halt proceeding with a mortgage. Independent Mortgage Loan Originators work with a variety of wholesale lenders and can check for a fit with a lender where overlays don’t exist. Many of these loan originators also specialize in dealing with unique problems and can find lenders where these issues are workable. And most large lenders already refer clients needing help to Housing

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Counselors. It makes sense that Independent Loan Originators should also consider utilizing housing counseling services. A unique opportunity HUD housing counseling agencies (HCAs) can utilize Fannie Mae Desktop (DU/DO) and Freddie Mac Loan Product Advisor (LPA) automated systems. Recently, Fannie Mae and Freddie Mac allowed HUD-approved housing counseling agencies to start using their automated underwriting systems1. The effort was started with Fannie Mae and a lender to work with denied consumers on the “Home Ready” first time homebuyer program. But incorrect credit for a past mortgage won’t be present if the client is a first-time homebuyer. A little discussed benefit of using the Fannie Mae and Freddie Mac automated systems is that erroneous credit code that is not visible on the face of a credit report does show up on Fannie Mae DO/DU and Freddie Mac LPA findings. An example of this is when foreclosure code shows up on credit for a short sale, modification, deed in lieu or even when excessive past mortgage lates exist. The foreclosure code results in a conventional loan denial and prolongs the ability to get a new conventional mortgage for seven years, rather than the four-year wait required after these events. HCA’s that can use the Fannie Mae and Freddie Mac automated systems can offer the ability to check if the foreclosure problem exists for potentially affected consumers and provide the Fannie Mae workaround (there is no workaround in Freddie

Mac), offering a valuable service to both Loan Originators and consumers. Challenges to overcome on both sides l Misconceptions between Independent Mortgage Loan Originators and Housing Counselors have existed for years. Almost every Loan Originator or Housing Counselor has a negative story about their attempt to connect with one another. Getting past these issues must be done first to make a connection. l Not all Housing Counselors provide the same services. For instance, all agencies help with credit, but not all offer in-depth credit help. l Most housing counseling agencies no longer provide post-purchase assistance due to budget cuts, but there are some agencies still providing these services. l Some customer management systems for housing counseling agencies don’t have a referral option for an Individual Loan Originator that is not connected to a lender. These HCAs may need to figure out how an individual loan originator referral can be entered. l Some HCAs work with approved mortgage networks where consumers are referred to the HCA and a “fee for service” is paid. This

can be confusing to Loan Originators, especially those who think that all housing counseling services are free. Learning about available services at each HCA to match what a client needs help with to get them “mortgage ready“ and developing a method of communication between the Housing Counselor, the client and the Independent Loan Originator are two basic components of making a good connection. Then, determining specific, consistent problems where housing counselors can assist consumers, clarifying the cost of services, who pays for these services and when, and use of a credit from the loan originator at the closing of a new loan needs to be firmed up to make this idea work for all parties. As the mortgage market gets busier, more clients are coming forward with issues that need attention to specific detail. Temporary fixes such as disputes don’t work. Getting consumers help before a purchase is imperative. Stay tuned. Disclaimer: While I am a member of the HUD Housing Counseling Federal Advisory Committee, the opinions noted are those of the author only.

Footnote 1—Federal Housing Finance Agency 2017 Scorecard Progress Report, pages 4-5: https://www.FHFA.gov/AboutUs/Reports/ReportDocuments/2017-Scorecard-Progress-Report.pdf.

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.

heard on the street

and strong market share. It has been named by San Antonio Express News as one of the â&#x20AC;&#x153;Top Workplacesâ&#x20AC;? in San Antonio for the past eight years. Trinity Title of Texas San Antonio division is in the process of rebranding and changing its name to Old Republic Title. â&#x20AC;&#x153;There will be no changes in current leadership or existing personnel, so customers, Realtors and lenders will continue to work with the same dedicated staff from Trinity,â&#x20AC;? said Mark A. Bilbrey, President, Old Republic National Title Holding Company. â&#x20AC;&#x153;We are pleased to welcome our friends at Trinityâ&#x20AC;&#x2122;s San Antonio operations to the Old Republic Title family.â&#x20AC;? Factual Data Announces Integration With Laser Credit Access

speeding up their decisionmaking process. This offers their customers a true competitive advantage.â&#x20AC;? MCT Partners With Freddie Mac

MetLife and State Street in Commercial Mortgage Pact

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 â&#x20AC;˘ San D Diego, CA

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

Join a growing team! 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 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

Carrington is expanding nationwide. Itâ&#x20AC;&#x2122;s time to make your move! WE OFFER:

Operations focused on quality & speed of closing

John Cervantes RECRUITER John.Cervantes@CarringtonMH.com

949-517-7127 Carlos Fernandez RECRUITER Carlos.Fernandez@CarringtonMH.com

949-517-7204

Marketing support and lead generation

Licensingg & compliance support Agent co-marketing programs V O T E D T O P 5 0 B E S T P L AC E S T O W O R K

MetLife Investment Management, the New York-based institutional continued on page 98

W E â&#x20AC;&#x2122; R E T H E # 6 FH A L E N D E R I N T H E N A AT T ION

ÂŠ Copy pyright 2007-2018 Carrington Mortg tgage Services, LLC C headquartered at 1600 South Douglass Road, d, Suites 110 & 200A 0A , Anaheim, CA C A 92806. 888-267-0584. NMLS ID #2600. Nationwide Mortg t gage Licensing Sy System (N (NMLS) S) Consumer Access website: www.nmlsconsumeraccess.org rg. Alll rig ights ts reserved. EQUAL OPPORTUNITY EMPLOYER

n National Mortgage Professional Magazine n SEPTEMBER 2018

Mortgage Capital Trading (MCT) has announced new functionality that delivers real-time pricing and automates loan committing for Freddie Mac clients. MCTâ&#x20AC;&#x2122;s lender clients receive the pricing information seamlessly via its integrated capital markets technology platform, MCTlive! After completing Best Execution Analysis and determining loans to be sold to Freddie Mac, lenders use Rapid Commit functionality which intelligently completes product selection and delivers commitments for all loans with a single click. MCTlive! Rapid Commit interfaces bi-directionally with Freddie Macâ&#x20AC;&#x2122;s Loan Selling Advisor system in real-time. â&#x20AC;&#x153;We are proud to leverage the system-to-system Pricing and Commitment functionalities within the newly released Freddie Mac APIs,â&#x20AC;? said Phil Rasori, Chief Operating Officer at MCT. â&#x20AC;&#x153;This integration is a significant step on our road map for increased technology collaboration with Freddie Mac for the benefit of our mutual lender clients.â&#x20AC;? MCTlive! Rapid Commit functionality speeds up the committing process, ensures data integrity, and optimizes best execution for all commitments. Working within MCTlive!, users leverage Rapid Commit to run initial best execution, confirm Freddie Mac eligibility, and analyze the optimal subset sizes and products to deliver as individual commitments. MCTlive! has converted a once manual process to a completely automated and efficient solution.

On Sale Noww

NationalMortgageProfessional.com

Factual Data has announced an integration of its services with LASER Accuracy LLC, a Salesforce AppExchange Partner, and developer of the Salesforce App LASER Credit Access. The agreement allows Factual Data customers to automatically access credit report data within their Salesforce environment. The integration removes many of the manual steps that otherwise would be necessary when a lender must move in and out of Salesforce to manually add information from the credit report. The credit data integrates with Salesforce, allowing the lender to access the credit data through their decisioning process. â&#x20AC;&#x153;This collaboration allows both companies to enhance their capabilities and provide customers with new features they didnâ&#x20AC;&#x2122;t have before,â&#x20AC;? said Factual Data President Jay Giesen. â&#x20AC;&#x153;It combines the power of Salesforce with the data verification services Factual Data can provide in a seamless way that will vastly speed up the decision-making process.â&#x20AC;? Michael Dunleavey, Managing Partner of LASER Accuracy, said, â&#x20AC;&#x153;It is our great pleasure to have worked with the Factual Data team on this project. The result of this will be customers of Factual Data, using the Salesforce platform, will now be able to instantly access credit data without leaving Salesforce,

continued from page 39

David H. Stevens, Mortgage Professional of the Year The 12 Best Lessons Dave Stevens Shared With the Mortgage Industry 1. About the work leaders do “Nothing really teaches you how to create a fully functioning operation better than building one from scratch. I was able to do that many times,” Stevens said. As an executive for World Savings, Stevens spent time working in every part of the business from front line loan sales to underwriting and risk management. He worked in the company’s headquarters for the head of capital markets and in a sales support role for the whole company. He even worked on the deposit side of the bank to learn how to set up and run a bank branch. “World had a really intense training and crosstraining discipline. It was an intentional way of developing the senior leaders to understand every aspect of the business,” Stevens said. Lesson: If you want to lead the business, you have to know the business, and that means doing the work of the business.

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

2. About the choices leaders make Someone who does only the work they enjoy rarely becomes a powerful leader. In contrast, strong leaders tend to do the most important work first. Stevens recalled being asked to work for the government. “I would never have gone to work for a presidential administration in any role if there wasn’t an important job to do. I’m not a good maintenance manager; I like to come in and fix things.” It was that same attitude that carried him over to the MBA. Daniel Arrigoni met Stevens when he worked at Freddie Mac. Over the years, the business relationship became a deep friendship. “When he was tapped on the shoulder to become the FHA Commissioner we were good friends and he talked a lot about that to me. At the time, the government job didn’t pay like a private enterprise, but wanted to give back to the industry. If he could help the housing industry and help people obtain loans for what we call the American dream, that was what he was about.” Lesson: Leaders do the jobs that need doing, not only the ones they enjoy or which are the most financially rewarding.

To make that happen, Stevens knew he had to make all of the organization’s members—small companies and large lenders, banks and non-banks—work together and quit fighting over “who was getting the better deal.” By working to level the playing field for all MBA members, Stevens accomplished this goal. “We stayed organized, we stayed together, and it worked. The industry really rallied.” Lesson: Growth is critical if a leader hopes to increase the impact an organization can have.

3. About the way leaders learn When Stevens worked at World, the president was a former Xerox executive who had been a top salesman for that company. “We really focused on professional selling skills—on learning them as a profession, not just something you read about in a book. We roleplayed selling and were videotaped. Everything I can do in terms of public speaking I learned during that period.” In addition, every new employee the company hired, regardless of previous experience, had to attend a thorough, week-long training boot camp. “We took them off site for training,” Stevens recalls. “For a week, we put them in a hotel or training facility and videotaped them presenting the products we offered and working on their sales abilities and public speaking. We then worked one-on-one all day long. We did this for seven days, and then they graduated.” Stevens said it was a “discipline that really paid off.” Lesson: Leaders know that everyone needs training and embrace it no matter how much they feel they already know. 4. About the way leaders pursue their missions Many trade associations survive by creating a position that is likely to benefit the members and then promoting these ideas. Stevens says that this is only a partial solution. “As an executive working in Washington, D.C., I learned that

you’ve got to be able to present yourself well. It’s not enough just to be smart and have good ideas and know the business. You’ve got to be able to organize your thoughts in a way that will motivate decision-makers to agree with you.” Stevens credits his earlier sales training for much of his success in Washington. “I sat in meetings with the President many times and we would debate which way to go on policy issues. And I remember meetings in which the President sided with my view over someone who disagreed with me and who was very senior at the time. That created my reality, which still exists for the MBA, which is: you’ve got to be able to persuade. Lesson: Leaders know that good ideas and industry knowledge are not enough if you can’t also be persuasive. 5. About the way leaders amass power When Stevens took the reins at the MBA, he knew he had to get the membership on the same page if they were to have any hope of influencing the changes that were already impacting the industry. Beyond that, he had to build up the size of the organization to increase its impact. “The goal was to make sure people realized that, as an industry, the only way to affect change is to be powerful. Power comes in size; size matters for a trade group.”

6. About the way leaders operate One of the best-known rules of leadership is that no one does it on their own. Stevens never thought otherwise. “I focused on making sure we had the right team, bringing in guys like Pete Mills (Senior Vice President, Residential Policy & Member Engagement), who has been an extraordinary leader for the independent mortgage bankers and for our members. And Marcia Davies, my Chief Operating Officer, who plans our conferences and built the MPower organization for Women in Leadership.” These leaders and others worked beside Stevens to expand everything the organization offered. “We expanded our diversity and inclusion initiatives, started a nonprofit charity called the Open Doors Foundation, focused more on the commercial-multifamily side of our business and then, most importantly, we took that reorganized organization and broke into the Administration and Capitol Hill in ways we hadn’t done before.” Stevens remembers bringing groups of industry CEOs to meet with the President in the West Wing, giving the industry a real “voice at the table that showed them we were a force to be reckoned with.” Lesson: Great leaders build great teams. 7. About the way leaders build relationships Some think of leaders as warriors that champion causes and fight any who oppose them. Some leaders do this. But Stevens says that when it comes to politics, a real leader must form strong relationships, even with adversaries.

David H. Stevens, Mortgage Professional of the Year The 12 Best Lessons Dave Stevens Shared With the Mortgage Industry

9. About the way leaders treat people Great leaders know how to make others feel important and help them accomplish their goals. According to Gary Acosta, CoFounder and CEO of the National Association of Hispanic Real Estate Professionals (NAHREP)

and a 25-year veteran of the housing industry, Stevens “really drove a major partnership between the NAHREP and Freddie Mac when we were a very early stage organization.” Acosta recalls how Stevens opened his doors to his organization’s members again when he was at FHA and then once again at the MBA. “Anytime we needed him to speak at an event, he would, without hesitation, commit to it,” said Acosta. “He always came and gave his best presentation at our events, and our members loved him. He is absolutely an honorary member of the Latino community, as far as we’re concerned.” In fact, NAHREP awarded Stevens its Founders Award, the association’s highest award. Usually reserved for members of the community it serves, Stevens is one of the few non-Hispanic mortgage professionals to ever receive it.

“There are a handful of really influential people in the industry who have worked to put NAHREP where it is today. Dave is definitely one of those people,” Acosta said. Lesson: Great leaders support others who are different from them. 10. About achieving balance in life and work While leaders are often driven, and may be described as Type A individuals, the best leaders are actually well-balanced. As longtime friend Randy Krout puts it, “I learned from Dave that you have to stay balanced in a business. It’s challenging, but you have to drive balance into your organization.” But it’s not just work Krout is talking about. Enjoying a deep personal friendship with Stevens for many years now, Krout spoke about a recent concert that he and his wife had attended with Stevens and his wife. “I watched him last night at a

“It doesn’t matter where you fall on the political spectrum; we need to recognize that our issues in the housing industry are non-partisan. This is not a partisan issue. Housing is an economic issue.”

11. About giving something back Great leaders find a way to give back to the people they care about. It’s not something extra that they do; it’s part of everything they do. NAHREP’s Gary Acosta remembers well the many times that Stevens reached out to him to share the name of another executive he felt Acosta should know or about an article that he had read in the newspaper that impacted the Hispanic community. “Stevens is very generous with his relationships,” Acosta said. “He would do that all the time. He wanted to be on the inside track, understanding the nuances of the Hispanic market. And even when we weren’t in the room—if he was doing a presentation, I would always get feedback that Dave had referenced us or some of the data that we as an organization had put out in some of our reports.” Arrigoni pointed out that Stevens doesn’t just give back to the industry. Arrigoni had started a small foundation called Spare Key that was designed to help make mortgage payments for families with sick children. When Stevens found out about it, he offered to help Arrigoni take it nationwide as the Open Doors Foundation. “I had the experience of putting it together, but he volunteered the staff of the MBA to do a lot of the administrative duties so that every dollar donated went to the cause. It gives you an idea of the type of man he is. And so we worked together on that, and Open Doors is tremendously successful today. Lesson: Giving back is part of what good leaders do. 12. Men must take their health seriously Most recently, Stevens has dedicated his blog and many of his personal appearances to raising awareness about men’s health issues, especially prostate cancer. Lesson: Get tested. Stay healthy.

n National Mortgage Professional Magazine n SEPTEMBER 2018

8. About what leaders bring to the job A leader’s effectiveness is dependent on the energy they can bring to the job. In that area, people who have worked with Stevens call him exceptional. “Dave brought a lot of energy to the job,” said Cunningham. “He connects well with people. He was always posting blogs. That energy, his ability to communicate, and the relationships that he built served the MBA well.” We’ve always referred to Dave as ‘The Energizer Bunny,’” Arrigoni said. “Just like that commercial on television, he is full of energy!” Lesson: Good leaders find a source of energy and unleash it to accomplish their missions. They hold nothing back.

concert,” Krout recalled. “Although life is very serious for him right now, he is still able to have a moment, make light of it and have fun, to smile and make jokes. That’s great.” Lesson: Great leaders find a way to balance all aspects of their lives, both business and personal.

NationalMortgageProfessional.com

“You must have relationships with the key regulators. Whether that’s Ed DeMarco, or later Mel Watt at FHFA, or Rich Cordray and now Mick Mulvaney at the CFPB. The same is true for the people we’ve had at HUD and FHA, from Donovan to Castro to Dr. Carson. And also up on the Hill, whether that be Bob Corker or Elizabeth Warren. Even Richard Cordray and I became good friends along the way, for better or worse.” Randy Krout is an industry veteran who first met Stevens in 1987 when he was hired to work for him as a Loan Officer. Over the years, Stevens continued to call on Krout to lead sales teams at various companies. “He’s one of the smartest guys I know,” said Krout. “He taught me how to deal with people at all levels, how no two people are the same, how to find out how they function, and how to motivate and manage them. He taught me how to operate a business that’s dependent on people who are from different backgrounds, different places, and who have different experience levels. Lesson: Leaders build strong personal relationships, even with their adversaries.

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

others cover the world ...we cover yours!

Visit MortgageNewsNetwork.com for the industry's latest topics... on-demand, 24/7 and sign up for your complimentary Daily MNN Show Alerts. If you have a product or service for mortgage professionals you can be a sponsor for these shows. For more information about these sponsorships or Mortgage News Network custom video productions please send an email to Info@MortgageNewsNetwork.com or call Beverly Bolnick, VP-Sales & Marketing, at 516-409-5555 ext. 4 and she'll tell you how you can be part of the action!

Day

MONDAY

TUESDAY

Show Title

Description

Day/Time Airing

Master the Markets with Barry Habib

Recap of key economic events that took place over the past week and a look ahead to events that will potentially impact interest rates in the housing market.

Mondays at 7 a.m.

Centurion Roundtable Interviews

Learn the secrets of success from this elite group of high volume originators.

Mondays at 11 a.m.

nmpU Campus Talk

Success Strategies that Work for Today’s Originator.

Mondays at 2 p.m.

The Mortgage Godfather

Ralph LuVuolo Sr., “The Mortgage Godfather,” shares his unique and innovative approach to mortgage origination. You better become a follower or else. It’s an offer you can’t refuse!

Tuesdays at 7 a.m.

Million Dollar Mortgage Minute

Jon Maddux’s insights on how to ﬁnd and market to multi-million dollar borrowers.

Tuesdays at 2 p.m.

Sponsor

WEDNESDAY

Wednesdays at 7 a.m.

Homeownership Heroes

The Battle to Increase Military Homeownership.

Wednesdays at 11 a.m.

The Most Connected Mortgage Professionals

Leaders who share their knowledge for the betterment of the industry. The most liked, followed, and retweeted Mortgage Professionals.

Thursdays at 7 a.m.

Alternative Lending: Top Originator Strategies

Strategies from top originators using alternative lending.

Thursdays at 11 a.m.

The WOW Factor

Learn the secrets of making the most of your online reputation from SocialSurvey’s Top Performers.

Thursdays at 7 a.m.

Inside the MBA

Your bi-weekly window into what’s happening at the MBA.

Fridays at 11 a.m. bi-weekly

Inside the NAMB

Your bi-weekly window into what’s happening at NAMB.

Fridays at 11 a.m. bi-weekly

n National Mortgage Professional Magazine n SEPTEMBER 2018

FRIDAY

Closing more, making more and still enjoying life!

NationalMortgageProfessional.com

THURSDAY

Top Originator Secrets with Brian Sacks

Whoâ&#x20AC;&#x2122;s Who in the

2018

Wholesale Marketplace Company Name

Web site

Specialty or Niche

State(s) Licensed In

NSERT: ACC_Mortgage_Logo]

WEApproveLoans.com

Non-QM, ITIN, Foreign National

AFR

AFRWholesale.com

Renovation/OTC construction to permanent government

AngelOakMS.com

Wholesale and Correspondent Lender

AL, AR, AZ, CA, CO, CT, DE, DC, FL, GA, IL, IN, IA, KS, KY, LA, ME, MD, MI, MN, MS, MO, NE, NM, NJ, NV, NC, OK, OH, OR, PA, RI, SC, TN, TX, UT, VA, WA & WI

American Advisors Group

AAG.com/Wholesale

Home Equity Solutions

Nationwide, except MA

Associated Bank

AssociatedTPO.com

Jumbo

Assurance Financial

LendTheWay.com

Independent, full-service residential mortgage banker

AL, AR, CA, CO, DC, FL, GA, IL, IN, KY, LA, MD, MI, MN, MS, NE, NC, OH, OK, PA, SC, TN, TX, VA & WV

BluePoint Mortgage

BluePointMTG.com

FHA/VA/Conventional/ Non-Agency Loans

AL, AR, CA, CO, DE, DC, FL, GA, IL, IN, KY, MD, MI, MN, MO, NV, NJ, OH, PA, SC, TN, UT, VA, WA & WI

Caliber Home Loans Inc.

CaliberWholesale.com

Caliber Portfolio Lending, Conventional, Government

Capital Alliance

CAlliance.com

Non-QM, Renovation & Bridge Loans on 1-4 Unit Residential Property

AZ, CA, CO, CT, DC, DE, FL, GA, IL, MD, NC, NJ, NV, PA, SC, TX, VA & WA

Nationwide, except HI

IA, IL, IN, KS, MI, MN, MO, OH & WI

Nationwide

W H O â&#x20AC;&#x2122; S

W H O

Company Name

I N

T H E

2 0 1 8

W H O L E S A L E

M A R K E T P L A C E

Web site

Specialty or Niche

State(s) Licensed In

CardinalFinancialWholesale.com

Cardinal Financial Wholesale delivers unmatched levels of execution by leveraging groundbreaking technology.

CarringtonWholesale.com

Committed to serving underserved borrowers with non-QM loan products for purchase, refinance and cash-out refi loans up to $2MM, to 90 percent LTV and NO MI (fixed and ARM options available); conventional purchase and refi; FHA purchase, streamline, 203H, 203k Full & Limited; VA purchase, refi and cash-out refi; USDA; loans for investors.

[INSERT: Citadel_Logo]

CitadelServicing.com

Non-prime wholesale and correspondent lending

CMG Financial

CMGFi.com/Wholesale

Technology, Service, All-in-One Loan

[INSERT: Corevest_Logo]

CorevestFinance.com

Private Lender to Residential Real Estate Investors

Ditech Financial LLC

BusinessLending.Ditech.com/ Wholesale/Overview.html

MINIMAL conventional/ government overlays and Alt-A Jumbo

Emigrant Mortgage Company Inc.

EmgrantMortgage.com

Residential and Commercial Portfolio Products

CT, FL, MA, NJ, NY & PA

Equity Cap Fund Advisors Inc.

EquityCapFundAdvisors.com

Private Money Bridge Loans & Equity Participations

Finance of America Mortgage LLC

FAMWholesale.com

Jumbo, Agency, Government, Non-QM, Expanded Criteria (serving independent originators and non-delegated correspondent)

Nationwide, except NY

[INSERT: First_Community_Logo]

FCMPartners.com

VA Loans

[INSERT: Florida_Capital_

FLCBMTG.com

Jumbo, VA, Warehouse Lines

Nationwide

AL, AK, AR, AZ, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MI, MN, MO, MS, MT, NC, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WV, WA, WI & WY

AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MN, MT, NC, NE, NH, NJ, NV, OK, OR, PA, SC, TN, TX, UT, VA, VT, WA, WI & WY Nationwide

AL, AK, AR, CA, CO, CT, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MS, MO, MT, NE, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, VT, VA, WA, WV, WI & WY Nationwide except NY & WV

Tennessee

Nationwide except AK & HI

W H O ’ S

W H O

Company Name

I N

T H E

2 0 1 8

W H O L E S A L E

M A R K E T P L A C E

Web site

Specialty or Niche

State(s) Licensed In

SERT: Freedom_Mortgage_Logo]

FreedomWholesale.com

Top five Residential Lender (Source: IMF, 2017)–A market-leader in conventional and government-insured lending offering competitive products and pricing for Conventional, FHA, VA, USDA, Jumbo & more, including Freedom First (low/no FICO) & Freedom Solutions (non-QM) programs.

Nationwide, Puerto Rico & D.C.

NSERT: FundLoans_Logo]

FundLoans.com

Jumbo-Super Jumbo Non-QM up to $15MM

AZ, CA, CO, FL, MI, MT, OR, TX, WA & WY

INSERT: Guaranty_Trust_Logo]

GTWB2B.MortgagebotLOS.com

Wholesale

[INSERT: High_Tech_Lending

HTLWholesale.com

Reverse Mortgages

HomeBridge Wholesale

HomeBridgeWholesale.com

FNMA, FHLMC, FHA, VA, USDA, Jumbo, 203(k)/ HomeStyle/VA Renovation loans, HomeReady, Home Possible, Piggyback HELOC, 90% LTV to $1 Million with No MI, 75% LTV to $3 Million Bank Statement Program–IO Available, Non-Del Correspondent, 24-Hour Purchase Underwriting

Nationwide

Home Point Financial

HomePointFinancial.com

Home Point Financial is a national multi-channel mortgage originator and servicer. With the goal of providing a superior customer experience, Home Point offers a full product suite that includes: Conventional, FHA, USDA, Renovation Lending, VA and Jumbo.

Nationwide, except HI

[INSERT: Impac_Mortgage_Logo]

ImpacWholesale.com

Non-QM, Government

[INSERT: JMAC_Lending_Logo]

JMACLending.com

Innovative Non-QM, and fast, AL, AZ, CA, CO, DC, FL, quality service for agency GA, HI, ID, IN, MD, NC, NJ, and government NV, OH, OR, SC, TN, TX, UT, VA & WA

[INSERT: Land_Home_Financial

LHFSWholesale.com

Conventional, Government, Jumbo, Reverse, Expanded Products (Non-QM) & Processing

[INSERT: Loan_Depot_Logo]

LDWholesale.com

Conventional, FHA, VA, Renovation & Jumbo

MCM Holdings Inc.

MCMHoldingsInc.com

Mortgage Lenders

32 States

AZ, CA, CO, DE, FL, GA, IL, MD, NJ, NM, NV, OR, PA, SC, TX, UT, VA & WA

Nationwide

Nationwide & D.C.

42 states plus D.C.

AL, AZ, CA, CO, CT, DC, FL, GA, IL, IN, LA, MD, NV, NJ, OR, PA, TN, TX, VA & WV

W H O â&#x20AC;&#x2122; S

W H O

Company Name

I N

T H E

2 0 1 8

W H O L E S A L E

M A R K E T P L A C E

Web site

Specialty or Niche

State(s) Licensed In

SERT: Moneyhouse_Logo]

MoneyhouseUS.com

Reverse Mortgage

[INSERT: Mortgage_Assurance

MAIBroker.com

Non-QM, Self-Employed, Investor Solutions

Mortgage Financial Services

MFSTPO.com

Service Level

Nations Direct Mortgage LLC

MyNDM.com

Exceptional customer service AL, AK, AZ, CA, CO, CT, while offering brokers FHA, DE, DC, FL, GA, IL, IN, KY, Conventional, VA, USDA, LA, MD, MA, MI, MN, MO, Jumbo and Non-QM loan MT, NV, NC, ND, NH, NJ, products. OH, OK, OR, PA, SC, TN, TX, UT, VA, WA & WI

[INSERT: New_Penn_Logo]

GoNewPenn.com

Conventional, Government, Jumbo, Non-QM SMART Series, Bank Statement Program, Piggyback HELOC, Non-Del Correspondent

Nationwide except for AK & HI

NexBank SSB

NexBank.com

NexBank has no retail division and offers great pricing on portfolio loan products including both QM Jumbo, Non-QM, Investment Properties, High LTV, bank statement products and interest only.

Nationwide, except NY

Norcom Mortgage

NorcomPartners.com

Government and Rehab Lending

42 states, primarily an East Coast lender with headquarters in CT

[INSERT: Orion_Lending_Logo

OrionLending.com

Wholesale Lending

AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MT, NH, NJ, NM, NC, NV, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, WA, WI & WY

[INSERT: PRMG_Logo]

PRMG.net/Wholesale

We deliver FHA/VA & government loan products with a high focus on purchase business, pricing and service!

Nationwide except NY & WY

Parkside Lending LLC

ParksideLending.com

Conventional Conforming, High Balance, Super Conforming, Jumbo, Non-QM, FHA & VA

AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MT, NE, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, TN, TX, UT, VA, WA, WI & WY

[INSERT: PennyMac_Logo]

PennyMacBrokerDirect.com

Providing capital strength for long-term broker success with a dedication to service, great pricing, flexibility, and best-in-class technology. Programs include FHA, VA, and Conventional (stay tuned for more).

Nationwide, except NY

CA, CO, FL, GA, IL, OR, TN & TX

AL, CO, CT, FL, GA, IL, IN, KY, LA, ME, MD, MN, NC, NH, PA, SC, TN, TX & VA

LA & TX

W H O ’ S

W H O

Company Name

I N

T H E

2 0 1 8

W H O L E S A L E

M A R K E T P L A C E

Web site

Specialty or Niche

State(s) Licensed In

Procura Mortgage Company

ProcuraMortgage.com

Specialty

[INSERT: REMN_Logo]

REMNWholesale.com

Renovation Lending

Royal Pacific Funding

RPFWholesale.com

FHA, VA, Conventional & Non-QM

Sierra Pacific Mortgage

SPMC.com

Retail & Wholesale

Spring EQ LLC

SpringEQ.com/Wholesale

Home Equity Loan Lending

[INSERT: Stearns_Lending_Logo]

StearnsWholesale.com

We believe in the distributed model and want to be out in the field learning from and working with our brokers to help them succeed.

Nationwide, except NY

[INSERT: The_Lender_Logo]

theLender.com

Helping brokers to maximize their potential

AL, AR, CA, CO, DC, FL, GA, IL, IN, KY, LA, MD, MI, MN, MS, NE, NC, OH, OK, PA, SC, TN, TX, VA & WV

[INSERT: TMS_Logo]

Wholesale.TheMoneySource.com

TMS specializes in Service (SLA’s and our Origination Loan Support Team) and Technology (Our proprietary system KISS). It’s also a specialty that we service all of our own loans.

Nationwide, except MO

[INSERT: Union_Home_Mortgage

UHWholesale.com

Great blend of High Tech and High Touch

United Wholesale Mortgage

UWM.com

Purchases, Mortgage Insurance, Elite Pricing, Industry-leading Turn Times

Village Mortgage Wholesale Lending

VillageMortgageWholesale.com

Our specialty is the way we handle our broker partner relationships. We are a customer-centric lender. We have an old school approach with common sense underwriting and proactive communication supported by innovative technology, a strong reputation and our fiercely dedicated team.

WA Nationwide

AL, AR, AZ, CA, CO, DC, DE, FL, GA, IL, IN, KY, MI, MN, MT, NJ, NV, OH, OR, PA, SC, TN, TX, UT, WA, WI & WY Nationwide, except AK AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, IN, IA, KS, KY, MD, MI, NC, NH, NJ, OH, OR, PA, RI, TN, TX, VA, VT, WA & WI

AZ, CA, FL, GA, IL, IN, KY, MI, MN, NC, NM, OH, SC, TN, TX & WI Nationwide

CO, CT, FL, MA, ME, NV, NH, RI & VT

mortgage fraud challenges

l Creating new investigatory and enforcement provisions.

I supposed the first two are somewhat obvious. The underwriting process should include: l Authenticating and verifying all documents; l Using notaries for signatures; l Confirming values; l Confirming appraiser identities; l Confirming real estate; and l Verify almost everything. Predictive models are relatively new in the mortgage field. There are models that can predict if a lender’s pre-funded loans, if booked, would stop paying within the first six months. Some analytics can show that mortgage early payment defaults can be linked to a significant misrepresentation on the original loan application, such as: l Income inflated by a significant percent; l Appraisals overvaluing the property by an excessive percent; and l Fictitious employers and/or falsified tax returns. On the obverse, there are models that show loans containing egregious misrepresentations were more likely to default in the first six months than loans—but did not. The third solution– implementing Red Flag training, fraud prevention control reviews, and fraud detection questionnaires–is the “Big Bucket” solution. I am going to set forth an outline that could help you conceptualize the challenges involving mortgage fraud, as it relates to this third prong. Red flags The term “Red Flags” is often associated with potentially suspicious activities for both money laundering and terrorist financing. Since mortgage fraud is a preferred means by which money laundering takes place, it is important to review the Red Flags list compiled by the Financial Crimes Enforcement

Fraud detection: Questionnaires In risk management, questions are sometimes more important than answers. Or, to put a fine point on it, the framing of questions relating to mortgage fraud is sometimes more important than the range of possible answers. If the right questions are asked, the company is in a better position to determine its fraud detection strategies. Having a set of basics, like the outline I have provided, is one of many steps

to identify and control for mortgage fraud. However, these are not questionnaires! A savvy lender must develop fraud detection questionnaires for at least the following areas: loan applications, appraisals, credit reports, sales contracts, title policies, chain of title, income and employment verification, asset verification, closing procedures and settlement statements. Over many years, Lenders Compliance Group has developed extensive fraud detection questionnaires that assist us in conducting our audits and drafting appropriate policies and procedures. In developing a program to monitor and mitigate mortgage fraud, it is in the company’s best interests to periodically build and continually update its own fraud detection questionnaires. Visit NMPMag.com/Catch-AThief for an extended version of this article including a “Checklist Approach” that you can perform in the loan origination process. Many of these Red Flags come from many years of audits and due diligence reviews. You may need a firm such as Lenders Compliance Group to conduct a comprehensive and independent audit; however, there really is no reason why you can’t undertake many aspects of this kind of review on your own. Footnotes 1—18 USC 1001. 2—18 USC 1010. 3—18 USC 1014. 4—18 USC 1028. 5—18 USC 1341. 6—18 USC 1342. 7—18 USC 1343. 8—18 USC 1344. 9—42 USC 408(a). 10—Georgia Residential Mortgage Fraud Act, SB 100. 11—Appendix F: Money Laundering and Terrorist Financing “Red Flags”, Bank Secrecy Act, Anti-Money Laundering Examination Manual. 12—Along with other government agencies, such as the National Credit Union Administration (NCUA). 13—Supplement A to Appendix A, Appendix A to Part 681, “Interagency Guidelines on Identity Theft Detection, Prevention, and Mitigation,” 72 FR 63771, Nov. 9, 2007, as amended at 74 FR 22646, May 14, 2009.

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 e-mail Compliance@LendersComplianceGroup.com.

n National Mortgage Professional Magazine n SEPTEMBER 2018

Solving fraud I do not think mortgage fraud is going away! Then again, neither is thunderstorms. But that doesn’t mean we should ignore taking an umbrella when a storm is on the way! Therefore, I am going to spend the rest of this article discussion solutions to reducing mortgage fraud. Emphasis will be placed on identifying and reducing fraud. I believe there are three primary solutions to preventing mortgage fraud. When we do our audits, sometimes I see the outcome of poorly written or improperly implemented procedures in the loan flow process. I say to myself, “If only they had done this,” or “If only they had done that!” The issues always seem to come down to having solutions that are timetested. The three solutions are: 1. Expanding the underwriting process;

2. Considering predictive models that reject loans in pre-funding; and 3. Implementing Red Flag training, fraud prevention control reviews, and fraud detection questionnaires.

Network (FinCEN).11 Although these lists are not all-inclusive, they should be consulted and used as a way to remain sensitized to the ways that fraudsters use mortgage fraud for a host of illicit purposes, such as money laundering and terrorist financing schemes. The Federal Trade Commission (FTC) has set forth its own Red Flags Rule12 to help prevent identity theft. The FTC also provides a very helpful list. It provides 26 Red Flags in these five areas: (1) Alerts, Notifications or Warnings from a Consumer Reporting Agency; (2) Suspicious Documents; (3) Suspicious Personal Identifying Information; (4) Unusual Use of, or Suspicious Activity Related to, the Covered Account; and (5) Notice from Customers, Victims of Identity Theft, Law Enforcement Authorities, or Other Persons Regarding Possible Identity Theft in Connection With Covered Accounts Held by the Financial Institution or Creditor.13 Most important to mortgage fraud prevention is the use of Red Flags and controlling for them throughout the mortgage loan process. Lenders Compliance Group believes controlling for a wide range of risks is so critical to a company’s survival that we established a Director’s position for it, which is held by Michelle Leigh, CRCM, Director of Regulatory Audits and Controls.

NationalMortgageProfessional.com

It is worth noting that the Mortgage Bankers Association (MBA) has gone on record saying that individual state mortgage fraud laws may make prosecution more difficult until sufficient case law is available for attorneys and judges under the new provisions. The view is that existing federal laws have been used to successfully prosecute mortgage fraud cases. Furthermore, it is also argued some states that allow private right of action against mortgage fraud perpetrators may create frivolous lawsuits without producing material reduction in mortgage fraud. I’m not so sure I agree with this view. After all, state banking departments have a legal obligation to exam their licensees for the purpose of protecting the consumer. In their role as consumer protection and advocacy agencies, state banking departments recognize that mortgage fraud is one of the most devastating plagues affecting individuals and entire communities. Although litigation has been building, it’s hard to tell when there will be case law to prevail in the prosecution of mortgage fraud. Meanwhile, the fraudsters keep spinning their yarn!

continued from page 33

$28 all--inclusive cred e it reports1 2 Escrow o waivers up to 95% with no escro ow waiver fee No-costt appraisals now th ough thr o hD December b 313 Elite BPM MI featuring some of the lowest M M.I. pricing available l Conventional High Balance Nationw wide d up to 90% LTV T 4 with M.I. Buyout

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Home Va alue Estimator and New Ho ome Listings tools Client i t Loyal o lty t M Manager Customiizable marketing materials Success Track LO, proc o essor and Brok o er Owner O training progr o ams

AND THESE ARE JUST SOME OF THE W SOM WA AYS UWM CAN SA SAV VE YOU AND YOUR BORROWER MONEY ON N EVER RY Y LOAN. UWM HELPS YOU WIN. At UWM, we know that rates #"! ! # " # # ! " ! # !! ! ! ! ! # "! #

"! ! ! ! !" # # #

# ! # " "" !" # ! ! # ! !! ! # #

YOU + UWM = YOUNITED | 800.981.8898 | UWM.COM In partnership with Clear Choice Credit Corp. 210/.-,+0*,)('./&'+(/%*$+#"!/ / -+/#$")'0 / **/'0/ *&/ *,)* !/

1 3

/- +*, / $' ' $ $' ' $*/ ",/$$"-0/-..$'#-+'"0) $' +' + / )++/ / !/ "-0)/ )++/#$")* $ / *#* *, / / ! 4 (')

(' /') ' /0"++/-/ *$' ' $* $' ' $ /

.," #+!/ "0 ", '0 /'0/-$$/ -+*,'-$/,*).*#+)/* #*.+/ ",/$"-0/- " 0+/'0/#*,+-'0/ -, *+)!/ (')/'0 ", -+'"0/')/.," ' * /+"/ ",+ - */-0 /,*-$/*)+-+*/.," *))'"0-$)/"0$ /-0 /')/0"+/'0+*0 * /0",/')/'+/- +(",' * / ",/#"0) *,/ ')+,' +'"0!

n National Mortgage Professional Magazine n SEPTEMBER 2018

! ! "# ! ! "! # # " # !

NationalMortgageProfessional.com

BY HELPING YO YOU LOW WER YO YOUR COSTS,

Cracking the 201 ach year, Inc. magazine releases its list of the top 5000 fastest-growing private companies in the United States, recognizing those private corporations who have experienced significant expansion and growth over the past year. As Inc. describes it, “If entrepreneurs are the lifeblood of an economy, consider Inc.’s ranking of 5,000 companies America’s circulatory system.” Members of the Inc. 5000 list have amassed a collective revenue of more than $206.2 billion in 2017, and three-year revenue growth rates that top out at 75,661 percent. The list represents a unique look at the most successful companies within the American economy’s most dynamic segment, including Microsoft, Dell, Domino’s Pizza, Pandora, Timberland, LinkedIn, Yelp, Zillow, and many other well-known names. “If your company is on the Inc. 5000, its unparalleled recognition of your years of hard work and sacrifice,” said Inc. Editor-in-Chief James Ledbetter. “The lines of business may come and go, or come and stay. What doesn’t change is the way entrepreneurs create and accelerate the forces that shape our lives.” In 2018, a number of mortgage- and housing-related companies populated the list. As many feel the industry is going through a state of transition, as downsizing and technology alter the industry on a daily basis, the following companies have seized their own niche in the market.

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Inc. ranked New American Funding on its Inc. 5000 List for the fastest-growing private companies in America. The national mortgage lender ranked 3,239 in the nation for 2018. In 2017, New American Funding was recognized on Inc. 5000’s Honor Roll, which is an elite group of companies that have made the fastest-growing list five times. This distinct milestone is an accomplishment that less than one-tenth of Inc. 5000 honorees achieve. “It’s extremely humbling to make the Inc. 5000 list again in 2018,” said New American Funding CEO Rick Arvielo. “This is a huge achievement and we are proud of our employees that have made us the fastestgrowing company. We have been focused on hiring the best talent for our industry and this has been the success for our continued growth.” Troy, Mich.-based United Shore ranked 2,158 on the 2018 Inc. 5000 List. Reporting a 2017 revenue of $1085.8 million, the company makes its fifth appearance on the Inc. 5000 List. Founded in 1986, United Shore currently employs more than 1,200 mortgage professionals nationwide. Making its debut on the Inc. 5000 List, Corona, Calif.-based Paramount Residential Mortgage Group (PRMG) provides mortgage banking services, supporting a comprehensive product offering across the retail, wholesale, and correspondent channels nationwide. The company ranked 4,332nd on the 2018 Inc. 5000 List, reporting a total revenue of $236.2 million in 2017. “I am very proud to see PRMG not only be considered, but included among some of America’s Fastest-Growing privately-held companies in the nation,” said Paul Rozo, PRMG CEO. “This prestigious ranking in of itself not only speaks volumes of those few top performing mortgage companies that share the stage with us in our industry, more importantly, it speaks to PRMG being part of something that resonates at a much larger scale—being included with top performing companies outside of the mortgage industry. That all being said, as we continue to grow our national presence over time, our vision is PRMG will eventually

find itself listed shoulder to shoulder with some of the top Inc. 500 companies in America.” A seven-time Inc. 5000 List honoree, Plymouth Meeting, Penn.-based New Penn Financial ranked 4,392nd on this year’s List. The company reported $309.8 million in revenue in 2017, with a threeyear growth rate of 75 percent. Mount Laurel, N.J.-based AnnieMac Home Mortgage is a mortgage lender with 46 branches nationwide. In 2018, the company made its second appearance on the Inc. 5000 List, ranking 4,091st, with a reported $120.4 million in revenue in 2017, along with a three-year 85 percent growth rate. Chicago-based Guaranteed Rate is a nine-time Inc. 5000 honoree. In 2018, the company ranked 3,767th on the List, reporting total revenue of $753.1 million in 2017, with a three-year growth rate of 97 percent. Homesnap was named number 43 on the 2018 Inc. 5000 list of the fastest-growing private companies in the country, ranking fourth in the real estate category. According to a company release, Homesnap has grown 6,336 percent in three years, into 160 markets across the nation. “You don’t make this list without doing something that’s truly great,” says Steve Barnes, Co-Founder of Homesnap. “I’m extremely proud of the achievements this award represents and look forward to sustained growth in the future.” Nationwide Title Clearing Inc. (NTC) has ranked 3,878th on the 37th annual Inc. 5000 List of the nation’s fastest-growing private companies. NTC was founded in 1991 and has grown into a national leading postclosing services provider for the residential mortgage industry. NTC provides a range of services to the nation’s top mortgage lenders, servicers and investors as well as various government entities. “NTC is incredibly honored to make the Inc. 5000 list of honorees,” said NTC Chief Executive Officer John Hillman. “We have seen exponential growth in our company over the last few years, and we are excited to see what the future holds for us as we continue to grow rapidly and continue to service the top financial institutions in the nation.” Ranked 2,716, Mt. Laurel, N.J.-based Freedom Mortgage earned $1154.7 million last year and grew 145 percent in the last three years. Freedom Mortgage assists homebuyers looking to purchase or finance a home. Freedom Mortgage, a six-time Inc. honoree, operates a full-service mortgage bank that offers services throughout the United States.

018 Inc. 5000 List Chicago-based Meridian Appraisal Management ranked 220th on this year’s Inc. 5000 list, reporting a 2017 revenue of $2.7 million and a three-year growth of 2,127 percent. Meridian Appraisal Management is a real estate appraisal management firm with national and local expertise, dedicated to providing valuation and consulting services through analytic discipline and a team approach. Total Expert earned a spot on the 2018 Inc. 500 list of fastest growing U.S. companies. With a compounded annual growth rate of 284 percent since 2015, Total Expert ranks 337th. By combining marketing, sales and compliance in a single platform, the Total Expert Marketing Operating System (MOS) empowers relationship managers to personalize and automate their marketing and communications, being more efficient with their time and money. “Making the Inc. 500 list and being recognized among the best and brightest companies in the country is a great honor,” said Joe Welu, Founder and Chief Executive Officer at Total Expert. “It’s also a testament to the commitment our team has had to helping our customers win every day in an environment where the pace of innovation is accelerating and margins are compressing.”

Movement Mortgage was been named one of America’s fastest growing companies by Inc. magazine for the sixth time, earning the company backto-back appearances on the Inc. 5000 Honor Roll. By making the list for the sixth time, Movement has accomplished what only six percent of all Inc. list members have ever achieved. Movement Mortgage’s ranking places it 2,109th, with a total revenue increase of more than 210 percent since 2014. Over the same time period, the overall economy expanded about 11 percent. “As we look back at our incredible growth, the thing I remember most are the lives we’ve impacted, borrowers, partners and teammates,” said Movement Co-Founder and Chief Executive Casey Crawford. “It is truly

Homeside Financial, based in New Albany, Ohio, provides mortgages and mortgage counseling to consumers. Through the assistance of mortgage advisors, loans are provided directly through the company’s online portal. With 22 locations nationwide, Homeside Financial ranked 853rd on the Inc. 5000 List in 2018, reporting revenue of $73.6 million in 2017, and a 589 percent three-year growth. Ft. Wayne, Ind.-based Ruoff Home Mortgage makes its sixth appearance on the Inc. 5000 List. The 35-year-old company ranked 1,614 on the 2018 List, having generated $90.4 million in 2017. “Being recognized on a national level, with such a prestigious honor as this, enforces the significant momentum that Ruoff Home Mortgage has been focused on,” said Mark Music, President and CEO of Ruoff Home Mortgage. “It’s a true testament to the talent and dedication of our team who work so hard on being second-to-none.” Inc. has named Homespire Mortgage Corporation to its Inc. 5000 List for 2018 for the second consecutive year. The company’s position at 1,306 places Homespire Mortgage Corporation among an elite group of companies that achieved remarkable and sustained three-year growth and expansion. Since its formation, Homespire Mortgage Corporation has expanded its presence into 29 states and the District of Columbia. “To be named to this prestigious list for the second consecutive year is an incredible honor for Homespire Mortgage,” said Homespire Mortgage Corporation Michael Rappaport, President and CEO. “It is a true testament to our sustained growth, our culture and our greatest strength of all, our people.” GSF Mortgage was ranked 2,837th on the 37th Annual Inc. 5000, appearing four consecutive years on the Inc. 5000, a feat that has only been accomplished by one percent of companies on the list. GSF boasted a three-year span of continued on page 56

n National Mortgage Professional Magazine n SEPTEMBER 2018

RealEstateInvestor.com of Danville, Calif. is an online platform for real estate investors, buyers, sellers, lenders, realtors, and banks. This year, the company ranked 633 on Inc.’s 5000 List, reporting a $4 million profit in 2017, while showing growth of 795 percent over the past three years. REIvault was founded by real estate investor and Fortune 500 consultant, Gary Boomershine when he realized that the only way he could scale his business is to implement rock-solid systems and procedures, taking him out of the day-to-day grind.

Gateway Mortgage Group appears on the Inc. 5000 for the sixth consecutive year, and the eighth time in the company’s history. According to Inc. Magazine, only two percent of companies have made the list eight times. Since 2012, Gateway has been regularly recognized for its achievements as an industry leader and top employer with more than 15 accolades including “Top Workplaces” by National Mortgage Professional Magazine. “We are honored to be named to the Inc. 5000 list for the eighth time in our company’s history,” said Kevin Stitt, Chairman of Gateway Mortgage Group. “Our continual inclusion on this list is a testament to our commitment to making a positive impact on our communities through increasing homeownership opportunities. This has been a year of record achievement and exciting changes for Gateway, and this honor is a reminder we can attribute our success to our team members’ persistent focus on our core values.”

NationalMortgageProfessional.com

SimpleNexus was recognized as a top 500 company by ranking 359th on the 2018 Inc. 5000 List. The recognition comes at a time of tremendous growth for SimpleNexus in both revenue and customer satisfaction. SimpleNexus has 15 of the top 25 retail mortgage lenders in the U.S. using its enterprise digital mortgage platform. More than $100 billion in transactions have flowed through the platform, and over 450,000 borrowers have used the SimpleNexus app. “We are humbled by this recognition and acknowledge the direct role our lenders’ success using the platform has played in the significant growth we have experienced as a company,” said Matt Hansen, SimpleNexus Founder and Chief Executive Officer.

an honor to know God has used our Movement community to love and value people in bigger and more substantial ways each year.”

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

eptember means that midterm elections are just a just a few months away. Members of the Mortgage Action Alliance (MAA) are encouraged to register to vote and stay up to date with the candidates running for office and their platforms. MAA has created a database with personalized information on your elected officials and candidates to make sure you are all set for Election Day. Check out the MAA Advocacy Action Center to learn more. For those already registered to vote, now is a good time reach out to your local elected officials. Through MBA’s Advocacy Action Center or the “Take Action” tab on the MAA mobile app, you can use the “Share Your Story” feature to introduce yourself as constituent issue experts. Similar to our Calls to Action, in a few easy steps, you are matched by zip code to your elected officials and you can use our helpful talking points to introduce yourself, your business and share your impact on your local community. Once you share your story, you can encourage others to do the same on social media. Simply click one of the social media buttons on the confirmation page after you submit your message. As always, we encourage people to download our app (visit MBA.org/MAAApp) to have instant access to current issues and stay up to date with what is happening in our industry. 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.

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Cracking the 2018 Inc. 5000 List continued from page 55

revenue growth of 145 percent. “We are overjoyed to be a part of this list, to be a part of the same list as other great companies is an enormous honor,” said GSF Mortgage President Chad Jampedro. “Here at GSF, we strive for greatness in everything we do and do whatever we can to make our employees, customers and referral partners happy. It is an amazing feeling that our efforts are successful and are noticed by Inc. 5000.” Gainesville, Ga.-based Homestar Financial operates a mortgage banking firm that handles every part of the loan process, including in-house processing, underwriting, closing and funding of each mortgage transaction. The company makes its third appearance on the Inc. 5000 List, ranking 2,832nd, generating $95.7 million in revenue in 2017, with a three-year growth of 146 percent. “This accomplishment could not have been met without the contributions made by every one of Homestar’s employees,” said Wes Hunt, CEO, Founder and President of Homestar Financial. Having achieved growth of more than 182 percent over the last three years, Inc. has ranked RoundPoint Mortgage Servicing Corporation 2,386th on its Annual Inc. 5000. “We are both honored and excited to have been named to this prestigious list. Our ranking is tangible acknowledgement of our team’s hard work and the tremendous growth and success we’ve experienced over the last three years,” said Kevin Brungardt, Chief Executive Officer at RoundPoint Mortgage Servicing. “We truly appreciate the recognition.” San Diego-based Griffin Funding is a mortgage company with access to wholesale rates that originates loans throughout Arizona, California and Hawaii. The company ranked 693 on the Inc. 5000 List, generating $4.1 million in revenue in 2017, with a three-year growth of 727 percent. Griffin Funding specializes in VA loans. Sausalito, Calif.-based Bay Equity Home Loans ranked 2,953 on this year’s Inc. 5000 List, generating $133.1 million in 2017, with a three-year growth of 138 percent. Led by CEO Brett McGovern, President and Chief Production Officer Casey McGovern, and Chief Business Development Officer Jon McGovern, Bay Equity provides full-service retail mortgage lending, offering an array of mortgage products in 32 states and adding more.

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.

Laurel Road of Darien, Conn. operates a national online lending company and FDIC-insured bank, offering online student loan refinancing, personal lending and mortgage products, as well as consumer and commercial banking services. This year, the company ranked 1,801 on the Inc. 5000 List, reporting $54 million in revenue in 2017. “This award comes on the heels of several exciting growth milestones–from exceeding $3.5 billion in loan originations, to the launch of our mortgage and digital banking products,” said Alyssa Schaefer, Chief Marketing Officer at Laurel Road. “The recognition is a testament to Laurel Road’s continued evolution, as fueled by our commitment to product innovation, hiring the best talent, and above all, an industry-leading customer experience.”

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.

n National Mortgage Professional Magazine n SEPTEMBER 2018

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.

SEPTEMBER 2018 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Acres of Diamonds for Loan Officers By Brian Sacks

Here is the Reader’s Digest version of this classic book Two farmers live next door to each other and are always working their fields. One is doing well, while the other is struggling. One day, the struggling farmer gives up and the neighbor buys his farm from him. The farmer starts working on the new field, and after a short time plowing the field, he sees something shiny on the ground. He digs down just a bit further and discovers that he now owns an entire diamond mine that has made him an instant multi-millionaire. The moral of the story The moral of this story is that we often give up and stop right before we would have succeeded. Does that strike a familiar chord with you and how you market your business and make new relationships? We all live in a time where everyone wants/needs instant gratification. Unfortunately, building a business and creating meaningful partnerships and relationships takes time and effort and will not happen instantly. Years ago, there was a very big real estate office that I was trying to get business from. They had some great lenders already working with them and were not very interested in anything I had to offer or even say for that matter. But day after day turned into

month after month and then year after year. I would occasionally get calls from some of the agents, and about six months in, I actually got a loan application from one of the agents. Yet I continued to visit that office at least two or three times every week for 10 to 15 minutes just to be in front of them. Then, one day it happened Their preferred lender truly messed up a loan and word spread around the office like an out of control forest fire. Instead of fixing the problem, this lender, who took his business for granted, actually got into a verbal shouting match with the agent. From that day onward, I became the preferred lender (not inhouse) and did about 80 percent of the business in that office for the next 13 years before they merged with a larger company. Think about your own relationships and my famous saying No one gets married on the first date. I say this so often that my bet is they will put this on my tombstone. But it is the truth … isn’t it? We all think we are going to meet an agent and instantly get all of their business and be there immediate go-to person.

When that doesn’t happen, we get very upset and maybe even a little angry. We do a great job on a loan and expect that agent to use us for every new deal they get. When that doesn’t happen we also get angry and discouraged right? What happens when you try multiple times to start a relationship and get blown off with excuses. The successful originator just keeps trying, while the struggling originator just gives up and moves on. Read Acres of Diamonds and as Winston Churchill said, “Never give up never ever!” Go ahead right now and read that book. Give a copy to your staff. Heck you can even give a copy to some of your Realtors and referral partners to read. But then think about the sources of business you have given up on and start making a conscious effort to stay in touch with them. You can do this by simply calling them or sending them a video. Make sure you also add them to your newsletters and any other communications you send regularly to your spheres of influence. One day … you will see the “Acres of Diamonds” in your own production !

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 32 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. For your free four-part video series on “How to Finally Close More Loans, Make More Money and Have the Time to Enjoy Life,” visit TopOriginatorMastermind.com/MMM, and learn more about the Top Originator Mastermind at TopOriginatorMastermind.com.

n National Mortgage Professional Magazine n SEPTEMBER 2018

What does acres of diamonds have to do with us and originating loans? It actually has everything to do

with originating loans. So let’s start first by telling you a little more about this book. The title of the book is Acres of Diamonds and it was written by Russell Cronwell many decades ago and has since become a sales classic. After you finish this article, you should immediately go get a copy on Amazon, and if you are a manager, make sure you share it with all of your sales team.

NationalMortgageProfessional.com

e have a difficult job … don’t we? The truth is that all sales jobs are difficult. When we are doing well, we can feel like we are on top of the world. But when things slow down or a deal goes sideways, we can often feel as low as a snail on the bottom of the ocean. Worse yet, we are often judged on things totally out of our control. I remember a few funny stories that illustrate this point. One day, I received a phone call from a buyer I had approved who was waiting for his new home to be completed so he could settle. He called me screaming about the delays and demanding an explanation as to why the home was not done yet. I told him that I would grab my hammer and some nails and get out there right away and that I was sorry for the delay. That, of course, made him laugh and diffused a tense phone call. Another time, I had an agent call me screaming at the top of her lungs wanting to know why her buyer’s loan was not approved and what the heck was wrong with us. To be fair, I had already told her at application and during weekly status updates exactly what I was missing from this buyer. As she screamed, I told her that I would pick her up, we would together break into the buyers apartment and search for the pay stubs and bank statements we needed to get the loan submitted. Unfortunately, my response only made her angrier and she just continued screaming until I finally had to hang up.

SEPTEMBER 2018 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Complete Property Management: A How-To Guide for Successful Landlords By Kathy Fettke

the truth is: You probably can’t. As a new investor, the biggest question you need to answer is: Should I self-manage my property or hire an experienced property manager? As with most things in life, there are pros and cons to both strategies. In this article, we’ll explore both options in detail, but first let’s discuss the basics of what property managers do exactly.

eviction process. In many states, this is a fairly simple process that can be completed in under 45 days for a couple hundred dollars. 7. Building a team: In order to effectively manage a property, it’s important to have a team in place that can handle administrative tasks, routine maintenance and emergency services. A few of the most obvious team members include: Handymen, groundskeepers and landscapers, electricians, plumbers and masons. If you choose to hire a professional property manager, they will already have a team established. The benefit here is that there won’t be any delays getting your new property into rent-ready shape. If you choose to manage your own property, keep in mind that building these types of relationships won’t happen overnight. It will take some time, and probably a bit of trial and error. Just be patient, and you’ll thank yourself for it in the long run. As you’ve probably started to notice, good management requires a significant amount of work. Depending on how many properties being managed, it can even be a full-time job. The question you need to answer is this: does it make continued on page 96

n National Mortgage Professional Magazine n SEPTEMBER 2018

What are the responsibilities of a property manager? Property managers oversee a variety of activities, including (1) Emergency repairs and follow-up, (2) Routine maintenance and repairs, (3) Marketing and leasing, (4) Tenant screening and background checks, (5) Rent collection, (6) Eviction, and (7) Team building. 1. Emergency repairs and follow-up: If your tenant’s dishwasher explodes at 3:00 a.m., the manager of the property should be available. They’ll need to speak with the tenant, assess the problem, call someone to repair the issue, and make sure the work is done correctly. Is this the type of thing you want to deal with it? Or would you rather have your property management company do it instead? 2. Routine maintenance and repairs: The manager of your property, either you or the

person/company you hire, will be in charge of scheduling all regular maintenance visits. Regular maintenance includes landscaping, cleaning out the gutters, plumbing inspections, etc. Marketing and leasing: One of the most important roles of the property manager is to minimize vacancies. The first objective is to keep your property well-maintained, so that it is attractive and desirable for prospective tenants. Additionally, the manager (or someone on the management team) will be responsible for advertising vacancies, showing units, and ultimately leasing the property to a qualified tenant. Tenant screening and background checks: The manager of your property should also be in charge of screening tenants, running credit and background checks, and qualifying/disqualifying prospects. Rent collection: Your property manager should collect rents owed for each property every month, deposit them into a timely manner, and document all payments. Eviction: If for some reason your tenant fails to pay, or violates the lease in any way, the manager of your property will initiate and oversee the

NationalMortgageProfessional.com

losing on an investment property is like getting a new puppy. In the beginning, all you can think about is how amazing, cute, beautiful and perfect your puppy is. Sure, it might pee on your floor, or whine all night long … but look at that face … how can you possibly get mad at that face? Give it a few weeks, and if you are like most people, one day you’ll open your eyes and realize that the adorableness of your puppy can’t masque the reality anymore. For the first time, you can clearly see that caring for a puppy is not all fun and games. It takes time, a lot of love, and hard work. The same is true for owning an investment property. However, the consequences of not taking proper care of your property extend way beyond barking and begging for food at the dinner table. The reality is that poor rental management can turn even the “best investment” into a bottomless money pit … and if you’re not careful, you just might lose it all. Many new investors have had to learn this lesson the hard way, but you don’t have to. How can you manage your property successfully so you can generate ongoing monthly cash flow? If you’re like most new investors,

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

The Wholesale, TPO & Correspondent Markets Brokers’ Time to Shine hen I think about the wholesale channel over the last 27 years of my career, one thing is clear: It’s everchanging. Players are always entering and exiting the business and new products are always being launched or tweaked. But in the end, it’s all about making homeownership more possible for more people. That—and the relationships— is the most rewarding part. As Director of Third-Party Originations at Flagstar Bank, a big part of my job is making sure our Mortgage Broker partners and their borrowers have the best experience possible with Flagstar. Our approach is simple—listen to customers, get their feedback and act on it. I’m fortunate that we operate in markets across the country, so it’s easy to pick up on regional and national trends and respond quickly to them. It’s also a great way to tap into and share best practices. I’ve learned a lot from my years knocking around the industry and my daily interactions with account execs and our broker clients. Here are some of my thoughts and perspectives on our industry … It’s probably no surprise to anyone in the mortgage business that today there’s more capacity than volume. The refi business has dried up, but refi shops are still hanging around, and lenders are accepting narrower margins to fill capacity. It’s an environment that’s ripe for mergers and acquisitions, and in some cases, all-out exits from the business. And that is happening. When it all shakes out, we should return to a market with healthier pricing and margins. That’s when those with the right strategic vision and the strongest relationships will rise to the top. On the other hand, smaller originators are emerging and setting up shop to take advantage of their local knowledge and

By Brian Vieaux, CMB

networking. They operate with no or low overhead and typically all their staff is producing. There are definitely green sprouts of small originators, but virtually no action in the full-service de novo mortgage company arena. There’s more good news The broker channel is alive, well and kicking. In 2013, the wholesale channel represented a little over 10 percent of the total mortgage market. Today, it’s nearly 11.5 percent and growing. Whomever I talk to—brokers, trade associations or competitors—all are seeing a rapid rate of growth, largely attributable to new broker companies entering the market. These are often single owner-operators coming out of larger institutions who recognize that the wholesale channel and the lenders who support it offer an attractive value proposition for them and the consumers they serve. A little bit about regulation It’s no secret our business is highly regulated, and many of the recent shifts in wholesale have been driven by regulation, specifically DoddFrank. Before the financial crisis, the wholesale channel represented a significant share of total mortgage originations. By some accounts, at its peak, wholesale accounted for nearly a third of all originations. Post-crisis, that figure dropped to mid- to single-digits. Many predicted DoddFrank, and its offspring, TRID, the integrated disclosure, would be the death knell for the broker channel. Here’s what’s happened … TRID shifted the onus for disclosure to mortgage lenders. Brokers, now free from disclosure requirements, could focus on what they do best—originate. Today, for wholesale lenders, brokers have become another flavor of retail. And many of the largest lenders had continued on page 64

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

brokers’ time to shine

the foresight to build their technologies not only to comply with TRID, but also to position their platforms to help brokers get more efficient. So Mortgage Brokers figured out not only how to survive, but also to thrive post-TRID. And wholesale lenders figured out how to use a perceived roadblock— TRID—to create value for brokers and their clients. Overlaying and supporting all this role-shifting in the industry is technology. We are starting to see a lot of technology that in the past would have been available only to the largest, well-capitalized lenders and financial institutions. These lenders have built state of the art, consumer-facing technology and deployed it in a way that’s helping them grow market share. From a consumer perspective, the technology now available to Mortgage Brokers helps them provide an experience for their customers and internal partners that rivals some of the largest lenders’ point of sale platforms.

continued from page 62

And that’s good for our industry and consumers, who now have more options, not just product options, but pricing options. For its part, Flagstar has teamed up with Blend Technologies to offer its point-of-sale system to Mortgage Brokers. This is helping to level the playing field for Mortgage Brokers in the technology arena. At Flagstar, we use feedback from our customers to prioritize our technology initiatives. This led to our recent pilot program where brokers can generate non-TRID application disclosures from LoanTrac, Flagstar’s proprietary loan origination system, and deliver them electronically to their customers. The result? Consumers come to one portal to receive all their disclosures. It’s all about reducing clicks, physical touch points, and ultimately, errors. And that leads me to my next topic— leveraging technology to reduce redundancy, improve efficiency and lower the cost to originate. There is still far too much “check

“So what is front and center with Mortgage Brokers today? They’re opting for fewer, more strategic wholesale lending partnerships, all with the goal of forming tighter and deeper relationships.”

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

64 the checker” in our business. A loan is originated by a Loan Officer, reviewed by a processor and submitted to an underwriter, only to have it reviewed again by Quality Control. Blockchain-like technology exists that provides point of sale digital collection of income, employment, assets, etc. Fannie Mae has rolled out Day 1 Certainty, granting representations and warranties relief to sellers/servicers on loans that have some or all of these elements digitally validated. As brokers and lenders get better at connecting technology platforms seamlessly, we will see point of sale digital decision tools through the entire loan process. The momentum is there. So what is front and center with Mortgage Brokers today? They’re opting for fewer, more strategic wholesale lending partnerships, all

with the goal of forming tighter and deeper relationships. This allows them to establish repeatable, reliable processes, and leverage their lenders’ technology for a better customer experience. And they’re looking for execution. This involves more than the interest rate and the price of the loan. The best price doesn’t cut it if fulfillment is clunky and loans aren’t getting closed. Interest rate and price are table stakes that put the mortgage broker in the game to compete for the consumer’s business. It’s up to the wholesale lender to finesse it all by making the mortgage broker a hero both to the client and the referral source. And that means ease of fulfillment. It also means reliability and consistency—two qualities that have characterized Flagstar for more than 30 years.

Brian Vieaux, CMB is Senior Vice President of Third-Party Originations for Troy, Mich.-based Flagstar Bank. Brian joined Flagstar in 2012 as Senior Vice President and Head of the Retail Mortgage Origination Channels. Three years later, he was named National Sales Director for Wholesale Lending. Before joining Flagstar, he held senior management positions with IndyMac Bank and CitiMortgage. He has held the Mortgage Bankers Association’s designation of Certified Mortgage Banker since 2005.

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

T H E P O W E R T O C LO S E M O RE L O A N S . C ARRINGTON FLE XIBLE ADV VA ANTAGE NON - QM LOA N PROGR R A MS* PURCH A SE | R EF IN A NCE | C A SH OU T

For client s with credit eventss;; late pa ayymentt,, bankruptcyy,, fo foreclosure, or shor t sale credit his torryy M i n i m u m c r e d i t s co r e s d o w n t o 5 0 0 ( 75% LT V ), maximum 80% LT V with no mor ttg gage insurance req quirement Max LTVs to 95% and expan nded DTTIIs up to 55%** $$))02/: 0 :30/+6:25 :5/1 or 7 7//1 ad djjus table- rate mor ttg ga ag gess Loan amounttss up to $2 million Self lff-- emplo oyyed d borrowerss;; b a n k s ta t e m e n t s a c c e p t e d i n p l a c e o off IRS tax document s to veriffyy income

â&#x20AC;¢ Primaryy,, second d,, and investment homes â&#x20AC;¢ Up Up to $2 million: Minimum 50 0 FICO, 70% LT V Minimum 580 FI FICO, 8 0% LT V

GOV E RNME N T LOAN PROGR A M S

BE A HERO

$ $ $

PURCH A SE | R EF IN A NCE | C A SH OU T

Lo w d o w n p a ayyment programs FH HA A 96 .5% LT V, V VA A /USDA 10 0% LT V Manuffa ac tured proper tyy programs D o wn pa ayyment assis tance programs FH HA A 203 k a n d F H HA A 203 h

CONVENTIONAL LOAN PROGR AMS PURCH A SE | R EF IN A NCE | C A SH OU T

Self lfff-- emplo oyyed with down p pa ayyment $ : 7053: 738: 4/ 0/ 750: /0 73:: and low down pa ayyment

Yourr go-to lender for the tough hest loans is also your one-sstop shop to he elp pump up your pipeline w with everything from Goverrnment to Conv ventional and ,)('&%)$ #"!) )$ %" $ "% '" $ " $ #)$ ) ) ) $ and Non-QM markets. )$ )$ ' )$ ' $ " ) ' $ %" $ "$ $ $ ' )$ )$ " $ ' ! ! ) $ #' #$' $ # $ )$ )$ #)$ '!)$ " "$ ) $) #$ "!) $ ' )$ ' %$ " $ )$ $ " $ "$ ) $ # $ ) #) "$ )$ " % $& $ ) & &%' $ " $ "$ " ) $ $ $ " $ %" $ "% '" "% '" $ #)% ' $ " $ %" )$ !" ) )$%" $ # $" #) $

Inves tment//m multi- unit proper ties Non - occupant co - borrower

$399 9

LOW UNDERWRIT TING FEE

YOUR TOUGH LOANS LENDE ER

866-453-2400

CLOSING YOUR LOAN JUST GOT EAS IER

LE ARN MORE ABOUT OUR PR OGR AMS BY VISITING

www. w.CarringtonWh Wholesale.com o

*Carrington Flexible Advantage (Non-QM) product requireements vary depending on the consum merâ&#x20AC;&#x2122;s credit grade, LTV, DTI, andFICO sccores and may require reserves from 3 to 6 months. Ask your Account Execu utive

4/:2 737452 : 0327 6:25 :/0 -7/0+0536 36!: 43:2 27 2 0:75: :. . : :25 : ! !: 4: 268:4-3:2 27 2 0:75:9 9 ! **Restrictions apply;; contact your Account Executive for details. Â© Copy pyrig ight 2007-201 18 Carrington Mortg t gag age Services, LLC C headquartered h at 1600 South Douglass R Road, d, Suites 110 & 200A 0A , Anaheim, C CA A 92 2806. 866-453-2400. NMLS ID #2600. Na ationwide Mortg t gage Licensing SSyy stem (NM MLS) S) Consumer Access web bsite: www.nmlsconsumeraccess.org rg. AZ:: Mortg t gage Banker BKK- 091074 745. CA: Licen nsed by by the Department of of Business Overrsig ight under the Calif ifornia Residential Mo ortg t gage Lending Act, Fi File 413 0904. CO: Check license status off your mortg t gage loan orig iginator att www.dora.sstate.co.us/r /real-estate/i /index.htm. GA: Georrggia Residential Mortg t gage Licensee 22721. IL: Illinois Residential Mortg t gag age Liceensee. MN;:98 9876:76:543:25:41 410/:34:0530/:75334:25: interestt rate lock agreeementt underr Minnesota Law. MO;:.7664 4-/7:,4+*25) 5):(0'763/23745:&%$&#% #% "!: 5$ 3230: 0;:.7664-/7:(067 05372 :.4/3' 3 '2''0: 425: /4 0/: 7 0560:&%$&#% #% "!: &: : 40 : 006: -++73 :. :"% " !:NV V:: Mortg t gage g Broker 4068 (Residential id ti l Mortg M t gag a ge O Orig igination/L i ti //LLendin ding) g ). NJ: Li Licensed d by by the th N N.J. J Department D t t of Banking NY Y:: Licensed Mortg t gage B Bankerâ&#x20AC;&#x201D; k râ&#x20AC;&#x201D; NYS D Department t t of of Fi Financial i i l SServices. i N New Yo Yorkk M Mortg t gage B Ba anker B k License Li B ki and d Insurance. I Li dM k 3 '2' 2'0: 425: 3: ,0 ,0/377 230: 4

4 : (0' 0'763/23745: .! & &#! #! !: R d Licensed Lenderr,, Lenderr License 20112809LL. VA: Lender & Broker License #MCC-5382. NMLS ID 2600 (w License B500980/107 7664. OH;: 874: .4/3' RI: Rhode Island www. rg ). WA : Consumer Loan License CL260 K , AR, CTT,, DE E,, DC C , FL, HI, ID, IN, C, N, IA, KS S,, KY Y,, LA, ME E,, MD, M S,, MTT,, NE, E, NH, H, NM, NC C,, OK K,, OR, PA, S SC C,, SD, TN N,, TX X,, UTT,, VTT,, WV V,, WI and WY Y. 00. Also licensed in AL, AK, MI, MS nmlsconsumeraccesss.org NOTI TICE;: : 4256:2/00:6-

0 3:34: /0 73 :-5 0/ /7375':25 :*/4* *0/3) 3 ):2**/4 2 :'-7 0 7506!: 10 10/0 : 425:*/4 - 36:+2) 2 ): 2/) / ): ) ):63230!:98 980/0:76:54 4:'-2/25300:3823:2 : 4//4 0/6: 7 : -2 7

7 )!:(063/7 37456:+2) 2 ):2** ) )!:98 9876:76:543: Terms, conditions and prog ograms are ssubj bject to change without notice. Th This in nformation is fo for industry r y prof ofessionals ls only l y and is not intended fo for distribution n to consumers. Carrington Mortg t gage a commitment to lend. Te lf o off or at the direction o off HUD/F H /FH A or any ny government a aggency c y. All rig rights reserved. Services, LLC is not accting on behalf

n National Mortgage Professional Magazine n SEPTEMBER 2018

Fannie /FFrreddie **

' " $' $ " $ ) ) ) $ ) " $ ' # #$ $ %%$ ) ) !$" $%" $ " " ! $ "$!)) $ $ ') $ " $ "!) needs..

NationalMortgageProfessional.com

FH HA A a nd V VA A programs down to 50 0 FI FICO USDA programs down to 550 5 FI FICO

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

Growth Opportunities in the Wholesale Arena By Laura Brandao

here are tremendous advantages, and seemingly infinite growth opportunities, to being a niche player in the wholesale market, offering a variety of specialty programs outside traditional mortgage financing. Rather than competing with megabanks for a share of the standard 15- and 30-year-fixedrate mortgage (FRM) market, and being subjected to rate wars, wholesale lenders can differentiate themselves by specializing in specialty loans. Being able to guide each and every borrow toward the right specialty program(s) 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 or one-time close (OTC) are among the more challenging lending specialties. Each with diverse delivery options including FHA, VA, USDA, Ginnie Mae, Fannie Mae and Freddie Mac.

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Renovation loans Basically, renovation loans allow borrowers to finance or refinance properties that need work, and include funds for everything from small repairs and simple updates to large scale renovations—all with one closing. And unlike a home equity loan or line of credit, it’s all part of the primary mortgage—not a second loan. What’s more, the loan is based on the value of the home after improvements are completed. There are a number of FHA programs to choose from, including options for homeowners in underserved areas and areas affected by disaster, and a Fannie Mae HomeStyle program. Renovation loans can allow current homeowners to refinance their mortgages with

“Rather than competing with megabanks for a share of the standard 15- and 30-year-fixed-rate mortgage (FRM) market, and being subjected to rate wars, wholesale lenders can differentiate themselves by specializing in specialty loans.” an “as complete” valuation that provides them with the cash needed to make repairs and upgrades. Manufactured housing loans With insufficient inventory of traditional stick-built singlefamily homes expected to persist, the nation is poised to experience a dramatic increase in manufactured housing. Fortunately, we are seeing an increase in financing options especially suited for the purchase of manufactured homes, as well. Educating consumers is key, both introducing manufactured housing as an option and where to search for homes and lots and sharing information about the specific financing options available. Financing manufactured housing has inherent complexity because the

home starts off as personal property and coverts to real estate property. So, it behooves borrowers to work with lenders with a track record of experience specifically in manufactured housing. Ginnie Mae, FHA and VA all support financing options for manufactured housing, and recently, Fannie Mae introduced its MH Advantage initiative, a mortgage program for specially designated manufactured homes with features comparable to traditional single-family homes. These homes can include interior features like drywall, energy efficient appliances and upgraded cabinets in kitchens and bathrooms, as well as exterior amenities such as porches, garages and architectural features like eaves and higher pitch rooflines. Truth is, manufactured homes

have been architecturally similar to stick-built homes for years, but this program validates it for the mortgage industry and prospective homeowners alike. VA loans There are approximately 2.1 million active-duty and reserve personnel serving in the U.S. armed forces, plus 20 million veterans, and nearly all of these people are eligible for VA Loans—home loans that are backed by the U.S. Department of Veterans Affairs. These government-backed loans offer very competitive rates and one of the only zerodown options left. One way of paying back our brave men and women in uniform for their service to the country. Within the larger VA Loan category there are a range of options. There are more traditional fully amortizing fixed loans with a variety of terms. There are one-time close loans that can be used to finance construction, lot purchases, and permanent mortgages, all with a single loan. There’s even a refinancing program (IRRRL) that allows a borrower to refinance an existing VA Loan. There’s also a VA renovation loan, allowing a borrower to buy a fixer-upper and make needed repairs. Offering VA loans is a great way to expand your customer base while helping America’s heroes save money with lowrate loans. Ongoing education and tech support In addition to offering a variety of specialized loan programs, leading wholesale lenders provide tools to help their mortgage originators be prepared and confident in their day-to-day operations. Empowering partners with product webinars and whitelabeled marketing materials for borrowers is needed, of course, but providing convenient access to educational resources and technology solutions for today’s fast-paced environment is vital to grow as a niche lender. A blended training approach can include microtraining, interactive conversational training, Webinars, how-to tutorials and on-demand training. Developing training that is engaging, shorter and more

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

In the universe of digital, local and national options, there is simply no replacement for a welltrained mortgage professional, regardless of their gender or ethnicity. Mortgage Brokers and

correspondents in the wholesale channel find it advantageous to be able to offer any number of loan programs addressing their specific home purchase and financial situation–and help bring more families home.

Laura Brandao is Chief Operating Officer at American Financial Resources Inc. (AFR). AFR is one of the leading FHA 203(k) lenders for sponsored originations in the country, and an innovator in the construction and renovation lending area. She may be reached by e-mail at Laura.Brandao@AFRCorp.com

n National Mortgage Professional Magazine n SEPTEMBER 2018

Individual aspirations Success is achieved through people. And the wholesale arena is an area ripe with opportunity for individuals at all levels. Knowing the local market and ongoing education are key

factors in growing within the industry, much more so than personal demographics, refreshingly. Supporting the growth of women in the industry specifically, the Association of Independent Mortgage Experts (AIME is currently launching a Women’s Affinity Group and plans are underway to host its inaugural meeting at the AIME Fuse 2018 National Conference next month (October 19).

NationalMortgageProfessional.com

focused allows for better retention of the subject matter. Niche loan programs are especially suited for on-demand training. With specific qualification requirements, timelines and even processes that may shift as new regulations affect specialized programs, interactive training that is updated regularly and designed in small blocks to enhance retention helps create a culture of learning and keep Loan Originators current on their varied menu of mortgage products. Some programs provide the ability to earn certifications for niche programs like renovation loans or one-time close, so consumers know the LO is “certified” and knowledgeable to offer those specific loans. The Web-based nature of such interactive training systems allows for the flexibility needed by today’s professionals. Employees can login and learn 24 hours a day, as their schedules dictate. Additional benefits of a robust online testing structure include that it can aid in material retention, measure gaps in understanding, assess team training needs and even provide course feedback. In addition to aiding with the ongoing education of various niche programs, when it comes to pricing a loan, issuing a prequalification or preapproval, and any process on through approval and closing, the right technology can make a huge difference in turnaround times and customer experience. Technology should enable consumers to drive how and when they want to interact with their lenders, while never losing the human touch. By doing so, you enable mortgage originators to provide superior service, while maintaining a personal local connection to the borrower. When there’s confusion over selecting a loan product or concern about whether closing will happen on time, there is no substitute for a conversation with a knowledgeable and caring mortgage professional.

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

Actions Lenders Can Take Now That Will Increase Their Millennial Market Share in 2019 By Julie Wink

ost of us have followed them, to some degree, for years … those sassy, intriguing Millennials. How they are educated, the activities they enjoy, what they won’t abide by, and their expectations on life in general have fascinated us for the past decade. Now, however, we must look at them in a different light, because they’ve jumped feet-first into the homebuying arena. According to the National Association of Realtors (NAR), Millennials have been the largest generation of homebuyers for the past five years. Lenders who want their business to flourish and their market share to expand now (and in the next few years) must figure out how to market successfully to this generation. And therein lies the problem … Millennials are unique from any other generation, so traditional campaigns and advertising that has brought in strong ROI in the past just aren’t going to work as well on them. The good news is that there are easy ways for lenders to adjust their strategy, so they engage Millennials and turn them into borrowers. After closely studying this home buying segment, we have found five actions lenders can take now that will increase their Millennial market share in 2019, and beyond.

add a pre-qualification button to their Web site will increase their Millennial borrowers exponentially. Think of it this way: Won’t it be nice to have borrowers initiating the contact, rather than beating the bushes for customers? Remember, however, that this generation doesn’t only want automated engagement. That’s why lenders must …

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

“Millennials are unique from any other generation, so traditional campaigns and advertising that has brought in strong ROI in the past just aren’t going to work as well on them.”

history and increasing their credit scores. Marketing mortgage lending products to Millennials means digging deeply into products that may not be as familiar as the popular 30-year fixed mortgage loan. Lenders need to check into loan programs that accept nontraditional forms of credit, such as #1: Embrace alternate credit cell phone bills and rental history. products Stepping out of the mortgage box Other generations haven’t faced we are used to when working with the obstacles of building credit other generations and getting that plagued Millennials. The creative with products outside the Credit Card Accountability Responsibility and Disclosure Act normal lender “comfort zone” is essential in successfully working of 2009 (CARD) made it significantly more difficult for 18- with this segment. to 21-year-olds to open credit #2: Strengthen mobile cards. In addition, the mortgage capabilities meltdown in 2008 tightened credit standards for several years It’s no secret this generation does everything from pay their bills to and blocked many opportunities for this generation to gain access find a date to get their news on their mobile devices. Their phones to credit. Both events worked are in front of their faces all the against this generation in time it seems! They are demanding building their length of credit

that their mortgage loan experience be the same. It was predicted recently that Millennials would originate nearly 30 billion in mobile mortgages this year alone! Lenders can either be part of this huge shift and industry increase, or they can miss it completely. It all depends on the actions taken now. First, lenders must make certain their websites are mobile capable. The last thing a Millennial will abide is a slow, unwieldy experience. They will click away before you can say “hashtag unhappy.” Next, there should be a place for them to enter their financial information and pre-qualify for a loan. Millennials who are looking for a mortgage at midnight on a Wednesday night will be irritated if they must wait until the next morning. This is the “got to have it right now” generation, and they won’t settle for less. Lenders who

#3: Bolster the customer experience Millennials expect to have it all, and they want it now! Lenders who take steps to deliver both exemplary electronic and human service will be the winners. Keep communication lines open with them from the beginning of the purchasing process past closing, and you’ll build a strong Millennial base of customers. Here are four ways to do it … l Be authentic. Millennials aren’t aliens. Talk to Millennials like real people, because that’s what they are. Opening conversations that foster questions is the way to communicate with this generation. l Be transparent. If there’s a hiccup or obstacle, let them know as soon as possible. Inform them and walk them through their options. Trying to sugarcoat or skate past issues will make them suspicious. With Millennials, it’s all about trust. l Meet them on their home turf. Adapt away from picking up the phone or dashing off an e-mail. Millennial borrowers may want you to text them or send them a message across social media. l Remember their reach. The power of social media is unmatched. They will share a positive customer experience far and wide, and you could receive tons more business. But, they also post about negative experiences. Make every effort to capitalize on their positive references. #4: Create ways to let them drive As we mentioned earlier, Millennials refuse to be

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

pigeonholed into the traditional business hours of nine to five, or the normal mortgage loan products, and other perceived written-in-stone rules. For example, they are the generation most likely to negotiate with Realtors about their commission. The more lenders can offer ways for Millennials to maintain control of the process, the more successful they will be at marketing to this generation. l Craft an online presence. It takes some time but building a few social media profiles puts you where the Millennials hang out seemingly all the time! Follow groups that cater to these buyers and be willing to share information about loans and finance that help them educate themselves and understand their options. l Give them choices. Instead of a big scary lender, function as a helpful partner. Let them choose how you communicate. Let them choose from the mortgage products available to them. The more options you offer them, without overwhelming them, the more in control they feel, and the more positively they will view their resulting experience is with you.

people and the companies they do business with and won’t settle for less. By acknowledging this and evolving out of the comfort zone, lenders can easily transform into

the Millennials’ mortgage originator. Taking these steps now ensure that 2019 and beyond will be chock full of happy Millennial customers and a boom in business.

Julie Wink is Executive Vice President of Cordova, Tenn.based Data Facts. For more than two decades, Julie has been a key contributor to growing Data Facts. Getting her start in the credit industry in 1987 as a “Credit Investigator,” she joined Data Facts in 1995, and in 2005, she became EVP and Partner. She may be reached by email at Julie@DataFacts.com.

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.

REAL ESTATE DATA & INSIDER CONTENT Show the housing opportunity in your local market to customers and real estate agents. We will provide you with affordability levels, appreciation, resale volume, new construction, and job growth…updated monthly and easily shared. There is also additional content from Art Cashin, Kiplinger letters, and much more.

MOBILE WEB APP

CALCULATORS AND TOOLS Powerful and unique calculators to help you when presenting to customers. Buy vs. Rent, ARM vs. Fixed, Paying Points, and Amortization calculator are a few examples. You can save and share the results to beat your competition.

What you're getting with your MBS Highway trial l Bond Quotes l Daily Video and Transcript l Interactive Charts l Lock/Float Advice l SMS Updates l Real Time Market News l Cashin's Corner l The Kiplinger Letters l Real Estate Market Data l By The Number$ l MBS TrendTRAKR l Social Share

Try it FREE for 14 days at MBSHighway.com/MNN

n National Mortgage Professional Magazine n SEPTEMBER 2018

Always stay in touch with the market when on the go with our Mobile Web App. It's fast and easy to use. Whether you have an iPhone, Android, Blackberry, Windows Phone, you'll always have access to MBS Highway. No downloads, no annoying updates, just visit m.mbshighway.com in your phone or tablet's browser.

NationalMortgageProfessional.com

#5: Prepare to educate Perhaps the biggest expectation Millennials have of the lender, and the one to focus on, is they expect lenders to be the experts. Lenders who convey and present their knowledge in a way that Millennials relate to will be miles ahead of their competition. Here’s how … l Did we mention social media? Engaging with the Millennial audience on social media helps solidify you as an expert. Posting happy borrower homes on Pinterest or tweeting quick credit score tips can spark their interest more than a hundred unread advertisements or flyers. l Remember their thirst for knowledge. This generation loves education. Provide them with information on credit scoring, downpayments, budgeting, and mortgage options. l Give them access. Be available to promptly answer questions as they arise. Lay out and explain their loan options in terms they understand. This may mean lenders must step out of their comfort zones into products

they would have never considered selling 10 years ago. In conclusion, Millennials are not the mortgage borrowers of old. They are unique from any generation that has come before them. To successfully market to them, lenders need to take a close look at their current actions and see where they could be missing the boat. Avoid focusing only on a high-tech experience, or a warm and fuzzy one. Millennials demand both from the

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

A Roadmap for Success With Non-QM Originations hinking of branching out to non-QM originations? Quite a few originators are, especially as the market for agency loans has slowed down. But if you

want to be successful, there are some important things to keep in mind before you venture into the non-QM space. After reading this article, you should have a much better understanding of how the non-QM

Table 1 The typical attributes of a Non-QM pool of owner-occupied loans will generally exhibit the following set of data points Average Loan Size $400,000 (CA is >$600,000) Average coupon 6% (can depend on LPC amount) Credit score >700 DTI 37%

Cash-out Mix Bank Statement Mix Foreign Nationals Interest Only ARM Mix Mix of CA and FL Purchase Mix Average LTV

16% >30% 3% 5% 70% >50% 76% 70%

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Table 2 The typical attributes of a Non-QM pool of non-owner/rental loans will generally exhibit the following set of data points Average Loan Size Average coupon Average LTV Credit score Interest Only Average DSCR No Ratio Mix (DSCR not calculated) Purchase Mix ARM Mix Prepay Mix CA/FL Mix 2-4 Units

$300,000 7.5% 64% >720 15% 1.3 40% 40% 75% >80% >50% 25%

Table 3 Process Steps Submitting a 3.2 loan file Uploading documents Ordering appraisals Disclosures Underwriting Pricing a loan Lock Process Processing Closing and Funding Servicing

Agency vs. Non-QM Same Same Same Same (owner-occupied), Similar (Investor) Very Different–Manual for Non-QM Very Different Same Similar (bank statements, entity docs) Same Same

Cycle Times (submit to funding)

Same, 15-45 days

By Steve Skolnik

market differs from the agency market, as well as what the profiles of some typical non-QM borrowers look like. I’ll also share my insights on how partnering with the right wholesaler can make all the difference in your success as an originator of non-QM loans. I’ll explain exactly what to look for in a wholesale partner, and the importance of their experience working in the non-QM space. First of all, make sure you know the reason why a non-QM borrower is seeking an alternative product to agency loan programs. In many cases, the borrowers are using bank statements to qualify under traditional debt-to-income (DTI) underwriting standards and/or recovering from a past credit event. For example, self-employed borrowers often don’t qualify for an agency mortgage, even if they have a steady source of income and excellent credit. Brokers looking to build non-QM loan originations would be wise to pay close attention to the growing number of self-employed people in the country. According to RealtyTrac, there are approximately 15 million self-employed borrowers in the United States, which represents about 10 percent of the working population. Those statistics point to a huge opportunity for mortgage brokers when traditional W-2/tax return, agency-based lending does not properly address their borrowers’ needs. When you look at wholesalers to partner with, know that not all nonQM end-investors are the same. Some keep loans in their portfolio, while others are using securitization as their secondary marketing strategy. The good news is that securitization of non-QM loans is growing quickly: Just consider that in 2017 there were 16 issuances for approximately $4 billion and by early summer of 2018, there were already 18 deals for approximately $7.5 billion. This year-over-year increase is helping to grow the non-QM market and improve pricing for borrowers.

sizable number of owner-occupied non-QM transactions, there is also a substantial amount of non-owner, rental income properties (see Table 2). And you will see right away that the non- QM market—for both owner-occupied and investor loans— is flush with purchase transactions and self-employed borrowers. Given today’s more challenging agency space, employing a well-thought-out non-QM strategy can help you maintain, and hopefully surpass, your current level of originations.

Non-QM demographics Before you get started, spend some time reviewing Tables 1 and 2 on the demographics for a pool of recently originated non-QM loans. You will quickly see that in addition to a

Training tips for originators The review and underwriting of a borrower’s business and personal bank statements are absolutely the most critical aspects when originators are trained in non-QM lending. And

Comparing the origination process of non-QM loans and agency loans Given that the majority of originations over the last decade were Fannie Mae, Freddie Mac, or FHA and VA loans, it is vital that you understand the non-QM origination process and how it compares to agency lending. In the table below, you will see that there is a considerable amount of overlap between the non-QM and agency processes: Marketing A good wholesale partner will help educate brokers on what it takes to effectively work with non-QM borrowers. There must be a spirit of collaboration between you and your wholesale partner. Look for the wholesalers that will help support your marketing needs by offering the following: l White label marketing to your Realtors l Joint prospecting efforts for business owners l Joint training events with your Realtors l Training your staff on how to review bank statements l Data-mining for self-employed, foreign national and super jumbo borrowers, as well as real estate investors who are underserved by today’s agency programs l A 24-hour or less turn time on loan scenario and credit exception requests l Jointly create Internal rate sheets for your loan officers

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

Keep in mind that bank statement loans require ongoing, hands-on help from your wholesale partner.

training a team of originators is most effective when itâ&#x20AC;&#x2122;s done in person at a local branch and led by both sales and underwriting staff. Most wholesalers will provide video training, but I believe video training is best done as a follow-up to in-person training at a branch. An added bonus: In-person training sessions provide an ample opportunity for originators to establish a relationship with the wholesalerâ&#x20AC;&#x2122;s credit and sales teams. The following are some high-level bank statement training tips for originators: l At point-of-sale, learn to collect 12-24 months of bank statements from your self-employed borrowers (depending on the loan program) l Obtain a business narrative from the borrower as it relates to their expenses such as employee compensation, number of staff, industry type, rent, etc. l Review and analyze bank statement eligible deposits, calculate gross income and decide on the associated expenses in order to come up with the qualified income youâ&#x20AC;&#x2122;ll use to compare against the loan application.

Itâ&#x20AC;&#x2122;s important to understand that most non-QM transactions will require a review by your wholesale partner earlier in the origination process than is the case with agency lending. Because of this, itâ&#x20AC;&#x2122;s imperative to connect with a local sales and credit person to help review guidelines and, if necessary, request a loan scenario or credit exception. If your wholesaler cannot turn the request back to you on the same day or in less than 24 hours, it might be time to look for a new wholesale partner. Non-QM borrowers usually have less time to close because theyâ&#x20AC;&#x2122;ve often already exhausted the options for an agency loan, especially if the transaction is a purchase deal. Make sure you have prompt access to an underwriter at your wholesalerâ&#x20AC;&#x201D;doing so will help to make for a successful start-tofinish with your Realtors and borrowers. When itâ&#x20AC;&#x2122;s time to consider a nonQM wholesaler, make sure a potential partner does the following: l Early in the transaction, prior to

loan submission, a good wholesale partner will review bank statements and calculate your borrowersâ&#x20AC;&#x2122; income for no fee or require the loan to be submitted. l The wholesaler is not part of a company that originates via a retail channel. Many non-QM borrowers are looking to refinance into an agency loan in a few years, so you donâ&#x20AC;&#x2122;t want to take the risk that a retail channel will go around you to get that loan. l It is critical you are dealing with an â&#x20AC;&#x153;end investor.â&#x20AC;? An end investor gives the final approval on all credit decisions and owns the long-term risk as the loans are kept in their portfolio. l All loan scenario and credit exception requests are completed in 24 hours or less. If your wholesaler is an â&#x20AC;&#x153;end investorâ&#x20AC;? they will not need to review credit

decisions with outside whole loan investors, thereby causing delays in responding to your customers. l A true wholesale partner will give your originations team access to its local sales and credit staff for training, and to work with you promptly on loan-level issues. Most experts predict significant growth in the non-QM sector over the next few years. During this time, the market is likely to see new wholesale entrants and increased competition. The time to do your research is now. Find a few wholesalers to help you and your team navigate the non-QM market, get trained, and then work closely with your new partners to originate loans together. Why not get started today? I wish you the best in 2018 and beyond and I look forward to competing for your business.

Steve Skolnik is the CEO of ClearEdge Lending, a solutionoriented, service-driven wholesale lender designed for helping Mortgage Brokers break into and scale their non-QM business. As the end investor, ClearEdge Lending has the final approval on all credit decisions. It is backed by a local full-service branch model providing brokers with excellent team support. 71

(917) 731- 4 870 bfarassat@ridge ewoodbank.com NMLS ID#646654 4

You deserve a wholesale lender who is responsive, easy to work with and â&#x20AC;&#x201C; above a all â&#x20AC;&#x201C; respectful of your re elationship with each client. At Ridgewood, we pride ou urselves on the integrity, professsionalism and service we brin ng to each partnership and every e deal. Turn to our experienc ced, friendly team for a wide e array of home loan options, including No FICO score (u unless PMI loan)

Cash-outs* up to $2.0M (no seasoning)

Discounted rates

Loan amounts up p to $3.5M

2 24/7 access through our onlline

with CLTTVs to 90% %

portal (coming soon!)

to cr

Lisa Constant (516) 64 0 - 8 375 lconstant@ridge ewoodbank.com NMLS ID#646655 5

www.ridgewoodbank.com

n National Mortgage Professional Magazine n SEPTEMBER 2018

WEâ&#x20AC;&#x2122;RE HERE E FOR YOU. O

Bijan Farassat

NationalMortgageProfessional.com

Youâ&#x20AC;&#x2122;re There for Your Clients.

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

Five Reasons Millennials Aren’t Purchasing Homes and Five Ways to Reach Them

By Steven Kaufman

Why Millennials should consider buying instead of renting There are still plenty of reasons Millennials should consider buying instead of renting. But convincing this generation to make such a large purchase means answering the question: How do we get Millennials to think differently about homebuying? There are various perspectives to put forward that help reach the current generation of prospects. Let’s take a look at five of these solutions.

t’s no secret that Millennials have been slow or even reluctant to purchase homes. Let’s examine current Millennial homebuying trends and address the various reasons why Millennials are not buying homes. Then let’s look at how to reach this generation and boost Millennial homeownership.

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Reason #1: Millennials value experiences over possessions The majority of Millennials— approximately three-quarters, according to research—value experiences over possessions. With global communication at an all-time high, everything is about the next Facebook or Instagram picture. Millennials would prefer to be traveling in an exotic location or dining at an enviable restaurant rather than focusing on the expenses of their own home. Reason #2: Millennials prefer to live in expensive locations In general, Millennials have a strong desire to live in trendy, walkable locations where there are both feelings of safety and connectedness. Communities like this usually contain the most expensive property thanks to the first three rules of real estate: Location, location, location. If it’s an area where people want to live, land is the one commodity which simply cannot be manufactured. Because of the recent housing boom, housing costs have risen over the last decade and a half while average wages have not. As desirable real estate in cities reaches astronomical prices, young professionals under the age of 35 with a median income of less than $40,000 per year are only able to rent in these prime neighborhoods. Reason #3: Millennials cannot save enough for a downpayment and closing fees It’s no secret that making a downpayment on the purchase of a house can be intimidating. Studies show many Millennials cannot save enough for a

“Beyond just setting up online systems that invite Millennials to the table, companies that put mobile apps in place find themselves reaching younger audiences more easily and bringing them around to the idea of settling down in a home of their own.” downpayment and closing fees. Part of the reason might be their choices in money management. Since young people are choosing to live in nicer neighborhoods with higher rent, saving becomes substantially tougher. Additionally, these younger adults prioritize taking more trips, whereas those saving for a downpayment are sacrificing annual vacations. When faced with the additional costs of homeownership, like insurance, HOA (Homeowners Association fees), property taxes and maintenance, the total is simply too overwhelming for many Millennials to accept. Reason #4: Millennials have lower credit scores than any generation Another likely reason for Millennials buying so few homes could be tied to the rise of student loan debt, along with the generation-wide decline in credit

scores. Student loan debt is not only a significant deterrent to a young adult beginning to save; this burden, along with minimal job opportunities, also impacts credit scores. Yet outside of having a co-buyer, too low of a credit score makes securing the real estate purchase seem hopeless. Reason #5: Marriage and children are coming later for Millennials Marriage and children are coming later in life for Millennials, a trend that baffles many Baby Boomers and even those of Generation X. Previous generations would marry and have children in their 20s, while the majority of Millennials are waiting until their 30s to get married and then have children. Unfortunately for the housing market, Millennials do still strongly associate owning a home with coming after tying the knot and starting a family.

Solution #1: Homeownership is a path to financial freedom Clearly, the current generation of younger adults does not wish to be tied down by financial obligation, but this argument doesn’t hold quite as much weight as one might think. Building up transferrable equity is a form of savings. The right property will be easy to sell if Millennial homeowners want to change locations a few years down the road. All of the money wasted renting could have built up enough equity to afford another downpayment elsewhere, even on the other side of the country. Although retirement is far from the mind of many Millennials, continuing to fork over rising rental rates is scary in the long term. Plain and simple, Millennials who don’t build equity will likely not be able to retire. When approached from this perspective, homeownership is a sound method to assure more financial freedom. Solution #2: Millennials who qualify should apply for an FHA or VA loan Many first-time millennial homebuyers are likely good candidates for FHA loans—those insured by the Federal Housing Administration—and probably don’t even know it. These mortgages are perfectly designed for first-time homebuyers. Millennials who suffer from less than perfect credit or who struggle with saving for a downpayment can have a

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

legitimate shot at purchasing a home when they take this route. FHA loans have lower credit score requirements and can be secured with downpayments as low as 3.5 percent. If a Millennial happens to be in the military, a veteran, a reservist, or even better, in the National Guard, VA (Veterans Affairs) loans provide even easier terms. Solution #3: Open new avenues with digital mortgages Convincing Millennials to consider homeownership starts with reaching themâ&#x20AC;&#x201D;and that means embracing technology as a means to educate young adults and simplify the lending process for them. Purchasing a home can be a daunting process. Digital mortgages step into the role that in-person meetings or phone calls with a mortgage lender might have played before. They also have multiple advantages such as less paperwork, more transparency and making the confusing steps much less complicated.

Millennials demand transparency. And finally, know that this generation will proceed in their own time.

Steven Kaufman, CPA, MsEDE, is a finance enthusiast and the Founder and Chief Acceleration Officer of ZeusLending.com, an online provider of real estate financing products, including traditional and non-traditional mortgages, hard money loans, and real estate crowdfunding opportunities. Kaufman is frequently interviewed on current financial markets by local and national news organizations such as FOX, ABC, CBS, CNN, and Bloomberg.

n National Mortgage Professional Magazine n SEPTEMBER 2018

Solution #5: Expect organic results to trend back toward homebuying One important reality to keep in mind is that Millennials are basically optimistic when it comes to finances. A recent study suggests that 81 percent of Millennials said they want to own a home, even if that future date is unknown. When children are in the mix, the rule of â&#x20AC;&#x153;Location, Location, Locationâ&#x20AC;? will mean a little something different than urban proximity and lower commute times; a phenomenal location is then going to need

The current landscape of homebuyers is comprised largely of Millennials at 34 percent of the market. The key is to find the ways to help Millennials understand and make the wisest

financial decisions possible. Give them simple and friction-free methods to find homes and apply for financing. Be aware that

NationalMortgageProfessional.com

Solution #4: Embrace technology with a mobile app Beyond just setting up online systems that invite Millennials to the table, companies that put mobile apps in place find themselves reaching younger audiences more easily and bringing them around to the idea of settling down in a home of their own. Sites like Zillow have already caught on and succeeded at creating such a platform, introducing mobile apps that make homebuying so much easier. Real estate agents should fully realize that virtually every Millennial shopping for a home is now going to do so via a mobile app and/or device.

great schools, and the best school districts are typically found in the suburbs where so many homes are sold. As this generation grows a little older, more and more of the Millennials are going to begin joining the ranks of homeowners.

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

TPO or TOP Originator? By Eric Weinstein

hen I first started in the industry, I thought “TPO” was a typo for “TOP Originator.” In case you don’t know, it stands for “Third-Party Originator.” I am assuming a First-Party Originator is a Loan Officer that works for a bank who lends and services their own loans. These are the “popular” kids that get invited to all the American Bankers Association parties. I guess that makes Second-Party Originators the slightly uglier kids that hang around the A-Listers and wheedle their way into the party … call them minicorrespondents. But, I have always been a TPO from middle school and throughout high school. The awkward pimple faced teenage boy wearing a pocket protector, in the chess club and with my jeans pulled up so high my white socks show. Envision anyone named Poindexter and your mind’s eye has taken a snapshot of me. The lonely, lowly Third-Party type, never a part of the show, never invited to the Prom. As proof, I never drank a beer in high school and never smoked pot. Not that I was morally against it, I just never got the invitation. Still, being alone is not so bad. I have my books and poetry to protect me, because a rock feels no pain, and an island never cries. So, I poured myself into learning and became the best originator I could be. Then Gramm, Leach and Bliley hurled the meteor that killed off us dinosaur Mortgage Brokers and the TPOs had an extinction level event. But, from every massacre there are survivors to tell the story (witness the alligator, unchanged since the dinosaur age). Don’t get me wrong, I do very well, thank you very much, and have all that I want. Here is the secret to that: “Don’t want a lot.” Despite the trend and pressure from my peers, I still love being a Mortgage Broker.

back to the Great Rabbi complaining this only happened to him once he followed his advice. The Rabbi explains that, “The Sages say, ‘He who wants to be wise goes south. But, he who wants to be rich goes north.’” So the now poor man asks, “What shall one do who wants to grow both wise and rich?” The Rabbi answers, “He who thinks nothing of himself, and makes himself nothing, grows in spirit and soul. And since a spirit and soul do not occupy space, he can go both north and south at the same time.”

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

“Being a TOP Originator is not scored by how much wealth you accumulate nor how much fame you earn. It is tallied on how many good deeds you accomplish in your life.”

Let me give you an example. I was doing a loan for a poor (translate that into lowmoderate income) borrower. She was a single AfricanAmerican mother so excited to be buying her first home. But, closing costs were more than expected and she just couldn’t come up with the funds. As a Mortgage Broker, I was able to reduce my fees and give her a lender credit to solve the problem. I did not make any money on that deal, and I doubt any of the “cool” Big Box Banker First-Party Loan Officers types would ever be allowed to do the same. I never told her what I did, and to her, it was nothing short of a miracle. We give not for our own self-aggrandizement, we give because it is our OBLIGATION to give. The Bible tells us, when we give for our own self pride, for that warm feeling we get from helping someone, or building a wing on

a hospital with our name on it, it is nothing but “ashes in a dog’s mouth.” It means nothing. A parable … A rich man goes to a Great Rabbi looking for redemption. The Rabbi tells him he must give to the poor to seek salvation. The rich man soon gives so much, he himself becomes poor. He then goes

I have found this to be too true. It is only when I give that my blessings come back to me tenfold. “You get more sand from an open hand, then a closed fist.” Being a TOP Originator is not scored by how much wealth you accumulate nor how much fame you earn. It is tallied on how many good deeds you accomplish in your life. And, after you die, you take all these good deeds, bundle them up into a tight ball, and throw it at the devil on your Judgment Day. It is a mighty weapon. To me, that is the true blessing of being a TPO. The leeway it gives you to help people that just don’t fit the cramped box of a big bank’s underwriting criteria. If it means being the ugly duckling and not being invited to sit at the cool kids’ lunch table, I can live with that. I guess TPO wasn’t a typo for “TOP” after all.

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.

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

Make Yo our Marketing e E Easy “The accu uracy of the data and the near n e clusiv contact wit w as they ar ae a mortga age moment, a much softe from a bor tradition nal

“Being able to

really with trried resultss.”

“Every time my p rang, at the oth o was an interest e e qualified persso

“We we increa e from mt marke 50 per

Sch hedule a Free e Consu ultatio on Now 888 8-717-8980 | info@tagq quest.com | www.TagQ a Quest.com

In America i 2 015 In A 2015

2016

SEER VICE PROVIDERS ERVICE

FOR TY

Inc. 5000

M MOR

FLUENT ST IN IAL MO

Y RT

TOOP 500 M TTGAGE MOR MORTGAGE

AGE PRO RTG FE S MO

–––––––

S UNDER NAL FO SIO

You ounng Gun ns 2014

n National Mortgage Professional Magazine n SEPTEMBER 2018

voicemails e added the extra magic g to increase my resp e onse rates.”

“Technolo e gy, integration and leadership.”

NationalMortgageProfessional.com

t year rcent us year.” .

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

How to Capture the Wholesale Market in This Competitive Industry By Tracy Marks

rom 2007-2014, U.S. megabanks’ share of mortgage origination fell a shocking 22 percent. Much of the decrease can be explained by an increasingly strict regulatory environment following the burst of the housing bubble, and the fact that the costs of lending mortgages simply outweigh the benefits for these big banks. As we finish out 2018 and move into 2019, refinances will virtually dissolve and the purchase environment will continue to be increasingly competitive for both big banks and large mortgage lenders. This shift in the industry has created a significant opportunity for those in the wholesale mortgage channel to capture potential business. As an example, LenderSelect Mortgage Group, a division Atlantic

Bay Mortgage Group, has worked over the last seven years to grow a sustainable model in the wholesale market. From its inception in 2011 to the present day, LenderSelect has grown its accounts from just two to more than 130 credit union, community bank and farm credit teammates across the Southeast and Midwest, with a sales team actively dedicated to expanding the business across the country. Some may be exiting the market, but the reality is, potential buyers are not. And, despite interest rates rising and margins compressing, the wholesale industry opens an alternative channel to capture business. However, to first grow and then nurture successful relationships, those in the wholesale channel need to be mindful of the following three core pillars, which

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

“… it can be overwhelming attempting to conform to the latest regulations–but it is truly an exceptional value-add in the third-party origination space and will be appreciated by potential wholesale teammates.” LenderSelect has centered its business model around: Offer borrower retention If a community lender ends up selling its mortgages to a big bank, or their current investor sells to the big banks, those banks may solicit business from their borrowers. This behavior does not build a sustainable relationship between the mortgage provider and community lender. The wholesale provider should not solicit business from those borrowers–ultimately, the community lender should be there as a resource for all financial needs, not just a mortgage. Increase profitability and reduce fixed costs Many community financial institutions that keep processors, underwriters and closers in-house are paying them year-round, even when business is slow. If the wholesale provider has a back-end mortgage team to go through the process from start to finish for every

transaction, it eliminates those fixed origination costs for the community lender. Focus on compliance Staying compliant in the financial industry can be challenging, especially with stringent regulations following the mortgage crisis of 2008. The wholesale provider should offer a dedicated compliance team provided from the beginning of the mortgage process all the way through closing to ensure regulations are met. Techniques to build a successful wholesale channel Whether you are just entering the wholesale business or looking to further develop your current platform, the four techniques below highlight key development strategies. Utilizing these techniques, we have been able to grow our annual volume over 15 percent the last two years. 1. Prospect perseverance: It is

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

necessary to view building relationships as a journey and not anticipate turning all prospects into customers immediately. It is hard to put a timeline on how long it takes to build a trusting relationship, but looking beyond prospecting and focusing instead on developing friendships, offering support, staying in touch and being there when the client is ready. A reliable approach is to give prospects a chance to get to know you, like you–and then begin to trust you once the first two points are appropriately satisfied. 2. Focus on customer satisfaction: It is important to work on meeting the needs of not only the business-tobusiness mortgage market but also the business-to-consumer audience–therefore, it is important to ensure the business model caters to both sides in order maximize potential success in a competitive market. Community lenders are working directly with borrowers who are making a significant financial

investment, buying a home in which they will build memories for years to come. The wholesale provider should ensure the team is providing a satisfactory home buying experience for both the community lending teammate and their borrower. 3. Embrace compliance: While it may be easy to view maintaining compliance as a burden, if it is approached as a value or strength embraced by your institution, it will get you far. Sure, it can be overwhelming attempting to conform to the latest regulations–but it is truly an exceptional value-add in the third-party origination space and will be appreciated by potential wholesale teammates. Choose to embrace the ever-changing environment and become the subject matter expert in order to have the answers your teammates may seek on the topic of compliance. 4. Identify strengths: How will your business stand apart from competitors in the industry? Highlight what the business excels at and avoid touting the

qualities that may not be a strength. For example, if rate is a strength, shout it from the rooftops. On the contrary, if your business is not as competitive on rate, do not focus on it. Have superb customer satisfaction? Tap into marketing resources to create engaging customer testimonials that represent what makes your business so great. Find what makes your business shine and do what it takes to ensure your potential audience is aware. Highlighting everything the business is just ‘okay’ at will almost guarantee it will fade into the noise; showcasing that one expertise your business excels at will help you stand out. It all comes down to the experience and tools provided to

clients. Highlight what your business is great at, embrace industry challenges, pay attention to clients’ needs and never give up on the opportunity to work with them now or in the future. Information is for educational purposes only and should not be relied upon by you. Information deemed reliable but not guaranteed. All loans subject to income verification, credit approval and property appraisal. Not a commitment to lend. LenderSelect Mortgage Group is a registered trade name (DBA) of Atlantic Bay Mortgage Group, L.L.C. NMLS #72043 (nmlscosnumeraccess.org) is an Equal Opportunity Lender. Located at 804 Moorefield Park Drive Suite 102, Richmond, VA 23236.

Tracy Marks is President of LenderSelect Mortgage Group. An executive with more than 35 years of diverse sales experience, Marks is experienced in business development, systems and operations, and managing sales acquisition and production. As the President of LenderSelect Mortgage Group, he built and strengthened the Third-Party Origination Division of Atlantic Bay Mortgage Group. 77

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.

n National Mortgage Professional Magazine n SEPTEMBER 2018

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.

NationalMortgageProfessional.com

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.

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

Millennials: The Underestimated Generation Capturing the Millennial homebuyer market uch has been written about Millennials and their trends, buying habits and lifestyles. Why is there such a focus on this generation, and why is it important to focus on them in the real estate and mortgage industries? For the past five years, Millennials have made up the largest group of homebuyers in the US, according to data from the National Association of Realtors (NAR). Millennials, those born between the early 1980s and late 1990s, number at more than 75 million in the U.S., as reported by the 2015 U.S. Census. Despite being the current largest group of home purchasers, Millennials have consistently received a bad rap: They are often portrayed as entitled hipsters mooching off their parents, exhibiting a failure to launch. However, when you really look at the data, this demographic is very underestimated. Many of them came of age during the Great Recession and saw lots of people lose everything due to the housing bubble collapse. Doesn’t it make sense their financial behavior would be affected accordingly? Is it not a sign of maturity to be more cautious after witnessing the effect of other generations’ behavior? Millennials are slower to enter the homebuying market for several reasons. One reason is many have fallen into the trap of needing degrees and higher education to get even entrylevel positions, leading to massive student loan debt. Gone are the days where people can graduate high school, enter the workforce and immediately earn a living wage. Now, entry-level positions require four-year degrees, or sometimes, even degrees beyond a Bachelor’s. According to data from Forbes, the average student loan debt among households that owe student loans is just under

By Brooke Mulder

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

“Millennials may end up making fewer home purchases over their lifetime than older generations due to post-recession caution, high student loan debt and a lower likelihood of buying a starter home and continuing to upgrade.”

$35,000. Some Millennials may feel they should wait to purchase until they have paid down most of their debt, or alternatively, must wait due to DTI ratios. Many Millennials don’t have enough income to ratio and qualify until later in life. Additionally, with student loan payments of several hundred dollars, saving for a downpayment on an entry-level salary becomes daunting. One study from the New York City Comptroller has shown that Millennials in New York City earned 20 percent less, adjusted for inflation, than the previous generation did upon entering the workforce. So Millennials are entering the workforce with tens of thousands in student debt and earning less than previous generations. Earning less income, coupled with staggering student loan debt, understandably makes this generation approach large

purchases with caution. Millennials are not delayed in purchasing their first homes because of a propensity towards avocado toast and lattes, despite what Internet memes may tell us. Economists and personal finance experts are starting to dispel the notion that the “Latte Factor” is what is keeping Americans from being rich. The “Latte Factor” theory tells us that if consumers stopped making small purchases at the frequency that most Americans make them, like a $4 latte, they could then save and ultimately invest that money and become rich. Many Millennials are shunning that advice and instead saving money in much bigger, lower frequency areas (home purchases, car purchases, etc.). They also use technology to save money in other ways, like using home-sharing services to save money on vacations, or

using apps to find roommates to share expenses or for ridesharing to avoid car payments. Earlier generations tended to purchase “starter homes” with the intention of upgrading every few years. Millennials are skipping the starter home and purchasing when they feel they are financially ready to own the home of their dreams. Millennials may end up making fewer home purchases over their lifetime than older generations due to postrecession caution, high student loan debt and a lower likelihood of buying a starter home and continuing to upgrade. This makes it even more important for lenders to capture this group on their first-time home purchase to increase the likelihood of becoming their lender for future refinances and purchases. If a lender doesn’t offer the smooth and intuitive experience via technology that Millennials are used to, they may never get another shot with this group. The group following Millennials, Generation Z, will be ready to start entering the homebuying market before we know it. Based on an analysis from Bloomberg of data from the United Nations, the group as a whole will surpass Millennials in size by 2019; they will soon make up 32 percent of the population. They will most likely trend in the same direction as Millennials, but maybe with an even greater emphasis on technology and instant gratification. This is the generation who was raised on smartphones, the Internet and social media from a very young age. The strategies lenders use to capture the Millennial market will also most likely be useful for Generation Z. Once Millennials reach the point where they are ready to buy, they, of course, go to technology first. Sites like Zillow, Trulia, Movoto and Redfin allow users to virtually search for the perfect property. Millennials have grown up with the Internet; they want to take

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

control of house hunting and not rely solely on real estate agents to get information on different properties. The same principle follows when it’s time to find a lender. Many borrowers are more likely to go with somebody who has been referred to them from a friend or family member. Additionally, borrowers, especially tech-savvy Millennials, use social media sites to crowd source reviews of lenders and Loan Officers. This is such an important area to focus on that some lenders have even recently rolled out programs to train their Loan Officers on the art of social marketing. After a Millennial feels financially ready to purchase a home and has spent time online researching properties as well as lenders and Loan Officers, it’s time to officially apply for a mortgage. Millennials absolutely do not want to sit down in a branch and apply for a mortgage, or even apply over the phone. It’s a computer, tablet, smartphone or bust!

They do, however, still want a human involved in the process for questions and professional guidance, but would prefer that even human interaction happens more and more through digital means. We’ve explored the necessity of capturing the Millennial market, now the question is … how? Millennials want to interact with businesses through technology first—be it Web sites, apps or artificial intelligence (AI). Lenders who are looking to compete in today’s mortgage landscape must invest in a digital lending platform for borrowers to utilize. Financial institutions should seek a true technology partner, a company that not only builds but helps customize and manage their borrowers’ journeys and experiences. The digital lending platform should allow lenders to deliver an intuitive, smooth and efficient consumer experience, improve conversions, significantly reduce origination costs and integrate with other innovative technologies, while maintaining

their own brand’s look and feel. A technology partner platform like this can help lenders futureproof their business and is a necessity to capture the millennial and Generation Z markets. Millennials, and of course lenders, are very sensitive about information security and data breaches. Millennial homebuyers are more educated on average than past generations, and they have seen widespread data breaches from large companies. They are more likely to worry about shredding

documents and wanting to make sure the sites they interact with are secure. Therefore, lenders need to ensure the platform they select is secure and communicate this clearly to instill confidence in their customers. Millennials are now the largest group of homebuyers and will most likely continue to be for decades to come. Lenders need to meet Millennials where they are—tech-savvy and fully embracing of digital technology—if they hope to capture this lucrative market.

Brooke Mulder is Marketing and Communications Manager for MortgageHippo, with seven-plus years of experience in the financial services sector. Prior to MortgageHippo, she worked for three top 15 mortgage lenders and is experienced in sales/originations, sales management, performance analytics and business development. She may be reached by phone at (623) 2295099 or e-mail Brooke@MortgageHippo.com. 79

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n SEPTEMBER 2018

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

Wholesale Strategy Insights: A Chat With Jim Wickham, VP of Third-Party Originations at Union Home Mortgage By Alice Alvey

on-bank lenders and brokers are making critical business decisions today in order to secure their share of a shrinking pool of customers. Wholesale and correspondent players have taken these business decisions to the streets and are waging a visible battle over pricing, product offerings and credit quality to attract and sustain loan volume levels. These strategies may work for some, and for the short-term. But what does it take to survive the longterm? I sat down with Jim Wickham, CMB, Vice President– Third-Party Originations at Union

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Home Mortgage to get his perspective on long-term strategies for wholesalers, nondelegated correspondents and brokers today. Jim has been VP of TPOs with Union Home Mortgage since August 2014, and has 20-plus years in the industry in retail, then expanding into wholesale lending in 2009. Jim’s has also served as President of First Independence Bank’s Mortgage Division, SVP at Cole Taylor Mortgage, Chairman and CEO at Lender Ltd., AVP of Secondary Marketing at Republic Bancorp Mortgage Inc., and is an active member of the Michigan Mortgage Lenders Association), including a term as association President.

What is the hot topic in wholesale today, besides the obvious? Jim Wickham: Defining the customer relationship between the originator and then later with the servicer is one of the most common topics that comes up at trade shows and partner visits over the past few months. The simple reality is the customer has a relationship with both the originator and the servicer, and both the originator and the servicer need to put time and effort into maintaining that relationship. We all have choices in how we go to the market to find new business, but very few companies will share that a positive and well-connected relationship with past customers is not the sole component for building future business. Both the originator and the servicer need to take an active role in being available to that customer over long periods of time to answer questions and solve concerns. Long-term customer relationship strategies include recognizing the strengths of each party. It isn’t one versus the other. Both parties should be a resource for that customer. There has been tremendous advancement in the technology utilized to track customer activity on the Web as it relates to the sites they visit and the information they look for. Not only do the current servicers and many originators pay for trigger leads and related technology, so do many in the mortgage-lending environment. Bottom line is the competition is fierce for all future needs of the borrower so whether you originated their current mortgage or you are servicing it, there is tremendous competition for that consumers next mortgage need. While many of us will continue to debate the best way to earn that business, it is foolish for any of us to believe the level of competition for these borrowers is going to diminish anytime soon. What strategies do you see wholesalers using to capture business and what is working and not working?

Past customers referring business via friends and family seems to be what is driving business with our broker/banker partners today as much as it has been historically. In a heavily weighted purchase market, the originator will rely on that type of referral more than most other paths in the market. Having a great digital presence is important, but keep in mind, most people these days will not blindly take what they read on the Internet as Gospel. There has been a fair amount of analytics done to support online feedback and reviews are well read and certainly influence buying decisions. It is not the only thing that matters, but it is important. A fair amount of positive online type reviews is important, but that word of mouth is equally valuable. There is no silver bullet type solution or quick path to building lasting success as a Mortgage Loan Officer. You have to pursue multiple approaches to building your personal brands. Friends and family are very common resources people look to when making big life decisions. As originators, now more than ever, our reputation matters! Wholesalers all have different approaches in product offerings and pricing. What are some of the differences between wholesalers, besides pricing? Brokers should look for a wholesaler who offers choices in the loan process. We all (wholesalers) operate our businesses in our own unique way. As a broker, it is important to have a few paths available to solve for each step in the process; there is no one perfect solution. Mortgage Brokers deserve respect for their ability to run a business and deserve business partners who recognizes this and offers support that is based on their needs at the time. That requires a lot of listening and offering some choices on the part of the wholesaler, especially when it comes to workflow. Workflow certainly needs to be efficient and cost-effective for the wholesaler, but the design of the workflow must have the needs and

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

the efficiency of the broker partners as an integral part of the design process. Listening to your broker partners and offering choice where possible is important. There are many decisions made when designing the best way to get a loan from submission to funding, keeping the broker experience front and center with each of those decisions is critical for all wholesalers. Whether you are looking at the disclosure process or document preparation and everything in between, offering choices matter. Some broker partners prefer to prepare their own LE while others are more comfortable having the wholesale partner prepare those docs. Some broker partners want to send one secure upload with everything in it for the wholesaler to split while others like to split documents into categories on their own. When it comes to doc prep, specifically on the non-delegated correspondent channel, you also need choices as some like to prepare their own docs, some outsource to a third party, and others want the wholesaler to execute that step of the process. With each aspect of the workflow, we believe you have a competitive advantage if you can offer your thirdparty originators choices and not just dictate a single path for resolve.

Jim Wickham, VP of Third-Party Originations, Union Home Mortgage

and staying focused on all aspects of variable costs is everyone’s responsibility on your TPO team. After great volume and growth over several years while housing values recovered in America, many companies grew fast and built in a lot of unnecessary expense. Now, more than ever, good business fundamentals matter, not wasting revenue is a great place to start when you are looking to battle the margin compression issue. When the market starts to trend in this direction it is typically a long road as well. Margin compression is a long term battle; we all need to look at efficiencies in every step of the process. Take the time to truly leave no stone unturned. Taking a deep dive to really understand what tools and processes you need to operate and what things are just wants. We all know folks in the business that confuse wants and needs, in this type of market we all really want to identify expenses that are absolute needs to achieve your goals and what are simply nice to have that we may need to learn to live without for the next several quarters or longer.

How has the AE service/support model changed over the years, or has it? Wholesalers need to offer more choices for communication with broker/banker partners, now more than ever. The AE is crucial for starting new relationships along with a solid support team. Both must be very accountable for ensuring the relationship with broker partners is maintained in a world-class manner. Now more than ever, AEs need to be cognizant of the fact that all brokers they serve have their own priorities and preferences. Today, a good AE operates with a great balance of high-tech and hightouch, while recognizing and advising, on an individual basis, which way customers want to move and manage their business. What are the top three challenges your broker are facing today?

Alice Alvey, Master CMB, is Vice President of Partner Education and Training for Strongsville, Ohio-based Union Home Mortgage. Alice is responsible for the development of Union Home Mortgage’s training program designed to support the company’s partners and organizational effectiveness. She may be reached by phone at (440) 4204294 or e-mail AAlvey@UnionHomeMortgage.com.

n National Mortgage Professional Magazine n SEPTEMBER 2018

How does a company survive the margin compression going on today? Very carefully! Removing fixed costs

“Both the originator and the servicer need to take an active role in being available to that customer over long periods of time to answer questions and solve concerns.”

Any tips for surviving as a broker and staying away from ‘growing up’ to a banker? There are pros and cons to becoming a correspondent that require careful and customized consideration. The ‘growing up’ part isn’t necessarily managing the warehouse line, it’s in being accountable for the loan decision. One of our broker partners said he is a ‘Risk Chicken’ and is perfectly content to stay in the non-delegated correspondent space. Communication is the key to surviving as a Mortgage Broker. Develop a clear vision on how your entire company is expected to communicate with borrowers and referral sources. Just as critical is setting clear expectations of what you need and want from your vendor and investor relationships. The vendors and investors you work with have great incentives to see you be successful. When working with any third-party, be very transparent about your expectations.. Now as it has been for years, it all boils down to communication and choices. We need to listen and learn what our TPO partner’s preferences are as to how we communicate with them and help them achieve their goals. We also need to respect that these originators have the same challenges and needs with their borrowers. Provide choices and excel with communication. It is not about picking a path like high-tech or high-touch, it is about being flexible so you can be good at whichever your business partner or business source wants you to be.

NationalMortgageProfessional.com

Is there a race to bottom in capturing business regardless of credit quality? There is always some of that in the marketplace, but many of today’s potential homebuyers lived through a very dramatic decline in home values. For many of today’s buyers, they watched and lived with their parents losing value in their home … the first time in a long time that has happened. Today’s consumer appears to recognize the risks of over-buying much better than previous generations. There will always be folks that will have good financial discipline and those who don’t. The industry can offer all types of crazy products and credit scenarios, but the consumer of today is showing they don’t have as big of an appetite as previous generations to take the risks associated with those products. Because we have smarter consumers, simply offering the latest low credit score product doesn’t fill the gap in the loss of refinances or increase margins.

Finding the next customer, meeting their needs, maintaining a strong relationship with them after closing, is number one. This means going back to good business fundamentals. Just as every broker has their preferences related to high-tech and high-touch, borrowers are the same. It is critical to have choices for your borrowers to communicate in multiple ways through all aspects of the relationship. We try to provide choices for our brokers/bankers, and hope in turn they can do the same with their borrowers.

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

Broker Business: Risk Management and Partnerships By Raymond LaFave III

urrounding the broker business, there are many myths, misunderstandings and misconceptions including the big three—broker business is riskier than retail, broker business lacks regulations, lock fall out is higher in wholesale than retail.

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

What is the truth? First, let’s undo myth one: Broker business is not riskier than retail. Mortgage Brokers bring borrowers and lenders together, but do not need to use their own funds to originate the mortgage. As the point of contact, the Mortgage Broker assists with the customer consulting, application and processing steps while providing a more personal approach with each loan. By utilizing the relationship, the Broker has with the borrower—a very important aspect—the Broker can help the borrower find the best loan program to meet his or her needs. TPO/Broker Risk Management uses the same batch of tools and processes that are in place for retail originations. Changes, industry practices, some required by regulation, some generated as best practices to avoid fraud are applied equally to both the retail and broker loan applications. TRID, appraisal independence regulations, late job verification, GSA/LDP, late credit review for new loans all have made significant impact to reduce the risk lenders retain after origination, but origination only quality loans to begin with, regardless of origination source. Second, Broker business is far from unregulated. In fact, regulations have changed the business so that the aggregator is known up front. New compliance rules ensure brokers are selling the proper programs and eliminating compensation variability based on terms of the transaction. The Secure and Fair Enforcement (SAFE) Mortgage Licensing Act of 2008 has assisted the industry’s business practices by ensuring that all Mortgage Loan Originators are registered and licensed. Requiring lenders to provide the borrower with the Loan Estimate disclosures allows

“Efficiency, honesty, adherence to regulations and less risk—these are all hallmarks of a good Broker. But what makes a great Mortgage Broker? People and partnerships. People and relationships. brokers and borrowers to be on the same page from the beginning of the origination process—nothing hidden, nothing misunderstood. The TILA/RESPA Integrated Disclosure (TRID) rule of 2013 ensures that borrowers understand all the rules and regulations relating to their mortgage loan. The disclosures are much easier to read: The estimate forms clearly display the terms of the loan from the beginning so the borrower has the option to continue with the transaction. Most importantly, the borrower will receive their final closing documents at least three business days prior to their closing so they have time to review their final numbers and ask any necessary questions. Third, lenders are under immense pressure from the secondary market to deliver a high percentage of what gets locked. But it’s a fallacy to believe lock fallout is always higher in wholesale than in retail. As an example, in one past quarter the wholesale side of our business

successfully closed five percent more of locked loans compared the retail side. It is no longer “easy” to switch loans to a new aggregator at the end of the process to get an extra 0.25 percent price improvement, nor can the Broker retain this additional income in most case. However, the key has always been and will remain– when you work with quality partners you don’t see a difference between TPO vs. retail fallout. The key difference: Efficiency matters. But what is efficiency? Efficiency signifies a level of performance that describes using the least amount of input to achieve the highest amount of output. Efficiency refers to the use of all inputs in producing any given output, including personal time and energy. It is a measurable concept that can be

determined using the ratio of useful output to total input. It minimizes the waste of resources such as physical materials, energy and time while accomplishing the desired output. In our business, understanding your lenders’ processes, building “help me” points, knowing how to submit loans the first time that will require limited subsequent submissions—this is how you as a broker maintain efficiency and deliver great service to your clients. That is the desired output and it should happen every time. Efficiency, honesty, adherence to regulations and less risk—these are all hallmarks of a good Broker. But what makes a great Mortgage Broker? People and partnerships. People and relationships. A Broker needs a solid relationship with both sales and operations teams. A Broker should have direct access to all internal staff from processing to underwriting to closing. Equally important as the Broker’s relationship with individuals within the internal organization is the Broker’s relationship with the Account Executive (AE). The AE not only sells the loan programs, but also sells the service that the organization provides, such as one-on-one underwriting and processing of each loan submitted. They assist the Broker with computer programs so the Broker can submit and process their loan packages promptly. That is a relationship worth nurturing. A connection with a customer is what sets you, the Broker, apart. This is your strength. Lender organizations need to have a similar commitment to the broker. At Towne Mortgage, we have a dedicated sales support group to assist with all loan submissions, closings, and internal system issues to ensure that each loan is processed, reviewed, and finalized within the rate lock period. It is a hands-on personal touch that not all lenders offer, especially large financial institutions, but it is one that is vitally needed. Although we at Towne Mortgage spend much time as an industry looking at “the numbers,” we must all remember this is a people business. Connections made over many transactions are what keep us in the business, and working with great partners. Both the Broker and the lender need to be customer focused and deliver on the service promise we make every day to earn our business in the future.

Raymond LaFave III is the Deputy Director of Wholesale at Towne Mortgage Company. With more than 20 years of experience, primarily in Wholesale Account Executive Sales and Management, Ray has been an Account Executive with Towne Mortgage Company for the last 20 years.

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

with nmpU President & Head Coach Ron Vaimberg Go to nmpUCoaching.com TODAY to request your FREE session Strategic Success Coaching • Loan Ofﬁcers • Account Executives • Managers/Owners

On-Site Success Workshops • For MLO's Low Cost / No Cost Lead Generation Strategies • Cover More Leads To Loans • 100% Referral Based Business

NationalMortgageProfessional.com

Wholesale/Correspondent AE "Win Series" • Win More Business From Existing Clients • Win More New Relationships • Win More Business With The Ultimate AE Presentation

n National Mortgage Professional Magazine n SEPTEMBER 2018

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

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

How to Take Advantage of the Growing Non-Agency Market

By Ben Wu

ate last year, S&P Global Ratings predicted the nonQualified Mortgage (non-QM) market would double, possibly triple, in 2018. And judging by recent news, the market is on track to rise from the $7-9 billion originated in 2017 to $15-18 billion this year— with several players in the space positioned to reach record nonQM originations. Angel Oak recently announced it originated $512.0 million in non-QM mortgages in Q2, and is expected to have an annual runrate of more than $2 billion for 2018. Additionally, Citadel Servicing Corp. reported nonQM production of $389.3 million in Q2, and has estimated that it will fund between $1.7-$1.8

billion in non-QM by year-end. Several factors are driving the growth of the non-QM / nonagency market. On the origination side, there has been a shift from a refinance to a purchase market and it’s a trend many in the mortgage industry expect will continue for the next few years. The Mortgage Bankers Association (MBA) forecasts that refinance share will drop from 35 percent in 2017 to 28 percent in 2018 and down further in 2019 to 25 percent. Additionally, the gig economy has grown significantly, with the Bureau of Labor Statistics recently reporting 16.5 million Americans as having “contingent” or “alternative work arrangements.” According to Fannie Mae, 71 percent of lenders have had borrowers apply

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

“Ideally, TPOs should work with forward-thinking wholesale lenders that offer non-agency options and have adopted technology that improves accuracy and efficiency, as well as allows all stakeholders to keep up with the rapid growth and change happening in the market.”

for a mortgage with gig economy income over the past year, with 89 percent of lenders expecting the number of borrowers who apply for a mortgage with gig economy income to grow in the next few years. This is leading to the development of more products for credit-worthy borrowers who don’t necessarily fit in the traditional agency box. Not your pre-crisis mortgages The non-agency mortgages originated today are quite different from the Alt-A and subprime loans originated pre-crisis. Those loans had extremely loose guidelines (100 percent or higher LTV) and were poorly supported (remember no income/no asset mortgages?). Today’s nonagency mortgages have LTVs in the 70 to 80 range, along with

sufficient reserves to weather the next downturn (sub-prime loans granted pre-crisis did not even require downpayments). The average FICO score is 699 and the average DTI is below the 43 percent QM threshold, though outliers are allowed through risk-based pricing. Because lenders must verify that borrowers meet ability-torepay standards, loans must be well documented and thoroughly underwritten. In addition, due diligence is performed on 100 percent of the underlying pool. Because today’s non-agency mortgages are backed by highquality underwriting and responsible decision-making, more innovative products are coming on the market. Some wholesale lenders are offering increased loan amounts;

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

expanded DTI (some scenarios up to 55 percent); expanded LTV (though we also see some tightening as well); 40-year terms; and interest-only options (e.g., 10-year interest only / 30year amortization). Lenders have also expanded alternative or reduced document options to help qualify self-employed borrowers. This includes bank statement loans for members of the gig economy who can demonstrate a reliable income stream through deposits into their bank account, rather than traditional W-2s, paystubs, and tax returns.

which could benefit mortgage lending, particularly the nonagency market. Though the details of the plans are not available yet, it is expected to include initiatives that would reduce regulatory risk for businesses that test new, innovative products. In an interview with Inside Mortgage Finance, Justin Wiseman, Associate Vice President and Managing Regulatory Counsel at the Mortgage Bankers Association said that “a regulatory sandbox for non-QMs would give creditworthy borrowers the opportunity to get financing they otherwise could not get under the QM rule.” TPOs that want to “get in on the ground floor” of the growing non-agency market should turn to wholesale lenders that provide the products and technology that allow TPOs to confidently offer borrowers more options and ultimately close more loans.

Ben Wu is Executive Director of LoanScorecard, a provider of non-agency automated underwriting, CECL loan-loss reserve, and borrower point-of-sale solutions designed to meet today’s regulatory challenges and capitalize on market opportunities. He can be reached by e-mail at Ben_Wu@LoanScorecard.com.

n National Mortgage Professional Magazine n SEPTEMBER 2018

Leveraging technology Ideally, TPOs should work with forward-thinking wholesale lenders that offer non-agency options and have adopted technology that improves

The future of non-agency The future looks bright for nonagency, with some industry insiders predicting the market will grow to more than $100 billion in the next few years. A big reason for that is the changing definition of QM, and

therefore non-QM. The recently signed Economic Growth, Regulatory Relief, and Consumer Protection Act states that QM status now applies to mortgages originated by and held in the portfolios of financial institutions with less than $10 billion in assets. This is expected to help non-agency lending. With more loans meeting QM standards, lenders could develop new products to help underserved borrowers, such as individuals with past defaults or those with assets looking for interest-only or asset-depletion options. The expanded definition could also lead to more secondary market options—lenders could shop for a better price for their agencyeligible loans in the private-label market—and ultimately more profitability. In addition, the Bureau of Consumer Financial Protection recently announced plans to create a “regulatory sandbox,”

NationalMortgageProfessional.com

The challenges of originating non-agency Many third-party originators (TPOs) find originating nonagency mortgages challenging because they believe they must do so manually. They also have easier access to agency mortgages through their automated underwriting systems (AUSs), i.e., Fannie Mae’s Desktop Underwriter (DU) and Freddie Mac’s Loan Product Advisor (LPA). TPOs use DU and LPA daily so they know what will be approved and what will not. When it comes to non-agency loans, many TPOs do not fully understand the programs available. Without an AUS, many find it difficult or time consuming to determine what to submit to a wholesale lender for a nonagency mortgage. If a TPO puts together a loan package and submits a borrower who gets denied, then the TPO and the borrower have wasted time completing the application and gathering all the documentation. Also, too many “false starts” increase operating costs and trigger HMDA filings, which can foster bad will with wholesale lenders. Increasingly, wholesale lenders are rating TPOs and penalizing those with low pullthrough rates. On the other hand, TPOs that play it too safe are leaving money on the table because they do not consider or present alternative non-agency products to hard-to-fit borrowers that they believe have the ability to repay.

accuracy and efficiency, as well as allows all stakeholders to keep up with the rapid growth and change happening in the market. Some wholesale lenders are using customizable AUSs to prequalify and underwrite non-agency products. And they are providing these tools to TPOs at no charge, even if the TPO is not approved to do business with them yet. Without an AUS, originating non-agency can feel like a guessing game for some TPOs. Having an AUS helps TPOs stay abreast of wholesale lenders’ ever-changing guidelines, input limited data, and run upfront pre-qualification scenarios at the point of sale. This gives TPOs an early indication if a mortgage will be approved or not and reduces the likelihood of providing inaccurate quotes to borrowers. An AUS gives TPOs the same confidence originating non-agency as they have originating agency mortgages. It allows them to quickly and easily provide borrowers with more options— and ultimately be more competitive.

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

Is It Time to Upgrade Your Stable of Correspondent Investors? By Jim Loving

oday’s correspondent lenders are facing strong market headwinds, including a severe shortage of homes for sale, skyrocketing new home construction costs brought on by trade battles, and rising interest rates that make it more difficult for homebuyers to qualify. The best solution to all those challenges is to offer niche products that make the decreasing volume in vanilla products less painful. After all, correspondents may not be able to replace all volume lost to economic and industry challenges, but adding new loan products can soften the blow. The key is having niche loan products that mediate the specific issues faced by today’s homebuyers. For this reason, I believe 203(k), Lock & Shop loans, and 2/1 buydowns are three of the best niche products for addressing current market conditions, as each one helps buyers overcome one or more common hurdles. But it’s not just the niche products you’ll need to grow business in a down market, but the investors who can provide them.

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

The 203(k) purchase loan Outdated homes and those in need of repair typically don’t have as many people competing for them, raising the odds the buyers’ offer will be accepted. That’s why 203(k) is a great product for wouldbe homebuyers who are frustrated because they’ve been repeatedly outbid. A 203(k) home loan gives homebuyers money to buy and renovate in a single loan. When there is a shortage of new and turn-key existing homes, buyers can use a 203(k) to buy and modernize older housing stock. Home sellers can also use it to fix up their property before putting it on the market. The product also works for buyers who want open floorplans, modern kitchens and spa bathrooms, but have a budget that only covers mid-Century ranches with tiny rooms and pink ‘70s bathtubs. With a 203(k) loan, they can knock down walls, update

kitchens and baths, and potentially avoid making mortgage payments for six months (at least during substantial renovations). The trouble is many companies don’t understand 203(k) loans, so they are sometimes reluctant to offer it. A high-quality investor will help correspondents overcome this hurdle by having a renovation expert on staff who makes the 203(k) loan as easy to understand as a 203(b). These experts can tackle another situation we see a lot in today’s competitive market: Home appraisals that come in too low. In such cases, a good 203(k) expert can show you how to save the loan before it’s too late and a potential customer walks out the door. The 2/1 buydown loan If you were around back in the days when interest rates came in double digits, chances are you know all about buydowns. In a 2/1 buydown loan, borrowers pay two points below the note rate for the first year, and one point below the second year. The selling point behind a 2/1 buydown loan is that it gives homebuyers financial wiggle room to buy big-ticket items like furniture and appliances. In a market where appliance costs have risen, due in part to U.S. tariffs of 25 percent on steel and 10 percent on aluminum, that’s especially welcome. Lenders who want to partner with local homebuilders may find the 2/1 buydown helps them win preferred lender business, too. With the advent of TRID, buydowns have become more difficult to disclose to borrowers, especially for correspondents who are not familiar with selling them. Partnering with a correspondent investor who knows how to comply with TRID requirements can help keep you out of hot water with regulators. The Lock & Shop loan In many local markets, low sales inventory is a huge challenge for homebuyers. It’s not uncommon for someone to submit two or three purchase offers before getting accepted, which means

buyers are spending more time shopping for homes. Lock & Shop loans allow preapproved homebuyers lock an interest rate for up to 120 days while they continue to shop. They can literally go out to the Realtor or a homebuilder with a true preapproval in hand, and when rates change, the loan doesn’t have to be re-underwritten. That appeals to homebuyers worried that interest rates may rise again before they find a home. Finding the right partner For all of the above reasons, the correspondent investor you choose to partner with is important even in the best of times, but it is absolutely critical during market declines. When the road gets rough, you need someone out there rolling out new products as the market changes, fighting to reduce LLPAs, and helping you expand your business. After looking around for a while, you will find the best correspondent investors share all the following traits: l They frequently bring on new products that help you compete in the current market. l They advocate for dropping LLPAs so your clients save money. l They have Support Services Representatives (SSRs), Regional Sale Managers, and Operations Managers who answer their phones or respond to e-mails on a timely basis. l They allow you to check pricing over a period of time and access products to review before you go through the approval process. l They offer resources to help your organization grow.

l They get loans off your warehouse lien faster because they operate more efficiently. Beyond these common traits, you’ll want to look for signs that the investor has the capacity to thrive in a downturn. For example, do they have leadership that was in the industry during the credit crisis and experience taking advantage of market inflections? Are they a single channel investor, or do they have multichannel operations, which tend to produce stronger balance sheets? And the most obvious–do they have a reliable source of funding? Considering the ups and downs of our business, it’s also important to look for a correspondent investor who sees you as a partner. In other words, you’ll want an investor that’s willing to work to keep you successful during the difficult times and helps you grow your business during the boom times. During periods of market stability—like the one we enjoyed for some time—it’s easy for mortgage companies, banks, and credit unions to get too comfortable and complacent with their stable of correspondent investors. In today’s challenging market, however, such an approach could prove fatal. There’s a saying that you find out who your real friends are during tough times. I believe that saying is extremely relevant to correspondent lenders today. Now’s the time to make sure your investor “friends” will be there for you during the difficult times that lay ahead of us. If your current stable of investors do not provide you with that sense of confidence, you should find ones that do.

Jim Loving is the National Sales Director for Planet Home Lending. Jim has more than 30 years of mortgage banking experience and has served as the former Chairman of Mortgage Banking Association’s Correspondent/Wholesale Committee. He can be reached by e-mail at JLoving@PlanetHomeLending.com.

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n SEPTEMBER 2018

a special focus on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on

Marketing to the Millennial Homebuyer: Have a Solid Digital Mortgage Strategy By Mike Eshelman

ith Millennials currently representing the largest share of homebuyers, it’s no wonder the focus on providing a digital mortgage experience has grown. This generation, who entered adulthood with the Internet at their fingertips, has a knack for comparison shopping to get the best deal on considered purchases. As the most technologically-literate generation of qualified homebuyers, it just makes good business sense to make the experience—from marketing through funding—easier and more appealing to Millennials. And that means digitization. Millennials make up 36 percent of the recent real estate transactions, according to the National Association of Realtors (NAR) 2018 Home Buyer and Seller Generational Trends. So how can lenders stretch their marketing dollars and position themselves to attract and convert almost two in five potential buyers? The answer is simple: Be in front of them when they want you to be in front of them, communicate to them in the manner in which they like to communicate, and let them transact a mortgage the same way they transact with other purchases. Okay, so the answer may not be so simple but, it has become much easier over the last few years. Here are a few tips to help improve your ability to attract and convert more Millennials into funded customers.

customers expect their lender to deliver on digital expectations. In short, if you don’t have a digital mortgage strategy already in place, I recommend you get one before your VCR breaks!

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

“As the most technologically-literate generation of qualified homebuyers, it just makes good business sense to make the experience—from marketing through funding—easier and more appealing to Millennials. And that means digitization.”

They are experts at multitasking, generally work longer hours, have shorter attention spans, will choose experiences over “things,” and like instant gratification. Amazon created and mastered serving Millennials in the shopping industry with one-click buying, same-day delivery, and predicting what a consumer wants to buy next based on behavioral data and displaying product on subsequent site visits. Apple made the iPhone appbased enabling people to tap and immediately retrieve the information they want (sports A snapshot of scores, stock prices, etc.) and to the Millennial buyer Let’s first dig into the makeup of accomplish the task, they wish to the Millennial generation. In their accomplish (book a hotel, call a research, NAR defines Millennials friend, play music) instantly. Millennials are digital natives as 37 years of age or younger and the wizards of leveraging (dang it! I feel old …), born between the early 1980s and late technology and getting things done fast. They have been 1990s, graduated college (with instrumental in advancing selfies to prove it), and prefer to technology at a quick pace and text, e-mail or use social media expect lenders can provide an to stay in touch with friends.

Amazon-like experience. They will flock to easy online applications that can be completed from their mobile device, demand the ability to snap a picture of their driver’s license, W-2, and other necessary documents to get an approval, and anticipate disclosures that require esignatures. If you dare ask them to fax anything, you’re dead in the water. When they need to ask their Loan Officer or Processor a question, there is an expectation of omni-channel communications allowing them to call, chat, text or e-mail (remember, they are multitaskers) and receive fast responses through the same channel. These digital mortgage options have been widely available for a few years and, says Accenture in their “Embracing Digital Drive Mortgage Differentiation” report,

Formulating a digital mortgage marketing strategy Once a digital mortgage experience has been successfully implemented, the focus should turn to attracting consumers who will use it. So how do you spend your marketing dollar more efficiently to attract more high-converting borrowers? It’s not just location, location, location of where you are marketing—it’s a combination of 1) Location, 2) Timing and 3) Message that will work together to gain the attention of the right people at the right time with the right message. 1. Location: Where does your target audience tend to spend their time? Social media sites and streaming video services are high on that list, and these are two of the places you’ll want to meet them. Many Millennials use Amazon Prime, YouTube, Netflix and Hulu to watch their shows which can contain short bursts of ads to keep consumers engaged. There are still some who watch cable television, however, this is not a medium to use when advertising to this demographic because their viewing behaviors are far different than those of the older generations. Millennials either fast-forward through commercials or look at their mobile device until their show returns rather than sitting through two minutes of ads (the Superbowl being an exception). More than ever, consumers are connected across multiple devices and multi-task with those multiple devices (I literally just texted my

s on THE WHOLESALE, TPO & CORRESPONDENT MARKETS special focus on THE WHOLES

Realtor while writing this sentence … I’m starting to feel like a Millennial!). Be sure to advertise and communicate to them where they are most active.

be constantly tested for performance optimization opportunities.

Mike Eshelman is Head of Consumer Finance at Jornaya, a data-as-a-service platform that delivers consumer journey insights to publishers, marketers, analytics and compliance professionals. He may be reached by e-mail at MEshelman@Jornaya.com.

The Same as Being There in Person: Complete Interactive Sales & Marketing Training Delivered Live Anywhere Your Sales People Are Your sales team will learn and master: l

How to Target the Right Referral Partner Relationships l Deliver the Ultimate Agent Presentation l Easily Overcome the Fear of Rejection or Objections

Increase Your Productivity and Effectiveness in the Field l Win the Business Over Your Competition l And so much more…

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

n National Mortgage Professional Magazine n SEPTEMBER 2018

3. Message: Understanding that there is a journey the customer takes while shopping for a mortgage and crafting messages that align with that journey is vital to deploying a highly effective strategy. Taking the time to create these e-mails, texts and ad units, tying them with proper calls-to-action, and delivering them in a logical cadence will yield results far superior than generic and template e-mails. Each message and ad unit should work together cohesively and

more clear picture about how and when those consumers will want to transact. Once that picture comes into focus and you provide consumers with the experience they prefer, your conversions will skyrocket.

NationalMortgageProfessional.com

Now that you have mastered the steps, I suggest taking some time to review your current marketing goals and strategy, 2. Timing: Deploy a marketing along with your digital mortgage and communications strategy capabilities, and determine based on when consumers whether they are in sync. If the are thinking about their mortgage in order to maximize audience you are attracting is generally non-Millennial and you the effectiveness of the have a stellar digital mortgage message. When a consumer fills out a form requesting a quote or complete an online application, getting a mortgage is top-of-mind and lenders will have the highest level of success getting them to engage at this time. Other than at form submission, identifying the right time to call, text, e-mail or display an ad is based on behavioral data. It’s much more strategic-based on in-market signal data on-boarded from data-as-a-service companies; e-mail agencies, who alert lenders of consumer e-mail interactions in real-time; or Google pixels placed on your owned and operated Web sites. Leveraging data points like these will provide the necessary insight to deliver the most effective timing to marketing and contact strategies. The law of diminishing returns applies to each unsuccessful contact and advertising attempt, which means lenders need to consider each attempt thoughtfully and strategically. Behavioral data will provide the insights as to when a consumer is most likely to convert into a customer and lenders leveraging these unique data sets are reaping the rewards.

platform that doesn’t get many completed applications through it, there is a mismatch of your audience and experience that should be corrected. Leveraging data to learn more about each consumer will paint a

SEPTEMBER 2018 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Tips for Getting More Positive Online Reviews By Andrea Obston

How to Ask for a Review There are a number of ways to ask for feedback. Here are three alternatives: H Direct request: In this approach, you thank the customers for their business, ask them for feedback and send them to a private customer feedback landing page on your site. Should that feedback be positive on your site, you can than respond with: “We’re pleased our services met your expectations. Our reputation is very important to us. Please take a moment to review us on Yelp by clicking here and for Google by clicking here. We appreciate you sharing your positive experience with our company and would love it if you could share it with others.” H Ratings-only request: In this approach, you ask the customer to rate their experience on a scale of one to 10 in response to this question: “How did we do?” For those who rate your company with an eight, nine or 10, you then send the feedback request mentioned above. H Feedback request: This brings

both approaches together, allowing for both positive and negative feedback. The content could read: “If you were pleased with our services, please tell the world. Click here to leave an online review. If we did not meet your expectations, please tell us. Click here [your site’s private customer feedback landing page] to tell us about your experience so we can make it right.” Here are some of the best practices for any feedback approach you choose: H Have the request for a review come from a real person’s email address. H Phrase it as a personal request from that person. H Have a very clear call-to-action link/button that only requires a click. H Use the customer’s name in the subject line to get their attention. H Test different email copy to see what performs best for your company. H Look into sending text messages to customers right after they have an interaction with your company. Since these go right to their phones they will be less likely to ignore them.

The bottom line is this: Customer check online reviews before they buy. According to a piece in Forbes, “Seventy-four percent of consumers say that positive reviews make them trust a local business more.” In that same piece they said that “Every one star increase in a Yelp rating means a five to nine percent increase in revenue.” Cultivating positive reviews allows your company to balance out the effects of negative reviews. And asking everyone in your company to request those reviews gives them a sense of ownership in the success of your company. Remember the old Connecticut Lottery slogan, “You Can’t Win if You Don’t Play?” That goes double for generating positive reviews that can make your business a winner.

Andrea Obston is President of Andrea Obston Marketing Communications, a reputation and crisis management firm. For the past 35 years, the company has built, enhanced and defended reputations for mid- to large-sized organizations. She may be reached by phone at (860) 243-1447 or e-mail AObston@AOMC.com.

n National Mortgage Professional Magazine n SEPTEMBER 2018

Who’s gonna do the ask? Requesting reviews has to be something that everyone in the organization sees as their responsibility. You want to ask for these reviews as soon as the product or service is delivered and any one of your employees could be the person who knows when that happens. Don’t make it the sole responsibility of the customer service team. Getting everyone involved underscores how important those reviews are to the growth of the company. In addition, it gives everyone access to the nice things your customers are saying about you. Here’s how to get everyone to jump on the “Request a Review Bandwagon:” H Communicate the importance of getting these positive reviews by explaining the direct impact they have on the business. This communication must come from top management. They won’t take

it seriously if the boss doesn’t! H Train key employees on how to ask for reviews. H Develop a scorecard that tracks reviews by locations. H Provide bonuses and awards for the locations and employees who have the best track record of asking for reviews and who get the best online reviews.

When asking for a review, here’s what you need to keep in mind: H Get permission before sending a review request. H Ask at the peak of your customer’s happiness with your product or service (i.e. soon after they receive it). H Use casual language. H Make it clear you are interested in feedback; not just a rating. H Approach the customer in a way that asks for a favor. H Let the customer know how long doing the review will take. H Tell the customer how much it means to your company that they write review. H Tell them that you’re looking forward to reading their review. H Express your gratitude for both their business and the time it takes to give the feedback. H Avoid offering incentives for leaving online reviews. Both Yelp and Google have taken aggressive stances against such practices. In addition, the FTC has rules against such practices and can file a complaint against your company for violating them.

NationalMortgageProfessional.com

ant to get more positive reviews? Ask. No, really … it’s that simple. But most businesses simply don’t do it. How many customers do you make happy every day? A lot, I’ll bet. But here’s the sad truth about that: Most people do not run to their screens to tell the world how great it was to get what they wanted when they wanted it. How about asking them to do just that? Heck, my dentist and my car repair shop do that. Why don’t you? The funny thing is that people are often more than happy to leave a review. In fact, 70 percent consumers will leave a review for a business if asked. “It‘s good business to ask your customers to provide reviews, as long as it isn‘t too aggressive or a quid-pro-quo. There‘s a fine line between encouraging reviews and demanding them,” cautions Jay Baer in his book Hug Your Haters. He goes on to say: “The best practice is to … let customers know you participate in review sites, and that you care about their feedback, however and wherever they choose to provide it. “

SEPTEMBER 2018 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Why Homebuyers Should be Shopping for Customer Service Instead of Low Rates By Michael Faulkner

great change right now with advancements in technology, new regulations, tight inventory and the rise of online lending. Those are surface aspects though. The real reason is the fact that consumers are focusing solely on rates, viewing lenders as a commodity instead of a service and not being on the same page with their lender in terms of meeting milestones throughout the loan process. I want to take some time to speak directly to consumers about all of this.

income qualifications, credit score qualifications, etc., because these aren’t things they learn in school. It is up to mortgage professionals to be the teachers. Lenders that aren’t providing an educational process are setting consumers up to fail. Don’t view loans as a commodity Let’s be real about this: No steak is the same, no wine is the same. Cost matters with those products if you care about value. Those products don’t come with a large customer service demand, however, because the product itself won’t be better or worse based on the customer service experience. Getting a home loan isn’t a commodity, it is a service and should be shopped as such if you want to have a good experience that sets you on a course to meet your real estate and financial goals. Loan Officers aren’t (at least they shouldn’t be) just application-takers on an assembly line. Not every lender is the same and you won’t get the same results from each lender. The good ones take the time to understand your unique financial situation, what your goals are and communicate with you how you want to be communicated with. Homebuyers should spend continued on page 99

n National Mortgage Professional Magazine n SEPTEMBER 2018

It isn’t just about shopping rates It is natural for you to want a good price, I get it. Let me ask you this though: If the interest rate is the most important thing to you, then why do the vast majority of online negative reviews about lenders not mention their interest rate at all? No one says, “I am so upset because my interest rate is so high.” You won’t find that because that is not what consumers truly want. Typically, lenders that have compressed margins have lower rates, and there is a reason why those rates are lower. What you will usually find is that the customer service of that lender suffers. When a consumer goes with this type of lender, they are leveraging lower rates under the assumption that their deal will

close, but there is no guarantee for that. Problems arise when you get a lender that pre-approves a loan amount and then a little over a week into the contract the deal falls through and you lose your earnest money. At this point in time, you are already set on the idea that the home you selected is yours and it is crushing when you find out that is no longer the case because the lender didn’t do their due diligence, they cut corners and didn’t properly educate you as the buyer. If this happened to you, chances are you would struggle to get a refund, you don’t have insurance and if you are working with a large bank (because hey, that is where you have your checking account and car loan), there may not even be a reliable point of contact to communicate with. The bottom line is this: If you are a home buyer, especially a first-time homebuyer, you are going to expect a lot of explanations and guidance, even if you don’t realize it when you begin the purchase process. Focusing solely on how much the interest rate will be can result in frustration and potentially some gut-wrenching results that quite often result in those one-star reviews that are all over the internet for lenders. Many first-time buyers have little to no knowledge about

NationalMortgageProfessional.com

hen I got into the mortgage business, I assumed all Loan Officers were operating at high capacity, focused on delivering the consumer the type of education they needed to make informed decisions about purchasing real estate. A few years later, the Great Recession hit and I realized that couldn’t be further from the truth. I believe that if consumers were better informed about the loan process and what they could and could not afford, then we might have avoided that generational disaster. I suppose I should have never assumed. It wasn’t until this happened, and I started to get feedback from clients about their past experiences with lenders and big banks that I fully understood the massive problem our industry was facing, and is still facing: A complete lack of dedication to education and customer service. If you look around at online reviews of most lenders you likely won’t find many positives. When I ask consumers if they had a good experience in the past with lenders, nine times out of 10, they tell me no. So, why is that? It is partly due to the fact that the industry is going through

SEPTEMBER 2018 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

What to Expect When HECM Expected Interest Rates Change By Jeffrey M. Birdsell, CMB

up, and the principal limit goes down. In fact, it’s possible for a mere one basis point (or 1/100 of a percent) change in expected interest rate to cause the rounded expected interest rate to change. For example, going from an expected interest rate of 5.06 percent to 5.07 percent will cause the principal limit to go down, because while 5.06 percent rounds down to five percent, 5.07 percent rounds up to 5.125 percent. Since the principal limit factors for 5.125 percent are slightly less than the principal limit factors for five percent, the resulting principal limit goes down. It’s also possible for seemingly large changes in expected rate to have no impact on the rounded expected rate. For instance, going from an expected interest rate of 5.07 percent one week to 5.18 percent the next week (a 12-basis point increase) won’t impact the principal limit at all. That’s because 5.07 percent and 5.18 percent both round to 5.125 percent, resulting in the same principal limit. The same thing can happen when rates are going down and you’re wondering why the principal limit didn’t go up. Note that there are formulas for calculating other aspects of HECM loans, like tenure payments and life expectancy set-asides (LESAs), that use the expected rate without rounding. Consequently, you could see a change in the expected rate that would result in no change to the principal limit but a small change to the tenure payment and LESA. The bottom line is that interest rates now matter in the HECM space as well as in a the traditional mortgage space. Hopefully, this sheds a little light on the HECM expected interest rates and helps you expect what to expect.

Jeffrey M. Birdsell, CMB is Vice President of Professional Services with ReverseVision Inc. Jeff was one of the founding board members of the National Reverse Mortgage Lenders Association (NRMLA) and remains an active Board Member to this day, serving on both the HUD Issues and Education Committees.

n National Mortgage Professional Magazine n SEPTEMBER 2018

purchase loan) l Age is the youngest borrower or qualified non-borrowing spouses’s nearest age. For example, a borrower who is 62 years and 10 months old rounds up to 63. l The expected interest rate is a combination of the 10-year LIBOR Swap Rate and the lender’s margin rounded to the nearest eighth. An expected interest rate of 5.06 percent would round down to five percent, whereas an expected interest rate of 4.94 percent would round up to five percent. Using HUD’s principal limit factor table, match the age with the rounded expected interest rate to find the corresponding principal limit factor. Then multiply that principal limit factor by the maximum claim amount to find the principal limit available for the loan. HUD’s factor table is broken down into expected interest rates from three percent to 10 percent in 1/8th percent increments. For each rate, HUD provides factors for ages 18 through 99. As rounded expected rates increase, the associated principal limit factors decrease, resulting in lower principal limits. If the rounded expected rate is less than three percent, then the three percent factor is used. If the rounded expected rate is greater than 10 percent, then the principal limit factor is zero, resulting in no principal limit. Most factor groups top out at age 90, meaning a borrower age 100 would get the same principal limit as a borrower age 90. Let’s look at some examples of how changes in the expected interest rate can cause a change in the principal limit. There are times when the expected interest rate barely goes

NationalMortgageProfessional.com

ver the past several years, we’ve seen expected interest rates for Home Equity Conversion Mortgages (HECMs) fluctuate from week to week, yet principal limits have remained constant. The principal limit is an important factor in determining the percentage of equity a senior can draw from his or her home using a HECM loan. If this is a new concept to you, think in terms of the importance of the loan-tovalue ratio in traditional lending and the potential effects of interest rates on LTV. When borrowers shop for a traditional loan, interest rates are a key consideration. But rates haven’t historically been a major concern for HECM borrowers. That’s because, until recently, expected interest rate changes did not affect HECM principal limits. HUD’s principal limit factor table topped out at 5.06 percent, making the principal limit the same for all expected interest rates equal to or lower than 5.06 percent and effectively making rates of very low concern to HECM borrowers. Program changes from HUD enacted on Oct. 2, 2017, have capped principal limits at an expected rate of 3.06 percent instead of 5.06 percent. The net impact of these changes is that HECMs now look and perform more like traditional mortgages than they used to, but there are still some differences. Let’s look at what to expect when expected interest rates change in this new HECM landscape. To do this, we first have to understand HUD’s principal limit factor table. There are three components used to determine the amount of principal limit available: maximum claim amount, age and expected interest rate. The maximum claim amount is the lowest of the following: l The home’s value l HUD’s lending limit l The purchase price (if it is a

complete property management

sense for you to manage your own property?

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

The three benefits of managing your own investment property There are many benefits of managing your own investment property, including (1) You care more than anyone else will, (2) You can save money selfmanaging, and (3) It’s easier to avoid scams. 1. You care more than anyone else will: One of the biggest reasons people choose to self-manage is because nobody cares about your property as much as you do. In most cases, this is true— nobody will try harder to attract and keep great tenants than you will. 2. You can save money: Another reason you might consider self-managing is that you’ll likely save a good amount of money. Most rental management companies charge monthly fees–usually between eight and 10 percent of the monthly rent. In other words, if you rent a property for $1,000 per month, you’ll end up paying $100 per month to your property manager. 3. You can avoid scams: Unfortunately, not all property managers/management companies have the same ethical standards. For example: It is not uncommon for management companies to take a kickback from vendors. Oftentimes, the vendors who offer these kickbacks also have higher prices or produce a lower quality product. Why? To pay for that kickback. For these reasons, and more, many investors choose to take matters into their own hands. However, before you follow-suit, you should know that selfmanaging is not as easy as it may seem. Are you really the best property manager in town? As we’ve discussed, managing your own property has many advantages, but success is not guaranteed. The honest truth is that self-management is not a viable option for most investors. Is it right for you? Here are some questions to help you decide:

continued from page 61

1. Are you available, and willing, to manage your property on a full-time basis? Note: You cannot have a full-time job. 2. Are you regularly updated on local landlord laws? 3. Are you able to manage contractors to ensure they are doing high-level work? 4. Are you able to run your tenants credit and perform background checks? 5. Do you honestly believe that you are the most qualified person to manage your property? If you answered no to any of these questions, you may want to consider hiring a professional property manager. The advantages of hiring a great property management company Hiring a professional management company is the key to success for many real estate investors. This is true for many reasons, including the ability to (1) Invest in the best markets and make more money, and (2) Enjoy passive monthly income. 1. You can invest in the best markets, and make more money: It’s pretty likely that your hometown is not be the best market to invest in right now. If you want to buy cash flowing properties that have a high chance of appreciation, what can you do? Option 1: Cross your fingers and hope the real estate market improves in your area. Option 2: Invest outside of your neighborhood, and hire an experienced property manager or management company in the local market. 2. Your investment income is passive, so you’re free to live life on your terms: After you close on your new investment property, your work is done. From this point forward, your property manager will handle day-today operations and emergency services. To recap, these services include: l Emergency repairs and follow-up l Routine maintenance and repairs l Marketing and Leasing l Tenant screening and background checks l Rent collection l Eviction These are just a few reasons

“As a new investor, the biggest question you need to answer is: Should I self-manage my property or hire an experienced property manager? As with most things in life, there are pros and cons to both strategies.” why you should consider hiring a good local property manager for each of your investment properties. If doing so is something you are interested in … the next big question you’ll need to answer is: How can you find a good property manager that you can trust?

11. 12. 13.

14. Finding a good property management company When evaluating a property management company, it’s important to review their reputation. Your best option is to talk with another landlord who has worked with the company, and ask for their honest feedback. If you don’t have anyone to talk to, go to Google and search [“Company Name” + Reviews], and see what comes up. Within a few minutes you should, at least, have a good idea of whether or not tenants are happy with a property manager. Once you have found several highly recommended property managers, here are some questions to ask, to make sure they are the right fit for you: 1. How long have they been in business? 2. Can they provide references? 3. What type of properties do they generally manage? 4. Do they specialize in residential properties? 5. Do they work 24 hours a day, seven days a week? 6. Do they work in the same area as your properties? 7. What are their fees? 8. Is there a leasing fee? 9. How do they market properties and rentals? 10. How long will it take for

15.

them to fill a vacant house? What is the turnaround time for sales and rentals? How often do they check on properties? What vendors and service providers do they work with? Have they evicted tenants and, if so, what is their process? Do they issue monthly and annual statements?

Conclusion Managing your own rental properties can save you money, and it’s also the only way you can completely avoid the possibility of getting scammed. However, self-management is difficult, time consuming, and it can also limit your profit potential in a number of ways. Again, these include: (1) The number properties you can purchase will be dependent upon how much time you have to manage them. (2) You will only be able to purchase properties near where you live, which might not be the most profitable market for you to invest in. And (3) In order to make more cash flow, you will eventually need to hire outside help anyways. The main takeaway: If you only own one or two rental properties, and you’re local, self-managing might be a good option for you. However, this is not true for most investors. One final thought: Would you rather (1) Spend your time to save a little money, or (2) Spend a little money to save a lot of time? The choice is yours.

Kathy Fettke is Co-CEO of Real Wealth Network and bestselling author of Retire Rich With Rentals. She is an active real estate investor, licensed Real Estate Agent, and former Mortgage Broker. Kathy is a frequent guest expert on such media as CNN, CNBC, Fox News, NPR, CBS MarketWatch and the Wall Street Journal. She is host of “The Real Wealth Show,” a featured podcast on iTunes with listeners in 27 different countries.

By Jonathan Foxx, Ph.D., MBA

Qualified Mortgages at Community Banks

The statute offers an exception from the portfolio retention requirement for certain transfers of the loan’s legal title, including a transfer by reason of bankruptcy or failure of the lender, transfer to another insured depository institution

or insured credit union with less than $10 billion in total consolidated 97 assets so long as that institution holds the loan in portfolio, transfer pursuant to a merger so long as the loan is retained in portfolio, or transfer to a wholly-owned subsidiary of the lender provided that after the transfer the loan is considered to be an asset of the parent lender for regulatory accounting purposes. Thus, if a community bank wishes to take advantage of the Section 101 exemption, it must do the following for each mortgage loan it would like to exclude from the standard ATR requirements (unless the loan already qualifies as a QM): l Comply with the prepayment penalty limitations. l Ensure that the loan does not have total points and fees exceeding three percent of the total loan amount. l Not include negative amortization or interest-only features. l Apply the bank’s own consideration and documentation requirements regarding debt, income, and financial resources. l Hold the loan in portfolio.

n National Mortgage Professional Magazine n SEPTEMBER 2018

l Must not have total points and fees exceeding three percent of the total loan amount. l Must not have negative amortization or interest-only features. l Must have been subjected to consideration and documentation requirements regarding debt, income, and financial resources of the consumer. Section 101 gives a creditor flexibility in determining these requirements. Section 101 specifies that multiple methods of documentation are permitted, and a creditor need not comply with Appendix Q of Regulation Z, which specifies standards for determining monthly debt and income. l Generally, must be held in portfolio and not sold to another person.

NationalMortgageProfessional.com

that certain mortgage loans made by an insured depository institution or insured credit union with less than $10 billion in total consolidated assets (the Act’s apparent definition of a “community bank”) are QMs that automatically satisfy the ATR requirements. In other words, they qualify as loans for which the creditor need not fuss with the detailed provisions of the CFPB’s ATR regulation. [Section 101, Economic Growth, Regulatory Relief, and Consumer Protection Act, Public Law No.115-174 (May 24, 2018)] Although this section might appear simple, it is not. To fall within this bucket of QMs, a mortgage loan must have several features typical of other QMs and Answer generally must be held in portfolio. This is a very good question. I will provide a concise response. Section The loan: 129C(b) of the Truth-in-Lending Act l Must comply with TILA’s (TILA), added by the Dodd-Frank limitations on prepayment Wall Street Reform and Consumer penalties for qualified mortgages, Protection Act, offers “qualified that is, any prepayment penalty mortgages” (QMs) a presumption imposed during the first year of that the lender has satisfied the the loan may not exceed three Ability-to-Repay Rule as percent of the outstanding implemented in Regulation Z § balance, during the second year 1026.43. The Economic Growth, may not exceed two percent of Regulatory Relief, and Consumer the outstanding balance, during Protection Act of 2018 (EGRRCP Act) the third year may not exceed one inserted a special QM for community percent of the outstanding banks. balance, and after the end of the Section 101 of the EGRRCP Act third year may not exceed zero amends the ability-to-repay (ATR) percent of the outstanding and qualified mortgage (QM) balance (i.e., no prepayment provisions in TILA § 129C to specify penalty after the third year).

Question am the Director of Compliance at a community bank. Recently, there were substantive changes to the Qualified Mortgage (QM) requirements, under Regulation Z. From my reading of the new rule, community banks would benefit because it makes our portfolio loans de facto Qualified Mortgages. My concern is whether we must ensure that our loans meet certain Qualified Mortgage criteria. Like most community banks, we do not intend to sell our loans. What criteria does a community bank have to meet to use the new Qualified Mortgage exemption?

SEPTEMBER 2018 n National Mortgage Professional Magazine n

LendingQB and Informative Research Partner on Tech Enhancement

Informative Research has announced their complete integration with LendingQB’s Loan Origination System (LOS). Now, LendingQB users will have access to a host of IR’s products and be able to order them with ease. “LendingQB is one of the most popular LOS platforms that mortgage lenders are using today,” said Scott Horn, Chief Operating Officer at Informative Research. “This has been a long time in the making and we’re excited to have our wide range of products, streamlined service, and unparalleled security available to even more lenders.” With this new integration, users will be able to order multiple products including but not limited to Credit

RoundPoint Selected as Subservicer by Bay Point Advisors

Mortgage professionals to watch RoundPoint Mortgage Servicing Corporation (RPMS) has been selected as a subservicing partner for Bay Point Advisors LLC, an Atlanta-based private lender providing small- and medium-sized businesses with secured, mezzanine, bridge and DIP financing. RPMS services loans for a variety of Investment Banks, PE firms, hedge funds, mortgage banks, credit unions/CUSO’s. “We are excited to add Bay Point to our diverse subservicing investor client base and we remain committed to partnering with organizations, such as Bay Point Advisors, as they continue to expand businesses and communities,” said Allen Price, Senior Vice President and Head of Business Development for RPMS. Charles Andros, President of Bay Point Advisors, said, “RoundPoint is very responsive to our needs and we are delighted by the service they provide.” Computershare Loan Services Buys LenderLive Network

Denver-based LenderLive Holdings has announced the sale of its LenderLive Network LLC mortgage fulfillment and secondary marketing division to Computershare Loan Services, a New York-headquartered

l New American Funding has announced that its CoFounder and President Patty Arvielo has been named to the Board of Directors of the National Park Foundation. Arvielo was appointed to a six-year term as one of its new Board Members. The appointment comes from the Secretary of the U.S. Department of the Interior, Ryan Zinke.

l Elizabeth Nichols, a Senior Account Executive at Parkside Lending LLC, has been appointed to the Board of Directors of the New York Association of Mortgage Brokers (NYAMB). l TMS has announced the addition of Greg Reed as Senior Vice President of Wholesale where he will oversee inside sales and will

be a driving force in helping the TMS wholesale channel reach its goal to originate $1 billion a month by 2022.

ALTMAN

Supplements, 4506-Ts, PreClose Monitoring (UDM), Flood reports, and their popular SoftQual solution, which lets lenders pull a soft inquiry on an applicant’s credit report before pulling a hard inquiry so they can prequalify them and save time and money. “Informative Research really took the reins when it came to integrating into our LOS,” said David Colwell, Vice President of LendingQB Strategy. “Our integrations team worked very closely with Informative Research to bring out the full potential of our OpenAPI’s to offer our customers a wider variety of enhanced products. Integrations like these are living proof of the value of maintaining powerful partnerships in the digital mortgage age.”

mortgage servicing provider. The terms of the transaction were not disclosed and the sale is expected to close in the fourth quarter. LenderLive Holdings, which is a portfolio company of the New York private equity firm Aquiline Capital Partners, and its LenderLive Services and Require Holdings subsidiary will not be part of the sale “The decision to sell the Network division grew out of our long-term strategic plan to invest in and build the company’s services and technology businesses while finding longterm strategic capital sources or partners for the fulfillment and secondary marketing businesses,” said Rob Clements, CEO at LenderLive Holdings. “Going forward, LenderLive Holdings will continue to offer a broad range of technologyenabled services though our LenderLive Services division and grow through strategic acquisitions like the recentlyclosed Require Holdings transaction.”

ARVIELO

NationalMortgageProfessional.com

asset management platform for MetLife Inc., and Boston’s State Street Corp. have signed a multiyear agreement in which MetLife Investment Management and its affiliates will originate and service up to $2 billion in commercial mortgages for State Street affiliates. The companies’ affiliates will also co-lend each loan under the agreement. “This MetLife-State Street partnership offers customers access to two highly respected, leading financial institutions,” said Robert Merck, Senior Managing Director and Global Head of Real Estate and Agriculture at MetLife Investment Management. “This is an important step in growing our real estate platform, and we look forward to partnering with State Street to provide a wider range of real estate financing options to our borrowers.” “We are pleased to partner with MetLife to source new investment opportunities, as well as add commercial real estate mortgages to our broad suite of lending options, and we plan to lend in concert with our many asset management clients,” said Paul Selian, Head of Global Credit Finance for State Street Global Markets. “This agreement is a testament to the relationship State Street has with MetLife.”

continued from page 41

NICHOLS

heard on the street

l Homebridge Financial Services has announced that Dan Altman has joined the company as a Mortgage Loan Originator in its Pikesville, Md. location. l Mortgage Network Inc. has announced that Peter Jose has joined the company’s Freeport, Maine branch as a Loan Officer serving the Portland area. Mortgage Network Inc. has also named Chris Horley Manager of its new Newport, R.I. branch office. Horley brings 23 years of mortgage banking experience in the Rhode Island area to Mortgage Network. l IndiSoft has named Mark Sweeney as its new Chief Technology Officer, responsible for all technical and product strategy, development and support. l Proper Title LLC has announced that it has hired Amanda Ley as Senior Escrow Officer. l PulteGroup’s West Florida Division has announced that Shannon Boylan has joined the company’s Mortgage Group, Pulte Mortgage, as West Florida Branch Manager. Boylan will help support the Division’s 2018 plan, which includes the opening of 12 communities in the Tampa region. l AmWest Funding Corp. has announced that industry veteran Pete Lunetto has joined the company as Vice President, Credit and Underwriting, based at the company’s corporate headquarters in Brea, Calif. l Draper and Kramer Mortgage has announced that Raymond Bravo has joined the company as Senior Vice President of Residential Lending. Bravo now heads a newly opened branch for the national lender in Palos Park, Ill. l The Appraisal Institute, the nation’s largest professional association of real estate appraisers, has named Jim Amorin as its new Chief Executive.

Your turn National Mortgage Professional Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of: Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail:

shopping for customer service

more time finding the right lender based on service and reviews and less time on interest rates. The top priority should be who is doing your loan. Which brings me to getting pre-qualified versus underwritten pre-approval. To get prequalified for a loan, you can usually get it done over the phone based on an honesty policy: You describe your financial situation the best you can in terms of income and credit, and the lender supplies you with a rough estimate on the amount you may qualify for. You then take this out on the market while making offers on homes. This strategy is typically quick and easy. The buyer may like this because they can move on with the fun part of shopping for a home, and the lender likes it because it isn’t time-consuming so it doesn’t cost a lot for them to do. The problem is the qualification isn’t based on actual financial documentation so there is no guarantee of closing. Getting underwritten preapproved, on the other hand, involves a full application, credit check, financial documentation being sent in and a full analysis by an underwriter. This takes more time, but it is generally more of a sure thing in terms of the amount you qualify for and allows for more assurance that the loan will actually close. This little example is one of the main distinctions between what sets up a good customer experience and a bad one. A good lender will want to make sure they put their buyer in the best position to fulfill their real estate dreams, and that starts with getting an underwritten preapproval done even though it may take more time and resources. This is why lenders shouldn’t be considered a commodity because it is largely about service and what your lender is going to do for you to make sure you are in good hands. What’s on you as the consumer Now that we have identified some of the problems on the

continued from page 93

lender side that may be causing some of these bad experiences, it is time we also discuss some things that you the consumer should consider. You have a responsibility to help the loan process be a success. When you commit to purchasing a home, and doing so through a loan, you will need to produce documentation to prove that you are capable of making payments on that loan. This includes things like pay stubs, bank statements, copies of photo IDs, rental history, W-2s, etc. This is all part of the underwriting process and the quicker you supply this documentation, the quicker the loan can close. Organization is key because we are talking about hundreds of thousands of dollars here. If you were asking anyone other than a lender to borrow that amount of money, don’t you think they would have some questions about getting paid back, and your means to do so? We all get busy, I understand that, but you should consider taking a day off of work, maybe sacrificing a weekend, to get the documentation in. It is what I call pulling on the rope with the lender–a give and take relationship to help the deal close. You should try to deliver on your end of the deal and they should be following up with you to deliver on their end. In conclusion, there is a reason why consumers are frustrated with traditional lenders and even new online lenders– many of them aren’t delivering a good customer experience. No matter the method of the home loan or the price of the rate, communication and education matters. This is what homebuyers deserve when buying a home: Great customer service, prompt communication, mortgage education and being treated like people, not numbers. I believe that if you are educated, then you can make good decisions about your loan product when buying your dream home.

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.

Michael Faulkner is a Mortgage Educator and Mortgage Advisor located in Scottsdale, Ariz. For more information, visit FaulknerMortgage.com.

n National Mortgage Professional Magazine n SEPTEMBER 2018

(NFCC) has named Rebecca Steele as its new President and Chief Executive Officer. Appraisal Logistics has hired Michael Matz as National Director of Sales. Matz has nearly 30 years of industry experience, having served 12 years at Freddie Mac and 17 at Fannie Mae. LERETA LLC has selected Rick Holcomb as Senior Vice President of its Tax Outsourcing Operations, Holcomb will oversee LERETA’s tax outsourcing, call center and customer care teams. Churchill Mortgage has announced its newest branch in San Dimas, Calif. Mike Hardy and Rick Mount will both serve as Regional Managers for Churchill’s operations in Southern California. GSF Mortgage Corporation has added mortgage industry veteran and Mortgage Loan Originator Andrew Jefferson to its Brookfield, Wis. office. Wells Fargo & Company has announced that Jeff Smith, currently responsible for servicing and customer excellence risk in the company’s Consumer Lending Real Estate Compliance and Operational Risk (RECOR) group, has been named Head of Home Lending Servicing. Smith succeeds Perry Hilzendeger, who was named in March to run the company’s Home Lending Retail Originations. Mortgage Guaranty Insurance Corporation (MGIC) has announced that Michael E. Jacobson joined the company as Vice President of Corporate Development, responsible for leading the development of mortgage credit enhancement solutions.

NationalMortgageProfessional.com

l Roostify has announced three executive appointments to their growing team: Syed Ijaz as Chief Customer Officer, Kevin Levitt as Vice President of Sales, and Eric Drattell as General Counsel. Roostify has also announced that Eric Amblard has joined the company as Chief Financial Officer. Amblard comes to Roostify from EverString Technologies, where he also served as CFO. l Equity Prime Mortgage has announced Leticia Lucio Vu as the newest Vice President of Market Strategy, and the promotion of Vice President of Marketing Eric Skates to the new role of Chief of Staff. l Stephen Curry has been appointed as the new Chief Executive Officer of Gateway Mortgage Group, succeeding Chairman and CEO Kevin Stitt, who founded Gateway in 2000 and has led the company for the past 18 years. Stitt will remain on as Chairman of the company. l Lenders One Cooperative has announced that Michael Kuentz has been promoted to the role of Chief Executive Officer by its Board of Directors. Kuentz previously held the title of President. l Altisource Portfolio Solutions has announced the appointment of Justin Vedder as Chief Operating Officer, Origination Solutions, responsible for the growth of Altisource’s Origination Solutions business. l InterLinc Mortgage Services has announced that Gene F. Thompson III, who has served as company President since 2010, is now the Chief Operating Officer. A 20-year veteran of the mortgage lending industry, Gene has been with InterLinc since 2007, where he has served as both Executive Vice President and President. l Velocity Mortgage Capital has announced the hiring of Michael Oddi as the firm’s Chief Marketing Officer. l Access National Mortgage has added William Lyons as Senior Loan Officer in its expanding Richmond, Va. market. l The National Foundation for Credit Counseling

outstanding w o r k

places to work

n a t i o n a l

m o r t g a g e

p r o f e s s i o n a l ’ s

o u t s t a n d i n g

p l a c e s

t o

Attention Recruiters, Business Development Managers and HR Professionals PRMG 1-855-PRMG-FAN! (855-7764-326) www.PRMG.net Built by originators for originators, PRMG was born from a vision of creating a company with a unique culture focused on the successes of the producer. We understand what it takes to be a successful originator and cultivate new business every day.

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

United Wholesale Mortgage 800-981-8898 www.uwm.com/careers Voted the #1 place to work in Metro Detroit, UWM is looking for A players to join our talented team. Our business is driven by our culture, and our people are our greatest asset. If you’re looking for the opportunity of a lifetime, apply to UWM today!

national mortgage professional’s

outstanding places to work

We are pleased to announce a new package that will give your firm the recruiting tools to instantly shift your recruiting efforts into high gear using a multimedia, market-saturating approach. We will utilize the most successful methods that our clients have been using to find, identify and place top talents for your company. We have designed these packages with the concept of making it less expensive to give you the ability to reach more people.

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE 1220 Wantagh Avenue Wantagh, New York 11793-2202 516-409-5555 Fax: 516-409-4600 E-mail: advertise@MortgageNewsNetwork.com

NationalMortgageProfessional.com

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S

calendar of events

SEPTEMBER 2018 Thursday-Friday, September 20-21 2018 VMLA Annual Convention Hilton Northfork The Main 100 East Main Street Norfolk, Va. For more information, visit VirginiaMLA.com.

Wednesday-Thursday, October 10-11 NYAMB’s 2018 Fall Convention & Trade Show Long Island Marriott 101 James Doolittle Boulevard Uniondale, N.Y. For more information, visit NYAMB.org.

Sunday-Tuesday, Saturday, October 13 September 23-25 mPowering You: MBA’s Summit MBA’s 2018 Risk Management, for Women in Real Estate Finance QA & Fraud Prevention Forum Walter E. Washington Convention JW Marriott Los Angeles L.A. LIVE Center 900 West Olympic Boulevard 801 Mount Vernon Place NW Los Angeles Washington, D.C. For more information, For more information, visit visit MBA.org. MBA.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. Wednesday, November 7 NAMMBA Connect 2018 Irvine Irvine Marriott 18000 Von Karman Avenue Irvine, Calif. For more information, visit Connect2018.org.

Thursday, November 15 NAMMBA Connect 2018 Orlando Doubletree by Hilton Orlando Seaworld 10100 International Drive Orlando, Fla. For more information, visit Connect2018.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.

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. 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.

101

n National Mortgage Professional Magazine n SEPTEMBER 2018

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.

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.

NationalMortgageProfessional.com

Sunday-Tuesday, Sunday-Wednesday, October September 23-25 14-17 2018 Northeast Conference of Mortgage Bankers Association Mortgage Brokers & Professionals 2018 Annual Conference & Trade Harrah’s Resort Show & Convention Center Walter E. Washington Convention 777 Harrah’s Boulevard Center Atlantic City, N.J. 801 Mt. Vernon Place NW For more information, visit Washington, D.C. MBANJ.com. For more information, visit MBA.org. Wednesday, September 26 27th Annual HAMB Wednesday, October 24 Conference/CE Classes NAMMBA Connect 2018 Dallas and Trade Show Addison Conference Center JCCH-Manoa Grand Ballroom 15650 Addison Road 2454 South Beretania Street Addison, Texas Honolulu, Hawaii For more information, visit For more information, visit Connect2018.org. HAMB.org. Sunday-Tuesday, October 28-30 OCTOBER 2018 2018 NRMLA Annual Meeting & Wednesday, October 3 Expo NAMMBA Connect 2018 Hilton San Diego Bayfront Greensboro 1 Park Boulevard Sheraton Greensboro at Four San Diego Seasons For more information, visit 3121 West Gate City Boulevard NRMLAOnline.org. Greensboro, N.C. For more information, visit Connect2018.org.

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.

APPRAISAL MANAGEMENT COMPANY

BONDS & LICENSING

COMPLIANCE CONSULTANTS

CLASS APPRAISAL

#1 RAATTED AMC BY NAATTIONâ&#x20AC;&#x2122;S

The Bond Exchange www.TheBondExchange.com (501) 224-8895

TOP LENDERS FOR PERFORMANCE

& CLIENT SAT ATISFACTION Contact Us: nmp@classappraisal.com (866) 333-8311

LOWEST-COST STATE MORTGAGE LICENSE BONDS

Online surety bond applications, instant underwriting approval, and credit card payments administered through The Bond Exchange NAMB's exclusive partner provider for state license surety bonds. The Bond Exchange is a national surety agency specializing in servicing mortgage license bonds for thousands of mortgage professionals across the country. Low prices and fantastic service. You really can have them both at the same time!

www.classappraisal.com

CHURCH FINANCING

AUDIT DEFENSE AND RESPONSE

LENDERS COMPLIANCE GROUP 167 West Hudson Street - Suite 200 Long Beach | NY | 11561 | (516) 442-3456 www.LendersComplianceGroup.com The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance. Pioneers in outsourcing solutions for mortgage compliance. Our Compliance Team Will: Leverage your existing employees. Improve your productivity. Collaborate on projects. Make the most of your current technology. Bring innovation to your company. Be a strong cultural fit. Free you to focus on your core competencies. Give you access to world-class expertise. Lower your total operational costs.

EDUCATION

MORTGAGE BROKER AND LENDER COMPLIANCE

102

AUDIT, MLO POLICIES and UPDATES Our fees are less than the big national firms

Concord Church Lenders www.concordchurchfinance.com 800-926-0399

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

that donâ&#x20AC;&#x2122;t call you back. Program includes all Manuals including QC, MLO Policies and Comp Plans, AML, GLB, Social Media and Web audits, on-line training sessions, governance documents, and our audit protection plan. Available in all 50 states. We have hands-on experience with regulators and audits. No theories here; we were Bankers. If you find yourself in federal court, we can handle that as well. Contact Nelson Locke at (800) 656-4584. Or you may e-mail us at nl@lockelaw.us All inquiries will be kept strictly confidential. This is not an offer for legal services, but rather for his expert review and opinion about your particular compliance situation. All fact patterns are different so the results will vary. No guarantees are expressed or implied. Licensed by California and Federal Bar. NMLS 149450.

AUDIT TECHNOLOGY

ACES Risk Management (ARMCO) 1000 West McNab Rd. Pompano Beach, FL 33069 (800) 858-1598 www.armco.us

â&#x2014;? â&#x2014;? â&#x2014;? â&#x2014;?

$100,000 to $5 mil - 75% LTV - Fixed Rate No personal guarantees & no prepayment penalties TEMPLES, SYNAGOGUES, ALL PLACES OF WORSHIP Originator Quote protected against circumvention for 45 days â&#x2014;? BONUS: A loan to a place of worship opens the door to residential mortgages for the congregation members

Visit our website to pre-qualify and request a FREE QUOTE

Certified Military Home Specialist Beverly Ray Frase "Training Boots on the Ground" Since 2009 â&#x20AC;˘ Trained 3,000 CMHS course grads â&#x20AC;˘ Trained for Depts of HUD, Treasury & more â&#x20AC;˘ 20+ years' experience in real estate & finance, military life COMING TO YOUR CITY!

COMPLIANCE CONSULTANTS

HARD MONEY/PRIVATE LENDING

BROKERS COMPLIANCE GROUP 167 West Hudson Street â&#x20AC;&#x201C; Suite 200 Long Beach | NY | 11561 members@brokerscompliancegroup.com www.BrokersComplianceGroup.com

Direct Private Money and Bridge Lender specializing in Stated Loans in CA 866-668-2663 Send Scenarios to info@CalHardMoney.com

Division of Lenders Compliance Group, BCG is the first and only mortgage risk management firm in the U.S. devoted to supporting the unique compliance needs of residential mortgage brokers. Leveling the Playing Field for Mortgage Brokers

ACES Risk Management delivers web-based audit technology solutions, as well as powerful data and analytics, to the nationâ&#x20AC;&#x2122;s top mortgage lenders, servicers, investors and outsourcing professionals. A trusted partner devoted to client relationships, ARMCO offers best-in-class quality control and compliance software that provides U.S. banks, mortgage companies and service providers the technology and data needed to support loan integrity, meet regulatory requirements, reduce risk and drive positive business decisions.

BOOTS ACROSS AMERICA TOUR 2018 Beverly@BootsAcrossAmerica.org

Low Cost Monthly Membership Includes: â&#x20AC;˘ Free Weekly Hotline â&#x20AC;˘ Access to Subject Matter Experts â&#x20AC;˘ Policies and Procedures â&#x20AC;˘ Webinars *Special Pricing* â&#x20AC;˘ Quality Control â&#x20AC;˘ Exam Readiness â&#x20AC;˘ Licensing â&#x20AC;˘ Legal Reviews

LENDING CRITERIA Âˇ Collateral: Stated 1st and 2nd position loans on N/O/O invest. properties (SFR, Condo, 1-4 units), Mixed-use, 5+ units, Retail, Industrial, Warehouse and Etc. Âˇ Fix & Flip program up to 70%-80% of the Purchase price on all types of properties Âˇ Loan amounts/Terms: $50,000 up to $5,000,000 and loans from 6 months to 10 years. Âˇ LTV: Purchases up to 70%-80% LTV; Refinances up to 60-65% LTV; 2nd Position up to 65% CLTV Âˇ BROKERS ALWAYS PROTECTED AND RATES STARTING AS LOW AS 8.50%

MARKETING

RECRUITMENT

WHOLESALE LENDERS

TagQuest www.tagquest.com 888-717-8980 TagQuest is a full service marketing firm created specifically for the ever changing mortgage business. We have tested and proven campaigns for FHA -VA - HARP - CONVENTIONAL loan types. TagQuest knows what it takes to generate quality leads whether through direct mail marketing, telemarketing, internet leads, data lists, tracking systems, or any combination thereof. TagQuest will brand your company, prepare targeted marketing campaigns that generate interest in your company, and most importantly, show you how to turn sales leads into repeat customers.

PRIVATE FINANCING

WHOLESALE/CORRESPONDENT LENDERS

103

NationalMortgageProfessional.com

Greenbox Loans, Inc 3250 Wilshire Blvd., Suite 1900 Los Angeles, CA, 90010 (800) 600-9198 www.greenboxloans.com Greenbox Loans, Inc. is a proven leader in the Non-QM & Non-Prime lending environment offering bank statement programs, foreign national lending solutions, along with programs allowing for recent short sale, foreclosure, bankruptcy for borrowers as low as 500 Fico Score. Greenbox Loans, Inc. is a national lender offering its programs through a multiple of channels including Retail, Wholesale, and Investor Specialty division.

WHOLESALE LENDERS

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

n National Mortgage Professional Magazine n SEPTEMBER 2018

PUBLICATIONS

RICK ARVIELO

CEO, New American Funding

PATTY ARVIELO

President, New American Funding

SEPTEMBER 2018 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

104

Bring it all together. www.BetterAtNAF.com

NMLS ID #6606. Licensed by Arizona Department of Financial Institutions license BK-0912376, Department of Business Oversight under the California Residential Mortgage Lending Act License, N.J. Department of Banking and Insurance, Mississippi Department of Banking and Consumer Finance. www.nmlsconsumeraccess.org. Georgia Residential Mortgage Licensee, License # 22564. Illinois Residential Mortgage Licensee. Kansas Licensed Mortgage Company Licensed MC.0025168. Mortgage Lender & Mortgage Broker License MC6606, Ohio Mortgage Broker Act Mortgage Banker Exemption License MBMB.850190.000. Rhode Island Licensed Lender. Texas licensed location 6504 International Pkwy, Ste. 1300, Plano, TX 75093. Consumer Loan Company License #CL-6606. Corporate Address: 14511 Myford Rd, Ste. 100, Tustin CA 92780 Corporate Phone: (800) 450-2010

WE’RE GROWING! Apply Now At JoinAngelOak.com

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