National Mortgage Professional Magazine September 2019 by ambizmedia

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

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

$ *

NationalMortgageProfessional.com

SO YOU CAN CLOSE MORE

Our expansive range of Non-QM, government and conventional G>GC)G<;@F#B @?D;&BA;6B;AGEBC4;6%@;D%>?#@D6;DBEA6)BGD=

Open for more closings. Call today. CarringtonAlly.com | 855-383-4417 ! ; + ; ; ! ; ++

!* :* ;; ;;+! ! $ Â©2007-2019 Carrington Mortgage Services, LLC headquartered at 1600 South Douglass Road, Suites 110 & 200A, Anaheim, CA 92806. (800)561-4567. All rights reserved. NMLS ID 2600. For licensing information, go to: www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

n National Mortgage Professional Magazine n SEPTEMBER 2019

solutions as unique as your borrowers

table of

N A T I O N A L

AI: The Solution to Customer Disloyalty and a Revolutionized Customer Experience By Frederick Townes

V O L

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

S E P T E M B E R

26 th i w k

Bec

The

The Beckwith Blog: The Back to School Mindset By Christine Beckwith

th kwi

30 Who’s Who in the 2019 Wholesale Marketplace

M O R T G

2 0 1 9

C I

Replacing the QM Patch: Time to Get It Right By David H. Stevens, CMB ................................................................54

T D

Find Flexibility and Variety With Wholesale Mortgages By Ray Brousseau ..............................................................................58

S P

Applauding the Resurgence of the Mortgage Broker: A Lender’s Perspective By Brian Daily ............................................60

B &

Risk Considerations for TPO Lenders and Service Providers By Dave Stephan ................................................................................62

P W

Basic Concepts for Managing Third-Party Risks By Thomas Grundy, CRCM ................................................................64

Wholesale, TPO and Correspondent Lenders Supporting Non-QM Loans By Deborah Hill ........................................................68

Dissecting the Non-QM Equation By Mary Kamelle ........................72

M M

Are You Relevant? A comprehensive guide to relevance in today’s marketplace By Megan Marsh ........................................74

T O

FEATURES

M H

ARMCP Set to Launch New Site ........................................................6 Non-QM Automation Must Fuse Speed and Personal Service By Tom Hutchens ................................................................................8

34 NMP’s Legends of Lending: IMPAC By Rick Grant

The Elite Performer: Respond! By Andy W. Harris, CRMS ................8

Recruiting, Training and Mentoring Corner By Dave Hershman ....10

Know Your Market Changes By Bob Caruso ..................................16

GSEs Announce Postponement of Revised URLA Mandatory Use Date By Gavin T. Ales ................................................................18

V I S I T Company

Web Site

O U R

A D Page

ACC Mortgage .................................................. weapproveloans.com ......................................................9 ACT Appraisal .................................................. actappraisal.com/ai ......................................................37 Angel Oak Mortgage Solutions ............................ angeloakms.com ..............................................Back Cover Brokers Compliance Group.................................. brokerscompliancegroup.com ..........................................88 Capital One ........................................................capitalone/financialinstitutions ..........................................11 Carrington Mortgage Services, LLC ...................... carringtonally.com ..................................................1 & 69 Citadel Servicing Corporation .............................. citadelservicing.com ......................................................61 Concord Church Finance .................................... concordchurchfinance.com ............................................73

48 Seeking Tomorrow’s Mortgage Loan Borrower By Rick Grant

Deephaven Mortgage, LLC .................................. deephavenmortgage.com ..............................................17 DocMagic .......................................................... docmagic.com ................................................................7 First National Bank of America............................ fnba.com/mortgagebrokers ..............................................5 Flagstar Bank .................................................... flagstar.com/why ..........................................................71 Greenbox Loans, Inc........................................... greenboxloans.com ................................Inside Front Cover Locke Law US, LLC ............................................ lockelaw.us ..................................................................76 Lykken On Lending ............................................ lykkenonlending.com ....................................................47

of contents

R T G A G E

V O L U M E

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

1 1

N U M B E R

NAMB Perspective ............................................................................20 Compliance Matters: Obligation to Accept Private Flood Insurance By Joyce Wilkins Pollison Esq. ........................................36

The Mortgage Godfather: Bosch … How a Homicide Detective Teaches Sales to MLO’s By Ralph LoVuolo Sr. ..............38 Striking the Right Balance Between Technology and Personal Interaction ........................................................................40 Brokers: It’s Time to Go Into Reverse By Jeff Bode & Dan Barksdale ................................................................................42 Pilot Program to Connect HUD-Approved Housing Counselors With LOs and Realtors Underway By Pam Marron ..........................46 BrokerNATION: Ryan & Jessica Ehler/Price Mortgage By Andy W. Harris, CRMS ..................................................................50 The Non-QM Proliferation: Other Alternative Products By Hitz Mistry ....................................................................................52 MBA’s Mortgage Action Alliance: A Message From MAA Chairman Jeffrey C. Taylor ....................................................77 Team Broker: Growing the Wholesale Channel, One Loan Originator at a Time By Alex Elezaj ..................................................78 NAMMBA Connect Live Tour: Coming to a City Near You! ............80 Marketing to Millennials: How to Capture the Millennial Homebuyer Market By Scott Gordon................................................82

COLUMNS New to Market ..................................................................................12 News Flash: September 2019 ..........................................................14 Heard on the Street ..........................................................................28 NMP Calendar of Events ..................................................................87

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

Web Site

Page

MBA-NJ/NJAMB .................................................. mbanj.com ..................................................................57 MBS Highway .................................................... mbshighway.com/MNN ..................................................29 Mortgage News Network (MNN) .......................... mortgagenewsnetwork.com ....................................44 & 45 NAMB+ ............................................................ nambplus.com ..............................................................19 NAWRB ............................................................ nawrb.com ....................................................................15 NRMLA.............................................................. nrmlaonline.org ............................................................73 Origination Pro.................................................. originationpro.com ........................................................75 Paramount Residential Mortgage Group, Inc. ...... prmg.net ................................................Inside Back Cover PB Financial Group Corp. .................................. calhardmoney.com ........................................................69 RCN Capital ...................................................... rcncapital.com ..............................................................39 Redstone Print & Mail Inc. ................................ redstoneprintmail.com ..................................................63 REMN................................................................ remnwholesale.com ......................................................13

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 2019 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.

Ridgewood Savings Bank .................................... ridgewoodbank.com ......................................................59 Sharestates, LLC ................................................ sharestates.com ............................................................67

To nominate yourself or someone else, visit

TCF Financial Corporation .................................. tcfbank.com/brokerloans/compensation ..................65 & 85

https://nationalmortgageprofessional.com/under-2019

SEPTEMBER 2019 Volume 11 • Number 9

FROM THE

publisher’s desk

Originating with partners One of the wonderful things about the mortgage lending business is that no one can do it 1220 Wantagh Avenue • Wantagh, NY 11793-2202 alone. It takes a team. An investor may have funds to lend, but without a primary market Phone: (516) 409-5555 • Fax: (516) 409-4600 lender with a team of loan officers, those funds will never make it to the borrower. Web site: NationalMortgageProfessional.com Not even loan officers, who begin the entire process started for the borrower, can do STAFF Eric C. Peck Joel M. Berman their work alone. Without the processing and loan closing departments that support them, Editor-in-Chief Publisher - CEO (516) 409-5555, ext. 312 (516) 409-5555, ext. 310 the loans would never close. ericp@mortgagenewsnetwork.com joel@mortgagenewsnetwork.com In this special issue, we provide our annual report on the Wholesale, TPO & Joey Arendt Beverly Bolnick Correspondent Markets. These are among our favorite parts of the business because they Art Director VP-Sales & Marketing (516) 409-5555, ext. 323 (516) 409-5555, ext. 316 showcase what great teams can do for our industry and the consumers we serve. joeya@mortgagenewsnetwork.com beverlyb@mortgagenewsnetwork.com We bring you eight fantastic articles in our Special Focus this month as well as a very Scott Koondel Phil Hall VP of Operations Managing Editor special section entitled, “Who’s Who in the 2019 Wholesale Marketplace.” We lay out this (516) 409-5555, ext. 324 (516) 409-5555, ext. 312 section to be an at-a-glance resource that will give our readers all of the information about scottk@mortgagenewsnetwork.com philh@mortgagenewsnetwork.com the best wholesale lenders in the industry. This is definitely information you’ll want to keep Richard Zyta Francine Miller Social Media Ambassador Advertising Coordinator handy. (516) 409-5555 (516) 409-5555, ext. 301 richardz@mortgagenewsnetwork.com francinem@mortgagenewsnetwork.com But to build strong relationships with any of these players, you need the information our Rick Grant Dylan Pollock authors have packed into our Special Focus articles. It all starts with deciding who you are Special Reports Editor Administrative Assistant and where you will play in the space. For that, we recommend “Are You Relevant? A (570) 497-1026 (direct) (516) 409-5555, ext. 314 (516) 409-555, ext. 311 dylanp@mortgagenewsnetwork.com comprehensive guide to relevance in today’s marketplace,” by Megan Marsh, co-founder of rickg@mortgagenewsnetwork.com Keystone Alliance Mortgage. ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact Many who perform this analysis will decide that something is missing in their businesses. VP-Sales & Marketing Beverly Bolnick at (516) 409-5555, ext. 316 or e-mail beverlyb@mortgageFor those, we recommend reading “Find Flexibility and Variety With Wholesale Mortgages: newsnetwork.com. Positive indicators signal growth for wholesale and correspondent channels,” by Ray ARTICLE SUBMISSIONS/PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck Brousseau, president of Carrington Mortgage Services. at (516) 409-5555, ext. 312 or e-mail ericp@mortgagenewsnetwork.com. The deadline for submissions One area in which a wholesale lending relationship is serving mortgage brokers and is the first of the month prior to the target issue. correspondent lenders very well right now is in the non-QM space. To support you there, SUBSCRIPTIONS To receive subscription information, please call (516) 409-5555, ext. 301; e-mail orders@mortgagewe bring you two articles this month. newsnetwork.com or visit www.nationalmortgageprofessional.com. Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600. Start with “Wholesale, TPO and Correspondent Lenders Supporting Non-QM Loans,” by Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the Deborah Hill, vice president of customer success and operations at MortgageHippo. Then authors alone and do not imply the opinion or endorsement of Mortgage News Network Inc., or the offimove on to “Dissecting the Non-QM Equation,” by Mary Kamelle, marketing manager at 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) Mortgage Equity Partners. and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, ARMCP and/or other state mortgage trade associations An important part of any lender’s strategy is risk mitigation. This is true for both events, activities and/or publications is available on a non-discriminatory basis and does not reflect the wholesale lenders, as well as the brokers and correspondents who work with them. So, we endorsement of the product and/or services by Mortgage News Network Inc., NAMB, NAPMW, NCRA, and other state mortgage trade associations. bring you a couple of excellent articles on this topic in this issue. National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, ARMCP and/or other state To that end, we bring you “Risk Considerations for TPO Lenders and Service Providers,” mortgage trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content conby Dave Stephan, TPO manager for Inlanta Mortgage and “Basic Concepts for Managing tained in Mortgage 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 artiThird-Party Risks,” by Thomas Grundy, CRCM, senior director, CMS and regulatory cles, information or data. consulting for Wolters Kluwer’s U.S. Advisory Services Group. Anyone who has been observing our industry for any length of time knows that the broker business is coming back stronger than ever. For a lender’s view on this, we bring you, “Applauding the Resurgence of the Mortgage Broker: A Lender’s Perspective,” by Brian Daily, senior vice president of production at Mountain West Financial. Finally, we are proud to bring you an article from David H Stevens. As you surely know, David is a Certified Mortgage Banker (CMB) and is former SVP of single family at Freddie Mac, former EVP at Wells Fargo Home Mortgage, former president and COO of the Long and Foster Realty Companies, former Assistant Secretary of Housing and FHA Commissioner, and former CEO of the Mortgage Bankers Association. We’re always proud to have his stories in our issue. This month, don’t miss, “Replacing the QM Patch: Time to Get It Right.” We’re very proud of our Special Focus Section this month, but that’s just part of what we’re bringing you. There are some other features I want to make sure you don’t miss. First, don’t miss our article on this month’s Legend of Lending, IMPAC. This is one of the only big lenders that made it through the financial crash and is still doing business today. Find out what IMPAC thinks of the non-QM opportunity and the power of the modern mortgage broker. For another perspective on this, see the article from Hitz Mistry, marketing director for Citadel Servicing Corporation, entitled “The NonQM Proliferation: Other Alternative Products.” And finally, we bring you the view from the top of Freddie Mac in an article entitled “Seeking Tomorrow’s Mortgage Loan Borrower.” The piece is part of a conversation between Rick Grant and Dave Lowman, executive vice president of Freddie Mac and head of the company’s Single-Family Business, in which the industry leader talks about the accomplishments he has witnessed in the industry during his rich career and where his firm expects to find mortgage borrowers in the future. And, of course, you’ll also find all of the trade show news, compliance information and industry blogs—including a new piece from Christine Beckwith, “The Back to School Mindset.” With all of this talk about partnerships, I have to say how proud we are to be partnered with all of you. We take your success very seriously, and we hope you find the articles in this issue beneficial as you work to build your companies and advance your careers. Sincerely,

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

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n SEPTEMBER 2019

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 2018-2019 BOARD OF OFFICERS & DIRECTORS E X E C U T I V E

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

Rocke Andrews, CMC, CRMS President-Elect Rocke.Andrews@NAMB.org

Michelle Velez, CMC Vice President Michelle.Velez@NAMB.org

B O A R D

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

Linda McCoy, CMRS Secretary Linda.McCoy@NAMB.org

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

D I R E C T O R S

Michael DeSantis Mike.DeSantis@NAMB.org

Matt Oliver Matt.Oliver@NAMB.org

Marty Pfeiffenberger MartyP@NAMB.org

Kimber White, CRMS Kimber.White@NAMB.org

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

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

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

2019-2020 BOARD OF DIRECTORS

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARMCP Set to Launch New Site To all 1,600 members of the Association of Residential Mortgage Compliance Professionals (ARMCP), the new ARMCP.org Web site is nearing its official launch, a state-of-the-art platform designed specifically to fulfill the needs of residential mortgage compliance professionals. The design and development have taken several years to bring to the point of launch. “This is just what our organization needs,” said Jonathan Foxx, Ph.D., MBA, founder and president of ARMCP. “Our current digital abode is on LinkedIn, and we will keep the LinkedIn group, though most of us will move to the new Web site home. We’ll be sending announcements your way soon, via LinkedIn and other media resources! If you have not yet joined ARMCP, please contact me at Info@ARMCP.org and I will send you an invitation.” ARMCP is the first and only independent, national organization in the United States devoted exclusively to residential mortgage compliance professionals. ARMCP’s independence means it is a non-profit association, owned and managed by its members, and not dependent on any profitbased enterprises. If you would like to join the association’s Steering Committee, create a forum to discuss news and views, or help in any way to build our organization, e-mail Info@ARMCP.org. For more information, visit ARMCP.org.

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n SEPTEMBER 2019

Non-QM Automation Must Fuse Speed and Personal Service By Tom Hutchens

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

major challenge for non-QM lenders and originators has been speeding and simplifying the pre-approval process without weakening the personal relationships that are essential to serving atypical borrowers. An effective technology solution must deliver automated, instantaneous eligibility decisions and improve the quality of communication between lender and loan officer. The best non-QM lenders have recently launched systems that reduce pre-qual decisions from as much as 24 hours to mere minutes. The task was daunting because the non-QM market’s fabulous growth has been interwoven with our ability to manually determine the ability to repay by people who were usually rejected by rigid, computer-enforced agency rules. Any effective technology must simplify the process for loan officers and improve communication between lender and originator. For non-QM originators to benefit from a non-agency automated underwriting system (AUS), the solution had to produce loan eligibility reports that both deliver pre-qual decisions and identify the special underwriting conditions that enable delivery of the best possible loan terms to each nonQM borrower. Using an AUS, experienced non-QM loan officers can apply faster, increase production and improve relationships with their clients. For loan officers who have not yet tested the non-QM waters, this technology simplifies pre-qualification and the entire loan process by automatically delivering a complete road map of the closing process. You are able to work nonQM loans just as quickly as agency loans. In developing Angel Oak’s proprietary non-agency AUS, QuickQual, our imperative has been enhancing the collaboration between lender and originator. QuickQual is unique in its ability to tie our account executives more closely to each loan application and its originator. Unlike other AUS software, QuickQual does not reduce or replace our people, rather, it enhances the quality of information and the ability for lender and originator to close more loans. The result of a useful AUS must be increased customer service. In evaluating any AUS, originators need to make sure the technology enables them to spend more time with their account executives and pay better attention to the special borrower situations that are the hallmark of non-QM lending. For non-QM lenders, personal service must remain the number one priority. But joining high-touch relationships with cutting-edge technology is also critical. As an advocate of non-QM lending, I encourage originators to learn more about this new technology. To learn more about QuickQual, go to http://bit.ly/QuickQualTutorial or contact your Angel Oak account executive at (866) 837-6312.

Tom Hutchens is EVP, production at Angel Oak Mortgage Solutions, an Atlanta-based wholesale and correspondent lender licensed in more than 40 states and operating in the non-QM space for over five years. Tom has been in the real estate lending business for nearly 20 years. He may be reached by phone at (855) 539-4910 or e-mail Info@AngelOakMS.com.

SPONSORED EDITORIAL

the

elite performer Respond! BY ANDY W. HARRIS, CRMS

’ve always found it fascinating the number of people in sales and production roles who don’t respond to messages timely or efficiently. To be honest, it drives me nuts. More importantly, it drives their client or perspective clients nuts. I’ve never been able to relate with this and am unsure if they entirely miss the messages or if they simply forget after reading or listening (if phone message, e-mail or text). I personally have an unrealistic expectation on how fast I expect a response, as I want all to respond immediately as I do, but I find nearly half the people I interact with have horrible response rates. Around 28 percent of our work week is consumed by e-mails. I get it. The solution is to organize yourself daily and categorize to effectively respond to all that require in a timely fashion. If you let things get disorganized or if you don’t respond quickly, you will lose out on not only new business, but put yourself that much further back in production. Immediate answers allow you to move onto the next client/task and also provide the people you interact with a much more positive view of you and your services. If you don’t think your neglect on e-mail and other messages are not hurting you, they are. How you reply shows how reliable you are. When you’re dealing with a large financial transaction, your clients need you. Business partners require timely responses and it’s vitally important we all understand this is a basic requirement in our line of work. Make responsiveness a priority. Time block if you must, but always acknowledge receipt if you need more time to address something. Personally, I will not do business with anyone nor refer anyone that is not an immediate responder. I expect it and many others do as well. Some of the busiest people I know, including myself, reply to each and every message personally and quickly. There is no excuse for being “too busy.” Don’t get complacent. Don’t get arrogant or so self-absorbed that you give people the impression they don’t warrant a response or that they are not important enough. Delete and filter SPAM, but respond to any and every personal and professional interaction with clients and business partners ‘quickly.’ Communication is the greatest asset or liability you have in business, depending on how you view it. Learn to listen and please, for the sake of everyone you know, answer your phone!

Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and past president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 4960431, e-mail AHarris@VantageMortgageGroup.com or visit VantageMortgageGroup.com.

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n SEPTEMBER 2019

Recruiting, Training and Mentoring Corner

Broker or Loan Officer or CEO? BY DAVE HERSHMAN

he Special Focus of this month’s edition concerns the future of the wholesale industry. One of the most important factors which will determine the opportunity of wholesale in the future is the growth of the mortgage broker segment of the industry–especially with regard to the broker/wholesale channel. One upon a time during the real estate boom, brokers held a market share of more than 50 percent of the industry. Obviously, the broker/wholesale channel was much larger at that time. Then came the financial crisis, followed by Dodd-Frank and a whole host of regulations. Banks dominated with the broker share moving down to just north of 10 percent. While the financial crisis caused a revolution, the recovery has been more of an evolution. The huge bank market has continued to drop gradually and non-bank mortgage companies have been making an impact. It stands to reason that the broker industry would also gain from this evolution, as loan officers with non-bank companies go out and open their own businesses. The introduction of non-QM products is also contributing to the trend because they provide the kind of niches which help brokers thrive. Thus, I am expecting that a major decision will be made again and again as the evolution evolves—do I want to start my own company? It is at this juncture that I bring back a

T SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

concept that I introduced some 25 years ago within this industry. I believe that, in order for every loan officer within this industry to be successful, they need to view themselves as a chief executive officer of their own business. This is true whether they work for a large national bank or are running their own brokerage shop. Do you think you have a great job in the mortgage industry? Or do you view yourself as the CEO of your own business? If you really want to lead the industry, you must view this as your company. That also means you must invest significant amounts of your money, time and energy in your business. And you must make this investment not up front, not later. I can’t tell you how many loan officers contact our company and say—I know I need this training, but I need to close or one or two loans first. Then they go months or years without the training they need. They are running businesses that are always going to struggle. And most of them will eventually fail because companies that are underfunded do not do well. Those who are on “pay as you go” status never seem to reach the top. So, here is the basic question: Are you investing what you need to in your business? Imagine if you were opening a retail store or restaurant. You would invest many thousands of dollars and hours before you rang up the first sale. This would include hundreds of hours of research and setting up the location. And when it was open,

the hours would be substantially greater. In the end you would still be in an industry that has a high failure rate even with this effort. People in the mortgage industry don’t have to invest as many hours or as many dollars as you might if starting a restaurant, but the concept is much the same. What do you need to invest in? Marketing, education, technology and more. Perhaps it is a laptop. Or it is the time to learn how to use a software program you have purchased for your laptop. Imagine running a store without the technology you need. Imagine running a doctor’s office without the knowledge you need! The investment needed would vary for each person. For example, a real estate agent of eight years moving into the mortgage industry would not need to attend a real estate licensing class as an investment in their knowledge base. On the other hand, someone moving from the insurance industry would have to take that class. After all, you are serving real estate agents if you are a loan officer. You need to become an expert in what your targets are doing so you can deliver

maximum value. Some will need a home office. Others will need a marketing assistant. It is this needs analysis that is an all-important research step. When I counsel managers, I counsel them to hire candidates that understand that they are not applying for a position but to start a business. The manager must make these candidates understand what investment must be made for each individual. And keep in mind that we are not just talking about investing money here. Money is important. But investing the time and energy in your business is just as important. Buying a bunch of stuff and then working 20 hours per week will be a waste of your money. Those who wait for their employers to give them the resources to be successful will typically have a long wait— forever. Success comes from within, and the key to this success is finding the right elements of investment that are needed for each individual. That is what a good manager or coach should help you do. But they can’t spend the money, time and energy to make your business thrive. Only you can do that.

Senior vice president of sales for Weichert Financial Services, Dave Hershman is a top author in this industry, with seven books published, as well as establishing the OriginationPro Marketing System and the OriginationPro Mortgage School–the online choice for mortgage learning and marketing content. His site is OriginationPro.com and Dave can be reached by e-mail at Dave@HershmanGroup.com.

" ' "%&"& " "(" ' # "# ' " " ( % ( "(& "%&#%$ # look no further than a top 10 U.S. commercial bankÂš.

Capital One Financial Institutions Group: Dave Donofrio Managing Director 312-739-4705 david.donofrio@capitalone.com

Tom Connally Managing Director 312-739-4719 thomas.connally@capitalone.com

Top U.S. Domiciled Bank Commercial Banking outstandings; COF externally reported numbers; Source: Individual bank Q2 2018 )('&%&$#"! (# # " ' #"(& "# ' % #" ' " " ( % ( " & " " '" " " " ( % ( " &

n National Mortgage Professional Magazine n SEPTEMBER 2019

Get a new take on mortgage warehouse lending from Capital OneÂŽ Financial Institutions Group. With our specialized expertise in serving mortgage originators, weâ&#x20AC;&#x2122;ll help you make the right moves at just the right time.

NationalMortgageProfessional.com

Where experience and new ideas intersect

Angel Oak Mortgage Services Introduces QuickQual

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Angel Oak Mortgage Solutions LLC is now offering QuickQual, a tool designed to help loan officers determine borrower eligibility for non-QM loans. According to the Atlanta-based company, QuickQual is powered by LoanScorecard and delivers loan eligibility decisions within minutes–previously, the process could take up to 24 hours. The product’s automated underwriting system produces a loan eligibility report, which is also sent to the appropriate Angel Oak account executive. If the report indicates a successful pass, the loan officer can instantly submit the loan. But if the report includes issues that prevent approval, the account executive is able to view the full file, including the analytics behind the denial, and respond accordingly. “Customer service is in our DNA, integrating QuickQual shows our dedication to client satisfaction,” said Tom Hutchens, executive vice president of production at Angel Oak Mortgage Solutions. “We realized right away that we couldn’t use an off-theshelf solution. That’s why we spent the last 18 months working collaboratively with LoanScorecard to develop a custom solution that elegantly addresses the loan officer’s need for speed and confidence and, at the same time, aligns with our world class account executive expertise. QuickQual is synchronized with our current processes, including the Salesforce integration to ensure a smooth transition.”

Velocity Launches Broker Marketing Toolkit

Velocity Mortgage Capital, a direct portfolio lender focused on investment property loans, is now offering a turnkey marketing toolkit for independent mortgage brokers. According to the Westlake Village, Calif.-based company, the marketing toolkit includes curated images and copy to help mortgage brokers prepare customized emails, social media posts and flyers for promotional outreach. The company added the toolkit is designed for brokerages that do not have inhouse marketing staff or external marketing agency support. “Our mission is to help brokers attract new clients and grow their business by servicing the needs of independent real estate investors and small business owners,” said Chris Farrar, CEO of Velocity Mortgage Capital. “That goes beyond our mortgage programs to include the expertise, support, and materials required to assist brokers with their origination efforts.” New Home Point Offering Creates “Customers for Life” for Brokers

Home Point Financial has launched its “Customer for Life” program, an all-encompassing technology ecosystem that revolutionizes the way that independent mortgage brokers maintain long-term relationships with their customers and creates stability and long-term value for mortgage brokers that doesn’t exist in the market today. Home Point’s created the

Customer for Life program as a resource for brokers following its recent study that showed that brokers are currently only recapturing 14 percent of their business from past customers. “The transactional nature of the mortgage business forces mortgage brokers to stay largely focused on the next loan, the next customer, but sustainability of existing business is more important to mortgage brokers’ growth than anything else,” said Phil Shoemaker, chief business officer at Home Point Financial. “The Customer for Life program creates stability and long-term value for mortgage brokers that has never existed before and, with Home Point being the only wholesale lender that retains all of its servicing, and it enables us to take the idea of true partnership to a whole new level.” The Customer for Life program keeps mortgage brokers, borrowers and the servicer interconnected for the life of the loan, making it easier than ever before for brokers to stay in front of their customers and recapture their business in the event of future refinance or purchase opportunities. The technology uses consumer data touch-points to identify if the consumer is in the market for new loan, and then feeds their contact information back to the originating broker. Additionally, Customer for Life keeps mortgage brokers informed of their customers’ interest in other financial areas, such as personal loans, alternate financing, homeowner’s insurance, and utility services, equipping brokers with resources to provide their customers with product recommendations and a framework to evaluate their options.

Citadel Keeps Pace With Non-Prime Industry Via New Offering

Evolving with the always-changing non-prime mortgage industry, Citadel Servicing Corporation has removed the 24-month bank statement as a means of qualification. The program has been superseded by allowing borrowers to qualify for loans amounts of up to $5 million by providing either the most current month’s bank statement or 12 months. Despite this deletion, Citadel’s lending program targeting selfemployed and 1099 income earners will still include up to 90 percent LTV, 100 percent of deposits for personal statements, and 50 percent deposits for business statements. “This is just another example of how Citadel has shown flexibility and adapted to the ever-changing non-prime mortgage industry,” said Kyle Gunderlock, president and chief operating officer of Citadel Servicing Corporation. “We measure and use data from loans we originate and service to provide the best in lending programs for meeting today’s needs. Citadel Servicing Corporation will continue to innovate and lead in the growth of this industry.” Calyx Wholesaler Marketplace Is Released

Calyx has introduced the Calyx Wholesaler MarketPlace, with seven of the nation’s prominent wholesale lenders.

Calyx Wholesaler MarketPlace is integrated with Calyx Point and is also a key feature of NAMB All-In, the cloud-based platform made available for free to NAMB members. According to the Dallasbased company, Calyx Wholesaler MarketPlace enables mortgage brokers to connect with wholesale lenders via a single portal. Caliber Home Loans, Quicken Loans, Freedom Mortgage, Stearns Lending, Plaza Home Mortgage, Sierra Pacific Mortgage and Cardinal Financial Company are the first wholesale lenders to accept loan submissions through this new network, and Calyx added that additional lenders are in the process of integration with launches coming soon. “We developed Calyx Wholesaler MarketPlace to make the mortgage origination process easier for both brokers and wholesalers,” said Thomas Hennen, director of strategic partnerships at Calyx. “This central portal allows brokers to connect with multiple wholesalers and seamlessly submit a loan file without leaving their Calyx loan origination system.”

LoanScorecard Takes Aim at Non-QM Market With Bank Statement Analyzer

LoanScorecard, an Irvine, Calif.based provider of non-agency automated underwriting systems (AUS), has rolled out Bank Statement Analyzer, a product designed to automatically collect

and verify bank statement data and then calculate income for nonQM mortgages. According to the company, Bank Statement Analyzer enables an originator to digitally source bank transaction data directly from a borrower’s financial institution. The borrower grants the originator access to the bank account where they’ve been depositing their income, instead of gathering and supplying hundreds of pages of past bank statements. When the data is collected, Bank Statement Analyzer creates a report that details allowable deposits for each

month and offers an average monthly income calculation; the program also explains if transactions are excluded and why they were not considered. The detailed income analysis can also be pushed into LoanScorecard’s non-agency automated underwriting system, Portfolio Underwriter to validate the loan against program guidelines, by analyzing the full 1003 and credit history. LoanScorecard stated the Bank Statement Analyzer Bank will help continued on page 47

aaime ime fu us use se s e u october 12, october 12 20199 ,

bellag bella bbellagio io hote d Casino oo eell and ellaaggio annd hotel bella Casino

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n SEPTEMBER 2019

SLK Global Announces Enhancements to Its SmartTrak Solution SLK Global Solutions has announced the addition of two new offerings for its SmartTrak property tax solution, a technology platform which is currently being used by more than 100 title and tax agents to make their tax reporting become faster and risk-free. The enhancements include a lowerpriced rapid tax report and a standalone municipal lien search report (MLSR). With these enhancements, title agents can now choose from a wide range of property tax solutions on the SmartTrak platform, from a simple and fast tax report, to comprehensive municipal lien searches that can be ordered with or without a full tax certificate. “Many customers have asked us for a faster and cost-effective property tax report, in addition to a much more comprehensive guaranteed tax certificate,” said Timothy Moreland, SVP of business development at SLK Global Solutions. “Now SmartTrak enables ordering of a quick and simple low-cost report of outstanding taxes against a property.” The new enhancement also means SmartTrak can be leveraged by mortgage servicers to

order a quick tax report during a portfolio purchase or to track a loan’s delinquency life cycle, including foreclosures and REO.

WSFLASH y SEPTEMBER 2019 y NMP NEWSFLASH y SEPTEMBER 2019 y NMP NEWSFLASH y SEPTEM

Zillow: Typical Rent is Unaffordable for New Teachers

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

The start of the new school year also signals a new round of housing-related headaches for entry-level teachers, according to new data from Zillow. In an analysis of the nation’s 50 largest metro areas, Zillow determined that the typical rent is unaffordable in 49 of these markets. Furthermore, entry-level teachers will need to spend more than half of their salaries on the typical rent in 19 of these markets. On a national average, new teachers would need to allocate 46.8 percent of their salary to cover the median rent. In comparison, a mid-career teacher would need to set aside 35.6 percent of their salary and the highest-paid teachers would need 26.6 percent. Not surprisingly, entry-level teachers have a greater struggle in the most expensive housing markets–most notably in San Francisco and San Jose, where median rent payments are greater than 100 percent of a starting teacher’s salary. Of the 50 largest metro areas, only Pittsburgh offers affordable rent for starting teachers. “Most acknowledge that building more homes is required to address the root cause of eroding housing affordability,” said Skylar Olsen, Zillow’s director of economic research. “Without that

new influx to take the pressure off rent and aggressive home value growth, it’s the public servants, like teachers, fire fighters, and nurses–the professions that keep us safe, our kids smart, and our families healthy–that often feel the pinch most. So don’t think of housing affordability policies as a choice between change and the status quo. Crowded, job-rich communities will change—and it will be either the buildings that change or the mix of people who can afford to live in them.” Most Homeowners Underestimate HurricaneRelated Damage Costs

This year’s hurricane season is now underway through November, and while there are no storms on the near-term horizon that should raise red flags, a new study by ValuePenguin.com found many homeowners in high-risk states expressed either ignorance or nonchalance regarding the property damage costs of hurricanes. In a survey of 1,050 homeowners in hurricane-prone states, 77 percent of respondents said they “felt prepared” for the 2019 hurricane season, although about 48 percent of the same respondents admitted they never began to make preparations. Meteorological warnings are ignored by many: 43 percent of respondents who live in high-risk states believed weather

forecasting professionals exaggerate the risk of hurricanes. When evacuation warnings are made, 56 percent of the surveyed homeowners said they were reluctant to evacuate their homes and would comply to mandatory orders to leave. One in 10 said they would not evacuate at all, despite orders to leave. As for the costs of hurricanerelated damages, 52 percent of the surveyed homeowners guessed that they would spend less than $10,000 repairing their homes after a hurricane. In reality, the average claim amounts in 2017 for wind and hail damage were $10,200 while flooding damage averaged $92,000. And in the markets where hurricane risk is highest, 45 percent of respondents said they didn’t know how much insurance coverage they would need to be fully protected. “As the peak of the 2019 hurricane season approaches, the National Oceanic and Atmospheric Administration updated its forecast to predict five to nine hurricanes in the Atlantic before the end of November,” said Chris Moon, Senior Research Analyst at Value Penguin.com. “Most hurricane seasons to date have included six. Yet in our survey, nearly half of all respondents predicted that the United States would experience no more than three hurricanes in 2019.” In May, CoreLogic estimated that more than 7.3 million single and multifamily homes along the Gulf and Atlantic Coasts face the potential for storm surge damage during this year’s Atlantic hurricane season. Florida has the most exposure to storm surge flooding, with more than 2.9 million homes at risk and the potential for more

than $603 billion in replacement cost value (RCV), while Louisiana has the second most exposure to storm surge flooding with more than 847,000 at-risk homes an RCV at over $202 billion. New York third in the number of homes at risk with more than over 564,000 in the potential for harm’s way plus more than $240 billion in RCV costs. Freedom Mortgage Hosts Backpack Drive to Benefit Military Families

Freedom Mortgage recently held its 7th Annual “Rucksacks to Backpacks” event with the South Jersey/Philadelphia Liberty USO. The collection topped last year’s efforts, raising more than 5,834 backpacks and 5,153 school supplies for children of military families returning back to school. “We truly appreciate the sacrifices our military families make to protect our freedoms, and we are also proud to support the USO,” said Stanley C. Middleman, president and chief executive officer of Freedom Mortgage. “We’ve been told by the USO that our backpack collection makes a real difference for the children of military families. Through a shared spirit of giving back, Freedom Mortgage employees have risen to the occasion and embraced the challenge of growing the collection each year.”

Are Homeowners Happy? Survey Says: You Betcha!

Churchill Mortgage has announced its collaboration with Sackcloth & Ashes, a Salem, Ore.-based nonprofit organization that aims to donate one million blankets to homeless shelters by 2024 through its “Blanket the United States” campaign. Founder of Sackcloth & Ashes, Bob Dalton, was inspired to help the homeless population when his mother, a hardworking single mother, found herself living on the streets in 2013. Because of his mother’s story, Bob realized that not all people choose to become homeless, some

thousands of lives and, collectively, make a greater difference in our world.” Redfin: Bidding Wars at Eight-Year Low

Prospective homebuyers are not continued on page 16

n National Mortgage Professional Magazine n SEPTEMBER 2019

Churchill Partners With Sackcloth & Ashes for Fundraiser

values like caring, honesty, respect and love for one’s neighbor,” said Andrew Edwards, Marketing Program Manager, Northwest Region of Churchill Mortgage. “We’re thrilled to work with Bob and Sackcloth & Ashes and look forward to supporting their initiatives.” Mike Hardwick, founder and president of Churchill Mortgage, said: “Whether donating time or resources to local charities, families and individuals in need, giving back to our communities is one of our top priorities. Our partnerships with organizations such as Sackcloth & Ashes allow us to positively impact

NationalMortgageProfessional.com

A new survey conducted by Bank of America has found the vast majority of homeowners are highly satisfied with owning their residences and would never go back to renting. According to the new Bank of America’s Homebuyer Insights Report that polled 1,919 adults, 93 percent of respondents said they were happier because they bought a home, with 88 percent stating it was the best decision they have ever made and 79 percent claiming that owning a home has changed them for the better. Two-thirds of respondents who are homeowners said their relationships with family and loved ones have changed for the better since purchasing a home, and 78 percent are satisfied with the quality of their social life–a higher share than the 58 percent of prospective homebuyers who were quizzed on the quality of their social life. As for giving up homeownership, 83 percent of respondents that own a residential property said they would never go back to renting. “We know how much homeownership means, and we see examples every day of how owning a home gives our clients the power to build personal wealth and make memories,” said D. Steve Boland, head of Consumer Lending at Bank of America. “They’ve told us very clearly that homeownership is invaluable, and that’s why we’re actively providing assistance with down payment and closing costs to help people buy homes and create a new lifestyle.”

people just need a second chance. He was inspired to call his local homeless shelters to ask what they needed most—they all said blankets. Founded in 2018, Sackcloth & Ashes, donates a blanket to local homeless shelters for every blanket purchased. Churchill Mortgage is working with Sackcloth & Ashes to give blankets as closing gifts to homebuyers. Each gifted blanket will also provide a blanket to the homeless shelter of the homebuyer’s choice, helping Sackcloth & Ashes reach its goal of one million blankets. “At Churchill, we believe in core

NMP NEWS FLASH

Know Your Market Changes By Bob Caruso

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

t is common practice for lenders to expand into new states with their direct marketing efforts after finding success in their local markets. For these clients, the typical “broad stroke” approach for their data and mail piece design does not apply to all markets. Market experience and research are paramount to continued success when expanding to new states. When building a multi-state marketing campaign, you must recognize that what may generate a two percent response in your local market may only produce half of that in a new market with a similar approach. Multiple aspects of the campaign must come under scrutiny—data selects, mail piece design and product offerings are pivotal starting points to maximizing your efforts. Let’s take, for example, a customer who successfully markets FHA streamline loans in California and is looking to expand into the New York market. What changes are necessary to duplicate success in New York? Would the same piece be as effective, or has it been saturated? Are the standard demographics appropriate to the new market, or do they need to be modified in order to accommodate this new potential clientele? Furthermore, is the FHA approach in New York currently profitable, or should it be modified completely to target another program such as HARP 2.0? How do you get around this? By being aware of what your competitors are using, you can exploit the mail pieces they are not, target the demographics they overlook and focus on products that are not as saturated. One of our main focuses when advising clients on multistate approaches is the saturation rate of their approach and how it relates to their new states. You don’t want to add to the saturation rate by sending a similar mailer to the same prospect pool as your competitors, so we may recommend changing the outer appearance or overall design of the mailer. In addition to the piece, we consider the data selects. Would it benefit them to increase the loan amount or modify the seasoning to capture consumers that their competitors overlook? These small tweaks can make or break the success of the campaign. Your current marketing firm should be able to provide their expertise with your newly intended states. Keep in mind that their experience may be the single most important aspect of your multistate marketing efforts. A marketing professional will be able to advise you on the proper steps to take to ensure your efforts aren’t wasted on targeting an already saturated prospect base. While there is not a “crystal ball” for marketing, proper guidance as you expand into new markets will ensure that your efforts are not wasted.

For nearly 12 years, Bob Caruso has provided the most effective turn-key marketing campaigns with direct mail for the mortgage industry. Since becoming senior vice president of sales at the Florida location for Redstone Print & Mail, he’s even better equipped to give his clients the guidance needed for repeatable marketing efforts.

SPONSORED EDITORIAL

continued from page 15

trying to one-up each other in making offers on property, according to new data released by Redfin. During August, Redfin found only 10.4 percent of offers written by its agents on behalf of their homebuying customers, down by a significant 42 percent from one year earlier. August’s peaceable housing market overtook the 11.4 percent rate of bidding wars in July as the lowest on record since at least 2011. The San Francisco metro was the most competitive market in August, with bidding wars on 31 percent of offers written by Redfin agents on behalf of their homebuying customers. Elsewhere in the Bay Area, San Jose’s 10.3 percent bidding war rate was down from 77 percent from one year earlier, the steepest 12-month decline among the major housing markets. “Despite remaining near threeyear lows, mortgage rates have failed to bring enough buyers to the market to rev up competition for homes this summer,” said Redfin Chief Economist Daryl Fairweather. “Recession fears have been enough to spook some would-be buyers from making the big financial commitment of a home purchase. But assuming a recession doesn’t arrive this fall or winter, consumers will likely adjust to the new ‘normal’ of continued volatility in the stock and global markets, and the people who need and want to make a move will take advantage of low mortgage rates. As a result, I still expect homebuying competition to pick back up in the new year. Title Alliance Collects Donations for Women’s Shelters Nationwide

Title Alliance Ltd. has launched its second campaign to give back to families in communities across the country. Each of the company’s 54 local offices will collect donations for women’s shelters from partners and the public in 10 states for the company’s August TA Gives Back initiative. The goal is to collect 3,000 clothing and personal care items for vulnerable

women and their families. Title Alliance offices are asking the public to donate personal care items, such as clothes and toiletries, as well as household items and gift cards. “Title Alliance is proud to be involved in the communities that support us, so it is vital that we serve those in need of a little help,” said Jim Campbell, CEO of Title Alliance. “We are committed to using our time and resources to positively impact local families, and we are thrilled our employees chose to collect donations for women’s shelters this August.” This is the second collection drive held by the Pennsylvaniabased title insurance and escrow agency. “Our August TA Gives Back initiative allows us to give back to the community while also sharing our culture that emphasizes genuine relationships, empathy and goodwill,” said Lindsay Smith, chief strategy officer at Title Alliance. “In all our joint ventures, we have a deep and genuine interest in both our employees and communities, which is why we strive to give back in concrete ways across our footprint.” Refi Boom Drives Down Loan Defects

The frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications decreased by five percent from June to July, according to the latest Loan Application Defect Index report from First American Financial Corp. Compared with July 2018, the Defect Index remained unchanged. The Defect Index for purchase transactions decreased by 3.6 percent only a monthly measurement but was up 1.3 percent compared with one year ago. The Defect Index for refinance transactions decreased by 4.2 percent from June and was the at the same level as the July 2018 reading. First American Chief Economist continued on page 18

SHINING THE LIGHT ON

NON-QM

LEN DIN G

NationalMortgageProfessional.com

Deephaven Mortgage is shining the light on Non-QM lending by providing products speciﬁcally designed to address the needs of millions of borrowers who are unable to obtain a traditional mortgage. In return, this allows originators to expand their business by reaching out to a broader group of borrowers. Help shine the light on Non-QM for your potential borrowers. Contact us by visiting www.deephavenmortgage.com and selecting either Correspondent or Wholesale. We look forward to you getting in touch with us today! Deephaven Mortgage® LLC. All rights reserved. This material is intended solely for the use of licensed mortgage professionals. Distribution to consumers is strictly prohibited. Program and rates are subject to change without notice. Not available in all states. Terms subject to qualiﬁcation. For more information on Deephaven’s state licensing, visit the NMLS Consumer Access webpage at http:// nmlsconsumeraccess.org/. NMLS #958425

n National Mortgage Professional Magazine n SEPTEMBER 2019

Millions of potential borrowers are locked out of today’s conventional mortgage market.

GSEs Announce Postponement of Revised URLA Mandatory Use Date By Gavin T. Ales

n Aug. 8, 2019, Fannie Mae and Freddie Mac (the GSEs) announced changes to be made to the revised Uniform Residential Loan Application (URLA) and a postponement of the mandatory use date. The mandatory use date was previously set for Feb. 1, 2020, and a new date has not yet been determined. The postponement and the new mandatory use date, when announced, will “allow industry participants time to make necessary changes,” before implementing the revised URLA and any additional changes to data mapping for the automated underwriting system. Per the announcement, the GSEs have been directed by the Federal Housing Finance Agency (FHFA) to make specific modifications to the revised URLA form, including:

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

l Removal of The Language Preference question (Borrower Information, Section 1a.) and The Homeownership Education and Housing Counseling question (Lender Loan Information, Section L5.) Instead, this information will be collected on a separate “voluntary consumer information form” to be developed for this purpose. l Revision of the “Use and Sharing of Information” in the Acknowledgment and Agreements (Borrower Information, Section 6.) to address specific uses of borrower data. l The Military Service question will be moved from Borrower Information, Section 1a. to Section 7: Demographic Information. l Additional minor edits for consistency and usability to be made throughout the URLA form. The new voluntary consumer information form will allow lenders to choose whether or not they wish to ask for the additional information that will now be on that form, including the borrower’s language preference. The announcement states that the “GSEs and the FHFA will assess the impact of these changes to the timeline and will provide more information about the new implementation dates as soon as it is available.” An “Optional Use Period” for the new URLA was set to begin July 1, 2019, but the GSEs, at the direction of the FHFA, announced June 12 that optional use period would not occur. In addition, the GSEs have indicated, though not yet officially announced, the mandatory use date for the revised Fannie Mae form 1008, the “Uniform Underwriting and Transmittal Summary” will coincide with the new URLA mandatory use date when that is announced. However, this form revision did not require the data mapping changes the revised URLA required. The Demographic Information Addendum that was published along with the revised URLA is still available for use with the current form 1003 application.

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

SPONSORED EDITORIAL

NMP NEWS FLASH continued from page 16

Opens Doors Foundation has allowed thousands of families to focus on their child’s treatment without being overcome with the stress of paying their mortgage or rent payment,” said George. Dubois said: “It’s humbling to receive an award steeped in the meaning and essence of the Alyse Childers-Wiley Memorial Award. She was a warrior, driven to make the world a better place, and that’s something to which I will always aspire. I’m honored by the recognition, especially coming from a company like CMG, which lives and breathes the value of working hard and giving back. Families across the country have my commitment, and I will continue to do all that I can to MBA Opens Doors Foundation’s help them in their time of need.” Deborah Dubois Honored by Tappable Equity at Record High CMG Financial Tappable Deborah equity, Dubois, defined as president the share of MBA of equity Opens available Doors Foundation, was presented with the for homeowners with mortgages to Alyse Childers-Wiley Memorial Award borrow against before reaching a maximum total combined loan-toby CMG Financial at the CMG value of 80 percent, reached a record Foundation’s 9th Annual Wine high in the second quarter, according Tasting and Auction in San to data from Black Knight Inc. Francisco. The second quarter’s level of $6.3 CMG Financial’s Alyse Childerstrillion was up by more than $335 Wiley Memorial Award recognizes billion and marked second exceptional industry professionals who strive to make a positive impact consecutive quarterly increase. The and inspire others. The annual award second quarter’s level was 26 percent above the mid-2006 peak of is named after the late Alyse $5 trillion. Childers-Wiley, a dedicated CMG Black Knight also noted that 49 Financial employee whose strength, percent of the 45 million commitment and generosity made homeowners with tappable equity the world a better place. ChildersWiley tragically lost a long nine-year have first lien interest rates greater than 4.25 percent, which makes battle to cancer in 2017. refinancing an appealing prospect. Dubois was honored with this year’s award at the CMG Foundation And 76 percent of these homeowners have rates at or above fundraiser event by Chris George, 3.75 percent. 2019 MBA chairman and founder, president and CEO of CMG Financial, and member of the Opens Your turn National Mortgage Professional Doors board of directors, for her leadership, commitment and success Magazine invites you to submit any information on regulatory changes, as president of the Opens Doors legislative updates, human interest Foundation. Opens Doors provides stories or any other newsworthy mortgage and rental assistance to items pertaining to the mortgage families with critically ill or injured industry to the attention of: children, allowing parents and guardians to be by a child’s side NMP News Flash column during treatment, without fear of Phone #: (516) 409-5555 jeopardizing their home. E-mail: “The Alyse Childers-Wiley Newsroom@MortgageNewsNetwork.com Memorial Award is a chance for our organization to not only honor the Note: Submissions sent via e-mail memory of our incredible Alyse, but it’s also to recognize members of our are preferred. The deadline for community for their service. Deborah submissions is the 1st of the month Dubois’ selfless commitment to MBA prior to the target issue. Mark Fleming predicted the defect risk could continue to decline thanks to increased refinancing activity. “In fact, according to estimates, the number of existing households that would be refinance candidates would increase to 11.6 million at a mortgage rate of 3.5 percent–as the prevailing rate would be at least 0.75 percentage point lower than their current rate–compared with just 2.9 million households when the mortgage rate is 4.5 percent,” he said. “As the mortgage market composition continues to shift toward refinance transactions in 2019, the risk of defect, fraud and misrepresentation will continue to decline.”

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

Dear Mortgage Professional, NAMB+ Endorsed Providers are a select group of companies approved by the NAMB+ Board of Directors as being qualified and committed to helping small business mortgage professionals by providing exclusive NAMB Members Only benefits, discounts and offerings, and exceptional customer service. A complete list of Endorsed Providers is displayed below and is available at www.nambplus.com. NAMB+ works hard to continue adding new

relationships that bring value to Members each month. If you have interest in becoming an Endorsed Provider, please contact me for more information. 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.

Ameriagency is a national insurance agency that shops for you, saving you time and saving your client hundreds of dollars on property insurance. Avantus is a technology-driven full-service credit reporting company. Brokers Compliance Group provides compliance support programs.

Focus IT supercharges your leads thanks to the Pulse CRM, our flagship tool that connects with your LOS.

MassMutual Disability Income provides NAMB members an opportunity to apply for individual disability income insurance (DI) at

Social 5 offers a social and mobile marketing strategy that gets noticed.

Starrex provides innovative service solutions including national appraisal management and credit products.

Syncro connects mobile salespeople to their office website leads.

Thrive Hive confirms that on average, a complete Google business listing gets 7x more clicks. Our free tool will grade your listing and tell you what’s missing.

USA Business Lending is your complete resource for everything commercial lending.

discounted rates. MortgageHippo Swift allows loan originators of all sizes to deliver a modern borrowing experience and reduce origination costs.

n National Mortgage Professional Magazine n SEPTEMBER 2019

CIC Credit offers Tri-merge Credit, Employment Screening, risk mitigation & much more.

Sarma gives you access to merged credit reports CreditXpert tools, AVM Reports and much more.

NationalMortgageProfessional.com

Camber Marketing Group provides premier lead generation, data solutions and direct mail marketing.

National Mortgage Insurance Corporation (National MI) is a private mortgage insurer enabling low down payment borrowers to realize homeownership.

Universal Credit Services is a top ranked national credit reporting agency and authorized report supplier for Fannie May Day 1 Certainty®

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!

N A M B

P E R S P E C T I V E

Better Health Insurance: Become an Agent for Change Understanding your options to consume group health coverage By Michael Haffey

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

In my last article in the March 2019 issue, “Become a Change Agent for Better Health Insurance: A case for Association Health Plans,” we explored how association members can become the agents for a much-needed change in the health insurance world. As we now work together to provide attractive new health plan options for the members of the National Association of Mortgage Brokers (NAMB), in future articles, we will explore all the options to buy health insurance and attractive benefits in America today. We will cover the following topics over the next few months: l The options that are available to groups of two or more to buy health insurance. l The options available to individuals, sole proprietors or independent contractors to buy coverage. l The Ancillary and Voluntary programs or other benefit plans available to business owners and employees to round out their offerings. This month, we will explore the coverage options for groups of two or more employees to access health insurance today. Perceived advantages of group insurance First, the perceived advantages of group health insurance plans include: l Lower rates l Better benefits l Guaranteed issue insurance l Coverage for pre-existing conditions Most of the above are true (not so sure about the lower premiums, right?) when your business is able to meet two challenging requirements. First, the contribution requirement mandates that the employer pay 50 percent of the single premium. Secondly, one must meet the participation requirement; usually at least 50 percent of the eligible group is required to be covered. If you can clear these two hurdles, most business owners just look at the first and most common option for group insurance: The ACA community rated marketplace plans. These are the plans that most brokers spreadsheet and make available. However, due to the community rating of these programs, guaranteed insurability and profit margin requirements of the larger insurers, the rates for these plans have become extremely high and unpalatable to most small business owners. More attractive group rates? Savings up to 45 percent! This second group health plan option can provide the most attractive rates and all the security of the ACA marketplace. These plans are called “Level Funded Health Plans.” Level Funded Plans provide attractive comprehensive coverage and cover pre-existing conditions. However, in order to drive attractive pricing, they require medical underwriting. Once approved, these plans can drive a guaranteed premium savings of 10 percent to 45 percent for a healthier group compared to ACA plans. Most employers get excited today when their insurer/broker delivers a single digit premium renewal or low rate increase when in reality they could be saving thousands of dollars a year by just looking at this attractive funding option. Let’s drill down a bit on how

this plan actually works. Level funded health plans combine the fixed premiums of (traditional) fully insured plans with the financial advantages of self-insured plans, but without the risk. With a level funded health plan, businesses pay a predetermined “level” premium, to a Third-Party Administrator (TPA) that processes and pays claims and collects premiums. These plans have an individual and aggregate stop-loss insurance policy embedded, which protects employers if an individual or the entire group’s claims exceed a certain dollar amount. After the end of the year-long plan, the level funded health plan will refund the company if claims came in lower than projected. If claims exceed the aggregate stop loss amount, then the company will be protected from this overage by the embedded stop loss policy. The good news is that, just like fully insuring your plan, the predetermined level premium is your only cost. Level funded health plans are emerging as a popular option because it provides the predictability of a fully insured plan, but companies only pay for the actual healthcare costs its employees incur. The NAMB Health Plan will initially provide level funded options down to groups of two employees. These plans have many attractive features that provide better benefits and control the cost of care that are normally only available to very large employers. The above group programs normally provide what would be considered “comprehensive coverage” (i.e. coverage for the nine of the 10 essential health benefits made famous by the ACA, usually leaving off number 10—Pediatric Oral and Vision Coverage): 1. Ambulatory patient services (outpatient services) 2. Emergency services 3. Hospitalization 4. Maternity and newborn care 5. Mental health and substance use disorder services, including behavioral health treatment 6. Prescription drugs 7. Rehabilitative and habilitative services (those that help patients acquire, maintain, or improve skills necessary for daily functioning) and devices 8. Laboratory services 9. Preventive and wellness services and chronic disease management 10. Pediatric services, including oral and vision care However, due to the removal of the individual mandate penalty to buy health insurance and the fact that small employers with less than 50 employees do not have to provide health insurance, this has created an opportunity for employers to provide plans that are less than comprehensive. Limited plans/access to care/lower premiums, but for a reason Catastrophic Plans, Limited Medical Plans, Medical Sharing Plans and Direct Primary Care Plans can provide effective, low-cost access to healthcare. These newer plans can provide different flavors of access to healthcare and significant value to many at very

N A M B

P E R S P E C T I V E

low price points. However, these plans usually provide a very specific schedule of benefits and either exclude or limit coverage for preexisting conditions. They can also exclude certain coverages all together and/or have a limited annual or lifetime maximum benefit. I’m not saying that these plans aren’t worth considering and don’t provide needed coverages. What I am saying is that one just needs to be fully aware of their limitations and exclusions in the plans. If you don’t need coverage for pre-existing conditions or can’t afford an unlimited coverage plan with all essential health benefits, these plans may be for you or some of your team. For some, just having access to a primary care, either in-person or virtually with little or no cost at the time of care, along with access to low-cost prescriptions, can be a real benefit.

Arrangement (HRA) regulations provide a new, expanded opportunity for employers to provide tax-friendly dollars to employees to cover individual market premiums. We will cover the opportunities for coverage using individual health insurance market in a future article. Our goal is simple: To provide access to plans that meet employers and employees where they are financially … not force them into a system that isn’t working. We need you—business leaders, employers and like-minded mortgage professionals—to be the agents for change and the catalyst for this movement toward better health insurance. To request a health insurance quote today or to speak with an expert about the plans that are best suited for your specific needs, be sure to visit Pendella.com/NAMB. For questions or to learn more, contact NAMB@Pendella.com.

Can’t do a group plan but still want to help your employees? Okay! Businesses that can’t meet the participation or contribution requirements for group health insurance have an option. They can provide employees access to an agreed upon amount of money called a “defined contribution.” Under a defined contribution approach, each employee can pick an individual market plan that best fits their needs and budget. Recent legislation may provide some much-needed tax advantages. Health Reimbursement

Michael Haffey is managing partner, association member benefits for Pendella. Michael’s passion is creating and deploying innovative strategies to assist employers and their employees in controlling their health insurance spend, while allowing access to the best healthcare and moving them towards real wellness and total health spans over 30 years. He may be reached by phone at (833) 7363355, ext. 706 or e-mail Michael@Pendella.com.

Embassy Suites Columbus-Dublin 5100 Upper Metro Place • Dublin, Ohio 8:30 a.m.-4:00 p.m. Join NAMB for a variety of speakers in Dublin, Ohio that will provide attendees with information and tools to help grow and improve their businesses when NAMB’s Road Show visits Ohio. Registration for this event is free!

8:30 a.m.-9:00 a.m. Registration 9:00 a.m.-9:05 a.m. Welcome from NAMB President Rocke Andrews, CMC, CRMS 9:05 a.m.-10:20 a.m. “What’s the 411 on the Available Affordable Products and Tools?,” presented by Freddie Mac 10:30 a.m.-11:50 a.m. “Getting Off the Loan Officer Roller Coaster,” featuring Carl White With Mortgage Marketing Animals Have you wondered why some loan officers are having their best month ever, while others are seeing significant decreases? Do you find yourself having one great month, followed by a slow month, you know, the “Loan Officer Rollercoaster?” As the current branch manager of one of the most successful mortgage branches in the nation, Carl White is going to map out for

you how to have ever increasing months of high production, by eliminating the “Good month followed by a slow month,” and “Who does what” with the most successful loan officers throughout the nation. Noon-12:50 p.m. NAMB President’s Update with Rocke Andrews, CMC, CRMS 1:00 p.m.-2:20 p.m. Session Featuring Freddie Mac Focused on Technology 2:30 p.m.-4:00 p.m. “The Perfect Week for a Top Producing Loan Officer,” featuring Carl White with Mortgage Marketing Animals In this session, Carl White will map out “The Perfect Week” to closing more loans, all while having less stress and more time off. This will be a step-by-step list of very specific activities for you to do each day of the week to maximize lead generation and lead conversion with specific scripts, texts and e-mails samples all provided.

For more information or to register, visit NAMB.org, or contact NAMB Executive Director Valerie Saunders at (202) 434-8250 or e-mail valsaun@namb.org.

n National Mortgage Professional Magazine n SEPTEMBER 2019

Agenda

NationalMortgageProfessional.com

NAMB’s Road Show Comes to Ohio Monday, October 28

N A M B

P E R S P E C T I V E

A Message From NAMB Membership Committee Chair Kimber White, CRMS As Membership Committee Chair of NAMB, I would like to welcome the new NAMB members listed below and offer the following message … Thanks for joining NAMB. We are sure you will enjoy the benefits of membership! Our Web site, NAMB.org, contains valuable information about upcoming events, NAMB certifications, legislative actions, the NAMB Toolbox, and information about all the benefits available to you, including our affinity partnerships available at NAMBPlus.com. New members can also access video recordings of educational events and informational Webinars hosted by some of our sponsors at the NAMB Video Stage and our Endorsed Providers at the NAMB+ Video Stage! Understanding the tools in the NAMB Toolbox Membership includes access to many benefits. If you have not looked in the NAMB Toolbox, you may be missing out on some great tools that can help you improve your business. Some examples are listed below: l NAMB All-In is a cloud-based loan origination system created for

mortgage brokers to streamline and support your success. From a mobile-friendly customer experience, to an integrated wholesaler marketplace, you will have everything you need to “wow” borrowers and win more business with a new competitive edge. l NAMB+ CRM easily and thoroughly integrates with Calyx PointCentral and will be integrating with Encompass in early 2019. NAMB+ CRM supercharges your LOS providing lead and referral management tools, automated email marketing and loan status alerts, and intelligent task management for your loan production. l EC Purchasing offers great discounts for NAMB members on copy/print, IT, overnight shipping, wireless and more. Review discounts from a wide range of national companies, then select discounts on the products and services that best meet your needs. Check out all the great tools in the NAMB Toolbox today at NAMB.org! For more information on the benefits of NAMB membership, visit NAMB.org and click on the “Membership” tab. Sincerely, Kimber White, CRMS Membership Committee Chair, National Association of Mortgage Brokers

NAMB New Members Report

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Gil Aguilar

Joseph Cora

Willie Lumpkin

David Towers

Ann Ahlo

Craig Cornelius

Gayle Lynch

Niesha Veasley

Allan Almarines

Jocelyn De Guzman

Stacey Maisano

Johnny Velazquez

Nicholas Anderson

Orlando Diaz

Denise Manning

Mindy Vu

Travis Andreasen

Diogenes Duzoglou

David Marsh

Tracy Wenhe

Reginald Ardis

Randy Ebright

Luis Martinez

Hong Sherrie Xiao

Michael Arnall

John Gillespie

Chad Mason

Mark Yancey

Earle Ashton

Bruce Goldberg

Marissa McGee

Radni Youkhaneh

Paul Banks

Stefanie Halpin

Angie Meadows

Elizabeth Bates

Matthew Harper

Ralph Mesa

Chris Behrns

Michael Herdman

William Moya

Kristie Bertolo

Jesus Hernandez

Jason Myers

Victor Boulos

David Holland

Nathan Nguyen

Amberlynn Boyle

James Hooper

Jess O’Bryant

Aaron Brockenberry

Venetia Jordan

Donna Paulk

Donald Brown

John Joyce

Wilfredo Paz

Mitch Brown

Hang Kim

David Powell

Ronald Bustamante

Navella Kunitz

David Reams

Katherine Cannon

Ramali Kusnadi

Riju Sam

Brandon Carrero

Luis Larcina

Matthew Sangiuolo

Bhurwinder Chahal

Walter Lauderdale

Kurt Schroeder

Daniel Chaney

Andre Little

Peggy Taylor

Jennifer Clark

Silvia Lopez Contreras

Brian Terrill

P E R S P E C T I V E N A M B

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n SEPTEMBER 2019

The Solution to Customer Disloyalty and a Revolutionized Customer Experience By Frederick Townes

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Enabling without eliminating Today’s borrowers (especially Millennials, who are now at the age to consider purchasing a home) are forcing lenders to rethink how they approach their business. This is mainly driven by the fact that Millennials, while technically savvy, also want and expect a personalized experience. This has increased pressure on lenders to adjust their tried-andtrue approach to meet new consumer demands for a streamlined experience with positive results that requires minimal effort on the consumer’s part. Millennials are already set to dominate the real estate market in the next decade. As that trend continues, real estate and mortgage professionals must adapt to remain competitive. The logical approach to this reality is to take advantage of technology to improve processes and help create the experiences consumers want–and AI and ML are the latest change agents lenders can harness to do so. Often seen as a subset of AI, ML is the scientific study of algorithms and statistical models that computers use to effectively perform a specific task without explicit instructions, instead relying on patterns and inference. These automated processes play an important role in developing strong customer relationships, which, in turn, build customer loyalty and differentiate financial institutions’ services. Nevertheless, while many

lenders understand the purpose and benefits of AI/ML, and reference them as technologies that will lead the financial industry into the future, they are still hesitant to incorporate them into their daily tasks or company infrastructure. Understandably, these lenders fear they will need to eliminate jobs as the technology further integrates into the homebuying process. Yet these technologies are not meant to replace human loan officers, nor should they. On the contrary, AI is about enabling lenders to make their companies and processes more efficient, so they can focus on building strong relationships with customers. In addition to improving the lending experience for customers, AI can also improve experiences for mortgage and real estate professionals. Through AI, real estate and mortgage professionals can personalize experiences by using borrower behavior and intentions to identify follow-up actions. The goal is to use this data to give the consumer what he or she wants and needs from the very beginning, all while keeping the loan originator central to the process. Then, when it’s time to take action, loan officers can leverage technology to make recommendations on the most beneficial course of action for borrower acquisition and retention. Here to stay While consumers are increasingly comfortable with digital-first borrowing experiences, they also want to feel a human connection with their lender when making such a large financial investment. AI/ML helps loan officers increase productivity, allowing them to spend more time cultivating personalized relationships. More than that, AI/ML give loan originators and real estate professionals the tools to truly understand consumers’ traits, habits, likes

and dislikes, helping them form deeper connections. As lenders allow AI/ML to improve more facets of the loan origination process, it is helpful to focus on the transformation of a single process until the entire process is made anew. If financial institutions consistently engage in this attitude of slow and continual improvement, they will make progress more quickly and efficiently, and have more control over their investment. Think about it this way: back when television was black and white, communities were smaller, your banker was a figure in your community, and relationships were life-long, personalization was essential to build trust and long-term relationships with customers. Today, TVs are portable, and communities are larger and digitally-connected. What has not changed, however, is the need for that same personal touch. Now, technology can provide that touch at scale to empower the professionals that serve the homebuyer. Even more truth The bottom line is that lenders should stop thinking of AI as merely a means to an end. Instead, they should embrace it as a tool to help users increase productivity and generate more value for the company through new and lasting relationships. By keeping borrowers at the forefront of their reasons for incorporating AI/ML in their processes, lenders can build personalized experiences that make the process more enjoyable. In turn, financial institutions can improve productivity while creating a customer for life. So, the next time a borrower searches for a loan and reaches out to you, think about how that experience could be improved with a personalized approach. It could make the difference between a homebuyer choosing your institution, or a competitor.

Frederick Townes is the chief technology officer and cofounder of NestReady, a one-stop digital real estate technology firm that builds innovative tools in the mortgage and real estate markets. He may be reached by phone at (866) 245-4014.

n National Mortgage Professional Magazine n SEPTEMBER 2019

The unfortunate truth The mortgage industry has

always been reluctant to embrace major changes to infrastructure. Since the introduction of automatic underwriting, lenders have traditionally been slower to adapt to new technology, and even slower to implement procedural changes in their institutions. This hesitation is based on several factors, including lack of funds to purchase technology, lack of desire to change entrenched processes that have been in place for a long time, fear of eliminating jobs and a “wait-andsee” mentality, in which lenders wait until a technology is embraced industry-wide. The lack of an enterprising, pleasant experience for customers has eroded consumers’ sense of loyalty to their financial institutions. This is also true when it comes to the homebuying process, which has become disjointed and disconnected from the other services banks and credit unions offer homebuyers.

NationalMortgageProfessional.com

hink of your last visit to the grocery store checkout counter. After entering your customer loyalty ID into the appropriate device, the clerk was probably very cordial, but also somewhat impersonal. “Hello, were you able to find everything you needed today?” That’s a perfectly pleasant greeting, but what if we could take it to a whole new level? Imagine going to that same checkout counter and having the clerk greet you by name. “Hello, Mr. Townes, thanks so much for being a loyal customer and shopping with us. We noticed you have been purchasing a lot of Hill’s Science Diet cat food recently, so I have a special offer for you on a new brand we know you’ll love.” While both of these examples are focused on the customer experience, the second one takes a giant step forward. The more personalized the message, the stronger a customer’s loyalty in turn. A personalized message creates engagement by recognizing the behavior and values of a specific customer, resulting in a more positive interaction. Customer satisfaction is the bedrock of success in today’s mortgage business. Creating meaningful engagement at every touch point, whether face-toface or digital, is paramount. No matter the communication method, lenders should be armed with homebuyer journey information so that the customer will become loyal to your brand, and therefore, more likely to refer business or be a repeat customer. Now, imagine this same scenario in the context of machine learning (ML) and artificial intelligence (AI) in the real estate industry. AI is basically the process of enabling computers to perform tasks that normally require human intelligence. Using AI enhances a financial institution’s ability to provide better, more tailored customer experiences in addition to improving productivity. Many lenders are beginning to see the potential of such technologies: According to a recent survey conducted by Harvard Business Review Analytic Services, 40 percent of respondents are exploring use cases for both AI and ML.

The Back to School Mindset Reticular Activator System: How to “Activate” the Super Salesman Within You in ONE Easy Step! By Christine Beckwith

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

h t i kw

c e B

The

h t i kw

When you bought your last car and if you researched that car,

test drove that car, shopped for that car, did you notice that afterwards that you saw this car on the road at a far higher frequency? The reason for that is your RAS or filter allowed your brain to pull that focus to the top. There were NOT more cars of this type around you than before you told your brain this was of interest, but your RAS was set to bring them into focus, Top of Mind. Make sense? A second example might be when you hear a strange word you’ve never heard before, BUT then you hear it again and again. Is that just a coincidence? No. It’s your RAS at work. Your filter is bringing it forward. What about a song you like that you are playing often and suddenly it’s now being played everywhere, you hear it in stores, when driving, etc. RAS again at work. What about when you had a baby? Whether man or woman here, as a new parent, you were in baby stores, checking out furniture, talking to everyone about the baby coming, online shopping for baby stuff, reading baby books, going to the baby doctor and you were certain it was the perfect time to have a baby because from your seat, it appeared the world was pregnant around you, as if an epidemic? No. RAS was at work here yet again.

So, now you understand what RAS is and how it works to filter things. Let’s put this to work for you in a money-making way. Let’s bring sales Top of Mind. When you get up in the morning and begin your routine, what are you thinking about? What if you were thinking about all the sales you are going to make that day? What if when you got dressed, part of your routine was to put 12 business cards in your pocket with the belief that you will find 12 new people a day to hand them out to and to share with them what you do? What are the opportunities within a day to find 12 people that you believe would want to help you

make a sale? What if I told you to put 25 business cards in your pocket per day and that for every person you gave one to, you also handed them a second or even third card and said, “I build my business on referrals and would appreciate your help sharing that I do ‘X’ for a living?” Would these people want to “help” you? So, let’s name people in your inner sphere of influence that you might hand a card to every day starting with you leaving your driveway on your way to work: l The guy/gal at the convenience store where you stop for gas and gum. l The guy/gal at the coffee shop and all their co-workers. l The teachers at your sons/daughter’s school. l The other parents at your sons/daughter’s school. l Your mechanic and all his/her co-workers. l Your landscaper and all his/her co-workers. l Your hairdresser and all his/her co-workers. l Your child’s sports coach and all their peers and the parents of the kids on your child’s team. l Your handyman. l Your mailman/woman. l All the neighbors on your street. l All the people in the businesses on your street. l All the people in the businesses at your place of employment in your building and on your business street. l All of your friends and their friends. l Your family. l Your parents’ friends. l Your friend’s families. l Your veterinarian and all their coworkers. l Your doctor and all their coworkers. l Your child’s pediatrician and all their co-workers.

l Your dentist and all their coworkers. l Your dermatologist and all their co-workers. l Your spa and all their employees. The list is endless!!!! So, my final question is truly simple in applying this system and bringing SALES to the Top of YOUR Mind and RAS. Is sales at the Top of Your Mind every day? Because, when you begin to realize that sales are all around you and that people you give business to and interact with want to “help” you, then you will have it come to your mind constantly. It’s up to you to feed your subconscious. We see what we want, it’s the basic Law of Attraction and in truth, the Law of Attraction cannot work without RAS, and RAS cannot work until you feed it what you want. It’s really that simple. Bonus tip: Using mortgage sales as an example, but is applicable to any type of product sales … what do you think is at Top of Mind for your clients who are buying, selling or refinancing a home? Their RAS is having them be aware of all of those people around them at work, neighbors, family members and friends who are also buying, selling and refinancing a home. Thus your greatest place to gain referrals is the current customer you are working with. THEY have referrals. THEY know who around them is doing what they are doing right now and you are displaying your impeccable knowledge and service right now so asking them to refer you should be pretty simple. Sales is not hard, but it is not for the lazy. If you are smart and you have any kind of work ethic, there is endless money waiting for you! Good luck! This article was originally written for LinkedIn.

Christine Beckwith is a 30-year mortgage industry veteran who has broken many glass ceilings and has blazed a trail for many female professionals to come. Christine is currently president and chief operating officer of 20/20 Vision for Success Coaching and Consulting, a decorated, sought after and award-winning leader. Christine may be reached by e-mail at Christine@VisionYourSuccess.net.

n National Mortgage Professional Magazine n SEPTEMBER 2019

NationalMortgageProfessional.com

’ve been writing about this for years since I learned the traits and proven results of “top of mind” awareness. In this article that I previously wrote for LinkedIn, I break down how this mindset effected incredible sales results. Also, these techniques are elaborated upon in my now award-winning sales book by the Los Angelos Best Book Awards for 2019, Wise Eyes: See Your Way to Success. I know exactly where I was when I first learned about Reticular Activation. I was on the sales floor of one of my old company’s district offices in Tampa, Fla., listening to a peer sales manager share his understanding of how this worked. He was impressive and articulate. He used examples and practical application so that his audience could apply his lesson easily. It changed my life in sales. I have been paying forward this lesson for nearly 15 years now. It can and will change your sales results immediately. The definition of “Reticular Activation” is this: “The Ascending Reticular Activating System (ARAS), also known as the extra thalamic control modulatory system or simply the Reticular Activating System (RAS), is a set of connected nuclei in the brains of vertebrates that is responsible for regulating wakefulness and sleepwake transitions.” So there you go, needed to get that part out of the way. Where am I going with this? Glad you asked! RAS has many functions, but one of them is filtering, like a secretary who controls who visits his/her executive, a system of what gets through, but in this case to your brain. That said, your conscious mind can take in far less data than your subconscious mind. In fact, it’s billions per parts of data difference. Why is that relevant? Because you need your subconscious mind to be working for you in order for this to work. This will require a change in how you think daily, but it’s not hard at all. So, here are some practical application examples:

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.

Citadel’s Servicing Portfolio Crosses the $3 Billion Mark

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Citadel Servicing Corporation has announced that it has surpassed $3 billion in servicing under management. CSC is a vertically integrated lender, solely dedicated to the non-QM/nonprime mortgage market. “We are continuously looking at ways to improve what we do and how we do it,” said Eric Friedman, CSC’s SVP, director of servicing. “We are always working with our partners to find cost-effective ways to service the needs of our customers. Over the past 12 months, we have invested in systems which allow us to provide efficient and easier ways to service our customers.”

the current tenants’ leases expire. Mat Ishbia, UWM’s president and CEO, credited his company’s success on the mortgage brokers that it serves. “UWM is all-in on the wholesale business,” said Ishbia in an August 2018 interview with National Mortgage Professional Magazine. “We are focused exclusively on brokers and we only care about what our brokers think. We are true partners to our brokers, and we want them to succeed and to wow their borrowers and real estate partners. We only care about helping them build their business and be successful in their local markets.”

Visionet to Integrate With Ellie Mae

New Report Finds Home Point Financial as Q2’s Fastest-Growing Non-Bank Mortgage Lender

UWM Expands HQ to Adjacent Property

United Wholesale Mortgage (UWM) is growing so fast that it needs a second building across the street from its headquarters complex in Pontiac, Mich. According to a report in Crain’s Detroit Business, the company employs 4,100 and is expecting to add nearly 3,000 employees by 2025. To keep up with this projected growth, UWM is acquiring the 900,000-squarefoot office building located across from its current 610,000square-foot campus. The company plans to build an enclosed skyway connecting the two buildings and will expand further into its new property as

Loans (43 percent). “Our business partners are trusting us with their customers, and we understand that our role as the servicer has a huge impact on their reputation and ability to earn repeat business” said Willie Newman, President and CEO of Home Point Financial. “It is for this reason that we are building out an experience that will support the customers’ entire homeownership journey and will create a stronger relationship between Home Point, the customer and our third-party partners. Ultimately, we intend on working with our partners to create customers for life.”

Home Point Financial, a wholesale and correspondent mortgage lender based in Ann Arbor Mich., was named the fastest-growing non-bank mortgage lender during the second quarter, according to a data report compiled by the trade publication Inside Mortgage Finance. The new data analysis found Home Point Financial increasing its loan volume by 98.5 percent from the first quarter through the second quarter, outpacing prominent lenders including Wells Fargo (62 percent), United Wholesale Mortgage (61 percent), Chase (60 percent) and Quicken

Visionet Systems has announced that it has completed the integration of its VisiLoanReview (VLR) with Ellie Mae’s Encompass Digital Lending Platform, including using Ellie Mae’s Encompass Partner Connect. The integration will allow lenders to more efficiently and securely share data between Visionet’s VLR solution and Encompass to drive quality and efficiency in the loan origination process. Visionet’s VLR enables lenders to process a large volume of documents with a high degree of accuracy and precision. Along with higher borrower satisfaction, lenders enjoy the benefits of faster loan disbursals and reduced operations cost. VisiLoanReview is built on an enterprise-level architecture, and is ideal for any documentintensive workflow within the lending lifecycle, including loan

setup, loan boarding, pre- and post-closing operations and audits. Ellie Mae’s Encompass Digital Lending Platform provides one system of record that enables banks, credit unions and mortgage lenders to originate and fund mortgages and improve compliance, loan quality and efficiency. “Visionet is delighted to partner with Ellie Mae,” said Arshad Masood, chief executive officer at Visionet Systems. “VLR’s secure, seamless integration with Encompass enables our clients to simplify the process of data extraction, indexing and stacking, so they can more efficiently process mortgage loans and grow their business. We look forward to a long, successful relationship with Ellie Mae.” Freedom Mortgage Acquires J.G. Wentworth Home Lending

Freedom Mortgage Corporation has announced its acquisition of J.G. Wentworth Home Lending LLC, a subsidiary of J.G. Wentworth Company. Terms of the deal were not disclosed. J.G. Wentworth Home Lending originates more than $6 billion in annual mortgage volume and manages a $6 billion servicing portfolio. The Chesterbrook, Pa.based company has 571 employees in more than 35 offices nationwide, with a particularly strong presence in the midAtlantic region. “J.G. Wentworth Home Lending’s excellent track record of serving first-time and veteran

homebuyers make them a perfect addition to Freedom Mortgage,” said Stanley Middleman, founder and CEO of Mount Laurel, N.J.based Freedom Mortgage. “By combining strengths, we’ll be able to provide affordable home financing options to even greater numbers of borrowers, so they may achieve the American dream of homeownership. We look forward to working together.” Phil Buscemi, president at J.G. Wentworth Home Lending, said, “We are very pleased to enter this next chapter in our company’s history. Freedom Mortgage shares our commitment to always put borrowers first and our dedication toward leveraging technology to make the financing process as fast and simple for consumers as possible. We look forward to an exciting future together.”

To be eligible, applicants must be a United States citizen or national, have a minimum grade point average (GPA) of 2.5 and meet one of the following criteria: be enrolled full-time in a U.S. high school, have graduated from a U.S. high school or have obtained a U.S. GED at the time of application; or be enrolled fulltime as a college student at the undergraduate level with a minimum GPA of 2.5 at the time of application. Applicants must also live within geographic reference to a Guild Mortgage branch or office in their city, state or county.

Students must submit a student essay, statement of career objectives, letter of reference and their official high school or college transcripts as part of the application process. Recipients are selected by a third-party law firm that specializes in assisting 501(c)(3) charities and foundations in navigating scholarship grant creation and maintenance programs. Payment is made to the recipient’s school of choice upon notification and in accordance with the school’s continued on page 81

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 2019

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

Guild Mortgage Awards 10 Academic Collegiate Scholarships Guild Mortgage has awarded 10 academic collegiate scholarships to students pursuing continuing education. The Guild Giving Scholarship Program, now in its third year, provides financial assistance to qualified members of the community, as well as Guild Mortgage employees and their dependents. Winners are awarded $1,500 to be applied to accredited colleges, community colleges, trade schools, and undergraduate and graduate degree programs in any field of study. The 2019 recipients are: Kai Broach, Western Washington University; Sebastian Castillo Cario, UCLA; Bailie Gowans, Brigham Young University-Idaho; Natasha Holland, University of Oregon; Madilyn Kusch, Texas Tech University; Grace Anne Martin, Liberty University (Va.); Dani McCartney, Pima Community College (Ariz.); Katharine Rucker, UCLA; Courtney Scott, Montana State University; and Miguel Velazquez, University of California San Diego. “Giving back and supporting our local communities is part of our culture at Guild,” said Mary Ann McGarry, Guild Mortgage president and CEO. “We’re pleased to see the Guild Giving Scholarship program continue to grow with an increasing number of applicants in 2019 and honored to help support the

continuing education of these 10 bright individuals.” The scholarships are awarded through the Guild Giving Foundation, a non-profit organization established to help deliver on Guild’s commitment to strengthening communities and building relationships across the country. In addition to supporting dozens of local and national charities through direct donations and company-backed volunteer time, the Guild Giving Foundation offers employees a dollar-for-dollar donation match, up to a maximum of $250 per year.

SEPTEMBER 2019 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

W H O â&#x20AC;&#x2122; S Company Name

W H O

I N

T H E

2 0 1 9

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

INSERT: ACC_Mortgage_Logo]

WeApproveLoans.com

Non-QM

AFR Wholesale

AFRWholesale.com

Manufactured Home, Renovation, One-Time Close Construction-to-Permanent, FHA, VA, USDA and Conventional

INSERT: Angel_Oak_Logo]

AngelOakMS.com

Alternative Lending, Non-QM

[INSERT: Caliber_Logo]

CaliberWholesale.com

Government, Conventional, Non-Agency, Jumbo

All 50 states

[INSERT: Carrington_Logo]

CarringtonAlly.com

Our Niche is Your Success

Nationwide, except MA & ND

[INSERT: Citadel_Logo]

CitadelServicing.com

Non-QM/Non-Prime Lending

AL, CA, CO, CT, DC, FL, GA, IL, IN, MD, MI, MN, MO, NE, NJ, NC, OK, OR, PA, SC, TN, UT, VA, WA & WI

CMG Financial

CMGFi.com/Wholesale

All In One Loan

[INSERT: Deephaven_Logo]

DeepHavenMortgage.com

Non-QM

First Guaranty Mortgage Corporation

FGMC.com/Wholesale

Non-QM Product Line: Maverick Solutions

[INSERT: First_National_Bank

FNBA.com/Mortgage-Brokers

Non-QM Lending

Nationwide

Flanagan State Bank

FSBTPO.com

USDA, FHA & VA

Doing business in all states, except AK, CT, MA, DE, NH, NJ, VT, NY, RI & DC

[INSERT: Greenbox_Logo]

GreenboxLoans.com

Non-QM Loan Products: Bank Statements, Non-Prime Full-Doc, Investor-No Income Loans, Near-Prime Full-Doc, Foreign National Full-Doc, ITIN Full-Doc, Asset Depletion & Full Doc

AZ, CA, CO, CT, DE, FL, GA, ID, IL, LA, MD, MA, MI, MS, NV, NJ, NC, OH, OK, OR, PA, TN, TX, VA, WA & WI

AZ, CA, CO, CT, DE, DC, FL, GA, ID, IL, IN, KS, MD, MA, MI, MN, NV, NJ, NC, OR, PA, SC, TN, TX, UT, VA & WA Nationwide, except AK & HI

45 states

All 50 states & DC

Nationwide, except AK, MO, HI, NY & WV

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

W H O ’ S

W H O

Company Name

I N

T H E

2 0 1 9

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

Halo Capital

SayHalo.com

Virtually all mortgage loan products—visit SayHalo.com for details

[INSERT: Home_Point_Financial

HomePointFinancial.com

Wholesale

Impac Mortgage

ImpacWholesale.com

Non-QM

Infinity Mortgage Group Inc.

InfinityMGF.com

30-Year, 20-Year, 15-Year, 10-Year, 1-Year ARMs, 3-Year ARMs, 5-Year ARMs, Conventional, Jumbo, Home Equity Lines, VA, Commercial, Full Documents, No Documents, Non-Owner Occupied (Investor) or Multi-Family

[INSERT: JMAC_Lending_Logo]

JMACLending.com

Wholesale and Correspondent Lending

LoanStream Mortgage

LSWholesale.com

Non-QM, Jumbo, FHA, VA & Conventional

[INSERT: Magnolia_Bank_Logo]

MagBankwl.com

In addition to a complete product menu, we offer warehouse lines of credit to mortgage brokers

[INSERT: Mountain_West_Logo]

MWFWholesale.com

Affordable housing mortgage transactions

[INSERT: New_Rez_Logo]

NewRezWholesale.com

Full line of Non-QM, Agency, Government and Jumbo mortgage solutions

Nationwide, except HI

NexBank SSB

NexBank.com

Non-QM Products, Jumbo products, excellent pricing with common sense underwriting

Nationwide, except NY

[INSERT: PRMG_Logo]

PRMG.net

FHA, VA, Jumbo & Conventional—all with a high focus on purchase, pricing and service!

48 states, except NY & WY

INSERT: Parkside_Lending_Logo]

ParksideLending.com

Wholesale and Non-Delegated Correspondent Lender with a full suite of Agency, Jumbo, FHA, VA, USDA & NON QM Products

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

[INSERT: Plaza_Home_Mortgage

PlazaHomeMortgage.com

Wholesale & Correspondent

Nationwide

All states, except DE, MA, ME & WY CO, FL & GA

AL, AZ, CA, CO, FL, GA, HI, ID, MD, NV, NJ, NC, OH, OR, SC, TN, TX, UT, VA & WA 30-Plus States

Nationwide

AZ, CA, OR, CO, WA, UT, NV & TX

W H O ’ S Company Name

W H O

I N

T H E

2 0 1 9

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

INSERT: Princeton_Wholesale

PrincetonWholesale.com

Great rates, less effort

INSERT: Quicken_Logo]

QLMortgageServices.com

Purchase and refinance. Industry-leading MI, pricing, turn times and direct access to your underwriter

Nationwide

[INSERT: Red_Star_Mortgage

RedStarMortgage.com

Commercial real estate financing—small balance $250,000-$6 million

Nationwide

[INSERT: REMN_Logo]

REMNWholesale.com

Renovation

Nationwide

[INSERT: Sierra_Pacific_Logo]

SierraPacificMortgage.com

Our specialty is our people and their dedication to partner and serve our TPO clients, even through difficult, rare or challenging loan files. Our knowledgeable and experienced Account executives demonstrate dependability and flexibility on each and every transaction, working alongside our brokers as guides and advisors, forming a true partnership for years to come.

Spring EQ

Wholesale.SpringEQ.com

Standalone and Piggyback second mortgages

WA, OR, CA, AZ, CO, TX, NE, KS, MN, IA, WI, IL, IN, OH, KY, TN, AL, LA, AR, FL, GA, IN, OH, PA, VA, NC, MD, DC, DE, NJ, CT, VT, NH & ME (coming soon … NV, UT, NM, MO, NY, MA & SC)

[INSERT: Union_Home_

UHMGO.com

Creating raving fans by delivering Agency, Government, and Flex Non-QM products with a combination of cutting-edge technology of UHMGo and high-touch service experience to mortgage brokers and non-delegated correspondent partners

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

[INSERT: UWM_Logo]

UWM.com

Wholesale lending

CA, CO, CT, DE, FL, GA, IL, MD, MI, NJ, OR, PA, SC, TX, VA, WA & DC

Nationwide, except AK

Nationwide

national mortgage professional magazine’s

Legends of Lending IMPAC By Rick Grant

he 1990s was a heady time to be in the U.S. mortgage lending business. Executives working back then witnessed the run-up to the historic refinance boom that would see more than triple the annual volume of home loans written. By the turn of the century, the industry was on fire, fueled by borrowers who previously had no hope of getting financing through traditional agency channels. Most of those companies are gone now, and like London, Paris and Rome, new things have been built upon their ruins. But there is one company that was a leading lender in those days and is still with us today, stronger than ever. That company is this month’s Legend of Lending: IMPAC Mortgage Holdings Inc. and its TPO subsidiary IMPAC Mortgage Corp. Wholesale & Correspondent. We spoke to Ryan Carry, IMPAC’s vice president of national TPO sales, about the company’s history and what it’s offering brokers and sellers for mortgage borrowers today.

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Strength built on historic performance IMPAC has been a publicly traded company since 1995. Prior to the crash of 2007-08, the company had originated $90 billion worth of home loans, many to ALT-A borrowers, consumers with good credit but who did not fit the specific approval requirements of the agencies. While the crash was a very difficult time for everyone working in this industry, Carry said the strength of his company along with good leadership allowed it to persevere. “We stayed alive and kept the lights on,” he said. “That’s a big deal and I have a lot of respect for company leadership. To my knowledge, IMPAC was the only non-bank, ALT-A lender that survived.” No one was thriving in the years just following the crash, but IMPAC was working to bring back its third-party origination (TPO) business as early as 2011. By 2014, the company had officially relaunched its line of non-agency loan products, but this time following industry convention by referring to them as non-QM. “It was good timing,” Carry admits. “At the time, there were only a few players that were offering non-QM products to brokers. Many of the firms in the business today weren’t even off the ground yet at that point.” Building a new business on the ruins of the old non-agency business of the past might seem like a complex and dangerous proposition to some. After all, the storied loans of the past have been blamed for the crash that ultimately led to the foreclosure crisis. Carry maintains that the non-QM products his company offers today bear little resemblance to the pre-crash products offered in the past. “Non-QM loans are often merged in with what we used to refer to as sub-prime. These are not the same products. We serve a different market,” he said. The weighted average FICO score for IMPAC’s Non-QM borrower is 731. The weighted, round the belt LTV is roughly 68-71 percent, depending upon the month and day. In addition, Carry says the assets and reserves these borrowers bring to the table are typically substantial. All of this leads to excellent credit profiles for these borrowers.

—Ryan Carry IMPAC’s Vice President of National TPO Sales

bank statement loan, you need a lending partner who will assist you in getting that loan done in a timely manner,” Carry said. Beyond that, he said IMPAC provides training to brokers to help them identify pitfalls and find opportunities when pre-qualifying their borrowers. These are not qualifying mortgages that you can just throw into a GSE system and expect to get approval and pricing back, he said. This comes down to actual work to get the loan done. “This is a big focus for us and it’s helpful that our broker base is extremely good at what they do,” Carry said. “It is obviously helpful for their relationship, both with us and their borrowers.” This is fortunate, Carry said, because more borrowers than ever are preferring to use products like IMPAC’s bank statement loans to establish income from business or investor cash flows, rather than trying to make themselves look like traditional borrowers. When it comes to investors, they don’t want their lender to tell them how many properties they can own. IMPAC currently works with some sophisticated investors who own 50 properties or more. In the past, these true investors were limited to hard money loans or self-financing. Today, they have a better option. These borrowers represent a great opportunity for empowered mortgage brokers who are willing to learn about the complexities of non-QM lending. Carry says IMPAC makes that easy. IMPAC can onboard a new broker in 72 hours. Once they receive the broker package back, a broker can be submitting loans within three to five days. But, Carry says, his company won’t just sign up a broker and then forget them. The firm offers a lot of support to help brokers get up to speed with the lender’s products.

IMPAC’s Most Popular Non-QM Loan Products l Bank Statement: Ideal for selfemployed borrowers. Easier to qualify for than most competitors with only 12-months of statements required. No tax returns required. Up to 90 percent LTV. Loan amounts up to $3.0 MM, cash out up to $2.5 MM. l Investor: Qualify based on the cash flow of subject property. No tax returns or DTI calculated. Up to 80% LTV. Loan amounts up to $2.5 MM, cash out up to $2.0 MM. l Agency Plus: Jumbo alternative with interest only option. Great for borrowers falling just outside agency guidelines. Shorter waiting periods for derogatory credit events. Loan amounts up to $3.0 MM, cash out up to $2.5 MM. l Asset Qualification: Perfect for borrowers with high cash liquidity. No employment, income or tax returns required. No DTI calculated. Loan amounts up to $3.0 MM, cash out up to $2.5 MM. l All Non-QM loan programs have available terms of 5/1, 7/1 & 10/1 ARM’s as well as 15 & 30 year fixed.

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 National Mortgage Professional Magazine n SEPTEMBER 2019

The right partner for today’s mortgage brokers Carry told National Mortgage Professional Magazine that IMPAC sees a great opportunity in the market today for brokers who are capable of presenting non-QM loan products to their borrowers. Those who do will need a capable wholesale lending partner. “If your borrower is trying to qualify for a

“I think the quality of the brokers working in the industry today is extremely high, which gives the borrower all the more reason to work with them.”

“We’ve been at this for quite a while,” Carry said. “In addition to providing training, we also provide free marketing materials they can use and we host frequent Webinars.” Carry said, IMPAC is willing to partner with brokers. One example he cited was a broker who wanted to expand its business in the real estate community by forging stronger relationships with Realtors. “It’s not uncommon for our account executives to go out and partner with brokers, giving presentations to the general public or the Realtor community. That kind of partnership is important for them.” Legends aren’t made overnight. IMPAC has been in the industry long enough to know what works and what won’t and, according to Carry, the company has made the commitment both to offer the non-QM products the market is asking for now and to partnering with the industry’s best brokers to get those products delivered. As he puts it, “We know what we’re doing. Our brokers see the opportunity and they’re making a decision to work with a lending partner with the experience, knowledge and resources to assist them in developing and growing their business in that space.”

NationalMortgageProfessional.com

Powering brokers with non-QM product Carry says IMPAC entered the market with four main products, a full doc non-QM loan; a bank statement product; an investor cash flow product; and a loan product underwritten with the borrower’s liquid assets in mind. Since then, Carry says all of its products have evolved. In 2014, Carry says that less than five percent of the TPO platform’s loan volume came from its non-QM loan products. Today, more than 90 percent of its volume comes from these products, with its bank statement product among the most popular due to its benefits for self-employed borrowers. “That’s where we see the opportunity today,” Carry said. “And not just for today. We see at least a five-year window of big growth in the non-QM space. So, that’s what we’re paying attention to.” But that’s not all Carry says IMPAC is paying attention to right now. He and his company are also focusing on the broker community. “I think the quality of the brokers working in the industry today is extremely high, which gives the borrower all the more reason to work with them,” Carry said. “That works out well for us because we’ve always been extremely supportive of the brokers we work with in our wholesale business.” Carry finds it ironic that in the days following the crash, many blamed brokers for the problems that led to the crisis. Today, with more professional broker shops rising up, it has become clear that these professionals are welleducated and very smart about the partners they choose. Part of this is evolution, but Carry believes that many of the brokers working today have always been consummate professionals. He knows this because he says many of the brokers the company works with today are well aware of the legacy behind the IMPAC name. “This isn’t our first rodeo,” Carry said. “Not for the TPO business nor non-QM lending.” Carry says IMPAC plans to be very successful selling non-QM loan products through its wholesale and correspondent channels because the company understands that service and execution is paramount. The brokers it works with are well aware of the company’s dedication to these ideals. “The sophistication of the modern broker is extremely helpful for us,” Carry said. “The nature of these non-QM loan products is that they are specifically designed for those borrowers who do not typically qualify for agency loans. They therefore require a certain level of competence to execute on. Our broker partners provide that.” It’s clear that the success of IMPAC is due, at least in part, to the quality of the broker community that it serves through its wholesale channel. For many brokers, that’s a two-way street.

By Joyce Wilkins Pollison Esq. 36

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Obligation to Accept Private Flood Insurance Question We are a community bank financing the construction of a mixed-use property consisting of retail/business use on the first floor and four residential units on the second floor. The property, which will be the collateral for the loan, is located in a flood zone. The loan amount is $550,000, with a replacement cost value of $980,000 (as is)/$1,110,000 (completed). The borrower is asking that we accept a private flood insurance policy that contains an 80 percent coinsurance clause which also has a 20 percent coinsurance deductible. Do we have any obligation to accept such a policy? And, if not, are we permitted to accept such a policy? Lastly, given that this is a mixed use property, how do we determine the maximum amount of coverage available under the National Flood Insurance Program (NFIP)? Answer Let’s take the last question first.

Non-residential buildings include mixed-use buildings with less than 75 percent residential square footage. If you are stating the first floor is commercial space and the second floor is residential space, I am assuming the square footage is 50-50, which would make it a nonresidential building for the purpose of flood insurance under the NFIP. The maximum coverage available for “Other NonResidential” is $500,000. Now onto the private flood insurance policy issue! In light of the current regulations as well as those effective July 1, 2019, the bank is under no obligation to accept a private flood insurance policy containing a coinsurance clause. However, the bank may use its discretion and accept same, provided the policy meets certain criteria which include the provision of sufficient protection of the loan, consistent with general safety and soundness considerations. Under current law, with respect to properties located in a flood zone, the bank must require flood insurance in an amount at least equal to the lesser of the outstanding principal balance of

the loan or the maximum coverage available for the particular type of property under the Act. [12 CFR §339.3 (effective 10/01/15)] Under the National Flood Insurance Program (NFIP) policy, insurance will cover up to whatever the stated amount is (less any deductible). The current regulation is silent as to whether the bank must accept private flood insurance in lieu of that provided under the NFIP. Effective July 1, 2019 (although earlier adoption is permissible), the regulations have been revised such that the bank must accept private flood insurance in satisfaction of the requirement for flood insurance if the policy meets certain requirements. The bank is mandated to accept a private flood insurance policy that, among other items … “provides flood insurance coverage that is at least as broad as the coverage provided under an SFIP for the same type of property, including when considering deductibles, exclusions, and conditions offered by the insurer. To be at least as broad as the coverage provided under an SFIP, the policy must, at a minimum …

(ii) Contain the coverage specified in an SFIP, including that relating to building property coverage; personal property coverage, if purchased by the insured mortgagor(s); other coverages; and increased cost of compliance coverage; (iii) Contain deductibles no higher than the specified maximum, and include similar non-applicability provisions, as under an SFIP, for any total policy coverage amount up to the maximum available under the NFIP at the time the policy is provided to the lender; … and (v) Not contain conditions that narrow the coverage provided in an SFIP.” [12 CFR §339.2 (effective 7/01/19)] A private flood insurance policy which contains a coinsurance clause does not equate to a policy issued under the NFIP. The coinsurance clause narrows the coverage otherwise provided under an SFIP, and effectively is a clause not applicable in an SFIP policy. Under an NFIP General Property–Standard Flood Insurance Policy, which is what continued on page 51

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n SEPTEMBER 2019

Bosch ... Teaches inge-watching is watching a multiserial television show episode after episode with little or no breaks between episodes. This is something I do periodically. You’ve probably done it as well. In-part, what we are discussing today is my participation in the Amazon Prime show that has now finished its fifth season, “Bosch.” I look forward to Season Six with great anticipation. It’s an exciting and relevant crime drama with a cast that just oozes authenticity. And that genuineness is what draws me to deliver this obvious plug to you today. If you take the time to view this show, you’ll see, from time to time, the inside of Harry Bosch’s cubicle in the homicide detectives’ room in Los Angeles. But the 8 ½” x 11” paper that’s tacked up inside Harry’s cubicle are words obviously meant to remind the detective to do something that every one of you should make as a daily requirement. The paper says: “Get up and get out and knock on doors.” This is one of the real purposes of my dissertation today and the words have so much meaning that if a homicide detective needs a reminder of the value, then how can I dismiss the value to you, and me. The market today is an MLO’s dream market. With interest rates at their lowest in years, there is the obvious need for refinancing. But those who have experience in markets like this have to remind you of one thing: Don’t forget your referral sources, especially the real estate agents who you hopefully have spent countless hours trying to show them how interested you are in THEIR success. With that in mind, I am required on my oath as a coach to devise a simple plan of action for your everyday existence. Your day can be divided into three parts.

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

The

Mortgage

Godfather

Part I Spend at least one-third of every day marketing your services to

... How a Homicide Detective es Sales to MLO’s BY RALPH LOVUOLO SR.

the real estate agents you were hopefully calling on before this dip in rates that Barry Habib says is going to go even lower. You should be seeing, in person, at least 10-15 producing agents each week. I’ve heard all the stories about closed offices, agents working out of their homes and on and on. If you see this activity as a source of business, then devise a way to see them. The same ones every Monday through Thursday. If you think this is too much for you, then what is your family going to use for money after the refi-boom is over? I have too many stories where I was personally involved when I was confronted by a real estate agent who asked me where I had been for the past two years. It took me months to soothe those bruised feelings.

Your Friday idea I admit that I cannot lay claim to this marketing idea, but it is so simple and so effective I told the MLO that I’m training he had to give me permission to use it. So, every Friday, send a text message to every single real estate person you know.

approval or pre-qualification and then you will call that potential borrower every three days to find out how they are doing, what houses they have seen, what they like or don’t like, whether or not you are meeting their needs, whether or not you have shown them enough properties, and as many questions as possible to help the agent sell more real estate. This idea is worth about $250,000 to every one of you and it is so simple, you can enact it today. Will you? Then you can thank me for your enormous success.

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. 39

n National Mortgage Professional Magazine n SEPTEMBER 2019

Part III Spend one-third of your day solving issues on your files, reading new changes to underwriting, marketing ideas you have yet to enact.

reading this. Why can’t you do what you should do? What stops you? What are you afraid of? What is wrong with being told “No,” and then learning a way to overcome that? What is wrong with having an idea that will help a real estate agent do more business? Okay, being terribly presumptive of your needs, here is a way for you to achieve superstardom. Tell the next real estate agent you meet that you will follow every lead they give you until they buy a house. Tell them that when you get a lead, you will do the proper pre-

NationalMortgageProfessional.com

Part II Spend one-third of your day getting in touch with past clients, family and friends. You should be staying in touch with them at least bi-weekly with updates on the market, via email and reminding them of your availability. This is one of the most often overlooked, yet simple, ideas I’ve ever spoken and written about. I promise that if every single person in your company sent just one email to everyone they know (usually more than 500 people), regardless of where that person lives, informing them that interest rates are approaching three percent, I almost guarantee that a lead will result from that ONE e-mail. Imagine doing it every two weeks.

Even the people in the offices you call on with part-timers. Here is what your message must say, word for word: “I hope you had a great week. And I hope you have a great weekend. If you need me this weekend, I’ll be standing by to answer any of your questions, to see or talk to any of your prospects. Thank you, your name and phone number.” Let’s look at it from another point of view … let’s look at it from a social media angle and try to define what that means. So much effort is being put into the methods of generating business in an alternative way, it is difficult to absorb even a small portion of the methods. I’m admitting that I’m not an SEO expert, nor am I an expert in many of the ways that marketing is done. But I do know that the adage I heard at the first seminar I attended still holds more water than any other way of generating business. It is true that as the younger generation of Millennials reach their adulthood, with their noses firmly pointing at the screen being held in their hands, they may desire to not meet the people they want to do business with. It is even true that the generation I’m speaking of might be encouraged, for many reasons not yet enumerated, to buy or sell almost everything they possess or want to possess will, merely by checking a computer screen and following directions. But as each day ends in the world I’m a part of, “people still do business with people.” If that maxim is true, then the words that are in Bosch’s cubicle are still the way for you, the MLO of 2019, to get your butt off the chair and get in your car and visit your potential referral sources. The average MLO is producing only two or three loans per month. That statistic is everywhere for everyone to see. Yet, so many of you are content to change absolutely nothing about what you do. Above here is a simplified version of what every single seriously successful MLO is doing or has done to get them to their level of production. And for the most part, that is well above those who should be

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Striking the Right Balance Between Technology and Personal Interaction

“Automation and technology can expedite and clarify the lending process, but interactions between borrowers and professional loan officers are still the best way to build trust and to provide a high level of comfort for homebuyers.” —Nate Johnson, Head of the U.S. Mortgage Business, SLK Global Solutions

ortgage lenders offer their customers a mix of digital processes and human interactions. Both options have their pluses and minuses, and the challenge is achieving the right balance to offer a fully functional mortgage application process. To discuss this subject, National Mortgage Professional Magazine spoke with Nate Johnson, head of the U.S. mortgage business at SLK Global Solutions, headquartered in Dallas.

On the flip side, what are the most common complaints that you’ve heard regarding the inperson mortgage application process? Nate Johnson: The biggest complaint that we see about lenders in the application process is their lack of availability. According to Ellie Mae’s Borrower Insights 2019 Survey, lenders reached out to most borrowers less than 10 times throughout the process. Mortgage providers increasingly believe that providing technological interventions across the origination process reduces the need for customer interaction. Yet the data shows the opposite: Borrowers prefer having frequent interactions with their loan professionals.

What is the best possible balance of the digital and inperson processes that a lender can offer? Nate Johnson: It’s simple … analyze your mortgage processes and borrower’s buying behavior. Make sure you have your team upfront and available for every possible discussion during three main processes: First, the loan application: First-time borrowers generally have concerns that can be addressed quickly with a conversation or an in-person meeting. A chatbot or an online application cannot provide the same level of comfort that a licensed professional can. If a loan professional needs to walk through an application with a borrower in order to have it completed, that is time much better spent than trying to have the borrower finish an abandoned mobile or online application. Second, document collection: There are many mobile and online tools that make document collection easier. How userfriendly are they and how comfortable are borrowers using them? With the recent data breaches, borrowers are even more afraid to upload their

personal information using an app that may be hosted in the cloud or on an unknown private server. Homeowners are concerned about entering their personal information online. The key is balance. A loan professional can interact with the borrower and introduce the document collection process to them. If it’s completely online, you need to reassure them about the safety of the process. The key is to talk to them and walk them through the process rather than, say, forwarding a link by e-mail. Borrowers from all generations–Millennial, Generation X and Baby Boomers– sometimes have to be hand-held through the process. Finally, processing and closing: Lenders often win over the customer during the loan application phase, but then lack good follow-through in completing the loan. This directly impacts a lender’s pull-through ratio. Lenders need to understand the importance of communication and should make sure to connect with the borrower periodically during the origination process. While e-mail notifications and dashboards are great for real-time loan updates and statuses, they do not replace the personal touch of a representative calling to update the borrower or to let them know that they are clear to close. Lenders must include periodic in-person communication in their operating procedures to keep borrowers engaged and happy. The “Secret Sauce” is having a happy medium. Lenders are enthusiastically applying digital innovations to their mortgage lending processes, but they must give equal time to customer contact capabilities. This can be achieved through omni-channel contact center services for mortgage originations. Lenders can outsource much of these customer contact and voice-based requirements while they focus on approving more borrowers, increasing volume and being profitable. Ultimately, I believe that most borrowers want a balanced combination of technology and human interaction. In the end, the lenders that can provide that balance will be the most successful.

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

n National Mortgage Professional Magazine n SEPTEMBER 2019

What are the most common complaints that you’ve heard regarding the digital mortgage application process? Nate Johnson: Borrowers today are mainly concerned about three things when it comes to an online mortgage: Safety, Complexity and Time. If those concerns are answered satisfactorily early in the mortgage process, borrowers are much more likely to complete an application. Homebuyers clearly want to be confident that the personal and financial information they provide to a lender is secure. When you consider that a 1003 application is one of the most thorough financial documents that a borrower will ever

In your view, are fears of data breaches strong among those who prefer not to use the digital mortgage application process? And if so, how can a lender mitigate those fears? Nate Johnson: The recent data breaches that have been in the news over the last 24 months, involving both financial services companies and non-lending companies, have definitely led to apprehension among consumers about submitting their personal information online. Having the right messaging when borrowers are introduced to a mortgage lender’s technology and application platform is crucial. Customers need to feel confident that a company is using security measures that include robust information security protocols. Every mortgage company needs an information security framework that includes server controls, encrypted online data transfer, data integrity and access to the right party. Adequate due diligence when outsourcing to a vendor is also imperative.

NationalMortgageProfessional.com

Let’s start with the most important question … will an online-only mortgage application ever completely eliminate the in-person application process with a loan officer? Nate Johnson: No, not completely. There are borrowers who have gone through an application without interacting with a loan officer, but that’s not typical. Buying a home is one of the most important decisions a person and their family ever make. Especially for a primary residence, the entire mortgage approval and closing process is as much an emotional journey as it is a financial one. Automation and technology can expedite and clarify the lending process, but interactions between borrowers and professional loan officers are still the best way to build trust and to provide a high level of comfort for homebuyers. They want to feel that they are well-informed and making the best decisions, and many people get that comfort from working personally with a loan officer.

complete, their concern is understandable. Ellie Mae’s Borrower Insights 2019 Survey shows that 46.5 percent of homeowners said they were “Somewhat Concerned” about entering their personal information online. Overall, 30.4 percent of respondents said security was the most important aspect of applying for a mortgage online. The same Ellie Mae survey in 2019 found that of borrowers who were offered an online application, but chose not to use it, 47 percent said they would prefer to work directly with a person and 41 percent preferred to work with physical paper. Of course, borrowers want to understand all of the forms they’re filling out and precisely what information is being requested of them, and some are much more comfortable dealing with a live person to do so. While completing an application, many borrowers have to stop and either clarify a request or search for the requested information. This often leads to the borrower abandoning the online application and turning to a loan professional to lead them through the process. In fact, Ellie Mae’s 2018 survey found out that 28 percent of borrowers thought an online application would be too difficult and never started one. And borrowers want to know upfront how long it will take them to complete the application and prefer to avoid a long, drawn-out process. We have found that a mix of automation and one-onone customer services is the best way to lead the borrower through the document collection/underwriting process, and close the loan in the shortest amount of time.

SEPTEMBER 2019 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Brokers: Itâ&#x20AC;&#x2122;s Time to Go Into Reverse By Jeff Bode & Dan Barksdale

ven though the recent rate drop has provided a boost to business, history tells us that refinances alone cannot sustain the mortgage industry. Thus, brokers must seek other opportunities in addition to refis to maintain volume in what has proven to be an otherwise tight market. While Millennials remain a highly coveted demographic for new originations, there is an opportunity to serve a somewhat overlooked segment of the market–seniors. With the changes to reverse mortgages/HECMs over the past few years, this once-maligned product is now an attractive and viable option for homeowners aged 62 years or older, and brokers that are ready and willing to dive in to this oftmisunderstood product can help insulate themselves from the rate rollercoaster and establish a more steady stream of business on a highly profitable product. What’s more, the increasing availability of support resources now allows brokers to easily add this highly complex product to their portfolio relatively quickly.

years or older to qualify), many borrowers choose to take out a reverse mortgage as soon as one spouse becomes eligible. In the past, the non-borrowing spouse was taken off the title of the home to secure the loan, and as a result, when the borrowing spouse eventually passed away, the non-borrowing spouse was required to vacate the property. This, too, has been rectified, and now, non-borrowing spouses can remain on the home’s title to avoid such issues. What’s more, a borrower’s heirs also need not give up the home upon the death of their parents, but can instead opt to pay off the loan and retain the home.

Success in reverse Of all the “niche” products brokers could add to their product mix, reverse mortgages are, by far, the most complex. Therefore, achieving success with this particular product requires brokers to either invest the necessary time and resources to become a reverse mortgage expert or to find partners willing to provide these to support brokers in their efforts to offer reverse mortgages. However, in terms of risk versus reward, brokers will find that the benefits of offering reverse mortgages far outweigh the initial investment. With the retirement-age demographic continuing to rise and the high concentration of homeownership and home equity amongst this demographic, reverse mortgages offer brokers a tremendous opportunity to create a steady stream of business in an otherwise volatile market. By providing this valuable financial planning tool to a highly underserved demographic, brokers not only serve themselves, but also one of the most vulnerable segments of the homebuying population– seniors.

Jeff Bode is chief executive officer of Addison, Texasbased Mid America Mortgage. Dan Barksdale is Mid America Mortgage’s director of HECM lending. They may be reached by phone at (205) 443-7290 or e-mail Dan.Barksdale@MidAmericaMortgage.com.

n National Mortgage Professional Magazine n SEPTEMBER 2019

HELOC vs. reverse mortgages Instead of offering senior borrowers a reverse mortgage, lenders often point them in the direction of a traditional home equity line of credit (HELOC) instead, but this strategy fails to take into account the key differences between the two products, not to mention consumer preferences. HELOCs are designed for borrowers that need short-term access to their equity to cover fixed expenses, like home repairs, college tuition, etc. Reverse mortgages, on the other hand, were designed to provide steady access to cash via home equity to cover more long-term, cost of living expenses. While interest rates between the two products are usually fairly comparable, the real difference lies in fees and loan terms. The mandatory fees for reverse mortgages are often higher than those for HELOCs, but with a HELOC, the borrower is required to make monthly payments on the loan once they begin to draw from the line of credit. Alternatively, reverse borrowers have the flexibility to make payments, receive payments or do nothing and allow their line of credit to grow each month. The unused portion of the HECM line of credit will grow each month and cannot be closed while the borrower’s occupy the home, whereas a traditional HELOC typically has a

fixed draw period and a balloon payment due at the end of that time. What’s more, when the differences between the two products are explained, consumers demonstrate a stronger preference for the reverse product over HELOCs. In a 2017 survey by the National Council on Aging, participants were divided into two groups. Each group was presented product descriptions for the HELOC and reverse mortgage product, with the product names used for one group and hidden from the other. In the “blind” group, 58 percent of respondents indicated they would select the reverse mortgage product over a HELOC to access their equity in retirement. Thus, while there still may be some reputational challenges to overcome, consumers prefer the reverse product once the facts are presented.

NationalMortgageProfessional.com

Reverse 101 Based on 2018 figures from the U.S. Census Bureau, 78 percent of Americans aged 65 or older currently own a home, which is the highest concentration of homeownership amongst all demographics surveyed. AARP reports that 10,000 Americans turn 65-years-old every day, thus adding to this growing demographic, and this age group continues to see its overall home wealth grow. In its June 2019 Reverse Mortgage Market Index issued in conjunction with RiskSpan Advisors, the National Reverse Mortgage Association (NRMLA) reports that senior home equity reached $7.14 trillion in Q1 2019. Thus, the senior demographic holds tremendous potential for brokers willing to rise to the challenge. For years, reverse mortgages were viewed as a scam that robbed seniors of their hard-won equity before putting them into foreclosure and out on the street. Admittedly, the early days of reverse mortgage origination were a bit like the Wild West, and several bad actors did, in fact, engage in somewhat predatory behavior that led to this reputation. However, rules and regulations have now been put into place to curb these activities

and protect the rights of reverse borrowers. As a quick primer, reverse mortgages—also known as Home Equity Conversion Mortgages (HECMs)—were created by the Reagan Administration in the late 1980s to allow seniors to leverage their home equity to finance their retirement. Previously viewed as a financial means of last resort for cashstrapped retirees, reverse mortgages are now recommended as one of several financial planning tools seniors can employ to maximize their wealth for retirement. While a reverse mortgage does not impact entitlement programs like Social Security and Medicare, it can affect other income-driven programs like Medicaid so seniors should consult with a financial advisor when considering a reverse mortgage as part of their overall financial retirement plan. Though some lenders offer private reverse mortgage products, the vast majority are insured by the Federal Housing Administration (FHA), thus providing a measure of stability and security for the lenders that choose to originate them. What’s more, seniors can also purchase a new home using the HECM for Purchase product, which enables the borrower to simultaneously purchase a new home and take out a reverse mortgage with one set of closing costs. All reverse borrowers are required to undergo reverse mortgage counseling by an independent party before they can secure the loan, and borrowers cannot extract 100 percent of their home’s equity. Instead, the amount is determined by the home’s value, the borrower’s age and current interest rates. Even if the home’s value declines, borrowers will not be financially penalized for such. Despite perceptions to the contrary, reverse mortgage borrowers retain the title to their home and can remain there until they become deceased or choose to move. In the past, some reverse borrowers ended up in foreclosure because they did not maintain payments for their property taxes and/or homeowners insurance, thus causing them to go into default on the loan. Today, set-asides for these obligations are required for borrowers with less-than-perfect credit. Because of the age restrictions on the reverse product (borrowers must be aged 62

others cover the world ...we cover yours!

Video Press Release

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Companies need video content to engage their target audiences when issuing a press release about important company news. MNNâ&#x20AC;&#x2122;s Interactive Press Release incorporates a professionally produced 3-4 minute recorded webcam interview. The interview will include a pre-production call to outline the dialogue and to discuss technical logistics, recording at a mutually convenient time and professional post-production to edit recording and insert branding elements. This interview will be available on the MNN website and YouTube Channel. An embed code will be provided to allow use with press release distribution services that support video content.

Visit MortgageNewsNetwork.com for the industry's latest topics... on-demand, 24/7 and sign up for your complimentary Daily MNN Show Alerts. Day

Show Title

Description

Day/Time Airing

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.

TUESDAY

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.

WEDNESDAY

Top Originator Secrets with Brian Sacks

Closing more, making more and still enjoying life!

Wednesdays at 7 a.m.

Homeownership Heroes

The Battle to Increase Military Homeownership.

Wednesdays at 11 a.m.

Coming Soon... Under Construction

Construction loans made easy.

Wednesdays at 2 p.m.

Coming Soon... Non-QM Mastery

Strategies from top originators using alternative lending.

Thursdays at 7 a.m.

Quick Hits

Carl White’s simple strategies for a quick boost in your productivity.

Thursdays at 11 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

THURSDAY

FRIDAY

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!

n National Mortgage Professional Magazine n SEPTEMBER 2019

Master the Markets with Barry Habib

NationalMortgageProfessional.com

MONDAY

Sponsor

Addressing Post-Housing Crisis Issues

Pilot Program to Connect HUD-Approved Housing Counselors With Los and Realtors Underway BY PAM MARRON ank and credit union loan originators have worked with U.S. Department of Housing & Urban Development (HUD)approved housing counseling agencies (HCA) for years because most of these institutions provide Community Reinvestment Act (CRA) funds to help pay for HCA services. But when a loan originator moves from a bank or credit union to an independent mortgage company, they often find that little knowledge of HUD HCA services is available … until they need downpayment assistance. And very few mortgage companies have CRA funds available to pay for HCA services. Connecting HUD housing counselors to independent loan originators and real estate agents to assist clients who aren’t quite ready to purchase a home and get them “mortgage ready” is what this effort is all about. But a method to be able to pay for the housing counseling services where CRA funds are not available had to be devised. That method is now being tested with loan originators and real estate agents.

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Here’s how it works … The pilot was made for loan originators and real estate agents who have determined that a client needs pre-purchase help in order to get ready for a mortgage. The three areas of help most needed are: l Assist clients with credit issues (and NO, we are not talking about credit repair). l Downpayment Assistance (DPA) assessment that includes wholesaler DPA programs in addition to county, city, SHIP and state DPA programs.

l Budgeting for a home … most needed by Millennials who often feel hopeless about buying a home. The RESPA Anti-Steering rule was greatest concern in forming MOU Great care was taken in writing a Memorandum of Understanding (MOU) to ensure a RESPA rule requiring no steering of clients was in place. HUD HCA’s are not-forprofit agencies and have a mandate that requires they refer clients to three lenders. But to encourage clients to come back to a referring loan originator or real estate agent, an MOU was developed that states a credit for upfront HCA costs initially paid for by the client can be applied towards closing costs on the mortgage closing if the client returns to the referring loan originator or real estate agent that signed the MOU. Insuring benefits for all parties l Much research was done on the model to use for the independent mortgage loan originator and real estate agent connection to housing counselors. Clients under low- to moderate-income (LMI) levels can get HUD housing counseling services on a sliding scale basis or for free. But many clients are also above LMI income levels, so great attention was given to the “Fee for Service” model which can accommodate above LMI income clients. This allows ease in referring ALL clients, no matter what their income, to housing counselors. l The client is not required to return to the referring loan

originator or real estate agent. However, the MOU agreement for the credit towards upfront HCA costs is only required by the loan originator or agent who signed the MOU if the client returns for a mortgage or purchase contract with the signing loan originator or agent. l This plan enables loan originators who move from the bank or credit union sector to the independent loan originator side of business to still have a financial way to encourage challenged clients to go to housing counseling. By using the MOU, this also encourages loan originators and real estate agents to refer clients to housing counselors knowing they will hear from these clients and the housing counselor when the client is “mortgage ready.” l The overall attitude of clients referred into this new pilot program is very positive. Why? The client is getting one-onone, concentrated help on their issues. l Frankly, the loan originators and real estate agents involved have been relieved and willing to provide a credit for skilled

professionals to assist clients who need help getting ready for a mortgage. Many mortgage professionals find they lack the skill and time to efficiently assist these clients. Importance to the growing independent loan originator industry There are 408,947 individually NMLS licensed independent loan originators in the U.S.1 and the majority of them work for independent mortgage companies. Per the NMLS Mortgage Industry Report for the first quarter of 2019, the independent mortgage loan originator business market share grew to 14.9 percent in Q1 of 2019, a 3.4 percent increase from same time last year, and continued to grow in the second quarter of 2019.2 The mortgage and housing industries are starting to see clients again who have challenges. Having a working connection between loan originators and trained HUDapproved housing counselors— whether the loan originator works at a bank, credit union or mortgage company—to assist our clients with homeownership is a good idea for our clients, real estate agents and for the mortgage profession. Stay tuned.

Footnotes 1—NMLS Mortgage Industry Report 2019Q1 Update (https://nationwidelicensingsystem.org/about/Reports/2019Q1%20Mortgage%20Report.pdf). 2—Loan Broker Market Share Climbs to New Post-Crisis High: 14.9% | August 22, 2019 By John Bancroft (https://www.insidemortgagefinance.com/articles/215598-loan-broker-marketshare-climbs-to-new-post-crisis-high-149).

Pam Marron (NMLS#: 246438) is senior loan originator with Innovative Mortgage Services Inc. (NMLS#: 250769) in Tampa Bay, Fla. She may be reached by phone at (727) 375-8986, e-mail PMarron@InnovativeMortgage.onmicrosoft.com or visit HousingCrisisStories.com, CloseWithPam.com or 8Problems.com.

NEW TO MARKET continued from page 13

lenders to qualify borrowers who are either self-employed or participate in the gig economy and, therefore, lack traditional forms of income documentation and must rely on personal or business bank statements, instead of tax returns, W-2s or pay stubs. “Until now, originating bank statement loans has been a timeconsuming, error-prone process because originators have had to manually collect a borrower’s bank statements and then calculate their monthly income,” said Ben Wu, executive director at LoanScorecard. “This breakthrough tool helps investors confidently lend to important, yet often underserved borrower segments. With Bank Statement Analyzer, lenders can get directly-sourced bank transaction history and an automated income calculation, so they can qualify more borrowers— accurately and quickly.”

information resource for the mortgage industry. According to the Santa Ana, Calif.-based company, the Innovation Center will feature original content by First American’s experts regarding market trends and technology that impacts real estate, title and mortgage lending professionals. Access to the resources is free, and a subscription service offers content update alerts. “The real estate and mortgage finance industries are undergoing dramatic changes as technology and consumer demand for an enhanced experience create opportunities for innovation,” said Dennis Gilmore, CEO at First American. “First American and our people are at the forefront of these changes, driving innovation to improve the customer experience, enhance security and accelerate the real estate transaction process.”

New Platform Aimed at Spanish-Speaking Homebuyers

Volly Launches POS Mobile App, Rebrands Its CRM App

First American Financial Corp. has introduced its First American Innovation Center, an online

continued on page 86

n National Mortgage Professional Magazine n SEPTEMBER 2019

First American Debuts Innovation Center

Volly has launched a new POS mobile app and a rebranding of its existing CRM mobile app. The Volly Point of Sale Mobile App gives loan officers the ability to invite borrowers to apply or get prequalified from anywhere, anytime, whether at an open house with a real estate agent partner sitting with prospective buyers or while out at the grocery store. With the mobile app, loan officers can also track loan status, and borrowers can upload documents and view statuses and tasks, and both can communicate directly within the app, making for a seamless experience that is accessible on any mobile device. Loan officers can invite their referral partners to download their lender branded mobile app to easily setup their own account to invite borrower referrals and track a referral’s status within minutes. The Volly CRM Mobile App enables users to access customer databases, schedule meetings, and view marketing activities. The rebranded app will reflect Volly’s new corporate colors and include a name change from CustomerManager to Volly. “In today’s ultracompetitive

NationalMortgageProfessional.com

Nationwide Mortgage Bankers (NMB), an independent mortgage lender headquartered in Melville, N.Y., has introduced Americasa, an online platform designed for Spanish-speaking homebuyers. The company cited 2017 data from U.S. Census Bureau that determined 41 million people in the U.S. speak Spanish at home, with only 59.9 percent of that share speaking English ‘very well.” NMB added that Americasa is designed to help Spanish-language speakers feel more empowered in learning more about the mortgage lending process. “I am very excited to announce the launch of Americasa for our Spanish-speaking customers,” said Richard Steinberg, Founder and Chairman of the Board at NMB. “We feel this market is highly underserved and look to be the goto source for Spanish speaking organizations.”

“The gig economy is making it harder for borrowers to document what they do. At the same time, we have multigenerational households that have pooled their resources in order to make ends meet. All of these things are causing us to think differently about how we underwrite those borrowers, how we document their incomes and how we think about the risks they represent.” —Dave Lowman, Executive Vice President of Freddie Mac and Head of the Company’s Single-Family Business

ecently, National Mortgage Professional Magazine had the opportunity to catch up with Dave Lowman, executive vice president of Freddie Mac and head of the company’s Single-Family Business, to talk about the accomplishments he has witnessed in the industry during his rich career and where his firm expects to find mortgage borrowers in the future. In many ways, Lowman is the perfect person to ask these questions. With nearly four decades of industry experience, he helped lead the modernization of the entire mortgage finance industry. Starting off his career in the audit group at KPMG, he soon moved into the mortgage industry, first at Guaranty Mortgage, then Prudential Home Mortgage, and then at Citi. He would eventually become head of Citi Financial Mortgage and Citicorp Trust Bank, FSB, before moving on to become CEO of JPMorgan Chase Home Lending. It was in this position that he found himself in the room with the nation’s other top bankers for then Secretary of the Treasury Henry Paulson’s announcement of the crisis that would lead to the Great Recession. He had a front row seat through one of the most challenging times in the U.S. housing market. As a result, Lowman was instrumental in drafting a solution for American homeowners that would ultimately become the HAMP program, which he calls one of the best things that came out of the crisis.

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Looking toward the future Today, Lowman leads Freddie’s efforts to use big data and advanced analytics to make the housing finance system simpler, more sustainable and cost effective. As part of that effort, he

has helped launch one of Freddie’s most advanced programs. “With the advent of technology and the ability to be connected everywhere, we’ve seen marked changes in the workforce,” Lowman said. “The gig economy is making it harder for borrowers to document what they do. At the same time, we have multigenerational households that have pooled their resources in order to make ends meet. All of these things are causing us to think differently about how we underwrite those borrowers, how we document their incomes and how we think about the risks they represent.” But Freddie Mac isn’t just thinking about it. The company has launched its Borrower of the Future® campaign, through which it is working with researchers at New York University to find out exactly what the borrower of the future is likely to need, and what that borrower should expect from our industry. The campaign brings together research, trends and insights that Freddie Mac says will help the mortgage industry better serve the needs of the next generation of homeowners, who have different needs and expectations due to factors such as the gig economy, digitally-driven lifestyles and the burden of student debt, among others. “Not so long ago, if a person came to the bank and said they had four part-time jobs, we’d have told them they weren’t ready to buy a home,” Lowman said. “Today, we’re asking if we can underwrite borrowers by checking the cash flow in their checking accounts. We’re spending a lot of time really thinking about what these consumers look like and how we must adapt to lend to this market segment.” Learning about the borrower To best serve this new generation of homeowners, Freddie is delving into continued on page 77

Seeking Tomorrow’s Mortgage Loan Borrower By Rick Grant

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n SEPTEMBER 2019

Dave Lowman, EVP of Freddie Mac and Head of Single-Family Business

Independent Mortgage Originators By Andy W. Harris, CRMS

Ryan & Jessica Ehler Price Mortgage NMLS#: 1429043 NMLS# 1607795 (Ryan Ehler) NMLS#: 1806543 (Jessica Ehler) EhlerLendingTeam.com

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

This month, I had a chance to chat with Ryan & Jessica Ehler, the husband and wife duo from Price Mortgage in Gilbert, Ariz. Ryan graduated from Arizona State University in 2006 with a BS in criminal justice and a minor in sociology. During his time at Arizona State University, he was an All-American scholar/athlete, competing in the decathlon for their track team. In 2010, he graduated from the University of Phoenix with an MBA. Jessica graduated from Arizona State University in 2010 with a BS in exercise science and a minor in psychology. Tell us a little about yourselves. Ryan: I’ve always had an entrepreneurial spirit and owned a business before I entered the mortgage industry. I have been applying those skills to the mortgage profession and our career is taking off. The biggest thing that separates us is the ability to record entertaining and educational videos that people actually watch. Jessica: Knowing how well we filled each other’s gaps in our previous business, it made sense for me to come on as an assistant to help keep Ryan organized when he got busy. Once I started learning about the mortgage world, I knew I needed to have a greater role and became licensed so I wouldn’t have limitations. Big surprise … I pretty much took over the loan aspect which allows Ryan to focus more on marketing and real estate agent relationships. I understand you are a mortgage broker now after previously working as a mortgage banker. What motivated you to make this change? Ryan: The main reason I made the change was to have complete faith that I was providing my clients with the best pricing and service. It’s easier to sleep at night when you know you can’t be beat. Being able to grow our own brand and work the way that is best for me was a close second. Jessica: It was getting to the point that we couldn’t compete and it’s not fair to ask a borrower to take a higher rate because of their loyalty to us. I also feel like the corporate nine to five expectations were stifling Ryan’s creativity. It was like they were putting up with his “crazy” videos instead of supporting him and now those videos are what is setting us apart and growing our business. What would you say so far are the biggest differences you’ve experienced coming from the retail side? Ryan: No fees, lower rates, no overlays, better processes, more

options and better pay. Jessica: Freedom! In every way. Instead of selling the specific products of one bank, we get to essentially have all of our lenders compete to find the best product and rate for our borrowers’ specific situation. How would you compare pricing when compared to the mortgage banker world? Ryan: The pricing is by far better. I have not lost a deal to pricing yet. Jessica: There is no comparison. The banks charge obscene underwriting and application fees and still can’t touch our rates. What are you seeing in your local market in terms of trends, inventory and consumer/real estate agent mortgage education? Ryan: With the increase in prices and reduction in inventory, we do have a lot of people sitting on the fence. Some get qualified and never see it through because they wanted something at a price range that does not exist anymore. Like always, there is a large group of renters who just don’t understand the homebuying process, but we have a plan to educate our community through short video courses. 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? Jessica: If you have a cohesive team supporting you, the process is very easy to control. Our roles are clearly defined and when everyone does what they are supposed to, we are unstoppable. Sure, you run into lenders who seem to make the process impossible sometimes, but that’s the best part of being a broker … not only can you ask the opinion of other brokers before registering a loan somewhere, but if you have an unpleasant experience, you don’t have to work with that lender again. What would you say are your best forms of marketing today to generate new business? Ryan: Social media … hands down–but, it must lead to in-person contact for referral partners and phone conversations for consumers. Jessica: I agree, social media is key. Our videos have played a major part in generating business, but don’t underestimate the organic traffic you get from your sphere (friends). A nice, quality picture, heartfelt gratitude and a little bit of personality go a long way FOR FREE! Are you an Independent Mortgage Broker? Do you have something you’d like to share? Reach out to me at AHarris@VantageMortgageGroup.com for future article considerations. Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and Past President of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 4960431, e-mail AHarris@VantageMortgageGroup.com or visit VantageMortgageGroup.com.

COMPLIANCE MATTERS continued from page 36

issues with respect to Other NonResidential Building such as the property you describe, the insurance covers up to whatever the stated amount is (in this case $500,000) less any deductible. However, the amount covered under a private policy with a coinsurance clause vastly differs. Under a policy with a coinsurance clause, the insured must carry insurance equal to at least a certain percentage of the property’s actual cash value. This is done to ensure that the property is not underinsured when the replacement cost loss settlement option is purchased. Your scenario is as follows: l Loan amount: $550,000 l RCV: $980,000 (as is)/$1,110,000 (as complete) l Insurance: $500,000 l Coinsurance Clause: 80 percent

Notably, the requirement that the private policy–“(iii) contain deductibles no higher than the specified maximum, and include similar non-applicability provisions, as under an SFIP, for any total policy coverage amount up to the maximum available under the NFIP at the time the policy is provided to the lender; … and (v) Not contain conditions that narrow the coverage provided in an SFIP”–are not conditions to the bank’s acceptance of a private flood insurance policy. The agencies noted that factors the institution can take into account in determining whether the policy provides sufficient protection of the loan include the policy’s deductibles, whether the policy provides adequate notice of cancellation, whether the policy’s limits of amounts to be paid per loss as well as the aggregate limits are adequate, whether the policy complies with state law, and whether the insurer has the financial solvency and strength to satisfy claims. Relevant sections of the regulation and the NFIP Flood Insurance Manual are set forth below. 12 CFR Part 339: §339.3: Requirement to purchase flood insurance where available (10/01/15) (a) In general. An FDIC-supervised institution shall not make, increase, extend, or renew any designated loan unless the building or mobile home and any personal property securing the loan is covered by flood insurance for the term of the loan. The amount of insurance must be at least equal to the lesser of the outstanding principal

§339.3: Requirement to purchase flood insurance where available (7/1/19) (c) Private flood insurance—(1) Mandatory acceptance. An FDICsupervised institution must accept private flood insurance, as defined in §339.2, in satisfaction of the flood insurance purchase requirement in paragraph (a) of this section if the policy meets the requirements for coverage in paragraph (a) of this section. (2) Compliance aid for mandatory acceptance. An FDICsupervised institution may determine that a policy meets the definition of private flood insurance in §339.2, without further review of the policy, if the following statement is included within the policy or as an endorsement to the policy: “This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a(b)(7) and the corresponding regulation.” (3) Discretionary acceptance. An FDIC-supervised institution may accept a flood insurance policy issued by a private insurer that is not issued under the NFIP and that does not meet the definition of private flood insurance in §339.2 in satisfaction of the flood insurance purchase requirement in paragraph (a) of this section if the policy: (i)

Provides coverage in the amount required by paragraph (a) of this section; (ii) Is issued by an insurer that is licensed, admitted, or otherwise approved to engage in the business of insurance by the insurance regulator of the State or jurisdiction in which the property to be insured is located; or in the case of a policy of difference in conditions, multiple peril, all risk, or other blanket coverage insuring nonresidential

Relevant Definitions from the April 2019 NFIP Flood Insurance Manual: l Mixed-Use Building: A building that has both residential and non-residential uses. l Non-Residential Building: A commercial or mixed-use building where the primary use is commercial or nonhabitational. l Non-Residential Property: Either a non-residential building, the contents within a non-residential building, or both. l Other Residential Building: A residential building that is designed for use as a residential space for five or more families or a mixed-use building in which the total floor area devoted to nonresidential uses is less than 25 percent of the total floor area within the building. Information contained in this article is not intended to be and is not a source of legal advice.

Joyce Wilkins Pollison Esq. is the executive director of Lenders Compliance Group and its director of legal and regulatory compliance. Lenders Compliance Group is the first and only full-service, mortgage risk management firm in the United States, specializing exclusively in outsourced mortgage compliance and offering a suite of services in residential mortgage banking for banks and non-banks. To ask a question or request compliance support, e-mail Compliance@LendersComplianceGroup.com

n National Mortgage Professional Magazine n SEPTEMBER 2019

For the purpose of this analysis, I will assume that the deductible under both the NFIP and private policy is $0. So, at the end of the day, under the NFIP policy, $500,000 will be covered by insurance whereas under the private policy, only $382,000 will be covered by insurance. Thus, as the coverage provided under the private policy is not meeting the maximum coverage available under the Act, the bank is under no obligation to accept it. That being said, commencing July 1, 2019, the bank may, but is not required to accept private flood insurance even though it may not meet the statutory definition described above provided that it: l Provides coverage in an amount at least equal to the lesser of the outstanding principal balance of the loan or the maximum amount of insurance coverage available for the particular property under the Act;

Is issued by an insurer that is approved to engage in the insurance business in the state in which the property is located, or recognized or not disapproved as a surplus lines insurer by the state insurance regulator; Covers both the mortgagor and mortgagee, except in the case of a condominium or similar group, and for which the premium is paid as a common expense; and Provides sufficient protection of the loan, consistent with general safety and soundness considerations, and the lending institution documents this determination.

commercial property, is issued by a surplus lines insurer recognized, or not disapproved, by the insurance regulator of the State or jurisdiction where the property to be insured is located; (iii) Covers both the mortgagor(s) and the mortgagee(s) as loss payees, except in the case of a policy that is provided by a condominium association, cooperative, homeowners association, or other applicable group and for which the premium is paid by the condominium association, cooperative, homeowners association, or other applicable group as a common expense; and (iv) Provides sufficient protection of the designated loan, consistent with general safety and soundness principles, and the FDIC-supervised institution documents its conclusion regarding sufficiency of the protection of the loan in writing.

NationalMortgageProfessional.com

Let’s assume the loss to the property is $600,000 and the actual cash value at time of loss is $980,000. l Required coinsurance = $784,000 (ACV x .80 coinsurance) l 63.75% = $500,000 (amount of insurance carried) / $784,000 (amount of insurance should have carried) l 63.75% x $600,000 (amount of loss) = $382,500 (amount covered by insurance less any deductible)

balance of the designated loan or the maximum limit of coverage available for the particular type of property under the Act. Flood insurance coverage under the Act is limited to the building or mobile home and any personal property that secures a loan and not the land itself.

SEPTEMBER 2019 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

The Non-QM Proliferation: Other Alternative Products By Hitz Mistry

hen it comes to a discussion of non-qualified mortgages (non-QM) or non-prime mortgages, quite a few originators may not know all of the permutations of alternative product categories available to them to satisfy their borrower’s requirements. The industry has gone through some much-needed adjustments with the introduction of stricter rules and regulations in this Dodd-Frank decade, creating a new and better generation of alternative lending. The result is a markedly responsible lending ethos that post the much maligned (and rightfully so) sub-prime mortgage era will mark a return to the heyday of finance company giants, such as Beneficial, Household, Associates and Dial Finance that were concerned with owning mortgage debt that paid in a consistent manner. For an industry segment built on providing alternative lending programs for borrowers who do not fit into the traditional agency mortgage bracket, clarity is something that is needed, but is often overlooked. There has been a significant increase in companies entering this space with the hope that they would be able to cash in or augment other facets of mortgage lending in this everexpanding market. However, those companies need to recognize that this is a mortgage segment that requires ethical and responsible business practices. Unlike the governmental agency market, the issue is self-sufficiency and selfpolicing of lending practices. So, who should originators look to as a good example of how to operate in the non-QM market? Citadel Servicing Corporation (CSC) is one such company that applies rigorous ethical business practices over a unique range of proprietary programs. Where all companies should build a product with profits in mind, CSC takes it one step further. This company has not just created programs that meet the needs of a customer base, but has consistently rejected practices that led to the bad lending results of previous eras. The thought of making a loan and then selling that loan with no regard for future customer experience and satisfaction is an

anathema for CSC. Thus, CSC has striven to produce loans that are capable of providing its borrowers with sensible loan product, fair pricing and consistent service, but additionally, with an experience that CSC has embraced and termed as “Vertical Integration.” What does this mean and why is this important? Firstly, one needs to understand exactly what Vertical Integration means. In a nutshell, “Vertical Integration” is the combination in a company of two or more stages of production normally operated by separate companies. To further expand on this principle, it is CSC’s senior management’s studied opinion based on four-plus decades of experience funding loans for personal residences to commercial properties that a broker or correspondent working with a lender that incorporates all aspects of the mortgage lifecycle, from origination to payoff, will make a big difference in the performance of a loan, as well as likely influence a borrower’s consideration to remain a loyal customer to that originator. This continuum, known as “Vertical Integration,” actually starts at the very beginning of the lending process with pricing and guidelines continuing through to underwriting, funding and loan audit. The process ends with the collection of the actual mortgage payments, including impounding and remitting taxes and insurance. This last piece, loan servicing, is where many companies with no experience working with non-QM or non-prime borrowers suffer a breakdown as they release the servicing act with the sale of the loan or place it into the portfolio of a sub-servicer. CSC is the only organization solely dedicated to the non-QM space that services its loan production. By being Vertically Integrated, CSC can be autonomous and efficient in the way it originates loans. That has resulted in a portfolio of loans in excess of $3.1

billion with a delinquency rate averaging 3.5 percent and total losses of $767,000 in more than $4.5 billion of closed loan production since 2011. How does this improve the non-QM landscape? A common misconception heard constantly in and around the nonQM market is that these loans are much more difficult to process, get approved and then close. The reality, however, is that while an originator might have to do a little extra work on the front end, such loans go through the system just as efficiently as any other loan if the program and qualification process is structured in the right manner. This is where CSC is an expert. In an era of automated underwriting systems (AUS), CSC employs a manual method that is definitive and delivers an answer in 48 hours from the submission of a full file. In a business where every loan has some sort of “story aspect” to it and a traditional or augmented AUS system can give false or inaccurate approvals, CSC, in that period, can analyze the loan and the appraisal delivering a firm, with approval subject to conditions. This is where CSC shines when compared with other companies. With all processes performed in-house and subject exclusively to CSC approval, Vertical Integration can make a significant difference. What are the alternative products available in the nonQM/non-prime marketplace? One of the most often asked questions in the world of alternative income documentation loans is when will “stated-income” come back? Well, I am happy to say that this formerly popular but ultra-risky form of qualification is not. So, given the increase in the number of self-employed borrowers who are trying to use adjusted gross income as a means to qualify (it is also important to

Hitz Mistry is marketing director for Citadel Servicing Corporation. He may be reached by phone at (949) 9006630, ext. 182 or e-mail HitzM@CitadelServicing.com.

SPONSORED EDITORIAL

note that these are not necessarily first-time homebuyers), what does one do to service the needs of such borrowers? A great alternative is CSC’s One Month Bank Statement. This is a great example of a product specifically designed to meet customer demand. The One Month Bank Statement (OMBS) program juxtapositions a significant downpayment or equity position with a real-world analysis of past and current spending habits to give a defined picture of what the borrower’s capacity to repay has been and will most probably continue to be in the future. This thesis has been born over the past two years by $500 million-plus in originations with delinquencies limited to three loans and only one of those loans past 60-days delinquency as the home is being sold. Another example of a product which has shown to be popular is CSC’s Outside Dodd-Frank Plus (ODF+) program. The Outside Dodd-Frank Plus program offers loans on properties up to 35 units and with loan amounts of to $5 million. Seeing the need in the market, CSC created a program that would offer products to borrowers personally or to their business entities and trusts for investment or business purposes. This unique product, when coupled with the original ODF, creates a one-stop marketplace for any loan driven by Debt Service Coverage Ratios (DSCRs), with ratios down as low as 0.75:1.00. Use these programs for hotels, motels, congregate care, cross-collateralized properties, mixed-use … or whatever you originate that is not land or construction. The wonderful thing in this market niche is that whatever can be conceived and risk measured can be priced providing an originator the opportunity to fill their client’s loan requirements. This is an industry that does not stand still … it is ever-changing and full of organizations that display flexibility and innovation, thus creating a progressive environment. It is in such an environment that CSC thrives in and continues to trail-blaze in an industry segment that, if managed properly, will continue to originate responsible and ethical loan production for years to come.

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

A SPECIAL FOCUS ON

An Update on the Wholesale, TPO & Correspondent Markets Replacing the QM Patch: Time to Get It Right By David H. Stevens, CMB

he administration and the new leadership at the Federal Housing Finance Agency (FHFA) and Consumer Financial Protection Bureau (CFPB) have been making announcements related to the future of the government-sponsored enterprises (GSEs) and to some of the key policies in place related to them.

The announced change to QM, where the so called â&#x20AC;&#x153;patchâ&#x20AC;? will be eliminated, may lead to more narrow credit availability and/or higher costs for low downpayment borrowers depending on how the rule itself is re-written. It also could result in making independent mortgage bankers and other lenders who do not hold loans on balance sheets less competitive, resulting in an uneven playing field. QM and the Patch The CFPB recently announced that they intend to let the patch expire. They have asked for input as to how to modify the rule in the absence of the patch. A variety of analysts have stated that the absence of the patch leaves a large gap, some estimating that it could impact mid-20 percent range of current GSE volume. Assuming there is no reversal one thing is clear, any attempt to replace the patch with a written explicit rule will leave some of the current market looking for other options, most of which will likely be more expensive. The plans being discussed and debated amongst varied industry, civil rights, and consumer groups propose some of the following structures: l Eliminate the DTI and simply use the APOR (Average Prime Offer Rate) cap to determine QM eligibility. The delta in a rate offered above APOR has been considered as one way to identify and cap high cost lending or predatory lending. The debate under this proposed option is now centered on the cap. Some are advocating the current 150bps over APOR. Others worry that 150bps is too low and could cut out some low loan balance borrowers amongst others. l Eliminate the DTI and use the APOR cap but include a DTI for loans above the cap. Under this scenario, it might expand the box slightly but the current DTI with appendix Q is still far too narrow an underwriting standard and would require a complicated fix. l Maintain the rule as is with the DTI and APOR but make fixes to both the DTI and Appendix Q to provide a broader credit box than it currently allows in order to make up for the loss of the patch. The key concern here is whether it is possible to write a rule that can cover the complexity of underwriting. The challenge in writing a regulatory rule to cover all underwriting compensating factors is extremely difficult to write and filled with complexity. There is discussion, however, to use new factors such as residual income after all monthly debts as a factor. Heading down this path will likely result in debate over how to write a rule and could divide the vast group of stakeholders making it more difficult to get a rule that actually works for the market. continued on page 56

KETS a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MAR

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

replacing the QM patch

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Sens. Warner and Rounds introduced a bill that would modify the rule to allow for more flexibility, targeted at self-employed borrowers. The bill proposes that a lender would meet the QM requirement as long as the loan was underwritten to the standards of any entity regulated by FHFA, any loan underwriting standard under HUD, VA, or Rural Housing as well. This would be a de-facto creation of an even broader “patch” Eliminate the safe harbor altogether and simply move to rebuttable presumption for all loans. This is the least likely scenario, yet it is endorsed by some of the more progressive civil rights groups. The argument here is that “lenders should be required to defend any foreclosure in court,” as was stated to me by one of them. Industry, as well as some of the more measured consumer groups, oppose this as they all fear a common concern that lenders would simply retrench.

No matter what the CFPB does, it is almost certain that, even with revisions to the rule, it is unlikely to cover the full scope of credit availability as does the patch. Regardless of one’s view on how large or small the GSE “footprint” should be, the elimination of the patch with whatever replaces it runs the risk of making credit more narrow or more expensive. Will the end of the Patch really reduce the GSE’s footprint? Since the announcement from the CFPB, some have stated that this will not necessarily mean a contraction in credit terms offered by the GSE’s, suggestions they could just keep on lending as they are now. There are two reasons why that view is misleading. First, it seems implausible that their regulator would let them take the risk of buying or guaranteeing higher risk loan products that are outside the rule. Mark Calabria has been clear in comments both in his current role and prior roles that he believes the GSE’s should be risk neutralized and that efforts should be made to reduce the

provisions in the rule had done enough to eliminate the risk of repeating the tragedy of the housing crisis. This provisions eliminated included the end of: l Negative amortization l No-doc/Low doc loans l Balloon loans l I/O loans l Extended term loans l Sub-prime l Short-term ARM’s

continued from page 54

“The announced change to QM, where the so called “patch” will be eliminated, may lead to more narrow credit availability and/or higher costs for low downpayment borrowers depending on how the rule itself is re-written.” reliance on government guarantees in the mortgage finance system. Any non-QM loan comes with “assignee liability,” meaning that any legal liability risks transfer through secondary parties in that transaction. This increases legal risk to the GSE’s, MBS investors, MI companies, and more for any loan outside the rule. Even if the FHFA permitted more expansive credit than the QM rule permits, something highly improbable, mortgage-backed security (MBS) investors and groups like the Securities Industry and Financial Markets Association (SIFMA) will likely demand a separate prefix at minimum. MBS investors are buying term and yield investment at a price. They do not want the risk of counterparty failure or legal liability. Any loan outside the QM safe harbor would likely be ineligible for TBA execution and would therefore be less liquid than before. This would result in either a narrower footprint or simply higher costs for this less liquid product and this assumes the mortgage insurance (MI) industry would insure a nonQM product.

Conclusion The design of QM was directed under Dodd-Frank and required the CFPB to write a rule that would insure a borrowers’ abilityto-repay their mortgage. In the debate that ensued during the consideration of how to write this rule an active community debated at length. The final rule as published resulted in a far too narrow field for credit eligibility with its hard line 43 percent DTI and a narrowly written Appendix Q. The patch that was added by Director Richard Cordray insured a continuity of credit access to any loan that was sold to the GSE’s. By doing so however, it increased the dependence on the GSE’s and made any return of private capital even more complex. At the time, some key trade groups determined that other

In addition, lenders had to document all loans to prove abilityto-repay. It added a high cost loan cap using APOR as the basis. Through other rule-makings by the Bureau the disclosure documents were changed to be more reader friendly and allow loan shopping to be more transparent, they added tight timelines for delivering these disclosures so that borrowers knew what they were getting with ample time to review. The Bureau established national servicing standards that now require any borrower at risk of default a bill of rights about process and options in order to keep as many as possible in their homes. The use of DTI and an Appendix Q will have only one set victims if left in the rule, borrowers who are more on the margin. Any borrowers not covered by this rule would be likely those that advocates are most concerned about losing access to homeownership. The APOR cap insures the elimination of higher cost loans in a QM. The other provisions in the rule already require documentation and elimination of the high risk products and features. In order to protect sustainable access to credit, the best choice here is to eliminate the DTI altogether and have the rule remain with an APOR cap of 150200 bps. With the FHA exempted from the QM rule by legislation, getting this rule right is the only way to avoid a rush to HUD products for the nonQM market. The bottom line … rewrite the rule based on a capped APOR and have confidence in the fact that the rest of rule and the other rules written, eliminate the risks as intended by the Dodd-Frank legislation.

David H. Stevens, CMB, is former SVP of single family at Freddie Mac, former EVP at Wells Fargo Home Mortgage, former president and COO of the Long and Foster Realty Companies, former Assistant Secretary of Housing and FHA Commissioner, and former CEO of the Mortgage Bankers Association. He may be reached by e-mail at Dave@DavidHStevens.com.

KETS a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MAR

Adam P. Smith is president of The Colorado Real Estate Finance Group Inc., a commercial and residential real estate finance firm, and the owner and sales coach of Just The Tips Coaching. He may be reached by phone at (303) 770-2262, ext. 112 or e-mail Adam@CoreFinanceGroup.com. 57

NationalMortgageProfessional.com

REDSTONE Print & Mail Inc.

THE NA ATTION’S TOP LENDERS USE REDSTONE PRINTT & MAIL

NEW CLIENT INCENTIVES:

• Turn-Key Direct Mailing • Loan Servicing Payment Fulfillment • In the Market Alert Programs

• Lowest Price Guarantee • Up to $5,000 in production credit • Free CRM and Lead tracking System

Call 1-866-306-6732 today to learn how Redstone Print & Mail, Inc. can an deliver the competitive edge you need to stay ahead of your competition.

24-Hourr Turnaround Interested in Seeing Mail Samples? Visit www.whatsmailing.com m Multi-Bureau Presccreened Data and use Offer Code: NMPFL for FREE ACCESS! C Compliance Minded Professionals P

n National Mortgage Professional Magazine n SEPTEMBER 2019

SERVICES:

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

Find Flexibility and Variety With Wholesale Mortgages Positive indicators signal growth for wholesale and correspondent channels

ith interest rates continuing to decline and home prices stabilizing, the mortgage industry has seen a recent surge in interest and originations. At the end of July, purchase applications for mortgages were up six percent year over year, according to the Mortgage Bankers Association (MBA).1 And this past June, purchase originations made up 69 percent of the overall market share, according to the Ellie Mae Origination Insight Report.2 These data points signal good things for wholesale and correspondent lending channels for the remainder of the year. As wholesale and correspondent brokers work to expand their business, and retail originators consider making a move, expect to see growth in these markets as originators and homebuyers alike demand the flexibility and variety provided by these lending options.

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Status of the market Significant shifts in the interest rate have driven the market during the first half of 2019. According to Ellie Mae, the average interest rate on a 30-year fixed rate mortgage was 4.4 percent this past June.3 That’s down from 4.52 percent in May, and down from 4.9 percent in June 2018. Some borrowers are even seeing rates below four percent. In fact, in the first week of August, the average contract interest rate for 30-year fixed mortgage on conforming loans was just 3.93 percent, its lowest point since November 2016, according to the MBA.4 These decreases may be fueling a second-quarter surge in originations. According to the Federal Reserve Bank of New York’s Center for Microeconomic Data, first-quarter 2019 originations, including refinances, were at their lowest point in four years, totaling just over $344 billion.5 But originations rose to $474 billion in the second quarter, marking the highest origination volume seen since third-quarter 2017. With such market volatility, no one can say for certain what the rest of the year will bring in terms

“In wholesale originations, service is paramount. Not only do brokers need to provide stellar servicer to their borrowers, they expect and need the same kind of service from their lending partners.”

of interest rates or originations, but there are a number of positive indicators. When the increase in mortgage originations is coupled with trends showing a slow-down in the rise in housing prices, there’s even more reason for a positive outlook. In fact, the National Association of Realtors’ Housing Affordability Index posted a year-over-year gain in secondquarter 2019, its first such increase in two years.6 Although there are no easy indicators of how the wholesale market is tracking within this, there are lenders who specialize in wholesale originations that are showing significant gains and growth. And though some large banks have closed their wholesale divisions, this past first quarter a wholesale lender ranked second in overall originations, beating out such large national banks as Wells Fargo and Chase, according to Inside Mortgage Finance.7 This may signal that more borrowers are seeking out the help of mortgage brokers to find the best mortgage for their financial situation.

Partner with the right lender Originators considering a shift to wholesale and brokers that are already familiar with the market should consider expanding their business with the assistance of the right lending partners. The lender is a critical part of the mortgage process, as any wholesale originator is well aware. The level of service provided, including the number of products available, can make or break a mortgage deal. There are many things that newcomers and experienced brokers alike should seek in their potential lending partners, and some are more important than others. In wholesale originations, service is paramount. Not only do brokers need to provide stellar servicer to their borrowers, they expect and need the same kind of service from their lending partners. One critical indicator of this is closing times. According to Ellie Mae, the average number of days to close on all loans this past June was 42 days.8 Where does your lender fall within that? Can they match it or beat it? But even more critical than quick

By Ray Brousseau

closing times is transparency. Does your lender set and communicate realistic expectations for closing times? Does your lender communicate well overall? Keeping borrowers up to date about the status of their loan is vital to keeping a satisfied customer. Wholesale lenders also need to keep their broker partners satisfied. With technology playing an increasing role in lending, brokers should be sure their lending partners are keeping up to date with all the changes. Look closely at their customer relationship management (CRM) system. Is it robust and current? Is it easy to use? When was it last updated? What other technological options do they offer? Can you present loan scenarios and get a quick response on whether there is a product available to fit your borrower’s needs? In addition to service and technological considerations, brokers should look at the business side of potential lending partners. Is their wholesale business growing? Or have they made recent cutbacks? How is their business structured? That is, is wholesale their only market? If not, how much of the business is dedicated to their wholesale department? Do they also offer correspondent channels? Brokers should consider all these factors and more as they consider partnering with wholesale lenders. Find the products you need The final piece in this puzzle is loan products. Brokers and correspondent lenders need partners that offer a broad spectrum of loan options, from conventional and government loans to niche offerings, like non-agency products. The broader the product offering, the greater the opportunity to meet the needs of the clients, which means more business for originators of any kind. Finding a lender with conventional and government loan products isn’t terribly difficult; there are many of them out there, and the loans are relatively straightforward. Brokers should be wary, however. Just because a lender lists Federal Housing Administration (FHA) loans in their product offerings, it doesn’t mean they provide loans to the full capability of the FHA’s guidelines. Originators should examine potential lenders’ underwriting guidelines to

KETS a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MAR

see if they use the broader parameters of the government, or Fannie Mae or Freddie Mac, or if they instead place additional requirements on borrowers. Consider talking with other brokers who have worked with a particular lender to not only determine if they can provide the loan you need, but to gauge the working environment with that lender. If you have a particular scenario in mind, consider talking with someone at the lending company to see if they have a product that can meet the needs of your borrowers. Brokers also should carefully consider the market potential of the loans offered by a lending partner. Conventional loans make up the majority of the mortgage marketplace (68 percent this past June, according to Ellie Mae),9 but what do the borrowers in your market need? Do you work primarily in government loans? Do you have borrowers that fall out of conventional guidelines? Or do you want to expand your business to include these types of loans? Borrowers with challenging credit scores are often denied by many

conventional lenders, despite falling within the guidelines of government programs. Consider partnering with lenders that specialize in this market or that are creating products to meet the increasing demand for non-qualified mortgages. This may be the next big opportunity, and originators who are ready to meet borrowersâ&#x20AC;&#x2122; needs with these products could see significant growth in their business. But brokers should also be willing to put in the time if theyâ&#x20AC;&#x2122;re considering adding these products to their arsenal. These are not simple loans, and they require heavy documentation to ensure responsible lending. By aligning themselves with lenders with experience with these loans, brokers will not only get the education they need, but also the resources to back it up. With recent interest-rate changes and home-price stabilization, the outlook for mortgage originations for the remainder of the year seems positive, and wholesale and correspondent channels are poised for growth under these conditions. Whether youâ&#x20AC;&#x2122;re a retail originator

considering a move to wholesale, a wholesale broker looking to expand, or a mortgage professional thinking of exploring the correspondent lending channel, you

will need the right lending partners to ensure success in your endeavors. Be sure to consider service, products and pricing carefully before you make your move.

Footnotes 1 2 3 4 5 6 7 8 9

www.mba.org/2019-press-releases/july/mortgage-applications-decrease-in-latest-mbaweekly-survey-x256683. assets.contentstack.io/v3/assets/blt47a327ac368e22cd/blt040b93ded869de38/5d2e84e 11b987e46ddec7401/EM_OIR_JUNE2019.pdf. assets.contentstack.io/v3/assets/blt47a327ac368e22cd/blt040b93ded869de38/5d2e84e 11b987e46ddec7401/EM_OIR_JUNE2019.pdf. www.mba.org/2019-press-releases/august/mortgage-applications-increase-in-latest-mbaweekly-survey-x257611. www.housingwire.com/articles/49839-mortgage-rollercoaster-originations-rise-to-nearly-2year-high-after-falling-to-4-year-low. www.morningstar.com/blog/2019/07/31/market-update-q32019.html. nationalmortgageprofessional.com/news/71262/united-shore-sets-record-percent-wholesalemarket-share. assets.contentstack.io/v3/assets/blt47a327ac368e22cd/blt040b93ded869de38/5d2e84e 11b987e46ddec7401/EM_OIR_JUNE2019.pdf. assets.contentstack.io/v3/assets/blt47a327ac368e22cd/blt040b93ded869de38/5d2e84e 11b987e46ddec7401/EM_OIR_JUNE2019.pdf.

Ray Brosseau is president of Carrington Mortgage Services LLC. He oversees all aspects of Carringtonâ&#x20AC;&#x2122;s lending and servicing divisions. Under his leadership, Carringtonâ&#x20AC;&#x2122;s fullservice mortgage-lending business with wholesale, retail, and centralized sales and operations has experienced unprecedented growth and operational results. Brousseau has nearly 30 years of experience in the mortgage banking and consumer-finance industry, including more than two dozen years with CitiGroupâ&#x20AC;&#x2122;s consumer-finance business. 59

No FICO score (unless PMI loan)

Cash-outs* up to t $2.5M (no seasoning)

Discounted rates

LLoan amounts t up to t $3.5M $3 5M with CLTVs to 90% 9 **

Bijan Farassat (917) 731- 4 870 bfara assat@ridgewoodbank.com NMLSS ID# 646654

24/7 access through our o online li portal t l

Joseph Novielllo (718) 24 0 - 478 0 jnoviel lo@r idgewoodbank.com NML S I D# 625762

*On primary residences an nd second homes (LTVs apply). | **1â&#x20AC;&#x201C;â&#x20AC;&#x201C;2 family and condo purchases and rate and term | Terms and conditio ons subject to change without notice. Loans subject to credit approval. | ÂŠ 2019 Ridgewood Savings Bank. All rightts reserved.

Mary Ann Scagg gs Sr. Mortgage Loan Originator Purchase, NY

www.ridgewoodbank.com

n National Mortgage Professional Magazine n SEPTEMBER 2019

As a trusted local wholesale lender, we eâ&#x20AC;&#x2122;re committed to prov viding great service for you and a great results for your clients â&#x20AC;&#x201C; each and every e time.

â&#x20AC;&#x153;I cannot expresss how grateful I am to have a broker relationnship with Ridgewood. Time and time again, youâ&#x20AC;&#x2122;re the lender I count on for personal attention and unparalleled service.â&#x20AC;? v

NationalMortgageProfessional.com

Depennd on Us. Deliver for Your Clients.

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

Applauding the Resurgence of the Mortgage Broker: A Lender’s Perspective By Brian Daily n the midst of the Great Recession, as the housing market plummeted, the conversation of whether or not the mortgage broker would disappear was very real. With the sheer number of mortgage brokers falling out of the industry, it would have been a safe bet to proclaim the mortgage broker was permanently gone. Mortgage lending fell to its lowest levels on record and many mortgage professionals left the industry. That was then, this is now. As the housing market and economy in general started to rebound, so too did the mortgage broker. Regulation, compliance and technology brought the industry a new type of mortgage broker that was better equipped and better positioned to not only meet, but exceed the needs of the savvier borrower. In short, the resurgence of the mortgage broker is well underway. Even though the actual count of licensed mortgage brokers is well off its peak from the early 2000’s, licensed mortgage brokers have been gradually increasing every year since the end of the Great Recession. The reasoning behind the continued growth can be attributed to many factors. I would like to narrow this discussion down to three dominate reasons for the resurgence: Technology, local borrower relationships, and the ability to offer loan programs that many banks do not offer. Robust and cutting-edge technology in the past were only available for capital rich companies and required a heavy investment in technology infrastructure. Research, programming and design were primarily functions of the big banks and large mortgage-related companies. The environment was nearly impossible for a mortgage broker to gain access to leading technology due to its cost; however, as time has continued, that equation has changed. Lenders recognized that a wholesale lender must operate in a collaborative partnership with the mortgage broker in order for mortgage brokers to have a

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

competitive edge in their markets. That is why mortgage brokers must consider intuitive and robust technology benefits when dealing with a wholesale lender. The broker must analyze if the lenders’ technology offers bonafide benefits for the brokers’ company to utilize. In the past, mortgage brokers typically utilized industry-supported loan origination software programs, and not much else. Additional helpful tools, such as mobile technology, marketing-generated platforms and customer fulfillment/engagement portals, were typically high-priced expenditures that the broker had to pay for “out of pocket”—or simply bypassed and attempted to compete in a different manner. One way for a lender to differentiate themselves from a competitor, beyond rates, is to offer technology that bring added value to the broker at no cost. For example, Mountain West Financial utilizes a technology platform called BOLT. Basically, an overlay of the loan originating software, this technology makes it easier for the broker to submit their loans. The ease of use of this system equates to better efficiencies for the broker, which in turn, equates to higher overall margins on the loans they submit to us. The collaboration and sharing of technology puts the broker on a more even playing field with banks and other competitors. Starting in the mid-1990’s through the Great Recession, mega bank mergers and acquisitions were occurring at a record pace. This M&A activity started to create massive banks and thus fell under scrutiny during the housing downturn, resulting in concerns about banks being “Too Big to Fail.” The common theme for the winning mega bank acquirer was they immediately gained more market share on multiple financial fronts, including the mortgage business. What many banks did not anticipate was the backlash the consumer started to express toward the mega bank. Consumers started to express strong opinions that the bank undervalued them because

of how large they become. The mortgage broker industry seized the opportunity to fill the gap for the consumer by being local and creating a more personalized approach. It is working. Consumers need to trust individuals who are handling their personal information and advising them on what the best loan to apply for may be. Mortgages are very complex transactions, and given all the notifications, preclosing disclosures, and required documentation from the borrower to be approved, it is a very intimating process. The consumer needs help with all of this information and they trust their local broker for guidance. It is that very local personalized approach which has been fostering and influencing the mortgage broker’s growth for years. This all really equates to a local broker being able to work more effectively with a borrower versus a big bank. Banks are now guided by regulatory laws and capital requirements to better safeguard against the financial disaster that hit the banks during the Great Recession. Loans within the banking system must meet certain loan criteria to safeguard against future losses. The Qualified Mortgage loan (QM loan) is just one example of strong regulatory guidance of what types of loans could be done by banks. Existing regulations such as RESPA, Truthin-Lending (Regulation Z) & the Home Mortgage Disclosure Act (HMDA) are just a few examples of regulations that have been enhanced to address the risk and performance issues that have impacted the consumers and banks alike during the housing meltdown.

After the Great Recession, the Consumer Finance Protection Bureau (CFPB) began its regulatory enforcement supervisory oversight of the financial sector designed to protect the consumer from unlawful and scrupulous activities. The existence of this agency, and its enforcement powers alone, forced banks to be more restrictive in their lending practices. With hefty fines already being levied against major banks for multiple items, the banks reverted to minimizing as much risk as possible, which includes eliminating non-QM loans. The brokers noticed this conservative approach to the mortgage business by the banks, which created an opportunity to seize additional market share for the brokers. The mortgage broker can typically offer a diverse set of loan programs to a borrower that banks do not offer. In addition to general loan products, brokers also participate in downpayment assistance programs and grant programs that are centered on affordable housing. The diversification of loan products and programs, under one roof, creates ample coverage for all types of qualifying borrowers. Low credit scores, high debt-toincomes ratios, minimal, if any downpayment money, are scenarios where some banks may not be able to assist the broker because of the banks’ more conservative approach toward mortgage lending. Borrowers do not all fit into the same qualifying buckets for a mortgage loan. For that general reason, there is a place and purpose for the mortgage brokers.

Brian Daily is SVP of production at Mountain West Financial Inc. Brian is responsible for the overall management, designing and implementing growth strategies, and creating world-class experiences for its clients within the wholesale channel. Brian has 30-plus years of experience in the mortgage banking sector, covering a wide range of responsibilities. Within the mortgage industry, he has managed, built and implemented strategies pertaining to origination channel rollout, mass national market expansion, B2B customer experience feedback platforms, to name a few areas.

KETS a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MAR

FIRS ST TO TO MARKET T.. FIRS ST TO INNO OV VATE. FIRS ST T TO LEAD.

NON-PRIM ME

oreclosure, short sal ale, and • Fbank ankruptcy okay o • Up to $5 million loan amounts • 90% LTTTVV, no MI

NE Month Bank Stat Sta ement • ONE Progrram m for income e • No reserrvess requirred w to 500 0 cred edit score • Down

OUTSID DE DODD D-FRANK -FR K® (ODF)

gn nationals natio • Foreign ed in ncome,, D DSCR, and • Stat Asset Deple letion • Business purpose/No TRID

• Interest only available FICO O and 500 FICO • No program p am allowable

OUTSIDE DODD-FRAN NK K® PLUS (ODF+)

• 5 to 35-unit properties Business entities ntities and • Bu trusts usts allowable • Up to $5 million loan amountss

otel / Mot M el / Rooming • Ho House / Healthcare • Up to 75% LTLTTVV

WHOLESALE / CORRESPONDENT NON-PRIME LENDING Call Citadel Servicing Now! 949-900-6630 sales@citadelservicing.com

citadelservicing.com Citadel Servicing Corporation NMLS ID# 144549, Licensed under Division of Business Oversight Under the California Residential Mortgage Lending Act license #4 411DBO-741 4196, Finance Lenders License # 60DB094450, and CA-DRE #01799059. 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. y lender. Rates, terms, and programs subject to change without notice. Offer of credit subject to credit approval per Distribution to the general public is prohibited. CSC is an equal opportunitty applicable underwriting and program guidelines, applicant eligibility, and market conditions. Not all applicants may qualiffy y. Not valid in the following states: AK, HI, IO, MA, MS, MO, NM, NY, ND, OH, RI, SD, and WV.

n National Mortgage Professional Magazine n SEPTEMBER 2019

bank statements • 1for2 minonth come • Interrest only available

NationalMortgageProfessional.com

MAGGI PLUS – THE NEW AL LT L T-A A

• 24 mo. f romm ccredit event ne year W2 orr 1040 to • O80% LTV LT TV T V • 90% LTTVV, no MI

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

Risk Considerations for TPO Lenders and Service Providers By Dave Stephan f you were a child with a love for board games, you may recall gathering your family or friends to spend countless hours playing the beloved game of Risk. At the time, your only focus was the simple goal of total world domination. Should you move your armies from Irkutsk to Kamchatka? Or attack Argentina? Maybe Greenland? If only things were still so simple. For us in the mortgage industry, “Risk” means something far more complicated today. It touches nearly everything we do and continues to impact our business on a daily basis. Mitigating risk can be a tricky business; balancing on the tightrope of too much or too little. If you work in or are involved with the process of wholesale lending, the considerations are no different for a third-party originations (TPO) program (for purposes of this article, the TPO service provider is the institution that originates the loan). The TPO lender is the entity that, depending on the relationship, will issue disclosures, process, underwrite and ultimately fund the loan in its own name. TPO risk management can be broadly broken down into two categories: Risk that is assumed by the TPO lender, and risk that is assumed by the TPO service provider. Each of those categories can be further divided into operational risk and compliance risk. Operational risk is the exposure brought about by the day-to-day functioning of a TPO business. Compliance risk are those risks that are brought about by the ability of both parties to meet the myriad compliance regulations that are required by the various governing agencies.

differently. So while we may be awash in refis today, as rates increase in the future, there’s no doubt lenders will look at infrastructure critically again. Once a TPO service provider is approved and the above answers are addressed, typically the same processes and controls in place for retail are sufficient for the day-today processing of TPO loans.

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Operational risk Let’s first focus on risks associated with the TPO lender. Day-to-day operational risk management starts the day that you, as a TPO/wholesale lender, begin courting a potential service provider. The first and

“For us in the mortgage industry, ‘Risk’ means something far more complicated today. It touches nearly everything we do and continues to impact our business on a daily basis.”

main question to ask is why the potential client wants to sign up for your services. The answers usually come in one or more of the following three responses: 1. We need products available that we do not currently originate, such as FHA, VA and USDA RD: Government lending can represent some major hurdles for a TPO service provider that is not accustomed to the documentation and compliance-heavy origination process. It‘s essential that the TPO lender have an initial training program ready to go that educates originators on the basic guidelines and documentation requirements, in addition to ongoing training sessions for new originators coming on board, as well as providing a constant refresher opportunity for those that need it.

2. We need help managing compliance deadlines and responsibilities: While most lenders now are accustomed to TRID, smaller community banks and credit unions may still be looking for relief from issuing upfront and closing disclosures. Many of these institutions don’t have a fulltime compliance specialist. Tolerance cures and audit violations may push some lenders to pursue a thirdparty source to manage these functions. 3. We need to trim down infrastructure to achieve better profitability: While we are currently experiencing an unexpected refi surge, it was only six months to a year ago when rates were in the five percent range with volumes dropping fast, and many lenders were evaluating their mortgage operations to find ways to cut down on its infrastructure and originate

Compliance risk Compliance risk for the TPO lender comes in many forms. Whether the clients are chartered financial institutions, mortgage bankers or brokers, the TPO’s investors as well as the GSEs will require monitoring. Yearly recertification must be conducted to include reverification of NMLS credentials, updated financials, insurance and bond coverage, as well as a review of any regulatory actions that may affect the client. Ongoing production must also be monitored for fall out and pricing exceptions. Closed production must also be reviewed for early payoffs, defaults and delinquencies. From the service provider’s perspective, these risks can be considerably different. We’ll be focusing on the risks associated with service providers that are chartered financial institutions, such as banks and credit unions, for this article. As a chartered financial institution, the service provider must take into account multiple considerations regarding risk. As with any aspect of mortgage lending these days, compliance risk is a consideration the service provider must take into consideration. In a traditional TPO relationship, most of the day-to-day compliance requirements, such as issuing disclosures, are handled by the TPO lender. However, RESPA requires that a certain number of defined services be

KETS a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MAR

performed by the service provider in order to receive payment. It varies greatly how each TPO client documents the performance of these services, as well as differing levels of scrutiny from an audit and regulatory standpoint. Given the variability, it’s wise to review each transaction and document the completion of the RESPA defined services chosen in the initial agreement between the lender and service provider. There are, of course, many areas where the TPO service provider can benefit from a compliance risk standpoint. Depending on the structure of the agreement, nearly all TRID related requirements become the responsibility of the TPO lender. Docs are also drawn by the TPO lender becoming solely its burden as well. Also, because the underwriting decision is in the hands of the TPO lender, the service provider is not required to report HMDA information. On the operations side, the TPO service provider’s risk

considerations also start when the initial relationship is being pursued. Ultimately, you as the service provider are putting your customer in the hands of the TPO lender. Due diligence is key here and requiring a full due diligence package from the prospective TPO lender is a must. Licenses and insurance/bond coverage must be up-to-date and service industry standards documented through SSAE and SOC reports are important as well. Because many of the day to day activities are conducted by the TPO lender (which the service provider has no direct control over) operational risk also has a reputational component to it as well. Due diligence must also be exercised in researching a prospective TPO lender. Conversations with references are essential to understand how the TPO lender is at meeting closing dates and how responsive it is. How long has the organization been in business? What is the

experience of its leadership? How does it treat borrowers? How does it perform in times of heavy volume? What kind of training does it provide? Technology must also be reviewed. The ability for the TPO lender’s loan origination system to collect information and communicate with the service provider and borrower is crucial. No matter how skilled either party is at mortgage lending, poor communication can cause ongoing frustration and ultimately lead to greater

reputational risk. Not only should this area be addressed in reference conversations, but if possible, a thorough demonstration of the system should be requested to evaluate it on a real-time basis. Ultimately the goal for both parties is to meet the needs of the borrower with an acceptable level of risk that is appropriate for the amount of income that each will earn from the transaction. Actually, world domination might indeed be easier.

Dave Stephan is TPO manager for Inlanta Mortgage Inc. He may be reached by phone at (262) 754-6494 or e-mail DaveStephan@Inlanta.com.

NationalMortgageProfessional.com

REDSTONE Print & Mail Inc.

THE NA ATTION’S TOP LENDERS USE REDSTONE PRINTT & MAIL

NEW CLIENT INCENTIVES:

• Turn-Key Direct Mailing • Loan Servicing Payment Fulfillment • In the Market Alert Programs

• Lowest Price Guarantee • Up to $5,000 in production credit • Free CRM and Lead tracking System

Call 1-866-306-6732 today to learn how Redstone Print & Mail, Inc. can an deliver the competitive edge you need to stay ahead of your competition.

24-Hourr Turnaround m Interested in Seeing Mail Samples? Visit www.whatsmailing.com Multi-Bureau Presccreened Data and use Offer Code: NMPFL for FREE ACCESS! Compliance C Minded Professionals P

n National Mortgage Professional Magazine n SEPTEMBER 2019

SERVICES:

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

Basic Concepts for Managing Third-Party Risks By Thomas Grundy, CRCM “Alone we can do so little; together we can do so much.” –Helen Keller o survive and thrive in the mortgage business, leaders of highperformance financial services organizations know that lean operations and strategic partnerships are key to achieving production objectives while managing operating costs. However, identifying qualified third parties to support your business objectives can be a challenge. Moreover, maintaining sound, productive third-party relationships requires ongoing oversight and management of an array of risks inherent in these relationships. Mortgage lending, like so many industries in today’s technology-based business environment, is largely built on partnerships with third parties that support many of the core activities and functions of the business. As a general matter, when core activities such as sales, underwriting, origination, closing, servicing and collections are conducted by a third-party partner, the risks to the outsourcing institution are in direct proportion to the quality of the control environment established by the third party, and to the level of oversight and monitoring conducted to maintain awareness. Board members and senior management bear the ultimate responsibility for managing activities conducted through third-party relationships. Fulfillment of this responsibility requires proactive identification of, and ongoing oversight of risks arising from third-party relationships, i.e., the same as if the activity is performed inhouse. However, what are some of the key risks and control considerations?

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Strategic risk Strategic risk emerges where misalignment of goals between

“Mortgage lending, like so many industries in today’s technology-based business environment, is largely built on partnerships with third parties that support many of the core activities and functions of the business.”

an institution and its third-party partners occurs. A common example of this would be in the instance where a third-party mortgage originator creates an incentive program resulting in the production of certain types of mortgage products, or creates a focus in particular markets but does not achieve the lending goals of the partner institution. Not only is this a critical misalignment of goals, but it could produce an unfavorable outcome from a fair lending or Community Reinvestment Act (CRA) perspective. Sales and production dashboards can be established to provide an ongoing information feed to monitor what loans are being made and where. In addition, it is always prudent to reserve the right to review and approve marketing initiatives and planned campaigns with third-party partners, as well as maintain ongoing awareness of

incentives plans established to drive sales activities. Operational risk Losses and violations resulting from inadequate or failed internal processes, poorly trained employees, inadequately developed systems, and external events such as natural disasters are all operational risks that can result in transactional failures. Only through regular, on-site visits and interactions is it possible to stay current on a partner’s operational control environment. Yet, too often mistakes and transactional failures are either identified through customer complaints or captured through detective monitoring activities—and addressed as a back-end remediation or corrective action measure. Given the proliferation of financial technology, artificial intelligence (AI), the use of alternative data, and the ability

to interact with consumers in large volumes and at high velocity, transaction risk can be considerable. Where large volumes of loans are originated involving multiple third parties, automated convergence of multiple data streams from varied sources, coding errors, or a system failure could result in considerable damage and potential consumer harm. This dynamic is particularly prevalent where newly developed products go to market in the absence of comprehensive compliance and quality control testing. Online application platforms, as well as automated origination workflows and underwriting processes, can serve as key controls if properly built and correctly implemented. However, financial commitments that drive aggressive development deadlines can in some cases result in problems down the road. The competitive focus in the mortgage industry is on speed of application, model-driven decisions, lean origination workflows, and agility of delivery largely to a generation of consumers raised on technology. With so much of the mortgage industry focusing on tech solutions and speed of delivery, it is vital to also maintain focus on core risk management fundamentals for ensuring compliance with applicable laws, regulations, and principles of safety and soundness. Tracking the progress status of every application has always been important. However, with technology now populating and assimilating so much of the documentation, humans should still monitor to ensure the process is fulfilling the mission. Application processes and protocols designed to automatically transfer and populate an applicant’s bank information, credit report data, property data, and to automatically conduct customer background checks can, and do, malfunction. Vigilance is, as it has always been, critical to maintaining the flow of pipeline activity and for identifying process irregularities. Failure in any input or application interface may result in an incorrectly

ETS a special focus on AN UPDATE ON THE

coded, declined or cancelled application that otherwise could proceed to an approved credit decision and be funded. The key to managing operational risk is to establish well-defined workflow processes and effective status tracking of application, underwriting, and processing activities. Credit risk Credit risk considers the ability of a company to meet the terms of the relationship agreement. When conducting due diligence on a potential third-party originator, regulated institutions should analyze controls established to ensure quality. Regulatory guidance is clear in cautioning that due diligence should result in an anticipated understanding of the credit quality of loans originated and preliminary knowledge of the volume of repurchase loans, if any. Knowing this prior to entering a third-party lending arrangement is the best credit risk management defense and serves to build productive relationships that are based on safe and sound lending practices.

continued on page 66

n National Mortgage Professional Magazine n SEPTEMBER 2019

Ongoing third-party risk management Building and maintaining successful partnerships with third parties is a direct reflection of the quality of the third-party management programs and disciplines established to “appropriately assess, measure, monitor, and control the risks” associated with third-party relationships. The FDIC’s Examination Guidance for ThirdParty Lending and other regulatory guidance1 with respect to third-party relationship management emphasize that the fundamental elements of an effective thirdparty risk management program are: l Risk assessment: Risk assessments provide data

NationalMortgageProfessional.com

Compliance and reputation risk Compliance risk in the context of third-party mortgage origination relationships can extend to a range of requirements including fair lending; fair credit reporting; consumer financial privacy; Unfair, Deceptive or Abusive Acts or Practices; and the Bank Secrecy Act—just to name a few. Regulatory guidance reminds that compliance risk and consumer harm can increase relative to the inherent risk of the product and the level of involvement by third-parties throughout the lifecycle of the relationship. Failure to comply with laws and regulations can put any lender on the fast track to regulatory enforcement, fines, and remediation actions—or worse—potentially making reputation-damaging headlines. For example, that same incentive program that results in the production of certain types of mortgage products may not be appropriate for a particular group of borrowers, potentially resulting in reputational harm. Thus, maintaining a clear line of

sight into the compliance management practices of thirdparty partners is critically important for preemptively managing compliance issues before they escalate and potentially result in reputational and/or financial damage. Regulators expect the boards and management of financial institutions to maintain ongoing oversight of third-party relationship risk. Periodic, riskbased targeted review in combination with over-arching Compliance Management System (CMS) reviews of third parties provide critical insights for maintaining ongoing awareness of the adequacy of a partner’s overall compliance management framework. Always keep in mind that third-party oversight requires indepth analysis not only of a third party, but in some cases the fourth and fifth parties that come with a complex partnership that deliver solutions for application, underwriting, processing, pipeline management, decision technologies, and funding processes. Full awareness of all parties involved effectively establishes the pedigree of the relationship from a legal, compliance, and risk management perspective. This approach can be particularly helpful should issues arise over time that require a thorough tracing and understanding of root cause of a transactional failure in the context of a complex relationship.

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

basic concepts for managing third-party risks

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

essential to informing the initial decision whether to establish a third-party relationship. While much of the focus is on the initial assessment of risk, over time relationships that go forward should be monitored for any changes in operations to determine the continued effectiveness of the control environment. Due diligence: Due diligence is an invaluable opportunity to get to know as much as possible about a prospective third-party partner. This process entails reviewing a third partyâ&#x20AC;&#x2122;s governance documentation; financial condition; experience and background information on the management team; and any other management information that will be critical to the ongoing

success of the relationships. Contract: Contracts establishing the relationship and the rights and responsibilities of the parties should address provisions outlined in regulatory guidance for third-party relationship management. Oversight: Periodic, independent reviews of third-party relationships should be appropriately scoped and conducted with a frequency that directly relates to the risk profile of the third-party partner. The findings generated through these review activities should be reported upward to the board and executive management. Termination: Third-party relationships terminate for various reasons, including expiration or satisfaction of

continued from page 65

the contract; decision to seek an alternate third party; decision to bring the activity in-house or discontinue altogether; and for breach of contract. The dynamics of establishing

and managing third-party relationships require dedicated resources, similar to managing a direct line of business. An effective third-party management program is essential to supporting successful third-party relationships.

Footnote 1

FIL-50-2016, Proposed Guidance for Third-Party Lending; OCC Bulletin 2013-29, Third-Party Relationships; OCC Bulletin 2017-21, Third-Party Relationships, Frequently Asked Questions to Supplement OCC Bulletin 2013-29; FIL-44-2008, Guidance for Managing Third-Party Risk; NCUA Supervisory Letter No. 07-01, Evaluating Third-Party Relationships; FFIEC IT Examination Handbook, Business Continuity Planning, Appendix J, Strengthening the Resilience of Outsourced Technology Services.

Thomas Grundy, CRCM, is senior director, CMS and regulatory consulting, for Wolters Kluwerâ&#x20AC;&#x2122;s U.S. Advisory Services Group. Thomas can be reached by e-mail at Thomas.Grundy@WoltersKluwer.com.

KETS a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MAR

Sharrestates

America’ss Private Lender America

MEET TH HE FASTES ST FUNDER R

‘All Cash’ contractss

Rates sstarting at 7.99% .

Up to 85% LTV T

Rehab, bridge & construction

Contact: Michael Ramin, VP, Business D Development Email: Sales@sharestates.com

Phone: 212.201.0750 Ext 814 40 Website: www.sharestates.co om

n National Mortgage Professional Magazine n SEPTEMBER 2019

APPLICATION + CREDIT + APPRA AISAL = FINANCING G

NationalMortgageProfessional.com

IN THE R REAL ESTAT TE JUNGLE E

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

Wholesale, TPO and Correspondent Lenders Supporting Non-QM Loans By Deborah Hill quarter 2018, according to the MBA (DBRS.com). However, to offer non-QM, the lender needs strong secondary market relationships or the lender may have to warehouse the loan.

holesale, TPO and correspond ent lenders support the origination of non-QM loans with higher interest rates and fees—finding profit at a time when qualified loan margins are thin to negative. Non-QM loans solve borrower problems, property problems and loan type problems, but are dependent on secondary market intermediaries and end investors. Let’s take a closer look at the non-QM process.

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Why non-QM? “Non-QM” loans get attention when interest rates drop while home prices rise. Non-QM loans address loans failing to qualify for GSE purchase. For more detail on what disqualifies a loan for GSE purpose, check out the articles on the CFPB site: ConsumerFinance.gov/Consum er-Tools/Mortgages/. Borrower problems If a borrower has poor credit, is self-employed or cannot afford properties in their area, the GSEs standards for counterparty risk prevent them from purchasing the loan. Examples include: l Borrowers without money for a downpayment, or who don’t meet the GSEs’ DTI ratio requirements or have bad credit. l Borrowers are selfemployed, retired or generating income from rental properties or investments. l Non-citizen borrowers who otherwise qualify for underwriting. While these problems could be resolved by the borrower waiting to buy, or adding a coborrower to the loan, some lenders may offer them a nonQM loan instead. Property problems Some properties don’t qualify for GSE mortgages–even if the borrower checks every

Bank statement loans The most popular type of nonQM loan helps small business owners and independent contractors purchase properties. These loans, also called “Bank Statement,” focus on the borrower’s historic income, rather than W-2s or employment verification.

“Non-QM loans solve borrower problems, property problems and loan type problems, but are dependent on secondary market intermediaries and end investors.”

qualification box. Some common property problems include: l Non-warrantable: Common for vacation properties and sometimes for a condo the borrower is buying as their primary residence if it’s new construction or a multi-unit building with a lot of renters. l Hazards, including proximity to gas tanks, hazardous waste sites, gas or oil wells may disqualify a property. Owners who sign leases for oil and gas drilling, owners who don’t own the drilling rights to their property and owners whose property is adjacent to either of the above are affected. Loan type problems Loan type problems affect lenders more than borrowers. These problems occur when a loan is unprofitable or has a limited secondary market. l Very low to negative interest rates: In Denmark,

Jyske Bank A/S, Denmark’s third-largest bank, now offers 10-year mortgages with a negative interest rate of 0.5 percent. In the United States, interest rates are dropping to levels that may no longer cover costs for lenders and servicers. Fee discounts: As credit unions increase their mortgage lending, the competition for lower closing costs intensifies. Large online lenders compete on fees, reducing revenue for other lenders forced to discount fees in response.

Common non-QM solutions The following non-traditional loans solve many of the above problems without materially increasing default risk. The 60day or more delinquency rate for non-QM loans hovered just under four percent. That’s compared to the delinquency rate for conventional loans at 3.45 percent and FHA loans at 8.70 percent as of second

Asset based Asset based mortgages allow the borrower to use their investment portfolio as collateral for their mortgage. One might ask why they don’t liquidate their holdings then buy the property? These borrowers want to realize income from the spread between their asset income and the lower rates on mortgage debt. For example, the borrower may be earning five percent on their portfolio while the cost of the mortgage is only 4.5 percent. Fee costs aside, the investor is better off holding their assets and assuming mortgage debt since liquidating the asset would result in a net loss of 50 basis points. The volatility (riskiness) and liquidity of the buyer’s assets determines the risk of the loan. Assets that take a long time to sell or are hard to price are less desirable. For example, a loan collateralized with artwork is higher risk than a loan backed by holdings in blue chip, AAA, rated companies. Property cash flow Some real estate investors cash flow their properties by renting them. For these borrowers, the cash flow from the subject properties establishes income and risk. Rates may vary by property net cash flow, property type or maintenance history. The key metric, Debt Service Coverage Ratio, divides rental income by the sum of; Interest, Principle, Property Taxes,

ETS a special focus on AN UPDATE ON THE

Insurance and dues (if applicable.) If the Coverage Ratio is greater than one, cash flow is deemed sufficient to cover payments. However, these loans come with higher risk premiums because a change in the rental market, building conditions or any of the values in the denominator may change the Ratio. HELOC style This loan type blends a 30year HELOC and demand deposit account to fund a purchase. The borrowerâ&#x20AC;&#x2122;s income (paycheck or other stream of payments) is direct deposited to the account, their monthly payment is taken and they use the balance of their income to pay bills or save, just like they would with a checking account. In some cases, the homeowner receives interest offsets if they carry a large enough balance in the account month to month.

Correspondents Correspondents (often banks) have their own funds so they both originate and fund loans. Then they package the loans into RMBS (residential mortgage-backed securities) and sell them onto the secondary market players. Correspondent lenders may also retain loan servicingâ&#x20AC;&#x201D; doing so increases their profit on RMBS because investors understand that servicing is a revenue stream for the lender continued on page 70

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; ReďŹ nances up to 60-65% LTV; 2nd Position up to 65% CLTV Âˇ BROKERS ALWAYS PROTECTED AND RATES STARTING AS LOW AS 8.50%

866-668-2663 Send Scenarios to

info@CalHardMoney.com 69

LOAN OFFICERS RETAI A L SALES MANA M GERS WHOLESALE ACCOUNT EXECUTIVES

C A R R ING TO N I S E X PA NDING N AT I O N W ID DE

It â&#x20AC;&#x2122;s time to make your move! VOTED

TOP 50

BEST PL ACES TO WORK

WE ARE A

TOP 10 GNMA SERVICER

O focused on quality & closing speed Operations M support and lead generation Marketing Liicensing and compliance support Agent co-marketing programs Contact me to learn more m b t exp di g you about xpanding urr b business i and career with Carrington.

RECRUITER

John.Cervantes@Ca arringtonMH.com

949-517-7127

ÂŠ 2007-2019 Carrington Mortg t gage Servvices, LLC C headquartered at 1600 S. Doug uglass Rd., R Suites 110 & 200A, Anaheim, CA C A 92806. 888-267-0584. NMLS ID #2 #2600. Nationwide Mortg t gag age Licensing ng Sy System t (NMLS) S) Consumer Access website: www.nmlsconsumera access.org r g. All rig i g hts reserved. EQUAL OPPO ORTUNITY EMPLOYER

n National Mortgage Professional Magazine n SEPTEMBER 2019

Common intermediaries The biggest barrier to non-QM loan origination remains disposing of the loan after it closes. Most non-QM loans are sold to intermediaries that package them and re-sell them to end investors. The three most common secondary market intermediaries are wholesale, TPO and correspondent lenders.

Third-party originator (TPO) TPOs are the chameleons of the mortgage industry so lenders should perform thorough due diligence before entering into agreements with TPOs. The broad definition of TPO incudes any firm that takes on part of the mortgage process for a lender. This can include anything from marketing to funding loans. In the non-QM world, some TPOs act like wholesalersâ&#x20AC;&#x201D;they have access to or agreements with investors with specific risk and style policies. Importantly, TPOs donâ&#x20AC;&#x2122;t actually control the pool of funds (unlike wholesalers) so the loan sale can fall through more easily. For example, a TPO may have a relationship with an investor who wants to invest in a book of non-QM loans. The TPO works with the lender to originate loansâ&#x20AC;&#x201D;but when the loan closes, the investor may still refuse to buy the loan. This makes TPOs riskier than wholesalers.

Direct Private Money and Bridge Lender specializing in Stated Loans in CA

NationalMortgageProfessional.com

Not interest based l Lease to own: The lender buys the property and then leases it back to the buyer. After making an agreedupon number of lease payments, property ownership is transferred to the buyer. l Share based: The buyer and the lender buy the property together as joint shareholders. The buyer then makes monthly payments to â&#x20AC;&#x153;buyâ&#x20AC;? shares from the lender. Additionally, the buyer pays a diminishing amount of rent monthly. l Profit based: The lender buys the property and then sells it back to the buyer at a higher price. They buyer pays fixed monthly payments that total the higher price when they are done.

Wholesale lenders Wholesalers buy loans originated by others, they essentially outsource the borrower-facing steps to independent mortgage banks (IMBs), credit unions or banks. Wholesalers have a pool of money from their investors to use for loan funding. They get loan terms and qualification standards from their end investors then communicate them to originators. Once their funding pool is exhausted, wholesalers package the loans and deliver them to their investors. Wholesale lenders make money from fees for underwriting and/or administration.

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

basic concepts for managing third-party risks

giving them an interest in making sure borrowers repay the loan. End investors l Hedge funds/asset allocators: Hedge Funds operate fund vehicles in which large asset allocators like endowments, family offices and foundations have holdings. These funds are paid a percentage of the fund’s profit plus a management fee. They are a significant driver for the expansion of non-QM lending because, to fully invest their fund, they need a very large number of loans. For example, Invictus Capital Partners runs 11 real estate debt funds with a combined AUM of $3.5 billion. Assuming an average loan size of $200,000, this

hedge fund has around 17,500 loans in its portfolio. Mortgage pool funds: Mortgage pool funds give investors direct exposure to alternative loans while minimizing fees. For example, Socotra Capital offers, “… a pool of real estate loans … diversified geographically and by size and property type … Risk is minimized by holding only first lien trust deeds, which have priority over all other claims on the property … [our] mortgage pool funds generate income from straightforward fix-and-flip loans. These loans are made to real estate professionals who need funding to acquire, renovate and market properties …” Bond issuers: Other players like Pimco offer non-QM bonds based on loans

continued from page 69

originated by Capital One. The bond’s tranches combine a relatively high Arange rating with yields ranging from 3.4 percent to 4.1 percent. The bond is based on more than 1,300 loans. Conclusion Non-QM loans present opportunities for positive fee and interest rate returns for

lenders if they have strong secondary market relationships. Investors seeking yield are increasingly looking for opportunities to invest in nonQM loans from trusted originators. As interest rates decrease and lenders compete for qualified loans by reducing fees, lenders should consider developing secondary market relationships so they can offer non-QM loans.

Deborah Hill has 10-plus years of experience helping financial services customers gain efficiencies through their implementation and use of software. Deborah is VP of customer success and operations at MortgageHippo. Before joining MortgageHippo, Deborah consulted and held board positions with several early-stage fintech firms. Prior to that, she was managing director at Backstop Solutions Group. Deborah holds a BA in economic theory, an MBA and is a CAIA Level 2 candidate.

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

National Mortgage Professional Magazine is seeking the best Military Lenders and Mortgage Loan Originators to include in its “Best Military Lenders and Originators” feature in our November 2019 issue.

For the “Best Military Lenders,” we will make our selection based on the following criteria: H Total VA loans closed in 2018; H Support efforts and community outreach (charity work, etc.); H The number of Mortgage Originators who have submitted their nominations for “The Best Military Originators.” Click here for the nomination form for "Best Military Lenders":

https://nmpmag.com/best-military-lenders-2019

For the “Best Military Originators,” we make our selection based on the following criteria: H Total VA loans closed in 2018 under that originator’s name; H Votes on profile; and H A brief essay on why they’re committed to helping active service members and veterans. Click here for the nomination form for "Best Military Originators":

https://nmpmag.com/best-military-originators-2019 The nomination deadline is Wednesday, October 23rd. Honorees will be showcased in National Mortgage Professional Magazine, both online and in our November 2019 print edition, and on Mortgage News Network.

KETS a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MAR /

CORRESPONDENT · WHOLESALE · WAREHOUSE · SUBSERVICING

Mortgage lending solutions

built with you in mind. The ideal lending solution is one that combines both technology and quality. For over 30 years, we have exceeded standards in consistency and customer service, offering award-winning mortgage solutions that are tailored to ﬁt our customers' goals.

Top 5 Bank Mortgage Originator1 #2 National FHA Wholesaler2 4x Fannie Mae Star Performer Servicing Award

Visit f lagstar.com/why to learn more.

Inside Mortgage Finance, Q4 2018 FHA Neighborhood Watch, Q4 2018 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.

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

Dissecting the Non-QM Equation

By Mary Kamelle

o you know an entrepreneur starting a tech company or a contractor who has finally decided to go out on their own? Are you a real estate agent with a borrower from another part of the world looking to buy or refinance in the U.S.? Do you have a customer who is an investor with income from multiple rental properties looking to buy another property? People like these are precisely the ones who can benefit from non-QM lending. Industry experts are predicting the non-QM market will grow to 100 billion by the year 2020. But what is non-QM? You have to understand the QM (Qualified Mortgage) Rule to understand non-QM lending. There are four parts to this rule:

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

1. The “ability-to-repay:” This rule requires a lender to fully document your income, employment, assets, credit, and monthly debts before giving you a mortgage loan. Doing so helps ensure you can afford the loan you’re receiving. The government requires a lender, at a minimum, to evaluate the following eight underwriting components to comply with the rule: l Current income/assets l Current employment status l Monthly payment on covered transaction, which involves stocks, securities, voting interests or assets and you gain control of a covered entity l Monthly payment on any simultaneous loan that’s secured by the home such as a piggyback mortgage, which is usually taken out when a borrower doesn’t have enough cash for a down payment l Monthly payment for mortgage-related obligations l Current debt obligations, alimony and child support

“Non-QM clients are more sophisticated. They realize their situations are complicated, and it is not all about the lowest rate.”

Monthly debt-to-income ratio or residual income l Credit history 2. Restrictions on risky loan features, such as loan terms that exceed 30 years, making interest-only payments without paying down the principal, making larger payments at the end of a loan term, known as “balloon payments,” and negative amortization loans, which allow your loan principal increase over time as you continue making payments. 3. Caps on fees and points that can dramatically increase borrowing costs. For loan amounts that exceed $100,000, lender fees cannot exceed three percent of the loan amount. 4. Limits on how much of your income can go toward your monthly mortgage payments and other recurring debts. A formula called the debt-toincome ratio is expressed as a percentage by dividing all of your monthly debts by

your pre-tax monthly income. In most cases, a qualified mortgage is limited to a DTI ratio of 43 percent; however, Fannie Mae now allows a DTI ratio of up to 50 percent. A non-QM loan is any loan product that doesn’t meet the standards of a qualified mortgage listed above. Basically, non-QM lenders have more discretion when underwriting loans. Non-QM lenders deal with borrowers that have more complicated financial situations. All of these rules were put into place after The Mortgage Meltdown of 2008, (aka), The Housing Crisis, The Great Recession, The Housing Crash, The Sub-Prime Mortgage Meltdown, The Mortgage Crisis of 2008, The Financial Crisis of 2007-2008 and you get the picture? And they are essential to protect borrowers and lenders alike, but more than 10 years have passed, and changes to the economy have

occurred that necessitates a new way of doing business. As the dust settles after the meltdown, and a new economy of gig workers, freelancers and entrepreneurs continues to grow the need for nontraditional mortgage funding grows with them. Many of these workers run their businesses online and accept payment in non-traditional ways. How do you prove your income when you are paid by Pay Pal or Venmo? No W-2s? No problem with non-QM products that allow you to verify income with bank statements rather than tax returns or W2’s. It is not just Uber drivers and freelancers that can benefit from non-QM lending. Real estate agents, financial planners and attorneys are all selfemployed borrowers. “Non-QM helps you capture a market segment that traditional lending disqualifies. If you don’t have a non-QM source, you are giving business away. Not all financial institutions have the ability to provide non-QM products. Mortgage Equity Partners is not a depository; so we can offer non-QM loans. Many of my best referral partners are loan officers from credit unions and banks. They are real serviceoriented LO’s who have their client’s best interest at heart, and if they can’t do the loan, they want to send it to someone who can. Most of my referral business comes to me in that way,” said Donald Sutherland, non-QM specialist at Mortgage Equity Partners (MEP). Another segment of borrowers who can benefit immensely from the non-QM lending model is real estate investors because non-QM lenders do not look at borrowers income but the income of the rental property. “For example, a contractor with a primary residence who owns an investment property that he rents which is building another investment property and only owes $120K combined on all three can’t get a traditional loan even with $400K in equity. He went to a local

ETS a special focus on AN UPDATE ON THE

bank to refinance his primary residence and was declined because of his DTI and tax returns. As a non-QM lender, we can offer the Bank Statement Program or the Investor Advantage and get this worthy borrower approved,” said Donald. Non-QM lending has come a long way from what it used to be … sub-prime or “liar’s loans.” There are safeguards in place, and there is no more 110 percent financing available. It is now a tool to be offered to borrowers with more complex financial backgrounds. It allows loan officers to meet the needs of more borrowers by adding a little flexibility to the traditional guidelines. The best sources for NONQM referrals are: l

l l

Self-employed Investors Borrowers with credit challenges Jumbo borrowers/larger loan amounts Foreign nationals

Another great reason to provide non-QM loans to this segment of borrowers is that you no longer need to haggle over rate. Non-QM clients are more sophisticated. They realize their situations are complicated, and it is not all about the lowest rate. Your average first-time homebuyer might not fully understand the complexity of the mortgage process. “Seasoned borrowers are more concerned about getting something done and less about the rate,” said Sutherland. An important change to the non-QM landscape is that there are now loan officers whose primary focus is in the non-QM space. They are committed to educating borrowers and creating a good experience with these product offerings. There is a real focus on the responsible expansion of this market by dedicated mortgage professionals. To expand your client base and build your business for 2019 and beyond, you certainly should be marketing your knowledge of non-QM to your traditional sources. Make your name well-known with self-employed clients, clients with recent credit issues, larger loan amounts, foreign nationals and investors. Next, you should branch out and market to different referral sources sharing the knowledge you have about non-QM programs. If you aren’t doing it, someone else will. Rates won’t stay this low forever, and once everyone has refinanced, you will need another source of business.

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

l $100,000 to $5 mil - 75% LTV - Fixed Rate l TEMPLES, SYNAGOGUES, ALL HOUSES OF WORSHIP l No personal guarantees & no prepayment penalties l Originator Quote protected against circumvention for 45 days

Visit our website to pre-qualify and request a FREE QUOTE BONUS: A loan to a house of worship opens the door to residential mortgages for their congregation members

Concord Church Lenders

www.concordchurchfinance.com

800-926-0399

Learn first-hand fi abou ut the lateest produccts and ser vice offerings that will expand your portfolio at: NRMLA’s 2019 Annual NRMLA A l Meeting i The largest gathering of reverse mortgage professionaals

November 18-20 Nashville, TN More info at: www.nrmlaonline l .org/events

National Reverse erse Mortgage Lenders Asssociation Use Promo Code NRMLANMP19 for a $250 Registration Discount Off the Non-Member Rate

n National Mortgage Professional Magazine n SEPTEMBER 2019

The top 5 kinds of borrowers that benefit from non-traditional

l l l

NationalMortgageProfessional.com

Bank and credit union loan officers: As depositories, they are simply not able to stray from the government or portfolio guidelines. Divorce attorneys: The financial transaction that takes place during or after a divorce requires some flexibility on the part of the lender. Non-QM fills this need. Real estate agents and brokers: While real estate agents and broker/owners are coming around to the non-QM mortgage space, and there is still a great deal of education that needs to be done. Showing real estate agents how to help customers who don’t fit in the QM box can make a huge difference for agents and loan officers. In addition, remember that nearly every managing real estate broker and agent are self-employed too. Closing a loan for them personally is a fantastic way to get your foot in the door with them for non-QM and traditional financing as well.

mortgage funding options include:

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

Are You Relevant? A comprehensive guide to relevance in today’s marketplace

uring Sunday morning brunch, a family begins a conversation about the neighborhood garage sale next weekend. The garage sale has been a tradition for years and Mary looks forward to seeing all her neighbors outside and catching up on the latest gossip. They have lived in their home for 20 years and are ready to unload much of the things they have accumulated to get ready to downsize. She makes a mental note to ask Donna who she used to buy and sell her home next door, since she knows she will need to start considering who to list with. Mary’s daughter Mackenzie pipes up and begins to tell her parents how she and her boyfriend Brian are thinking about starting to look at condos or a starter home somewhere in the downtown area. Mary lets Mackenzie know that she can get her the name of the real estate agent and loan officer that Donna used, but is cut off as Mackenzie informs her Mom, “I actually connected with this really great agent and lender I have been talking to in a Facebook Group for First-Time Homebuyers in the Pittsburgh market. They post these really great live talks each week and have shared the types of homes that are in different price ranges. I haven’t spoken to them yet, but we set up a buyer’s consult through a Google Hangout this coming Wednesday.” The evolution of the real estate and mortgage industry is underway. Your ability to adapt and evolve as it morphs into an Uber ecosystem is what will determine if you are relevant in today’s real estate market. It doesn’t matter if you are a broker, retail lender or anything in between, the ways to connect with today’s buyers, most of which are Millennials, is vital to staying in business. If you are a new customer, what do you really want from a lender that nobody else is providing? Where would you be looking for information? What type of advisor would make you

By Megan Marsh

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

comfortable enough to engage with them and begin the homebuying process? Unlike other generations, Millennials embrace change and see it as an improvement. Therefore, the current mortgage process is viewed like dinosaurs—old and extinct. Millennials want to believe they are starting on a journey more like an African safari. How can you find a way to relate and help them understand? The key to overcoming this challenge is not to make them adapt to your ways. Learn how to adapt to theirs if you want to remain relevant. Focus on their needs and address the concerns they don’t even know they have yet. Educate Millennials A few weeks ago, my 21-yearold babysitter and three of her friends were hanging around our home when we started talking about buying a home. I was curious and asked who they would use as their real estate agent. I wanted to know if they would go to their parents or begin their search online. Would they look for videos, beautiful pictures of lakefront homes or even look at the Saturday paper. They shared with me that they would ask their parents, but wouldn’t automatically call that person. They would then

check them out online to see what content and info they had. They wanted to see videos more than anything and stated that hardly any professionals are doing videos. If they found someone who was posting videos, they would consider contacting. Begin by giving Millennials the valuable information they are yearning for. They want to be educated. They want an advocate that empowers them and makes them feel like they have someone to trust. Someone who asks: “What can I do for you?” What do you need? Where do you want to be 20 years from now and how can I help you get there? We are so used to telling customers, “This is just the way the loan process is, welcome to government regulation, give me your bank statements or you can’t get a mortgage!!” By adopting the role of an “advocate” instead of a “mentor,” you are saying, “How we’ve done it is irrelevant. What do you need to know and how can we help you get there?” This shift from all about us, to all about them will earn sales professionals respect and trust in an arena that Millennials feel completely lost and confused. By this point, you should be asking yourself, “What can I do to be more relevant.” Here are a few suggestions to get started: l Start a homebuyer club/group on Facebook where they can

l l

l l l l

join and feel safe to ask questions. Record a series of videos about the mortgage process. Create a referral template you go over with buyers the week before closing, that extends your service and support and ultimately creates lifetime clients. Share with them your go-to: Attorney to help draft a will Handyman to take care of repairs Audio company to connect all the Smart products they love

Millenials are known for their love of exploration and are waiting longer to purchase a home. They also are known to want the things their parents took years to acquire, like a white picket fence or home in the country. Share with them a message about the value and satisfaction of owning their own home. This could be a video or post that sounds something like this: Video script I’ve had clients, friends and family who can afford guilty pleasures, but I want to assure you that no fancy, expensive new car, clothing or vacation will make you feel as content or secure as your own place to call home. True contentment comes from setting big goals in life and knowing you have worked hard to achieve them.

KETS a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MAR

So, to all the young adults out there looking at Facebook and Instagram where everyone is posting their perfect vacations and brand new cars … stay grounded. Know who you are and what you are aiming for as you move forward. I purchased my first home when I was 24 and now at 40, I am in a much better financial position because of the decisions I made when I was in my 20s. It’s totally fine if you want to get a mani pedi with a $6 Starbucks in hand every once in a while, just don’t get caught up in it or make it a habit if you have credit card debt or no savings. Don’t waste money that you don’t have on things that you don’t need. (I still struggle with this too!) Put your reality on paper, put your goal down as well. Map out a blueprint of how you are going to get from A to B, and take your first step, even if it seems insignificant. Track your progress regularly, re-evaluate and readjust.

“Data indicates it can take 20 to 50 touches to engage a prospect who has no familiarity, but just 1 to 10 if they have a high degree of familiarity with you, your company or brand.” Data indicates it can take 20 to 50 touches to engage a prospect who has no familiarity, but just one to 10 if they have a high degree of familiarity with you, your company or brand. This is where social media is the quickest and most effective way to build that familiarity. But it is only effective if you put the right message in front of your audience.

Here are the questions to ask yourself when you are ready to post, talk to or communicate with the Millennial generation: l What questions are they asking? l How are they phrasing those questions? l What are they more likely to click on? l How can I provide them with

Everything you do should be about them. It’s not about how many homes you have sold or financed. It’s not about how fantastic you think you are. It’s not about the product you are selling. Everything must come back to how they benefit and how you fit into their story. I routinely see so many postings about the listing they just sold or the clients they’ve just closed with. While these posts are not bad for awareness, your prospects get nothing out of a listing that is now sold. The couple you closed with yesterday can be an effective post if you relate it back to your audience. Telling a story can be quite effective. Next time try something like this when making a post about your most recent sale … “Bob and Sally closed on their first home today. It has been a long journey I am proud to have taken with them. When we met, they didn’t know that you could buy a home with zero down! They thought owning was only a dream they wouldn’t reach for years after traveling the world and just settling down. Through advice, buyer’s consult meetings and a continued on page 76

NationalMortgageProfessional.com

n National Mortgage Professional Magazine n SEPTEMBER 2019

Educate them and communicate with them … where they are at For real estate and mortgage professionals, social media is the most important thing to conquer since the invention of the telephone. It’s all about creating familiarity and awareness of your name, expertise and reputation. You want people to believe you are the only person who can solve their unique problems. The truth is that the more familiar prospects are with you and your brand, the more likely they will accept your calls, e-mails, invites and social media connections. We get so overwhelmed by change and all the options and obstacles out there that many loan officers and real estate agents do nothing, instead sticking to old habits. However, if you have any ambitions to earn income that seems untouchable you need to learn how to take intentional action. Have a plan by figuring out who you are and what you are good at. You need to meet the new generation where they are at. Don’t make them come find you. Odds are they won’t. You can’t be afraid to fail or make a mistake because it is the only way to learn and move forward.

the best value? What do I want them to do when they view my posts? What can I eliminate to make it easier for them to understand?

a special focus on AN UPDATE ON THE WHOLESALE, TPO & CORRESPONDENT MARKETS

are you relevant?

continued from page 75

meeting with a knowledgeable lender, we were able to help Bob and Sally find a home within two months that fit their needs and qualified for the zero down USDA loan. If you or someone you know has little money to put down, but wants to own their own home, contact me through the link below and I will walk them through the same steps just like Bob and Sally.” Create brand awareness It’s a unique time when you can get your message out there by simply pointing, clicking, writing or creating videos quickly and with very little cost, as we can right now. So do it! Volunteer to write guest blogs, start your own blog, create ebooks, host podcasts and Webinars. You can create massive brand awareness by generating valuable content to a

targeted audience. You just need to take action! Some suggestions to reach the Millennial buyers and sellers: l Use real-life stories: Post about the young couple you just helped find their first home. l Give tips on ways to solve your clients problems or how to fix a problem they think is keeping them from contacting you. l Show potential customers what you do behind the scenes with live videos on Facebook or Instagram. What do you do when you’re not with clients? l Talk about rates changing or how they can buy a home and borrow extra for renovations. l Share info on organizations that buyers can donate their household items to when they move.

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

MORTGAGE BROKER AND LENDER COMPLIANCE AUDIT, MLO POLICIES and UPDATES Our fees are less than the big national firms that don’t call you back. Program includes all Manuals including QC, MLO Policies and Comp Plans, AML, GLB, Social Media and Web audits, on-line training sessions, governance documents, and our audit protection plan. Available in all 50 states. We have hands-on experience with regulators and audits. No theories here; we were Bankers. If you find yourself in federal court, we can handle that as well.

Contact Nelson Locke at

(800) 656-4584 Or you may e-mail us at

nl@lockelaw.us All inquiries will be kept strictly confidential. This is not an offer for legal services, but rather for his expert review and opinion about your particular compliance situation. All fact patterns are different so the results will vary. No guarantees are expressed or implied. Licensed by California and Federal Bar. NMLS 149450.

Join a Facebook Group for first-time homebuyers or create one. Use technology: Offer to meet with you clients virtually instead of asking them to meet you in person. Ask to make a guest visit at an organization that supports younger professionals. I know you think no one wants to hear you, or that you sound weird, but trust me, you sound weird in real life too!

They want to be inspired Millennials define contribution, success and thriving in a different way than other generations. Millennials are looking for organizations and professionals to work with that are making an impact in their communities. So, get involved. They want to see first-hand how your business is working to make a difference on both a local and larger scale. They believe everything impacts them one way or another. Show them how you are impacting others in a positive way. Some of the messages that will speak to a Millennial buyer: l Talk about what they will become after owning their own home. l Where it will take them after their home is paid off. l The change it will have on their life. l Get their parents involved— tell the parents “You have to let go and trust us to teach them.” Millennials see their parents as “partners in life.” They make career decisions together, purchase decisions together and even buy homes together. Communicate in their language This doesn’t mean you need to be your client’s “Bae,” but “Yaas,” we would love that! It is smart to understand how they like to communicate, and in a way that feels most familiar to them. Millennials, more than other generations, do not prefer to talk

on the phone. They prefer to communicate via text, chat and video. Make sure that the automation and marketing pieces you are using, support these channels or a Millennial homebuyer will get very frustrated if you play phone tag for days. And by all means, if you are not prioritizing it already, get reviews … and get them everywhere! The idea of being relevant is no longer a passive activity. Placing an ad on a park bench, a banner ad on a local Web site or the weekly paper is old news. (Yes, pun intended.) It is estimated that we are exposed to nearly 5,000 ads a day. The emerging market of Millennials has become numb to these types of ads. Today, staying relevant means being active. It means being accessible. It means being relatable and trustworthy. It means being available when the customer needs you. That doesn’t mean you’re a 24-hour coffee shop it means they can find you when they need you. By creating loads of content, blogs, e-books, videos, podcasts and more, you are going to meet your customers where they are at—online. Remember, McKenzie? McKenzie is your future customer. She has questions and wants to learn. She seeks out her information online and builds her relationships the same way. That’s not to say that McKenzie and others like her don’t want a personal connection, it means that they prefer to get to know you first through learning more about you. How can you help her and others soon to be buyers like her? What value do you bring to them? How are you going to change their lives during one of the biggest decisions they will likely make? But most importantly … can they trust you? You can help them answer this question by staying relevant to them. So open that laptop and start your blog, start cranking out your podcasts, or pick up your phone and record a video.

Megan Marsh is a co-founder of Keystone Alliance Mortgage. She is a serial entrepreneur and property investor who has launched eight businesses and built a growing real estate portfolio with over 40 properties. Megan is a speaker, a coach and podcast host who has a passion to help others discover the secrets of turning actions into success. For more information, visit KeystoneAllianceMortgage.com or CollaboratingCoFounders.com or call (814) 528-6807.

MORTGAGE LOAN BORROWER continued from page 48

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.

A Message From MAA Chairman Jeffrey C. Taylor continued on page 84

t’s hard to believe, but the 2020 Primary Elections are 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.

In fact, MAA is supporting National Voter Registration Day, a national, non-partisan effort to maximize awareness of voter registration opportunities to reach tens of thousands of voters who may not register otherwise. This year, National Voter Registration Day will be held Tuesday, Sept. 24, 2019. 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 our Advocacy Action Center at Action.MBA.org 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” advocacy tool 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. There is no legislative ask. The goal is simply to identify yourself as a constituent and an industry practitioner who can be a resource for questions about legislation impacting the mortgage market. 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. 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.

Jeffrey C. Taylor is chairman of the Mortgage Bankers Association’s Mortgage Action Alliance. Jeffrey is also co-founder and managing director of Digital Risk, a provider of mortgage risk, compliance and transaction management solutions. His is a frequent guest on financial television networks, such as Fox Business News and CNBC, as well as a source to top tier new outlets including The Wall Street Journal, sharing keen insights on the U.S. mortgage market and the economy.

n National Mortgage Professional Magazine n SEPTEMBER 2019

Changing to meet future borrower needs Lowman admits that when the reports began to come back from researchers a few years ago, many viewed them with skepticism. “Not everyone believed what the data were telling us three years ago,” Lowman said. “Today, we realize this new picture of the American home loan borrower is a reality right now.” He tells stories about friends and

family who are making decisions about where they will live without filtering them by their employer’s requirements because they know they can work from anywhere. Even at his own company, the traditional view of an on-site workforce is changing, with many people now working from home multiple days each week. It’s clear that, as Lowman puts it, “The whole world is changing.” There is currently a great deal of data available to back this up and show that the industry is currently dealing with a much different type of borrower. But will that knowledge be enough to get the industry to make the changes required to accommodate these new homebuyers? Lowman says it will because he’s helped the industry navigate many changes over the years. His advice to those companies ready to meet the changing needs of tomorrow’s borrowers today is straightforward. Learn more about what Freddie Mac has to offer. “We are constantly updating and enhancing our programs,” Lowman said. “I encourage all originators to make themselves familiar with Freddie Mac’s loan products and our technology.” One capability in particular he recommends is Loan Product Advisor® asset and income modeler (AIM) for self-employed, Freddie Mac’s solution for automating the manual process of assessing a self-employed borrower’s capacity to pay back a loan. AIM uses the expertise and technology of a third-party service provider to help automate income calculation for self-employed borrowers–simplifying the loan origination process, driving efficiency and improving the lender and borrower’s experience. Lowman says this is a great tool for self-employed borrowers. Tools like AIM for self-employed will make it easier for lenders to uncover the value in the new generation of borrowers. And this isn’t a future opportunity, it’s something they can be doing today to build stronger businesses. “Loan originators are definitely going to win more business leveraging these capabilities,” Lowman said. “Because those borrowers are out there. We know they are.”

NationalMortgageProfessional.com

the data and studying the characteristics of different demographics and generations, their views of homeownership and the impacts technology and innovation have had on their lifestyles. So far, this is what Freddie Mac has learned about the Borrower of the Future: l They are staying home longer: With more Millennials now living with their parents than with a spouse, they represent a reservoir of pent-up demand for housing. And while some boomers are downsizing for economic reasons or moving to be closer to family, many are choosing to “age in place.” l They are changing the way America looks: America is on track to become a “majority– minority” country. This demographic shift will result in Hispanic Americans making up 50 percent of first-time homebuyers by 2020. And multigenerational household trends are increasing, with children, parents and grandparents living under one roof. l They are not tied to a desk: The digital age has allowed for work to be done from anywhere. And more Americans today work two or three different jobs, versus being full–time, salaried employees. By the year 2020, it’s estimated that non-staff employment will account for 43 percent of all labor, as more workers will be self-employed, either by choice or because of new business models. l They share more: From hailing an Uber ride to booking a room through Airbnb, the sharing economy is altering our view of our most valuable assets. Homes have become a way to generate income for some.

MBA’s Mortgage Action Alliance

SEPTEMBER 2019 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Team Broker: Growing the Wholesale Chanel, One Loan Originator at a Time By Alex Elezaj e are seeing a huge shift in the mortgage lending landscape. The wholesale channel is coming back and it’s coming back strong. Over the last few years, thousands of loan originators have either started their own broker shop or joined an existing one. This trend will continue for the foreseeable future as more LO’s are recognizing that an independent broker shop is the best place to work and more consumers are seeing that working with a mortgage broker is the best way to get a home loan. That combination has helped wholesale market share climb to nearly 20 percent and industry experts believe it will reach 25 percent by 2020. There are a number of reasons for this. Over the last three to five years, United Wholesale Mortgage (UWM) and other wholesale lenders have made a huge investment to help mortgage brokers succeed and excel. They’ve improved technology, marketing and tools so that an independent mortgage broker can now compete with and beat the retail megagiants and big banks. In the early 2000s, mortgage broker market share was at more than 50 percent. Even then, mortgage brokers didn’t have the support they needed to help grow their business. Now, there are many resources available to help loan originators who are looking to make the switch from the retail side join wholesale. Now, industry groups such AIME have empowered mortgage brokers and given them a voice. A support system is in place giving independent mortgage brokers the upper hand.

Technology turning the tables Going through an independent mortgage broker has been best for consumers for years, but it hasn’t always been best for a loan officer. Mortgage brokers didn’t have wholesale lenders who would invest in the tools that allow them to excel. Technology has changed everything. Wholesale lenders now have made mortgage brokers the obvious choice through a significant investment in technology, marketing and tools. Mortgage brokers have access to cutting-edge technology through their partnerships, often more advanced technology and resources than most direct lenders and banks. Retail loan originators are often limited by technology because they’re at the mercy of their own company’s resources and many have not invested

in technology to make the process easier for consumers. We’ve reached the point where retail lenders don’t have the same level of technology that wholesale lenders have, let alone the ability to give those tools to an originator. A few years ago, no one would have thought this was possible. Wholesale lenders are more nimble and are winning deals and so are the mortgage brokers who partner with them. The investment in marketing has also been huge. Most independent brokers don’t have the budgets to hire a marketing team. Now, they don’t have to because their wholesale lending partners are providing them with the best marketing tools in the industry to help grow and retain their business. Now, independent brokers have the power to protect their pipelines and focus on getting their borrowers the best deal possible. Spreading the word It wasn’t long ago that many borrowers and Realtors didn’t know how to find a mortgage broker. When you’d do a Google search for “Mortgage Broker,” whoever paid the most money would pop up first, which is still the case. Mega retail lenders pop up, even though they are not a mortgage broker. Brokers didn’t have the money to show up on the first page of Google. There was a real need to educate people on where to find true mortgage brokers and how to get access to them. That has now changed as well. In 2018, UWM launched a Web site to help consumers and real estate professionals find mortgage brokers in their local community. This site promotes the advantages of working with a mortgage broker to both and ensures that when a borrower wants to work with an independent mortgage broker, they’re actually finding one who is local to their area. Wholesale investment, wholesale development It can be scary to go out on your own in business. Over the last few years,

many loan originators have wanted to make the switch from retail to wholesale, but they didn’t know how or weren’t sure where to start. You had retail LO’s thinking there are barriers to becoming a mortgage broker because their boss or employer told them that. In reality, it’s an easy, low-cost transition for LO’s. This is where UWM saw an opportunity to help. UWM is so passionate about mortgage brokers that we decided to start a team dedicated to helping more LO’s become mortgage brokers. We have the tools and the team in place to make the transition quick and easy. Our wholesale development team helps LO’s with everything from getting licensed to coming up with the resources, support, and strategies needed to become a broker/owner or simply join an existing broker shop. This year alone, UWM has helped several hundred originators enter the wholesale channel. UWM also established the Web site, BeAMortgageBroker.com, for retail LO’s and bankers who want to know more about the process of becoming a mortgage broker or a broker/owner. There’s an opportunity to have a confidential consultation with one of our directors who will walk you through the entire process whether they have an NMLS license or not. There are also retail LO’s who already know they want to join the wholesale channel but don’t know which shop to join. Our team connects loan originators with broker shops that might be a good fit for their business. This helps ensure that new brokers find a shop that is right for them and it helps broker/owners spend less time on recruiting and more time on growing their business. UWM has an entire network of people who want to see independent mortgage brokers succeed and make sure we are providing tangible benefits for mortgage brokers to excel. There’s free LOS software through Blink, which creates a huge

Alex Elezaj is chief strategy officer for United Wholesale Mortgage (UWM). A big part of helping UWM’s mortgage broker clients grow their businesses—and making sure they maintain that growth well into the future—is doing whatever they can to grow the mortgage broker channel as a whole. Alex is laser-focused on this. His aim is to build strategic partnerships that promote mortgage brokers as the best place for loan originators to work and for borrowers to get a mortgage.

SPONSORED EDITORIAL

cost savings. There are also discounts on credit reports, which can save a broker shop thousands of dollars. Another discounted service allows mortgage brokers to send video chat e-mails to their borrowers, helping them engage with their clients. There’s even a resource that helps mortgage brokers know where to go to obtain health insurance. This is what a true partnership and support for independent mortgage brokers is all about. Continuing education and support There are plenty of resources and support available once a loan originator joins the wholesale channel. UWM’s Success Track offers free in-house training for LO’s of all experience levels, including a class that is specifically geared toward retail LO’s making the transition to the wholesale channel. This training is designed to help independent brokers become experts at their craft. In 2019, more than 2,000 clients will attend a Success Track class and UWM expects more than 4,000 will attend in 2020. A big part of the Success Track experience is the opportunity to network with other mortgage brokers. Attendees get to meet others from around the country and share best practices. Broker/owners, originators and processors who come to Success Track leave with invaluable takeaways that will help grow their business and new professional contacts who can act as resources in the future. Broker/owners should be able to focus on building relationships that will help them win more loans and grow their business. Wholesale lenders who are true partners understand that broker/owners don’t have the time to properly train every new LO that they hire. With Success Track, UWM does the work for them. It’s a win-win. The timing is right for independent mortgage brokers to dominate the market. With all of the tools and support out there, there’s never been a more exciting time to go independent. Wholesale lenders need to continue to do their part and give brokers a stronger voice. For all of the LO’s out there who have already become mortgage brokers, there are many more still to come. They will need help with technology and marketing. They will need training and coaching resources. They will need the wholesale community’s full support. The wholesale broker channel will continue to grow and it will take a team effort to get there.

NAMMBA IN THE NEWS NAMMBA Connect Live Tour: Coming to a City Near You! 80

AMMBA is embarking on a six city live tour to

Wednesday, October 23

CONNECT you with the latest resources to

NAMMBA Connect Houston The Westin Houston, Memorial City 945 Gessner Road Houston 9:00 a.m.-5:00 p.m.

grow your success in the industry you know and love! Tony Thompson, CMB, industry leader and association founder, will be the emcee and resident NAMMBA rock star

leading this one-day sales development event where you will be

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

immersed in discussions on the future of LO comp and finding new

Featuring Keynote Speaker: Jen Du Plessis Kinetic Spark Consulting, Principal

agents while hearing from top realtors and loan originators on multiple panels throughout the session. This event is designed to help you finish the year on a strong note and get ready for 2020. By attending, you will not only walk away with information to help in you grow your business, you could be the lucky participant who walks away a winner of some awesome prizes. But donâ&#x20AC;&#x2122;t worry, everyone will be a winner at NAMMBAâ&#x20AC;&#x2122;s road show. The tour is a must see event tailored just for you, so get your tickets today!

Wednesday, November 6 NAMMBA Connect Los Angeles The Westin Bonaventure Hotel and Suites 404 South Figueroa Street Los Angeles 9:00 a.m.-5:00 p.m.

Thank you to sponsors Freddie Mac, Essent and Planet Home Lending for helping make this event possible and for their vital involvement. Sponsorship and exhibitor opportunities are still

Featuring Keynote Speaker: Shashank Shekhar Arcus Lending, CEO

available.

Wednesday, October 9

Monday, November 11

NAMMBA Connect Charlotte Queens University (Sports Complex) 2229 Tyvola Road Charlotte, N.C. 9:00 a.m.-5:00 p.m.

NAMMBA Connect Orlando DoubleTree by Hilton Orlando at SeaWorld 10100 International Drive Orlando, Fla. 9:00 a.m.-5:00 p.m.

Featuring Keynote Speaker: Nick Clements LendingTree, Head of Mortgage

Featuring Keynote Speaker: Carmen Mercado Single Family Affordable Lending Business Development Manager, Freddie Mac

For more information, visit NAMMBA.org.

HEARD ON THE STREET continued from page 29

scholarship guidelines. Scholarships may be a one-time award or be renewed each year through an endowment.

National MI Partners With Blue Sage

CBCInnovis has announced that it will join forces with Factual Data as part of a brand unification. Affiliates since the 2015 acquisition of Factual Data, the combined organization will carry the Factual Data brand name. “This unified organization will allow us to focus our efforts on growing a singular, stronger market leading credit reporting agency backed by best-in-class customer service and technology,” said Chief Operating Officer Ken Viviano. Both CBCInnovis and Factual Data are credit reporting agencies operating as part of the same family of businesses. Brands also include industry-leading DataVerify, which offers a singlesource platform for data verification, fraud prevention, and compliance assistance. Under the combined Factual Data brand, Viviano will head the company’s mortgage-related businesses, while Factual Data President Jay Giesen will focus on business development through a combined sales organization. “A single brand provides us the greatest ability to focus and respond rapidly for our customers

ClosingCorp has announced that its SmartFees service has been integrated with Plaza Home Mortgage’s BREEZE loan origination system. The integration provides wholesale mortgage brokers the option of creating, previewing and delivering loan estimate (LE) disclosures at the point of sale. SmartFees provides an automated fee solution that gives Plaza mortgage brokers immediate access to vendor-verified closing costs with an audit trail and a data-backed guarantee. The integration allows BREEZE users to quickly search for and select a closing agent and title company in their specific markets. SmartFees will integrate the loan file information, transfer tax and recording data, as well as service provider fees, including land surveys and other services required depending on the property’s location, from more than 70,000 rate cards. Lender business rules and other requirements are also feed into BREEZE—allowing Plaza Home Mortgage brokers the ability to originate mortgage confidently and compliantly. “Lenders want proven applications to help them meet compliance requirements,” said Bob Jennings, chief executive officer of ClosingCorp. “Our partnership with Plaza Home Mortgage will improve their efforts to provide accurate and timely data to their borrowers while also giving them peace of mind that they are in compliance.” “Our integration with ClosingCorp represents our continued commitment to streamlining the LE and disclosure form generation process for our clients,” said Jeff Leinan, executive vice president of national wholesale production for Plaza Home Mortgage. “Continuing to collaborate with industry leaders,

William Lyon Homes Expands into Mortgage and Title Services

William Lyon Homes, a homebuilder based in Newport Beach, Calif., has created ClosingMark Financial Group LLC as a wholly-owned subsidiary that will provide homebuyers with products including title agency, settlement and mortgage services. ClosingMark has recently begun to offer title agency services in the Central Texas, Arizona, Colorado and Nevada markets, and expects to expand its title and settlement services operations into virtually all of the company’s homebuilding markets over the next two quarters. ClosingMark has also acquired South Pacific Financial Corp., which was rebranded as ClosingMark Homes Loans Inc. an independent retail mortgage banking company based in Irvine, Calif., which will serve as the platform for building out ClosingMark’s mortgage-related services. “We are excited to take the next steps in the strategic evolution of our ancillary financial services business, following up on our hiring of Brian Hale, a 35-year veteran of the mortgage business, last year to optimize and build out our financial services group, and putting us in position to have a full suite of in-house financial services available to our homebuyers by the end of the year,” said Matthew R. Zaist, the company’s president and CEO. “Under Brian’s leadership, ClosingMark will be committed to providing competitive financial services and outstanding customer service to support the needs of our homebuyers and complement our homebuilding operations, while providing an additional source of earnings for the company.” Veterans United Home Loans Honored as a “Top Workplace for Millennials”

Veterans United Home Loans has been named one of the country’s “100 Best Workplaces for Millennials in 2019,” coming in at number 11. The list was compiled continued on page 84

n National Mortgage Professional Magazine n SEPTEMBER 2019

National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings, has announced an integration with the Blue Sage Digital Lending Platform, a browser-based, endto-end mortgage platform built in the cloud, which will enable lenders to obtain immediate and accurate National MI rate quotes and order delegated mortgage insurance (MI) without ever leaving Blue Sage. The integration brings National MI’s innovative, real-time, riskbased MI pricing to Blue Sage, leveraging Blue Sage’s application programming interfaces (APIs), thus enabling seamless interoperability between third-party technology providers. “National MI is very pleased to

Factual Data and CBCInnovis to Unify Brands

ClosingCorp Announces Integration With Plaza Home Mortgage

like ClosingCorp, allows us to provide our clients with access to the most accurate rates and fees enabling them to close fully compliant loans.”

NationalMortgageProfessional.com

NewRez Debuts New Mortgage Company for Tampa Area NewRez LLC has rolled out Preferred Lending Services LLC, a new joint venture mortgage company operating in Florida’s Greater Tampa market. Bob Klorer, an area manager with the company, will head up the new company. Preferred Lending Services is the 13th joint venture to be established in the NewRez partnership network. “We are thrilled to formally expand our lending footprint throughout the state of Florida with the launch of Preferred Lending Services,” said Randy VandenHouten, senior vice president of joint venture and retail lending at NewRez, headquartered in Plymouth Meeting, Pa. “Under Bob’s leadership, and backed by the strength and expertise of NewRez and Shelter Mortgage, Preferred Lending Services will prove to be a great asset to the Greater Tampa community.”

join forces with Blue Sage,” said Mike Dirrane, chief sales officer and senior managing director with National MI. “Lenders can now see National MI’s rate, and choose the quote that is best for them. Having access to our Rate GPS risk-based pricing through the Blue Sage platform will save lenders time and streamline the origination process.” Joe Langner, CEO of Blue Sage, said, “National MI’s products and groundbreaking risk-based pricing technology make them a perfect partner for us. One of the many distinctive aspects to this direct, system-tosystem integration is that Blue Sage automatically alerts users if changes in the loan file require mortgage insurance to be reordered or re-priced. This type of rules-based process automation is unique among mortgage platforms because only Blue Sage was built with today’s modern technology.”

in this quickly transforming industry,” Giesen said. “There is significant momentum around digital mortgage, consumer and customer experience, automation, and workflow efficiencies. It is important for Factual Data to remain agile and innovative for us to serve our customers in a rapidly-evolving marketplace.”

SEPTEMBER 2019 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Marketing to Millennials: How to Capture the Millennial Homebuyer Market By Scott Gordon

Integrate education The Millennial generation has also grown up in an age of handholding. They value education and have the desire to fully understand a concept before

they make decisions. This plays a pivotal role in the mortgage process for them. We as loan originators can use this desire for knowledge and walk them through the process by integrating educational platforms into the products we roll out. The more the Millennial generation feels comfortable during this process, the happier they will be throughout the life of their loan. This should also be integrated into how you operate on social media. Making your borrowers feel comfortable coming to you for questions is critical in capturing this market. It is also important to remember that this demographic does not like to be told what to do. They work best with a mortgage professional that feeds their curiosity, but lets them be the decision-maker. This gives them the control in a process that can be daunting and confusing to many. Brand ethics Creating a brand that is steadfast in its moral code will also help you cater to the desires of the millennial generation. This group of over 80 million Americans grew up in a time of significant events like 9/11, mass shootings and the Great Recession that ingrained in them a passion for picking companies that stand for something greater. Millennials will purposefully work with companies that give back to the community and use their power for good. For example, if a brokerage donates a percentage of profits to a charity or neighborhood initiative, this is highly regarded in the mind of a socially-conscious Millennial.

When a company is clear that their brand is established on a foundation of societal improvement, this generation will feel more comfortable supporting them financially. Community reputation Loan originators should be utilizing peer reviews to cater to this age group as well. Millennial beliefs are generally created and affirmed by their inner circle and community. If we as mortgage professionals create a social and digital atmosphere of positive endorsements from employees, previous borrowers and community members, it will be much easier to succeed with this growing market. Marketing to this generation may seem intimidating to many, as this demographic typically has a reputation of being difficult. But the key to gaining their trust in the mortgage industry is to truly be trustworthy! Listen to them, value what they have to say and use their experiences and desires to find the best deal for them. Leveraging technology and social media platforms will connect you to this demographic most directly, and creating an open channel of communication makes it easiest on them to trust you with their needs. As this generation takes control of the homebuying market, mortgage professionals will have to alter their approach to capitalize on the desires of America’s largest and most educated generation. The same generation who is also on track to become the wealthiest demographic in the years to come.

Scott Gordon is president and CEO of Austin, Texasbased multichannel lender Open Mortgage. Scott is a veteran of the mortgage industry with more than 16 years, referring to himself as a “serial entrepreneur” due to his passion for start-up culture and business investing. Scott is also the author of Social Media for Loan Officers and The New Reverse Mortgage. Originally a software engineer, Scott is highly invested in technology and using it to continue to improve his team at Open Mortgage.

n National Mortgage Professional Magazine n SEPTEMBER 2019

Digital connectivity My background as a software engineer sparked my interest in this topic, and I have been heavily invested in the digital and social sphere for many years. I see this space and want my company to be as heavily techenabled as possible. My first book, Social Media for Loan Officers, delves into the topic of utilizing social media to grow your business and online popularity within your network. Loan origination is a popularity contest, and it always has been. Social media is the modern day gauge for popularity, which makes it a crucial tool for succeeding in the industry, especially when targeting the millennial generation. They have a deeply-rooted history with social media and constant

contact with their digital tribe. They are more inclined to share their lives online, and desire the validation of their peers. This is where being a socially-conscious loan officer is vital to success with this market. Loan officers who leverage their skills and abilities on social media give their network the opportunity to put a face to the name and feel more comfortable trusting them with one of their biggest life decisions. Social media allows you to grow a community of people interested in the knowledge and help you can share. It allows you to advertise and interact at the same time. It is a more personal way of taking something that is professional and mechanical, and turning it into something engaging and fun. It allows you to market yourself without it being obvious that you are marketing. To them, you are just a person with knowledge that they can use for their needs. Being digitally engaged as a mortgage professional also helps you control your business by connecting easily to referralpartners, as well as prospective clients. This creates an easy channel for your partners to scout leads and direct them specifically to the source … you! These platforms provide an easy way to organically market networking events that will consequently bring in business. Above all else, it helps you create a relationship with the borrowers before they have even made a purchase, and created a loyalty that will affect your ability to finalize agreements down the road. Marketing yourself as a mortgage professional in the digital space will return its investment in more ways than one.

NationalMortgageProfessional.com

illennials … This techsavvy demographic typically defined as those born from 1980 through the mid-1990s, is entering the homebuying market and bringing with them a different set of values than what we as mortgage professionals have previously seen. As loan officers, we depend on our ability to get our names out and leverage connections to build trust as experts. Traditional methods such as networking events or expensive advertising techniques do still work, but now it’s more about taking your expertise to the people. Generally marked by their coming of age in a world surrounded by instant gratification and technology in the palm of their hands, Millennials are comfortable with the use of digital technologies and social media. Social media may seem like an incomprehensible blur, but it is important to take it seriously as it will be your best resource for succeeding in the Millennial homebuying market.

HEARD ON THE STREET continued from page 81

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

by Great Place to Work and FORTUNE. Veterans United, with corporate offices in Columbia, Mo; Lenexa, Kan.; and Irving, Texas, specializes in helping veterans use their VA home loan benefit to achieve the dream of homeownership. Veterans United has nearly 2,700 employees nationwide, of which more than 1,800 are Millennials. “Our employees foster a work environment that promotes opportunities for friendship, growth and success across generations,” said Dr. Amanda Andrade, Veterans United Chief People Officer. “Having a collective mission to enhance lives provides us with unity and common goals that include serving our Veterans and their families, our communities and each other.” The ranking considered feedback representing over 4.5 million employees working at Great Place to Work-Certified organizations. Great Place to Work, a global people analytics and consulting firm, evaluated more than 60 elements of team members’ experience on the job. These included the extent to which employees trust leaders, the respect with which people are treated, the fairness of workplace decisions, and how much camaraderie there is among the team. Rankings are based on employees’ feedback and reward companies who best include all employees, no matter who they are or what they do for the organization. “Millennials today face a unique set of challenges both in and out of the workplace, ranging from cumbersome student loans to a lack of trust in their management,” said Michael Bush, CEO of Great Place to Work. “The Best Workplaces on this list have created a greater sense of fairness, collaboration, and professional development for Millennials. These positive Planet Home Lending Opens New Texas Regional Operating Center

Planet Home Lending LLC has announced the opening of a regional office in Irving, Texas. As the company’s first Regional Operating Center, the 25,000-

sqare-foot facility accommodates approximately 130 employees and offers space to expand to house more employees. The office has five conference and training rooms, in addition to access to a large-scale meeting and conference center. Employees and departments previously based in Dallas have moved to the new Irving office, including the Legal and Enterprise Risk Management, Credit Policy, Origination Support Service, National Operations, Human Resources, IT, Project Management and Servicing Departments. “As Planet Home Lending grows, we can tap into Dallas’ significant mortgage industry talent pool,” said Planet Home Lending’s Executive Vice President, National Operations Suzy Lindblom. “It’s also a central meeting location for our executives and leadership, who are based in multiple states. The Regional Operating Center gives us additional leverage in assisting our clients in Planet Home Lending’s national footprint. OpenClose and Vice Capital Markets Integrate for Enhanced Hedging Automation

OpenClose has announced the completion of an integration with Vice Capital Markets Inc., an established mortgage hedge advisory firm. Focused on maximizing hedging efficiencies, the new interface reduces the time to prepare and deliver loan data and eliminates the manual intervention that occurs today, automating an ongoing seamless delivery of data. In addition, loan sale data is directly boarded back to OpenClose, automating the final loan reconciliation and expected versus actual variance analysis. The integration takes loan-level lock data from OpenClose’s LenderAssist LOS and securely transmits it directly to Vice Capital’s hedging platform, thus eliminating multiple manual steps and potential “break-points” in the overall process and saving time, reducing errors and increasing visibility that results in optimized

position management. “Our customer success is dependent on speed and accuracy, especially as it relates to effective hedging and trade management strategies,” said Vince Furey, CRO at OpenClose. “OpenClose is pleased to partner with Vice Capital in order to help our mutual customers maximize profitability and minimize risk in the secondary market. Using this integration, our customers are able to operate more efficiently in a fast-moving, tech-driven lending landscape.” TotalExpert and ReverseVision Ease the Reverse Journey

ReverseVision has announced a partnership with Total Expert to deploy an API integration that links the Total Expert MOS with ReverseVision’s RV Exchange (RVX) loan origination platform, enhancing the customer journey for reverse mortgage borrowers and enabling originators to better serve customers at all walks of life. Total Expert offers a centralized platform that helps mortgage lenders manage their brands at an enterprise level with multi-channel marketing solutions, contact management, audit-ready compliance and built-in support for co-branded marketing campaigns. The system lets lenders orchestrate and deploy marketing campaigns across any channel (e.g., e-mail, print, social media, text, video) and create hyperpersonalized relationships that keep prospects moving through the purchase decision tree. “When it comes to reverse mortgages, no one understands how to build the relationship between loan officer and borrower better than ReverseVision,” said Total Expert President Jeff Walton. “We’re pleased to deliver that expertise to lenders as part of an integrated approach to sales and marketing that combines automation and personalization and that scales for any organization.” ReverseVision VP of Sales and Marketing Wendy Peel said, “By pairing RVSA with Total Expert’s MOS, we’ve developed a package of generationallycomprehensive loan modeling and marketing tools that are readily scalable in format. Bringing HECM’s forward helps lenders better serve senior borrowers by matching them with the lending products that best meet their financial goals.”

EXOS and Blend Partner to Enhance the Digital Mortgage Experience

EXOS Technologies, a ServiceLink company, and Blend, are collaborating on a partnership to further extend and enhance the consumer digital mortgage experience. EXOS and Blend are partnering to deliver exact real-time appraisal scheduling functionality for lender clients using EXOS Appraisal, a core offering from the EXOS platform. This integration will enable consumers seeking a new mortgage to seamlessly schedule appraisal appointments by accessing live calendars of tens of thousands of licensed appraisers in all 50 states. Borrowers can digitally select the exact date and time of their preferred appointment and receive instant confirmation, plus a photo of their appraiser and the make and model of their vehicle. By automating appraisal orders and empowering the home buyer to selfserve, lenders can deliver on faster closings. “Blend is committed to streamlining the mortgage workflow, and EXOS adds yet another dimension when it comes to driving efficiency and automation in the appraisal process,” said Brian Martin, head of business development at Blend. “Partnering with EXOS provides the opportunity to offer a more complete digital mortgage experience and help our customers interact with borrowers on a deeper level.” Appraisal Logistics to License AIMPort AMC Software

Appraisal Logistics (ALS) has announced that it will license AIMPort, its proprietary technology platform, to lenders who want to manage some or all of their own appraisal process as well as to other appraisal management companies (AMCs). “Not every lender wants to outsource its appraisal management to an AMC,” said Frank Danna, CEO of Appraisal Logistics. “If they manage it internally, they must have access to software powerful enough to manage that process in a compliant and efficient manner. If they do work with an AMC, they may still want to manage some appraisals or evaluations internally. Most lenders need some support when lending outside of their

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

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

Providing HELOC solutions to the mortgage broker industry since 2006 serving most major markets in the US. Ask about the new broker compensation prog am with Stand-Alone HELOC’s!

n National Mortgage Professional Magazine n SEPTEMBER 2019

Mortgage professionals to watch l George Mason Mortgage LLC, a Fairfax, Va.-based subsidiary of United Bank, has named David H. Stevens to its board of directors as an advisor. l Cloudvirga has announced the promotion of Daniel Sogorka to the role of chief executive officer. Sogorka, who joined Cloudvirga as chief revenue officer in January this year, has more than 20 years of experience removing inefficiency and costs from the mortgage industry. l Calyx has announced that Robert Shumake has joined the company as national sales consultant, where he will be responsible for developing effective sales strategies and managing customer relationships for Calyx Path, the company’s latest cloud-based digital loan origination system. l Williston Financial Group (WFG) has announced the appointment of three vice presidents of business development for its enterprise

solutions division: Linda Vo, Melanie Cornelius and Monique Winston. The Appraisal Institute has announced the election of Pledger M. (Jody) Bishop III, senior managing director of Valbridge Property Advisors in Charleston, S.C., as its 2020 vice president. Experian Mortgage has named Susan Allen as its new head of product. Gateway First Bank, headquartered in Jenks, Okla., has named Jeff Schmidt as its chief mortgage operations officer. Angel Oak Mortgage Solutions has announced the addition of four new Account Executives: Mark Tirabassi, New Jersey; Alex Trujillo, Inside Sales; Danielle Evans, Houston, Texas; and Jaime Sanchez, San Diego, Calif. WFG National Title Insurance Company (WFG) has announced that Gregg W. Christensen has been appointed senior business development officer for the company’s New York Citybased national commercial services division. The Federal Home Loan Bank of San Francisco (FHLBank San Francisco) has promoted Greg Ward to executive vice president and chief risk officer, and has also promoted Arlene Coyle to senior vice president and chief audit executive, the role most recently held by Ward. Appraisal Logistics Solutions LLC has hired Mark Tague as vice president of sales. In his new role with the Washington, D.C.-based company, Tague will be responsible for the company’s appraisal management services and its AIMPort appraisal management software.

NationalMortgageProfessional.com

footprint, but the process has to be very efficient to keep costs low. Finding the right mix is the key to reducing the lender’s overall costs in the appraisal department. Our software makes that easy.” AIMPort is a single source solution developed to bring management and operations teams, technical tools and vendor partners together seamlessly. The platform improves workflow efficiency and accuracy in a costeffective manner to support the lender’s own vendor process. The platform offers functionality for vendor management, order process, assignments, tracking, reviewing, delivery, reporting and accounting. ALS created AIMPort internally using its own in-house IT group. The company has been operating on the platform in all 50 states since 2011. “The possibilities are virtually limitless,” said Dennis Ashcroft, ALS vice president of sales. “Whether your interest is to farm out the cost/risk to a third-party vender or manage the process internally through a state-of-the-art technology, we can analyze your existing process and provide a cost-effective solution that meets/exceeds all government and Interagency guidelines. As the only provider with the coveted ISO 9001-2015 Certification, a Quality/Performance Improvement program, your compliance at the end of the day is guaranteed.”

SAVE THE DATE!

NCRA 27th Annual Conference Tuesday-Thursday, November 5-7 The DeSoto Hotel 15 East Liberty • Savannah, Ga.

SEPTEMBER 2019 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

Preliminary Schedule of Events Subject to change

Monday. November 4 NCRA Board of Directors Meeting (all day)

Tuesday, November 5 8:00 a.m.-4:00 p.m. User and Sales Meetings 6:00 p.m.-7:30 p.m. Welcome Reception and Marketplace

Wednesday, November 6 8:00 a.m. Breakfast 9:00 a.m.-5:00 p.m. Conference Open 6:00 p.m.-9:30 p.m. Feature Event

Thursday, November 7 8:00 a.m. Committee Sign-Up & Breakfast 9:00 a.m.-4:00 p.m. General Sessions For more information and details, visit NCRAInc.org, call (630) 539-1525, or e-mail NCRA Executive Director Terry Clemans at TClemans@NCRAInc.org or NCRA Office & Members Services Manager Jan Gerber at JGerber@NCRAInc.org.

NEW TO MARKET continued from page 47

environment, borrowers demand immediacy and responsiveness,” said Jerry Halbrook, Volly’s CEO. “Our mobile apps allow loan officers to work more efficiently and dynamically to collaborate with customers and partners. We’re confident that this technology advancement will substantially improve the quality and satisfaction of the customer journey.”

ReverseVision Launches Interactive Comparison Tool

ReverseVision has announced the release of the Comparison Calculator within RV Sales Accelerator (RVSA), an interactive tool that allows loan originators to give consumers side-by-side comparisons of how HECMs and their unique features perform ComplianceEase Adds VA against other home equity loan Loan Audit Function products over the projected life of the loan. ReverseVision developed its Comparison Calculator in response to a study by the National Council of Aging, which ComplianceEase has announced found that when presented with a that its flagship platform blind comparison of HECM and ComplianceAnalyzer will now Home Equity Line of Credit enable the auditing of Veterans (HELOC) loans, seniors choose Affairs (VA) loans for unique state charges and fee deviations allowed the HECM over the HELOC 58 percent of the time. The by the Department of Veterans Comparison Calculator is the first Affairs. tool of its kind to offer consumers According to the Burlingame, side-by-side comparisons of Calif.-based company, VA HECM lines of credit against guidelines restrict lenders to other loan types, such as home charging 1 percent of the loan equity lines of credit (HELOCs) amount to cover origination, processing and underwriting costs. and traditional first- and secondlien mortgages. This has been handled either “With seniors holding more through charging a flat one percent fee to cover costs or itemizing fees than $6 trillion in accumulated home equity in the United States, through state deviations and consumers need to know that exceptions and then charge fees they have options to tap into their that would otherwise not be financial resources—and allowed. With the new originators need tools to help enhancement, ComplianceEase them describe the differences in added, lenders can test VA loans how these options perform over for allowable state charges and the long term,” said fees that are typically considered ReverseVision Product Manager unallowable under VA guidelines, Jason Price. “We are proud to thus providing compliance affirmation when itemizing charges introduce a tool that takes the Generational Lending concept and fees. and puts to practice helping “More than 30 states allow lenders to charge certain fees that borrowers as their needs change over time.” would otherwise be included in the one percent cap for VA loans. Your turn Itemizing these fees can be National Mortgage Professional challenging and, if done Magazine invites you to submit any incorrectly, lead to compliance violations and reputational risk. In information promoting new “niche” fact, several lenders are currently loan programs, new products or any other announcement related to under investigation for the introduction of a new program, overcharging veterans for to the attention of: mortgage loans,” said Sanjay Tibrewal, senior vice president of New to Market column product management at Phone #: (516) 409-5555 ComplianceEase. “Our E-mail: enhancements to ComplianceAnalyzer allow lenders Newsroom@MortgageNewsNetwork.com to not only itemize fees for VA Note: Submissions sent via e-mail loans to take advantage of are preferred. The deadline for allowable state exceptions, but submissions is the 1st of the month also mitigate risk by ensuring prior to the target issue. compliance and quality control.”

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S

calendar of events OCTOBER 2019 Wednesday, October 9 NAMMBA Connect Charlotte Queens University (Sports Complex) 2229 Tyvola Road Charlotte, N.C. For more information, visit NAMMBA.org. Wednesday-Thursday, October 9-10 Oregon Mortgage Association Summit 2019 Salem Convention Center 200 Commercial Street Southeast Salem, Ore. For more information, visit OregonMortgageAssociation.com.

Saturday, October 26 mPowering You: MBA’s Summit For Women in Real Estate Finance Austin Convention Center 500 East Cesar Chavez Street Austin, Texas For more information, visit MBA.org. Sunday-Wednesday, October 27-30 MBA’s 2019 Annual Convention & Expo Austin Convention Center 500 East Cesar Chavez Street Austin, Texas For more information, visit MBA.org.

Wednesday-Thursday, November 6-7 MBA Commercial/Multifamily Technology Officer Roundtable MBA Headquarters 1919 M Street NW, 5th Floor Washington, D.C. For more information, visit MBA.org. Monday, November 11 NAMMBA Connect Orlando DoubleTree by Hilton Orlando at SeaWorld 10100 International Drive Orlando, Fla. For more information, visit NAMMBA.org. Thursday, November 14 FAMP’s 2019 Miami Mortgage Convention Trade Show DoubleTree by Hilton Hotel Miami Airport & Convention Center 711 NW 72nd Avenue • Miami For more information, visit MiamiFAMP.org. Monday-Wednesday, November 18-20 2019 NRMLA Annual Meeting & Expo Nashville Omni 250 5th Avenue South Nashville, Tenn. For more information, visit NRMLAOnline.org/event/2019annual-meeting-expo.

FEBRUARY 2020 Monday-Thursday, February 3-6 MBA’s 2020 Independent Mortgage Bankers Conference Hyatt Regency New Orleans 601 Loyola Avenue New Orleans For more information, visit MBA.org. Sunday-Wednesday, February 9-12 MBA’s 2020 CREF/Multifamily Housing Convention & Expo Manchester Grand Hyatt San Diego 1 Market Place San Diego For more information, visit MBA.org. Sunday-Wednesday, February 23-26 MBA’s 2020 National Mortgage Servicing Conference & Expo Hyatt Regency Orlando 9801 International Drive Orlando, Fla. For more information, visit MBA.org. MARCH 2020 Sunday-Wednesday, March 8-11 MBA’s 2020 Mid-Winter Housing Finance Conference Ritz-Carlton, Bachelor Gulch 0130 Daybreak Ridge • Avon, Colo. For more information, visit MBA.org. Sunday-Wednesday, March 29-April 1 MBA’s 2020 Technology Solutions Conference & Expo JW Marriott Los Angeles L.A. LIVE 900 West Olympic Boulevard Los Angeles For more information, visit MBA.org.

APRIL 2020 Monday-Tuesday, April 20-21 MBA’s 2020 State & Local Workshop Renaissance Washington, D.C.Downtown Hotel 999 19th Street, NW Washington, D.C. For more information, visit MBA.org. Tuesday-Wednesday, April 21-22 MBA’s 2020 National Advocacy Conference Renaissance Washington, D.C.Downtown Hotel 999 19th Street, NW Washington, D.C. For more information, visit MBA.org. 87 Thursday, April 23 MBA’s 2020 Capital Markets Summit Sheraton New York Times Square Hotel 811 7th Avenue, West 53rd Street New York, N.Y. For more information, visit MBA.org. MAY 2020 Sunday-Wednesday, May 3-6 MBA’s 2020 Legal Issues and Regulatory Compliance Conference New York Marriott Marquis 1535 Broadway New York, N.Y. For more information, visit MBA.org. Sunday-Wednesday, May 17-20 MBA’s 2020 National Secondary Market Conference & Expo New York Marriott Marquis 1535 Broadway New York, N.Y. For more information, visit MBA.org. Sunday-Wednesday, May 17-20 MBA’s 2020 Commercial/Multifamily Servicing & Technology Conference New Orleans Marriott 555 Canal Street New Orleans For more information, visit MBA.org.

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

n National Mortgage Professional Magazine n SEPTEMBER 2019

Thursday, October 24 AZAMP Annual Expo 2019 JW Marriott Phoenix Desert Ridge Resort & Spa 5350 East Marriott Drive Phoenix, Ariz. For more information, visit AzAMP.org.

Wednesday, November 6 NAMMBA Connect Los Angeles The Westin Bonaventure Hotel and Suites 404 South Figueroa St. • Los Angeles For more information, visit NAMMBA.org.

Tuesday-Thursday, November 19-21 MBA’s Accounting and Financial Management Conference 2019 Marriott Marquis San Diego Marina 333 West Harbor Drive San Diego For more information, visit MBA.org.

NationalMortgageProfessional.com

Wednesday, October 23 NAMMBA Connect Houston The Westin Houston, Memorial City 945 Gessner Road Houston, Texas For more information, visit NAMMBA.org.

NOVEMBER 2019 Tuesday-Thursday, November 5-7 NCRA 27th Annual Conference The DeSoto Hotel 15 East Liberty • Savannah, Ga. For more information, visit NCRAInc.org.

SEPTEMBER 2019 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

Visit www.AngelOakMS.com or call 855.631.9943 Simply The Best Solution in Non-QM Wholesale and Correspondent Lending g. ÂŠ Angel Oak Mortgage Solutions LLC NMLS #1160240, Corporate office, 980 Hammond Drive, Suite 850, Atlanta, GA, 30328. This communication is sent only by Angel Oak Mortgage Solutions LLC and is not intended to imply that any of our loan products will be off ffeered by or in conjunction with HUD, FHA, VA, the U.S. government or any ffeederal, state or local governmental body. This is a business-to-business communication and is intended ffo or licensed mortgage proffeessionals only and is not intended to be distributed to the consumer or the general public. Each application is reviewed independently ffo or approval an nd not all applicants will qualify fy ffo or 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. MS675_0419