National Mortgage Professional Magazine November 2014 by United Sports Publications

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F addi sconsumeraccess.org. b Licensedd by Dp t 2 AAriizona: d th W Bel B l Road, R d Sui S te 1, Glendale, AZ 85308, N 0907158; Arkansas: Combi C binatition Mortgage BBroker k Servicer, Licensee No. C lifornia: Licensed by by the th Department DDepa t t off Busi B iness Oversi O ight under d the California Residential Mortgage L ding Department, Licensee No. 21332; o Licensed as an Arizona Mortgage g g Banker under the AAriizona DDepar p rtment of Financiial IInstitittuti 8 g g Banker-Broker-Servi Banke k rr-Broker-Ser No. 11884; Cal p rtment g g Lendi Department utitions, 4347 W. Licensee No. AAct,t Licensee NNo. 6037237 d Regul R g lattedd by by the th Col C lorado d Division off Real R l Estate; E t t Connecti C ticut:t Licen D laware: Licensedd by by the th Del D laware State St t Bank B k Commi C issiioner to t engage ( d through th 2014)) Distrit ict off Col C lumbi bia: Licensedd by by the th D.C. D C Department D p t t off Insurance, I surance, 6037237; C Collorado: nsedd bbyy the th Connecti C ticuutt Department D p t t off Banki B king, g Licensee No. N 10162; 1016222; Del engage g g in busi b ness in this State t under d License No. No. 2403 (renewed throuugh gh 2014); Ins ensed Floriida: Floriida M tg g LLender d Licensee NNo. MLD333 M tg g Licensee, No. N 13967; 13967 Idaho: Id h Licensedd by by the th Idaho Id h Department D p t t off Finance, Licensee No. N MBL-5032; R identitial Mortgage M g g Licensee, No. 05484 Indi I diana: Indi I diana Firstt Lien Mortgage M tg g Lendi L ding License under d the th Indi I diana Department D p t t off FiF nanciial SSecuriities andd BBankikingg, Licensee NNo. MLB2917 MLB2917; M Mortgage MLD333; G Georg gia: G Georgi gia RResiidentitial Mortgage MBL 5032 Illinoiis: Illinoiis Resi No. MB.0005484; Georgi I titutitions, Licensee NNo. 11058 0309 KKan K Licens C p y Licensee No. N SL.0000212; SL 0000212 Kentucky: K t ky Licensedd by by the th Kentucky K t ky Department D p t t off Financiial Insti N MC16957; MC16957 Loui L isiana: Resi 1421 Mai M ine: Supervi S p isedd Lender L d Licensee No. No. SLM5962; SLM5962 Maryl M yland: Insti 11058; IIowa: LiL censedd bbyy th the IIowa Division off BBankikingg, Licensee NNo. 2004 2004-0309; sas: Kansas-Li edd Mortgage M tg g Company, I titutitions, n Licensee No. R identitial Mortgage M tg g Lendi L ding Liicensee No. No. 1421; d Kansas: ensed M h tt Massachusetts M h tt Mortgage M tg g Broker/Lender/Servi B k /L d /S icer Regi t Minnesota t Resi ff to t enter t into t an agreement t law. Any t Marylylandd Mortgage M M tg g Lender L d Licensee No. N 1731; 1731 Massachusetts: M tg g Lender L d Licensee No. NNoo. ML 2917; 2917 Michigan: 1st 1 t Mortgage R gistrant, t t LiL censee No. N FR0714; FR0714 Minnesota: R identitial Mortgage M tg g Ori O iginator t License No. No. MN-MO-20399083. MN-MO-20399083. MO 20399083 This is nott an offer g t under d Minnesota A y suchh offer ff mayy onlly be b made d pursuant p to q irementst in Minn. Stat. Section on 47.206 ((3)) and (4); ( ) Mississippppi: Licensedd by p t of Banking aand ndd Consumer ennsed byy the Missouri Division of Finance, Licensee No. 14-2178; Montana g g Lender under the Division of Banking & Financial Instititutitions, Licensee No. 8453; Nebraska: Nebraska: t the th requi by the th Mississippppi Department C 2178 Montana: M t a: Licensed Mortgage k Nebraska Mortgage M tg g Banker LiL censee Finance, Licensee No. 2917; Missourii: Licensed M tg g Lendi L ding to k loans securedd by by liens on reall property, W t Warm 702 454 4212 New N Jersey:y Licensedd by J y Department N Mexi M ico: New NNo. 1470 1470; NNevada: d Licensedd by by the th Nevada NNevada d Division off Mortgage t make makel p p ty Licensee No. NNo.1047 G ty Mortgage M tg g Corporati C p tion, n 1489 West W Spri Sp ings g Road, RRoad,S d Suiite 215, 215,HHenderson, 215 d 89014 Phone Ph e No. No. 702-454-4212; NewJ by the theN th DDepartme p t entt off Banki B king andd Insurance, I No. 9700530; 9700530 New N w Mexi M ico 1047, Firstt Guaranty NV 89014, New Jersey Licensee No. tg g LLoa S icer Regi R gistrati ttraatit on, Licensee No. B500800 B50080 (d/b/a C p on);) North N th Carol C M t Mortgage g LLoan Com mpany p y License NNo. 01085 01085; NNew YYork:k Licensed Mortgage g g Banker - N.Y. .S. Bankiking DDepartment p and Exempt pM Mortgage ( p Naame First Guarantyy Mortgage g g Corporati North Carollina: North Caroollina Mortgage o. L-100362; North Dakota: Licensed in North North Company N.Y.S. Loann Servi FGMC In Lieu of True Corporate Name Lender Licensee No. DDakota k t as Firstt Guaranty ty Mortgage M tg g Corporati N MB101924; MB101924 M tg g Broker M tg g Banker B k Exempti MBMB 8550010 hhomaM O g Mortgage M tg g Lendi L ding Licensee GuaraantyMortgageCorporati G C p tion dba db FGMC, FGMC,LiLicensee No. FGMC MB101924;Ohi B k Act A t Mortgage E ption No. N MBMB.850010.000; MBMB.85 50010.000; 000 Oklahoma: h tg g Lender L d Licensee No. N ML002709; ML0002709 02709;O g Oregon enseeN No.ML 2634 Pennsyl PPennnsylylvaniia: Ohio::Ohi Ohio Mortgage Oklahoma Mortgage Oregon: No. ML-2634; D p t t off Banki B ng and Securities, Licensee No. 20768; Rhode IIslland: d Rhode Rh Island Licensedd LLend th Carol C lina: South Carol No. MLS-2917; South Dakota: by the th South S th Dakota D k t Department Dp t Licensed byy the PPen nnsylylvaniia Department R er; South Caarolina Mortgage g g Lender/Servicer Licensee No. Dakotaa: Licensedd by g ation, n Division Pennsyl Lender; of Labor and Regul N ML.05077; ML 05077 Tennessee: T T D p t t off Financiial Insti I titut S ings N 5491155; V t Licensedd by V t Department off BBankikingg, Licenseee No. Tennessee Department Mortgage tg g Licensee NNo. 109451 109451; TTexa by the th Texas T Department De D partment p t t off Savi g andd Mortgage M tg g Lendi L ding; g Utah: Ut h Utah Ut h Mortgage M tg g Enti EEnntitity Licensee No. 5491155 Vermont: by the th Vermont DDepar p rtment t t off utitit ons M Texas:s: Licensedd by g lationn,, Licensee No. the Virggiinia St State gt Washi No. CL-2917; W t Virginia: West Virginia Mortgage Lender Licensee No. ML-20742; Financiial RRegul N 6644; 6644 Virggiinia: Licensedd bbyy th t Corporati C p tioonn Commi C issiion as a Lender L d andd Broker BBroker, k , Licensee No. N MC-436; MC 436 Washi W hington: W hington t Consumer C L Company, C CL 2917 West 0742 Wi W sconsin: Follow us on: Loan Licensee No. Licensedd Wisconsiin M t BBanker, k Licensee NNo. 26835BA Mortgage 26835BA; W Wyomiing: Licensedd bby th the W Wyomiing Division off BBankiking, Licensee NNo. 18 31. 31 1831.

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n National Mortgage Professional Magazine n NOVEMBER 2014

Master the Markets with Barry Habib

table o

N A T I O N A L

Surveying the Opinions and Expectations of the Mortgage Industry’s Top Brass By Tom LaMalfa

N O V E M B E R

32 The Millennials Are Coming, the Millennials Are Coming ... Sort Of By Phil Hall

2 0 1 4

M O R T

V O

A SPECIAL FOCUS ON “MORTGAGE TECHNOLOGY OF TODAY”

Successfully Implementing a Cloud-Based LOS: A Lender’s Perspective By Anthony Pham ......................................66 Using Technology to Better Serve Borrowers By Ray Brosseau ..68 Technology Offers the Opportunity for Mortgage Providers to Meet the Demand for Quicker Closings By Geriel Thornburg May....................................................................70 Turn Your Smartphone Into a Referral Generator By Ben Brashen ..................................................................................72 Are You Sarah Connor? By Eric Weinstein ......................................73

40 Lykken on Leadership: Eight Ways a Coach Can Make You a Better Leader By David Lykken

Can Technology Help Identify Loan Defects? By Ramesh Devare ............................................................................74 High-Tech vs. High-Touch By Laura Burke ....................................75 Developing a Web Presence By Ashley Lubey ................................77 A Winning Combination for Virtual Underwriting By Brent Chandler ..............................................................................78 The Future of Mortgage Marketing By Brent Emler........................80 Treating Integration as an Investment By Matt Seu ......................82

FEATURES The Elite Performer: The Right Routine Equals Results By Andy W. Harris, CRMS ....................................................................8 Why Video Can Bring Your Brand Story to Life By Brian Karoff....16 Four Direct Mail Marketing Myths Busted By K. Justin Restaino..18 NAMB Perspective ............................................................................20

47 NMP’s 2014 Mortgage Technology Providers Directory

84 NMP Mortgage Professional of the Month: Ted Tozer, President of Ginnie Mae By Phil Hall & Robert Ottone

What Boy Scouts Can Teach You About Success in Mortgage Lending By Bubba Mills ..............................................24 Using Energy Efficiency to Push Home Sales By Phil Hall ............26

V I S I T Company

Web Site

O U R

A Page

AllRegs.............................................................. www.allregs.com ..........................................................40 American Financial Resources ............................ www.afrwholesale.com ......................................Back Cover BetterLoanOfficers.com ...................................... www.betterloanofficers.com ..........................................41 Boomerang........................................................ www.boomerangprospecting.com ..................................45 Brokers Compliance Group.................................. www.brokerscompliancegroup.com ..................................96 CallFurst.com ...................................................... www.callfurst.com ............................................................79 Carrington Mortgage Services, LLC ...................... www.carringtonwholesale.com ..............................27 & 33 Continental Home Loans, Inc. ............................ www.chlmortgage.com ....................................................5 Document Systems, Inc./DocMagic ...................... www.docmagic.com ..........................................7, 39 & 57 Easy Mortgage Apps............................................ www.easymortgageapps.com ..........................................76 Equity Prime LLC................................................ www.equityprime.com ..................................................75 First Guaranty Mortgage Corp. ............................ www.fgmc.com ..............................Inside Front Cover & 73 Flagstar Bank .................................................... www.wholesale.flagstar.com ..........................................17 HomeBridge Wholesale ...................................... www.homebridgewholesale.com ....................................11 JMAC Lending .................................................... www.jmaclending.com ..................................................31 Listing Booster .................................................. www.listingbooster.com ................................................61 Lykken On Lending ............................................ www.lykkenonlending.com ............................................59 Maverick Funding Corp....................................... www.maverickfunding.com ............................................35 Mortgage News Network (MNN) .......................... www.mortgagenewsnetwork.com ......................................1 NAMB+ ............................................................ www.nambplus.com ......................................................23

f contents

T G A G E

O L U M E

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

N U M B E R

1 1

Catch Mortgage Fraud Before It Sinks You By Greg Holmes ......28 The End of Interest Rate Selling......................................................30 Tales From the Closing Table By Andrew Liput ..............................34 Controlling Multitasking Mayhem With Automation By Kelly Booth ....................................................................................36 USDA Confirms Acceptance of Electronic Signatures By Melanie A. Feliciano Esq. ..............................................................42

The Unintended Consequences of Basel III By Doug Rossbach ..44 NMP’s Economic Commentary: The Fed Moves On By Dave Hershman ............................................................................46 The Simple Way to Plan for 2015 By Tom Ward ............................52 Just Ask Eric & Laura By Eric Weinstein & Laura Burke..................54 Winning With Technology By Garrett M. Kolb ................................56 A Few Quick Tips From AllRegs on Vendor Management............58 The Long & Short: The Business of Short Sales By Pam Marron....58 New Integrated Disclosure Will Test the Mettle of Mortgage Settlement Agents By Andrew Liput ..........................62 Time Traps By Dr. Kerry Johnson ....................................................64 Scenes From the MBA’s 101st Annual Convention & Expo..........86 MBA’s Mortgage Action Alliance By Amy Swaney ........................92 Step Inside Ginnie Mae By Ted W. Tozer ........................................93

COLUMNS New to Market..............................................................................12 News Flash: November 2014 ......................................................14 Heard on the Street ....................................................................38 NMP Resource Registry..............................................................90 NMP Calendar of Events ............................................................95

D V E R T I S E R S Company

Web Site

Page

NAMBPAC.......................................................... www.namb.org ................................................................3 NAPMW ............................................................ www.napmw.org ....................................................65 & 78 NAWRB ............................................................ www.nawrb.com ............................................................92 New England Mortgage Expo .............................. www.nemortgageexpo.com ............................................71 Paramount Residential Mortgage Group, Inc. ...... www.prmg.net ..........................15, 55 & Inside Back Cover Path2Buy .......................................................... www.path2buy.com ..............................................63 & 80 PB Financial Group Corp..................................... www.pbfinancialgrp.com ..............................................53 REMN (Real Estate Mortgage Network) ................ www.remnwholesale.com ..............................................13 Reverse Mortgage Solutions, Inc. ........................ www.partners.rmsnav.com ............................................81 Ridgewood Savings Bank .................................. www.ridgewoodbank.com ..............................................69 Streetlinks LLC .................................................. www.streetlinks.com ......................................................19 TagQuest .......................................................... www.tagquest.com ........................................................43 The Bond Exchange............................................ www.thebondexchange.com ..........................................46 The National Real Estate Post.............................. www.thenationalrealestatepost.com ..........................27, 53 Titan List & Mailing Services, Inc. ........................ www.titanlists.com ..........................................................9 Top Producer Round Table ................................ www.topproducerroundtable.com ..................................25 TPD Marketing .................................................. www.tpdmarketing.com ................................................37 United Northern Mortgage Bankers, Ltd............... www.unitednorthern.com ......................................29 & 67 United Wholesale Mortgage ................................ www.uwm.com/younited ................................................51

Dear Mortgage Professional, My name is John G. Stevens, CRMS. I am honored to serve as the 2014-2015 Chair of NAMBPAC, a political action committee dedicated to preserving the American dream and the only PAC working exclusively to protect the interests of consumers and mortgage professionals nationwide. NAMBPAC is the non-partisan political action committee for NAMB, The Association of Mortgage Professionals. NAMB is the recognized and respected voice of the mortgage originator on Capitol Hill and throughout Washington, D.C., and NAMB supports the operation of NAMBPAC as authorized by, and in accordance with, federal law. Funds raised by NAMBPAC are used to support Members of Congress who support a strong mortgage market, fair competition and meaningful consumer protection. On behalf of NAMB and NAMBPAC, I would like to sincerely thank the following individuals and political committees for their generous contributions to NAMBPAC through October 15, 2014: Mike Anderson Chuck Anderson Rocke Andrews Fred Arnold Kevin Ary Jayne Bail Jim Barry Joel Berman Rick Bettencourt Sharon Bitz Doug Braden Joseph Cannarozzi Terry Casey Dana Chahidi George Charles Kay Cleland Terry Clemans John Councilman

Roy DeLoach Michael DeSantis Harry Dinham George Duarte Scott Dudley Don Fader Ginny Ferguson FAMP Federal PAC Bryan Foreman Don Frommeyer Scott Grifﬁn Sylvia Gutierrez Andy Harris Melissa Hayes Lisa Hernandez Carla Highland John Hudson Edmund Irwin

Everett Ives Helga James Erik Janeczko Jon Kaempfer David Kane Charlie Keiser Edmund King Linda Knowlton Terri Koubek Fred Kreger Olga Kucerak Kim Lewis Lisa Lund Linda McCoy Tiffany McCoy Danielle Neveu OAMBPAC Jim Pair

Nathan Pierce John Porter Tina Rose Kathy Rubin Diego Sandoval Valerie Saunders Andy Seepersad Lisa Severseike Kane Smeltz John G. Stevens TAMB Federal PAC David Timmerman Michelle Velez Irving Webb Kimber White Cynthia Wingo Brain Yampolsky

For additional information about NAMBPAC, please feel free to contact me or visit www.namb.org.

John G. Stevens, CRMS 2014-2015 Chair NAMBPAC John@JohnGStevens.com

NOVEMBER 2014 Volume 6 • Number 11

FROM THE

Has Anyone Seen My Okidata 92 Dot Matrix Printer?

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

By definition, the word “technology” is a body of knowledge used to create tools, develop skills and extract or collect materials. It is also the application of science (the combination of scientific method and material) to meet an objective or solve a problem. The technology of today has applications that permeate every facet of the mortgage process. When I look back at the days I was in the mortgage broker industry in the late 1980s and early 1990s, I remember just how exciting it was to have a computer, fax machine and dot matrix printer. File storage on these machines was done by floppy discs. Jump ahead 25 years later, and technology has simply re-defined the way in which the mortgage profession operates in today’s fast-paced, high-tech world. Those old clunky machines have been literally downsized to glass screens that fit in the palms of our hands. Those boxes of floppy discs have been replaced by cloud storage, with data accessible at any time or any place. How have you embraced this change? Are you adapting to these technological advances of the day or have you held out and resisted this change? Today, grasping this change is unavoidable. It’s just a matter of when and how we will embrace this change. Unlike most other changes we have the power over, adapting to the proliferation of technology in today’s world is inevitable. Every facet of the mortgage loan process has been streamlined via technology. From house shopping, to pre-qualification, to closing, the entire mortgage process has adapted as well by reducing mounds of paperwork. Your Web presence is your window display. When prospective homebuyers are shopping for a home or present homeowners are looking to refinance, does your Web presence serve as that virtual “hook” to reel in these prospects? Or, does your site need a facelift? Is your site mobile-friendly? That difference of having your site load quicker on a tablet or smartphone could be the competitive advantage needed to outlast the competition and grab that sale over your competitors. Embracing technology is not an option if you want to survive and thrive into the future. The myriad of growing compliance requirements can only be met by the assistance of technology. The days that the biggest technology fear was the tractor feed of the dot matrix printer failing are quickly slipping away. Let’s keep it simple … use technology to grow your business profitably and compliantly or like the dot matrix printer, you will be gone soon as well! Sincerely,

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

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

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

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

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

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

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

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

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

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

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

NOVEMBER 2014 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

publisher’s desk

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

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE’S

EDITORIAL CONTRIBUTORS Featured Editorial Contributors Phil Hall

Andy W. Harris, CRMS

Amy Swaney

Editorial Contributors Kelly Booth

Dave Hershman

Ben Brashen

Andrew Liput

Ray Brosseau

David Lykken

Laura Burke

Pam Marron

Brent Chandler

Ramesh Devare

Garrett M. Kolb

Matt Seu

Brent Emler

Ashley Lubey

Geriel Thornburg May

Melanie A. Feliciano Esq.

Bubba Mills

Ted W. Tozer

Greg Holmes

Anthony Pham

Tom Ward

Dr. Kerry Johnson

K. Justin Restaino

Eric Weinstein

Brian Karoff

Doug Rossbach

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n National Mortgage Professional Magazine n NOVEMBER 2014

Continental C Conti tiinental i taal H Home ome L Loans oa has joined forces with

NAMB The Association of Mortgage Professionals

National Association of Professional Mortgage Women

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

2014-2015 NAPMW National Board of Directors

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

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

NOVEMBER 2014 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

DIRECTORS

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

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

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

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

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

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

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

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

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

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

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

2013-2014 Board of Directors & Staff

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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n National Mortgage Professional Magazine n NOVEMBER 2014

www.DocMagic.com I 1.800.649.1362

Coming in December

NOVEMBER 2014 n National Mortgage Professional Magazine n

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Last month, Jonathan Foxx, president and managing director of Lenders Compliance Group, published RESPA/TILA Integration–Part I: Overview and Loan Estimate in the October 2014 issue of National Mortgage Professional Magazine. This is the first of a four-part series on the new RESPA/TILA rules. The article received considerable attention from our readers–especially the Loan Estimate Table, which outlined the Loan Estimate in a tabular format. You can find the article and table in the October 2014 edition of National Mortgage Professional Magazine, respectively, on page 28 and page 51. We want you to enjoy the benefit of reading this analysis online, so we have placed the entire review on the Web at http://goo.gl/Z01cXj. In December, we will be publishing Part II in this series. This forthcoming article will be devoted to the Closing Disclosure, and it will also contain an informative table as well. Be sure to look for it!

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

THE

elite performer The Right Routine Equals Results By Andy W. Harris, CRMS

had a meeting with some colleagues last “Routine, in an week to discuss some intelligent man, different things we do is a sign of ambiion.” individually to increase productivity —W.H. Auden and success. The one trait that stood out to me that I believe top producers share is having a simple and consistent routine every work day which they don’t stray from. A routine is defined as a sequence of actions regularly followed, and I believe many just lack the “regularly followed” piece. While some short-term routines might not be productive, I would assume those sticking to a consistent routine have found success with it. So what exactly is a daily routine? In my opinion, it is a set of conscious goals with subconscious actions laid out to maximize a work day and to be consistently followed for optimized performance. If you don’t have a set routine or commitments each day, then the inconsistencies could prohibit you from capitalizing new prospects from marketing efforts and disorganizing your work flow. A productive routine helps you mentally prepare each day and stay alert by being punctual and organized. For those who have a consistent routine, they know what it feels like when they stray and how it can impact their workday. Personally, I make it a priority to get up around the same time every day. I start my day by sitting down and reading something inspirational over a cup of coffee, followed by a morning workout which stimulates the mind and metabolism. I get ready for work, grab my protein shake, and jump in the car. On the way to work, I find listening to audio books related to your professional trade and goals can be priceless. My routine includes these audio books for that very reason, creating more ideas and ambition every day. I try to arrive at work at or around the same time every morning, and truly believe that those who are not punctual in their work schedule simply produce less. Start thinking about what you do each work day consistently that is helping or hurting your professional life. What changes can be made or what is causing you to not meet goals or holding the necessary discipline? It is very vital for those of us that work for ourselves or in a position with flexible schedules to realize the importance of having a daily routine and continuing to improve and build from it. We must hold ourselves accountable for our chosen actions each and every day, and ensure that we monitor our routines to optimize being punctual, productive and progressive.

Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 2010-2011 president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail aharris@vantagemortgagegroup.com or visit www.vantagemortgagegroup.com.

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n National Mortgage Professional Magazine n NOVEMBER 2014

Surveying the Opinions and Expectations of the Mortgage Industry’s Top Brass

Inudstry leaders and visionaries weigh in at MBA 2014 Annual Convention By Tom LaMalfa his is the 13th time since 2008 that this survey of senior mortgage banking executives has been conducted and distributed. It is completed twice annually, at the MBA’s Annual Convention in October and at the MBA’s National Secondary Market Conference in May. The purpose of the survey is to capture some basic data and gather the opinions, attitudes, values and expectations of senior executives on many of the business and industry’s key issues, topics and concerns. For this year’s MBA Annual Convention, 30 meetings were arranged and 30 surveys were completed. The surveyed group consisted of eight mortgage company presidents, 10 executive vice presidents, eight senior vice presidents, and four vice presidents or regional vice presidents. Excluding the presidents, all of those surveyed work in capital markets, operations or production. Of the 28 firms represented in the survey, eight produced more than $10 billion in 2013, 13 others originated between $1-$9 billion, and another seven produced less than $1 billion last year.

The executives surveyed represent 16 banks, 12 independent mortgage companies, including two homebuilder-owned firms, one mortgage brokerage, and one real estate agent-owned firm. One of the firms is Internet-based. Thirteen of the firms originate only through retail, while the other 15 produces in at least two channels. Six of the 28 firms originate in retail, correspondent and broker wholesale. The surveyed group is structured to be reasonably representative of the industry in firm size and operating channels. The 65-question survey was drafted several weeks before the conference, beta tested, and run past several industry insiders for comprehensiveness and clarity. Except for the beta test group, all surveys were completed face to face during meetings at the MBA Annual Convention, with about 45 minutes reserved for each survey. The project’s objective is to record the responses to the questions, compile the information, prepare a report of the findings, and distribute it to those surveyed and other interested parties. By design, the survey group consists almost solely of industry friends and busi-

ness associates. All are industry veterans. Many have been part of this survey since its inception. Some execs are polled both at the Secondary Marketing Conference and again at the MBA Annual Conference about six months later. Most of those surveyed are close industry contacts who have helped keep me informed of intraindustry trends and developments over the course of years. Most have been colleagues for decades. Only four of those included were surveyed for the first time. Given who is being polled, no thought was ever given to even suggest that the survey findings reflect the attitudes or opinions of a broad cross-section of the U.S. population. To the contrary, since it wasn’t a random survey, there is nothing scientific about the results that would necessarily apply outside the mortgage banking industry. And. of course, responses are only valid as of a specific point in time. That said the surveyor believes the findings well represent the ideas, attitudes and expectations of the broad mortgage industry. Although some of the questions are time-specific and appear on these surveys only once or twice, most of them are

included in each and every survey. This polling process provides a dataset of responses over time. An analysis of the resulting longitudinal data shows patterns and trends along with new developments in the business and industry. For example, the reduced demand by the government-sponsored enterprises (GSEs) for the repurchase of loans is reflected in the moderate improvement noted in this survey and the prior one when compared to the findings in the surveys conducted in 2010 through the first half of 2013. Past survey results have been the basis for five recent articles in Mortgage Banking, the most recent published in the October 2014 issue of the publication. The current plan is to write at least one article from this survey’s findings in the next several months. The purpose of these articles is to bring senior execs into the public discussion of key issues and topics without drama and despite the often-controversial nature of the underlying subjects. This report’s author finds the information collected to be relevant, interesting, continued on page 30

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Veros Enhances Its Sapphire Valuation Management Platform

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Veros Real Estate Solutions has announced enhanced features to its property valuation management platform, Sapphire, that provides lenders with the ability to simplify and enrich their valuation review process, while enhancing their vendor management capabilities. Sapphire is a SaaS-based property valuation management platform that allows for quick adoption into the loan processing workflow, with flexibility that enables configuration to specific and unique operational needs. With modules including Order, Review, Reporting and Appraiser Panel Management (APM), Sapphire’s latest enhancements correlate with Veros’ objective of continual product strengthening. Sapphire offers users increased flexibility in managing the payment requirements associated with the ordering of appraisals, broker price opinions or other valuation tools. Continuing to deliver a secure portal for sensitive financial data, Sapphire’s enhanced payment processing capabilities provides versatility in how system and service fees are routed, as well as in the management of direct payments to appraisers or other valuation vendors. Sapphire allows users to establish ordering rules for valuation providers based upon configurable ‘zones.’ From geographic areas down to specific neighborhoods, Sapphire enables users to select the optimum vendor (appraiser, AMC, broker or other) based upon expertise to a highly specialized location. Sapphire users can now instantly see relevant data culled from reliable sources. Additionally, Sapphire will filter the available data and display them on maps that can be toggled between street and satellite views. Through this functionality, reviewers can also adjust the parameters for comparable data and instantly review new properties in order to better validate the data contained within the valuation, determine next steps and reduce possible risk. “Sapphire was designed to enable conscientious institutions to stay com-

pliant with ever-evolving regulations and requirements in an intuitive and user-friendly interface for property valuation management,” said David Rasmussen, senior vice president of operations for Veros. “These enhancements are another step down that road as we continually augment our SaaSbased valuation tools.”

New Credit Plus Offering Helps Lenders Monitor Loan Quality

Credit Plus Inc. has announced that it will be offering a new loan quality control (QC) program: QC Review, powered by the LoanHD Platform. QC Review enables lenders to run quality assurance checks throughout the entire origination process using real-time QC technology—from pre-closing to closing and beyond. “Research shows that one-in-five loans wouldn’t pass Qualified Mortgage (QM) standards,” said Greg Holmes, national director of sales and marketing for Credit Plus. “QC Review assures lenders that the loans they fund meet FHA/HUD, Fannie Mae, Freddie Mac, VA, and private investor requirements for prefunding analysis and post-closing audits.” Using QC Review, lenders can run quality assurance checks to meet their own policies and procedures before initial disclosure, after drawing documents, upon change of circumstances, during post-funding reviews, and more. The platform provides scalable efficiency and an organized method to evaluate granular, verified and validated detail for loan quality audits. QC Review’s insight can help lenders target loan risk, prepare for agency audits, and improve compliance safeguards. “Should a lender ever find itself facing an audit, buyback or lawsuit, QC Review’s reports can provide valuable information for their defense,” said Holmes. “The platform also supports long-term risk mitigation with business

intelligence tools that enable a lender to track trends, patterns and perform root cause analysis to improve loan quality.”

DLS Servicing Launches New FHA Servicing Product

DLS Servicing Consultants LLC has announced a new boutique FHA servicing programs aimed at new FHA servicers. “We’ve been approached by numerous small banks and mortgage companies that either have just obtained their FHA servicing ability, or have traditionally sold off their FHA loans and are now retaining servicing,” said Michael Meroney, director of business development and consulting for DLS. DLS is owned and staffed by industry veterans who have specialized in all aspects of FHA servicing. It also created and owns WaterfallCalc.com, provider of FHA loss mitigation decisioning software. “Mortgage servicing has become increasingly more complicated over the last five years,” said Donna Schmidt, owner and founder of DLS and WaterfallCalc.com. “Expert guidance will help new FHA servicers reduce the risk of costly mistakes, such as interest curtailments, indemnifications or treble damages.” DLS offers consulting and outsourcing services aimed at small banks and servicers that are new to the FHA servicing game. Assuring that SOP’s are up to date with current FHA and CFPB requirements, training staff and management, providing preliminary audits, and assisting with responding to post-HUD audits. DLS will also provide due diligence and sample loan reviews for clients that may be acquiring FHA portfolios. “We are uniquely positioned to assist FHA servicers with due diligence because of our WaterfallCalc.com product,” said Meroney. “We can quickly determine whether transferred

loans in default have been handled correctly from a loss mitigation standpoint, which has been a recent focus of the CFPB.” DLS can assist with proactive quality analysis of the loss mitigation documentation and calculations, pre-foreclosure sale documentation and acceptable net proceeds and HUD-1 configurations, first legal deadline tracking and warning reports, foreclosure claim processing and a host of other processes. DLS plans to offer these services at a large discount compared to its competitors, who are often too costly for the small servicer. “I have a real affinity for the small servicer,” said Schmidt. “I’ve been there. Our business model is to offer comprehensive, personalized and customizable consulting services with the budget of the small servicer in mind.”

CoesterVMS Integrates With a la mode’s Mercury Vendor Management Portal

CoesterVMS, a nationwide provider appraisal management and technology, has integrated its Cloud Control appraisal management service into a la mode’s Mercury Vendor Management Portal. Mercury users are now able to use the system to place appraisal orders into the CoesterVMS platform. Lenders are tasked with managing the compliance and regulatory requirements associated with firewalls used to protect systems and information. One of the ways to ensure the methods used for a specific process are predictable and repeatable is to use automation. This drastically decreases the possibility of error. “This is an intuitive next step in the evolution of automating valuations,” said Brian Coester, chief executive officer of CoesterVMS. “Mercury is a great platform and we believe this relationship will be very productive as it creates additional efficiencies in the industry.”

continued on page 18

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EWSFLASH l NOVEMBER 2014 l NMP NEWSFLASH l NOVEMBER 2014 l NMP NE MBA Forecasts $1.19 Trillion in Originations in 2015

NOVEMBER 2014 n National Mortgage Professional Magazine n

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The Mortgage Bankers Association (MBA) has announced that it expects to see $1.19 trillion in mortgage originations during 2015, a seven percent increase from 2014. While MBA anticipates purchase originations will increase 15 percent, it expects refinance originations to decrease three percent. MBA’s forecast predicts purchase originations will increase to $731 billion in 2015, up from $635 billion in 2014. In contrast, refinances are expected to drop to $457 billion, from $471 billion, in 2014. “We are projecting that home purchase originations will increase in 2015 as the U.S. economy continues on its current path of stronger growth, job gains and declining unemployment,” said Michael Fratantoni, MBA’s chief economist and senior vice president for research and industry technology. “The job market has shown sustained improvement this year; with robust monthly increases in both payroll jobs and job openings. We are forecasting that strong job growth, coupled with still low mortgage rates, should translate to an increase in home sales and purchase originations.” For 2016, MBA is forecasting purchase originations of $791 billion and refinance originations of $379 billion for a total of $1.17 trillion. “Our projection for overall economic growth is 2.9 percent in 2015 and 2.4 in 2016, which will be driven mainly by strong consumer spending and business fixed investment, as households continue to spend on durable goods, such as cars and appliances, and as businesses invest in new plant and equipment,” said Fratantoni. “Moreover, after several years of contraction, the rate of government spending should no longer be a drag on the economy.” MBA upwardly revised its estimate of originations for 2014 to $1.11 trillion from $1.01 trillion, and for 2013

to $1.85 trillion from $1.76 trillion, to reflect the most recent data reported in the 2013 Home Mortgage Disclosure Act (HMDA) data release. “We expect that the 10-Year Treasury rate will stay below three percent through the first half of next year as concerns about broader global issues have caused a flight to quality, with investors seeking safety in U.S. Treasury securities,” said Fratantoni. “However, if the global turmoil diminishes and U.S. economic growth continues, we anticipate the rate will exceed three percent in the second half of 2015, continuing to increase through 2016. We expect the Federal Reserve will keep short-term rates near zero until mid-2015, when we expect to see the first fed funds rate increase.”

SSI Polls Nearly 2,000 Closing Agents on Data Privacy, Training and Trust Accounts Secure Settlements Inc. (SSI) has announced the results of its most recent survey of nationwide mortgage settlement and closing professionals. The survey polled 1,788 professionals throughout the country about such issues as data privacy and security controls, trust account management and audits, and employee training. This latest survey conducted Oct. 7-14, is one of a series conducted regularly among the more than 8,200 settlement professionals in the SSI nationwide closing agent database. The results are offered as a resource to those seeking data intelligence on the escrow and settlement industry to assess the opinions, practices and experiences of these important professionals. Some of the highlights of the opinion poll include the following: l Only 32 percent of the agents polled carry cyber liability or data

security insurance, although more than 80 percent have either errors and omissions insurance or fidelity bonds or both. More than 80 percent say they train their employees regularly in both mortgage fraud and the handling sensitive borrower information, while only 64 percent train their staff in anti-money laundering (AML) rules and risks and 69 percent conduct training on Consumer Financial Protection Bureau (CFPB) rules and regulations. When asked how often their trust accounts were audited in the past 24 months, nearly a third of the attorneys polled replied “never” while 65 percent of title and escrow agents had been audited at least once with nearly 15 percent having been audited three or more times in that period. Vetting is the new watchword of the day for agents, as 83 percent of those polled indicated that they had experienced some sort of vendor management review in the past three months, with an increase in requests for background evaluations from lenders nationally. Twenty-three percent of these agents had been vetted by their underwriters, 21 percent by lenders directly, and the balance of 56 percent by third-party vendor management firms. Agents report business is down the past quarter, with 37 percent of agents seeing lower business volume in the past quarter, and only 11 percent seeing any revenue growth. Forty-two percent of those polled report no change from the second quarter of 2014. The mood for the first quarter of 2015, however, is positive. When asked about their confidence in the real estate market in 2015, 55 percent see positive growth ahead, while 26 percent see a tough year on the horizon for the

industry and 19 percent had no opinion.

Multifamily Lending Hits New Record Levels in 2013

n 2013, 2,898 different multifamily lenders provided a total of $172.5 billion in new mortgages for apartment buildings with five or more units, according to a report from the Mortgage Bankers Association (MBA). The 2013 dollar volume represents an 18 percent increase from 2012 levels. Sixty-two percent of the active lenders made five or fewer multifamily loans over the course of the year. “Multifamily lending hit a new record in 2013,” said Jamie Woodwell, MBA’s vice president of research and economics. “A strong appetite for loans led banks to increases multifamily lending by 19 percent, life companies to increase by 65 percent and the CMBS market to increase by 119 percent. The report shows increases in multifamily lending among both smaller and larger loan sizes and within most lender segments.” The MBA report is based on its surveys of the larger multifamily lenders and the recently released Home Mortgage Disclosure Act (HMDA) data that covers multifamily loans made by many smaller lenders, particularly commercial banks. The $172.5 billion of multifamily mortgages originated in 2013 went to a variety of investors. By dollar volume, the greatest share (39 percent of the total) went to commercial bank, thrift and credit union portfolios. The top five multifamily lenders in 2013 by dollar volume were JP Morgan Chase and Company, Wells Fargo, PNC Real Estate, CBRE Capital Markets Inc. and KeyBank. The MBA report is the most comprehensive view available of the multifamily lending market and includes: l A detailed summary of the $172.5

billion multifamily market, l Profiles of distinct market segments, including the very-small loan (loans of $1 million or less) lender segment, l A breakout of 2013 multifamily lending volume by investor group, l A listing of 2,898 lenders who made multifamily loans in 2013, including their lending volume, number of loans made and average loan size, and l A listing of metropolitan areas and the volume of very-small loans made in each in 2013.

HAMP Hacker Sentenced for Fannie Mae Data Breach

HAMP eligibility. As a result of these actions, Rajendran caused damage and loss to the site in the amount of $69,638. “Rajendran, a former federal IT contractor, crashed the functionality of www.CheckMyNPV.com which temporarily prevented struggling homeowners from using the site’s ‘net present value’ calculator to determine their eligibility for TARP’s housing program, HAMP,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “Those who stand in the way of homeowners getting the help they seek and need through HAMP will be held accountable and brought to justice by SIGTARP and our law enforcement partners.”

Nearly $20 Billion in U.S. Mortgage Apps Scarred by Fraud

CoreLogic has released its latest Mortgage Fraud Report, which found that at the end of the second quarter of 2014, the report shows a 3.2 percent year-over-year increase in fraud risk, as measured by the Mortgage Application Fraud Risk Index, and estimates that applications representing continued on page 16

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Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) has announced that Sathish Kumar Chandhun Rajendran of Sterling, Va., has been sentenced for engaging in unauthorized access to government servers that hosted a Fannie Mae Web site used to support federal mortgage loan modification programs, including the Home Affordable Modification Program (HAMP). U.S. District Judge T.S. Ellis III presided over the hearing, which took place in federal court in Alexandria, Va. Rajendran was sentenced to three years of supervised release and will be required to perform 50 hours of community service. Restitution was ordered in the amount of $69,638, and Rajendran was ordered to forfeit ownership of the laptop computer from which he accessed federal Web site servers without authorization. Rajendran was also ordered to write and publish online an article detailing the particulars of the offense, its seriousness, its effect on himself and his family, and why others should not engage in similar behavior. Rajendran was charged and pleaded guilty on July 10, 2014, to a onecount criminal information charging him with unauthorized access to a protected computer causing damage. In the plea agreement, Rajendran also agreed, for a period of three years following his conviction, to refrain from participating as an employee, contractor or subcontractor, in any government contract requiring clearance. According to court documents, Rajendran worked at Fannie Mae as an IT employee, and was assigned to the development of the www.CheckMyNPV.com Web site. The site was established under the DoddFrank Act by the U.S. Department of the Treasury and the U.S. Department of Housing & Urban Development (HUD) in conjunction

with the government’s Making Home Affordable (MHA) program. The online tool on the site, operated by Fannie Mae under the auspices of MHA, allowed homeowners to determine the net present value of their homes and check their eligibility to participate in HAMP, a federal program designed to prevent mass foreclosures. After being terminated from employment in August 2013, Rajendran repeatedly used administrator credentials to log into government servers and make unauthorized changes to the CheckMyNPV site, including disabling the site’s online tool for calculating the net present value of homes and for checking

Video Marketing Why Video Can Bring Your Brand Story to Life By Brian Karoff

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We sometimes forget why video is important to our marketing strategy. Back in 2008, I was visiting a film studio in San Rafael, Calif., the same studio where George Lucas made “Star Wars.” The studio executives and I went to see “Up in 3D.” We grabbed our popcorn and drinks, sat down in front of the big screen and put our polarized 3D glasses on during the ads. Oddly enough, we kept looking with and without our glasses to see if any of the ads were in 3D. There were none. Disappointed, we came up with the idea to produce 3D commercials prior to the feature. When pitching executives on the idea, it came down to the numbers and not enough theatres had rolled out 3D screens yet. Only three ads were produced in 3D prior to the release of one of the biggest 3D blockbusters of all time, “Avatar.” That was a massive missed opportunity for marketers and if you’re not producing video right now, you’re missing out. Video can help you emotionally connect with your audience. It gives a face to the brand, and it brings your message to life. The problem brands have with video is the understanding of production. From creative, scripting, storyboards, location scouting, set designs, crews, cameras, editing, graphics and so on. It seems like an expensive endeavor just to get started. Times have changed. It’s fairly inexpensive now to produce great content with the advent of smartphones, and now is the time to hedge forward and let the camera roll! YouTube is great for building an audience and earning subscribers, plus you can take up pixel space on the first page of Google because the search engine favors its sister company. Yet, just like my 3D experience, you need to make it contextually relevant and interesting for your audience. Video does wonders for real estate agents. So much so, they have gone as far as using drones to fly through homes to illustrate its features and benefits. Mortgage professionals have the opportunity to do the same. They just need a few creative ideas, a log line for your brand, and the willingness to put your message out there. Car dealerships utilize video very well to personally brand their sales reps and move inventory. Service shops now take videos of their inspections to show customers potential issues. What’s really powerful is a testimonial from a customer on video. There’s no greater message than a third-party unconditionally giving you and your company a personal recommendation on film. Introduce yourself, what you represent, how you got into the business, and why people should work with you. BetterLoanOfficers.com’s Founder and CEO Rene Rodriguez is producing a series called “Leadership and Influence” that will begin airing this month. Tune into www.mortgagenewsnetwork.com for more information. Brian Karoff is the digital marketing manager for BetterLoanOfficers.com, a powerful and easy-to-use online loan officer review management system. Loan officers can collect, manage and promote their views in order to build trust, secure more referral relationships and close more deals. Brian is a dynamic leader and entrepreneur working with business leaders and executives from all over the world. He has worked with Chet Holmes and Tony Robbins in producing the Ultimate Business Mastery System and consults clients on business growth through marketing and technology.

SPONSORED EDITORIAL

nmp news flash continued from page 15

approximately $3.3 billion in mortgage debt contained elements of fraud or serious misrepresentations in the second quarter of 2014. For the 12 months ending the second quarter 2014, the report estimates the total value of applications with fraud or serious misrepresentations at $19.8 billion. The analysis found that during the second quarter of 2014, approximately 11,100 mortgage applications, or 0.69 percent of all mortgage applications, contained elements of fraud, as compared with 19,700 or 0.67 percent in the second quarter of 2013, when the total application volume was substantially higher. The CoreLogic Mortgage Fraud Report analyzes the collective level of loan application fraud risk throughout the mortgage industry. The CoreLogic Mortgage Application Fraud Risk Index is based on residential mortgage loan applications processed by CoreLogic LoanSafe Fraud Manager, which includes a predictive fraud scoring technology. The report includes detailed data for six application fraud type indices that complement the national index: Employment, identity, income, occupancy, property and undisclosed debt. Among the highlights of the report: l Nationally, Florida experienced the highest year-over-year growth in mortgage application fraud risk; Arizona experienced the largest decline. l Of the six components in the CoreLogic Mortgage Application Fraud Type Indexes, property fraud risk had the largest yearover-year percentage increase at 3.3 percent; undisclosed debt risk showed the largest year-over-year decline at 22.7 percent. l As has been the case for the past four years, jumbo mortgages have exhibited the highest fraud risk, followed by low-downpayment mortgages. The year over year differences are likely driven to some extent by changes to market conditions including: l New government programs— notably the “ability to repay” rules that went into effect last January—that have placed additional scrutiny on debt and irregular income such as bonuses and rental payments; l Over 3.2 million additional singlefamily properties added to the rental market since 2006, increasing both the potential for occupancy fraud as well as the number of consumers showing rental income and multiple mortgages. l Deferred maintenance for some

properties and rapid appreciation for others leading to large discrepancies in value among nearby properties, increasing opportunities for incorrect valuation and fraud-for-profit schemes. This was most often the case in judicial foreclosure states and high vacancy areas. “Increasing home values have improved home equity, enabling many homeowners with previously marginal equity to purchase a different property, refinance, or obtain a cash-out home equity loan or HELOC,” said Michael Bradley, Ph.D., senior vice president of Analytics at CoreLogic. “Also, job creation, as well as the aging of negative credit report records from the beginning of the recession, have increased the number of consumers able to qualify for mortgages. Finally, more institutions are beginning to rely on advanced analytics to relax credit overlays and expand the credit envelope. All of these trends have expanded access to mortgage credit modestly with only a slight increase in fraud risk, as the CoreLogic Mortgage Fraud Report indicates.”

Fourteen Certified Mortgage Bankers Recognized by the MBA MBA Education, the award-winning education division of the Mortgage Bankers Association (MBA), recognized 14 individuals who earned the Certified Mortgage Banker (CMB) designation at a ceremony held at the MBA’s 101st Annual Convention & Expo in Las Vegas. Earning one’s CMB is the highest professional honor within the real estate finance industry. The 14 CMBs who received their designations this past calendar year will join a group of more than 1,200 industry professionals who have proven their commitment to excellence within the mortgage banking industry. “The knowledge that comes with the CMB accreditation is the most significant component of this honor because it positions one to navigate today’s ever-changing landscape,” said MBA Chairman Bill Cosgrove. “I applaud this year’s graduates and wish them luck in their continued career advancement.” CMB candidates must acquire 150 points earned through a combination of professional experience, secondary education, continuing education through MBA-sponsored events and MBA Education courses, as well as continued on page 39

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n National Mortgage Professional Magazine n NOVEMBER 2014

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Four Direct Mail Marketing Myths Busted By K. Justin Restaino Direct mail can be an effective tool for mortgage brokers looking to attract new clients. Unfortunately, there are a number of myths about direct mail that may be holding you back from using it. Below, we examine and dispel some of the most common myths that brokers have about direct mail: 1. Direct mail is dead While direct mail is often regarded as something ancient, its popularity has grown in recent years. For example, 20.8 percent of marketers in a recent survey said that they plan to spend more on direct mail in the upcoming year than they have in the past. More and more, brokers are discovering that direct mail is an effective way to attract new clients. 2. People don’t read direct mail A great deal of mortgage brokers secretly suspect that direct mail is ignored. However, studies show that the vast majority (81 percent) of direct mail is read or scanned. By contrast, only about 20 percent of e-mails are opened by potential customers. Effectively, this means that your direct mail piece is far more likely to be read than any email you might send.

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3. It costs too much to use direct mail Admittedly, direct mail is more expensive than e-mail. But with many mortgage brokers choosing to opt for postcard mailings, direct mail doesn’t have to be cost prohibitive and the return-on-investment (ROI) can be substantial. Consider the case of Riverside Mortgage, which promoted refinancing by sending postcards to homeowners. The company was so successful with the postcards, that it experienced a 2,500 percent ROI. 4. Direct mail is not the best medium for my target demographic If you are trying to capture first-time homebuyers, direct mail might be the way to go. According to a recent survey, people between the ages of 18 and 32 prefer receiving marketing offers via postal mail than through online sources. Furthermore, if you’re trying to promote reverse mortgages, direct mail is one of the most effective ways to reach senior citizens. Direct mail is not only a convenient method of reaching your target demographic, but it can also yield huge dividends. That being said, you may just want to give it a try when you formulate your next marketing campaign—the results might surprise you! K. Justin Restaino is vice president of Titan List & Mailing Services Inc. For more than 13 years, he has led Titan’s Mortgage Division, helping lenders of all capacities grow their businesses utilizing targeted direct mail. With a specialized focus in refinance and purchase markets, Restaino has the insight for proper data and mail application for success. He may be reached by phone at (800) 544-8060, ext. 204 or e-mail justin@titanlists.com.

new to market continued from page 12

More than 600 of the country’s largest lenders and appraisal management companies use the Mercury Network with more than 20,000 appraisal deliveries a day powered by the network. “We are always looking for ways to improve and streamline our operations through automation,” said Corey Dubnoff, chief administrative officer of American Financial Resources Inc., a lender that has recently started using Mercury and has been on CoesterVMS’ systems for three years. “Mercury and Coester offer great solutions and having the two integrated will help us improve how we respond to our customers as we have built a significant part of our valuation process into their systems.”

ValuTrac Announces Integration With FNC’s AppraisalPort Offering ValuTrac Software has announced the integration with FNC, a provider of real estate collateral information technology. ValuTrac has integrated directly with FNC’s AppraisalPort to seamlessly facilitate the appraisal portion of the loan process. The integration is designed to increase efficiency and mitigate risk for ValuTrac customers by automating complicated appraisal steps. “We are excited about working with our newest integration partner, FNC, and the trusted value they add to our customizable appraisal management platform,” said Clint Cornett, CEO of ValuTrac Software. “By partnering with FNC, our customers have more seamless electronic interface options, and ValuTrac takes another step in integrating innovative technology into a holistic platform to further streamline and mitigate risk throughout the lending value chain.” Mike Mitchell, chief strategy officer with FNC Inc., said, “FNC welcomes ValuTrac as an integrated settlement services provider on FNC’s AppraisalPort. FNC’s CMS platform clients will have the opportunity to benefit from this new valuation service provider option.”

Global DMS Releases New Mobile App for Appraisers

SPONSORED EDITORIAL

Global DMS, a provider of Web-based compliant valuation management software, announced that it launched Appraisal Tracking On Mobile (ATOM), an application that arms appraisers with robust functionality, instant access to information, and communication

capabilities that facilitates greater productivity in the field. ATOM gives appraisers easy access to Global DMS’ eTrac valuation management platform, which lenders, AMCs and other real estate entities rely on to compliantly automate their entire appraisal process. Using ATOM, appraisers can view their pipelines; accept and decline orders via their mobile device; see all open, closed and cancelled orders; update order status along with notations and conditions; contact borrowers to schedule inspection dates; and obtain directions to the property being appraised. “We want to do everything we can to make our clients and their customers’ jobs as easy as possible,” said Vladimir Bien-Aime, president and CEO of Global DMS. “ATOM is a very effective communication, workflow and task management tool that helps users who are on the go quickly and efficiently complete appraisals in full compliance using comprehensive mobile technology automation.” The design of ATOM also allows appraisers to drill down into to the details of all orders in their pipelines. Examples include the file number, borrower information, property address, lender, loan product, property type, client name and contact information, vendor fees, due dates and more. In addition, ATOM integrates with appraisers’ mobile devices and GPS to automatically synchronize their calendars with property inspection dates and times as well as other tasks, making the management of calendar appointments seamless and easy. ATOM also has an integrated help system for when appraisers have on-the-fly questions.

LoanLogics Upgrades Its LoanHD Tool

LoanLogics has announced that it has enhanced its LoanHD platform with a fully automated signature clipping tool, SignaFacts, that provides visual validation of execution and easy comparison of signatures. The types of documents evaluated by this tool include, but are not limited to, the Good Faith Estimate (GFE), Truth-in-Lending disclosure, mortgage note, deed of trust and U.S. Department of Housing & Urban Development (HUD) endorsement. “Because of this enhancement, the actual signatures can be audited, and when there are dissimilar signatures, it will be readily apparent. Until now, underwriters and auditors did not have a reliable method to quickly and easily inspect signatures side-by-side, which continued on page 61

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NAMB PERSPECTIVE The President’s Corner: November 2014 It’s hard to believe not every mortgage professional is member of NAMB—The Association of Mortgage Professionals. As I think about all of the challenges we face every day, I am so glad there is NAMB. I don’t say this because I am president of the association … I have paid my dues since 1986. I know what it is like to operate without the power of community. It wasn’t until the early 1990s that NAMB had enough credibility to make a difference and what a difference it has made! As mort-

gage originators and account executives, we have prospered. Some originators have gone on to create huge companies, while others have done very well just being one-person shops. This is a good business that provides a valuable service, despite the trials we face. NAMB is there to help give the industry structure. We bring wholesale and correspondent lenders into a relationship with smaller companies. Our trade shows and magazine specialize in this. But these avenues bring so much more to you. The wonderful seminars and articles keep you informed, and if you

Grassroots Growth of the Mortgage Professional By Fred Kreger, CMC

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This month, I thought that I would bring you all up to speed and introduce NAMB’s focus on a Grassroots Strategy. So you hear the word “grassroots” and what comes to mind for you? Is it walking your political district to get agreement with common goals? Is getting fellow industry partners and originators to advocate on behalf of the clients you all serve? It is both and more. What is the etymology of this word “grassroots?” Figuratively it is “at the fundamental level.” In political sense, it is the “rank and file of the electorate.” When NAMB calls something a “grassroots strategy,” we are talking about the basic fundamental approach to get our talking points out to the masses: The local, state and federal elected officials. The goal of this Grassroots Strategy is to establish NAMB members to organize in order to have a relationship with “Key Members” of the U.S. House and Senate that affect our business on a day-to-day and year-to-year basis. The fostering of these relationships will allow NAMB and its members to respond to “Call to Action” items quicker and more efficient. This strategy will also enable NAMB be thought of as the de facto association to initiate new legislation to solve new and future housing issues. This strategy will also assist in our member meetings in D.C. during NAMB’s Spring Government Affairs Conference. By identifying these constituent congressional members and their staff of legislative aides, the NAMB Grassroots Team will be able to respond

quicker because relationships will have already been established so that NAMB members will not have to double sell our positions and channels of direct communication with the Congressional member and their staffers has been established. (i.e. who we are and what NAMB does). I need all of you to help me with this strategy. Everyone reading I hope is inspired to take this strategy and run with it in your local area. It is about gratitude and you need know that you are part of something bigger. I will talk about the word “gratitude” next month. Here are some of the basic outline steps to the strategy: l Identify key members of the U.S. House of Representatives Financial Services and Senate Banking Committees that have been influential and “friendly” to mortgage originators. These members are our first level of discussions with NAMB member constituents and enable them to be introduced as the key point of contact within NAMB housing goals. l Deliver key talking points to the NAMB’s Grassroots Member Team. l Identify congressional key players that may not necessarily be on the House Financial Services or Senate Banking Committees, but have originated or co-sponsored housing related bills. l Once all congressional members are identified, create a script and talking points for NAMB members to originate in district meetings as the con-

avail yourself of them, you will become a better originator, processor or underwriter. You will learn from top speakers at NAMB events. I attended the Southwest Chapter of the Florida Association of Mortgage Professionals (FAMP) Monthly Meeting recently and walked away with invaluable information. As I looked around at the small crowd, I thought to myself, “How do people who are not here exist?” Valerie Saunders delivered a tremendous presentation on the new mortgage disclosures coming out next year. I cannot imagine being totally unprepared for all of this complexity. I suppose many originators will just rely on someone else in their company or a wholesale lender to deal with it. That makes me wonder: What kind of com-

pany would not push their employees to learn all they can? I regularly see huge mistakes being made by people who take the approach of letting someone else figure it out for them. Sadly, there are people who are reading this who are not members of NAMB. They are satisfied being less than their peers. It is never too late to change that and build your knowledge and skills, and NAMB membership is a great place to start.

gressional member’s constituent. This will reinforce the relationship between NAMB and the congressional member.

be forwarded to Congressional members by their NAMB Key Contacts.

l Create collateral with NAMB talking points to support and continuously reinforce NAMB Government Affairs Strategy and distribute during district days for Congressional members. l Establish quarterly in-district lobby days for all NAMB members to visit their respective Congressional members. These meetings will initially be to create relationships that have not been established and reinforce those already forged. All talking points and NAMB position papers will be distributed at this time. Along with an “I Am the Housing Expert” NAMB card. l Establish an emergency e-mail distribution list to respond to Calls to Action, receive key pieces of data or overall feed of information that can

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

l Establish a blog, Twitter feed, and/or LinkedIn account for this group that will distribute key housing information to Congressional members. Your NAMB Government Affairs Team is hard at work to ensure that you become an advocate for every stakeholder in the mortgage industry. I thank you all for your continued support and dedication to your industry. Fred Kreger, CMC is the branch manager at American Family Funding, a Division of American Pacific Mortgage. He is also a past statewide president of the California Association of Mortgage Professionals (CAMP) and currently is the vice president and Government Affairs vice chairman for NAMB—The Association of Mortgage Professionals. He may be reached by phone at (661) 505-4311 or e-mail fred.kreger@affloans.com.

A Message From NAMB CEO Donald J. Frommeyer As I start this next year as chief executive officer of NAMB, I must admit that as your NAMB president, I was working 40 hours a week in my job and 40 hours a week as the NAMB president. And now, current NAMB President John Councilman is working those hours. He has been very active with all of the association’s committees and getting adjusted to his new job. I can tell you

this, he has had this job as president for about 45 days and he has jumped right in. I look forward to the next 11 months as he is really working to keep membership going and the committees on their toes. Good job John! Donald J. Frommeyer, CRMS is chief executive officer for NAMB—The Association of Mortgage Professional. He may be reached by e-mail at namb.ceo@namb.org.

NAMB PERSPECTIVE Will the FHFA and FHA Really Open the Credit Box? By John Councilman, CMC, CRMS

By Rocke Andrews, CMC, CRMS

NAMB—The Association of Mortgage Professionals has entered into a partnership with Americas Homeowner Alliance (AHA). AHA’s mission statement is “To Protect and Promote Sustainable Homeownership for ALL Segments of America.” The AHA serves as the advocate voice of homeowners and aspiring homeowners. The AHA protects against policies that do not promote sustainable homeownership, while offering a Member

Rewards Program created to help you save money. Explore AHA’s Web site at www.myaha.com, to learn more about their mission and benefits available. AHA’s goals closely align with those of mortgage originators. Their belief is the American homeowner was the only one without a voice in Washington, D.C. during the housing crisis for the last few years. Their aim is to get enough members to have a voice in D.C. to make sure that homeowners’ interests are represented in rule-making and legislation. They believe many current and proposed public and business policies are in conflict with their mission of protecting and promoting sustainable home-

ownership for all segments of America. The mortgage interest deduction— until only recently considered untouchable by policy-makers—is on the table for potential significant reduction or elimination. Interest rates are at historic lows, yet the availability of low downpayment, affordable credit is excessively tight and getting tighter. The outcome of the debate of the government’s role in housing finance will determine the availability of a 30-year fixed-rate mortgage (FRM)—the cornerstone of homeownership in America. Fees associated with obtaining a mortgage are ever-increasing and the tightening of credit is making it very difficult for many would-be homeowners to obtain approval. As of 2012, the federal government—

through the FHA, Fannie Mae and Freddie Mac—provided access to more than 90 percent of mortgage finance. This trend must be reversed to ensure that homeowners have access to private free market sources of capital, balanced by modest government support as needed. Homebuilders in America do not have access to adequate acquisition, development and construction financing, leading to a shortage of housing units in America. Many prepared to purchase a home are finding themselves “boxed-out” by programs that give the advantage to institutional investors over owner-occupants. These investors may have less regard for the stability of neighborhoods than do owner-occupant homeowners.

John Councilman, CMC, CRMS of AMC Mortgage Corporation in Ft. Myers, Fla. is president of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (239) 267-2400 or email jlc@amcmortgage.com.

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Where Do We Go From Here?

them was not accurate and did not provide complete guidance. Castro intends to continue encouraging lenders to make FHA loans by making certain the guidelines are clear and up to date. Defects will be streamlined to a far smaller number that lenders can more easily address. To encourage lenders to make loans to borrowers with lower credit scores, the FHA will no longer compare lenders working only with high score borrowers to those who primarily serve lower score borrowers. Each will have its own metric based on the types of borrowers they serve. Castro promised that Ginnie Mae will be working to give smaller lenders more access to the market. There already seems to be a disconnect here since Ginnie Mae just announced sizable increases in its net worth requirements. Over the last month, there have been rumors that the FHA may reduce its mortgage insurance premiums now that the agency’s finances are mending. A proposal has already been floated to lower them for borrowers who take housing counseling. Overall, it appears we have an administrative change of course. Rather than further restricting the credit policies of the GSEs and the FHA, they appear to be headed for a larger share of the market. The promises are hardly radical, but they certainly send a signal that governmentrelated lending is going to be easier rather than more restrictive in the near future.

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Recently, the new and really, the first Senateconfirmed Federal Housing Finance Agency (FHFA) head, Mel Watt, promised to loosen credit for borrowers. That is a tall promise, but not an unexpected one from the former congressman. Watt’s predecessor, Edward DeMarco, was very clearly a conservative. DeMarco flatly refused to write down underwater mortgages through principal reductions. On the other hand, Watt, as a Democratic congressman, was outspoken in favor of them. Interestingly, more recently, Watt says he hasn’t decided on them yet. DeMarco was working to shrink the dominion of the government-sponsored enterprises (GSEs), a stated goal of the Obama Administration. Recently, Watt said he is still committed to winding down both Fannie Mae and Freddie Mac. Earlier this year, the president had introduced legislation to wind down the GSEs and replace them with a more privatized system. In seeming contradiction to those goals, the new FHFA head has plans to expand certain GSE programs. Undoubtedly, if Watt opens the credit standards of the GSEs, they will increase their market share and make their demise much more difficult. Perhaps eliminating the GSEs is a political impossibility, so why not use them? It’s interesting to look back at what the Obama Administration presented to Congress in 2011 in its report titled, “Reforming America’s Housing Finance

Market.” The report called for increasing pricing for Fannie Mae and Freddie Mac loans to encourage private capital to lend. There was to be a reduction in conforming loan limits, a possible 10 percent downpayment requirement and the eventual wind-down. That sounds as far removed from Mel Watt’s recent speech as north is from south. Also in the report was a proposal to return the Federal Housing Administration (FHA) to its traditional role of providing loans for the less affluent below the median income and by lowering loan limits. The FHA Commissioner even promised to cut FHA’s loan-to-value (LTV) ratio. FHA’s premiums were sharply increased to recapitalize it and provide room for private mortgage insurance (PMI). That is also somewhat different than the talk on expansion that HUD Secretary Julian Castro presented. What a difference three years makes! Keeping all of that in mind, we must assume that Fannie, Freddie and the FHA are on an entirely different track than a few years ago. It hasn’t gone unnoticed that the GSEs have become very profitable, and even FHA’s fund is reported to be recovering faster than originally thought. Private capital has not returned to any significant extent. Therefore, I believe the thought process in Washington, D.C. is: “Perhaps we should change our thinking about them.” After all, the GSEs have been making a lot of money and providing the financing that the housing market desperately needs. Let’s look at what is being proposed for Fannie and Freddie. First, there are

those who are still underwater or facing foreclosure. Watt was a big advocate of principal write-downs prior to taking office at the FHFA. Since taking office, he has been non-committal. This recent speech indicates he is swinging in favor of borrowers. One area that could open credit without changing any guidelines would be to soften reps and warranties. That will definitely spur lenders to write more loans that could potentially have a few delinquencies in the first three years. Better defining what will trigger a repurchase could also lead to more loans being made. Insignificant violations of guidelines are a primary worry for lenders. Only requiring repurchase or compensatory fees for violations that were directly related to non-performance would make it easier for borrowers to obtain loans. Trivial details have derailed more than a few loans. One proposal that has raised concerns from conservatives is the return to loans with only a three percent downpayment. This will be unveiled soon, perhaps by the time this article is released. Watt believes that with the appropriate guidelines, these loans can perform well. He has good reason to believe that considering how well VA and USDA loans perform without any downpayment. Could we eventually return to a Fannie Mae/Freddie Mac 100 program? The recent messages from HUD Secretary Castro mirror Watt’s comments to increase mortgage lending through the FHA. There is no indication of a pull-back such as lower LTVs or cutting the seller contribution. Instead, Castro indicates he wants to make it easier to work with the FHA. The HUD Handbooks were woefully outdated. Lenders were often concerned that information contained in

NAMB PERSPECTIVE where do we go from here continued from page 21

In the hopes of partnering and capitalizing on NAMB’s membership AHA is offering a free first year membership to NAMB members and their customers. You receive a code and can enroll all of your customers for a free membership. Once enrolled, they can receive online discounts to numerous major retailers, such as Home Depot, Sears, Crate & Barrel, Ace Hardware, Office Depot,

Verizon, UPS, Best Buy, Apple, Marriott, Southwest Airlines, Target, Kmart, Bed Bath & Beyond, Walgreens, Macy’s, AutoZone, iTunes, AT&T, Banana Republic, Nordstrom, Sam’s Club, BJ’s, Bloomingdales, JCPenney, Linens-NThings, Pier 1 Imports, and more than 1,000 additional merchants. They receive discounts as well as points that can be utilized for rewards,

as well as towards their next year’s membership. If they use this benefit, it is likely they will not ever have to pay a fee to belong to AHA while benefitting from their representation in Washington, D.C. This is a great benefit for NAMB members to give to their customers, as well as a great marketing tool to contact your previous customers. Send them an e-mail or call them and enroll them over the phone while asking if they have questions about their mortgage or if they know of anyone looking to buy a home. This is a win-win benefit for NAMB, our

member’s customers, as well as the American homeowner. Please visit the NAMB Web site at www.namb.org for details. This information should be available by Nov. 15. In the meantime, e-mail me at randrews@lendingarizona.net if you want details to get started now. Rocke Andrews, CMC, CRMS of Lending Arizona LLC in Tucson, Ariz. is presidentelect of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (520) 886-7283 or email randrews@lendingarizona.net.

The NAMB Certification Program

General Mortgage Associate

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

Alabama Linda McCoy, CRMS Penny H. Phillips, CRMS

Stanley Y. Wang, CMC, CRMS Linda M. Wright, CMC

Arkansas Shane Lester, CMC, CRMS

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

Colorado Arizona Rocke Andrews, CMC, CRMS Cal Carlson, CMC, CRMS Bert Carpenter, CMC, CRMS, GMA Randall E. Hotchkiss, CMC William R. Howe, CMC, CRMS Brian Jacenko, CMC Ross Jameson, CMC Gilda Kemp, CRMS Gary G. Kiehlbaugh, CRMS Hratch K. Panosian, CMC Joseph P. Paonessa, CMC Mark L. Ross, CMC, CRMS Gary N. Smith, CMC

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

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

District of Columbia Diane B. Cook, CRMS Jan Hix, CMC

Certified Residential Mortgage Specialist

Certified Mortgage Consultant

Florida

Indiana

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

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

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

Georgia

Kansas

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

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

Hawaii

Nicolas M. Ellis, CMC, CRMS

Donna Dodd, CRMS Patricia K. Morimoto, CMC Glenn Takasato, CMC Barbara Welsh, CMC

Michael Anderson, CRMS Tracy Lynn West, GMA

Kentucky Louisiana

Illinois

Maine

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

Elizabeth Monaghan, CMC

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

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

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

Minnesota Jason Decker, CRMS

NAMB PERSPECTIVE Christopher Dueffert, CRMS Shannon Roepke, CRMS Jayne B. Sims, CRMS J.J. Sims, CRMS

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

Missouri Andrew Conner, CRMS

Tennessee Sheila Lipman, CRMS Brian C. Short, CMC, CRMS, GMA

Texas Harry H. Dinham, CMC John H. Hudson, CRMS Jolene Jaehne, GMA Olga Kucerak, CRMS Karl LeBlanc, CRMS Henry Lesmeister, CRMS Stacy London, CMC Terry J. Morrow, CMC Robin C. Morton, CRMS

Jim Pair, CMC William Parker, CMC, CRMS Jerry Rutledge, CMC April Schummer, CRMS Jeffrey Shealey, GMA

Richard L. Gilbert, CRMS David E. Shelor, CRMS

Washington

Utah

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

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

Marc Savitt, CRMS

West Virginia

Virginia

Wisconsin

Bernice Brown, CRMS Jason Crigler, CRMS

John L. Stearns, CMC, CRMS

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

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

Nebraska Brent Rasmussen, CRMS

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

New Jersey Richard L. Jarocki, CMC

New Mexico Ginger Bell, CRMS Wes Moore, CRMS

New York

thing from compliance to credit reports, lead generation, payroll, phone service, social media, custom canvas prints for your ofﬁce or home, and much more! Additionally, every time you use a NAMB+ Endorsed Provider you are supporting your industry trade association – NAMB, The Association of Mortgage Professionals. I urge each of you to visit NAMBPlus.com today, as that is the only place you can go to ﬁnd out about all of the amazing offers from every NAMB+ Endorsed Provider!

John G. Stevens, CRMS, President NAMB+, Inc. John@JohnGStevens.com NAMBPlus.com See below for a complete listing of the current NAMB+ Endorsed Providers and visit NAMBPlus.com for more information.

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

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

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

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

South Carolina James Taylor, CMC

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

NAMB members receive a 19% discount for CopyTalk services.

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Ohio

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

Dear Mortgage Professional, 2014 is quickly coming to a close and, if you’re like me, you are already starting to make plans and preparations for the New Year ahead. This is a great time to evaluate the relationships you have with outside service providers to make sure you are getting the most value for your money, as well as the highest quality service. Shopping around for new service providers or negotiating better pricing can seem like a daunting task to undertake in the midst of everything else you are responsible for. However, this is where NAMB+ can and should be a huge asset to you and your business. NAMB+ has built and continues to grow its list of Endorsed Providers. These companies have been specifically identified by NAMB+ as leading providers of products or services for mortgage professionals, like you. What’s more, NAMB+ has already negotiated with each of these Endorsed Providers to arrange for special pricing, discounts, unique products/service offerings, and other special benefits for NAMB Members. NAMB+ Endorsed Providers can help you on a daily basis with every-

What Boy Scouts Can Teach You About Success in

Mortgage Lending

NOVEMBER 2014 n National Mortgage Professional Magazine n

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By Bubba Mills When I was growing up in Oceanside, Calif. as an only child to a single mother—both of us staying afloat on love and food stamps— something good happened to me. My grandfather introduced me to the Boy Scouts of America. It was the lifeline I needed. Troop 750 taught me many of the life lessons I use every day—to this very day. In fact, I regularly share those same lessons with groups when I speak publicly. And today, I’d like to share them with you. Let’s start with the Scout law which reads: “A Scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent.” I’d say you could do a lot worse if you substituted scout with mortgage lender in that sentence. Not much to argue with there. But again, this is just the start. Here are six more key values all mortgage lenders can tap to be better at their jobs.

1. Seek advancement The Boy Scouts are experts at helping kids improve themselves. You’ve likely heard about all the merit badges they can earn. These badges help scouts develop physical skills, social skills and self-reliance— and in so doing—the kids get a healthy dose of self-confidence. So, let me ask you this: If you’re not taking continuing education courses, why not?

2. Help your community It’s the image seared in our brains: The devout Boy Scout helping the old lady across the street. Community service is an essential part of the scouts and it should be for you, too. You make your living from your community so it’s only natural that you give back to it. Please take time to assess if you’re giving enough time and money back to yours. If not, get busy.

3. Be adventuresome Scouts explore new ideas and embark on innovative adventures that let them face their fears of the unknown and then conquer those fears. How many of these kids had experience rock climbing, rappelling or whitewa-

ter rafting before the Scouts? Few if any at all. But that didn’t stop them from jumping in feet first. What a great lesson for those in the mortgage brokerage business. If you’re afraid of doing something, get over it. Be bold. Be strong. Do it!

4. Be prepared That’s the motto we’ve all heard many times. But being prepared for what? For Scouts, it’s about getting prepared for adulthood and life. And in the mortgage industry, it’s about being prepared for all the ebbs and flows that are inevitable. Be prepared and always have a business plan, especially for the lean times.

5. Know it’s always about the group One of the first lessons I learned when I joined the Scouts at the age of seven was that my actions were a direct reflection of the entire group. When someone got booted from the Boy Scouts, it wasn’t the organization that kicked him out, it was his peers in his troop. Realize that you are part of a team with your fellow brokers, real

estate agents, attorneys and many others. So always do your best.

6. Get outdoors It’s probably the first picture that comes to mind when you think of a Boy Scout … being outside building a fire, camping and hiking. I like to compare this to real estate agents because it’s a fine reminder for you to get out of your office and get some new business. Hold a mortgage seminar. Give a talk on the industry to a civic group. The business isn’t coming to you, you must go to it. So get to it! Let me hear from you. What can you learn from the Boy Scouts? Do you need to work on advancement? What continuing education have you been putting off? What about community service? Is there a local non-profit that’s a good fit for you and your interests? Please send any comments or questions to article@corcorancoaching.com or visit www.facebook.com/CorcoranCoaching. Bubba Mills is executive vice president of Corcoran Consulting & Coaching Inc. He may be reached by phone at (800) 9578353 or visit www.corcorancoaching.com.

Wednesday, December 10, 2014 Atlantic City Convention Center • Atlantic City, New Jersey 11:30am - 1:30pm

If You Could Ask a TOP Producer ONE Question, WHAT WOULD IT BE?

Jennifer Du Plessis Jen has consistently generated over $1 million in personal annual revenue as a top loan originator over the past 20 years. Jen and her team have been named in the top 200 list of loan originators in the US. She'll share her systems, structure and implementation strategies. You'll walk away with some great tips to build, structure and lead a high performance team!

Steve Grossman Many Loan Originators have appeared on the industry’s Top 200 list over the past 20 years, 25 but very few have appeared more than 15 times. Steve is one of the few originators who has done so. He's consistently achieved high volume in any market, while managing a team of 80 LO's. Learn how he does it!

Brent Hicks Brent Hicks has been consistently ranked as one of the top 50 loan originators in the US. He has more than 15 years experience in leading and building sales organizations. Brent is an expert in using technology to create efficient back office systems and cutting edge marketing campaigns. You'll learn how to save time while connecting better with clients and referral partners! Craig Strent Craig Strent is regularly turned to by the local and national media for his opinion on mortgage trends. He is one of the few originators who has appeared in the mortgage industry's Top 200 list over 10 times. Craig has originated well over $1 billion in loan volume in his career, with most loans coming from Financial Planners, Database Management, Divorce Attorney & CPA’s. Craig has done all of this while building an Inc 5000 Mortgage Company and managing a team of loan officers. You won't want to miss his insights!

MODERATED BY Gibran Nicholas Founder, Chairman and CEO of CMPS Institute, an organization that has trained, coached and certified over 7,000 of the nation's top loan originators since 2005

Ready to learn, network and get inspired?

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You'll walk away with: l Clear direction on what to do next to grow your business l 60-day plan of action that you can implement right away l Practical insights and inspiration from some of the nation's most successful loan originators

Scott Forman Scott is one of the nation's most productive loan originators, having grown his personal income from $300,000 to over $3,000,000 in four years. Scott also leads a team of 15 loan originators. Scott is a National Mortgage Training Coach with The CORE Training, a Certified Mortgage Planning Specialist, Certified Senior Advisor, Certified Military Housing Specialist and Certified Reverse Mortgage Planner. Scott is a contributor to the WCBS / Wall Street Journal Report. His insights will help you focus on the right activities to skyrocket your production!

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Join us at the ﬁrst ever Top Producer Round Table™ where we'll have live Q and A with some of the nation's most successful loan originators. We'll answer some of your toughest questions like: l How to STOP getting rate shopped, and how to stand apart from the 520,000 other loan officers selling mortgages l When to hire an assistant, and what job functions your assistant(s) should perform l How to compete more effectively with in-house lenders and MSAs l How to take your business to the next level by working with CPAs, attorneys and financial planners

SPEAKERS

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Using Energy Efficiency to Push Ho By Phil Hall ith October having wrapped as “National Energy Awareness Month,” a survey by WalletHub sought to identify the nation’s most energy efficient states. The results of this survey, according to industry professionals, could confirm the power of energy efficiency in driving home sales. WalletHub considered “homerelated energy efficiency” by calculating the ratio between the total residential energy consumption and annual degree days–WalletHub noted the average “American household spends more than $2,200 a year on energy bills, almost half of which goes to heating and cooling expenses.” A “car-related energy efficiency” measurement, obtained via the annual vehicle miles driven by the gallons of gasoline consumed, was also factored in.

In overall ranking, Vermont topped WalletHub’s list as the most energy efficient state in the U.S., followed in the top 10 by New York, Wisconsin, California, Rhode Island, Minnesota, Colorado, Utah, Maine and Michigan. South Carolina came in last on WalletHub’s listing; Alaska, Hawaii and the District of Columbia were not included in the study due to data limitations. For Chris West, proprietor of Eco Homes of Vermont LLC and the president-elect of the Home Builders and Remodelers Association of Northern Vermont, the WalletHub survey exposes some extreme contradictions in the Green Mountain State’s housing market. “Vermont has the oldest existing stock in the country,” West said. “Ninety-seven percent of the houses are old, leaky and not very efficient. And we’re in a part of the country with some of the toughest winters. But in terms of new building,

Vermont has been, per capita, the leader in building passive houses and high performance houses that use 90 percent less energy to heat and cool than the standard housing code.” West is also a certified passive housing consultant, and he has seen a dramatic increase in local interest in this European-derived standard for ensuring low-energy consumption. “Since I began my company four years ago, this has been my busiest year,” West stated, adding that Vermont saw its first passive house constructed only four year ago. “So far, I have seven projects and I have people waiting in line to talk to me. Before, I was getting one person per year.” While West acknowledged that an energy efficient property is helpful for those seeking to sell existing homes, many of the upgrades being done across Vermont now are based on economics and meteorology. “People living in these houses are

seeing fuel prices increase, colder winters and more expenses,” he said. “That encourages them to make their homes more efficiency.” West pointed to the state agency Efficiency Vermont has playing a major role in connecting homeowners (as well as commercial real estate owners) in reducing their energy costs. Maura Collins, director of policy and administration with the Vermont Housing Finance Agency (VHFA), noted that the state’s building code on new construction placed a major priority on energy efficiency. “We have a relatively high current standard of what is required,” Collins said. “The state aggressively put policies in place that ensured homes coming into the market are very energy efficient.” Todd Leach, vice president of Leach Construction of Vermont LLC and past president of the Home Builders and Remodelers Association

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© Copyright 2007-2014 Carrington Mortgage Services, LLC headquartered at 1610 E. Saint Andrew Place, Suite B150, Santa Ana, CA 92705. Toll Free (800)561-4567. NMLS ID 2600. Nationwide Mortgage Licensing System (NMLS) Consumer Access Web Site: www.nmlsconsumeraccess.org. AZ: Mortgage Banker BK-0910745; 2159 McCulloch Blvd 4, Lake Havasu City, AZ 86403. CA: Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, File No. 413 0904. CO: Check the license status of your mortgage loan originator at http://www.dora.state.co.us/real-estate/index.htm. GA: Georgia Residential Mortgage Licensee 22721. IL: Illinois Residential Mortgage Licensee. MN: This is not an offer to enter into an interest rate lock agreement under Minnesota Law. MO: Residential Mortgage Broker License 09-1746-S. NH: Licensed by the New Hampshire Banking Department. NJ: Licensed by the N.J. Department of Banking and Insurance. NY: Licensed Mortgage Banker—NYS Department of Financial Services. New York Mortgage Banker License B500980/107664. OH: Ohio Mortgage Broker Act Mortgage Banker Exemption MBMB.850208.000 (FHA DE & VA Automatic loans only) OR: Mortgage Lender License ML-4886. PA: Licensed by the Department of Banking. RI: Rhode Island Licensed Lender, Lender License 20112809LL. VA: Licensed by the Virginia State Corporation Commission MC-5382. WA: Consumer Loan License CL-2600. Also licensed in AL, AR, CT, DE, DC, FL, ID, IN, ME, MD, MI, NM, NC, OK, SC, TN, TX, WV and WI. All rights reserved.

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Carolina Real Estate Investors LLC in Donalds, S.C. “Most of the people buying homes are trying to find properties with the newer heat pumps.” “It is a critical component in today’s environment,” said Joe Dahleen, senior vice president at Seattle-based Primary Capital Mortgage. “Over 80 percent of housing is more than 20-years-old. This is important for anyone thinking of moving up or moving down. Their houses are going to need to have energy efficiency improvements to get the right buyers.” Dahleen added that energy efficiency is especially important for ecoconscious younger consumers who make their green statements via hybrid automobiles and other lifestyle choices. “This is not a demand anymore,” he said about energy efficient properties. “It is what is expected.” However, Chris Sorensen, director of mergers and acquisitions at Corona, Calif.-based Paramount Residential Mortgage Group Inc. (PRMG) and author of Financial Sense to White Picket Fence, noted that this subject is not without its hiccups. “Surveys reveal that at least on paper, buyers want energy efficient homes and to a point, are willing to pay for them,” Sorensen said. “The NAHB survey asserts average buyers are look for an ROI of 14 percent, meaning they’ll pay an additional $7,000 for an annual savings of $1,000. First time buyers require a more robust 16 percent ROI. The Shelton Group did a survey back in 2009 that asked homeowners how they would spend $10,000 on their home if given the money, the majority chose remodeling their kitchen or bath, not insulation, or energy efficient windows. So, while we claim we want energy efficient homes, we’re likely to sacrifice such for beauty.” Sorensen added that federal and state intervention will play a key role of Northern Vermont, has empha- in driving energy efficiency standards sized the energy efficiency in the new in housing. homes his company has designed and “Because of this, government regubuilt in the state. He also noted that lation has become the weapon of homebuyers are not viewing this type choice for environmentalist,” of property for potential flipping. Sorensen continued. “By imposing “These buyers are seeking houses regulation, homebuilders will be for the long-term–not one of our forced to comply and homebuyers houses that has been resold in the will be forced to pay, once again. last 15 years we’ve been doing this,” Most accept this is ultimately a good Leach said. “The customers are usual- thing—if not for the environment, ly young professionals with expand- then for one’s wallet on a month by ing families. They want to stay in the month cash flow basis. An extra area and are willing to invest in $10,000 spent on a home spread out house, not just as a commodity that over a 30-year mortgage is insignifithey can turn around and trade in cant by comparison to the monthly after a few years.” savings in energy cost. This fact, couBut the push for improved energy pled by public perception, will indeed efficiency in housing is more than continue to have a greater and just a Vermont fad. Even in South greater impact on what homes conCarolina, the last-place entry in the sumers buy.” WalletHub list, homebuyers have an eye on the energy efficiency of a Phil Hall is managing editor of potential property. National Mortgage Professional “It makes a huge impact,” said Magazine. He may be reached by e-mail Debbie Crow, broker with South at philh@nmpmediacorp.com.

Catch Mortgage F By Greg Holmes When I was a kid, my grandfather used to take me fishing. Sometimes we would catch and release, and other times we would bring home fish to enjoy that night for dinner. As I grew older, I realized that our success was determined by our level of preparedness—was the lake we were fishing known for pan fish, did we have the proper bait, was it the right time of day, were we fishing in an area that fish frequent, such as in the branches of fallen trees? I found that if we could answer yes to those questions, we were probably going to have a productive day. But, if we took a more relaxed approach, we might have gotten lucky—heck, even a blind squirrel catches a nut sometimes—but more than likely we spent the day frustrated and looking for nibbles. Catching mortgage fraud is a lot like fishing—before you can begin to hook it, you first need to know what types of fraud are most common and where it is most prevalent. Once you know what you’re looking for, the proper tools will help you reel in illegal activity.

Mortgage fraud is still bobbing along

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According to the FBI, numbers of pending mortgage fraud cases dropped a little between 2011 and 2012. But that’s no cause for celebration. Numbers still remain high and, in fact, distressed homeowner fraud has replaced loan origination fraud as the most visible threat to the mortgage industry. In fact, some 94 percent of all incidents reported to the most recent LexisNexis Mortgage Industry Data Exchange (MIDEX) in 2012 were for loans originated prior to 2012.1 Even though borrowers face up to 30 years in federal prison and a $1 million fine, or both, if caught and convicted, those potential penalties aren’t deterrent enough for some people. While there are many different types of mortgage fraud, some are more common than others. These include employment fraud, income fraud, occupancy fraud, and illegal flipping. The LexisNexis report showed that of all loans investigated in 2012, 69 percent of those investigated showed some type of application misrepresentation or fraud— this is a five-year high. Of loans that originated in 2012, 61 percent of loans showed application misrepresentation or fraud. Application fraud and misrepresentation includes, but is not limited to: Incorrect name(s) used for the borrower(s); misrepresentation about occupancy, income, employment, debt, or assets; different signature(s) for a name; invalid Social Security Number(s); misrepresented citizen/alien status; incorrect address or address history; and incorrect transaction type. Income fraud, when a borrower inflates his/her income on the mortgage application, was one of the causes of the 2008 mortgage crisis. At that time, borrowers were allowed to qualify for mortgages using stated income, without underwriting to verify that income. New underwriting regulations have made it more difficult to commit mortgage fraud, but it still exists. In a recent high-profile case, a husband and wife were recently convicted of fraud charges for submitting falsified loan applications in order to get $5 million in mortgages and construction loans. The wife, who was unemployed, submitted fake W-2 forms and claimed to be employed as a real estate agent with an income of $15,000/month.

Cast a wide net According to Fannie Mae,2 inconsistencies in a loan file are often a tip-off that the file contains misrepresentations. The presence of such inconsistencies doesn’t necessarily mean that the borrower’s intent was to commit fraud, but it may. The more aware a lender is of the red flags to look for, the less likely they will find their organization sinking under the weight of unrecognized mortgage fraud. Common, highlevel red flags include: l Social security number discrepancies within the loan file l Address discrepancies within the loan file l Verifications addressed to a specific party’s attention l Verifications completed on the same day they were ordered l Verifications completed on weekend or holiday l Documentation that includes deletions, correction fluid, or other alteration l Numbers on the documentation appear to be “squeezed” due to alteration l Different handwriting or type styles within a document l An excessive number of Automated Underwriting Systems (AUS) submissions

Reel in fraud with the right gear Many types of fraud schemes operate just under the surface, evading detection because they aren’t obvious to the naked eye. To combat this, many companies, including Credit Plus, Inc., are now offering products and tools to help mortgage

Fraud Before It Sinks You professionals uncover mortgage fraud before it pulls them under. The use of technology makes it easy for lenders to quickly verify data, perform a thorough risk assessment on each applicant, and detect problems with applications. Information is collected from various sources, including data providers, government services, validating companies, public records, and more. One of the key benefits is that lenders can get all the verifications they need from one sourceâ&#x20AC;&#x201D;they no longer will need to vet various sources to ensure the data they are using is accurate. This makes the lending process more efficient and gives lenders confidence that their process and borrowers are in compliance with regulations. Easy-to-read reports generated by the validation technology identify worrisome areas on each application reviewed. Reports that offer a summary cover sheet enable lenders to see at a glance whether an applicant is a risk. Such reports can provide a wealth of information, including the following and much more:

Identity validation Advanced technology validates an appli-

cantâ&#x20AC;&#x2122;s identity, including name, address, Social Security Number, birthdate, and phone number. It often can be customized to provide other information, such as driverâ&#x20AC;&#x2122;s license number, other properties owned and more. Identify reports may also include: l Alias information: Other identities the borrower may be using to acquire loans and debt. l Other properties owned: Properties owned by the applicant that may or may not be tied to a mortgage are identified; property taxes and homeownerâ&#x20AC;&#x2122;s insurance must be factored into the debt-to-income ratio for the applicant on their loan. l Relatives and associates: Details about an applicantâ&#x20AC;&#x2122;s relatives or associates can identify any conflicts of interest. l Voter registration: Provides additional validation of identity. l Liens/judgments: A separate search from what is reported on the credit report; includes lien or judgment records associated with an individual. l Continual monitoring of credit report and undisclosed debts right up until loan closing: Ensures the applicantâ&#x20AC;&#x2122;s debt-to-income ratio hasnâ&#x20AC;&#x2122;t increased

to a level that would disqualify him/her from qualifying for a mortgage

Employment and income validation Technology can also be used in a number of ways to provide information about an applicantâ&#x20AC;&#x2122;s employment and income. The Work Number, a solution offered through Equifax Workforce Solutions, maintains the largest collection of payroll records contributed directly from employers and offers accurate verification of employment. Other types of employer verification can also be conducted, such as searching the employerâ&#x20AC;&#x2122;s address and its proximity to the new house to ensure the applicant will be able to maintain employment after moving into the new home.

these lists. Technology can help lenders verify that their applicants are not on any of these lists: the FBI Hijack Suspects list, the FBI Top Ten Most wanted, HUD Limited Denial of Participation, and more.

Make sure every applicant is a keeper While new regulations have helped reduce mortgage fraud a bit, there will always be people who try to get ahead by lying and cheating. For lenders, the best protection against such predatory bottom-suckers is a fraud prevention program that utilizes the latest technology to validate applicant information and monitor borrower activity all the way through closing. Just as with fishing, preparing in advance is the best way to ensure your applicants are truly worth keeping.

Watchlist clearance The Office of Foreign Assets Control of the U.S. Department of Treasury maintains a list of foreign countries, businesses and individuals sanctioned for economic and trade violations as they relate to national security. The Bank Secrecy Act and the Patriot Act require that all money services businesses make a reasonable effort to determine if their customers appear on

Greg Holmes is national director of sales and marketing for Credit Plus Inc., a thirdparty verifications company serving the mortgage industry. He can be reached by email at info@creditplus.com.

Footnotes 1â&#x20AC;&#x201D;LexisNexis 15th Annual Mortgage Fraud Report. 2â&#x20AC;&#x201D;Fannie Mae.

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The End of Interest Rate Selling

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Since the market crashed, we’ve been stuck in a world of rate reduction refinances. No one has any equity and consumers are afraid of the term “Adjustable-Rate Mortgage.” So the only refinancing to be done is lowering interest rates. What are we going to do when rates go back up? The time has come to change our sales approach from only having rate reduction conversations back to the method of finding out a borrower’s situation and then presenting them with as many options as possible. They will then be able to choose the one that best suits their needs. This will increase your close ratios and bring you more loans and more income each month. The highest close ratios come from the mortgage professionals who do not have rate conversations with their borrowers. The conversations are about the borrower’s financial needs and then move to their mortgage, and eventually to what they qualify for. Home values are stabilizing allowing some borrowers to qualify for cash-out refinances so they can do the repairs they have been putting off since the market crashed. Borrowers have options besides rate reduction now and it’s important to talk to them about all of the products they may qualify for. Some people would rather have a short-term loan and have no problem with higher payments to get it. If you were trying to pay off all your debt so you can retire, buy a second home, or put your kids through college, the interest rate doesn’t matter as much because you are paying off the loan early anyways. Because the only refinance conversation to have has been rate reduction. Loan officers have become accustomed to asking for the rate first and telling the borrowers how much they can save if they lower it. Now, that those same loan officers are trying to sell mortgage insurance premium (MIP) removal, they are having a hard time conveying the benefits to the borrower. The conversations still revolve around interest rates because loan officers are still asking what their current rate is. This is putting rate first in the borrower’s mind. When these borrowers hear that their rates are going up, they don’t see the value of a lower payment. When you know what is motivating someone to make a major financial change, it’s a whole lot easier to explain the benefits in terms they will understand. TagQuest Inc. customer spotlight … Santosh Manjrekar Each month, we talk with our clients to find out how their campaigns are going. Here’s what we heard from Santosh Manjrekar, a Colorado mortgage lender. l Product used: Live transfer leads l Results: Took six applications from first 10 live transfers. Closed three loans and has at least one more working. Highlights of the campaign that work well for you … “We have filters that ensure that only the high loan amount leads are transferred, ensuring profitability when a lead is converted.” Highlights of the campaign that you think might work well others … “Easy to work with and with great customer service.” Santosh Manjrekar, President VeryNiceHomes.COM 4610 S Ulster Street, Suite 150 • Denver, CO 80237 Direct: (303) 790-7526 • Cell: (303) 882-4836 Fax: (720) 302-0635 • E-mail: santosh@verynicehomes.com Licenses: NMLS# 302917, Colorado LMB100011395, EA40015300 Regulated by the Division of Real Estate "We are the Nordstrom of service and Walmart of rates and we are actively looking for loan officers to join us.” Medford, Ore.-based TagQuest Inc. is a full-service marketing firm, built specifically for the ever-changing mortgage industry. Utilizing marketing expertise, technology and industry knowledge to generate top quality leads, and most importantly, how to convert those leads into customers. TagQuest knows what it takes to produce unprecedented results in today’s fast-paced mortgage environment. For more information, call (888) 717-8980 or visit www.tagquest.com.

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insightful, informative and instructive for policymakers at a most challenging time for the CFPB, the Congress, the Federal Reserve, state and federal regulators, the FHFA, the GSEs and the Obama Administration. With that preface it’s off to the questions, with the understanding that what follows is intended as only an on-the-surface explanation of the responses, not a detailed analysis of them. l Question 1 asked those surveyed what they thought the interest rate on the 30-year conventional conforming fixedrate mortgage would be at year-end 2015. The group average weighed in at 4.625 percent. The range of expectations was from 3.875 percent to 5.5 percent, but most responses were clustered around 4.5 percent. l Question 2 wanted to know how much residential origination volume they expected next year. The group average—which like all averages cited herein, is not weighted by volume in this or any of the subsequent answers cited—is $1.06 trillion. The response range was from $850 billion to $1.5 trillion. l Question 3 asked how much their firm’s production was down year-todate compared to the same period last year. The response range was from no decline—two firms actually were up— to down 60 percent, with the average off by 27 percent. l Question 4 wanted to know whether their firms were originating non-qualified mortgages (QMs). Of the 30 answering the question, 17 answered in the affirmative and 13 responded in the negative. l Questions 5, 6 and 7 wanted to know, respectively, what percentage of their year-to-date originations were in refinances, jumbos and then VA and USDA combined. The average responses were 32 percent, 12 percent and 12 percent respectively, and the ranges were 0-65 percent, 0-35 percent and 0-20 percent, respectively. l Question 8 inquired as to whether their firm experienced a decline in FHA production since last year’s MBA Annual Convention. Yes, said 22 of those surveyed compared to eight who indicated otherwise. The average decline was 26 percent, with a range from five percent to 70 percent. l What percentage of your firm’s conventional production exceeds 80 percent LTV, asked Question 9. The group average was 29 percent, with a range of five percent to 75 percent. l Question 10 sought to learn if those surveyed believed that industry profits would decline again this year after 2013’s drop. Yes they would said 26, versus one lone dissenter. l Dovetailing the prior question, Question 11 wanted to know by how much the respondents felt their firm’s

profitability would be down in 2014 compared to 2013. Profits are expected to be down 30 percent on average from 2013. Questions 12, 13 and 14 asked the execs if their firms were doing more, less or the same amount of high LTVs (>90), high DTIs (>41%) and low FICOs (<680) this year than last. Sixteen firms were doing more high LTVs compared to four who were doing less. Four firms are doing more high DTIs compared to 12 doing less. And eight were doing more low-FICO lending compared to 11 doing less. In each category, the balance of those queried was doing roughly the same amount as in 2013. Question 15 queried the respondents about whether their 2014 volume would be up, down or flat this year. Eleven said it would be flat, 14 said their volume would be down, while four indicated their FHA volume would be up this year. Is the Obama Administration’s push on lenders to expand FHA’s credit box a good idea Question 16 sought to know. It is not, reported 21 of those surveyed versus nine who felt expanding the credit box was a good idea. Following up on this question, Question 17 asked if lenders would go along with any push to expand credit. No, said 17 of 30, lenders won’t respond favorably to an expansion of credit standards (at least not without a reasonably ironclad rep and warrant framework). Question 18 wondered if adding a residual income test for FHA loans would be a good idea. It would indeed say 26 of the 30 executives asked. Neighborhood Watch and the “compare ratio” are two metrics used by HUD to measure lenders’ performances. Question 19 asked if these metrics were serving the industry well. Yes they are, said seven respondents, while the other 17 disagreed with that assessment of the two metrics. Question 20 wondered if the lenders surveyed considered appraised values a major concern today. They are, said 13 executives, but the other 16 responding disagreed, saying they were not a ‘major concern.’ Do the executives think house prices will rise in 2015, asked Question 21? Surprisingly, only seven expect house prices will rise next year, versus 17 who think not. Of those optimistic enough to expect higher home prices in 2015, the average expected increase is three percent. Only one indicated an increase of over 10 percent. Question 22 wanted to know if the respondents expected the overall size of the mortgage banking industry to shrink next year. It will, said 22 respondents, compared to seven who don’t expect a decline in the number of operating firms and the industry’s employment headcount. As for how

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and Freddie Mac. Specifically, we asked if their firm’s interactions with Fannie were one-sided; whether both GSEs should start providing details about their cash window business (volumes, types, etc.); whether their firms felt they were losing business to the twosome; and based on their individual performances, what letter grade (A to F) the executives would give each. In the question about any one-sidedness among the two parties, lenders said Fannie was the dominant firm, ranking it at a group average of 7.25, with 13 ranking it an eight or higher. As for details on their cash window volumes, 25 reported that the GSEs should provide market participants with this info. Concerning firms’ loss of business to Fannie and Freddie, 18 said no loss compared to 12 who report losing business to the two GSEs. And, for overall performance, both got C averages from the group, with two A’s and 17 B’s awarded among the 60 responses. Question 40 asked about the outsourcing of fulfillment services, and whether or not their firms were doing so. Of the 25 executives asked this question, 20 indicated that their firms weren’t outsourcing fulfillment services. Question 41 inquired as to where their firm’s production operating capacity stood compared to an ideal operating rate of 100 percent. The group average was 80 percent, with 12 claiming to likely be operating below this threshold. Questions 42 and 43 wanted to know about membership in mortgage cooperatives and about private label securities issuance. Sixteen out of 30 said their firms dealt with at least one of the co-ops. As for PLSs, 23 of the 30 respondents felt confident such issuance would pick up over the next several years. Compliance cost was the focus of Questions 44, 45 and 46. First, we sought to learn how much they estimated their firm’s compliance cost had increased since the enactment of the Dodd-Frank Act. Second, we also wanted to know how much of their total operating budget compliance accounted for, and how much it increased the cost of a single mortgage origination. As for the cost of Dodd-Frank rules, the average total cost has risen nearly fivefold from pre-2010. Twenty firms reported cost increases of at least a tripling of their pre-Dodd-Frank expenditures. Compliance now accounts for a group average of 21 percent of total costs, with 11 executives reporting compliance costs of 25 percent or more. Regulations have added an average of $1,189 to the average cost of an origination said the executives, with 15 of them estimating the added cost for their firms was $1,000 or more per origination and six who reported cost increases of $2,000 or more. The housing recovery and its forward momentum, if any, was the topic at hand in Question 47. Nearly evenly

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much shrinkage, the average expectation was down 21 percent. Mortgage brokerage market share is off by nearly three-fourths since its peak in 2006. Question 23 inquired if the executives thought any further growth in broker share would occur over the next two years. The responses were about as divided as possible, with 15 not expecting any further growth in broker share compared to 14 who expect a modest increase. How competitive is the primary mortgage market today, Question 24 asked? Very competitive it appears, with the question’s responses garnering an eight on a scale of one to 10. Seven of those surveyed rated their response a nine or 10, compared to only one responder who rated the level of competition a five. Questions 25, 26 and 27 dealt with various aspects of mortgage servicing rights (MSRs); specifically whether their firms would be retaining or selling servicing, or doing both; whether they were buying flow and/or bulk MSRs; and at about what return their firms considered an investment in MSRs attractive. As for retaining or selling MSRs, 18 firms were retaining, seven were selling and five others were doing both. Only seven of those surveyed indicated they were buying flow and/or bulk servicing, whereas almost three times that number weren’t. At or above a 12 percent return, MSRs are deemed attractive. The average point of appeal for the group was 14 percent. Given enforcement actions taken in New York State and elsewhere, Questions 28 and 29 wondered if these actions were disrupting the normal transfer of MSRs; and if yes, was it adversely affecting servicing sales and MSR prices? Twenty-four of 27 executives indicated that these enforcement actions had disrupted the market for MSRs, and of the 24 responding in the affirmative, 21 indicated enforcement actions were adversely affecting sales and pricing. Questions 30 and 31 wanted to know if agency buyback demands were up, down or unchanged since last year’s MBA Annual Convention, and how large a problem they considered repurchases to be today. Of the 30 surveyed, 20 said repurchases were up, eight said they were down, and two said unchanged. As to the extent of the repurchase problem, it ranked 5.7 out of 10, with six ranking the problem an eight or greater, and 13 ranking the answer a five or less. Underwriting standards were under question in Questions 32, 33 and 34. Are GSE standards too tight? Not according to 20 who said not, versus 10 who thought they were too tight. However, documentation standards at the GSEs were said to be too stringent according to 23 of the 30 executives. As for the FHA’s underwriting standards, only four of the 29 respondents answered that they were too tight. Questions 35, 36, 37, 38 and 39 raised questions about Fannie Mae

The Millennials Are Coming, the Millen By Phil Hall

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If you have been following the headlines over the past few months, it would have been difficult to ignore the quantity of coverage devoted to the impact that Millennials may or may not have on the housing market— as well as the contradictory nature of this coverage. With such headlines including “Why Millennials Are Hurting the Real Estate Recovery” (MarketWatch, May 12) to “Millennial-Driven Housing Boom Could Be On The Way” (Time Magazine, June 28) to “More Millennials Leave Parental Nest, Without Lifting Housing Market” (Trulia, Sept. 16) to “How Millennials Could Be Housing Market Heroes” (USNews.com, Sept. 17), it is difficult to know if this demographic should be courted or condemned. Complicating matters somewhat is an announcement from Realtor.com that stated half of all Millennials viewed real estate Web sites during August, but tight inventory and lending standards

coupled with increasing home prices made it difficult for this demographic to pursue homeownership. “Millennials were hit the hardest by recession layoffs and job shortages, and many are still facing the financial aftermath of the downturn including reduced wages and depleted savings,” said Jonathan Smoke, chief economist for Realtor.com. “Monthly mortgage affordability and 20 percent down payments have become especially difficult as home prices increase.” Realtor.com offered a list of 10 markets that it claimed were ideal for Millennials looking to buy a home, based on housing affordability and increases in inventory. These markets included, in alphabetical order, Akron, Ohio; Buffalo-Niagara Falls, N.Y.; Charleston, W.V., Grand RapidsMuskegon-Holland, Mich., HarrisburgLebanon-Carlisle, Pa.; Indianapolis; Melbourne-Titusville-Palm Bay, Fla.; the Memphis metro market; PeoriaPekin, Ill.; and Syracuse, N.Y. “The neighborhoods on our list offer plenty of opportunity for Millennials

looking to get into the market in the next few months,” Smoke said. “Not only are first timers more likely to be able to afford homes in these areas, less competition in these markets means they are more likely to have their offers accepted.” But that is predicated on the financial health of the Millennial homebuyers. Irvine, Calif.-based John Burns Real Estate Consulting recently issued a report stating that the onerous burden of student loan debt among Millennials–now over $1 trillion–will result in the loss of 414,000 home purchasing transactions this year. The company estimated that if the typical price of a house is $200,000, the lost volume would equal $83 billion per year. This research follows the much-discussed study from earlier this year by the Federal Reserve Bank of New York that found college graduating Millennials with student debt are less likely to own a house and a mortgage than those that never attended college. However, research conducted by The Demand Institute, a New York-based

think tank, found a more positive picture. In a survey of 1,000 Millennials, 74 percent of those polled expected to move in the next five years, while 79 percent predicted that their financial situation would improve. But only 48 percent of those surveyed said they would own their residence rather than pay rent. And, of course, there is the question of jobs–or the lack thereof. “If you look at the unemployment rate for 20- to 24-year-olds, it is 10 percent,” said Amy Crews Cutts, senior vice president and chief economist at Atlanta-based Equifax. “Having an elevated unemployment rate like this compounds this problem.” Andy W. Harris, president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc., pointed out that even if Millennials were eager to pursue homeownership, the loan products that once encouraged first-time homebuyers are now unsatisfactory for this demographic. “FHA is very restrictive now on mortgage insurance costs,” Harris said. “That

nnials Are Coming … Sort Of pay off their student loans, and we also have people whose mom and dad can write them a check for a house.” Kekich also observed that some Millennials are very picky in their housing choices. For example, because Millennials usually avoid landline phones in their residences, the absence of strong cell phone service impacts their buying decisions. “We can walk in somewhere with a bad signal and they will say, ‘This isn’t

going to cut it,’” Kekich said. “They also want to be close to shopping, transportation, coffee shops–they want a reasonable walk from their front door, and they are willing to sacrifice a lot in the size of a home to get those things.” But if the Millennials are not in a mad rush to flood the housing market today, that doesn’t mean they won’t be a factor in a few years from now. “In terms of numbers, they are bigger than the Baby Boomers,” said Dr.

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

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makes it a lot less affordable than it used to be.” Harris challenged Fannie Mae and Freddie Mac to do more to create products that would aid Millennials. And Bob Dorsa, president of the American Credit Union Mortgage Association (ACUMA), called on credit unions that originate home loans to make a stronger outreach effort to this target audience. “The issue is, and always has been, that young people need and want information online, but credit unions are something that has Grandma and Grandpa affiliated with them,” Dorsa said. “The ball is in our court–we have to do a better job in the online networking community to reach out to the Millennials.” But Scott K. Stucky, chief strategy officer at Idaho Falls, Idaho-based DocuTech, believed that credit unions are not alone in their failure to engage Millennials. “This generation has seen people lose home and go through foreclosure, and they have a distrust of traditional financial services companies,” Stucky said. Indeed, a survey conducted in May by Accenture found 72 percent of respondents in the 18-to-34 age range said they were likely to do their bank with at least one non-financial services company, such as PayPal, Google or other online financial platform. Stucky also stressed that today’s originators are not much help to would-be homebuyers in this demographic because of the restrictive nature of the Qualified Mortgage (QM) rule. “They simply don’t qualify because of their student loan debt and the 43 percent debt-to-ratio income under QM,” Stucky continued. “But that doesn’t mean they shouldn’t qualify.” Rick Sharga, executive vice president of Santa Ana, Calif.-based Auction.com, observed that the industry has not responded to this situation. “There is not a loan product out there that lends itself to the situation that Millennials find themselves in,” Sharga said. “We may see a non-bank lender try to fill that void with a product that does not fit nicely into the QM box. But we won’t see that product in any big numbers due to regulatory concerns the absence of secondary market opportunities.” Yet Brandon Kekich, real estate agent with RE/MAX Dream Properties in Northville, Mich., stated that perceptions of struggling Millennials are often incorrect. “I have this neat mix of Millennials in my market,” said Kekich, who serves the Metro Detroit area. “We have people struggle like everyone else, trying to

Mark A. Calabria, director of financial regulation studies at the Cato Institute in Washington, D.C. “Number-wise, there is going to be an increased demand for housing.” Yet Dr. Calabria acknowledged that reading Millennials by the numbers alone is a mistake, especially when assuming their belief in contemporary homeownership values. “It is not clear at this time if this is a generation that buys into the doubledigit appreciation/flip it in five years attitude,” Dr. Calabria added.

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

Top industry news … Big jury award against PHH tossed out: In a major victory for the New Jersey-based mortgage giant and loan servicer PHH, a California judge overturned a $16.2 million jury verdict awarded to a California homeowner in connection with a mismanaged loan modification. The judge in the case issued a seven-page ruling throwing out all claims for negligence, intentional misrepresentation, interference and infliction of emotional distress. A jury had awarded homeowner $513,000 in compensatory damages and $15.7 million in punitive damages following a 17-day trial in July. The court found “no substantial evidence,” in support of $355,000 in compensatory damages or any punitive damages. It did however let stand breach of contract and good faith claims totaling nearly $160,000.00. In a statement PHH said the company is “pleased” with the judge’s ruling. The news also gave a sigh of relief to many other lenders and banks who were concerned the original verdict would create a precedent for every borrower who was rejected for a loan modification resulting in a firestorm of legal claims and potentially billions in damages.

You cannot make this stuff up!

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l In New York, a man posing as a real estate agent was arrested in a scheme that defrauded an investor of nearly $200,000 in down payments for numerous properties. The Long Island resident represented himself as a real estate agent and negotiated the sale of 49 properties that he claimed were distressed to an investor from Queens. The investor turned over down payments for the properties totaling $191,300. l Also in New York, a real estate attorney was arrested for allegedly stealing $720,000 held in an escrow account, as well as selling another property owned in the name of his law firm and pocketing over $700,000 in proceeds. l A North Carolina closing attorney involved in a massive and widespread fraud scheme was sentenced on Oct. 27 as a key figure in a conspiracy to defraud numerous banks and lenders using straw buyers resulting in mortgage loan disbursements exceeding $20 million, $5 million in loan proceeds, and losses exceeding $1 million. l An attorney and radio talk show host from Illinois was convicted on federal charges for engaging in two mortgage fraud schemes that defrauded lenders of a total of approximately $9.7 million. l Six people, including a lawyer, real estate agent and funeral home director, have been charged with conspiring to steal a Pennsylvania home from an elderly widow after she died. l A California banker who sold mortgages on behalf of GMAC admitted receiving more than one million dollars in bribe payments while working on at the bank to use his position and influence to ensure that his customers won their bids to purchase mortgage notes.

Regulatory updates … With the CFPB’s new Integrated Disclosure Rules set to take effect next year, Wells Fargo has announced a new policy to ensure compliance. In September, Wells Fargo announced that beginning Aug. continued on page 94

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

Controlling Multitasking Mayhem With Automation By Kelly Booth

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Here’s a question for you: Exactly when did “multitasking” become such an important skill? We’re all expected to multitask—but what does this word even mean? Well, I looked it up, and discovered that “multitasking” is actually a fairly new term. According to Google Ngram Viewer (a fascinating online phraseusage graphing tool), “multitask” began to get notice in 1960, but since 1980, the word has taken off, roughly doubling in use every 10 years. In fact, the “rise” of multitasking seems to mirror the growth of personal computing and the Internet, which makes sense, when you think about it. Technology helps us multitask. Go to any grocery store and look at the checkout line. At least half of everybody in line is staring at a smartphone! But is all this multi-tasking such a good thing—especially for today’s mortgage professional?

Multitasking: Myth vs. reality When we look deeper into multitasking, the picture becomes troubling. A growing body of research indicates that human beings are not naturally born multi-taskers. In fact, our brains were actually created to focus on specific tasks—such as building things, protecting ourselves, or hunting for food. Recently, the University of Utah conducted a study on multitasking by running 310 undergraduates through a series of tasks. The study found that 97.5 percent of participants saw a significant decrease in performance when required to handle two tasks simultaneously. More interestingly, there was sharp divide between those who thought they could multitask well and those who were actually good at it. The problem is that loan officers actually do need to multitask. Like many sales professionals, loan officers routinely handle answering e-mails,

sending texts, making calls, forwarding information, providing counsel, managing pipelines, setting up meetings, keeping calendars and a whole realm of other responsibilities, large and small. So if you’re in mortgage sales, multitasking is unavoidable. In fact, according to Sibson Consulting, a Chicago-based human resources consulting firm, the average sales professional spends nearly twothirds of their day performing tasks that are not related to sales at all. That number was not broken down by industry. But because of all the steps that are involved in the rather complicated business of originating mortgages, I’m willing to bet that loan officers have even less selling time on their hands than other sales professionals.

The costs of multitasking For obvious reasons, excessive multitasking costs money. Let’s assume that one-half of a loan officer’s selling time is lost due to multi-tasking and the cumulative mental breaks that occur

between every activity. Since there are roughly 215 business days in every year—not counting weekends, holidays and vacation—more than 100 days are wasted either through multitasking or its effects. The key to getting more sales hours into your day is deploying work habits that enable loan officers to prioritize the highest priority task first, then the next highest, and then the next highest, and so on in cascading fashion. That way, if disaster strikes or the loan officer simply runs out of daylight, any remaining tasks that do not get completed are the least important. Prioritization becomes most powerful within the sales process itself. In one sense, it doesn’t matter how much or how little time loan officers spend selling. The time loan officers do spend selling can be greatly improved by focusing on leads that offer the best returns. The key is using technology that can first measure the relative importance of every contact a loan

“Lenders that have automated prioritization are realizing officer could be reaching out to at any given moment. If they have a list of new leads that haven’t yet been touched, it’s important to look at the attributes of each lead that might indicate the motivation and ability of the prospective borrower to get a loan. If they have a number of leads in the pipeline that are active but not yet closed, it is important to determine where these prospects are in the buying process and the important follow up steps that need to happen in order to close the deal. I know many, many salespeople rely on “gut instinct” when it comes to leads. Years of experience has taught them to recognize the signs and key phrases potential borrowers use that indicate that they are ready to pull the trigger on buying a home. I also know that many of these folks feel they don’t need technology to tell them how or when to sell. This strategy works fine—if such a salesperson is able to respond quickly enough to a hot lead, or is not buried in one or more, less important tasks.

Automation is the key

conversion rates, and discovering a much better throughput of leads worked for each loan officer.”

to ensure the highest chances of closing a loan. In addition, automated prioritization tools can help loan officers with scheduling activities, appointments and follow-ups, to keep active prospects engaged in the process. All they have to do is turn on their computer and go down the list. The decision over who they should call first has already been made. Lenders that have automated prioritization are realizing significantly

increasing revenues, drastically improving conversion rates, and discovering a much better throughput of leads worked for each loan officer. I know that multi-tasking is unavoidable to a degree in our business. But for the most sales professionals, and certainly for loan officers in our highly competitive industry, the benefits of multi-tasking usually don’t add up. In fact, they subtract down. Fortunately, the same technology that

turned us all into multitasking experts can also give sales professionals the focus and power to do what they do best. Kelly Booth is the mortgage unit director for Velocify, a cloud-based intelligent sales automation solutions, where she is responsible for helping mortgage professionals improve their sales and lead management strategies. A 25-year veteran of the mortgage industry, Booth has served as vice president of sales for Motivity Solutions and vice president of sales at Consolidated Business Forms, later known as VMP Mortgage Forms. She can be reached by e-mail at kbooth@velocify.com.

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So what’s the answer? If I were to identify the one thing mortgage companies and loan officers need in order to get rid of the ailment I’ll call “multitasking,” it’s automation. While new steps and processes are constantly being added to the average mortgage transaction, across the board, every significant innovation that has taken place in our industry has transformed one or more of these steps through automation. For loan officers, there is obviously no shortage of loan production tools that automate tasks that historically required paper, pen and calculator. But when it comes to handling sales leads, companies and mortgage professionals that utilize what we call “automated prioritization” are achieving much higher sales volumes than they have in the past. Companies that use automated prioritization tools are able to reach 12 percent more prospects in the same amount of time than those who do not use them. In fact, according to our research, salespeople leveraging automated prioritization technology average 88 percent more talk time with prospects. Meanwhile, they convert 97 percent more leads overall; almost double their counterparts who don’t use such technology. Automated prioritization describes a type of technology that automatically makes the decision for sales professionals—or anybody, really—in regards to which tasks to focus on. It does this by looking at all potential tasks and ranks them in order of importance. In a sales environment, automated prioritization is best utilized for ranking leads depending on each borrower’s level of motivation and ability to buy a home. It is also used to tell loan officers exactly how to best follow up with each borrower

significantly increasing revenues, drastically improving

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.

Visio Financial Partners With SSI to Vet and Monitor Settlement Agents

partner in that endeavor and look forward to working with them.”

Freedom Mortgage to Visio Financial Servi- Acquire Continental ces Inc. has announced Home Loans, Form New that it has enhanced CHL Mortgage

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its risk management policies and procedures by requiring all settlement agents having access to a borrower’s loan documents and mortgage proceeds to first pass through a vetting and risk assessment process. The process will be implemented for Visio by Secure Settlements Inc. (SSI), a vendor management firm that specializes in closing table risk. Visio chose the SSI Closing Guard tool to evaluate the backgrounds, licensing, insurance and trust accounts of agents as a method to identify potential threats before a closing takes place. Visio’s new quality control (QC) process will encompass comprehensive risk evaluation, reporting and ongoing monitoring for all closing agents handling its investor mortgage loans in the 34 states where it lends. The program is being rolled out following several months of discussions, negotiations, vendor management approvals and onboarding. “We are committed to meeting and exceeding industry expectations for quality control and loan quality assurance,” said William J. Kerley, chief financial officer at Visio. “We also care about our borrowers and know that protection is a critical part of every lender’s enterprise risk management platform. We spent a good deal of time researching the right solution and were pleased to find the right tool to fit within our operations while offering a reliable solution to our borrower protection needs in this area.” SSI President Andrew Liput said, “We are honored to have been chosen as the vendor for these critical risk management services. Visio is clearly commitment to quality control, borrower protection and overall loan quality assurance. We are proud to be their

Freedom Mortgage Corporation has announced an agreement with Continental Home Loans (CHL) of Melville, N.Y. to acquire the assets of the Long Island-based mortgage lender. Management and staff formerly with Continental Home Loans join CHL Mortgage, a division of Freedom Mortgage. Freedom Mortgage President and CEO Stanley C. Middleman sees this acquisition as an opportunity to continue its expansion by leveraging a highly expert team with deep knowledge of and an established presence in each of its real estate markets. “Continental Home Loans enjoys a sterling reputation and takes pride in being the largest independent FHA lender in New York State,” Middleman said. “They are renowned throughout the greater New York area and well beyond. From Long Island to the boroughs, and from Westchester to upstate New York and New Jersey, Continental has earned a reputation for outstanding service that has endured since its inception in 1984. As Freedom Mortgage’s CHL Division, the organization will continue to be led by its exceptional executive team, Mike McHugh, Eric Reeps and Sam Barreta.” The addition of the CHL Mortgage team brings Freedom to over 2,000 employees and $2 billion-plus in monthly loan volume. “CHL will continue to operate with the same staff and enhanced systems. All loans will continue to be centrally

processed and underwritten out of our Melville, New York office,” said McHugh, president of CHL. McHugh has been president of Continental since 1986 and was recognized in October 2014 by National Mortgage Professional Magazine as the NMP Mortgage Professional of the Month. “All closing practices and functions will remain the same, ensuring that our borrowers and referral partners will continue to receive the personalized and quality service they have come to expect with us. And now we will have the strength and national brand power of Freedom Mortgage behind us.”

eSignSystems Acquired by DocMagic

DocMagic Inc. has announced the acquisition of electronic software solutions provider eSignSystems, from WAVE Systems Corp. As part of the acquisition, DocMagic will bring on the entire management team of eSignSystems, including co-founder and EVP of Sales and Marketing Kelly Purcell and SVP of Technology Solutions, Jonathan Kearns. “The acquisition of eSignSystems by DocMagic is a marriage of extraordinary talented and visionary people with incredible SaaS and on-premise products and services,” said Dominic Iannitti, president and CEO of DocMagic. “The management team at eSignSystems has done an exceptional job bringing innovative solutions to the forefront of e-mortgage adoption, and their contribution to the eMortgage revolution cannot be overstated. By combining the best of eSignSystems onpremise software with DocMagic’s SaaS solutions, eSignature patent, compliance and enterprise infrastructure, there is no question that this acquisition

was meant to be. Simply put, we are just better together.” The acquisition adds to DocMagic’s already robust suite of electronic products and services. eSignSystems products include, SmartSAFE, a solution enabling the eDelivery, eSigning, and life-cycle management of the electronic record, including short and long term retention of electronic files (eVault), SmartIDENTITY a solution for validating signers in real-time, SmartFORMS, a solution for generating proper and personalized forms, and SmartCLOSE, a solution for simplifying the MERS eRegistry Integration. “The acquisition for DocMagic has spectacular timing for electronic mortgage adoption,” said Tim Anderson, director of eServices for DocMagic. “Not only are DocMagic products and services the most easily integrated tools available in the market, the comprehensiveness of the combined eSignSystems and DocMagic offerings is now officially off the charts. That makes DocMagic the ePowerhouse.”

VA to Implement CoreLogic’s Appraisal Tool for Quality Control CoreLogic has announced that its LoanSafe Appraisal Manager product has been chosen by the U.S. Department of Veterans Affairs (VA) to help ensure that real estate appraisals meet established VA requirements and standards. LoanSafe Appraisal Manager will be integrated into the VA’s WebLGY system, which manages multiple aspects of the VA’s review process when guaranteeing mortgages. All appraisals delivered to the VA through WebLGY will automatically run through LoanSafe Appraisal Manager as they are submitted. The VA processes hundreds of thou-

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Champaign, Ill.; and Andrew C. Wideman, CMB, AMP, senior vice president of national sales, Title Source in Denver, Colo. CMB Designees from the Executive Certified Mortgage Banker program include: Michael Kaysen, CMB, chief operations officer, Home Point Capital in Ann Arbor, Mich.; Eduardo Perez, CMB, president, Equity Loans LLC in Atlanta, Ga.; and Souren Sarkar, CMB, managing partner, Advantium Mortgage Solutions in Fort Lauderdale, Fla.

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

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n National Mortgage Professional Magazine n NOVEMBER 2014

participation in MBA at the local, state and/or national level. After accumulating the required points and passing a comprehensive written exam, candidates must demonstrate industry knowledge by passing an oral exam conducted by a panel of CMBs. “I join MBA Chairman Bill Cosgrove in congratulating all of this year’s CMB graduates for achieving this noteworthy milestone,” said Jeff Schummer, MBA’s vice president of Education Development. “Because of this honor, each now has a new set of skills that will serve them well going forward.” Candidates have the option of choosing among the Commercial CMB, Residential CMB or Master CMB designations. The Master CMB is a combination of both commercial and residential mortgage banking disciplines, while the Residential CMB and Commercial CMB focus on their respective subfields of the mortgage industry. In June 2009, MBA launched the Executive Certified Mortgage Banker program. Designed for busy professionals, this program allows candidates to substitute their real-world knowledge and experience for many of the educational requirements of the CMB program. In order to be eligible for the CMB designation, candidates must either work for an MBA member company or be a member of a recognized state MBA. Every candidate for an Executive CMB is required to have a minimum of 10 years of experience in real estate finance and hold a senior management position at an MBA member company. MBA Education awarded the following industry professionals with the CMB designation from November 2013 to October 2014: (Residential CMB Designees): Daniel H. Aminoff, CMB, AMP, branch manager, EverBank in Alexandria, Va.; Michael Bekes, CMB, AMP, vice president, Wells Fargo Home Mortgage in Milwaukee, Wis.; Jonathan M. Grafflin, CMB, AMP, key account executive, Chase in Irving, Texas; Peter A. Hinrichs, CMB, CRU, senior director, AgStar Home Mortgage Services in Rochester, Minn.; Bruce Meyers, CMB, branch manager, First Home Mortgage Corporation in Bethesda, Md.; Joe Nunziata, CMB, CRO, chairman, FBC Mortgage LLC in Orlando, Fla.; Joseph Panebianco, CMB, CFA, president and CEO, AnnieMac Home Mortgage in Mount Laurel, N.J.; Todd Potter, CMB, national correspondent sales manager, Envoy Mortgage in Brighton, Mich.; David Rembert, CMB, AMP, branch manager, Cornerstone Home Lending in Belton, Texas; Matthew J. Whalen, CMB, AMP, assistant vice president, Wells Fargo Home Mortgage in

National Mortgage Professional Magazine invites you to submit any information on regulatory changes, legislative updates, human interest stories or any other newsworthy items pertaining to the mortgage industry to the attention of:

DECEMBER 2014

Your turn

nmp news flash

LYKKEN ON

leadership

Eight Ways a Coach Can Make You a Better Leader By David Lykken hen we think of technology in today’s society, we almost automatically

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think of computers. But technology isn’t confined to contemporary society—it has existed throughout human history. At one point, the horse-and-buggy was a technological development for transportation. At one point, writing

was a technological development for communication. Technology is any development that makes our lives better in some way. Thinking of technology in this broader context, I started to wonder about the technological advancements in the art of leadership throughout history. What development in leadership has had the greatest impact on the ability of leaders to improve themselves and better serve their organizations, customers, and the world at large? One “technology” immediately popped into my head, one development, that I believe, has served leaders more so than any other. This advancement is the subject of this article: The coach. If you ask any great leader, he or she will tell you about a mentor or coach that has shaped and molded them into better leaders. The greatest leaders, they themselves will freely admit, are merely students of the greatest teachers. And just how does a coach improve the lives of leaders so much? Well, I’m glad you asked … First and foremost, a good coach will provide a moral compass that can keep your integrity in check. Even if you consider yourself a “good person,” it can be easy to sacrifice your ethics in the heat of the moment. When you’re trying to advance your career, you can justify to yourself doing things that you know are wrong. Your coach can be that conscience whispering in your ear to take a step back and think about the longterm consequences of your behavior. Your coach can keep you in check. Similar to integrity, a coach can help you with accountability. When I say accountability, I mean sticking to your commitments and doing what

you said you were going to do. Do you keep track of your deliverables? Do you monitor the promises you make to people, to ensure that you’re keeping them? A coach can help you manage these commitments and encourage you to keep them. A coach can also help you to become a better decision-maker. As a leader in your organization, you will deal a lot with complexity. It can be hard to think strategically and make the right decisions at the right time. A coach can be someone who you can run your options by. You need someone to bounce ideas off of and to help you weigh the benefits of alternative decisions. A coach can help you think more strategically and lead you to become better at making the important decisions that affect your organization the most. In addition to developing you strategically, a good leader will also strengthen your interpersonal skills. In building a healthy organization, communication is everything. You’ve got to be able to clearly communicate expectations as well as empathy to your employees, your vendors, your customers, and the public. A good coach can help you to hone your writing and speaking skills to communicate in a way that the people with whom you interact with can better relate to. You cannot expect people to follow you if you don’t really connect with them on a personal level. Developing those personal connections is where you will have the greatest impact. When you get a good coach, you’ll be constantly improving your communication skills so as to leave a more meaningful impression on everyone around you. As a leader in the mortgage indus-

that made you a great leader in the first place. The greatest mistake that you as a leader can make is to think you can do it on your own. Sir Isaac Newton famously said that, if he stood tall, it was because he was standing on the shoulders of giants. If you are to accomplish anything meaningful for your organization and for the industry, you’ve got to develop the same mentality. You need a leader that you yourself can follow. You need a mentor. You need a coach. All of the best leaders have embraced this “technology.” If you want to reach your full potential, you’ll do the same. There is no shame in seeking

out help. If you choose a good one, a coach will transform your life, your career, the industry, and society. Choose wisely … but choose as soon as possible. The world is waiting for your greatness. David Lykken is 40-year mortgage industry veteran who has been an owner operator in three mortgage banking companies and a software company. As a former business owner/operator, today David loves helping C-Level executives and business owners achieve extraordinary results via consulting, coaching and communications, with the objective of eliminating corporate dysfunction, estab-

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

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try, you’ve always got to be learning. You’ve got to pay attention to the latest industry news, as well as the larger news in the economy. A coach can help you improve your knowledge of the industry and economy by being a filter for the most important information that you need to absorb. A solid coach can assess the things you need to know and show you the most important resources from which you can draw the knowledge that you need. Sometimes, the smallest insight can make the biggest difference in your day-to-day operations. Being aware of what’s going on around you can help you become more competent in the eyes of your people. One of the most difficult challenges with being a leader in business can be finding balance in your life. We hear a lot about work/life balance and most of us recognize the importance of devoting the appropriate amounts of attention to various spheres of our lives. But, when it comes down to it, it can be easy to get sucked into our work and forget about our other obligations. A coach can provide a wake-up call when we get carried away. A coach can sound the alarm that gets us back on track for finding balance in our lives. A coach can help us understand when we need to invest more time in work, in home, in church, or in any other area that is important to us. Even leaders can get discouraged. The more you have on your plate, the closer you can get to breaking. Stress is a very human thing, and you as a leader in your organization are not immune to it. The pressures of managing diverse interests within your organization, dealing with the challenges of the economy, and keeping up with the continually changing regulations can all be very taxing on your spirt. A good coach can help you stay optimistic. Your coach can be the one that keeps you inspired and motivated to continue in doing the work that matters. A coach will encourage you and keep you from caving in under the pressure. When you first emerged as a leader in your organization, you probably held grandiose notions of conquering the world and playing a strategic role in moving your organization forward to be at the top of the industry. If you’re like many leaders, though, the fire probably began to fizzle out as you settled into your role. Being a leader can sometimes feel more tactical than strategic. You can sometimes feel more like a babysitter than a leader—spending all of your time putting out fires and settling small, short-term issues. Having a coach can help you stay focused on the longterm, strategic issues for which your leadership is most needed. A coach can help you to set a vision for your organization and develop that vision into a reality. You became a leader because of your vision; a coach can help you keep that sense of vision

USDA Confirms Acceptance of Electronic Signatures

By Melanie A. Feliciano Esq.

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The United States Department of Agriculture (USDA) Rural Development announced on Sept. 23, 2014, that it will accept electronic signatures in connection with its Single Family Housing Program (SFHGLP), unless otherwise prohibited by law or regulation. This announcement comes as welcome news for those lenders that have resisted using electronic signatures because of their inability to adopt electronic signatures for the origination of all loan types, including conventional and all government agency mortgage loans (i.e., FHA, VA, USDA). The SFHGLP regulations are silent as to whether electronic signatures are permissible. The regulations require that lenders submit signed documents to the USDA, such as the promissory note, security instrument, etc. In addition, the regulations require that lenders perfect and maintain a first lien position and enforceable promissory note. Through RD AN. No. 4776, lenders may now use electronic signatures, provided that they comply with the Electronic Signatures in Global and National Commerce (ESIGN) Act, as well as all other applicable federal and state regulations and guidelines. In addition, lenders must comply with existing SFHGLP regulations by perfecting and maintaining a first lien position and an enforceable promissory note, and satisfying all other agency requirements. For more information regarding the USDA’s acceptance of electronic signatures and details about the two available methods for electronically transmitting credit documents to the USDA, please refer to RD AN. No. 4776. Melanie A. Feliciano Esq. is DocMagic Inc.’s chief legal officer and currently serves as editor-in-chief of DocMagic’s electronic compliance newsletter, The Compliance Wizard. She received her JD from the Georgetown University Law Center, and is licensed in California and Texas. She may be reached by phone at (800) 649-1362 or e-mail melanie@docmagic.com.

SPONSORED EDITORIAL

heard on the street continued from page 38

sands of mortgages per year through WebLGY and previously required additional tools to help manage and monitor the appraisal quality. LoanSafe Appraisal Manager will provide the VA and lender-based staff appraisal reviewers with the ability to thoroughly and efficiently examine appraisals. Each appraisal will be scored and the system will produce benchmarking reports enabling the VA to understand risk across a variety of dimensions. LoanSafe Appraisal Manager assesses appraisals from multiple risk viewpoints, producing a valuation risk score and an integrity risk score for each appraisal. The tool performs an analysis of comparable properties used in the appraisal, and alerts reviewers to areas of the appraisal where a more detailed review is warranted. The unique valuation risk score measures both overvaluation and undervaluation risk utilizing CoreLogic market leading automated valuation methods together with extensive proprietary property, MLS and market data. The integrity risk score indicates the potential risk associated with the construction of the appraisal. As part of the integrity analysis, LoanSafe Appraisal Manager reviews missing or incomplete data fields, validates required and conditionally required fields, and verifies compliance with UAD (Uniform Appraisal Dataset), USPAP (Uniform Standards of Professional Appraisal Practice), FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act), FHA (Federal Housing Administration), VA (Veterans Administration), GSE (Government Sponsored Enterprise) and other quality checks.

Stonegate Mortgage Opens New Stonegate Direct Division Stonegate Mortgage Corporation has announced that it has formed a new division called Stonegate Direct, which will provide consumers across the U.S. with direct access to mortgage advisors to facilitate 24-hour, seven day a week, access to the company’s mortgage products and services. The creation of this new division enhances and simplifies the customer experience and home loan application process for qualified customers by providing quick, secure online access for homebuyers and those looking to refinance. Stonegate Direct is being formed through the integration of the call center operations of Crossline Capital, which it acquired in December 2013. The division will be run by Tim Elkins, executive vice president of Stonegate Direct who will report to Lisa Rogers, executive vice president of loan origination. As part of the division’s operating

plan, the company will have offices in southern California and open a call center in Dallas, Texas that will provide service and capabilities to customer across the country. “Delivering a superior customer experience is one of the fundamental components of Stonegate Mortgage’s approach to lending,” said Jim Cutillo, founder and CEO of Stonegate Mortgage. “Younger generations have enhanced expectations for the efficiency of online experiences in all kinds of purchases—from buying music, to purchasing vehicles and now, even securing mortgages to purchase homes. The Stonegate Direct business is being driven by our commitment to provide all customers with access to mortgage products in an easy, understandable and timely manner and in the way that they would prefer to get it. We are taking a customer-focused approach that will distinguish Stonegate Mortgage from competitors and drive originations as we continue to grow in 2014 and beyond.”

eLynx to Acquire Data Solutions and Title Expertise Firm eLynx, a portfolio company of American Capital Ltd., has entered into a definitive agreement to acquire the assets of Medallion Analytics Company, a provider of innovative services that help lenders and settlement services companies extract data from documents rather than rely simply on image files. This data can then be used to pre-populate forms and ensure greater quality, accuracy and compliance in loan documents from pre- to post-close. The addition of Medallion brings valuable expertise in data and settlement services to eLynx. Medallion’s solutions focus squarely on the timely extraction of valuable data contained within documents to ensure better quality and compliance, enhance process efficiency and facilitate smoother, timely collaboration between workflow participants. “The best way for lenders to costeffectively produce high quality loans, keep up with increasing regulatory demands and meet investor requirements is to be able to track documents and the data in them throughout the loan life cycle,” said eLynx President and CEO Sharon Matthews. “Our acquisition of Medallion provides a simple, elegant set of solutions to extract and analyze the data within documents so participants can collaborate better in the loan workflow.” Both companies bring an emphasis on putting customers first and helping continued on page 52

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info@tagquest.com

www.TagQuest.com

The Unintended Con

Basel III

By Doug Rossbach he Basel Accords are a set of voluntary international agreements that establish capital adequacy guidelines, which are then used to measure bank solvency and reduce the risk of bank failure. Bank capital is divided into tiers based on the source of the capital. Tier One capital or core capital is

primarily composed of common equity. Basel III requires banks to hold 4.5 percent of common equityÂ and six percent of Tier One capital (including common equity) against risk weighted assets. Basel III introduced additional capital buffers which include a mandatory capital conservation buffer of 2.5 percent and a discretionary counter-cyclical buffer which allows national regulators to require up to another 2.5 percent of capital. In the

U.S., banks are regulated by the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), which are responsible for determining the capital weightings that determine how much capital the banks are required to set aside to meet Basel III.

What happened? Under a final rule that was adopted

by the Federal Reserve in July 2013, the amount of capital needed to support mortgage servicing rights (MSRs) and certain types of mortgages was substantially increased. Key changes include: l The Federal Reserve increased the risk weighting for MSRs from 100 percent to 250 percent for MSR balances representing up to 10 percent of the bankâ&#x20AC;&#x2122;s common equity.

nsequences of l In addition, banks that hold MSR balances in excess of 10 percent of their common equity must deduct the excess from Tier One capital. These changes increase the capital costs of holding MSRs and reduce the amount of Tier One capital available to support other types of risk assets including mortgages. In other words, holding MSRs is becoming more expensive and could crowd out a bankâ&#x20AC;&#x2122;s ability to hold other assets including mortgages.

â&#x20AC;&#x153;The idea behind Basel III is to reduce banking risk and create a standard capital model that ensures that banks are well capitalized to withstand the unexpected losses associated with various risk assets.â&#x20AC;?

MSRs rise when interest rates rise. This is because MSR value is based on the cash flows that banks receive for servicing the underlying mortgages. When interest rates

rise, fewer borrowers are willing to refinance or move because new mortgages become expensive relative to the loans they already have.

l This increases the life expectancy or persistency of the underlying mortgages and therefore the cash flows from MSRs. Since banks must mark the value of MSRs to market, they will show a profit which can be used to offset the drop in revenue from fewer new mortgage originations. As banks shed MSRs continued on page 60

Unintended consequences The idea behind Basel III is to reduce banking risk and create a standard capital model that ensures that banks are well capitalized to withstand the unexpected losses associated with various risk assets. Unfortunately, the unintended consequence of the regulation may be to actually increase some bank risks and to make it more difficult or expensive for consumers to obtain a mortgage or to obtain help at a reasonable price when faced with a financial setback. In reaction to the impending regulations, U.S. banks have started shedding MSR assets and selling them to non-bank servicers such as Ocwen, Nationstar and Walter Investment Company. This is illustrated by looking at the MSR assets held by the four largest U.S. banks (Wells Fargo, Bank of America, Citi and Chase) which are down 18 percent from June 2012 to June 2014. During this same period, MSRs held by the three largest nonbank servicers (Ocwen, Nationstar and Walter) have increased by 50 percent (Source: Mortgage Daily). These changes may actually increase risk to the U.S. banking system and contribute to higher costs, poorer service levels, more foreclosures and a less vibrant home finance system. Here is why:

NationalMortgageProfessional.com

l These are the same banks that historically have owned large quantities of MSRs. MSRs can help offset these losses because the value of

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l MSRs provide a natural hedge for banks that participate in the mortgage industry. The mortgage industry is cyclical and is highly influenced by interest rates. When interest rates increase, origination volume and the associated revenues earned from new mortgage origination decline. This drop in revenue can have a devastating impact on large banks that participate heavily in the mortgage market. Recent bank earnings reflect this very scenario.

N A T I O N A L

M O R T G A G E

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

M A G A Z I N E ’ S

economic commentary

THE

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By Dave Hershman The volatile market environment of the month of October made the timing of the meeting of the Federal Reserve Board’s Federal Open Market Committee just before Nov. 1 very interesting. With the stock market gyrating and interest rates and oil prices falling in light of world events, certainly there was concern. Yet, the domestic economic news was anything but negative, with housing starts and existing home sales rising in September and more jobs being created. Indeed, the preliminary measure of economic

FED

growth for the third quarter was also released showing a solid 3.5 percent gain, but of course, this is subject to future revisions. Indeed, one would have thought these conflicting factors would provide some confusion for the Fed heading into the meeting, though the markets seemed to be optimistic coming up on the meeting as the stock market recovered a good portion of its losses of the previous month. However, there was nothing surprising or confusing about the Fed statement. They ended their bond purchase program as scheduled: “The Committee judges that there has

MOVES

been a substantial improvement in the outlook for the labor market since the inception of its current asset purchase program. Moreover, the Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the Committee decided to conclude its asset purchase program this month.” In addition, the Fed continued to use the term “considerable time” with regard to how long they will keep rates low. They did insert language that they reserve the right to shorten that period

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if the economy, and especially employment growth, improves more quickly than anticipated: “However, if incoming information indicates faster progress toward the Committee’s employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated.” Meanwhile, speaking of jobs, the Fed announcement was released just ten days before the release of the allimportant employment report. The jobs data is the first picture we get of the last quarter. October’s release of September’s employment report was one of the best months for job creation since the great recession and as the month wore on, we saw weekly first time claims for unemployment move to their lowest levels in almost a decade. This has made many analysts confident about continued success with regard to job creation. One thing we know about the jobs data—it can be very volatile and subject to future revisions. A surprise in either direction could have already caused more market volatility before this publication went to print. We are not saying it would happen, but always consider the possibility? Dave Hershman is a top author in the mortgage industry with seven books published. He is also the founder of the OriginationPro Marketing System, and currently the director of branch support for McLean Mortgage. He may be reached by e-mail at dave@hershmangroup.com or visit www.originationpro.com.

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CoreLogic Why techies love the company: CoreLogic arranges its processes to work the way our clients do business. Why clients love the company: CoreLogic helps clients know more about increasing volume and managing risk. Description of products offered: Rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. CoreLogic is a leading global property information, analytics and data-enabled services provider. The Company’s combined data from public, contributory and proprietary sources includes over 3.5 billion records spanning 40-plus years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Phone #: (800) 426-1466 Web site: www.corelogic.com 47

D+H Why techies love the company: SaaS efficiency-D+H does the regulatory updates and software enhancements for you!

Why clients love the company: Providing a voice and currency of trust for the mortgage industry. Description of products offered: We provide tools that give loan officers a voice that conveys trust and professionalism with consumers and referral partners. Phone #: (952) 232-1771 Web site: www.betterloanofficers.com

Why clients love the company: Streamlined implementations, responsive service and experience.

Phone #: (800) 815-5592 Web site: www.dh.com

Calyx Software

DocMagic Inc.

Why techies love the company: Fast implementation, products integrate seamlessly, free support, easy to maintain.

Why techies love the company: Integrated security infrastructure, processing power, scalability and storage.

Why clients love the company: Intuitive, accurate calculations, IT department not required, 200-plus vendor connections. Description of products offered: Loan origination software (LOS), broker Web sites with online 1003, electronic signature, custom AUS. Phone #: (800) 362-2599 Web site: www.calyxsoftware.com

Why clients love the company: Twenty-five years of customer service, technical support, and compliance expertise. Description of products offered: For more than 25 years, DocMagic has developed award-winning loan document preparation, compliance and delivery solutions. Dedicated to providing you with the tools and technology you need to survive in today’s complex regulatory environment, DocMagic continues to advance a wide variety of innovative products and eServices while serving the needs of 10,000-plus financial institutions in all 50 states. As the largest provider of end-to-end document preparation solutions, DocMagic has built its relationships and reputation on innovation, quality, service and trust. Phone #: (800) 649-1362 Web site: www.docmagic.com

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Description of products offered: D+H’s end-to-end Mortgagebot online lending and origination solution helps you sharpen your competitive edge to attract borrowers, simplify compliance to minimize risk, and optimize back-office processing through post-closing to boost profitability. We work with you to configure a solution to your lending footprint and will help you achieve quick success through a proven implementation process.

NationalMortgageProfessional.com

Better Loan Officers Why techies love the company: The integrity of our review ecosystem and security with sensitive data.

NMP’s 2014 MORTGAGE TECHNOLOGY PROVIDERS DIRECTORY

Easy Mortgage Apps LLC

Fast Forward Stories

Why techies love the company: Techies love us because we are up to date with the newest features on devices.

Why techies love the company: Cloud-based video content system delivers video content with no IT hassles.

Why clients love the company: We offer a true solution for companies looking to implement a mobile strategy. Description of products offered: Easy Mortgage Apps LLC (EMALLC) develops private label mobile apps specifically designed for the mortgage industry. Amongst other functionality, EMALLC offers a true solution to the number one issue plaguing the mortgage industry, communication. Borrowers and real estate agents remain engaged throughout the process. The app allows lenders to enhance the experience by creating an unparalleled leading ecosystem where clients and agents can securely communicate, share time sensitive data and receive updates in real time. Phone #: (888) 987-6842 Web site: www.easymortgageapps.com

Why clients love the company: Great content. Great technology. Fantastic support. Nothing else like it! Description of products offered: Instant consumer-friendly branded video content for websites, social media, e-mail marketing, mobile and client presentations. All videos compliance reviewed. Educate customers and answer questions with this comprehensive video glossary of mortgage and real estate concepts. Subscriptionbased service with best-in-class technology, without the high cost of custom video creation. Enterprise platform, co-branding and mobile app available. Phone #: (888) 618-9088 Web site: www.fastforwardstories.com

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eFace2Face

GeoData Plus

Why techies love the company: WebRTCbased eFace2Face is easy to integrate into any online infrastructure.

Why techies love the company: Web-based and mobile-friendly. Get your property data and comps from anywhere.

Why clients love the company: eFace2Face is easy to implement and generates return-on-investment (ROI) in weeks, not years.

Why clients love the company: It’s the trusted data source for tens of thousands of real estate appraisals every year. Easy to use, fast and affordable.

Description of products offered: eFace2Face is the world’s only complete Web-based video selling and e-signing solution. Connect consumers to your experts instantly for secure, high-quality video, audio or chat-based meetings directly from your Web site. During meetings, your experts can share any form of content instantly. eFace2Face also delivers real-time collaboration, so customers can complete forms and applications immediately. When it’s time to sign on the digital line, eFace2Face’s unique electronic signature process enables all signatories to sign wherever and whenever it’s convenient for them.

Description of products offered: Quickly access detailed property data, comps, and lis pendens with GeoData Plus. Used by thousands of appraisers, lenders, real estate agents and investors. Phone #: (516) 663-0790 Web site: www.geodataplus.com

Phone #: (727) 439-0393 Web site: www.eface2face.com

Ellie Mae Inc.

Global DMS

Why techies love the company: We’re a leader of innovative solutions for the residential mortgage industry.

Why techies love the company: We strive to offer the most advanced and usable technical product functionality.

Why clients love the company: We help them improve compliance, quality and efficiency at every loan stage. Description of products offered: Ellie Mae’s all-in-one Encompass mortgage management solution and on-demand services provide loan originators with a single system of record that ensures data integrity and improves compliance, quality and efficiency at every stage of the loan life cycle. Phone #: (888) 955-9100 Web site: www.EllieMae.com

Why clients love the company: We care about our customers and strive to provide the best experience possible. Description of products offered: Global DMS is a leading provider of commercial and residential real estate valuation solutions catering to lenders, servicers, AMCs, appraisers and other real estate entities. The company’s solution set is cost effectively delivered on a Software-as-Service (SaaS) transactional basis that ensures compliance adherence, reduces costs, increases efficiencies and expedites the entire real estate appraisal process. The company’s solutions include its eTrac valuation management platform, eTrac WebForms, Global Kinex, AVMs, the MISMO Appraisal Review System (MARS) and AMCmatch.com. Phone #: (877) 866-2747 Web site: www.globaldms.com

NMP’s 2014 MORTGAGE TECHNOLOGY PROVIDERS DIRECTORY

LoanTek

Mortgage Mapp

Why techies love the company: More software to make more loans for less money—end to end online origination.

Why techies love the company: We provide unique mobile solution customized for loan officers.

Why clients love the company: We make mortgage leads become mortgage loans—up to four times higher conversion rates. Description of products offered: LoanTek is the most complete software suite for the mortgage industry. Our services include automated best execution pricing engine, interactive consumer pricing, Web site and landing pages, mortgage lead management, sales management, CRM, e-Marketing and more. Of equal importance, LoanTek bundles these applications to create efficiency and value. More service, more markets, more loans, with LoanTek.

Why clients love the company: Personalized mobile app which keeps loan officers engaged with clients 24/7. Description of products offered: Mortgage Mapp creates personalized mobile apps for loan officers. It turns their smartphones into referral magnets, backed by a powerful tracking and reporting system. Features like the mortgage calculator, pre-approval requests and real time mortgage news deliver a seamless end-to-end client experience. These unique components combine to drive engagement and help users close more leads. Phone #: (855) 827-7439 Web site: www.mortgagemapp.com

Phone #: (888) 562-6835 Web site: www.loantek.com 49

MTS Software Solutions Why techies love the company: Open, Web services platform enables rapid deployment and seamless integration.

Why clients love the company: We speak mortgage and understand workflow from loan origination to purchase.

Why clients love the company: IntellaLend offers painless processing and automatic data validation.

Description of products offered: Mortgage operations expertise with strong technical backgrounds.

Phone #: (866) 274-6243 Web site: www.mtssoftwaresolutions.com

MortgageFlex Systems

PreApprovalLetter.com

Why techies love the company: MortgageFlex offers secure, SSAE-16 hosting services that is scalable.

Why techies love the company: We’ve developed an algorithm that streamlines the mortgage pre-approval process.

Why clients love the company: MortgageFlex ensures compliance, while automating lending processes.

Why clients love the company: Our platform allows lenders to focus on closing deals for quality homebuyers.

Description of products offered: MortgageFlex Systems was founded in 1980 and provides innovative loan origination and servicing software solutions to the lending industry. MortgageFlex brings you the industry’s most comprehensive suite of systems that address every aspect of the lending business from origination/acquisition to servicing and REO. The LoanQuest product platform supports evolving business processes, as well as government compliance requirements with business rules, intuitive workflow and an embedded product and pricing engine.

Description of products offered: Our instant pre-approval tool empowers homebuyers with personalized home loan budgeting and a tailored analysis based on current underwriting rules and guidelines. We formulate using a tri-merged credit report and follow Fannie Mae DU methodology with conforming underwriting guidelines to display qualifying options on specific MLS properties nationwide. For lenders, this translates into the highest quality leads on the market. We have prequalified and pre-approved buyers and our concierge service schedules guaranteed appointments. Programs are available for LOs, branches and national lenders.

Phone #: (800) 326-3539 Web site: www.mortgageflex.com

Phone #: (855) 864-4265 Web site: www.preapprovalletter.com

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Phone #: (516) 802-7375 Web site: www.matchboxllc.com

Description of products offered: IntellaLend leverages Intelligent Data Capture and Smart Process Applications to expedite mortgage processing. Our solution captures incoming files from any source, classifies the documents for routing into workflows while measuring for completeness, automatically extracts and compares the data from those documents against other data repositories or sources, and delivers the validated data to existing systems and/or personnel. IntellaLend combines capture, automation and analytics technologies to deliver a solution that is revolutionizing how mortgages are processed.

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matchbox LLC Why techies love the company: Strong understanding of the Encompass LOS from development to implementation.

NMP’s 2014 MORTGAGE TECHNOLOGY PROVIDERS DIRECTORY

TagQuest Inc. Why techies love the company: Merging data files and using those files to pinpoint target social media ads. Why clients love the company: We offer one place to ingrate all of your marketing. Backed by 10 years of experience. Description of products offered: Full-service direct mail with integrated personal URL Web site domains and social media plug-ins to send those same people your offer with ads on social Web sites like Facebook and Twitter. Mortgage Insights is a program that notifies you when your past clients have their credit checked by another mortgage company. We also offer more than 3,000 separate data selects in our lists for targeting prospects. Internet leads, live transfer leads, trigger leads, online marketing like SEO, PPC, and Google AdWords Management. Phone #: (888) 717-8980 Web site: www.tagquest.com

SimpleNexus LLC Why techies love the company: Techies love generating leads, LOS integration, and closing. We help them work. Why clients love the company: We help LOs be loved by compliance, IT, legal and their clients. Description of products offered: SimpleNexus provides whitelabeled apps for mortgage companies and banks. Our apps help you generate more leads, connect with real estate agents, and stay compliant. SimpleNexus customers collectively increased real estate agents connections by more than 300 percent in 2013. Mortgage companies rate our customer service 9.8 out of 10. Phone #: (855) 684-2777 Web site: www.simplenexus.com

Titan List & Mailing Services Inc. Why techies love the company: We’re able to integrate our marketing services into CRM platforms seamlessly. Why clients love the company: Our unmatched commitment to service, integrity and turn around time. Description of products offered: Complete data, print and direct mail services all in one service provider. Phone #: (800) 544-8060 Web site: www.titanlists.com

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Smarsh

TTP Enterprises/MACH3

Why techies love the company: Smarsh offers fast, simple, and smart social media monitoring.

Why techies love the company: Rules-based SaaS engine with operational efficiency and compliance and control.

Why clients love the company: Smarsh allows MLOs to manage compliance and legal risks related to social media.

Why clients love the company: Technology-driven marketing, in-house printing and extensive content library.

Description of products offered: Smarsh delivers cloud-based archiving solutions for the information-driven enterprise. Its centralized platform provides a unified compliance and e-discovery workflow across the entire range of digital communications, including email, public and enterprise social media, Web sites, instant messaging and mobile messaging. Founded in 2001, Smarsh helps more than 20,000 organizations meet regulatory compliance, e-discovery and record retention requirements. The company is headquartered in Portland, Ore., with offices in New York City, Atlanta, Boston, Los Angeles and London. Phone #: (866) 762-7741 Web site: www.smarsh.com

StreetLinks Lender Solutions, an Assurant Company Why techies love the company: We’re continually working to propel the lending industry forward. Why clients love the company: We’re committed to exceptional quality, service and partnership. Description of products offered: Both StreetLinks and Assurant Specialty Property thrive on bringing collateral risk management expertise, innovative technology, and bestin-class services to mortgage professionals nationwide. With our combined strength and dedication to quality and service, we deliver a comprehensive suite of valuation solutions that covers the loan cycle from origination to final collateral disposition. Partner with us for full-service appraisal management, lender-executed appraisal software and automated appraisal review technology, as well as property preservation, property inspections, broker price opinions and more! Phone #: (800) 778-4920 Web site: www.streetlinks.com

Description of products offered: TTP provides compliancecentric marketing solutions that identify targeted opportunities, then shapes these opportunities into a tangible return on marketing investments. MACH3 helps lenders broaden their perspective and view every customer, prospect and partner as a constant revenue stream. TTP offers an intelligent approach to automated print and email marketing along with a customizable authorization hierarchy. TTP’s in-house print and mailing facility ensures unparalleled quality, service, and speed to market. Phone #: (888) 887-7880 Web site: www.turningpoint.com

Waterfallcalc.com Why techies love the company: The complexity of the algorithms behind the scenes of this software is amazing. Why clients love the company: FHA loss mitigation decisions are guaranteed. Processing time is cut by 90 percent. Description of products offered: WaterfallCalc.com assists mortgage servicers with choosing the best FHA loss mitigation option and performs all calculations based on the most current FHA Loss Mitigation Guidelines (Mortgagee Letter 2012-22 and 2013-32). It is capable of interfacing with any servicing platform to reduce keystroke errors and input times. The average time to determine the correct FHA loss mitigation decision is under 10 minutes. The cost of the product is approximately four percent of the home-retention incentives paid by HUD. Phone #: (616) 570-0199, ext. 127 Web site: www.waterfallcalc.com

GOOD BETTER

ELITE • 760+ FICO • 80% LTV OR LESS • $250K+ LOAN AMOUNT

NationalMortgageProfessional.com

Top-tier borrowers deserve unbeatable pricing. With our Elite line of products, you can offer your well-qualiﬁed clients industrywide low rates combined with unparalleled service. When you have borrowers of this caliber, wow them with an overall premium lending experience from the lender who can have them closing the same month. Now that’s lending made easy. Join our network, and unite with us at uwm.com/younited

800-981-8898 | UWM.COM/YOUNITED

n National Mortgage Professional Magazine n NOVEMBER 2014

OUR BEST FOR YOUR BEST. PERIOD.

The Simple Way to Plan for 2015 By Tom Ward

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As the end of 2014 approaches at a rapid pace, it’s time to start planning for 2015. When you start to get into a planning mode for the coming year, we often see pages and pages of forms to fill out with so much detail that it becomes overwhelming. My attempt today is something that I’ve been told is one of my strengths, and that’s making the complex simple. As most of you have heard me say before, there are six categories of loans in two brackets: The refinance bracket and the purchase bracket. The first thing you need to do is to go through your closed loans for the past year and determine the number of loans you closed. More importantly, you must determine the types of loans you have closed. For example, let’s just say that you closed 50 loans, with 25 of them refinances and the other 25 as purchase apps. After the mortgage meltdown, we know that most of those refinance loans were rate and term. The first question you need to ask yourself is what are the market conditions going to look like in 2015? It’s important to be brutally honest with yourself here. Is the environment for refinances going to be the same, better or worse in the coming year? Most will say it will be worse than the previous year. Let’s just say that you still get some, say 10 loans. If you want to maintain the 50 loans you closed last year, you will need to get 40 purchase loans. There are four categories of purchase loans: move-up/move down, foreclosure victim, investor/second home, and renter (never owned). In the move-up/move down category, do you see an appetite that's going to increase? These folks don't have enough equity just yet and are still uncertain about the economy and might want to stay put for a few more years. The investors/second home buyers has not been a hot category and all predictions appear that for that continue over the next few years. So the two categories that remain are both renters, one that has never owned a home before, and the other who has lost a home due to foreclosure or short sale and is re-entering the marketplace as a buyer. I think a bulk of your 40 loans will need to come from one of these two categories. This renter has several idiosyncrasies that we cover on our Web site below. When you want to just maintain the same number of loans you closed last year or you are looking to make 2015 your best year ever, you need to learn about these renters. Become an expert in your local marketplace. I’ve been studying this customer for the past three-anda-half years, and that’s why we created the Path2Buy program. Our training program will get you up and running fast, and you’ll become an expert in your local market. For more information, log on to www.path2buydemo.com. If you’d like to download the planning form, visit www.2015planning.com. We also have a movie explaining the step-bystep process as well. Tom Ward is founder of the Path2Buy Homeownership Coaching Program (Path2Buy.com). He may be reached by phone at (847) 970-4295 or e-mail tom@path2buy.com.

heard on the street continued from page 42

them by making workflows easier and more efficient. “We couldn’t be happier to be joining the eLynx team,” said Medallion Chairman and CEO Joel Davidson. “Our deep expertise in title services is a perfect complement to their strength in the closing process, making it a natural fit for us to be working as one. We share a common view on the value of data and its impact when properly applied in the mortgage closing process.”

Wingspan Gets Capital Infusion and Names New Company President

Wingspan Portfolio Advisors has announced a multi-million dollar capital infusion from its stockholder investor group. Simultaneously with the capital infusion, the company announced it has divested itself of Dimont & Associates, the insurance claims management firm it acquired in May 2013. Wingspan also announced that Wingspan Executive Vice President of National Operations Jason Spooner has been named as president. Spooner has more than 20 years of mortgage industry experience, including leadership roles at Bank of America, Sun Trust, and Wells Fargo. Spooner joined Wingspan in 2012 to manage national operations, and as president, he will also oversee the company’s daily operations. Wingspan’s Founder, CEO and President Steven Horne has moved to a senior advisor position. “We have just finalized a significant strategic transaction with an investor group and we are now debt free,” said Horne. “The transaction will give Wingspan a stronger financial foundation than we have ever had and further enhances our ability to deliver exceptional service to our clients. As the company’s founder, I am excited by the opportunities ahead for Wingspan. Over the past year, like many other companies in the servicing industry, Wingspan has experienced a fair degree of turbulence as the industry is successfully transitioning out of the default crisis. Wingspan has diversified its services and aligned its workforce accordingly. With the closing of this strategic transaction, we have secured the financial support we need to continue as the leader in component servicing and outsourcing solutions.”

GSF Mortgage Becomes a Ginnie Mae Issuer

GSF Mortgage has announced that it has been approved as a Ginnie Mae SPONSORED EDITORIAL

Issuer. Ginnie Mae facilitates the securitization of government-insured products. They are not in the business of making or purchasing mortgage loans and does not buy, sell or issue securities. Ginnie Mae guarantees investors timely payments of principal and interest on mortgage-backed securities (MBS) backed by federally insured or guaranteed loans—typically loans insured by FHA and VA. Other loans that are eligible include the Department of Agriculture’s Rural Development (RD). Ginnie Mae securities are the only MBS to carry the full faith and credit guaranty of the United State’s Government, meaning that even in challenging times, Ginnie Mae MBS are one of the safest an investor can make. “We have had our sights set on becoming a Ginnie Mae Issuer for some time. We share the same fundamental mission of expanding homeownership for credit worthy borrowers,” said GSF President Chad Jampedro. “The ability to issue Ginnie Mae securities will allow GSF to establish its own underwriting criteria within agency guidelines and retain the servicing rights of the borrower’s loans that we are originating. Our goal is to continue to serve our borrowers at the highest-level, beginning at origination and continuing as their servicer. Customer support and retention is at the core of our business plan and becoming a Ginnie Mae Issuer will allow us an opportunity to be more to our borrowers over the life of their loan. We had the opportunity to attend the Ginnie Summit in Washington D.C. and were so impressed with the their staff and training presentations. Their mission is clear, they believe in ‘The Power of Partnerships’ and GSF Mortgage is certainly pleased to be included as an approved partner.”

Guild Mortgage Acquires Portland-Based Northwest Mortgage Group Guild Mortgage Company has acquired Northwest Mortgage Group based in Portland, Ore., with eight branches in Oregon and $842 million in loan volume in 2013. Northwest Mortgage Group is one of the largest purchase mortgage lenders in the Portland area. The acquisition is the newest step in Guild’s long range plan to grow through acquisition, adding branches in new and existing markets and preserving its customer service culture with experienced, talented loan officers with established relationships. From 2010 to 2013, Guild grew from its western base into the Southeast and Southwest, increasing its number of branches and satellites from 75 to more than 200. Loan volume in the same period jumped

from $4.1 billion to $7 billion. Servicing volume more than doubled, from $6.4 billion to $13 billion. Bob Engelke, CEO of Northwest Mortgage Group, started his mortgage banking career in 1993 and formed Northwest Mortgage Group with three partners in 1995. Since then, the company has grown from one branch and six employees to eight branches with more than 150 employees and is the leading independent mortgage banking company in the Portland area. He will continue as Oregon manager, leading the new Northwest Mortgage Group division within Guild. Northwest Mortgage Group currently has offices in Portland, Beaverton, Lloyd Center, NW Portland, Lake Oswego, Clackamas, Newberg, and Scappoose, Ore. “Northwest and Guild together will be stronger in every way than each company is today,” said Mary Ann McGarry, Guild’s president and CEO. “Northwest Mortgage Group has built an exceptional company, noted for well-established sales leadership and insights into every market where Northwest competes. Guild brings technology in support of sales, custom-built systems, tools, products, a servicing portfolio, a strong balance sheet, and management strength with a group of owner managers committed to continuing success.”

People’s Home Equity Partners Up With Comergence

We ar Califor e Premie nia’s r Private Direct M and Br oney idg Lender e

Ellie Mae Encompass Users Eclipse the 100,000 Mark

Ellie Mae, a provider of on-demand software solutions and services for the residential mortgage industry, has announced that it has recently surpassed 100,000 active users of its Encompass mortgage management solution, the mortgage industry’s solution for achieving compliance, loan quality and efficiency. “With increasing regulatory oversight and an ultra-competitive market, choosing the right mortgage technology provider that provides innovative products and enterprise class service and support has never been more important,” said Jonathan Corr, president and COO of Ellie Mae. “Compliance is a key driver for adoption of Encompass technology for banks of all sizes, with significant adoption from very large lenders. They recognize Encompass will not only improve the quality of their loans, but save them time and money as well. We are grateful that so many lenders have placed their trust in us, and we will continue doing everything we can to keep it.” The Encompass management solution allows banks, credit unions and mortgage lenders to originate and fund mortgages. The platform has built-in compliance and quality tools, including the Ellie Mae Total Quality Loan Program, that help lenders of all sizes create loans faster and more efficiently, while staying compliant with regulations and investor guidelines.

Stated Business Purpose Loans on Residential Properties • Reﬁnances up to 65% LTV, min loan amount 50K to 5 million • Purchases up to 70% min. loan amount 50K to 5 million • Loan term, 6 months, 3 year, 5 year, interest only or fully amortized available • Programs with no PP available • Rates from 8.50% and up depending on LTV term and prepayment penalty • We have 2nd position loans available for n/o/o and investment properties up to 55%-60% CLTV • 5-7 days closing available

Apartments and units (5+ residential units) • Up to 70% on refinance and purchases • Stated but verified rental income of property • Loan terms: 1 year, 3 year, 5 year, 7 year and 10 year; fixed IO or fully amortized • Rates from 8.00% and up • Programs with no PP available depending on LTV, term and prepayment penalty • We have 2nd position loans available for our commercial products up to 60% CLTV • 5-7 days closing available

Commercial (industrial, retail, church, mixed-use, gas station, auto related, manufacturing, etc.) • Up to 55% on reﬁnances • Up to 60%-65% on purchases • Term 1 to 5 years Land loan (max LTV 35%, reﬁnance, 50% purchase) call for details

877-700-3703 Office 866-318-4471 Direct Fax

www.pbﬁnancialgrp.com • e-mail scenarios to: info@pbﬁnancialgrp.com PB Financial Group Corp. NMLS #357614/PB Financial Group Corp BRE #01522495

Disclosures: per FDIC Regulations Section 6500 Part 226, Subpart C, 226.24. The amount of each payment that will apply over the term of the loan is based on simple annual interest applied to the unpaid balance. Loans range from 1 day to 60 months, are interest only and include a balloon payment due at term. Finance charges apply. Payments do not include amounts per property taxes or insurance premiums. This is not a commitment to lend. Rates and points are subject to change without notice. NMLS #357614

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OpenClose Adds Staffers During Record Year OpenClose has announced that it is adding technical staff to effectively manage a growing demand for its browserbased LOS platform, LenderAssist, and accompanying solutions. OpenClose is reporting its best revenue growth year in company history. “We’re seeing a significant uptick in LOS deal flow, and as such, proactive measures are being taken in order to have adequate resources on hand to implement and support the on-boarding of new clients,” said JP Kelly, president of OpenClose. “Our sales team recently signed a number of different lenders, which includes several marquee clients. We treat our customer base as long-term partners and always strive to provide excellence in service; the new hires will help us to continually deliver on that promise.” Part of OpenClose’s rapid growth is the result of its recent development of a continued on page 56

www.TheNationalRealEstatePost.com

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Comergence, a provider of third-party riskmanagement platforms for the mortgage industry, has announced that it is now providing its originator screening and due diligence services to People’s Home Equity Inc., a full-service mortgage lender based in Brentwood, Tenn. Comergence offers a full suite of handson and automated services for mortgage originator and appraiser due diligence and profile surveillance. People’s Home Equity recently began using Comergence’s REALM for Third Party Originators, a proprietary platform with a comprehensive database of over 400,000 records on every licensed mortgage originator in the country. REALM aggregates critical data such as: Licensing, criminal and civil records, financial sanctions, as well as bankruptcies and foreclosures. Because the REALM platform is updated continuously, clients are able to keep current on the status of their third party originators, helping to ensure compliance with state and federal regulations. “With REALM for Third Party Originators, People’s Home Equity is simplifying its originator approval process and making it more efficient,” said Greg Schroeder, president of Comergence. “By using our due diligence and monitoring services, People’s Home Equity is also showing its commitment to quality control and regula-

tory compliance. We’re delighted to add them to our growing client base.”

Just Ask

Eric Weinstein & Laura Burke

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

tax professional. Please e-mail us at JustAskEricandLaura@gmail.com to voice any questions or problems. We are here for you!

Self-promotion Eric from North Carolina asks … I did an e-mail blast flyer about a certain lender’s program which sounded pretty unique to me. Almost immediately, I received several inquiries from other loan officers asking who the wholesaler was. Do I tell them? Eric’s reply to Eric … I love your first name. My first inclination

is to say not just “No”, but “Hell, no.” When it comes down to it, knowledge is your stock and trade. You are not really selling mortgages; you are selling your knowledge about certain mortgages. Why would you tell your competition? But then I thought, maybe you are in North Carolina and they are in Maryland where they cannot possibly be any competition for you. Then do you tell them? In that case, I would say “Yes.” Maybe I am just an old fool, but I like the idea of helping people. That is why I share my knowledge of the mortgage industry in these columns. What possible good could come of helping your fellow man? Possibly the Maryland loan officer has a friend in North

Carolina he informs who works across the street from you. Now don’t you feel like an idiot? It really comes down to your own philosophy. It is the same problem with giving a bum on the street a dollar. He says he will use it for food, but maybe he is scamming you for liquor money. What do you do? A great Rabbi was once asked this question by one of his disciples (I am Jewish, so all my stories have Rabbis in them, but you can change it to Priest, Pastor, Imam, etc. according to your beliefs.) The Rabbi said, “Yes, he could be lying to me, but I cannot take the chance.” He meant that we have so few chances in this world to extol our virtues that you

k Eric & Laura have to grab them when they come up. Read the lyrics to Brad Paisley’s “What If She’s an Angel” and get back to me on what you decide.

Knowing when to pick your battle and when to hold ‘em Parker from Virginia asks …

Eric’s reply to Parker … I always took state exams as ways to improve my operations. The one thing I DID learn is not to fight over it. The examiners are hardly ever wrong. Even when they are wrong … they are right, if you catch my meaning. They have so much power over you that your company will rarely ever win. The only correct response to a deficiency is “This is the plan we now have in place so it can NEVER happen again.” When a traffic cop stops you for speeding, are you going to yell and scream at him like an episode of “The Jersey Shore?” No, if you are sane, you take the ticket and move on. If you are in the right, you can argue it in traffic court, but don’t try to convince the cop. He is only doing his job. You can definitely contact the regulators, discuss the issue and explain your

more you antagonize them, the more they might find. The same often go for authorities like the IRS. I recently had an agent tell me they never got a return. I argued the point as I had proof I sent the return via certified mail. She said you can argue with me, you can mail me the documentation verifying you sent it in, and I may still be continued on page 59

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I have a small mortgage company in Virginia. We just went through our first audit. The examiners found some deficiencies which I think are very picky. How do I address it? Do I fight them over it or just give in?

Laura’s reply to Parker … Wow, two questions and Eric and I are in agreement. In an audit, I recommend going with the flow of least resistance. Give them what they want, play dumb like a

fox. “Oh, I didn’t know that was what meant, let me correct that immediately.” On the flip side, if it is blatantly an attack against you or your company, and it doesn’t have merit, than yes, as Eric also mentioned, let them finish the audit, and move on out of your office. You can then contact your attorney and decide what steps to follow next. But getting them done and out the door is the best course of action. The longer you keep them, the

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Laura’s reply to Eric … I am impressed! My co-author has a heart and a soul … scary! I agree with almost all that Eric has said. I truly believe in helping others, but I also believe in Henny Penny, the old children’s tale. She was a chicken, I believe, and she thought that she would bake some bread, so she planted some seeds and watered the garden. She asked for help with planting the seeds and no one would help. She asked for help weeding the garden and no one would help. She then harvested the wheat she planted, and again asked for help. No one would help. She asked one last time for help baking the bread and still no one helped. So when it came time to eat the delicious warm bread, everyone wanted to join her, and she simply said, “No! I will eat it myself.” So if you did the work and spent the time to find a program to set yourself apart from your competition, “No, I don’t think you need to tell them who and how to compete with you.” You have the competitive advantage and I would keep it. Obtaining the competitive advantage came with a cost to you, whether it was time, expertise, networking or learning a new product, you have put forth an effort to gain what you have. I say to roll with it!

understanding of the law, but remember, if they say “No,” then it is a definitive “No.” It is easier to just correct the problem (as they see it) then to hire a lawyer to try to get your license back. Just my opinion.

Winning With Technology By Garrett M. Kolb

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

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heard on the street continued from page 53

correspondent lending module, which is being used to help launch new correspondent channels or grow existing correspondent businesses. The module can work as a standalone, turnkey solution or in conjunction with the LenderAssist LOS. In addition, OpenClose’s wholesale lending solution has also generated significant revenue. “The correspondent and wholesale components of our technology offering have been wildly successful and a major driver of OpenClose’s growth over the past year,” said Kelly. “We want to make sure that we are well-staffed and have a solid infrastructure in place to effectively support clients. Our plan is to keep adding personnel in an effort to manage company growth at a healthy, controlled rate.” The addition of staff will largely focus on software development, solution implementation and technical support. OpenClose has offices in West Palm Beach, Fla. and Seattle, Wash. The company says most new hires will reside out of its corporate office in Florida.

First American’s Mortgage Solutions Group Named a Freddie Mac Distributor

First American Financial Corporation has announced that its Mortgage Solutions Group is now a distributor of Freddie Mac’s Home Value Suite, a defined set of valuation modeling tools that automate, streamline and drive down the cost of collateral valuation in the housing market. First American Mortgage Solutions was named as an approved distributor based on the company’s long-standing history as a leading reseller of several automated valuation models (AVMs)—specifically Freddie Mac’s AVM, Home Value Explorer (HVE)—to lenders, servicers and investors. The distributor arrangement is an extension of the current reseller agreements in place since 2000. “First American Mortgage Solutions is committed to Freddie Mac’s HVE and we are thrilled to be an approved distributor so we can provide mortgage lending customers with lower product pricing and increased certainty in their lending as they continue efforts to produce defect-free mortgages,” said Kevin Wall, president of First American Mortgage Solutions. As an approved distributor of the Home Value Suite, First American Mortgage Solutions provides AVM services to a broad sector of the mortgage industry via direct connection with Freddie Mac. This distributor relationship also provides increased reliability in model performance due to direct connections, an improved focus on AVM evaluation criteria, and the ability to offer Freddie Mac products, including both HVE and Calibrator, directly to lenders and reseller clients.

Supreme Lending Continues Midwest Expansion

Supreme Lending, a Dallas-based nationwide mortgage banker, has opened two new branches, in Overland Park, Kan., a suburb of Kansas City, and the other in Kansas City, Mo. This is the second Supreme Lending branch in Missouri, and the first in the Kansas City area. The move is part of Supreme Lending’s growth plan to develop its presence in this strong market. Industry veteran David Curry joined Supreme Lending as branch manager for both branches. Reporting to him are five loan originators and one operations manager—four originators in the Kansas office and one in the Missouri branch. Curry has worked in the mortgage industry for more than 25 years. Prior to joining Supreme Lending, he served as a branch manager and senior loan officer for Prime Lending, where he managed four branches and 19 loan officers. Prior to that, Curry served as senior division president and senior loan officer with Diamond Residential Mortgage, where he focused on FHA/VA, USDA and conventional loans. “We are looking forward to serving homeowners in Kansas City and the surrounding areas with Supreme Lending’s highly acclaimed customer service,” said Rick Hogle, CSO of Supreme Lending. “We know David and his team will use their knowledge and experience to differentiate themselves in the marketplace.”

Fay Servicing Named an Approved Fannie Mae Servicer and Ginnie Mae Issuer

Fay Servicing has received approvals as a Ginnie Mae issuer and Fannie Mae servicer, enabling the company to expand into additional business lines within originations, servicing and sub-servicing. Receiving both Fannie Mae and Ginnie Mae approvals is a positive validation of the firm’s servicing expertise, compliance regime and financial strength. This is an important step for Fay Servicing that broadens its servicing product mix and origination capabilities in multiple distribution channels. “Fannie Mae and Ginnie Mae approvals add meaningful opportunity for us to grow both our servicing and origination businesses,” said Ed Fay, CEO of Fay Servicing. “We look forward to applying our highly differentiated and borrowercentric business model in the agency and Ginnie Mae markets.” Fay Servicing plans to both buy servicing rights and sub-service for countercontinued on page 89

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1.800.649.1362 I www.DocMagic.com

A Few Quick Tips From AllRegs on Vendor Management Vendors pose a risk for banks and non-banks alike … and the Consumer Financial Protection Bureau (CFPB) is monitoring those risks. “Consumers are at a real disadvantage because they do not get to choose the service providers they deal with—the financial institution does,” said CFPB Director Richard Cordray in a release from the CFPB. “Consumers must not be hurt by unfair, deceptive or abusive practices of service providers. Banks and non-banks must manage these relationships carefully and can be held accountable if they break the law.” The CFPB has specified that “supervised entities” are responsible for ensuring that their vendors and service providers are in compliance of federal financial laws. Here are few items you should know about vendor management compliance. 1. There is a difference between a vendor and a service provider A vendor is a person or organization that vends or sells a product. A service provider sells a service, like consulting or staffing. In the mortgage arena, vendors do not come in contact with consumers or client files. The “vendors” who usually cause the extra compliance risk are in fact “service providers.” These companies offer services that bring them into contact with consumers, consumer data, loan files, and decision-making processes which are regulated by the government. You are liable for your service providers when they are in contact with your consumers or loan files.

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2. Be diligent about ensuring vendor/service provider compliance, or you put your own organization at risk When you hire a vendor or service provider, they may seem like they are responsible and compliance-ready. You may feel confident to trust that they are compliant since they are a reputable company and actually doing the work that requires compliance. Do not follow this route. The law holds you liable for their actions. Make sure you have policies and procedures in place to monitor their activities to ensure compliance of the law. More importantly, make sure you have a Compliance Management System in place for all aspects of CFPB compliance. 3. Get your senior management and board of directors involved CFPB guidance clearly conveys the expectation that the board of directors and management will “develop a plan of action for oversight of serviceprovider (vendor) relationships.” Your vendor management policy requires their final approval. To take it a step further, your staff vendor management training should also reflect the internal policies of your business. So, how do you manage vendor compliance? The AllRegs Compliance Management System gives you the tools you need to ensure that your entire organization is compliant with the CFPB through technology and professional services. Our system gives you access to courses like Examining Vendor Management to train your staff. You can also work with the AllRegs Professional Services Group on a customized Vendor Management policy. To learn more, visit us at www.allregs.com or contact your dedicated account executive at (800) 848-4904.

The Long & Short: The Business of Short Sales

A Public “Thank You!” to Fannie Mae and a Request for Conventional Hardship Counseling Certification for Past Short Sellers An Open Letter to Mel Watt, Director of the Federal Housing Finance Agency (FHFA) By Pam Marron Dear Mr. Watt: First, thank you to Fannie Mae for the Aug. 16, 2014 Desktop Originator “fix”1 that provides for past short sale credit reported as a foreclosure to be corrected! This allows thousands of eligible past short sellers to again re-enter the housing market! Now, there is another problem we need your help with: The confusion of real hardship with strategic defaults. Underwriters are now reviewing more borrowers who had a past short sale. Many underwriters have a problem with the fact that the mortgage was on time, and then all of a sudden, went delinquent right before the short sale and assumes these folks were strategic defaulters. However, an overwhelming majority of underwater homeowners were told by their lenders that they could not receive help unless the mortgage was delinquent. A massive number of short sellers will tell you they went delinquent because it was the only option given to them by their lender to get a short sale approval. Further, it can be proven that a massive number of these folks stayed in their homes until they could not do so any longer. Staying current was a struggle: Hardship is what forced the short sale. In the midst of the worst recession in U.S. history, many underwater homeowners wiped themselves out, emptying 401(k)s and savings to stay afloat. The hardship was the circumstance that occurred when these folks were at the end of their rope, and had no option left except to short sale their home. And, yes, there were those who took advantage of the system. But the great majority continued to make payments, expecting to gain back equity and eventually move on. However, there are areas across the U.S. where appreciation has not happened fast enough and life events have resulted in continued short sales for underwater homeowners (approximately 9.1 million per RealtyTrac in July of 2014).2

FHA has “Back to Work” Certification The Federal Housing Authority (FHA) has a “Back to Work” program3, where those who have had a past short sale, foreclosure or bankruptcy can get a certificate from a HUD Approved Counselor where hardship existed and where a 20 percent reduction in income was sustained for six months or more. In acceptable circumstances, a new FHA mortgage can be approved one year after the short sale, foreclosure or bankruptcy as another option to the three-year wait required now. Could the FHFA allow a Hardship Certification from a HUD-approved counseling agency or private mortgage insurance (PMI) company for conventional mortgages? Why? Because underwriters unfamiliar with problems surrounding short sales are turning down qualified conventional borrowers with extenuating circumstances at the two-year mark after a short sale.

Real hardship examples A husband loses his job after a brain aneurysm. The medical crisis causes the couple to file for bankruptcy, but they continue to pay the mortgage on the wife’s salary alone. Soon, it is evident the husband will no longer be able to work. It takes 18 months to get Social Security Disability for him and the underwater home is put up for a short sale. The short sale takes almost two years with two contracts that fall apart due to the lengthy short sale process. The employed wife struggles to make the house payments, wiping out the 401(k)s of both her and her husband. The wife is told she must go delinquent in order to get a short sale approval, so she does. Two years later, the wife attempts a new mortgage. The underwriter turns her down, stating she made the mortgage payments after the bankruptcy. The wife asks, “How hard does my hardship have to be?” Another couple kept their underwater property as a rental. Both moved to another state for jobs, rented out their home and paid monthly for the difference between rent SPONSORED EDITORIAL

received and the mortgage payment. One’s 401(k)s and savings reserves were wiped out to cover the difference of funds needed. When they lost their final tenant, the options were to short sale or go into foreclosure, as all funds were depleted. They short sold the property. Please allow trained HUD counselors or PMI underwriters to provide a certification for hardship to prove extenuating circumstances. Lenders will not approve a short sale unless a hardship exists. Questioning hardship requires that borrowers must revisit a difficult time all over again. Allowing those trained with allowable criteria to determine real hardship and provide borrowers with an option to layout their story to an unbiased third party can make a difference in the

growth of the housing market. Sincerely, Pam Marron NMLS#: 246438 Pam Marron is senior loan officer with Innovative Mortgage Services Inc. She may be reached by phone at (727) 375-8986 or email pmarron@tampabay.rr.com.

Footnote 1—Desktop Originator/Desktop Underwriter Release Notes/DU Version 9.1 August Update/June 17, 2014 (www.fanniemae.com/content/release_notes/du-dorelease-notes-08162014.pdf). 2—U.S. Homes Underwater Stalls at 9.1 Million in Second Quarter as Home Price Appreciation Slows in Many Markets, July 24, 2014, RealtyTrac (www.realtytrac.com/content/foreclosure-market-report/us-q22014-home-equity-and-underwater-report-8118). 3—Back to Work Program: Get Your Certificate (http://backtoworkprogram.org).

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unable to locate it. Or you can simply remail me the missing return. Which do you want to do? I re-mailed the return in question. The old adage comes to mind here, “You can catch more flies with honey.”

Too many questions Stan from Iowa asks … My manager doesn’t always answer my questions, and often leaves me hanging. Should I go around him or above him to get the assistance I need for my loans and clients? I don’t want to make the situation worse, but I need timely answers.

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

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

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Laura’s reply to Stan … All too often, we take the easiest path, which is to ask someone the questions who always knows the answers, or knows where to find the answers. The reason that person knows the answers is because they have been looking them up for quite a

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Eric’s reply to Stan … I feel you. I had the very same situation with my first boss when I just got into the mortgage business. He told me he was too busy doing his own loans, but really, I think it is a power trip to block the flow of information to make himself feel better about his petty little life … but I digress. The best advice he gave me was by throwing a big lender’s binder manual at me and said, “Look it up yourself.” Yes, back then it came in a binder, but now it is all online. Ask yourself honestly, are you really maybe just asking a lot of simple questions because it I might be easier to ask rather than take the time to look it up? I have had employees like that and indeed, it does get tiresome. Go to your lender’s wholesale manual online and start looking up your questions. Soon, people will be asking you the questions you are now asking your manager. Knowledge is power my friend. The more you learn, the more you will make. The first part of learning is how to look things up.

while. So I agree again, with Eric. If they are questions relating to products or vendors and you can do the research yourself, then start doing it. The best way to learn something is to teach it. The more you learn, the more you can share. However, I have also had multiple managers whom I had no choice but to ask specific questions relating to company software, phone systems, permissions, human resources inquiries and pricing that needed to be answered by your manager. I recommend here asking them first, and maybe even a second time. If, by the second time, you have asked the question and have given it a good 24-36 hours for a response (unless your manager is out of town), then I would go either to their boss, to HR, or pricing—whatever it is you are looking for an answer to. Never let your manager coerce you in to doing something unethical or illegal. Just because the manager is telling you to do it, don’t. This is where you go to their supervisor immediately, and if needed, go above them until you get to someone who will listen and can rectify the situation.

the unintended consequences continued from page 45

due to Basel III, they lose this natural hedge and become more susceptible to large earnings swings as interest rates change. l Moreover, the shift to non-bank servicers driven by Basel III injects additional risks into the financial system at precisely the time when the U.S. economy most needs stability in the housing finance system. Non-banks do not fall under Basel III and do not have to hold equivalent capital. What happens if the economy falters, defaults

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increase, and servicing becomes less profitable? One plausible scenario is that these non-bank servicers will strive to reduce costs. As a result, service quality could drop, more loans would default, foreclosures would increase, pressure on housing prices would increase, and investors and insurers would incur higher credit losses. Another potential pitfall of the Basel III guidelines is that the regula-

tors are raising the capital required to support MSRs just as the credit quality of the underlying loans is improving. The point of Basel III is to ensure banks have the financial resources to manage through stress scenarios. A major stress scenario related to mortgage servicing rights is that large numbers of underlying loans default, raising the costs to manage them and putting pressure on bank earnings. However, under Basel III there is no correlation between the credit quality of the underlying loans and the capital required to support the servicing rights. Additionally, Basel III is being implemented on top of other regulations, such as Dodd Frank, that have

mandated tighter underwriting and product guidelines resulting in substantially better credit quality. Consumers may also suffer as a result of Basel III. By increasing the capital costs associated with mortgage servicing, the regulations make it more difficult for banks to make a profit providing home loans. This could result in fewer loans being made, even tighter underwriting guidelines, and/or cost increases to the borrower. Moreover, non-banks do not have the same relationship with borrowers that banks have and may be less motivated to provide high levels of customer service or invest in customer support when a borrower gets in trouble. Non-bank servicers, lacking a broader relationship with the borrower, may also be incented to charge higher collection fees and pass on higher workout expenses. The Consumer Financial Protection Bureau (CFPB) which regulates mortgage servicing has recently started to look at non-bank servicers and raise red flags. The Securities and Exchange Commission (SEC) has also raised concerns regarding cross ownership relationships between one of the largest specialty servicers and companies that provide loss mitigation services. There is no simple fix to ensure banks have just the right amount of capital to support the risks they incur. However, Basel III could be improved by scaling the amount of capital required to support MSRs to the credit quality of the underlying mortgages. Banks that hold riskier MSRs would be required to hold more capital. This would ultimately raise the costs to the most risky borrowers while keeping prices lower for others. This would also allow the Basel III guidelines to be coordinated with other regulations like Dodd Frank, which determines the conditions under which a loan is considered a qualified mortgage. To create a more even playing field, the Basel III capital requirements related to MSRs should also be extended to non-bank servicers. Doug Rossbach is a vice president with North Highland, a global management consultancy, and the mortgage banking leader within the firmâ&#x20AC;&#x2122;s financial services network. Doug has more than 30 years of industry and consulting experience working directly with financial institutions such as Big Four banks, credit unions, mortgage insurers and service providers, and warehouse lenders. For more information, visit www.northhighland.com.

new to market continued from page 18

presented quality control issues for mortgage lenders,” said Craig Riddell, SVP and chief business officer for LoanLogics. “This innovation in a pre-close audit helps identify potentially fraudulent signatures before the loan is closed, and in the process, protects borrowers and lenders. Additionally, we have spent considerable time with industry leading Correspondent lenders who are confident that SignaFacts will be a very valuable feature in further reducing the costs of their pre-funding audits. It has always been difficult and time consuming to catch differences in signatures across the hundreds of pages contained in loan file documents that often arrive at the lender’s offices at different times. To complicate matters, the number of loan documents in a file has increased dramatically and staffs are stretched as their audit check lists have grown exponentially in the wake of new regulations and heightened investor scrutiny. Not only are individual documents assessed but results compile into defect reports to help identify which employees and documents are most often involved.

Velocify Introduces New CRM Tool Velocify, a provider of cloudb a s e d intelligent sales automation software, has announced it is now offering to mortgage lenders Velocify for Salesforce, a unique application that integrates high-velocity sales tools into the market-leading CRM technology. Velocify for Salesforce extends the value of Salesforce by removing the guesswork

for loan officers on the highest priority borrowers and increasing the number of contacts lenders make with potential borrowers, thereby helping lenders reach and exceed their sales goals. Matt Baker, a senior loan advisor with the Bookspan Baker Team of Cobalt Mortgage based in Scottsdale, Ariz., and an early adopter of Velocify for Salesforce, says the solution has helped his 12-person team create a winning call strategy while eliminating gaps in the company’s contact rate and inprocess mortgage applications. “Our biggest gap was in the sales opportunity stage,” Baker said. “We didn’t have a great system that could tell us, ‘Hey, call these people again.’ Velocify for Salesforce solved that prob-

lem for us by making sure everybody was accountable in the lead and application process. It’s having a direct impact on our bottom line.”

AXIS Appraisal Management Launches New QC Report AXIS Appraisal Management Solutions has announced the launch of Appraisal Quality Compliance (AQC) Report. AQC provides a reliable nationwide solution for independent appraisal review, including the stringent AMC review requirements required by the Texas Appraiser continued on page 88

LendingQB Announces Integration With QuestSoft’s Compliance EAGLE 61

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LendingQB, a provider of loan origination software (LOS) has incorporated Compliance EAGLE, QuestSoft’s automated compliance solution, into its LOS platform to further enhance compliance automation and provide end-to-end regulatory and investor assessments throughout all stages of the loan origination process. QuestSoft’s Compliance EAGLE enables LendingQB customers to maintain data integrity and uphold compliance throughout the loan origination lifecycle by providing loan-level reviews prior to closing. The platform also allows lenders to enhance data collection and reporting capabilities by easily generating reports for investors, auditors and executives. Additionally, the software enables customers to minimize compliance errors and reduce risk while optimizing performance and ensuring that high levels of accuracy are met from start to finish. “The partnership with QuestSoft was driven by customer demand, and we decided an integration would help us maintain the best compliance standards in the industry,” said Chris Anderson, chief business development officer for LendingQB. “The challenges imposed by today’s regulatory environment create the need for quality compliance that can be carried out on all levels. Compliance EAGLE offers a suite of automated and comprehensive compliance tests that give our customers the technology they need to remain compliant at all times.”

New Integrated Disclosure Will Test the Mettle of Mortgage Settlement Agents

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By Andrew Liput

n September, Wells Fargo announced that, beginning Aug. 1, 2015, it will control the generation and delivery of the borrower’s closing disclosure form in anticipation of the Consumer Financial Protection Bureau’s new TILA-RESPA Integrated Disclosure Rule that takes effect the same day. The new disclosure is a combination of the existing Truth-in-Lending (TIL) disclosure and the HUD-1 Settlement Statement. Wells Fargo stated they will be taking over this process in order to meet internal compliance and governmental regulatory compliance expectations on the bank. Wells said the reason they will be delivering the new Integrated Disclosure Form is to maintain evidence that the borrower received the disclosure at least three days prior to the closing, a key compliance requirement, in the event this evidence is required during a regulatory audit.

Although other lenders are expected to follow Wells’ example, the new disclosure rule does not establish that the supervision and delivery of the disclosure is no longer a responsibility of the settlement agent, who continues to be responsible for the seller’s information and will, in most instances, prepare and deliver the seller’s closing disclosure. The ability of settlement agents to effectively manage the proper execution and delivery of this document, while complying with the advanced disclosure time period requirements is being called into question. The reason for this is that, while the title industry, largely due to the efforts of the American Land Title Association (ALTA), have been proactive in educating themselves about compliance, there is very little evidence that real estate attorneys and notaries, who may also have responsibility for the delivery of this document in various states, have likewise been prepared. I had the opportunity to speak before a state bar association’s real

estate college recently. There were more than 300 attorneys present who spend the bulk of their practice handling mortgage closings. I was introduced as someone who was going to speak about CFPB rules that “may potentially be enacted” and that “might impact the industry.” The first words I uttered were that “these rules are already here, and have been for quite some time, that this is not an ‘if,’ this is a ‘now.’” Over the next 45 minutes, I spoke about the vast changes to the industry enacted by the CFPB to a group of professionals who appeared to be hearing about them for the first time. I was quite frankly shocked. As they were with the third-party vetting rules, many in the mortgage settlement field seem woefully unprepared to meet the compliance requirements imposed upon them by lenders who must answer to CFPB audits and enforcement action threats. Although agents rely upon lenders for their business, there are far too many who fail to educate themselves and take the appropriate measures to meet

compliance directives on the timetable established by the government, resulting in surprise, shock, anger, bitterness and resentment … followed by grudging acceptance. The time is now for all settlement agents to become familiar with the new integrated disclosure rules and to reach out proactively to their lenders to ensure they can work together, hand in hand, in generating and delivering the Closing Disclosure Forms. In doing so, they may help to avoid unnecessary costs and expenses from consumer litigation and audit issues stemming from the CFPB’s RESPA-TILA Integrated Disclosure rules. Andrew Liput has been a corporate, real estate and banking attorney for more than 25 years He is the founder, CEO and president of SSI, the first data intelligence and risk analytics firm to offer specialized vendor management services addressing settlement agent risk to mortgage lenders and banks nationwide. He can be reached by e-mail at aliput@securesettlements.com.

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Visit www.the15minutesalescall.com

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Visit www.Path2Buy.com

Time Traps Coping With Time Demands in an “I Want It Now” Business By Kerry Johnson, Ph.D. John needed to process five more loans by noon and had another 10 issues to iron out in underwriting. He was falling behind in his client calls and couldn’t even get the standard paperwork done. His wife was getting ticked at him claiming he wasn’t the guy she married. He hadn’t spent more than 10 minutes with his kids in the last week. All this and he wasn’t even making more money. John was feeling more stressed as the week went on. It didn’t make sense. He should be able to coast a little after all these years. But the mortgage business was more demanding than ever and he was enjoying it less. There must be a business out there that wasn’t so pressur-

ized. Maybe there is a course he could take that would teach him how to cope. Could he? But John rationalized that where else could he make this much money? As if money made up for the stress. If you are like the majority of mortgage professionals, your company probably isn’t considering hiring staff to support you. In fact, they are likely thinking of who they can fire to increase return. Can they get another two percent output and make more money? The same goes for the support people you work with. They aren’t getting back to you in a few hours. It’s now days or weeks. There are two ways to cope. Take a course on coping with stress or learn some techniques on giving yourself more time to get things done. Have you ever said you don’t have enough time. I love talking to meeting planners who wait to book a speaker

“You don’t need to learn more about the mortgage business ... you need to become more effective at doing the things you already know.”

two weeks before the event and tell me they didn’t have time to coordinate all the details. When I arrive, the meeting room is too small, the AV wasn’t ordered and the attendees feel like they wasted a week at an event that caused them to fall even more behind. We all have the same amount of time. We just choose to prioritize it differently. You make time to get done the things that matter. Saying you don’t have enough time is an excuse. You are really communicating that the person you reject due to time pressure isn’t important enough to give time to. Australians have a quaint expression, “I’ve got time for her.” This means that someone is important enough to give time to. The truth is that all of us have the same amount of time. Some of us just use it better than others. When time is lost, it is never to be used again. The Chinese demonstrated that to students in Temples during ancient times. Inventors of the first clocks, they would dangle a rope from the ceiling rafters with knots representing hours. They would then light a flame at the bottom which would burn evenly indicating to the viewers duration of

time. This representation would also show children once time was gone, it could never be recaptured. They burned a lot of temples back in those days. So the elders changed to measuring time using water buckets. Priests would punch a hole in the bottom of the bucket to allow water to pass. But then the temples got water logged. So the early clock inventors finally created the mechanical clock. We no longer have the sense of time escaping from a water bucket or being burned on a rope. But we feel the pressure of time as if we were being burned by it. You do have the same amount of time as your competitors and everyone else on the planet. But there are things you can do to maximize the time you do have to get more done. Here are seven techniques you can use today.

1. Stop fighting fires If you are spending more than 25 percent of your day fixing problems, you may be causing the difficulties in the first place. A few years ago, a broker called me to complain his business was hurting because he couldn’t spent enough time on gaining new clients. I

analyzed his day hour by hour and determined that he indeed wasn’t selling, but was instead fixing computers, amending forms, and rectifying mistakes by staff. Surprised, I worked backwards and learned that he hired people but only gave them about a day of training and then sent the new staff to the wolves of work. The problem was those same wolves came back to bite him daily. Poor training creates poor motivation. Poor motivation creates black holes of wasted money. When you hire, take 25 percent more time to train than you think is needed. Practice this plan. Tell your staff, show your staff, then let them show it to you. Wait a day and ask them to show it you again. Only then can you possess the ability to trust someone’s competence to get things done. Also, fight fires only in the afternoons. This may not work for problems that will stop your business cold. But it will train your staff to approach you only during certain windows of the day you are available. The alternative is to fight fires all day long. If they can come to derail you they will. I believe in O’Toole’s law. O’Toole thought Murphy was an optimist.

registered. What does this person have to do to get an audience? Catch a bullet in her teeth? Compare that to the Life Insurance Industry’s Million Dollar Round Table annual meeting. I spoke at their June meeting of 6,000. There were exactly 6,000 seats in an auditorium. If you weren’t there by 8:00 a.m., you didn’t get in. A few were late and there were none in the foyer chatting. No one stayed at the hotels enjoying late breakfasts. People came to learn, to get an edge, to make more money. Incidentally, to be invited to the meeting, your income level had to be at least $75,000 in commissions. Obviously, most in attendance made far more. Two lumberjacks years ago started work one day with a bet. Each wagered that they could cut the most timber. Both started out well, but one clearly cut more wood at the end of the day than the other. The losing lumberjack accused the winner of cheating. He saw the winner taking a two-hour lunch and loaf for much of the day. The winner said, “What you didn’t see was me sharpening my ax.” The mortgage business is legendary for requiring brokers and loan officers to work extremely hard with dull axes that haven’t been sharpened for years.

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

2. Write out your one-, three- and five-year goals

4. A messy desk is a Keep them on your desk in plain view. sign of a messy mind

5. Stop sitting at your sit downs Have you ever noticed how much time is wasted at meetings you didn’t want to attend in the first place? Start holding them standing up. This is useful idea voiced a few years ago, but it still works now. Meetings stay on issue and end quickly when you don’t let people relax so much that they digress to other topics. Your meetings will end 50 percent more quickly if you keep those involved on their literal toes. Another good idea is to schedule appointments and meetings at odd times. If you schedule a meeting for 10:00 a.m., most people expect it to last until 11:00 a.m. unless otherwise stated. But if the appointment is 10:20 a.m. or 10:17 a.m., you are seen to be very continued on page 94

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

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3. Sharpen your ax This is an era of constant improvement of both sales and systems. I spoke at the California Association of Mortgage Professionals Annual Conference a few years ago. Sally Ride, the first female astronaut in space was the keynote speaker. My presentation was in the afternoon and I arrived an hour early that morning to a get a good seat in the auditorium of 1,500-plus. Only 150 showed up out of the 3,000 attendees

If you were to clean your desk and find Jimmy Hoffa’s body, you may be wasting time looking for items you need right now. Much psychological research over the past decades has shown that we strive to be organized no matter how bad the mess. Has anyone ever straightened your desk slightly while you became upset that you couldn’t find anything? Even a mess is organized somewhat. The problem is that you are sacrificing time to look for things you should not take time to look for. Only handle messages once. Read an e-mail and file it, forward it or discard it. Take a sheet of paper and do the same. If you want to keep a paper, jot a post it note and stick it on the sheet, then file it. That way you won’t have to read it again.

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I have written often on the importance of always being proactive in your career. It is so easy to maintain your business. But I guarantee maintenance today will mean deconstruction tomorrow. By adhering to your goals daily, you will keep your business growing instead of dying. If this sounds trite and obvious, you’ve been jaded. The brokers and loan officers in this business who are regularly in the industry’s top five percent stick to their daily goals like glue. They review them in the morning before the day starts and plan out the next day before the current one is done always with the goal in mind. They also hold planning retreats monthly trying constantly to stay on track. This doesn’t mean they never derail. But when they do take a detour, it’s only a short distance back to the main track. It is often difficult to do less appealing activities even though you need to get them done. Helen Gurley Brown founder of Cosmopolitan Magazine said she always did the most unpleasant things on her list first to get them out of the way. Give the most undesirable jobs the highest priorities.

“SaaS applications provide small- and medium-sized businesses with the opportunity to narrow the competitive advantage that larger lenders have with their IT infrastructure.”

Successfully Implementing a Cloud-Based LOS: A Lender’s Perspective By Anthony Pham

NOVEMBER 2014 n National Mortgage Professional Magazine n

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Many established lenders have experienced an on-premise loan origination system (LOS) implementation. The comprehensive, organizational change of these implementations were lengthy, costly, expended more resources than anticipated and caused the lender to miss their return-on-investment (ROI) targets. Moreover, these implementations were particularly burdensome for the limited resources of small- and medium-sized business. Over the last few years, lenders have begun transitioning to a cloud-driven Software-as-a-Solution (SaaS) LOS platform. Since many have already transitioned to cloud-based services such as Google Apps, Salesforce and Document vendors, it is not surprising to see more lenders opting for SaaS implementation. After all, SaaS consumes less internal resources, provides integration with other Web-based software, and allows for custom software enhancements. Although there are new security risks

posed to sensitive consumer data, these can be mitigated by having proper due diligence and controls in place. SaaS applications provide small- and medium-sized businesses with the opportunity to narrow the competitive advantage that larger lenders have with their IT infrastructure. Choosing the right vendor will allow these businesses to focus on their core business. Evaluating key SaaS differentiators in vendor capabilities and avoiding the common pitfalls with implementation will allow you to experience a more expedient, cost-effective and effortless transition that will reduce your costper-loan and increase your ROI.

LOS evaluation: Key differentiators The first step for any lender is to compile and weigh the LOS functional requirements for each department. Lenders often overlook or undervalue the key differentiators that SaaS providers offer.

Choose a vendor that owns the initial deployment and is responsible for configuring their system. Their cumulative knowledge of prior configurations will streamline testing and enhance training. An ideal vendor will have an established project management process that will ensure the lender’s workflow is studied and transformed properly into the LOS platform. While the majority of their project plan will revolve around configuration and implementation, yours will focus on testing and training. Once implementation is considered, choose a vendor with the development resources to simultaneously adapt to regulatory changes and provide enhancements that align with your goals. With the cost to manufacture a loan gradually increasing, working with a strong development partner will offset these increases and keep costs low. To understand the vendor’s development process, review the past product’s enhancements and current product road map to see if the enhancements align with your business objectives. Finally, consider the platform’s ability to integrate with other Web-based software and your own custom-developed systems. Although LOS vendors promote their end-to-end solution, it’s critical to see what functions are missing and weigh the costs of any potential custom development or integration. For example, if the platform’s business intelligence (BI) is inadequate for your business needs, you may spend more money and waste more resources to compensate for deficiencies.

Implementation effectiveness: The PPTT emphasis

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Once a vendor is selected, these four common pitfalls influence the success or failure of your implementation: l Poor planning that underestimates resource needs and overlooks key deliverables. l Ineffective project management that undermines communication and coordination. l Incomplete testing that neglects configuration errors and issues after release.

l Limited training that results in lower user adoption rates. Let’s examine how to avoid these pitfalls.

Planning Planning will be a collaborative process with the vendor that will combine their past experiences with your company’s organization and timeline. l The LOS vendor should provide you with a detailed project plan that identifies the responsible party for each activity, the expected time of completion, and the number of hours required for task completion. l The LOS vendor and your project management team should conduct joint planning sessions to revise the initial vendor plan and reach a consensus on configuration, testing, approach and timelines. l Once the project plan is defined, your project manager should gain management’s approval to utilize those resources “when needed” as opposed to “when available.” Often, delays in implementation are caused when the resources needed are not available for timely task completion.

Project management Effective project management begins with well-designed management processes, focused leadership, clear communication and consistent coordination. l Visible executive involvement: Select an executive sponsor who will represent the project, defend for resource allocations, advocate internal process changes, and request key enhancement requests. l Solidify communication channels with the vendor: Working with an external company requires a strong communication framework, especially when there are issues with implementation. Platforms like Smartsheet or Basecamp can be utilized to update all parties on the progress instantaneously. l Establish a culture of change: Moving to a new LOS means introducing and establishing new workflow processes across all depart-

ments; therefore, verify that all managers receptive and open to the changes.

Test everything Testing the platform allows for the creation of internal workflow procedures, reveals areas that need improved development and leads to less production delays and errors. l Dedicate a minimum of 10 percent of your resources in the testing process and ensure that the majority of the team is comprised of managers or team leaders. This allows for the testing to be completed efficiently and gives your team ownership to become effective trainers. l ompare loan documents and data extracts generated in your existing LOS with your new one … use the same

loan file for both. This process will ensure that you generate the same product as your prior LOS system. l Develop a comprehensive and routine testing process for each department by creating testing checklists based on the role (underwriter, for example) or loan status (suspended, for example), and testing different loan scenarios to ensure that all situations are evaluated. l Maintain a list of key issues and desired enhancement requests to continuously improve the functionality of the LOS for your company.

Train everyone Proper training allows the user to utilize and interact with the system’s full capabilities, as well as understand additional features and identify system errors.

l Managers and team leads that were involved in the testing phase should be responsible for training their staff. l Develop a comprehensive training manual for users, and publish it online for convenient accessibility. l Create a dedicated internal support desk for platform related questions with procedures for internal escalation and software that categorizes issues. Review these issues monthly to determine and communicate the key issues and system improvements to your vendor. With the transition to a SaaS-based LOS solution, it is imperative to evaluate the vendors’ delivery and development capabilities. Selecting the right vendor and focusing on core competencies will strengthen the planning and imple-

mentation, accelerate timelines, and improve user expertise. Implementing a LOS in six months is achievable by setting attainable goals and emphasizing clear communication channels. Though the road to SaaS still requires substantial planning, the vendor carries a greater burden. Small- to medium-sized businesses can technologically keep pace with the larger lenders, while maintaining the agility to quickly respond to changes in this challenging market. Anthony Pham is the controller and IT director at JMAC Lending. In 2014, he has driven key technology change initiatives with business intelligence, loan origination systems and financial forecasting. He may be reached by phone at (949) 390-2616 or e-mail anthony@jmaclending.com. 67

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“As lenders and mortgage professionals continue to focus on improving the market, particularly for the underserved, more tools to help the consumer will come about.”

Using Technology to Better Serve Borrowers By Ray Brousseau

NOVEMBER 2014 n National Mortgage Professional Magazine n

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There is little doubt that the real estate industry has felt the significant impact of technology in recent years. From real estate agents reaching potential homebuyers via Twitter or Facebook, to mortgage originators using electronic signatures to close loans, the latest technological tools are making their presence known. Much has been made of apps that allow consumers to more easily find homes or locate potential lenders, but are these tools really improving the homebuying process for consumers? Are consumers actually learning more about what it means to be a homeowner? The answer to these questions isn’t a simple “Yes” or “No.” Information about finding and buying a home abounds on the Internet today, and consumers have unprecedented access to the details of home finance. Access to information doesn’t mean comprehension of that data, however. Many consumers are still undereducated about the homebuying and mortgage lending process. Presenting the complexity of homebuying in a way that is easy for the layperson to understand remains one of the challenges facing the industry. As more and more consumers look to the Internet and specialized apps, mortgage professionals must be armed with technological tools that not only help consumers find the houses and loan products they need, but also help them increase their financial literacy.

Serving the underserved Most mortgage professionals know how to work with the ideal client— one with a high FICO score and a significant downpayment, who is maybe even a previous homeowner. But dealing with first-time homebuyers

or those with lower FICO scores represent challenges in today’s lending environment. It is here, perhaps, that technology can best step in; it is here that mortgage professionals and technology can combine to aid this struggling market segment. Historically, first-time homebuyers typically make up around 40 percent of all buyers, but that number has been much lower in recent years. In fact, according to the National Association of Realtors (NAR), firsttime homebuyers made up only 29 percent of the market this past August, and that percentage had remained below 30 percent for 16 of the previous 17 months. 1 As Millennials struggle to live on their own, household formation figures also have been declining. According to the most recent figures from the U.S. Census Bureau, household formation dropped to just 476,000 in the year spanning from March 2013 to March 2014. This is significantly lower than the average of 1.3 million in each of the previous two years.2 By targeting this first-time homebuyer market, mortgage professionals can reap the benefits of serving an underserved market. Carrington Mortgage Services has a dedicated strategy to serve these potential homeowners, and their first-time homebuyer numbers reflect that. This past September, 71 percent of the company’s purchase business was first-time homebuyers—almost triple the 25 percent to 30 percent that the rest of the market is seeing. By making homeownership possible for these consumers, we are not only helping the underserved population, but also improving business. Another of the issues keeping today’s consumer from becoming a homeowner is the tightened lending

criteria that have narrowed the market considerably since the financial crisis. According to industry experts, an estimated one in three consumers has a FICO credit score below 650. For these potential homebuyers, it can be challenging to gain access to the appropriate financing vehicles. In light of this, some mortgage lenders are lowering their minimum credit requirements, extending eligibility to more property types, and reducing overlays. These are just some of the steps necessary to serve this market, however. Technology can help take these improvements even further.

Moving the market forward As the market continues to evolve and lending criteria continues to change, mortgage professionals must be prepared to best serve today’s borrowers, especially the segment of the market that has been underserved. Information and education are key to helping the underserved and all homebuyers to better understand their financial position and the loan products available to them. Lenders should support both a transactional consumer and a relational consumer (one who wants the full story before deciding) through technology, customer experiences and processes. For all potential homebuyers—but particularly the underserved—technological tools can go a long way toward helping them achieve the dream of homeownership. The first tool that any potential homebuyer needs is a simple one: Prequalification. Most lenders have some kind of mechanism on their Web site or app that allows consumers to get a quick look at what kind of home they can afford. Although this is a somewhat obvious and simple first step, its importance should not be underestimated. Prequalification is critical to getting consumers to understand their financial standing and what kind of mortgage they can afford. This is often first-time homebuyers’ initial exposure to how lenders look at their

financial standing, and it can be an eye-opening experience for many. The prequalification process is really just the first step toward financial literacy. Once pre-qualified for a mortgage, consumers then must actually understand the financial instrument that will be securing their house. The mortgage process is a complex one, and many consumers don’t fully grasp the rights and responsibilities that come with owning a home when they sign the many papers that come along with a mortgage. And by the time closing comes around, many consumers are eager to simply complete the transaction and move into their new home. This is where technology can help educate the consumer about their loan. Technology can help further a review of the borrower’s current annual and monthly income, and an outline of mortgage payment options along with budgeting details, including non-housing related living expenses and other monthly debts. Unlike the plethora of information available on the Internet; however, this information is tailored to the consumer’s specific situation, and most companies will require its customers to complete this education before funding. Although providing information like this is critical to improving consumers’ financial literacy, lenders should also offer products that simplify the mortgage process, particularly for the underserved market. By simplifying the actual mortgage itself, lenders can increase the transparency of the lending process and offer better products to the underserved market. These consumers typically have less cash to close, and easier or better technology will not solve offline challenges that lenders can solve with better loan programs. With a complex financial instrument like the mortgage, consumers need information, education, and simplification to best comprehend their undertaking. In terms of technology, the mortgage industry can take a page from the Apple brand,

where an elegant interface makes usability a priority and makes the device consumer-friendly. Like this, lendersâ&#x20AC;&#x2122; technology and processes should strive to make the customer experience better for all involved.

to improve workflow efficiency3 as factors in the decline in closing times. Improved closing times and efficiency, increased transparency, and better consumer education are just some of the ways that technology can help the mortgage industry, however. Signs of improvement As lenders and mortgage professionThere is little doubt that technology als continue to focus on improving has already improved the mortgage the market, particularly for the market in many ways. In fact, accord- underserved, more tools to help the ing to Ellie Maeâ&#x20AC;&#x2122;s Origination Insight consumer will come about. Report, the average mortgage closing Technology is a vital part of the morttime hit a three-year low this past gage industry today, and creating July. Loans that closed that month tools to increase consumersâ&#x20AC;&#x2122; financial took an average of 37 days from literacyâ&#x20AC;&#x201D;as well as to improve and application to funding. Ellie Mae streamline the loan processâ&#x20AC;&#x201D;will Chief Operating Officer Jonathan Corr help move the industry forward into a attributes some of that to lower vol- brighter future for all. ume, but he also points to lendersâ&#x20AC;&#x2122; investments in technology and efforts Ray Brousseau is executive vice presi-

dent of Carrington Mortgage Services LLC, Mortgage Lending Division, responsible for all day-to-day operations and P&L management. Ray has 26 years in the mortgage banking and consumer finance business. Prior to joining Carrington in 2011, he spent 23 years leading various segments of Citiâ&#x20AC;&#x2122;s consumer finance business, CitiFinancial.

Footnotes: 1â&#x20AC;&#x201D;www.realtor.org/news-releases/2014/09/existing-home-sales-slightly-lose-momentum-inaugust-as-investor-activity-declines. 2.â&#x20AC;&#x201D;blogs.wsj.com/economics/2014/09/22/rateof-americans-starting-own-households-disturbingly-slow. 3â&#x20AC;&#x201D;www.nationalmortgagenews.com/news/origination/survey-shows-average-mortgage-closingtime-hits-three-year-low-1042432-1.html.

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Markets may be volatile, but thereâ&#x20AC;&#x2122;s one thing you can always count on, the total commitment of our Mor tgage Team. Loyalty, continuity of ser vice and our dedication to protecting the integrity of our relationships are just a few of the things that set us apar t.

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“Lenders should also look for opportunities to leverage their document imaging systems to streamline the delivery of loan documents to vendors and service providers in the loan underwriting process.”

Technology Advances Offer the Opportunity for Mortgage Providers to Meet the Demand for Quicker Loan Closings By Geriel Thornburg May

NOVEMBER 2014 n National Mortgage Professional Magazine n

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Advances in loan processing technology during the past several years present an exciting opportunity for mortgage lenders to narrow the gap between initial loan submission and approval, helping them deliver quicker loan closings and, in the process, differentiate themselves in the marketplace. According to a recent survey of 300 housing executives at the 2014 MBA Annual Convention conducted by Genworth U.S. Mortgage Insurance, 52 percent of mortgage professionals consider the loan processing process to be either below technological standards or outdated, underscoring the need for mortgage providers to invest in new technology. Mortgage insurers have long recognized the importance of leveraging technological advancements to streamline the MI order process,

automate repetitive work tasks and simplify the exchange of loan data among trading partners. Here is a run-down of key technologies that can improve productivity and closing speed for mortgage lenders of all sizes.

Document image management A document image management system is used to convert paper loan files into electronic images that are stored for easy retrieval. Most document image management systems allow for the definition of standard names for each type of document that is stored in the system. For example, underwriters may see a “1003,” “Income Document,” or “Asset Document.” Once loan documents are indexed or identified, the images are available for use by all

users of the system. The mortgage industry started adopting document image management platforms in the early 1980s and many companies continue to refine their use of this powerful technology today. Most lenders have created a paperless office where all underwriting is done from images. But there is a big difference between being paperless, and being an efficient “paperless office.” Becoming an efficient user of imaging technology requires a strong commitment from management to take a fresh look at how work gets done on the production floor. Without this important step, existing workflow is simply automated without regard for efficiency or maximizing throughput of work. Document image management systems allow a lender to change the way work is assigned and completed. File ownership, where one individual owns the entire loan file from origination through closing, is no longer the standard. Instead, work is divided and separated by skill set, which allows for resource specialization by task. This specialization greatly simplifies worker training and enables more work to occur simultaneously since the loan file is now available to be viewed by multiple users at once. As compared to paper loan files, document imaging management systems provide a more secure environment for storing confidential borrower information and simplify the distribution of work for remote users or when working with disaster-recovery planning. Additional cost-savings are generated by the elimination of paper storage fees and associated shipping charges. Lenders should also look for opportunities to leverage their document imaging systems to streamline the delivery of loan documents to vendors and service providers in the loan underwriting process. If implemented properly, document imaging technology can help a lender reduce costs and accelerate the applicationto-closing timeframe.

Rules engine/workflow engine If you’ve ever used Desktop Underwriter or Loan Prospector, you have interacted with a rules engine. A rules engine supports the definition, testing and application of regulatory, investor, or company-level data checks without the need to change programming. Mortgage lenders can leverage rules engine technology to accelerate the underwriting process by focusing processors and underwriters on concerning data anomalies and guideline violations as soon as they occur. Rules engines can also be used to improve loan quality by adding checks for frequently-occurring errors or guideline exceptions. A workflow engine is the same idea as a rules engine, but it works with the flow of work rather than checking of rules. The system administrator of the workflow engine defines the paths required to move a work item from the beginning to end of a loan process. They also define what happens if a process exception occurs. Most workflow engines also provide an auditable record of each step the loan takes through the process, which is helpful for audit and compliance checking. Once basic workflow is defined, advanced techniques can be used to route work based on the level of difficulty and/or worker experience. These advanced workflow capabilities can also be used to establish and maintain service levels by monitoring the time allocated for each step in the process and escalating to management when service level performance is in jeopardy.

Product pricing engines (PPEs) Product pricing engines or “PPEs,” are systems that automate certain secondary marketing functions and help loan officers match loan products and guidelines to borrower needs. From configuring loan programs, to locking the pipeline, today’s PPE tools are easier to use than the specialized spreadsheets of the past. Advanced PPE tools provide direct access to MI rate estimates

which enables the loan officer to quickly compare rate quotes for different MI products and select the one that best fits the borrower’s needs. l

Loan origination systems (LOS) All loan origination system (LOS) vendors work hard to ensure that their tools are compliant with the most recent grouping of regulatory changes. But what else do they offer to help a mortgage lender to reduce the cost of originating and provide borrowers with the best possible customer experience? Look for the following features and functions to make your LOS best-in-class: l Support of the lending process from lead generation and prequalification through post-closing

l l l

and loan delivery. Some LOS vendors also provide integrated secondary marketing and servicing functionality. Built-in workflow and business rule engine capabilities that allow the lender to customize the LOS workflow to fit their needs. Document image management capabilities that enable the creation of a paper office and speed the delivery of documents to trading partners, borrowers and investors. Built-in support for loan closing documents to eliminate the need for third-party doc prep fees. Support for e-Signing and the ability to delivery documents electronically. A consumer portal to satisfy

today’s Internet-savvy customers looking for rate quotes and loan application submission 24/7. l Integrated electronic interfaces to simplify ordering from industry service providers like credit, flood and mortgage insurance. Interfaces should pre-populate order data without the need to re-key and automatically return and store the order results. Integrated electronic interfaces help lenders increase worker productivity and eliminate mistakes caused by re-keying errors. When shopping for a new LOS, you may find that all LOS tools are similar, yet different. For instance, some are stronger in secondary marketing capabilities, while others may provide more customizable underwriting

policy tools. Be prepared to weigh the options and select the features that will make the most positive impact on your institution’s value proposition. As a final word of advice, make certain you are working with an LOS vendor with a good market reputation, a track record of meeting deadlines for regulatory changes and a history of supporting customer needs with timely responses to customization and error correction requests. Geriel Thornburg May is the director of customer experience for Genworth’s U.S. Mortgage Insurance Division. Geriel has created innovative solutions for mortgage industry customers since 2001. She may be reached by e-mail at geriel.thornburgmay@genworth.com. 71

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“The successful agent or broker of the future will have an incredibly high engagement between their app and their clients.”

Turn Your Smartphone Into a Referral Generator By Ben Brashen

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The ever-changing dynamics of the mortgage and real estate space keeps industry professionals on their toes when it comes to adopting to new marketing techniques. Newsletters, search engine optimization (SEO), trade shows and buying leads … we try it all. However, every so often, new technology comes along that improves the way we do things. “Go mobile” is the new buzzword in marketing. With more than three million users worldwide, phone users and 10 times as many consumer access points as the wired Internet, it is clear that the mobile marketing industry is positioned for unprecedented growth in the real estate space. Does that mean it is meant for you and why you may want to go mobile now? Here are some statistics to consider: 1. Eighty-five percent of smartphone users would rather “give up drinking water” than delete their mobile apps (Source: Apigee). 2. Mobile marketing ad spending grew more than 100 percent in 2013 (Source: Mobile Marketing).

3. Seventy-six percent of Millennials own a smartphone, and 73 percent own a laptop (Source: The Social Media Hat). Getting a mobile app is the new “cool” thing to do. The question is which one is appropriate for your business? Here are a few pointers that will help you cut through the clutter and choose a mobile app solution that will help seasoned mortgage and real estate professionals get quality leads and grow their network.

Customize the way you want it If it’s not personalized to you, then it’s not your app! For the best marketing effect, ensure that your mobile app is personalized with yours or your team’s branding, including your photo or logo, contact information and more. Personalized apps can be customized to fit a variety of internal and external needs. Each app should be able stand on its own or be a part of a searchable network. This way, within seconds, you

can find and connect with people it doesn’t just keep you in front of important for your business and start clients like never before, but keeps you building strategic relations. connected with them.

Loaded with cool features One-touch referrals Your clients are very likely going to use an app during their home purchase. We can at least agree on that. At some point in time, they are going to search for a property, use a mortgage calculator or check out rates. The successful agent or broker of the future will have an incredibly high engagement between their app and their clients. It is absolutely crucial to get your clients engaged with your app. Homebuyers have hundreds of places they can get a loan, and every one of those places is begging for the opportunity to answer even just one question for a potential client. The answering of a simple question becomes an nice lead for your competing broker. Keeping your prospects tied in to your app with features like a mortgage calculator, property search and real-time real estate news adds to the engagement of your clients and the app. The more relevant data they can get from you, the lower the chance that they have to go somewhere else (your competitor) to get the information. You can even link your social networks to the app and engage with them on social media! So a mobile app with your picture is more than the new age fridge magnet–

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The biggest reason to have your mobile app is to be a click away from your client network and referral partner’s network. The lifeblood of a mortgage broker is their referrals and now you have that needle that can constantly tap that vein. Having an app that gives people a one-touch way to refer you is undoubtedly going to grow your business with new clients. Confirm that your app is easy to share, so that growing your referral network is super easy.

Real-time reporting and superlative client management Timing is the key to success. Ensure that your app provides unparalleled client tracking that empowers you to reach out to your prospect right at the moment when he or she is looking for you! Even better is a daily report of your app activity e-mailed to you guaranteeing that you do not miss a business opportunity! A good app will allow a user to request a quote or home showing right from the app. No phone calls, no text messages … a bona fide request for service right from the app that makes you money. Mobile technology is here and it is not going anywhere. As with anything, you can be an early adopter or you can wait. If you don’t take any action soon, however, you may allow your competitors get quality leads while you are stuck e-mailing people or hoping they check your Facebook page! Ben Brashen is chief executive officer and president of CardTapp. Ben created CardTapp with the mission of making mobile marketing a successful tool for real estate professionals and their clients. CardTapp’s products—Mortgage Mapp and AgentTapp—create personalized apps for users, creating an opportunity to engage with clients 24/7 on a mobile device. Ben may be reached by e-mail at ben@cardttapp.com.

“How long will it be before some private company bundles all the financial records into one endless database merging in property valuation systems, public land records and more?”

Are Your Sarah Connor? By Eric Weinstein

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home’s value at the speed of light. Credit bureaus respond instantaneously, like they do now, downloading payments, credit history and liens. LP or DU approves the loan without human input. Before the customer even has a chance to respond to their next email, their loan approval is sitting in their inbox. All they have to do is click on the approval and the loan is automatically recorded in the land records. The cost is added to the loan amount or deducted from their checking account. The automatic monthly payment is adjusted and the new amount is now deducted from their account each month. Total elapsed time: Five minutes. Loan officers employed: Zero. If you are wondering about all of the mortgage processors, appraisers and settlement agents who might be unemployed in that future, just look at the automotive workers who were once on the assembly lines and are now replaced by robots. If something can be automated, it will be automated. For more information, ask your local grocery checkout clerk, gas station attendant and bank teller. Oh wait! If you are a real estate agent, don’t be so complacent. You can just as easily be replaced with lockboxes electronically changed for each visiting buyer, a virtual online tour and interior security cameras when visitors come. A home data sheet generated online giving every single aspect of the real estate is practically here now. Okay, so now that you are thoroughly depressed, what is to become of us? Ask the people who sold pagers in the 1990s. You change, you adapt and you survive. You move on to the next thing. There are entire industries around now that were not even dreamt of in 1991. By the time this future comes around, there will be

Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. These days, Eric is semi-retired, doing mortgages by referral only. As he likes to put it, “He is either saving people money per month or helping them buy a new home. What a great job!” He may be reached by phone at (703) 505-8692 or e-mail eweinstein4u@gmail.com.

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I have always been a huge fan of science fiction. What kills me are the old sci-fi movies and just how wrong they got it. Everyone in the future seemed to wear those shiny jumpsuits, the astronaut’s microphone still had a cord attached to it and the spaceship controls used dials. One movie that got it right was “Terminator.” If you remember (spoiler alert), the computer system finally developed self-awareness when all the computers in the world were linked up. Based on the latest fraud detection systems out there “Skynet” cannot be long to follow. Right now, various databases like the IRS, The Work Number, banks and the credit bureaus, just to name a few, don’t talk to each other. I can easily envision a day when they are all connected (if they aren’t already by the NSA for Homeland Patriot Act reasons.) Spy satellites become Google Earth, rocket launches are made by private industry and everyone now has GPS which was originally developed strictly for the military. Fast-forward a few years. How long will it be before some private company bundles all the financial records into one endless database merging in property valuation systems, public land records and more? It will go something like this … a computer bank in some dusty warehouse crunches algorithms based on the current mortgage rates and costs to refinance in a certain municipality. A positive result triggers an automated e-mail to the borrowers that a predetermined margin of cost/benefit has been reached. With the customer’s affirmative e-mail reply, the system automatically reaches out to the IRS and The Work Number to verify current employment and income. Bank databases are queried to fill in the asset portion of the virtual 1003. Property valuation systems spit out the

other jobs of which we have not yet even conceived. The future is going to happen and there is nothing we can do about it. The biggest mistake one can make is not to change with the times. And when the times change and you are automated out of a job, get a new job in a new field. Look back and say, “It was a good run while it lasted.” Then move on to the next thing. Did Sarah Connor give up in Terminator? No, she ran and fought and died a horrible death. But that’s not the point. What I am really trying to say is, smash your laptop now, get out of the mortgage industry and leave all the loans for me to do. My toaster will thank you.

“Technology has been evolving and will continue to evolve to come up with newer and more effective ways to solve the industry problem.”

Can Technology Help Identify Loan Defects? By Ramesh Devare

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The mortgage industry has spent nearly a decade in the incremental rebound from the last market crash. During this time, stakeholders have experienced the challenge of managing good loans that eventually pay in full, as well as foreclosures, short sales and loan modifications. Technology can help lenders identify, early in the loan origination process, those loans that are defects and can provide methods to address and remedy them. The housing crisis went into full swing when more than just one or two borrowers in a loan portfolio began defaulting on their mortgage payments. It was like a house of cards that just began to crumble, one card falling after another. Lenders tried to determine what the best procedure should be for each defaulted borrower: A loan modification, a short sale or a foreclosure? However, it was not a cut and dry situation though as everyone had different circumstances, some more severe than others. A recent news article pointed out that nearly half of all of the foreclosed homes from December 2013 remained on the market as of August 2014. And now the situation has still not really improved. Loans that were funded on the good faith that borrowers would be able to repay are still being modified, foreclosed or sold for less than the amount owed to the bank. In fact, more loans are going into these categories every day, and now in retrospect, all of these loans can be categorized as having loan defects. This has made some professionals in the industry pose some very pointed questions. Can lenders reduce loan defects moving forward? Is there technology available to help identify these loan defects in the loan origination

process? The answer is yes. There is a technology that is designed with builtin data intelligence, pro-active alerts and strong quality control (QC) governance that can certainly help to identify the loan defects and/or reduce their occurrences. Here are some examples of how technology can be used effectively early in the lending process to avoid the loan defects: l Technology can collect data intelligence, such as demographics, spending behavior and spending habits, that can help determine a borrowers’ ability to repay the loan. l Technology can connect dots by analyzing a maze of patterns and trends and then develop artificial intelligence to assist lenders in making the right lending decisions. l Technology can also help lenders target a specific demographic that has a strong financial foundation track record and would be less likely to have a loan defects. With the results derived from the data analytics, technology can be used to build a dashboard to enable the decision-makers to make wiser lending decisions during the loan origination process. Loan defects, however, may occur when a borrower does not provide a true or accurate financial picture or does not share any changes that may have occurred in their situation. To curb these types of situations, certain financial data (such as bill payments, additional or reduction in debt, influx of cash, etc.) can be tracked during and even after the loan origination process. Technology can provide alerts to the decision-makers so that these situations can be avoided.

Deeper involvement in analyzing data patterns and effective QC mechanisms during the loan origination process will also positively impact the overall loan origination process. Compliance will play a major role in strengthening QC framework, and lenders will not have to spend unnecessary time in the later stages of the process. Having a QC process in place to identify issues effectively will result in better performing loans for lenders because they will be able to address those issues early on in the life of the loan. Officials at the Federal Housing Administration (FHA) have said they want lenders to make fewer mistakes in the loan origination process. In order for this to happen, lenders need to more carefully review the creditworthiness of each borrower more diligently in order to have fewer loan defects. Technology can help ensure that lenders have the required documents and the necessary information tracking that meets company and regulatory requirements. The September 2014 issue of Lender Insight, a newsletter published by FHA’s Single Family Office of Lender Activities and Program Compliance (OLAPC), shared findings of 5,217 loans reviewed and included in a quarterly review program. The review found that 47 percent of the loans were initially unacceptable and 34 percent were deficient, while 49 percent of the loans had issues related to file documentation. Lenders must ensure that they have electronic document management implemented for their loan portfolios, have a governance dashboard in place to review each loan carefully and set pro-active alerts to indicate defects in the loans early stage to reduce the overall defects. Implementing an electronic cabinet for maintaining loan documents by the borrower can eliminate this as well as most common errors. Business rules can be set to trigger a notification or alert mechanism that can be easily traceable if a required document is missing. Borrowers can also be notified with a

message protocol. Technology can help build the common platform for various stakeholders involved in the process, to see where challenges in the loan exist and to identify and eliminate common obstacles in the loan process. Now with mobile technology, lenders can quickly reach out to borrowers, which improves communication and reduces loan turn time. Based on historical data, lenders have had to endure lawsuits and deal with penalties from the government-sponsored enterprises (GSE)— Fannie Mae and Freddie Mac. To eliminate the defects and improve loan manufacturing process, GSEs are now expecting lenders to produce quality loans with no defects. In further analyzing loan defects, lenders need to start measuring the current loan defect baseline, identify opportunities of improvement, analyze the patterns and determine trends to improve further. Technology has been evolving and will continue to evolve to come up with newer and more effective ways to solve the industry problem. It will always have a major role in helping organizations reduce loan defects, prepare a strategy to fix the current loan defects and put in place the appropriate business rules during the pre- and post-loan manufacturing process to pro-actively monitor defects and take timely action. With the advancements available today, the mortgage industry should start seeing more quality loans being made which will help the industry rebound more quickly. Ramesh Devare is COO at Columbia, Md.-based IndiSoft. Ramesh is responsible for products and services delivery in the healthcare and security domains. He has more than 25 years of global IT experience in managing key strategic accounts in banking, financial services and insurance for North American and European customers. He can be reached by e-mail at ramesh.davare@indisoft.us.

â&#x20AC;&#x153;Keep in mind, the data you gather is only beneficial if you use it, and use it properly.â&#x20AC;?

High-Tech vs. High-Touch By Laura Burke â&#x20AC;&#x153;High-Tech vs. High-Touchâ&#x20AC;? â&#x20AC;Ś where social media meets the road. Has social media taken the place of networking live and building tangible relationships? I have a LinkedIn account, Facebook account, Twitter account â&#x20AC;Ś and others seem to pop up almost daily. I used to like LinkedIn, but donâ&#x20AC;&#x2122;t care for it too much anymore. To

me, itâ&#x20AC;&#x2122;s a big data gathering hole. Everyone and anyone gets their LinkedIn page up and running. They have their resume, recommendations, and of course, endorsements meticulously posted for all to read. The endorsements really get me. I have numerous LinkedIn contacts continuously ask me for endorsements. I will not endorse anyone I

do not know. Call me old-fashioned, but what good are endorsements if they are phony in nature. I donâ&#x20AC;&#x2122;t want others to endorse me either, if they donâ&#x20AC;&#x2122;t know me. But they do so they can get their name attached to my network. In 2012, I was appointed by LinkedIn as one of the top five present most viewed LinkedIn profiles, a time in which LinkedIn had 200 million members. What did it do for me? I got a big thank you from LinkedIn for being a part of their community. So what. I didnâ&#x20AC;&#x2122;t get a job offer, I didnâ&#x20AC;&#x2122;t get a new client, nor did I make a true

friend. What I did was connect to a bunch of people I donâ&#x20AC;&#x2122;t know, and probably never will. Facebook, is fun â&#x20AC;Ś but it too gets old. Do you have that one person who you donâ&#x20AC;&#x2122;t really know who â&#x20AC;&#x153;Likesâ&#x20AC;? everything you ever post, and everyone elseâ&#x20AC;&#x2122;s too? What does â&#x20AC;&#x153;Likeâ&#x20AC;? really mean? I like your picture, I like your post, I like your comment â&#x20AC;Ś itâ&#x20AC;&#x2122;s a sea of â&#x20AC;&#x153;Likes.â&#x20AC;? Have you ever posted a picture and then wondered why so and so didnâ&#x20AC;&#x2122;t â&#x20AC;&#x153;Likeâ&#x20AC;? it? I started thinking I must be crazy to spend continued on page 76

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Realtors and title companies rave about our service.

high-tech vs. high-touch continued from page 75

even a few minutes thinking about who will like my pictures or posts. I will admit Facebook, unlike LinkedIn, has kept me in contact with old friends, classmates from years past, cousins and friends. Businesswise, I am not connected to any business clients on Facebook, as it is for my private life and not for sharing with my clients. So with all of that being said, where does that leave me with social networking for business? I think that the next big wave of communication and business building is “Big data, and data mining.”

Keep in mind, the data you gather is only beneficial if you use it, and use it properly. Otherwise it is a huge waste of time and money. The new buzz is, “Data information is the next hottest commodity.” Are you prepared? Are you mining the right data? How are you using it? How do you plan to use it? If you plan now, it will lead to better usage later. No planning now leads to waste and additional costs down the road. Is data management only for big companies? What about small- to mid-sized companies, what about

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www.easymortgageapps.com/signup

the individual loan officer. Which leads me to the next question; “Whose data is it, the company’s information or that of the loan officer? The loan officer developed the relationship, built it, wrote the loan, but it’s the company’s data. How are you as a company protecting that data, from outside sources, from hackers and yes, from your own inhouse employees? Here’s a hint … a Corporate Security Policy. I think social networking will be one of the best, if not the best, way to gather data from potential clients, current clients and existing clients. The more data you gather, the better. Data can be used in many ways, such as target marketing, strengthening relationships, customer service, new business, related business services or products. The new generation is so used to the Internet and social media, they don’t even think twice about using it to search for information, compare prices and make purchases. The same comfort level needs to be matched by your industry to attract the Y Generation. In mortgage lending, so much data is easily gathered, by multiple facets within the industry. Is anyone studying the data, its patterns, the needs, the wants, the fallout? If not, then why not? You are paying for this information. Use your data as your “game changer.” Be the first to harness the power of data mining. The economy will turn around and the country will see prosperous times again, and prepare to plan your best strategies now, use your data. I cannot say it enough. Forget about the time spent on Twitter and LinkedIn, and building a Facebook Page if you are not properly gathering your data you are throwing away time and money. Hire the right team to work with, along with the right chief information officer, chief security officer, chief data officer you choose who and what your team needs, but take action today. You still can have the pick of the best in the data and information industry. But wait until it’s too late, and the good ones will be gobbled up. As a loan officer, I strongly recommend following up with hot contacts made online with a personal e-mail, live card (could be something funny

or generic, include your tangible business cards). If the contact is nearby, meet them for coffee, drop off a small gift if a referring source, a real estate agent, an attorney, etc. What if it’s a client? Extra care needs to be taken to make them feel like you care, and they are important to you. If nearby, meet them, drop off papers to sign, pick something up. If they live too far, send them a thank you note, a card or something to strengthen the relationship. Otherwise, you’re just someone they met online or on Facebook. You want to become their friend, their “go to” person when they have a question. You want to give them the same “Hightouch” you would give a live contact, and get away from the “hightech” feeling. One way I have found to do this is to find something in common, outside of the workplace that you are doing for them. Perhaps their son plays football and yours does as well. Perhaps they like a certain restaurant and you do … build on it. I have always found it easy to be open and more personal with my clients, giving me that edge of being more than just their “loan officer”. I will always go that extra mile for them. Over the years, I have had them go the extra mile for me as well. One thing to remember … whether you are old school, new school, high-tech or high-touch, your business is based on referrals. You live and breathe for referrals. A client referred is so much easier to work with, and so much easier to please than a random client. Start networking today, with the hightouch and watch your business grow. Laura Lynn Burke, EA, CFE, MBA, MS MIS (2015) has gone from Avon lady to chief executive officer of her own mortgage company, residential and commercial. She currently owns Global Tax Masters, along with a tax school, The Global Tax Training Institute. Laura is a Certified Fraud Examiner, and studied information security along with digital forensics. She may be reached by phone at (708) 692-6199 or e-mail lauralynnburke@gmail.com.

“While developing a strong Web presence may appear to require too much time and money, you are ultimately establishing your brand and voice.”

Developing a Web Presence By Ashley Lubey

Ashley Lubey is copywriter and public relations specialist for CMG Financial. She graduated from Saint Mary’s College of California with a bachelor’s degree in communications. She may be reached by phone at (925) 983-3207 or e-mail alubey@cmgfi.com.

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ward when you are trying to find clarity on an unfamiliar subject. However, providing an easily accessible site will only get you so far. You still need to provide the information that originally drove the consumer to your website. Developing relevant content is not easy but it is incredibly important. Not only does it allow you to establish yourself as a knowledgeable resource on the topic, but it also increases your search engine optimization (SEO). Higher quality SEO means your Web site will appear higher in a list of results when the topic is searched for online. Use keywords that will assist search engines in determining the topics of your articles and landing pages. But avoid keyword stacking at all costs. Search engines such as Google know when a Web site is using the same word repeatedly simply to help their SEO so stick to professional content. Don’t overload your website with nothing but keywords and rethink naming that landing page “Mortgage, Mortgage, Mortgage!” The more traffic you are able to drive to your site and page views you accrue, the higher your site will be displayed in search results. The Internet has opened the competition for search result listings to anyone with a Web site. All the more reason to ensure your content is relevant, useful, and accessible. Don’t just write to write. Make it valuable and keep your audience engaged. Having recently been part of a couple new site launches, the best advice I can give is to create a detailed plan and develop a spectacular Web site based on your perfect site architecture the first time around. Sounds easy enough, right? The truth is the development of a robust Web site takes time, dedication and many revisions to get it just

prise launch to the public or revealing new website features as you go, make sure your audience knows! Email current customers and subscribers of your latest feat and encourage them to give it a look. Blast the site link and highlight improved features or new information on social media. Be proud of your new site and make it known you are ready and able to be an expert in your field by providing your audience a quality experience with knowledgeable content and information. Enjoy and relish your accomplishment, while at the same time, knowing and understanding that your celebration is just for the initial launch. There is a long road ahead of maintaining, updating and improving the Web site as time goes on. While developing a strong Web presence may appear to require too much time and money, you are ultimately establishing your brand and voice. Your presence on the Internet is not something to take lightly. Don’t let the opportunity pass you by when it comes to having a conversation with your customers and being where your customers are. Staking your spot in the industry and sharing your knowledge and expertise on your specific subject will allow you to develop a voice in your field. It is known that customers will turn to the Internet to explore their options and find more information before making a final decision. Take advantage of this opportunity by taking the time to expand your web presence in a professional and sophisticated manner. Before you know it, you will be the go-to resource for information.

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Recommendations from family and friends go a long way when it comes to making decisions about virtually anything. Whether it be buying a home, which school to attend, or what to have for dinner, many of our decisions are heavily influenced by those around us whose opinion we value and respect. But what is the next step taken in the decisionmaking process? We gather more information. Most people turn to the Internet and browse the Web site of the product or company in consideration. Is your site up to the task of being the persuading factor in that final decision? Consumers spend less than 15 seconds on average determining whether a Web site is worth the time to continue browsing or if they should move on to the next site in a long list of search results. With this in mind, it is essential to immediately establish a rapport with your audience and provide them with the information they are searching for or the tools they need to dig deeper and obtain answers. Capturing your audience as soon as they enter your Web site is important. Create a wellconstructed landing page that is sure to showcase your site as a whole in a positive light. Consumers’ time is valuable, and with so many distractions these days, it is easy to lose a customer before you even have your hook in them. An easy-to-navigate site compels consumers to remain on your page and continue searching for the information they originally sought, or to search for new information since they have found your Web site to be a valuable resource. Avoid complex, overly-programmed components of a Web site that are hard to use and simply get to the point. Nothing is more appreciated than being clear, concise and straightfor-

right. Be ready to make adjustments if something isn’t working. If a tab is hard to notice, move it. If a page is cluttered and full of too much information, cut it down and clean it up. Be prepared to spend hours editing your Web site for the optimal user experience. How often have you left a site because you were frustrated with the layout, overwhelmed with tabs, or got lost trying to navigate to a specific page? Don’t be that site! I highly recommend setting aside a two to three week period for testing. Allow a set group of users to click around the site and provide feedback without any direction from you. Other audiences won’t have instructions on how to navigate your new site, so the test group should not either. They will catch things you don’t since you have been staring at it so long. Take their feedback and make revisions. Edit until your red pen runs out of ink and the final touches ultimately makes the new site completely different from the original plan. One of my pet peeves is going to a Web site and finding the information to be ridiculously outdated. Don’t lose credibility by having incorrect or old information posted. Continuously updating your site is a must. Keep your eyes open not only for the latest content that should be posted, but also on site features that could be implemented. Technology is constantly improving. By keeping up with the latest trends appropriate to your product and audience, you establish a positive reputation with the consumer. They view you as a proactive, reliable and trustworthy resource they will continue to return to for the most recent information, the information that will help in making that final decision. Prove your dedication to providing relevant and pertinent information by remaining on top of your game. I have found a successful Web site launch to be pulled off with the utmost professionalism and a touch of grandeur. Whether you’re going for the build-up to an ultimate sur-

“Not only can a loan officer check the status of a loan and call a borrower by smartphone, the loan officer can also send out texts, the preferred method of communication by more borrowers, especially the coveted Millennial consumer.”

play and communicate from virtually every corner of the earth. It’s truly an extraordinary time. The key for mortgage professionals is to leverage these innovations to create a fast, efficient and compliant virtual underwriting strateBy Brent Chandler gy, which is difficult considering the innovations are happening so fast. The lenders For example, the mortgage industry that choose wisely, however, will have a It hit me recently that some of our nation’s greatest discoveries, innovations or leaps seems to be on the verge of not just one, formula that will help differentiate themin societal progress were the result of but two technological revolutions in lend- selves in a challenging and highly competpairs. Lewis and Clark, Wozniak and Jobs, ing. The first is the adoption of paperless itive market. the Wright Brothers, and (in moments of technology, as domino after domino conweakness), Ben and Jerry, all come to tinues to fall, bringing the day closer when The constantly moving mind. It also occurs to me that innovations loans can be fully electronic. The second, I mortgage professional themselves come in pairs. And when they believe, is mobile technology, which is A mortgage is not the sort of thing someone making it possible for everyone to work, creates on a smartphone, or even an iPad. do, the results can be extraordinary. And yet, mortgage professionals—like professionals in most industries—are quickly adopting smartphones and tablet computers for work purposes, for multiple reasons. For one, the mortgage industry has rarely been more competitive. Rates are near historic lows and home prices are risThe National Association of Professional Mortgage Women (NAPMW) Partners in Progress sponsor program is designed for companies of all sizes interested in ing—and yet inventory levels are down enhancing their national presence with NAPMW, the premier community of and sales volumes are extremely low. Every professionals in the mortgage banking industry. loan counts and lenders are scraping for any edge they can get. They are keenly NAPMW’s sponsor packages are priced to encourage participation aware that responding quickly to a conby businesses of all sizes. The fee for each package is affordable and all maximize sponsors’ exposure beyond what would sumer’s request for information can make be received if purchased individually. the difference between a deal or no deal. Not only can a loan officer check the status Primary benefits include: of a loan and call a borrower by smart• National visibility to professionals from all areas of the phone, the loan officer can also send out mortgage industry texts, the preferred method of communi• Advertising exposure through numerous proven cation by more borrowers, especially the communication channels coveted Millennial consumer. • High-profile marketing at key association events The second reason is efficiency. While For more information or to become a sponsor competition is tight, lenders are forced to of the Partners in Progrees program, contact: spend more resources to meet the requirements of investors and regulatory agencies. DEANNA MELLAS North American Title Company This has caused per loan costs to rise as a Business Consultant, result. Handling relatively “light” loan National Partners in Progress Chair tasks, such as communicating with borc: 832.465.6413 rowers and underwriters, tracking income: dmellas@nat.com ing appraisals and ordering and receiving www.nat.com/DeannaMellas electronic bank statements, can be accomwww.nat.com/Texas plished by smart phone or tablet device while on the go, or even while waiting for a call. The upside is that a loan officer can better spend precious time prospecting or consulting with borrowers one-on-one. Provided by North American Title Company

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How the paperless processes fits into the mobile world Over the past 15 years, paperless processes

have completely transformed the mortgage industry. We are closer than ever to the day in which the entire mortgage process is paperless. Indeed, virtual underwriting is no longer a fantasy. Tasks that used to be done on paper that can now be done electronically include verification of a borrower’s identity, credit history, income and employment status, not to mention mortgage applications and the requisite mortgage disclosures. Unfortunately, many lenders still do not use electronic, webbased tools to automate these documents and processes. Such tools are plentiful, and lenders are increasingly moving in this direction every day. In addition to the growth of paperless processes, electronic signatures are also now widely accepted on all pieces of the mortgage transaction. The recent decision by the Federal Housing Administration (FHA) to accept electronic signatures on loan documents—one of the last dominos that needed to fall in order to make mainstream paperless lending possible—will make the mortgage transaction easier for millions of additional homeowners, specifically first-time borrowers who rely on FHA loans to achieve the American dream. But one of the most significant holdups to getting loans approved—and a key stumbling block when it comes to a borrower’s ability to get an offer on a home accepted—are asset checks. Many lenders continue to rely on paper-based processes and restricting their efforts to merely checking a borrower’s account balances. As a result, they are wasting days filling out, faxing and waiting to receive paper documents from borrowers. And because borrowers also have to provide paper bank statements, the process can take a week or more and expose lenders to the uncertainty of fraud. However, more and more lenders are using Web-based solutions to receive paperless bank verifications. These virtual underwriting tools are so quick and inexpensive to obtain, and they can help lenders monitor a borrower’s assets through the life of the mortgage application, as well. The algorithms and artificial intelligence features of a market-tested and investor-approved Verification of Deposit and Asset (VODA) solution can help lenders red flag potential issues before they develop. Should the bor-

rower’s financial picture change significantly before closing, the lender can instantly re-pull the documents and take a closer look before they possibly take a loss on the loan. It’s clear to see that mobile computing and paperless processes will be increasingly important because of the many verifications borrowers must submit to in order to get a loan approved. As it stands, these steps of verifying income, employment and assets extend the loan process, adding costs and increasing risk. In many cases, borrowers have to wait days or even a week just to find out how much house they can afford. And in fast-moving markets, that delay could cost them at the closing table or even to lose the home of their dreams. Together, mobile devices and paperless processes are already speeding up mortgage timelines tremendously.

The security factor But for all the benefits technology provides, it also opens up risks that lenders need to be aware of. Americans are only now becoming aware of the perils of large-scale consumer security breaches such as the recent Heartbleed virus and this year’s Target and Home Dept debit and credit card data breaches. Mobile data hacking is a growing threat of its own, especially in light of the number of businesses that are adopting mobile technology. The threat is magnified considering how much personal and business information both consumers and loan officers now store on their smart phones and other mobile devices. The fact that the devices are small and thus easy to misplace compounds the risk. Security attacks on smart phones typically target text messaging, WiFi, Bluetooth, as well as weaknesses on a device’s Web browser and operating sys-

tem. All lenders should have policies for using smartphones and restrictions on how they are used. For example, transmitting personal borrower information, such as Social Security Numbers and bank account numbers by text message, is probably not a good idea. All in all, the advances of paperless and mobile technology will make the next year an exciting one for the mortgage industry. Projections of mortgage volume remain modest, but assuming the economy continues to grow, I think we’ll see strong growth in the housing sector throughout 2015. I predict that a year from now, the winners in this market are going to be the ones who embrace and integrate safe standards in both mobile computing and paperless technology. Both innovations make the mortgage experience faster and more convenient for lenders and borrowers, and give mortgage

companies the potential to produce loans at much higher volumes and lower costs. Besides the quality and virtual underwriting benefits, growing mortgage companies are looking for an edge when recruiting new talent, and technology is a leading influencer for top originators. Like all great pairs, these are clearly two great innovations whose destinies are not only intertwined, but are also more powerful together than apart. Brent Chandler is founder and CEO of FormFree Holdings Corporation. Brent has more than 20 years of experience in the financial services and technology industries. He helped create the CheckFree online trading platform and led the development of the CashEdge wealth management platform (both now part of Fiserv). Brent has also held senior level positions at Merrill Lynch and Fidelity. He may be reached by phone at (800) 334-1406 or visit www.formfree.com. 79

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â&#x20AC;&#x153;By creating marketing campaigns that are highly specific and then keying off important data, we can make marketing automation more powerful than ever.â&#x20AC;?

The Future of Mortgage Marketing By Brent Emler

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Itâ&#x20AC;&#x2122;s easy to look back at previous marketing strategies and through the analysis of actual results, develop an opinion around which methods resulted in the most success. Itâ&#x20AC;&#x2122;s much more difficult, however, to look into the future and accurately predict the success of different types of marketing. Itâ&#x20AC;&#x2122;s challenging because the mortgage industry evolves at almost super-sonic speeds. Keeping up with current regu-

lations, cutting-edge technology, and heavy competition gives us little time to look very far forward and develop strategies that put us ahead of this curve. Weâ&#x20AC;&#x2122;ve all sat around campfires or dining tables, or perhaps over a drink with friends and colleagues and imagined the results of â&#x20AC;&#x153;what if â&#x20AC;Śâ&#x20AC;? In fact, I was a part of a group of friends and business owners who would gather for

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the express purpose of exercising our ability to imagine how we might grow our respective business ventures. There were no rules and no limitations. The ideas of improbability and impossibility were given no space in the exercise. This might sound like a waste of time but it was where the tiny seeds of future realities began to germinate. Sure, there were and are limitations but the exercise of imagining processes through to success without giving credence to improbability or impossibility gave us a basic roadmap and helped us find a way to navigate the realistic challenges without losing focus. What do you imagine mortgage marketing to look like for you in the future? What technologies and marketing principals are here to stay and which ones are guaranteed to launch you into the next generation of successful marketing? Where should you invest your time and marketing budget to stay out in front of this generation of overstimulated, advertisementweary consumers? I recently spoke to Matthew VanFossen, CEO of Absolute Home Mortgage Corporation, and undoubtedly, a visionary. Impressed with his â&#x20AC;&#x153;out of the boxâ&#x20AC;? approach and forwardthinking strategies, I asked him to share some of his thoughts about mortgage marketing and how we can implement fresh marketing plans that have genuine impact. Mattâ&#x20AC;&#x2122;s first statement was, â&#x20AC;&#x153;Put everything you know about marketing in a box and throw it away!â&#x20AC;? The formerly â&#x20AC;&#x153;tried and trueâ&#x20AC;? methods just donâ&#x20AC;&#x2122;t cut through the deafening commercial static. People are numb and immune. It takes real forethought and a real education in the available technologies to hit home with consumers. Be clever, but be real. The dynamic has dramatically shifted. Consumers are not as often looking for a product or company because companies are so busy putting their product(s) in front of their audience. How do they do it effectively? The majority of people who make up your target audience are, for the most part, on the Internet, and this is where the

majority of your marketing energy needs to be spent. If you havenâ&#x20AC;&#x2122;t taken the time to really learn about marketing through Facebook, Twitter, and Google+, you are already behind the curve. Itâ&#x20AC;&#x2122;s impossible to come up with a forwardthinking marketing strategy if youâ&#x20AC;&#x2122;re not well-versed in the methodologies and capabilities of these social media platforms. Get there first, and then youâ&#x20AC;&#x2122;ll be in a position to strategize towards the future. Facebook isnâ&#x20AC;&#x2122;t necessarily a powerful marketing tool because itâ&#x20AC;&#x2122;s popularâ&#x20AC;&#x201D; although that doesnâ&#x20AC;&#x2122;t hurt. Itâ&#x20AC;&#x2122;s powerful because there is so much valuable information with which targeted campaigns can be deployed. Consider this: Letâ&#x20AC;&#x2122;s say your strength lies in closing first-time homebuyers. Well, what group of people might that apply to? Well, for starters, couples that are engaged would be one segment of the population who are likely to be thinking about purchasing a home. Did you know that Facebook can tell you who is: (a) Female, (b) Between the ages of 26-35; and (c) A relationship status of â&#x20AC;&#x153;Engaged?â&#x20AC;? You suddenly have a very targeted group of people who might respond well to an article titled, â&#x20AC;&#x153;Is Your House Hunting Getting in the Way of Your Wedding Plans?â&#x20AC;? The data that you have at your fingertips is a goldmine. People very openly disclose their name, age, profession, education history, special interests, relationship status, and many more pertinent details. Based on that information, you can design and implement campaigns that attract very specific groups of people. Did you know that Facebook just made local advertising even simpler? Local awareness ads allow your business to be found easily by groups of people who are in your immediate local. Creating an ad takes just a few, simple steps. 1. Head to the â&#x20AC;&#x153;Ads Create Toolâ&#x20AC;? and select â&#x20AC;&#x153;Local Awarenessâ&#x20AC;? 2. Select the Page of the business you want to promote 3. Enter your business address

4. Stipulate the radius around which you want to advertise (a map will show you the area covered by your ad)

While Iâ&#x20AC;&#x2122;ve primarily profiled social media sites that certainly enhance your ability to capture new business, I would be remiss if I didnâ&#x20AC;&#x2122;t highlight the importance of technologies that have the intelligence required to maintain and facilitate database marketing for repeat and referral business. All things being equal, statistics show that you will spend less for greater return by marketing to your

exciting part is that technology is bringing development costs down. This means more access to more robust solutions. In the past, only the largest organizations have had the ability to connect to their contacts in a deep and meaningful way. With the strides being made in social media and marketing automation, the holy grail of big business marketing with a small business budget is within reach. Take the time to understand and exploit the value of such systems and youâ&#x20AC;&#x2122;ll be the one exclaiming, â&#x20AC;&#x153;Think outside the box!â&#x20AC;? Brent Emler is director of sales and marketing at Velma.com, a customizable marketing software provider exclusive to the mortgage industry. He may be reached by e-mail at brent@velma.com. 81

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Marketing automation and technology

ability to utilize their powerful engine to provide highly specific detailed information that can be merged into emails and print marketing. Imagine a scenario where a presentation link is converted into a QR Code and added to a â&#x20AC;&#x153;Rent vs. Purchaseâ&#x20AC;? Postcard. When the recipient scans the QR Code with their mobile phone, we capture that scan and the subsequent views of the presentation, and report all of this back to the loan officer and the executive team. This simple process would effectively provide â&#x20AC;&#x153;open ratesâ&#x20AC;? for printed material. We can then couple open rates, presentation views, and pull through reports to provide a detailed return-on-investment (ROI). The future of mortgage marketing is replete with opportunity and the most

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Facebookâ&#x20AC;&#x2122;s system uses all of this information to create an audience for the ad that includes people who live nearby or were recently near your business. How cool is that?! Beyond that, you can drill down even further and choose the age and gender of your audience, set a budget and duration for your ad. Based on your settings, Facebook will show you how many people you can expect to reach each day that your ad runs. For further information, go to: https://www.facebook.com/business/ne ws/facebook-local-awareness. While Facebook is â&#x20AC;&#x153;where weâ&#x20AC;&#x2122;re atâ&#x20AC;?, services such as Hearsay Social are definitely taking things to the next level. Hearsay Social is a Web-based solution that uses the best in modern technology to bring all of your social media marketing initiatives under one roof and provides a sleek, user-friendly interface through which you can post to all of the social media platforms: Facebook, LinkedIn, Twitter and Google+. Hearsay Social takes what weâ&#x20AC;&#x2122;ve imagined possible through Facebook marketing and facilitates such initiatives by tracking and providing notices on â&#x20AC;&#x153;Social Signals,â&#x20AC;? highlighting contacts that â&#x20AC;&#x153;may have just gotten married,â&#x20AC;? â&#x20AC;&#x153;may have just had a babyâ&#x20AC;? or â&#x20AC;&#x153;may have just landed a new positionâ&#x20AC;? to name just a few. These queues give one the opportunity to provide valuable content directly to that contact in an easy, efficient way. Imagine a marriage of this type of technology with your LOS and automated marketing system.

current book of business. How does one do that effectively? Every mortgage lender has a huge database of past clients, prospects, and referral partners. If harnessed and presented properly, the existing information has immense potential for your business. When I was speaking with Matthew Van Fossen at Absolute Mortgage, he reiterated the idea that the marketing of the future has to connect loan officers with their clients, prospects, and referral partners in a very personal way. â&#x20AC;&#x153;During the mortgage loan processes, weâ&#x20AC;&#x2122;re collecting a wealth of information about the customer; whether on the application or just during the course of conversing with a prospective client,â&#x20AC;? said Van Fossen. â&#x20AC;&#x153;In the future, weâ&#x20AC;&#x2122;re going to be able to use that information to automatically distribute e-mails and printed material based on the very unique qualities of an individual contact.â&#x20AC;? Matthew gave me this example: Say, for instance, you discover your borrower is a golfer. Imagine putting that information into your automatic marketing platform and develop an in-process campaign that incorporates language that likens the loan process to a round of golf. The initial introductory content might say something to the effect of, â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re ready to tee off! Here are some of the items youâ&#x20AC;&#x2122;ll need to provide â&#x20AC;Śâ&#x20AC;? The goal of marketing is to make sure youâ&#x20AC;&#x2122;re connecting in a very personal way. By creating marketing campaigns that are highly specific and then keying off important data, we can make marketing automation more powerful than ever. New technologies like AngularJS, Breeze and Mongo Database provide development teams who support business analysts and marketers the ability to create incredibly complex queries and work flows with lighting speed. While some of the marketing capabilities are still conceptual, some marketing platforms are already laying the foundation for extremely specific campaign configurations. I spoke to Joe Puthur at Mortgage Coach recently about the value of their presentations and loan scenario tools. As many of the readers already know, Mortgage Coachâ&#x20AC;&#x2122;s â&#x20AC;&#x153;Edgeâ&#x20AC;? product is absolutely fantastic. We envision the

“Integrating processes along parameters that are dictated to the lender will provide several benefits including the ability to cross-train workers, management of busy and slow periods, and the ability to have a clear audit trail of every transaction.”

Treating Integration as an Investment How Business and Technology Integration Can Save Money and Avoid Regulatory Pressure By Matt Seu

NOVEMBER 2014 n National Mortgage Professional Magazine n

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In today’s market, lenders and their service providers are struggling to balance the demands from fierce competition, the need to meet regulatory requirements, and still meet bottom line expectations. Not only are the regulators asking for more information, but now there needs to be transparency on how decisions are made and the ability to prove it is imperative. Additionally, the Consumer Financial Protection Bureau (CFPB) is mandating new forms for loan estimates and closings that require significant process and technology changes. It is hard to imagine adding any more pressure to the situation, but if lenders could step back and understand how integration of processes and technology can ultimately save time, money, and reduce regulatory pressure they would look at it as an investment rather than a cost. This article will suggest some of the pitfalls of less optimal integration models and the true benefits of integration. Let us start by looking at mortgage technology over the last 15 years and how things have evolved. During the 1990s, companies began to move away from desk top technology to more modern architectural patterns that have evolved over time to include the use of the internet and now cloud computing. The constant from the very beginning is that companies have anchored their business on a loan origination system (LOS). From there, companies may also use secondary marketing software, compliance tools, pricing engines or services, document preparation software and a general ledger application. Many companies actually use more

than one tool for each business application and others use spreadsheets and other manually intensive methods. Additionally, many companies need to integrate with one-tomany investors and servicers. There are three integration models that have some major pitfalls that are discussed below. We will discuss these and end with a more optimal integration that can transform a lender’s business (see Chart One). Companies often use a point-topoint solution that integrates each tool separately. This is usually just an evolution that occurs over time. As more tools are added, the company simply creates single interfaces to connect them. This approach is problematic because each tool may have a different connectivity protocol. Even if the company can initially link everything together it requires a very broad set of technology expertise due to the multiple protocols and languages. For small- to mid-sized lenders, this pattern is very expensive from a staffing perspective. It requires knowledge of multiple tools and requires manual checks to ensure that data are transferred properly. Also, think about what happens if one tool needs to be replaced. You will have to rewrite each interface that connects to the tool. Often this problem keeps companies from replacing obsolete tools and “holds them hostage.” We also see companies that ignore most integration challenges and simply upload and download in what we refer to as a manual integration. This pattern is not just for small lenders. We have seen this pattern exist with top 20 lenders. There are two major problems with

this pattern. The first is fairly obvious and is the lack of controls and data quality filters. This approach is prone to manual errors, data being overwritten, lost, etc. It is nearly impossible to have an audit trail using this pattern. A less obvious issue is the inability to scale. We see companies struggle to add products, add channels, and increase purchase volume because this pattern requires so much manual intervention and oversight. Eventually a company using manual uploads and downloads will need to add staff and eventually automate or they will implode. The final pattern which we call proprietary is also very common in the industry and is often the one with the most risk. This pattern usually revolves around an LOS package. Many lenders pick an LOS and then use the LOS proprietary data structure as the basis for everything that they do. These lenders will implement an LOS and then build connections to other tools. Most of the time this is done via batch processes that move large amounts of data from tool to tool over night or at specific times during the day to provide more real time updates. Many LOS vendors have a suite of products that connect to the LOS or they partner with other companies. On the surface, this seems like a reasonable approach to integration especially since the LOS vendor has more “out of the box” connections. However we believe that this can actually be the worst case scenario for a lender. One issue is that lenders create a business process around the LOS and other tools rather than defining processes in a way that is optimal. However, the largest issue that we see with this pattern is that it becomes a monumental undertaking to replace the LOS or whatever tool is responsible for the proprietary data set. Many companies we work with want to use a best in breed approach to technology, but the proprietary pattern is often so engrained that they cannot move off of it. In fact, we often see companies

add new LOS packages without removing the original one because it is so difficult to do while running the business. There are some significant issues that are created with every pattern although some are worse than others depending on the implementation. Each pattern is expensive to maintain. Whether it is business staff or technology resources, these patterns require a lot of maintenance. Regardless of pattern it is very difficult to extract key information for reporting, analytics, regulatory compliance and even accounting. It requires either a separate data warehouse or a team of analysts to accumulate, scrub, filter and manage the data. Each pattern is susceptible to data quality issues simply due to the multiple data interfaces, languages, data definitions, and transformations. Finally, none of them scale. Ultimately each of these patterns will paralyze a lender and hold them hostage. The good news is that there are other alternatives that are becoming easier to implement due to changes in mortgage technology and standards that are being widely implemented throughout the industry. The industry is moving to a more standards based implementation model. We have seen standards emanate from the CFPB, the GSEs, and HUD. One example is the regulation regarding the qualified mortgage (QM). Another is the new regulation that goes into effect next August related to the Loan Estimate and Closing Disclosure Statements, again coming from CFPB. These regulations assume a standard operating procedure and processes. In addition, the FHFA and the GSEs have created MISMO-based data standards through the Uniform Mortgage Data Program (UMDP) for appraisal and delivery and are working on similar ones for application, loan estimate, closing and servicing. Ginnie Mae is working on similar standards. Here are the keys to success when thinking about integration of

CHART 01

l Define and integrate your manufacturing processes based on industry standard events whenever possible. l Create a data infrastructure that is standards based and that is based on the manufacturing processes. l Continuously keep an eye on the market. Lenders should decide what business they are playing in and create and document business manufacturing processes that are based on industry standard events. An example is the new CFPB regulation for loan estimate and closing. In the regulation, there are specific timelines that must be followed.

Similarly, there are timelines and standard events that occur if a lender is selling to Fannie Mae, Freddie Mac, others. Be resistant to the urge to try to fit every internal process into one box. Instead, create processes that align with investors, servicers and other counterparties. Document the processes and create training manuals and procedures that are easily understood by the staff. This will allow for specific workflows internally that are easily tracked and measured. Management must manage by measurement so that they can make minor changes to the processes to optimize operations and identify where staff may need additional training or development. Integrating processes along parameters that are dictated to the lender will provide several benefits includ-

ing the ability to cross-train workers, management of busy and slow periods, and the ability to have a clear audit trail of every transaction. Ultimately, using standards based processes will allow for a reduction in processing time, a reduction in second and third level reviews, and will result in a more effective and motivated work force. Next, a data infrastructure should be implemented that is the center of all operations. Make sure that the data infrastructure is based on an independent data model that is resilient to changes in the market and that is not tied to any one vendor or tool. MISMO has been the standard for messaging in the mortgage insurance (MI) community for years and is also the reference model of choice for FHFA, Fannie Mae and

Matt Seu is a partner and owner of Actualize Consulting and is a member of the MISMO Strategic Planning Committee. He may be reached by e-mail at mseu@actualizeconsulting.com.

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processes and data to leverage the standards.

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CHART 02

Freddie Mac when transferring information via Uniform Loan Delivery Dataset (ULDD), to the Appraisal Portal, and for other processes in the future. Ginnie Mae is also moving in this direction and has announced their Pool Delivery Dataset (PDD) requirements recently. When creating the data infrastructure use the data standard as the core to a metadata model that can be insulated through translators to each tool. A data change in one tool can be quickly accommodated through translation language and can be propagated downstream to consuming tools with far less complexity than in the three integration models mentioned earlier. This will require an upfront investment to create a data model and infrastructure that meet these requirements, but the pay back will be quick and the cost of IT will go down immediately due to the far fewer moving parts that must be changed when any one tool changes. It will also provide the ability to plug and play additional or replacement tools in the future. An example of such a data infrastructure could look like (see Chart Two). The last key ingredient is the pay attention to the market. Keeping an eye on the regulatory environment and changing mortgage technology will allow any lender to be proactive. Think of the entire environment as an opportunity to compete. Knowing when changes are coming and having the ability to react quickly will save time, money, reduce risk and provide a key differentiator for lenders relative to the competition. If lenders take a step back and look at how their processes and technologies currently resemble some of the patterns I describe in this article they should contemplate how they are positioned going forward. An investment today when volumes are lower than in recent years could pay enormous dividends in the future. Staying with a less than optimal model could result in major problems down the road.

NMP M O R T G A G E

Ted Tozer

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NOVEMBER 2014 n National Mortgage Professional Magazine n

P R O F E S S

President of Ginnie Mae BY PHIL HALL & ROBERT OTTONE

n Feb. 24, 2010, Theodore W. “Ted” Tozer was sworn in as president of the Government National Mortgage Association, more commonly known as “Ginnie Mae.” His arrival in the federal government capped a three-decade career of leadership in the private sector. Born in 1957, Tozer graduated from Indiana University in 1979 with a bachelor of science degree in accounting and finance. Following his graduation, he joined BancOhio National Bank as vice president and investment operations manager. From 1986-1989, he was vice president and chief financial officer at BancOhio National Bank. In 1989, he became senior vice president of capital markets at National City Mortgage Company, which was later absorbed into PNC Financial Services Group. During his years in the private sector, Tozer served as a trustee of the Ohio Mortgage Bankers Association from 1999-2001, as a member of the Fannie Mae Midwest Secondary Advisory Group from 1994-1999, and as a member of Freddie Mac’s National Lender Advisory Board in 2002. He also served as chairman of the

“IT’S TRUE THAT WE’VE GROWN, BUT ONE OF THE THINGS WE’VE TRIED TO DO HERE AT GINNIE MAE IS TO MAKE PEOPLE CUSTOMER-CENTRIC. OUR GOAL IS TO MAKE SURE OUR SECURITIES TRADE WELL, AND TO MAKE SURE OUR PROCESSES ARE AS BUSINESS FRIENDLY AS POSSIBLE.”

Mortgage Bankers Association’s (MBA) Secondary and Capital Markets Committee from 2002-2004. In the latter chairmanship, he also served on the MBA Residential Board of Governors (RESBOG) and worked with Ginnie Mae in the overhaul of the GNMA II program. Tozer also served as a charter member of Fannie Mae’s National Lender Advisory Board in 2008. When President Obama nominated Tozer for the Ginnie Mae position in late 2009, his nomination was greeted enthusiastically by John A. Courson, president

and CEO of the MBA, who claimed, “I cannot think of anyone better suited to run Ginnie Mae.” Did you originally intend to become part of the mortgage industry? Ted Tozer: I take the belief that mortgage banking is the industry of refugees–because nobody ever starts out to be a mortgage banker. I came out of college with a degree in accounting and finance, and ended up running the investment operations side for BancOhio National Bank!

And how did you wind up at Ginnie Mae? PNC bought National City at the end of 1989. In 2009, PNC wanted to get out of the mortgage business. I was contacted by the White House and asked in September 2009 if I would be interested in this job. I sent my resume in. At the beginning of that month, I wasn’t certain what I was going to do. By the end of September, I had a new job. But you were no stranger to Ginnie Mae before taking the lead at the agency? PNC was approved by Ginnie Mae as far back as 1987, so I had been dealing with them for almost 27 years. When I was chairman of the MBA’s Capital Markets Committee, I was dealing a lot with Ginnie Mae. I knew most of the people here, so it was a relatively easy transition. Under your leadership, Ginnie Mae’s portfolio has seen remarkable growth. How was this accomplished? It is a great tribute to the people here and what we are doing. It’s true that we’ve grown, but one of the things we’ve tried to do here at Ginnie Mae is

S I O N A L to make people customer-centric. Our goal is to make sure our securities trade well, and to make sure our processes are as business friendly as possible.

Yet your monitoring is defined by your resources. How is Ginnie Mae able to monitor fiscal feasibility and integrity across the expansive mortgage industry, considering what is taking place at this point? The way Congress funds us requires

M O N T H

the salaries we can pay to be approved through the appropriations process. But if Congress wants us to contract additional resources on a separate basis, we are given a limited amount of funding. In the past, Ginnie Mae would hire one of the big CPA firms to go down and audit people. Now, I am trying to get enough funding from Congress to bring that function in-house because the CPA firms don’t always do as thorough a job as you would like them to do of our issuers. Having our staff doing it would be a little more thorough. I am trying to get Congress to get me to hire these people, rather than bringing a contractor in. Have your reviews traditionally been handled on regular basis, or were they more of a response to a distress beacon that appears? In the past, they were done as a beacon, and this was a problem If there was a red flag that came up, we’d send in an audit team. But there were flags that did not come up until [the companies] were on the verge of bankruptcy–that’s why it would be better to build up a staff here, so we can send Ginnie Mae teams out a more regular basis, as well as having relationship managers in Washington, D.C. that are contacting the issuers’ organizations on a daily basis and asking to see the quarterly financials. I need to hire another 30-40 people to staff up my issuer manager area. Right now, with salaries and travel, I have a budget of $19.5 million. I’d like to get somewhere closer to $35 million to bring some of the stuff in-house. Is the Ginnie Mae monitoring process more proactive or reactive today? We are building models based on trends with lenders that tended to fail. Now, we have a scoring mechanism based on the probability of people failing—using such factors as liquidity and delinquency. If a lender is high risk, we will spend more time and effort and resources working with them based on the screening. We have built a spotlight process out to anticipate that the lender will be in trouble, so we can put more account executives on them—we will spend more time with them and get more information from them. We even ask for lenders management to come into Washington, D.C. to meet with us, so we can have a better understanding of where they are going. This helps us stay ahead of the process. Our goal is not to have another default with an issuer.

In your view, what are the most common reasons for default? People default because they are doing inappropriate things or because they don’t manage well. Either way, things happen—it doesn’t mean it is a riskfree business. The more we educate people on that, the more this helps people understand the mortgage business better. Your term at Ginnie Mae has also seen a high-tech modernization effort. How has that progressed? We are in the process of overhauling all of our technology. When I got here, the systems were all basic systems that had been in place since the 1970s and 1980s. We had modernization in 2000, but it was pretty minor. We are looking at everything—all of the systems from the ground up, and we want to move them off the mainframe and into the 21st Century infrastructure so we can leverage all of the new technologies. This way, we can have lenders shift pools using different devices, whether it is an iPad or whatever they want to use. Right now, they have to use desktops. Plus, our rollout of new products will be a lot quicker. We already started several changes already, so issuers are already seeing some improvements. For example, last fall, issuers that wanted to issue a pool had to reserve funds ahead of time. Now, we are in a situation where money can be requested online. What used to take days is now taking minutes. We are hoping to have it all of the upgraded completed in the next 18 months or so. Ginnie Mae continues to be very popular with international investors. What is the appeal to the overseas markets? Investors like it because they are not concerned about the actual credit

losses. If you are an insurance company in Taiwan or a bank in Tokyo, you’re in a situation where you know that you will get your principal back. Even though people say housing is weak, the government guarantee is there to ensure that you get your principal back, no matter what. And Ginnie Mae will help in the recovery, because we’ve been able every year to raise $3-$4 billion for the housing sector. The biggest thing is that people look at us as an organization, and not a government agency. They hold us to a higher standard—they look at us as doing things in a way that makes people think we’re a partner with them. How long would you like to stay at Ginnie Mae’s helm? I’d like to stay for as long as I feel that I can make a contribution, and to stick around to make sure that the changes I have made are permanent. I am a presidential appointee and I assume that when there is an administration change there will be a different person in this position. We’ve been talking all about your work. What do you do in your offtime? Probably the biggest hobby I enjoy is just being here in Washington, D.C. —the chance to play the role of a tourist, to go around and see all of the historical sites here. My wife and I went over to the Blue Ridge Mountains to spend a weekend. It is nice to be in this part of the country and to see different Civil War battlefields in the area. That is how I’ve spent a lot of my free time in D.C. over the last four years. Phil Hall is managing editor of National Mortgage Professional Magazine. He may be reached by email at philh@nmpmediacorp.com.

n National Mortgage Professional Magazine n NOVEMBER 2014

Didn’t this apply to Lend America, when Ginnie Mae stepped in following the company’s collapse in 2009? Yes. When Lend America could not financially continue its obligations, we seized their servicing.

T H E

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Still, your growth can be credited to much more than just a successful customer experience … is this true? First, our guarantee is not at the individual loan level. We’re very similar to the Federal Deposit Insurance Corporation (FDIC) in that sense. For example, let’s say Wells Fargo comes to us and gets their securities guarantee. Our guarantee only comes into play with Wells Fargo if they go bankrupt. As a result of that, our oversight is only limited to the lenders themselves and not the individual loans. So if Wells Fargo were to double their amount of securities or loans, there is still only one counter party for us to worry about. There is a correlation between the amount of securities and our risk–our risk is more focused on the number of issuers. In past years, we’ve seen a doubling of the number of issuers, so we’ve had some growth in that perspective. But not as much as you would think, because what happened is that the issuers were doing more. As with the FDIC, if bank deposits grow across the country, but the number of banks stays the same, the FDIC has the same amount of resources they need to spend on the same number of banks. That is kind of the way our model works, and that is the beauty of our model. Our guarantee is on the issuer’s ability to pay. It limits our oversight to them and not the loans themselves. If an issuer defaults, we don’t have to take on the position of covering the credit losses. We liquidate the servicer and transfer the servicing to a new Ginnie Mae issuer that continues the obligation. And our guarantee is only affected to the amount we have to subsidize the transfer of that servicing. It is not tied to the credit losses in that portfolio. Our model is totally different from Fannie and Freddie in that we don’t take any credit risk except the counter-credit risks from the issuers.

O F

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

Scenes From the MBA’s 101s

October 19-22 at the Mandalay B Credit photos to Rick Grant (credit Mortgage News Network photos to Michael J. Citak)

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Larry Zastrow from AllRegs on the exhibit hall floor of the Mandalay Bay Hotel & Casino

A Plaza Home Mortgage rep chats with an attendee during the MBA Annual Expo

Attendees are welcomed to the MBA’s 101st Annual Convention & Expo in Las Vegas

Phil Hall (right) interviews Bri Coester VMS, for Mortgage Ne hall floor of the Mandalay Bay

Michael Chaney and Dominic Iannitti from DocMagic were on hand to discuss their company’s product offerings during the MBA Expo

st Annual Convention & Expo

Bay Hotel & Casino in Las Vegas

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The Calyx Software booth featured a number of demos of the firm’s software solutions

A rep from Credit Plus Inc. chats with an attendee about the firm’s QC review product offerings

Jacob Gaffney (right), executive editor at HousingWire, is interviewed by Mortgage News Network lead anchor/commentator Phil Hall (left) in Vegas

Phil Hall with Elizabeth Green of Rel-E-Vantn Solutions on the set of Mortgage News Network’s broadcast plaza

n National Mortgage Professional Magazine n NOVEMBER 2014

ian Coester (left), CEO of ews Network on the expo y Hotel & Casino

new to market continued from page 61

NOVEMBER 2014 n National Mortgage Professional Magazine n

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License and Certification Board. “As GSE and lenders seek to reduce appraisal errors, it’s essential to have a robust independent appraisal quality and review program,” said Kim Perotti, EVP at AXIS. “AQC is a nationwide solution that provides a consistent review and grading process that exceeds the USPAP Standard 3 desk review requirements.” AQC leverages AXIS proprietary workflow and forms of technology to enable reviewers to efficiently perform consistent and reliable appraisal reviews. At the start of an order, the appraisal data is extracted from the original appraisal and provided for analysis and review. Supplementary public records data is provided to ensure accuracy at every stage of the process. Lastly, as the reviewer assesses appraisal report violations and severity of, the system dynamically assists in recommending a consistent overall grade to the reviewer. “In my experience, one of the biggest challenges that AMCs and lenders face is ensuring high-quality and consistent appraisal review,” said Todd Rasmussen, VP of sales for AXIS Appraisal Review Division. “AQC overcomes many of these challenges by developing reliable method for grading appraisals that provides an effective solution for targeting and identifying deficient appraisals.” As part of its new Appraisal Review Division, AXIS leverages its panel of experienced appraisers to perform AQC Review Reports. Each reviewer is required to be licensed or certified in the state of the original appraisal, as well as have access to local-market MLS and data sources. In an effort to fully support their panel with this process, AXIS Appraisal Management not only provides training, but also an additional in-house quality control review team to ensure reliable and consistent results.

Collateral Analytics Enhances to Its Credit Risk Model

Collateral Analytics has developed an important enhancement to its Credit Risk Model (CRM) to now provide similar analysis for seasoned loans. The CA CRM provides information about the credit risk associated with a mortgage which has been originated at some point in the past. This product combines CA’s industry leading AVM with its proprietary home price forecasts and metro level default and prepayment models to predict the expected profitability of a residential mortgage. “Our CRM product is designed for lenders who seek additional information about the credit risk in their portfolio and the capital required to meet stress scenarios,” said Michael Sklarz, president and CEO of Collateral Analytics, a leading provider of comprehensive automated valuation solutions and real estate ana-

lytic products for large lenders and the financial services industry. “It can be also utilized by investors to assess the potential value and risk associated with individual loans or mortgage portfolios or RMBS pools. A Collateral Analytics case study of still performing loans conducted with the CRM is available online. The study suggests that lenders would be justified in providing much lower capital amounts than would typically be assigned for UPBs unadjusted for predicted risk. It also concludes that potential investors may wish to use the information to help establish bid prices for the loans. Another application of the seasoned model highlighted in the case study is its ability to help lenders decide upon the risk of a second lien or home equity loan on top of the first.

Data Facts Releases New Third-Party Management Solution Data Facts Inc. and Temenos have partnered together to offer banks and lenders a solution to help meet today’s regulatory guidelines: Banker VMS, powered by Temenos, a comprehensive, third-party vendor management software. Banker VMS is a Webbased, central data repository for all vendor information and the business processes associated with them. This software will assist banks and lenders complete an ongoing annual supervision and monitoring of all critical vendors identified in the risk assessment, in an easy to view dashboard format. “By offering our clients innovative solutions to industry regulations, we enable them to focus on the more profitable side of their business—closing more loans,” said Julie Wink, executive vice president of Data Facts Inc. “We are committed to doing market research, and then offering our clients the best in technology products and compliance solutions, keeping them competitive in the marketplace.” Banker VMS provides vendor management policies, due diligence checklist, risk management, and a disaster recovery product. The risk compliance feature is a uniform, systematic approach to vendor risk assessment based on FFIEC guidelines, keeping banks and lenders compliant with new industry regulations.

Mortgage Builder Upgrades Its Architect LOS

Mortgage Builder Software has announced the introduction of its Architect Connect enhancement to its flagship LOS, Architect. Architect Connect allows borrowers to directly interact with the system through their computers and mobile devices, adding convenience for consumers and saving time and money for lenders.

“Architect Connect brings borrowers into the loan experience online from wherever they happen to be, anywhere in the world,” said John Vella, chief operating officer of Mortgage Builder and Equator, both Altisource businesses. “They can upload required information, communicate with their lender via the LOS on a 24/7 basis and check real-time loan status from their tablet, smartphone or computer. It’s instant gratification for borrowers and lenders alike.” Architect Connect provides benefits to both lenders and borrowers. Lenders can now offer customers more services via their computers and mobile devices including lead capture, prequalification and interactive Form 1003 loan applications, and the reporting and analytics they need to stay compliant. Borrowers can now use Architect Connect to quickly check the status of their loan on a computer or mobile device, avoiding constant time-consuming phone calls that have long been a costly fact of life for lenders. “Architect Connect enables a secure, completely transparent process that allows lenders to know exactly how their sales efforts are doing at any time,” said Brian Abbott, Mortgage Builder’s director of corporate initiatives. “Many tasks that used to take hours on the phone with a loan officer or a processor can now be completed on a self-service basis by the borrower using Architect Connect.”

Mortech Announces Web Offerings for Mortgage Lenders

Mortech, a Zillow business providing mortgage technology software solutions for mortgage bankers and secondary market teams, has announced the launch of lender Web sites, which will allow mortgage lenders to quickly and affordably create a custom WordPress-powered site for their personal brand and business. Custom lender sites from Mortech are designed for lenders who do not have an existing Web site or want to improve their current site. No prior Web design expertise is required to create and maintain content and the Web sites come with online mortgage tools and smart 1003 applications built-in. Key features of the Web sites include: A personalized domain name of the lender’s choosing; a variety of templates, themes and colors; the ability to add custom, search engine optimized (SEO) content; responsive design for smartphones, tablets and desktop computers; real-time rate quotes and rate search; loan officer lookup; and mortgage calculators and educational resources “With borrowers increasingly using the internet to find their mortgage lender, it is imperative that lenders have an online presence, yet lenders shy away from it due to the perceived complexity,” said Doug Foral, general manager of Mortech. “With lender Web sites from Mortech, we’ve taken the complexity factor out of the equation by building a Web platform that even the least Internet-savvy lender can use. With lender Web sites from Mortech,

there is no longer a good reason for not having a dominating brand presence online.”

Capsilon DocVelocity Launched to Amp Up Loan Quality Capsilon has announced the release of its new flagship product, Capsilon DocVelocity. Recent regulatory changes have forced lenders to reevaluate their operations to ensure that their document management operations have adequate data integrity controls to satisfy compliance requirements. Data extraction and validation is the cornerstone of data integrity, and lenders must harness technology to move their operations toward a data-centric model. Capsilon’s vision defines a new standard for the future of mortgage document management—a standard that brings the concept of straight-through processing (STP) to the mortgage industry, where a technologyenabled model is used to extract data from loan documents to move quality control to the front of the loan process. The mortgage industry can realize similar benefits, and others, by applying the concepts of STP to the loan origination process. This STP model automates much of the loan process, reduces manual intervention, and speeds processing while ensuring loan quality. The practice of “stare and compare,” in which a human being looks back and forth across two or more documents to verify that the information is consistent across document types, is time-consuming and errorprone, not to mention costly. Plus, using this approach, it’s only feasible for lenders to send a small percentage of loans through quality control (QC). Capsilon’s vision incorporates an exception-based processing model in which human intervention is required only when something that is flagged by the automation engine needs to be validated. “The pressure on mortgage lenders to QC one hundred percent of their loans, while keeping the cost per loan in check, has never been greater,” said Sanjeev Malaney, CEO of Capsilon Corporation. “With Capsilon DocVelocity, large lenders now have the enterprise-level features and the capabilities they need to automate much of the loan origination process, from loan intake to post-closing, using automation engines coupled with exception-based processing to speed time to close while ensuring data integrity.”

Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of: New to Market column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

heard on the street continued from page 56

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are you

nominated coming in december 2014

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SKIMEL PEREZ JOHNSON

l LenderLive Network has announced the addition of David Grief as regional account executive covering the Florida region for LenerLive’s Correspondent Lending Division. LenderLive Network has also announced that Dan Biebel has joined the firm as regional account executive covering the states of Iowa, Illinois, Minnesota and Wisconsin for the company’s Correspondent Lending Division. continued on page 94

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

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

n National Mortgage Professional Magazine n NOVEMBER 2014

l Paramount Residential Mortgage Group Inc. (PRMG) has announced the hiring of Scott Thompson as retail branch manager for the firm’s Cincinnati branch. PRMG has also

l HomeBridge Financial Services Inc. has announced the addition of Steve Stapleton in the role of senior vice president to oversee the firm’s Midwest expansion. HomeBridge has also continued its nationwide expansion by adding new mortgage loan originators joining across Texas and Arizona including: Charlene Sharp, Devin Fremouw and Jason Fremouw in Peoria, Ariz.; Donna Lafont in Sugar Land, Texas; Glyn Brady and Jack Feise in San Antonio, Texas; Lisa Warren in Southlake, Texas; Mark Candelaria in Casa Grande, Ariz.; Michael Collins in Phoenix, Ariz.; Richard Lindemann in Park Cities, Texas; and Richard McClain Jr. in Glendale, Ariz.

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announced the opening of three new branches nationwide, as Retail Branch Manager Laurie Gable will serve as branch manager of PRMG’s St. George, Utah branch; Mark Toth will lead the new Brick, N.J. retail branch office; and Dean Adler will serve as manager of the Weston, Fla. branch. PRMG has also announced the additions of Michael Skimel as Denver retail branch manager and Mauricio Perez as retail operations manager, as well as Jodie Johnson as retail operations manager of PRMG’s retail branch in Seattle, Wash.

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

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n National Mortgage Professional Magazine n NOVEMBER 2014

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MBA’s Mortgage Action Alliance A Message From MAA Chairwoman Amy Swaney

NOVEMBER 2014 n National Mortgage Professional Magazine n

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he Mortgage Action Alliance (MAA) has never been stronger. Our grassroots networks have picked up momentum, and with more than 8,200 active MAA members, we are larger than ever. This is just the beginning. Our advocacy efforts are firm and our network will continue to grow. This cycle, we employed some new and creative ways to spread the word about MAA. We went into the cycle with the goal of engaging our state leaders, and as we had hoped, state associations welcomed this responsibility. We worked with state associations to run MAA campaigns, and earlier this fall, the State MAA Enrollment Challenge increased our active membership by 1,556 members in just one month. States competed for recognition and complimentary attendance to a number of MBA events throughout the year. The enrollment challenge was a great lead into MBA’s Annual Convention, where 2015 MBA Chairman Bill Cosgrove stressed the importance of active advocacy in our industry. As Bill mentioned, advocacy must become a part of our company culture and—simply put—signing up for MAA is the easiest thing you can do to support our industry. I could not agree with our chairman any more. The future of our advocacy efforts in Washington, D.C. and in state capitals across the country relies heavily on the ability our company and state leaders to set the “advocacy example.” When our leaders make active advocacy important, it becomes a part of our company culture. Mortgage banking is our nine to five, but we cannot forget that the fate and health of our industry requires us to spend from 5:00 p.m.-5:15 p.m. being active mouthpieces for the real estate finance industry. I’m proud to work with such a dedicated team of advocates, and I hope we can finish this cycle strong. For those who have run MAA campaigns—thank you. For those who have not, I challenge you to become a leader for the industry and be an active participant in moving the industry forward. If you would like to run an MAA campaign, please contact Stephanie Graham at (202) 557-2818 or e-mail sgraham@mba.org to receive an Enrollment Campaign Kit and learn more about how you can engage your colleagues and employees in MBA’s advocacy programs. Real estate finance industry professionals who wish to join or learn more about MAA can do so by logging on to www.mortgageactionalliance.org. If you have any questions regarding MBA’s advocacy programs, please contact MBA’s Assistant Director of Political Affairs Annie Gawkowski at (202) 557-2816 or e-mail agawkowski@mba.org. Amy Swaney, CMB is governmental relations officer and branch manager with Scottsdale, Ariz.-based Citywide Home Loans. Amy is also chair of the Mortgage Action Alliance (MAA), a voluntary, non-partisan and free nationwide grassroots lobbying network of real estate finance industry professionals, affiliated with the Mortgage Bankers Association (MBA). Amy may be reached by phone at (480) 822-6262, ext. 2164, e-mail amy@amyswaney.com or visit http://mba.org/Advocacy/MortgageActionAlliance.

surveying the opinions continued from page 31

My thanks to all those who participated in the survey and especially to Tom Millon and the Capital Markets Cooperative for again sponsoring the survey and the report. Tom LaMalfa is a 34-year veteran mortgage-market analyst and researcher. He has done pioneering work in the areas of secondary markets, wholesale mortgage banking, mortgage brokerages, financial benchmarking and GSE reform. Tom continues since 1977 to co-author an old-fashioned mail newsletter, The Holm Mortgage Finance Report. In the aftermath of the financial crisis, his focus is on Washington, D.C. and the regulatory burden it is imposing on consumers and lenders. His 20-plusyear-old research firm, TSl Consulting, does survey research. He may be reached by email at tom.lamalfa@gmail.com.

Step Inside Ginnie Mae The Little Sister, All Grown Up By Ted W. Tozer Formed in 1968 to provide a guaranty backed by the full faith and credit of the United States government for timely payment of principal and interest on mortgage-backed securities (MBS), Ginnie Mae issued the first MBS in 1970. From the time of our inception and up to the most recent housing crisis, with the Savings and Loan crisis of the 1980s being an exception, the housing finance industry has been fairly steady. As Freddie Mac and Fannie Mae were viewed as the dominant players in the housing finance industry, Ginnie Mae was often regarded as the “Little Sister.” However, with the rapid changes now facing the industry as a result of the housing and global financial crisis, today’s environment is vastly different than it was in 1968. Yet, Ginnie Mae has flourished while many others, including Freddie and Fannie, have withdrawn or stayed on the sidelines. Through this period of change, Ginnie Mae has continued to grow, returning a healthy profit each year during the housing crisis. Each year since 2009, Ginnie Mae has returned revenues in excess of $1 billion, and those in the housing finance industry have taken notice. In fact, Ginnie Mae’s profits have reduced the government deficit by over five billion dollars since 2008. But the changing environment in recent years has led to a transformation in which commercial banks are retreating from mortgage lending and servicing, with non-depository institutions filling that void. We see increasingly more complex financial and operational structures. This has notably changed Ginnie Mae’s 93 issuer base and represents a significantly different operating environment, one for which the Ginnie Mae program was not originally designed. This evolving market is also seeing a credit tightening that is keeping many locked out of the housing market. Our new program with the Federal Home Loan Bank of Chicago demonstrates that Ginnie Mae can effectively open up credit availability to consumers who are being shut out of the American dream of homeownership. However, we are taking a leadership role in the housing finance industry to ensure that we continue to manage risk effectively and remain a cornerstone within the industry. We are modernizing our mortgage-backed securities (MBS) program and securitization platform to strengthen and expand our capacity to ensure that low-cost credit continues to be available across the single family, multifamily and health care sectors, while insulating the American tax payer against losses. We are focusing on closer scrutiny of an issuer’s liquidity, providing more detailed and more frequent mortgage servicing rights (MSR) portfolio valuations, and publishing data-driven operational performance metrics. In the wake of the housing crisis, many of the legislative proposals in Congress, as well as other reform proposals, envision a larger role for private capital in the market. However, a growing consensus has emerged that a government guarantee is essential to ensure a well-functioning mortgage market in the United States. I believe that the Ginnie Mae business model is more relevant than ever in the current environment. We know from experience that our model works, we have 433 approved Ginnie Mae issuers to prove it! Between 2007-2014, Ginnie Mae’s total MBS outstanding nearly tripled, as government-backed MBS programs became virtually the only means of financing residential real estate. By modifying our MBS program to meet changing conditions while maintaining the key principles and features that have contributed to our long-term success, Ginnie Mae will continue to ensure a healthy housing finance market for many years to come. In fact, given our extraordinary growth and industry leadership, industry analysts predict that we will surpass Freddie Mac in MBS outstanding within the next nine months. Given all that, it’s easy to see that Ginnie Mae, Freddie and Fannie’s “little sister,” is all grown up now. Ted W. Tozer is was sworn in as president of Ginnie Mae on Feb. 24, 2010, bringing with him more than 30 years of experience in the mortgage, banking and securities industries. As president of Ginnie Mae, Tozer actively manages Ginnie Mae’s $1.5 trillion portfolio of mortgage-backed securities (MBS) and more than $460 billion in annual issuance.

n National Mortgage Professional Magazine n NOVEMBER 2014

l The response to Question 59 indicated that only five of 29 executives thought that a cost/benefit analysis would indicate that the consumer’s benefit from the CFPB would be outweighed by its cost. l Questions about the affordability of housing are hot issues in the media, among lenders, and at the Federal Reserve. Respondents to Question 60 reported by nearly two-to-one that they think affordability is waning nationwide. As for how much, the affordability problem ranked a group average of three out of 10, indicating it’s still viewed as a minor problem. l Question 61 inquired about the performance of FHFA Director Mel Watt in his first 10 months at the helm of the FHFA. According to the respondents, Director Watt currently scores a 5.3 on the 10 point scale. l The mortgage banking industry has been hearing about GSE reform and a major restructuring of the secondary market since at least 2010. Asked in Question 62 if they expect such a major restructuring, 21 said not in the next two to three years compared to eight who felt it was possible in three years depending on the White House. l Looking out to 2017, Question 63 wondered how attractive those surveyed thought the mortgage business would be in the next several years. The group response averaged a 4.8 of 10, with only five ranking it an 8 or higher. l Question 64 asked who was familiar with the National Mortgage Risk Index. Twenty-four of 30 indicated an awareness of the index, the introduction of which was launched one year ago. l The final question, Question 65, was whether the executives thought the Republicans would win the Senate next week. If they are correct, it won’t even be close, as five times as many respondents said the Republicans would take over in the Senate as those predicting the Democrats would retain the majority.

NationalMortgageProfessional.com

split, 14 of the respondents indicated that they felt the recovery was gaining momentum, whereas the other 16 didn’t agree. Those saying yes ranked the momentum a modest four on a scale of one through 10. Question 48 wondered whether lenders thought they could be in full compliance with the disparate impacttreatment theory under the Fair Lending Act and not end up originating too many risky loans. Overall, most lenders, by a response tally of 22 to eight, don’t think they can meet the disparate impact and treatment legal interpretations and not go overboard with loans they otherwise wouldn’t make. For at least a year, lenders have been saying what a challenge it has been recruiting and retaining strong LOs. Question 49 asked the respondents to rank the extent of the challenge doing so. The group average was 7.3 of 10. Seventeen ranked the challenge of recruiting and retaining strong LOs an eight or better. Question 50 wanted to know if their firm’s LOs were encouraged to participate in their state and local trade associations. Twenty-one executives reported providing such encouragement, versus eight that indicated little such encouragement. The CFPB was the subject of Questions 51-59. The specific issues inquired about included: The clarity of the loan originator (LO) compensation rule, qualified mortgage (QM) rule clarity, the size of the challenge involved in preparing for the August 2015 implementation of the new RESPA/TILA disclosures, the difficulty and cost of implementing QM/ATR, the idea of a public consumer complaint database, the challenge of the vendor management compliance rule, the expansion and use of HMDA data, and whether those surveyed think that mortgage consumers are benefiting from the advent of the CFPB on the basis of a thorough cost/benefit analysis. Yes, clarity has been brought to the issues of LO compensation and QM, say small majorities of six and four respectively. However, the RESPA/TILA disclosure rule was ranked an 8.1 on the 10 point scale, with 24 ranking it an 8 or more and eight ranking it a 10. The difficulty and cost of QM/ATR implementation were both ranked 6 out of 10. Nine executives ranked the difficulty an eight or greater, while 12 ranked the cost to implement QMs an eight or higher. As for establishing a complaint database, the idea received support from six executives, while 24 indicated it wasn’t a good idea. Meanwhile, only two of 27 respondents thought that the new data being collected under the Home Mortgage Disclosure Act (HMDA) would be used to help not harm lenders.

time traps

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EUBANKS

heard on the street

BRYAN

l TrakLogix has hired blogger Barbara Eubanks from Mindstorm Media to focus her efforts on updating individuals of the mortgage industry’s latest headlines. TrakLogix has also announced the addition of Gary Bryan as its new national director of sales.

BURCHAM

NOVEMBER 2014 n National Mortgage Professional Magazine n

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l The Compliance Group Inc. (TCG) has announced it has hired Jeremy Burcham as chief strategy officer. l Primary Residential Mortgage Inc. (PRMI) has announced that Scott Mattern has joined the firm as a regional manager. l Lenders Compliance Group Inc. (LCG) has announced that Matt Strahl has joined the firm as director of compliance solutions. l David H. Stevens, president and chief executive officer of the Mortgage Bankers Association (MBA), has announced the appointment of Lisa J. Haynes as chief financial officer. Haynes joins MBA from Fannie Mae, where she was most recently vice president for operational accounting. The MBA has also announced that Dr. Lynn M. Fisher has joined the Association as vice president of research and economics. l LDWholesale, the third-party origination division of loanDepot LLC, has announced that Jack O’Brien has joined LDWholesale as vice president, east regional sales. l GSF Mortgage has named Bruce Olster to its corporate team as direc-

tor of capital markets and corporate development. GSF has also added Teresa Nelson as branch manager in the firm’s Iola, Wisc. branch. FirstService Residential has announced the addition of Scott Lang as senior vice president of finance for the Mid-Atlantic region where he will be responsible for driving revenue enhancement and cost control initiatives across the region. CoreLogic has announced that David Martin, a financial services, sales and marketing veteran, has joined the company as senior vice president, global head of sales and marketing. Fairway Independent Mortgage Corporation has announced that it has added a new branch in Scottsdale, Ariz., to be managed by Jon Tobias, a top mortgage originator in Arizona’s Maricopa County. The Data and Analytics Division of Black Knight Financial Services (BKFS) has named Ben Graboske to assume its chief technology officer role. Comergence has named Rebecca Atchison as marketing director. Anne E. Sutherland has joined Ballard Spahr as of counsel in the firm’s Mortgage Banking and Consumer Financial Services Groups. Timothy J. Hatter has joined Mortgage Network Inc. as a sales manager in the company’s Doylestown, Penn. branch office. With 30-plus years of experience creating high-performing mortgage sales operations, Larry Gunnin has joined Mortgage Network Inc. as the company’s Southeast regional manager. ClosingCorp has announced the appointment of Kamel Boulos as chief technology officer.

busy, and I guarantee the meeting will have the expectation of being short unless you extend it. Also arrive early to plan your ideas. If you aren’t early, you’re late. If your mind isn’t prepared to start when your body is present, you are wasting time that could be spent doing more important things.

6. Make time to sell every day It is so easy to come up with excuses to avoid marketing yourself or your business. The sad fact is, the landscape is littered with mortgage brokers and bankers who think they are in the mortgage business instead of the sales business. There is a problem with underwriting, so you avoid making phone calls. A staff dilemma and you procrastinate setting an appointment with a referral source. Do that for few months and your business looks like Oprah Winfrey’s weight loss plan. A constant roller coaster of up and down. Do you sell when you are desperate and procrastinate making calls when business is good? A wise and wealthy mortgage pro loved to see his competition get too much business. This was his sign to sell harder, gaining market share which meant referral sources giving him business he didn’t have to pay advertising dollars for.

7. Don’t get trapped into “Hurry Sickness” Do you rush around even when you don’t have to. Do you become inpatient in lines even on Sundays? Do your thoughts turn to work on your time off? You are suffering from “Hurry Sickness.” Dr. James Dobson had a spot on his show a short time ago in which a prominent psychologist described this malady. He talked

about a focus so intense that even your off time became on. This is “Type A” behavior pattern gone wild. Sam Walton of Wal-Mart fame stated on his death bed that he blew it. The employee listening to his last statements thought he was about to hear a scandal the dying CEO regretted. Worse yet, a financial goal that went unrealized. Instead Walton said he blew it with his family. The only thing important in the final hours of one’s life isn’t the money or the conquests, it’s the people. Walton said he barely knew his youngest son. His wife stayed with him out of commitment. He even neglected his grandchildren. No one in the last stages of life has ever looked back to take stock and regretted not making more money. It is always the relationships they missed. You don’t need to learn more about the mortgage business … you need to become more effective at doing the things you already know. This means discipline, focus and most importantly making the time for the most important staff support group in your life, your family. You can do that and still earn a decent living. Dr. Kerry Johnson is a frequent speaker at mortgage industry conferences on topics like “How to Read Your Clients Mind” and “How to Increase Your Sales by 80 Percent in Eight Weeks.” He is the author of six books, including Mastering the Game: The Human Edge in Sales and Marketing, WILLPOWER: The Secrets of Self-Discipline and his newest book, Why Smart People Make Dumb Mistakes With Their Money. For more information, visit www.kerryjohnson.com/coaching, call (714) 368-3650 or e-mail kerry@kerryjohnson.com.

Your turn National Mortgage Professional Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of: Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

tales from the closing table continued from page 34

1, 2015, it will control the generation and delivery of the Borrower’s Closing Disclosure form in anticipation of the CFPB’s new TILA-RESPA Integrated Disclosure Rule that takes effect the same day. The new disclosure is a combination of the existing Truth-in-Lending (TIL) disclosure and the HUD-1 Settlement Statement. Wells stated they will be taking over this process in order to meet internal compliance and governmental regulatory compliance expectations on the bank.

On the lighter side …

www.mortgagenewsnetwork.com

The Top Five Things You Don’t Want to Hear From Your Realtor When You Close on Your New Home 1. “I think unexplained crop circles add a unique flair to any home’s garden.” 2. “Yes, the last owner did donate the house to the Hell’s Angels, but I’m told

that the judge has ordered them not to come within 50 feet of it.” 3. “Your neighbor has assured me that, technically, they’re not ‘killer’ bees.” 4. “It’s quite common for roaches to grow that big even when not in the presence of radioactivity.” 5. “It’s true that they died in the house, but the prosecutor was never actually able to prove it was murder.” Andrew Liput has been a corporate, real estate and banking attorney for more than 25 years He is the founder, CEO and president of SSI, the first data intelligence and risk analytics firm to offer specialized vendor management services addressing settlement agent risk to mortgage lenders and banks nationwide. He can be reached by e-mail at aliput@securesettlements.com.

calendar of events N A T I O N A L

DECEMBER 2014 Wednesday-Friday, December 3-5 Mortgage Bankers Association Independent Mortgage Bankers Conference Hotel Del Coronado 1500 Orange Avenue Coronado, Calif. For more information, call (800) 793-6222 or visit www.mortgagebankers.org. JANUARY 2015 Monday-Friday, January 12-16 MISMO Winter 2015 Educational Summit & Workshop Hotel Contessa Luxury Suites on the Riverwalk 306 West Market Street San Antonio, Texas For more information, e-mail info@mismo.org or visit www.mismo.org.

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

MARCH 2015 Wednesday-Saturday, March 4-7 Mortgage Bankers Association Mid-Winter Housing Finance Conference 2015 The Ritz-Carlton Bachelor Gulch 130 Daybreak Ridge Avon, Colo. For more information, call (800) 793-6222 or visit www.mortgagebankers.org. Sunday-Thursday, March 8-12 32nd Annual Regional Conference of MBAs Trump Taj Mahal Casino Resort 1000 Boardwalk Atlantic City, N.J. For more information, call (732) 596-1619 or visit www.mbanj.com. Wednesday-Friday, March 18-20 American Land Title Association (ALTA) 2015 Business Strategies Conference Sheraton Philadelphia Downtown 201 North 17th Street Philadelphia For more information, call (202) 296-3671, visit www.alta.org or e-mail service@alta.org. Sunday-Wednesday, March 29-April 1 Mortgage Bankers Association’s National Technology in Mortgage Banking Conference & Expo 2015 Hyatt Regency Orlando 9801 International Drive Orlando, Fla. For more information, call (800) 793-6222 or visit www.mortgagebankers.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@nmpmediacorp.com. * Looking for additional exposure at key industry events? Call 516.409.5555, ext. 4 to discover how to maximize your event coverage.

APRIL 2015 Thursday, April 2 Texas Mortgage Roundup 2015 Hyatt Regency San Antonio 123 Losoya Street San Antonio, Texas For more information, call (860) 922-3441, email info@agilityresourcesgroup.com or visit www.txmortgageroundup.com. Wednesday, April 29 2015 Midwest Mortgage Matchmaker Conference Ameristar Casino Resort & Spa 1 Ameristar Boulevard Saint Charles, Mo. For more information, call (314) 690-1504, e-mail information@mamp.biz or visit www.mortgage-matchmaker.com. MAY 2015 Tuesday, May 12 2015 Great Northwest Mortgage Expo Crowne Plaza Downtown Portland 1441 NE 2nd Avenue Portland, Ore. For more information, call (503) 567-9326, e-mail info@oamponline.com or visit www.greatnorthwestexpo.com. Monday-Wednesday, May 18-20 American Land Title Association 2015 Federal Conference and Lobby Day Mandarin Oriental Hotel 1330 Maryland Avenue SW Washington, D.C. For more information, call (202) 296-3671, visit www.alta.org or e-mail service@alta.org. JUNE 2015 Thursday, June 4 2015 Southwest Mortgage Fest Sandia Casino & Resort 30 Rainbow Road Albuquerque, N.M. For more information, call (860) 719-1991, e-mail info@agilityresourcesgroup.com or visit www.swmortgagefest.com.

Monday-Wednesday, June 22-24 Ultimate Mortgage Expo 2015 The Hotel Monteleone 214 Royal Street • New Orleans, La. For more information, call (860) 719-1991, e-mail info@agilityresourcesgroup.com or visit www.ultimatemortgageexpo.com. AUGUST 2015 Thursday-Friday, August 20-21 Louisiana Mortgage Lenders Association (LMLA) 2015 Education Conference The Hilton New Orleans Riverside Hotel 2 Poydras Street • New Orleans, La. For more information, call (225) 590-5722 or visit www.lmla.com. OCTOBER 2015 Wednesday-Friday, October 7-10 American Land Title Association 2015 Annual Convention Westin Copley Place Boston 10 Huntington Avenue Boston, Mass. For more information, call (202) 296-3671, visit www.alta.org or e-mail service@alta.org. Saturday-Monday, October 17-19 2015 NAMB National Conference Luxor Resort and Hotel 3900 South Las Vegas Boulevard Las Vegas For more information, call (860) 719-1991, e-mail info@agilityresourcesgroup.com or visit www.nambnational.com. Sunday-Wednesday, October 18-21 Mortgage Bankers Association Annual Convention and Expo 2015 San Diego Convention Center 111 West Harbor Drive San Diego, Calif. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

NOVEMBER 2015 Wednesday-Thursday, November 18-19 Mortgage Star Conference 2015 Canyons Resort 4000 Canyon Resort Drive • Park City, Utah For more information, call (860) 719-1991, e-mail info@agilityresourcesgroup.com or visit www.mortgage-star.net. Friday, November 20 Utah Association of Mortgage Professionals (UAMP) Expo 2015 Canyons Resort 4000 Canyon Resort Drive • Park City, Utah For more information, call (860) 719-1991, e-mail info@agilityresourcesgroup.com or visit www.uampexpo.com.

n National Mortgage Professional Magazine n NOVEMBER 2014

FEBRUARY 2015 Sunday-Wednesday, February 1-4 Mortgage Bankers Association’s Commercial Real Estate Finance (CREF)/Multifamily Housing Convention & Expo 2015 Manchester Grand Hyatt 1 Market Place San Diego, Calif. For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

Monday-Thursday, February 23-26 Mortgage Bankers Association National Mortgage Servicing Conference & Expo 2015 Gaylord Texan Hotel & Convention Center 1501 Gaylord Trail Grapevine, Texas For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

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

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Thursday-Friday, January 29-30 California Association of Mortgage Professionals 2015 Sales & Marketing Conference Hilton Los Angeles/Universal City 555 Universal Hollywood Drive Universal City, Calif. For more information, call (916) 448-8236, e-mail info@ca-amp.org or visit www.thecampsite.org.

M O R T G A G E

NOVEMBER 2014 n National Mortgage Professional Magazine n NationalMortgageProfessional.com

WE BUILT OUR TEAM TO MOVE YOUR BUSINESS FORWARD FROM THE GROUND UP We restructured our production and support staffs to deliver more responsive file processing and quicker suspended item resolution. We strive to offer personalized service to each and every one of our lending partners.

AFR Wholesale is committed to improving the lender experience and building lasting relationships through exceptional service, which is why we made significant changes that provide you consistent service from a reliable and dedicated team.

WITH YOU IN MIND Responding to the needs of our clients is what earns us trusted business. Our improved structure means you spend less time working in-process files and more time building your business and gaining new clients.

JOIN OUR TEAM BY VISITING AFRWHOLESALE.COM OR CALL US AT 877-552-8737 Lender NMLS 2826. AFR Wholesale is a division of American Financial Resources, Inc. - AFR is a nationwide wholesale and correspondent lender. This information is provided to assist business professionals only and is not an advertisement extended to the consumer as defined by Section 226.2 Regulation Z. - EHL / EOE - 9 Sylvan Way, Parsippany, NJ 07054 - www.afrwholesale.com