Issue 044 March 2011 TheNicheReport.com
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Bringing Up Better 54 20Clients Can't Get 28 Litigating The Rear Terms for Distressed FEATURE ARTICLE!
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CONTENTS
Issue 044
20
March 2011
Clients Can't Get Financed? Their Securities Portfolio could provide the loans they need ... and FAST
NICHE REPORTS Agency & FHA HARD MONEY & NON-PRIME COMMERCIAL ConStruction JUMBO REVERSE MORTGAGE Service Providers
pg 45 pg 45 pg 46 pg 46 pg 46 pg 46 pg 47
Joseph Andahazy FOUNDER & PRESIDENT Robert Pegg robert@thenichereport.com CO-FOUNDER & PRESIDENT David Pegg david@thenichereport.com MANAGING EDITOR Stewart Mednick stewart@thenichereport.com
14 17 26
Mortgage Marketing 2.0 Rocky Foroutan CeO, Lender411 Get connected or get out!
The Right Place at the Right Time BJ BOUNDS Sr. Marketing Communications Specialist, Calyx Software Optimize your marketing potential.
Three Steps to a Steady Stream of REALTOR Referrals Geoff Zimpfer Speed Marketing™ for Loan Officers Traditional methods simply no longer work.
28
Litigating Better Terms for Distressed Homeowners Chris Fuelling CEO, The Loan Post Hopelessly underwater and starving for a loan mod.
6
38
March 2011
Center Stage with Lender411.com The niche report The Niche Report talks with Rocky Foroutan, CEO.
DEPARTMENTS
09 10 31 34 40 43 50 54
Editor's Forward LETTERS TO THE EDITOR FRANK & BRIAN SPEAK APPRAISER sound off TIP OF THE MONth What's your mortgage IQ? LENDER & RESOURCE DIRECTORY BRINGING UP THE REAR
EDITORIAL / CONTENT MANAGER Kristen Moser kristen@thenichereport.com ACCOUNTING MANAGER Shawna Ingram shawna@thenichereport.com Advertising Director Jessica Grizzle Jessica@thenichereport.com Advertising sales Heather Bopp Heather@thenichereport.com Production Manager Henry Suchman henry@thenichereport.com Production Assistant Dawn Exner dawn@thenichereport.com COLUMNISTS & Contributing Authors Martin Andelman Joseph Andahazy BJ Bounds Karen Deis Chris Fuelling Rocky Foroutan Santiago Herreros de Tejada Frank Garay Stewart Mednick Brian Stevens Geoff Zimpfer
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Editor's Forward
In recent breaking news, quoted from TradingMarkets.com: “In a move that had been widely anticipated, the Obama administration … wants to get the government out of the mortgage business by winding down operations at Fannie Mae and Freddie Mac over the next five to seven years. "Fundamental reform" is the aim, Treasury Secretary Timothy Geithner said in announcing the plan to not only "shrink the government footprint in housing," but also "strengthen consumer protection and preserve access to affordable housing for people who need it…." Withdrawing government support of housing financing by gradually eliminating Fannie Mae and Freddie Mac, would bring private capital back into the market. The government now guarantees nine of every 10 home loans, which Geithner says has discouraged private capital's return. The 160,000-member California Association of Realtors said the plan would raise borrowing costs and restrict a safe and affordable flow of financing, further impeding a still-fragile housing recovery. American Bankers Association CEO Frank Keating suggested that rather than develop a "silver bullet" solution to housing finance, policymakers should create a well-regulated covered bond market and enhance the Federal Home Loan Banks "to better help them meet their mission of providing advances to private market portfolio lenders with minimal taxpayer exposure." Saying that Fannie Mae and Freddie Mac's multifamily programs "were not part of the meltdown" and are a "vital capital source for the rental-housing sector," National Multi Housing Council President Doug Bibby urged the government to be cautious in its reform efforts. Yet economist Anthony Sanders, a professor of real estate finance at George Mason University in Fairfax, Va., said that aside from saving U.S. taxpayers hundreds of billions of dollars in the future, not much will change in a world without Fannie and Freddie. "After pumping trillions into the mortgage market since 1998 through the government-sponsored enterprises (GSEs), the homeownership rate is back to 1998 levels," Sanders said. "Enormous pain and suffering occurred in the United States trying to go from 66 percent to 70 percent homeownership…." So, what do you think of this recent news? Here is my take: Let’s learn from a historical event that took place in Egypt. 18 days of full-out public protesting brought down a thirty year dictatorship. The people spoke and the government listened and acted according to what the people wanted, not what the government wanted to do. Can the mortgage, real-estate and appraisal communities band together to forge a united front to speak loud enough so the government will act in accordance to our desires and not the government’s political aspirations? The front starts here! Cheers!
Stewart Mednick Managing Editor
Official
MEMBER
TheNicheReport.com
9
Letters to the editor Stewart - I just wanted to say thank you for your work with The Niche Report. I faithfully read it every month and I am sure that I have learned a lot. I say that simply by way of telling you that I have been saving them for the “Tip of the Month”. I am not sure why but they have really touched me lately. Personal Mission Statements, the Four Agreements (found it, read it, reading it again – great stuff), I have started to scan them and toss the rest. I appreciate your candor and your encouragement. Never cloying or over sentimentalized. I feel like you feel my pain and frustration and confusion.
Securitization by Martin Andelman, Nov 2010, pg 20
I also saw the article this month by Kurt Reisig. I used to work for Kurt and I think the world of him and APMC. I think it should be THE model of how branching companies (or any company) should be run. You could do a great article on developing a great corporate culture by just spending a day with Kurt. Douglas W Woods Mortgage Advisor Axia Financial, LLC
Looking forward to more of your great articles. Jim C, Mortgage Consultant
Is Really An Audit? by Peter Hebert, Feature Article, Jan 2011
Mr. Andlemans commentary on securitization causing our economy to collapse left big questions unanswered in the minds of readers.
I just want to reach out to you and let you know how much I enjoyed reading Jan '11 edition of The Niche Report. Even though it was a history lesson I really enjoyed learning about the banking system. That was quality education.
One question is on page 29 with the paragraph that begins with “So when things changed…”, leaves even the casual reader asking “So what did change?” The premise of the whole article hinges upon this one question – but no explanation is given.
I hope things otherwise are going well for you. Tommy Duncan
Martin - Your article in the November, 2010, Niche Report was the best, most honest appraisal of the meltdown I had ever read. You explained a very difficult situation in a clear and unemotional way. In the article you say, "Don't you get it? We're not going to have any sort of a recovery until we stop the foreclosure crisis. And we can't stop the foreclosure crisis without... The foreclosure crisis is entirely unnecessary..."
From an honest heart you have exposed the criminal invasion of our nation. The banking industry must be punished sufficiently to discourage it from ever returning to the scene of the crime. R Moss
Another question is ‘Why were bonds downgraded on 7/10/2007?” He
states the downgrading of bonds as the cause of our economic collapse, offers his thoughts on what was not responsible, but offers no insight as to why the bonds were downgraded. Your readers deserve know how he supports his opinions. Thank you. Brian Tata
Bringing up the Rear, Dec 2010, pg 54 Thanks for shining a light on the appearance of conflict of interest and impropriety in Eagle County. The bottom line is that if you or I had been Erzinger's position, we would have been charged with felony hit and run and we would not have been "offered" a plea bargain of two lesser included misdemeanor offenses. Timothy Kells Nixon, J.D.
Letters to the Editor may be e-mailed to info@TheNicheReport.com or faxed to 703-991-2362. Include your full name, email address, and daytime phone number. We are unable to publish all letters and may edit letters for length and clarity. Visit us online at www.TheNicheReport. com to subscribe to our magazine and/or eNewsletter. Or call toll-free at 866-964-2695 for more information.
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letters to the editor - letters continued
Is The Loan Officer Dead? By Rick Roque, Dec 2010, pg 18 I just wanted to pass along my compliments of the Rick Roque article this month. It provided a great breadth of the issues facing brokers and technology providers without offering too much in the way of unsubstantiated conjecture. Great work. Thanks and keep it up. Josh Bopp President focusIT, Inc.
In my opinion, your view of our industry clearly describes the current environment and may be one of the most informative and concise overviews I have read in quite a while. Good job! Cal Haupt President & CEO Southeast Mortgage
I read your article, Is the Loan Officer Dead, with great interest. As a 25 year mortgage veteran I have seen and am experiencing much of what you write about. You have also validated a suspicion of mine that there is an active agenda behind the myriad and onerous regulations passed down by HUD, Congress, et al. I have believed and continue to believe that the underlying agenda is to either steer the mortgage business into the hands of 4 or 5 mega lenders who are beholden to the Federal Government or to have the Feds take over the dispensation of mortgage loans in the same way they took over student loans. Either prospect is a scary thought and will do nothing to assist or protect the consumer or a free market. It is very disappointing and frustrating to see our government respond to the realization of too big to fail by making changes which will encourage an increase in TBTF lender’s share of the mortgage market making them even more too big to fail. Your insights and perspectives are the reason why I read the magazine - probably the best and most insightful writer I've read in a long time. Scott Thigpen Citizens Bank
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If your appraisal data is scanned or extracted from PDFs, talk to us. Before it’s too late. In 2011, the GSEs will require lenders to submit full appraisals in MISMO XML 2.6 format. If your process uses PDF extraction to get data, it will fail. It’s not a question of “if” PDF data extraction and scanning will fail. It’s how often, and how much it costs you. And the answer isn’t good. Do the math: The URAR form alone has over 1000 fields. Even at 98% field-level accuracy, 20 or more fields will be corrupted. Some of those will be critical, and so your pipeline will stop due to bad data. You might not notice it today, because PDF extracted appraisals aren’t subjected to rigorous data analysis. But they will be, and many won’t pass. The solution? Demand “Native XML” appraisals. No conversion, no extraction, no excuses. Just clean XML straight from the appraiser’s desktop software. Then you get exactly what they typed, even on every kind of odd form or addendum. PDF extraction just can’t do that. We’re certain, because we create, transmit, analyze, store, and manage more appraisal data than anyone on Earth, including the GSEs. So when we tell you there’s a problem with PDF extraction, believe it. Protect yourself by downloading the free “MISMO XML 2.6 Appraisal Checklist” from our website. It’s a vendor questionnaire that helps you set policy now for the coming regulations. Whether you use an AMC or manage appraisals inhouse, it ensures a 100% native XML process free of pipeline problems — without changing vendors, or even paying us a dime. Why? We’d rather have you thank us later, than call us later.
Download the MISMO XML 2.6 Appraisal Checklist from the web, at www.MercuryVMP.com/XML Native XML is just one of our compliance and workflow solutions. Call us today for more.
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AD CODE: MANRMN0311 a la mode and its products are trademarks or registered trademarks of a la mode, inc. Other brand and product names are trademarks or registered trademarks of their respective owners. All prices, terms, policies, and other items are subject to change without notice. Copyright ©2011 a la mode, inc.
Mortgage Marketing 2.0 Get Connected or Get Out
by rocky foroutan
T
he internet has changed mortgage marketing. Everyone knows this. But web marketing success remains elusive for many mortgage professionals. What’s wrong?
We Think We’re Supposed to Advertise Mortgage marketing used to be about renting a billboard and yelling, “I’m the best.” Any company serious enough to rent billboards, create TV commercials or pay for radio broadcasting was serious enough to get your business. This was why old media worked. The platforms were exclusive and everyone knew it. But the internet has changed this. It stands in direct opposition to exclusivity. The internet, in many ways, is a giant sandbox. Any new kid on the block is free to play. The “billboards” of this generation—websites, blogs, social media, and so on—are free or extremely cheap. Not exclusive by any means. The simple act of broadcasting a message does not set you apart anymore. Everyone’s broadcasting. Talk is cheap. No matter how much you claim to be “the best,” consumers are not going to believe it until they see proof. What kind of proof do consumers want? Many companies think, “bigger, louder billboards.” This is how it used to be done, and it might still bring modest 14
March 2011
returns, if you are willing to put the money into it. In fact, traditional advertising, such as banner ads and pay-per-click campaigns can be a great way to get the attention of your audience. But if you want to convert that traffic, if you want to keep the attention, you have to go beyond oneliners and static sales copy.
We Don’t Know What the Internet is For Different forms of media lend themselves to different marketing uses. We need to know how the internet works as a communicative medium before we try to utilize it. The internet is visual in nature, which makes it a lot like TV. But it communicates through text, for the most part, which makes it more like print media. Then again, access to it is commoditized, which is rarely the case with print, and usage is paid for by ad revenue which is only true of some print formats. This makes it more like radio. Which is it? The internet borrows heavily from all these forms, but it is actually a descendant of an entirely different informational medium. The internet is most like the telephone. A phone performs one basic task. It connects two individuals and allows them to share information in a highly personal way. It allows them to act and react with each other directly, not at the watered-down level of mass communication. This functionality lies at the core of the internet. This is what internet users expect to encounter, whether they know it or not.
Interaction - Personal, authentic, identifiable interaction. If you ignore this aspect of the internet and try to shout the loudest instead, you might be heard but you will not be believed. You will get clicks without conversions. You will get traffic but no calls. Ever had this experience?
Learning How to Talk, Again What does successful web interaction look like? The internet is not as basic as the telephone. You are connected to a vast community, and the way you network with and relate to the individuals in this community will affect your success. Interaction can take many shapes but is always built upon one of two core events. 1. Someone within the community says something, and you respond. This is the simplest way to establish a connection. The community members ask about mortgage rates. They research loan types. They want to know what refinance options are available to them. They ask questions, they post reviews, they read articles and blogs. How are you responding to all of this? By saying, “I’m the best?” Or by offering intelligent, personalized answers and solutions? Your goal is not to broadcast. Your goal is to respond. It may seem like a subtle difference, but it’s profound. Identify where, when, and how the community is reaching
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out for responses, and be there to respond. Forums, blogs, social networking sites, and even the comments section of a popular news article are all hotspots of consumer activity. 2. You say something to the community, and someone within the community responds. This is the other way to build a connection. In this case, your goal is to convince web users to respond to you. But isn’t this what all advertising is about? Isn’t this just the same old thing? It is not. Remember, users are looking for interaction. The message you present to the community should be, “I am here to interact,” not “I’m the best.” The latter will not get you anywhere. Consumers will ignore it or disbelieve it. The former, though, will open the door for intelligent, authentic communication. Do you write blog posts? Do you manage a web column of current financial news? Do you update your site regularly with fresh information? Have you written a first time home buyer tutorial? Do you share your insights and offer assistance and follow up swiftly and honestly? How are you communicating to the world that you are alive, active, and able to help? Remember, you can not just say that you are alive and active and able to help. If you say it, it is just sales copy. The whole point of the internet is that we don’t just say things anymore. We prove things through interaction.
Get Connected or Get Out Did you notice that effective interaction, described above, always takes the form of contribution? Find a way to contribute something of yourself to the community, and connections will follow. Start by identifying the hotspots, the places where the community comes together to interact. Facebook is an obvious first choice, but you actually may find more opportunities to contribute at industry-specific sites such as Zillow, Activerain and Lender411. These sites are designed to facilitate productive interaction. Answer questions. Write articles. Contribute. A stagnant website, devoid of personality, is no better than a billboard alongside an empty highway. Internet users want to be heard and helped. They are ready for you. Not your slogans. Not your billboard. You. Get connected or get out. Rocky Foroutan is the CEO of Lender411.com, a rapidly growing online community for mortgage professionals. Lender411 offers an open and transparent platform for generation and delivery of high quality real-time internet leads. Lender411.com also offers the perfect venue for marketing and advertising mortgage services. Basic membership on the site is free. Rocky can be reached by email: rocky@lender411.com or by phone: 888-333-6628 x11.
The Right Place at the Right Time Optimize your Marketing potential
by b.j. bounds
“
I
t is useless to resist.” These are the famous words from Darth Vader to his son Luke Skywalker in the sci-fi classic, The Empire Strikes Back. In the end, Luke did resist, and he survived to win the day in the next movie. Resistance to the evil that his father represented was the right choice for Luke. But for many of us in the mortgage industry, resistance to progress is indeed useless. But how many of you continue to resist the technology age and watch as your competitors grow from gaining business of online mortgage shoppers? They are marketing where the customers are. Over the last several years, the popularity of “Cyber Monday” has grown because many consumers choose to do their holiday shopping online vs. facing the crowds on “Black Friday.” In 2010, online retailers reported a 20 percent increase over the previous year, far out-pacing the .3 percent increase reported by brick & mortar retailers. The secret is out. More shoppers are going online. It’s time to embrace technology to help you market
and grow your business. And while a recent study by LendingTree.com shows that only 21 percent of mortgage shoppers start online, 21 percent represents a pretty decent number to community-sized brokers and lenders. To give a little perspective, Red Home Realty reports that there were 20,858 homes sold in 2009 in Austin, TX. That is just one city in one state! So 21 percent of 20,858 means 4380 potential home buyers could have found you! For the rest of them, there are other marketing tools you probably already have that you can use to find them.
Grab that 21 Percent You already have the tools you need for traditional marketing if you have a Loan Origination System (LOS). If you haven’t figured that out yet, you will want to keep reading to the end. But, if you are not on the Internet, you are missing out on a healthy amount of business for which your competitors are aiming. As we have seen with traditional retailers, online shopping growth has surpassed that of traditional shopping growth. This same trend will occur with mortgages loans. Those that will ultimately qualify for loans now are going to save TheNicheReport.com
17
themselves time and effort by shopping online. And since further statistics from LendingTree.com show that 39 percent of home buyers originate with their first rate quote without shopping for better rates, wouldn’t you want to be the first stop they make? That is where having your own website is beneficial. By leveraging available technology at very reasonable prices, you can have a customized website that drives borrowers to you with little or no effort on your part. A good website works for you 24 hours a day, 7 days a week. If you have been resisting technology because of the complexity of it, rest assured that building a website is as easy as using your friendly neighborhood (favorite) LOS. Just like with your LOS, you can find a template that fits your business perfectly. You choose the look and feel of your site to convey just the right image—evoke just the right feelings. Are you marketing to rural families, or is a downtown theme more appropriate? It’s up to you. Once you have determined the right market to focus upon for your website, you need to determine what information is relevant to your audience. It may not be
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enough to list your contact information and what you do. If you become a source of helpful information, you may have repeat visitors and new customers. The information that may bring visitors back include: industry information, including links to federal agencies, rates in your local area, testimonials from happy clients, and other statistical information about your area properties, schools, etc. Become the “chamber of commerce” for your community. One of the more recent tactics for drawing in customers is the judicious use of video marketing. Embedding video in your website puts your personality front and center. It is your chance to relay vital information to potential clients and give them the opportunity to learn about you and your business. According to Carl White, Chief Strategist of The Marketing Animals on mortgagemarketinganimals. com, 90 percent of web content is video—and the right content on your website can increase relationships and decrease the chances your viewers will keep shopping. Part of having the right content is making it easy for potential clients to acquire the information and quote they need without unnecessary delay. Make sure your website can accept online applications. To be truly efficient and accurate; your online application program should drop your prospect data directly into your LOS, where the sensitive information is secure and you can begin processing without the hindrance of having to populate information redundantly. You can even limit the information taken on the online application so that an initial GFE is not required until you have the opportunity to speak with your new client and further build your relationship.
And For the Other 79 Percent By building relationships, you increase your business.
Relationships—a client’s trust in you—are where the magic begins for mortgage professionals. For the 79 percent of home buyers who do not start on the Internet, there are creative marketing ideas you can implement with the tools included with your LOS. If you want to start from scratch, you can begin by obtaining small lists of potential clients in your area. That could be local apartment dwellers to big employers in the area that might relocate employees to the community. And lists are easy to obtain these days—using technology. You can use a search engine to search near a particular address (such as apartment complex) or look up the HR director of large employers. Everything you need is on the Internet if you take the time to look. Of course there is always the option of purchasing a list, but this could be an expensive and possibly avoidable last step. You can import your newly created or newly purchased list into your LOS database. You can then create visibly appealing marketing materials or letters of introduction in Microsoft® Word and use your LOS to print or email them. If you prefer an even more personal touch, use your LOS to print simple mailing labels to use on your hand-written personal notes. Your mail carrier will appreciate your printed labels! Your LOS makes it easy to market to potential clients and keeps their information so that you can update their details once they become clients. Maintaining your list of contacts within your LOS database is another way to build and maintain relationships and it works in several ways: • Your LOS allows you to run reports based on contact birthdays, interests, etc. You can search on and report on any information you can enter about your client.. • Those reports can be used with your marketing templates to send birthday messages or milestone celebration messages via email or mail. • You can use your database and marketing tools to send referral requests or just to touch base. • Your LOS also allows you to record contacts made and future contacts planned with current borrowers within their loan file. This is significant because timely response to your clients is imperative to building trust. If you are out of the office with an emergency, anyone working in your place can easily
pick up where you left off and your client is not left waiting and wondering.
100 Percent Marketing Machine Henry Ford said, "A man who stops advertising to save money is like a man who stops the clock to save time." It is often the case that marketing activities are the first to be eliminated by companies facing financial hardship. But it is really not the best route to take -especially for mortgage professionals who always have opportunities for business if they are in the right place at the right time. A substantial web presence will achieve that in part. Embrace the technology that you have resisted long enough. Put your business where your customers can find you and build your relationships with the personal touches that make you a friend and an adviser. Using the tools you already have with your LOS can take you the rest of the way, and with very little monetary output. Using templates and reports with a robust contact database will keep you in touch with past, current, and potential clients. It’s time for you to be in the right place.
B.J. Bounds is the Sr. Marketing Communications Specialist for Calyx Software. In addition to media relations and copywriting, Ms. Bounds is a contributing author to the Calyx Software blog, CalyxCorner. Bounds has over 10 years experience in sales and corporate marketing with a focus on technology that spans several industries. For more information on Calyx Software, contact 800-362-2599 or visit www.calyxsoftware.com or www.calyxcorner.com.
Clients Can’t Get Financed? Their Securities Portfolio could provide the loan they need … and FAST! By Joseph Andahazy
Problems, Confusion and Red Tape Many have experienced the long drawn out process of applying for a loan only to discover after several weeks, and in some cases months, their application was denied. Several reasons are offered for the denial but the bottom line is, you don’t have the financing you need to accomplish your goal. Reasons for denying loans come in many forms skeptical Income, home value is too low, credit scores are marginal, too many properties financed or maybe the borrower is not properly documented in this country and the list goes on. Being denied financing is a harsh blow mentally which typically generates emotional distress and sometimes physical illness. Where do you turn? What other options are there? We’ve all heard and seen advertisements from the auto industry promoting the “Sign and Drive” concept to take home the car of your dreams “today,” signaling the process is simple and easy. However in real estate, it appears the application process has always been, and will continue to be, a complicated comprehensive affair. And it is more so now after the mortgage industry meltdown creating additional regulatory licensing and disclosures. I have friends wanting to refinance their homes to take advantage of the current low interest rates. They’re not looking to cash out. They have great credit, great jobs, low income to debt ratios, their loan-to-values are well below the maximum qualifying standards, and they’re waiting more than 90 days to get to settlement! Some are facing interest rate lock expirations and are being charged fees to extend the lock period. How insane is that! I’ve also heard stories about individuals who need cash now - today, to pay off liens, send off a tuition payment, get cash for a business matter or to ward off an emergency at hand. They are literally at the mercy of the same bureaucratic processing and underwriting backlog nightmare. In the commercial world, it’s even worse.
Ninety to 120 days to settlement is considered light speed. In the scenarios mentioned here, I am referring to attaining financing through traditional mainstream banks and mortgage companies. But what if you just can’t wait that long? You’re positive you will get approved, but if timing is an issue what other options are there for securing the financing quickly. You may find a portfolio lender who could act quicker because their decisions are made “in house” and they’re not selling the loan off to the secondary market. However, their customized qualifying criteria for underwriting may be stricter than the Fannie / Freddie rules because they’re a small organization concerned about minimizing risk. You could consider finding a private lender who will act relatively fast with limited documentation requirements, but the amount of cash out will be restricted because of loan-to-value and use of funds. Most private lenders do not like the cash out to be used for anything other than making improvements to the subject property or for the paying off of personal debt and other liens. A private loan will also cost significantly more in fees and interest rate and is only for short term purposes. Now and for the foreseeable future, those wishing to take no cash out and just capture a low rate, should apply now, and wait out the current process of underwriting. Until our elected officials in Washington decide the American people deserve a better system and change the process, we are stuck with what we have. The old saying of “They’re only selling Chevys so you are stuck with driving a Chevy”. [Let’s be clear, this is just an analogy. I don’t have anything against Chevys. I own one myself.] The current economic environment has forced many brokers to get out of the business. Banks and large mortgage companies have scooped up a large portion of these little shops, and new regulations are causing backups. Loan officers are now being directed to retrain to stay in compliance just to sell the same old financing, let alone learn some new and innovative niche lending techniques. As there are many scenarios in the world of lending, we could spend hours, even days speculating major issues, horror stories and diverse scenarios about residential deals and commercial deals. Just talk to any experienced loan officer and the stories will pour out endlessly. As this is the Niche Report, naturally we like to focus on niche lending concepts. So in the spirit of creativity, let’s shift gears and travel down a new path for a moment. I would like to bring to your attention to another method of borrowing money, especially if you
are not having any success getting qualified, growing impatient trying to get to settlement or need cash now. Mind you this is just an option to consider, it’s not for the masses of mainstream borrowers, but the benefits are real and could be the dramatic turn-around to your situation and an answer to your borrowing needs.
Securities Based Lending (SBL) Unlike a traditional mortgage, Securities Based Lending (SBL), and more specifically Securities Based Line of Credit (SBLOC) is based on the strength of a borrower’s securities portfolio as opposed to the strength of the borrower’s credit, source of income, employment history or the type and/or number of properties being financed. As a matter of fact, none of the traditional underwriting criteria are used to qualify. The only requirement is for a borrower or borrowing entity to own securities such as stocks, bonds or mutual funds in a portfolio having some level of market value. The concept of the SBL is based on lending against those securities at a percentage of their value. It is more like a traditional margin loan offered by any investment brokerage company. And of course, the more solid the securities, the more you can borrow against them. Treasury Notes and Bonds will render the highest liquidity value and therefore lending against them at 90% of their value is very typical. Now you say, well I don’t own any securities; I just have this lousy retirement plan that’s been tanking for the past three years. Sorry to say, pension or retirement plans do not qualify. You can however open up a securities account if you have the means. For instance, if you own a company and you have cash assets to purchase the securities – in effect, trading one asset for another, then the company can submit that portfolio to qualify for the loan against it. Unlike conventional financing, the application and underwriting process is straightforward and quick. The client needs only to submit a simple application along with their most current brokerage account statement and a term sheet will be issued within 24-48 hours. The Line of Credit can be made available within a week as soon as the client’s securities are moved into the new brokerage account. As part of my research, I consulted with Midtown Capital Group based in Manhattan, New York. Mr. David Borish, President and Mark Stevens, a Director of SBL, have created a program to help individuals and companies use their securities portfolio to finance unique scenarios at lower than market interest rates. One note to make
regarding Midtown’s program in comparison with others offering similar SBL loan products is their program allows the borrower to retain title (ownership) of the securities during the loan term period. This is a huge benefit. Most other SBL providers will require the borrower to surrender ownership during this period, only retaining “beneficial ownership” receiving the dividends earned. Basic SBL loan features include • Revolving line of credit – Only charge interest on what you use. • Floating or fixed rates available – With the ability to lock in a fixed rate at anytime. • Interest rates as a low as 1.5% - Interest only. • Loan to value ranging from 70-90% of the value of the securities. • Securities remain titled in client’s name. • Limited documentation - No credit or income requirements. • No prepayment penalty - With variable rate. • Dividends paid directly to client (or) credited against interest. • Client receives 100% of portfolio appreciation. • Wide range of eligible securities.
• Foreign nationals with foreign securities accepted. Eligibility The following securities are generally acceptable: • NYSE, AMEX and NASDAQ stocks whose values exceed $5.00 • U.S. mutual funds held over 30 days • Treasury Notes & T-Bills • Corporate and Municipal Bonds • Fannie Mae & Freddie Mac CMO’s • Options The following are generally NOT acceptable: • Pink sheet or OTC BB stocks • Restricted stocks • Any stocks whose value is less than $5.00 • Any securities held in a 401K or Individual Retirement Account (IRA) • CMO's (Excluding Fannie Mae & Freddie Mac ONLY) • Stand By Letters of Credit • Bank Guarantees
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The loan can actually be used for other applications besides real estate. Since the lien is independent of the subject property, the use of funds is totally up to the borrower as long as the terms for borrowing are honored.
marginable securities], you can pay down debt, purchase a home, pay tuition, all at lower than market rates. It’s an additional option you have to maintain your securities portfolio without selling your shares and creating liquidity. For Real Estate investors – It’s a method of attaining funds quickly for rehabbing properties or purchasing other prospects before your current project is completed - and certainly less expensive than using private money loans. So, for a quick way to get financed, consider your portfolio of securities as an option to traditional financing. And as always, you’re wise to provide your own due diligence and consult with your financial advisors and tax consultants regarding this financing concept and how it applies to your specific situation.
What are the benefits for …? Loan Originators and Realtors – You might have a client who does not qualify for a traditional mortgage. If they have securities, (even foreign securities), that might be the answer for a larger down payment, the payoff of liens to improve their credit scores or extra funds to buy the upgraded home features the mortgage won’t cover. For Borrowers – Use of funds for just about anything you need, [with the exception of purchasing additional
Joseph Andahazy is the managing principal of Fair Market Funding LLC, in Alexandria Virginia. An independent real estate finance consulting company specializing in loan structuring, document preparation, presentation and sourcing capital for debt and/or equity participation funding. Email: info@fairmarketfunding.com. Office: 703-879-1828. Copywrite©2011 Fair Market Funding LLC.
For Real Estate a SBL can be used for a wide variety of purposes, including but not limited to: • Generating or increasing down payments • Outright purchase of real estate • Paying down existing mortgages • Covering hard costs of real estate investments • Temporary or “Bridge” financing • REO, rehab or fixed and flip loans
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Three Steps to a Steady Stream of REALTOR Referrals Traditional methods simply no longer work By Geoff Zimpfer
O
ne of the biggest struggles mortgage originators deal with on a daily basis is finding a steady stream of good agents to fill their referral network. Today’s real estate market calls for a fresh, out-of-the box solution to resolve this problem as the old, traditional methods simply no longer work: visiting the kitchens of broker offices with hopes of luring a bagel loving realtor into a conversation; running the open house circuit on precious weekend days; attending broker previews; spending hours in REALTOR® association meetings. The good news is that there is a better way. There are three simple reasons most originators rarely meet with enough of the right types of agents, and as a result, struggle to build a steady stream of referral business: 1. Use of an outdated, stale approach that every other originator is using. The “I have great rates and excellent service” simply no longer carries any validity. With the heavy use of internet rate shopping by buyers and easy access to interest rate information by agents, “rate” information is no longer a valuable tool. As for “excellent service,” today’s demanding market requires excellent service for every mortgage originator, so again, it
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holds no selling value. 2. Chasing the wrong agents. Forget the bottom 80 percent. Set your sights high and aim for the top 20 percent who are closing business and poised for growth. These agents have other agents hold their open houses, run their flyers, and attend broker led previews. Some of them are in positions of leadership in REALTOR® associations, but most are too busy. 3. A limited mindset that undermines success. The mortgage business is demanding so it is easy to unknowingly carry negative energy about real estate agents. This energy will cloud judgment and repel agents away. The following three repeatable steps describe a simple, successful system for attracting quality real estate agents who want to give their referrals and are seeking help with their clients.
Step 1: Provide Value REALTORS® are busy and must allocate their time carefully. As stated previously, lead generation methods, like bringing donuts to broker offices and handing out free pens, simply don’t work in today’s real estate market. REALTORS® want something they can use to enhance their business pipeline right now. The best way to provide value is through well designed, informative, educational seminars.
Educational seminars place the host as the expert, make the best use of time for the agents, and produce multiple introductions to agents at one event.
Step 2: Provide Business Building Resources Educational seminars allow the mortgage originator to provide business building resources that are important to the realtor. This means that it is not necessary to be a formally trained public speaker or an expert on each topic presented at the seminars. Arrange for local speakers to present on a variety of subjects, such as: social media, ezines, Internet presence, modern marketing techniques, home staging, and tax tips. Agents will be grateful for the free education, opportunity to expand their business with new service providers for their clients, and come to learn to trust the advice of the mortgage originator. The speakers are eager to share their knowledge, often times at no cost, because it provides them with an opportunity to be introduced to a multitude of prospective clients. Step 3: Rinse, Repeat, and Refine Top producing mortgage originators understand the importance of having a repeatable, results oriented, system. It is critical to define and document the process of conducting an educational seminar so it can be
streamlined. In this manner, the seminar production will continue to provide relevant, helpful information to REALTORS®, resulting in increased referrals, which equates to increased business. In addition, by having an established system in place, each event will be consistent, professional, and worthy of the agents taking time out of their schedules to attend. Educational seminars provide a way to generate contact with multiple REALTORS®, as opposed to just one at a time. The idea is to become the conduit through which the REALTOR® receives expert advice. By doing this, you will quickly become known in your local community as the “go to” expert, which builds your credibility, awareness, celebrity, and trust. Start now and in no time flat, you will quickly knock down the barriers to partnering with top producing agents. Consistent referrals are guaranteed to soon follow. Geoff Zimpfer is the author of Speed Marketing™ for Loan Officers; a field tested guide to boosting your agent referrals by hosting educational seminars for agents. Grab your Free eBook and more useful information at Zimpfer’s blog: www.LoanOfficerMarketingBlog.com
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Litigating Better Terms for Distressed Homeowners Hopelessly underwater and starving for a loan mod By Chris Fuelling
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he world of loan modification and loss mitigation is a mess; robo-signatures, blank documents, missing documents, foreclosure moratoriums, foreclosure litigation, improperly executed affidavits, and courts invalidating foreclosures. It almost sounds like lyrics from an R.E.M. song and that is just the first verse. The subprime mortgage meltdown, and collateral offshoots, boiled down to data; the inability of institutions to properly acquire and secure data of their borrowers. So now we are witnessing banks and servicers scrambling to prove to judges, with the recently filled in or even missing documents, that they own those mortgages in question., And, there is the cyber entity, MERS, the Mortgage Electronic Registration System, to register and assign loans, which more easily enabled massive and profitable mortgage securitization, in a structure many courts can not quite figure out. Somehow, I do not think the founders of MERS envisioned a time when county recorders would become so popular again with the courts. Against this backdrop, many distressed borrowers, who thought they had a chance to quality for the federal Home Affordable Modification Program (HAMP) or 28
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a bank modification, feel helpless in their efforts to save their homes from foreclosure by big servicers. Small loan modification shops, smaller special servicers and subservicers can not afford the robust default management software systems to automate and streamline their loss mitigation processes that are used by the major servicers. Without this technology, they can not reach the growing population of hundreds of thousands of homeowners who are hopelessly underwater and are starving for loan modifications. So where can people turn who are facing the loss of their home? The courts? An individual homeowner does not have the financial wherewithal to litigate possible RESPA and Truth-in-Lending Act violations against big servicers and banks. In order for a court to grant them relief from foreclosure and a chance to negotiate and modify their unaffordable mortgage, homeowners will still need capital. But distressed homeowners can team up and seek specific causes of action for each borrower in a mass joinder lawsuit against a bank or servicer. A mass joinder case is not a class action lawsuit in which only lawyers usually win with a big lump sum of cash as their contingency fee, while money the plaintiffs receive is watered down by their numbers. Perhaps you’ve received a check for $3.95 in the mail, representing your portion of the proceeds from a class action lawsuit settlement of a defective consumer product
you did not even know was litigated. Each borrower plaintiff is identified as an individual in a mass joinder lawsuit. Conversely, in class action, each plaintiff is not identified individually, and is seeking a specific cause of action concerning his or her particular mortgage. In a mass joinder suit, each plaintiff can accept, reject or negotiate their specific terms of a settlement. In 2009, the Kramer and Kaslow law firm of Calabasas, CA filed a mass joinder suit on behalf of more than 1,200 borrower plaintiffs in Los Angeles Superior Court against Bank of America and its recent acquisition,Countrywide Home Loans.. Many are facing foreclosure actions by the bank. Philip Kramer, the lead counsel in the case, noted that the lawsuit seeks the following relief: • Mortgage notes voided through a full lien strip, so the house is owned free and clear; • Reduction in the principal balance of the loan to at least 80 percent or less of the homes current market value; and • Cash settlement If the ultimate award of this mass joinder suit is the
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voiding of all the plaintiffs’ promissory notes, according to Kramer, it is not likely that Bank of America would want to go to trial. The bank could instead seek to settle the lawsuit out of court. Such a settlement might include a principal reduction and restructuring of each plaintiff ’s loan. Kramer noted that this is not a loan modification effort, but litigation making demands, not requests, of the bank. Without web-based software technology, coordinating such a complex and massive lawsuit would be daunting. Each plaintiff loan file and status must be uploaded into an attorney’s software database. Of course, each plaintiff ’s loan modification interaction with the bank is different. Some plaintiffs are up-todate on their mortgage payments, others are past due or post-bankruptcy. Within the lawsuit, plaintiffs can seek a forbearance of foreclosure or a rescission of default. All this varied information must be consistently updated by technology. The most consequential role technology plays in putting together a mass joinder lawsuit is the electronic signature, which enables attorneys to rapidly execute the retainer documents with plaintiffs. Mass joinder lawsuits are financed through plaintiffs paying modest upfront fees. Kramer noted that a reliable technology partner is key to supporting complex and time-consuming litigation that requires fast and reliable data retrieval as plaintiffs’ face the most formidable defenses money can buy. The Bank of America mass joinder case might not come to trial until 2012, but it already has aided plaintiffs who feared losing their homes. According to Kramer and Kaslow, five injunctions and the rescission of nine notices of default have already been secured for plaintiffs, and the court has ordered Bank of America to submit to discovery. Distressed borrowers have been empowered in their quest for loan modifications and home retention. Such lawsuits create a more level playing field, allowing more mortgage outreach and assistance firms to help more people put together modification packages that banks and servicers can’t ignore. Chris Fuelling is CEO of The Loan Post, which provides comprehensive software technology for hundreds of mortgage outreach firms, law offices, real estate brokers, housing counselors, mortgage professionals and sub-servicers nationwide to streamline and automate the loss mitigation process.
frank & brian speak
When Reform Attacks by frank garay & brian stevens
T
hink of all the reform we have just undergone in the wonderful world of mortgage lending. Really, I am sick of talking about change, but I just find the conclusions of said change very perplexing. If it were a TV show it would be called "When Government Regulation Attacks!" That feels about right. You can picture our regulators and congressional representatives discussing the coming unintended consequences of their actions very much like a pit bull owner talks about his animal after he tears someone apart. Question: "What the hell happened?" Answer: "Nothing like this has ever happened before. I can't believe this happened. I'm so sorry." So, are we talking about the owner of a vicious dog or a legislature of House Financial Services Committee? Really, it feels about the same. I find it unfathomable that not a single person in a position to influence the MBS market can see what has happened or what is coming. The simple answer is: the opposite of what they intended. I think the goal was, and is, to bring transparency to the market, bring the costs and rates down for the consumer, and get rid of loans that will leave people in dire straits. So let’s look at
these points individually. Transparency. The goal is for a home buyer understands the money that is changing hands in their transaction. Personally, I love the idea of complete transparency. Let’s face it; if you are embarrassed about what you are charging, it is too much. Transparency would create a helpful "check and balance" that would effectively reign in wayward originators; sounds good. So where does the problem lie? Congress and the Federal Reserve tried to accomplish this goal and completely screwed up. "When Animals/Regulators Attack!" Through the Federal Reserve’s final Rule to Regulation Z, they outlined a variety of ways a loan officer can, and now must, be compensated. This will forever be off the borrowers closing statement. These ways include, but are not limited to, loan volume bonuses, long term performance, hourly compensation, fixed advanced fees for delivering borrowers, loan quality, over head and so much more. Further, the Federal Reserve says the rules regarding compensation disclosure does not cover payments received by lenders when selling loans in the secondary market. All these referenced TheNicheReport.com
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frank & brian speak
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compensation opportunities are the brain child of the Federal Reserve and will never end up on a settlement statement. Prior to the change, yield spread was on the final settlement statement. In other words, the Federal Reserve completely "screwed the pooch" when it comes to mortgage lending transparency. Borrower Affordability. The Federal rule to compensation stated goal is to preclude loan originators from having any financial interest in the terms or conditions of the loan. The reason they want the originator out of the conditions is because the Federal Reserve believes the loan officer will screw their borrower. Never mind the fact that screwing your borrower hurts the loan officer’s chance at future referrals; the lifeline of a successful business. So, keeping the loan officer out of the terms should effectively keep costs down to the borrower. Home Valuation Code of Conduct (HVCC) created Appraisal Management Companies (AMC) regulation, which increased the cost of appraisals. HVCC has also increased the need for second appraisals, field reviews, and appraisal audits, which all come at a cost to the Consumer. I just saw a scenario where a potential buyer spent $900 on appraisals only to see the deal fall apart. Additional, more paper, disclosures and means of tracking and selling mortgages has come at increased doc preparation, administrative costs, and a variety of other junk fees. 9:42:29 AM In fact, I think an argument can easily be made for the lack of transparency on loans, and the fact that Loan Officers will not be able to compete through a process of lowering rates. Rates will actually increase in the coming years, becoming another attack on the consumer through unintended consequences. ".... but he seemed like such a nice dog." Getting rid of loans that leave people in dire straits. Ok, they accomplished this goal, but they approached it like chemo therapy approaches cancer treatment. Sure it kills the cancer but it also kills everything else. Sure we eliminated the 100 percent stated negative amortization loan, but we also eliminated the 20 percent down stated negative amortization deal for the self employed person. That was a good loan. In this scenario, they threw the baby out with the bathwater. In this case, we got rid of a bad product and the cost was a good product for investors and entrepreneurs. OK, we do not have subprime loans, but how many good loan shops and originators were taken out in the process. You need not look any further than NMLS. In some states, originators have been reduced
frank & brian speak by 75 percent. Since I do not prescribe to the notion that 75 percent of originators are bad, I think those numbers are not healthy for our industry. Furtherwhen we develop a national appetite for "recovery," who will originate loans? The process of qualifying for a loan is so difficult now, more than ever, we need quality originators, and they simply do not exist in the quantity required to support a recovery. I would like to see change in the mortgage lending industry, but it needs to be change for the positive. At this point, I would be ok with "two steps forward and one step back." The problem is, it feels like a constant movement backwards. I fear that we will not have positive change until we are well into the second major downturn. The effects of the Dodd Frank Bill, NMLS, GFE 2010, and so much more are truly felt. If I could ask one thing of every originator, it would be to tune into what is taking place and voice your opinion in written and video form to those in positions of authority and consequence. Chances are, you already feel and know what is happening. Chances are, you could
write an article outlining your personal scenarios that will feeble very similar to my appraisal story. I would say, put it in writing and put it in video and send it up the food chain. Your industry needs you now more than ever. Now for a shameless plug, you can do it by signing up and receive your own free blog and profile at www.realestatemarbles.com, the site where we host the www.tbwsdaily.com show.
Thinkbigworksmall.com (TBWS) was founded in 2007 by a group of highly successful real estate and mortgage industry entrepreneurs. Born in the most battered market in the real estate and mortgage industry history, Thinkbigworksmall.com was conceived after decades of observing how the most successful professionals always seem to work smarter not harder. Frank & Brian can be reached at tbwsdaily@gmail.com
Appraiser sound off
Technology and Compliance International Style by Santiago Herreros de tejada
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echnology & Compliance: key elements to control the quality of the appraisal and to offer safety and security to the appraisal process and to the mortgage market in international markets With over 27 years experience in the International Real Estate Industry and the valuation market of Grupo Sociedad de Tasación (Group ST), we have been actively involved in conferences and valuation events internationally, thus being able to verify the substantial increase in the concern regarding quality control in valuation industry. As a matter of fact, since the emergence of the global financial credit crunch, we have detected that the valuation and real estate congresses internationally meet. They gather authorities, financial institutions and professionals involved in the valuation industry, in order to search for solutions which can offer security and safety to their local mortgage markets. It is clear that the residential valuation system is broken. There are several factors which imply risk, which should be avoided. Some of them are the following: heterogeneous criteria between the different professionals 34
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involved in the valuation industry, heterogeneous content in the valuation reports, non- existence of independent quality control over the valuation reports, the non-audition of Data Bases, information that is not standardized, a monopoly of ‘valuers’ (appraisers) in several areas, processes that are not automated, manipulability of PDF´s etc. All of these factors create systematic risks in the valuation market which prevent making an efficient quality control of the valuations linked to mortgage loans. Due to the above mentioned factors, deviations may be produced in the opinions of value expressed by the valuers about the subject properties, and when the real value of a property is not shown in the valuation report, there is a substantial potential financial loss which, due to the globalization of the markets and to mortgage securitizations, can have devastating effects in the global economy. The need of change in processes and methodologies already existed in several markets. But now, due to the current situation, the need is more evident. It is necessary to make in depth and significant changes in how the valuations are produced and delivered.
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Appraiser sound off In order to achieve security in the mortgage market, it is key to achieve an optimum control over the valuation products. At Group ST we believe that the combination of strict regulations implemented by governmental authorities with efficient technologies is essential to have a healthy valuation and mortgage market. In order to achieve the change, it is extremely important to receive the support of the governmental authorities and of the financial institutions and banking commissions. Authorities must implement strict regulations. Financial institutions and banking commissions must assure that the valuers work in a professional manner following the standards and specifications requested by the bank and by local regulations in order to follow “good practices” in the valuation market. Through the implementation of an effective regulation, and through the use of intelligent valuation technology platforms which assure compliance is being met and that the technical aspects of the valuation are being approached correctly, the mortgage market will see how the risk is considerably reduced and will be able to achieve heterogeneous technical criteria, heterogeneous reports, make sure that the appropriate quality controls are produced, shared and audited databases, and standardized information which will allow a better analysis of the valuation works. Additionally, in markets with high volumes of valuations, it is virtually impossible to conduct the business in a secure way without the use of specialized software which manage and automate the process of the valuation work. If you are an appraiser or a valuation firm, the work flow processes must include technology which will allow to receive orders, highlight important deadlines, track the status of the report, assure that compliance is being met,
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that the criteria, procedures, and methodologies used are the appropriate, and which verify the coherence of the certified values, with the main goal of offering security and quality control tools to the mortgage market. In Spain and Mexico the use of technologies where all of the appraisal workflow (ordering-assignmentdevelopment of the report-quality control) is integrated, is common. The financial organizations in charge of the quality of the reports do not want appraisers to be creative and for this reason they ask them to work over their valuation programs to develop the appraisal reports, assuring compliance and quality. The integration between the quality control programs and the appraisal programs used, allow to maximize the efficiency in the appraisal process, reducing considerably operational costs in the quality control process (Eg: In Spain the AMC of Group ST, quality reviewed 288,000 appraisals with 50 reviewers, which is an excellent ratio). When this methodology was implemented it created a great issue between the appraisal community as they had to change the way they worked despite this issue this process brought security and safety to the mortgage market. The binomial regulation/supervision accompanied by technology is key in order to achieve quality, professionalism and productivity in the valuation activity. Using robust, flexible, trustworthy and secure technologies which assure the quality of the valuations gives an added value to the international mortgage industry and more security to investors in MBS (mortgaged backed securities). It is necessary to convince the valuation industry that it is extremely profitable, in terms of security, to invest in quality and automation of the valuation work flow in order to achieve productivity and profitability in the business units involved in the valuation industry. Santiago Herreros de Tejada is Managing Director of ST Internacional which is the international division of Grupo Sociedad de Tasación which is a group of companies involved in the appraisal business in Spain and Mexico since 1982. The technology of the group has processed more than 3 million appraisals in Spain and Mexico since it was created, and the Group has helped the spanish and mexican governments in the implementation of appraisal regulation in both markets. Also in 2010 the Group has collaborated with the Mexican Banking Comission (CNBV) in the development of “good practices home valuation code of conduct” which will be implemented in 2011.
Are You eArning interest With Your Current CompAnY?
For a complete list of benefits, please visit www.tffbranch.com or call us at 866-301-0653
Top Flite Financial, Inc. (NMLS #4181) is a Licensed Mortgage Lender in AL (MC 20407), AR (37008), AZ (910742), CA (603-E727), CO (MB100020065), CT (19570), GA (I9468), FL (CL0700521), IA (MBK-2007-0051), IL (MB6759955), IN (ELB-000191), KS (MC0025049) KY (MB19307) LA (RML2640-0), MA (MB4924), MI (FL3326/SR1700), MN (20619001), MO (10-1792), MS (58/2008), ND (MB102066), NH (14260-MB), NM (03190), OH (MB.803839.000), OR (ML-4427), UT (6818424-MLCO), SC (MB.803839.000), TN (5735762), TX (78413), WI (600267). Top Flite Financial, Inc. is a Licensed Mortgage Broker in DE (9875), RI (20070072LB), WV (MB-23570).
Center sTage
Center stage with lender411.com The Niche Report talks with Rocky Foroutan, CEO of Lender411.com by the niche report
Lender411.com is a rapidly growing online community for mortgage professionals. Lender411 offers an open and transparent platform for generation and delivery of high quality real-time internet leads. Lender411.com also offers the perfect venue for marketing and advertising mortgage services. Mr. Foroutan is a contributing author to The Niche Report including an article in this current issue titled, “Mortgage Marketing 2.0 – Get Connected or Get Out.” His wisdom and experience provides insight on the marketing aspect of the real estate business. What is Lender411?
Lender411 is an online community for mortgage professionals that allows them to promote their services and connect with prospective clients on a local and national level. We’re the fastest growing internet mortgage community, and we’re one of the top marketing hubs for lenders, brokers, and loan officers. How did Lender411 get started?
We’ve been making websites for mortgage professionals through our sister company, LenderHomepage.com, since 2003. Though our sites have always been top of the line, many of our clients asked for additional internet 38
March 2011
marketing opportunities. We rose to the challenge and created Lender411 as a mortgage marketing vehicle for our clients. They loved it, and we made the site available to all mortgage professionals. We’ve been expanding and refining it ever since. Is Lender411 a directory?
I wouldn’t call it that. A directory is a simple list of service providers. Lender411 is a highly dynamic online community designed to facilitate interaction, feedback, and information sharing. It’s a marketing site that allows lenders to customize personal profiles, write blogs, interact with potential borrowers, and establish industry credibility through branding and thought leadership. If a borrower is looking for a lender, he or she will try to find that lender in one of two ways. He or she will take what I call a social approach, using a search engine to target names and geographic regions, or he or she will take an informational approach, searching for mortgage advice or answers to questions. Lender411 is optimized to capture traffic on both fronts. On the social front, our lender profiles rank well on major search engines. Many of our lenders see substantial organic traffic to their profile pages. More than this, Lender411 serves as a community hub, a neutral territory
Center sTage where lenders and borrowers can find each other and interact. On the information front, we host integrated blogs for all of our members and encourage lenders to share their insights with the community. We maintain a question and answer forum that allows borrowers to post questions and receive answers from lenders immediately. In addition, we provide our own aggregated information, such as news updates, mortgage guides, rate tables, and more to attract borrowers interested in educating themselves. How do lenders connect with borrowers on Lender411?
Leads. We maintain a network of hundreds of geotargeted landing pages that capture leads for our lenders. We gather all our leads through organic search engine traffic to our own sites to maintain the highest possible quality. And that’s the feedback we get from our lenders. High quality, high conversion. We generate the best leads on the internet. In addition, we get a number of borrowers who simply see active lenders on our site, visit their profiles, and contact them for loans. This happens all the time. Lenders who are constantly engaged in the community, writing blogs, answering questions, and so on, can see significant success in this way. Is there anything that makes Lender411 different from other internet lead platforms?
Absolutely. Lender411 is built upon the principle of transparency. We believe that you should never buy a lead you know nothing about. We believe you should know what you’re purchasing when you’re buying a lead. This principle guides everything we do on Lender411. First, we sell our leads only up to four times each. Never more! After a lead has been sold four times, it disappears from the marketplace forever. We do this to preserve the quality of the transaction for both the lender and the borrower. We don’t want our lenders to spend money on leads that have been called fifteen times already, and we don’t want our borrowers to get called fifteen times. It creates irritation and makes the mortgage process that much more difficult for everyone involved. Second, we’ve developed and implemented an innovative, dynamic pricing model that tags each lead with a unique value depending on the parameters included. High credit, low LTV, freshness, and other positive aspects impart a higher price, while low credit, high LTV, and age
within the marketplace impart lower prices. This allows lenders to cherrypick the leads they want based on price and other characteristics. In my opinion, though, our most exciting feature is our real-time leads system. Lenders who sign up for this plan place a predetermined sum of money into a Lender411.com account and set filters to specify the types of leads they want to receive. If a lead is captured that fits a lender’s parameters, the lead information is sent instantly to the lender’s email and the purchase price is deducted from his or her account. This allows the lender to contact a lead before it’s even available for sale in the marketplace. We also provide exclusive leads through our premium Lender411 PPC campaigns. With this option, we’ll actually build a website for you and place your rates on our mortgage rate table for the geographic area where you’re licensed to lend. Our rate tables are the most visited pages on our site. As visitors click on your rates, they’re directed to your personal landing page where they can fill out an information request form to get in touch with you. What do you charge for your services?
Our marketing services, including all of our core site functionalities, are completely free. This includes a customizable profile, blog, and more, along with full access to the site. You can join the community and start interacting with borrowers for free today. We provide free marketing widgets, tools, and whitepapers as well. The dynamic pricing on our leads makes it easy to tailor your purchase budget to meet your needs. Our realtime leads are governed by the same pricing model, and our exclusive lead campaigns are customized on a case-bycase basis. What advice would you offer mortgage professionals trying to get ahead through internet marketing?
I would say, learn as much as you can. Get as much information about best practices as possible. Success on the internet is built upon interaction, not billboard-style broadcasting, and if you want to succeed in this sphere, you need to be a thought leader. You need to know where potential borrowers are looking for mortgages and how they’re doing it, and you need to be able to meet them where they’re at. We built Lender411 to help lenders do this, and in my opinion, it will take your internet mortgage marketing to the next level.
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Tip of the Month Innovation: can it improve the state of the mortgage industry?
by Stewart Mednick
W
hen someone develops a new idea and it changes business as we know it, is that innovation? Can change be positive and negative and still be innovative? Is innovation the critical overlooked aspect of what can be the savior of the mortgage industry? A company in Minnesota called Generate, exists for the sole purpose of exploring all about innovation; a slippery, provocative, scary and refreshing word, all at once. Some of the largest companies in this country have innovation officers of some type: General Mills, Cargill, Anderson Windows, Toro, Blue Cross Blue Shield and Thomson Reuters to name a few. So with business’ like these jumping on the innovation bandwagon, what is everyone else missing? Is there a corporate cultural revolution in the midst? Perhaps we are already within the full swing of this revolution. “Going Green,” is an innovation in the early stages of this revolution. From that we have recycled building materials for houses, electric cars, alternative
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power sources and more. How does this apply to the mortgage business; let’s cut to the chase. There are thousands of mortgage professionals across this country. Who out there is not feeling very limited, punished, and even ‘dirty’ after the mortgage debacle and ensuing legislation that followed? Perhaps innovation in the way business is conducted will be the future ‘cleansing’ we need. Uri Neren, the founder and CEO of Generate, has researched and identified 105 catagories of innovation best practices including 162 methodologies, 17 cultural conditions and 14 innovative functions by which firms are organized. Systematic inventive thinking (SIT) is one of the 162 methodologies identified. This method asserts that innovative solutions share common patterns; the result is a structured thinking process that can reliably and repeatedly create good new concepts. According to Neren, SIT is “… based on empirical proven evidence….” Some cultural conditions identified includes internal connectedness; how easy is it for employees to interface with each other, find experts, and know
2011 regional conference of mbas
managing in the brave new world of mortgage finance march 15 - 17, 2011 trump taj mahal, atlantic city, nj residential program at-a-glance tuesday, march 15, 2011 tu Opening Networking Cocktail Reception in the Exhibit Hall
wednesday, march 16, 2011 w
General Session Topics • The Future of the Securitization Market, Risk Retention, TBA Market, Reforming the GSE’s, Government Guarantees & More • MBA’s Report on Current Legislative/Regulatory Issues • Banks in the Mortgage Market • How to Use Social Networking: Facebook, Twitter, LO Websites, Blogs Exhibit Hall with Lunch Afternoon Session Topics • LO & Broker Compensation • Labor Law Issues (LO Overtime, Department Of Labor Opinion, Minimum Wage) Mortgage Bankers & Financial Institutions Panel: Independent Mortgage Bankers Mortgage Brokers (FHA Business, Use Of Compare Ratio’s, Etc.) Regulators Roundtable: Regulators from NJ, PA & NY Mortgage Fraud Panel: How To Detect And Avoid Mortgage Fraud Networking Cocktail Reception
tthursday, h march 17, 2011 Critical Issues Day • An in Depth Look at Financial Regulatory Reform • LO Compensation • Risk Retention • Ability To Repay • CFPB Regulations • Fed Reserve Rules • SAFE Act And Related Issues MI’s: Future Of The Private MI Industry Residential Mortgage Lending For Financial Institutions • Subsidiary vs. Division • Registration of LO’s • Obtaining HUD Approval • Investor Approvals • Underwriting A View From The Regulators: OCC, FDIC, State Reg
commercial property program will run concurrent with the residential program for more information visit www.mbanj.com
what colleagues are working on in all departments. Another condition is explicit innovation team; a group focused on new markets, growth trends and breakthrough ideas. To some, this may sound fuffy, ‘touchy-feely’ and even stupid. Get over it. This trend is what makes some of the largest, most successful companies grow. In the turbulent, rollercoaster industry that we are in, don’t you think that the stability of innovation just might be what we should rally around? I have worked in brokerage houses and large banks. The culture is always to be guarded of your pipeline, marketing techniques, and materials. Success has always been something you flaunt in front of less successful peers. Perhaps innovation should be a cultural shift to unity and sharing. I believe that The Niche Report has been on the forefront of innovation by providing a platform for innovative ideas to be shared. My tip of the month: be the change agent of your company and find the successful practices that work for you and share them and swap them with other successful professionals. Let me know how it goes.
Stewart Mednick is a seasoned mortgage banker and published author. His writing focuses on relationship development, personal empowerment, customer satisfaction, marketing and sales techniques. Stewart is available for consulting, personal coaching and training sessions. If you have a comment or a question for Stewart, contact him at 651-895-5122 or smednick1@netzero.net
WHAT IS YOUR MORTGAGE IQ?
What's your mortgage IQ? BY MortgageCurrentcy
Every lead, every transaction is precious these days. You can’t afford the luxury of saying “no” to a deal—until you have thoroughly researched it and asked the right questions. Here are some of the questions we have answered with some marketing tips on how you can generate more leads—and more of your loans approved. (Answers from guidelines and do not cover lender overlays.) FHA: My customer wants to buy a primary home using FHA. He currently has seven properties. (six rentals + one owner-occupied home) The six rentals are paid off. Will underwriting give me a hard time about the numberof properties even though they are paid off? Your underwriter will scrutinize this file for any signs that the borrower is using FHA financing to acquire an investment property. The home the borrower is purchasing will have to be an obvious upgrade from the home they currently live in and the location will be considered regarding proximity to the borrower's employer. The underwriter is required to show a lot of due diligence on this type of file. Marketing Tip: Let your real estate agents know that if they are working with a buyer who has rental properties, to beware. While the owner-occupied purchase transaction may be perfectly legitimate, the client will need extra documentation and it could be a “red flag” when it comes right down to it.
VA: Is a VA buyer allowed to pay for a structural inspection? And do you have a list of what the buyer is allowed/not allowed to pay? The Veterans Administration is very strict for what a veteran can and cannot pay. There are no restrictions on what an outside party can pay. There are only limitations for what the borrower and seller can pay. Marketing Tip: This matrix is especially critical when your real estate agents present a VA purchase contact. Because there are closing costs that the veteran buyer cannot pay, it affects the seller’s net sheet. Share the matrix with them or email with the subject line: Do You Know Allowable Closing Costs for VA Loans? Compliance: Can I give a client a copy of his credit report? If not, why? There are procedures for the consumer to follow in order to obtain a copy of their credit report. Each State also may have laws regarding consumer reporting. Policy differs between companies -- most will tell you they do not provide a credit report to the consumer because they are not a reporting agency. The consumer may obtain a copy of a report through the methods listed in this summary provided by the FTC. Another place to determine if you can give your client a copy is your “contract” that you have TheNicheReport.com
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WHAT IS YOUR MORTGAGE IQ? signed with the credit bureau with whom you work. The FTC article summarizes the customer's rights under FCRA. http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre35.pdf Marketing Tip: Great info for seminars, your FaceBook Fan page, website, email. Share the link with your real estate agents and ask them to “acknowledge” that you were the loan officer who provided the link. Fannie: I have a client who wants to purchase a home for his mother and obtain a conventional loan. Would this be an investment property? According to Fannie, you may add the mother as a borrower and their child may purchase a home without the intent to occupy for a parent as a primary residence. Here are some of the conditions: • Must to relative’s primary residence • Five percent Down payment • Children can provide housing for elderly parents – even if parents have little or no income • Parents can provide housing for physically or developmentally disabled adult child—even if
child has little or no income. • Can purchase “group home” where disabled adult or elderly parents would live. Marketing Tip: Send an email to your database saying: “Many children are taking care of their parents these days. You can buy a home for your parents for only 5 percent down. Call me for the details.” Partner up with real estate agents and have them send the same email to THEIR past clients. Fannie: Is it true that a refinance to pay off a spouse or domestic partner is considered a rate and term refinance instead of a cash-out refinance? Yes under certain conditions you can buy out an owner's interest as a limited cash-out refinance -- must have written agreement, jointly owned in previous 12 months, all proceeds must go to other party -- no cash-out. Before exceeding 80 percent LTV, check with your PMI providers for eligibility in your area. Written and contributed by Karen Deis of Mortgagecurrentcy. com. Provided monthly by www.MortgageCurrentcy.com – Interpreting the Rules and Regulation Changes for loan officers, processors, underwriters, and owners/managers. Mortgage Talking Points TM, charts and checklists included.
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NICHE REPORTS
Agency & FHA 360 Mortgage Group 866-418-2997
NEW
AgFirst Farm Credit Bank
Conv, FHA, VA and portfolio products. To become an approved broker or to view a rate sheet, visit our website www.360mortgagegroup.com. Mortgage Lending for the Homeowner living in Rural America.
800-858-4651
Axis Capital Group Inc.
Specializing in FHA,203k, Reverse. AZ,CA,CO,FL,HI,TX,WA.
888-229-4773
NEW
Bank of Internet
Jumbo and Super Jumbo Loans 5/1 - 7/1 and 10/1 options.
888-833-0555 ext 1508
Flagstar Wholesale Lending (866) 945-9872
Icon Residential www.iconwholesale.com
Offer a full array of FHA and Agency products, coupled with industryleading underwriting turn times and technology. National Wholesale Lender offering a full line of Conforming and FHA products. We offer personalized customer service where our client is our primary focus.
HARD MONEY & NON-PRIME GreenLake Real Estate Fund, LLC 310-462-4637
Manaseh, Epharim & Associates 770-840-0112
Windvest Corporation 877-285-0777
Private direct commercial loans in CA and NV. All property types except raw land. Our latest fund was raised specifically for loans in this tough economy. We're eager to lend, so please call today! Direct Lender with fast closings. Your source for international and domestic funding. Specializing in Investor Loans & Rehabs, Income Property, Rentals, Probate, Cash Out Refis and now doing Owner Occ throughout CA. Direct lender offering generous broker commissions. Fast and Friendly service since 1994. We offer same day approvals and 7 day closings. Call us today or visit us online www.windvestcorp.com.
Financing may not be available in all states. The above summaries are intended for Mortgage Professionals only, and not intended for distribution to consumers, as defined by Section 226.2 of Regulation Z, which implements the Truth-In-Lending Act. Information is subject to change without notice. Refer to each lender’s information on products, program, procedures, representations, and warranties for details.
TheNicheReport.com
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NICHE REPORTS
COMMERCIAL GreenLake Real Estate Fund, LLC 310-462-4637
Private direct commercial loans in CA and NV. All property types except raw land. Our latest fund was raised specifically for loans in this tough economy. We're eager to lend, so please call today!
CONSTRUCTION Bismark Mortgage Company 800-350-7199 x106
Owner Builder and Spec Construction for residential AL, AK, AZ, CA, CO, GA, HI, ID, IL, IN, KY, ME, MD, MA, MI, MN, MO, NY, NV, NJ, NC, OH, OR, PA, TN, TX, UT, VA and WA.
JUMBO NEW
Bank of Internet 888-833-0555 ext 1508
Jumbo and Super Jumbo Loans 5/1 - 7/1 and 10/1 options.
REverse Mortgage NEW
ReverseIT 888-777-3311
Reverse Mortgages, fastest turn times in the industry. Training and lead support available.
Financing may not be available in all states. The above summaries are intended for Mortgage Professionals only, and not intended for distribution to consumers, as defined by Section 226.2 of Regulation Z, which implements the Truth-In-Lending Act. Information is subject to change without notice. Refer to each lender’s information on products, program, procedures, representations, and warranties for details.
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Service provider classifieds
Service Provider Classifieds Technology a la mode 1-800-252-6633 ext 309 AllRegs (800) 848-4904 Applied Business Software 800-833-3343
NEW
StreetLinks Lender Solutions 800-778-4788 DocMagic 800-649-1362
Websites and marketing tools for real estate professionals.
Products include single and multifamily underwriting & insuring guidelines, federal & state compliance laws and regulations, contract publishing services, policy and procedure manual templates, AllRegs Academy training programs and more. Origination and Servicing software for hard money lenders.
Providing lenders with a suite of valuation services and robust lending technology solutions, including full-service & self-managed appraisal products The largest dedicated loan document production company in the country, delivers a fusion of solutions guaranteed to meet today's complex loan document challenges.
Credit Repair & Restoration HTDI Financial 877-877-4834 opt 5
Start your own credit repair company with our state of the art tracking software and dispute outsourcing options. Top notch support by a dedicated Account Expert.
Credit-Aid Software 800-257-1192
Credit Repair Software. Credit repair business opportunity.
title work & insurance Entitle Direct 877-936-8485 or 877-9ENTITLE
Hundreds of mortgage professionals have saved their borrowers up to 35% or more on their title insurance by recommending Entitle Direct.
Linear Title & Closing 401-841-9991
Linear Title & Closing, Ltd., is a recognized leader and national provider of Closing, REO, Title Insurance and Settlement Services. Our streamlined RESPA compliant process utilizes flexible software tools that are easily integrated with your system.
Mortgage Insurance Agency 866-355-9944
State Licensed Surety Bonds, Errors & Omissions and Fidelity Bond coverage’s for Mortgage Bankers and Mortgage Brokers nationally.
TheNicheReport.com
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Service provider classifieds
Training & education AllRegs 800-848-4904
MortgageCurrentcy.com 800-231-4787
AllRegs Academy offers online, audio and classroom training, continuing education, certifications, study guides, practical guides and customized training at your site on compliance, underwriting, servicing, FHA, VA, SAFE and more. Interpreting the complicated mortgage rules in plain language (Fannie, Freddie, FHA, VA, Compliance, Credit) that ONLY affect the loan origination side of the business. Help Desk. Rule Change Calendar. Automatic Face Book posts & Mortgage Talking Points™ for your real estate agents. Online e-zine published 2X month. Try for $1.
marketing & lead Gen Financial Lead Services 877-290-7903
NEW
In Touch Today 800-433-3755
Lender 411 888-333-6628
Mailer Leads 866-783-4053 ext 14
NEW
Mortgage Planner CRM 888-771-7672
OSI Express 866-674-1999
Exclusive Direct Mail Transfers $225,000 average loan size. 640+ FICO, NO BK's, No Lates, Seeking Refinance. FHA/ VA Streamline, Reverse, Purchase, A+ Conforming/ Jumbo, Debt Consolidation. Every lead meets your criteria. Delivering complete marketing education, valuable products to grow your business and exceptional service to make marketing an easy, enjoyable, and profitable experience. We provide full service automated marketing plans to fit your budget and business goals incorporating postcards, newsletters, greeting cards, brochures, presentations and more! Marketing consultations are available to help strategize the best marketing plan for your individual needs, whether just starting a marketing campaign, or enhancing your current plan. Mortgage Leads & Internet Marketing. Sign up FREE on www.lender411.com. Check out testimonials of our existing members about the quality of our leads and the level of our service for web marketing. We are fast becoming the Gorilla in the market. Imagine having 50 prospects per loan officer that are already pre-approved calling you within 10 days from today! Our mailers are FICO and AVM based and are pre-qualified based on credit data. Prospects will be ready to finance when they call you! The ultimate contact management system for LOs. Increase your performance with automated marketing and alerts. Sync correspondence from Outlook and mobile devices to one centralized location to track contacts, leads, loan activity and referrals. Not just mortgage flyers and open house flyers, we are a powerful financial analysis tool for refinance and purchase, greatly helping loan originators.
Appraisal & AMC National Valuation Service 786-581-9171
NEW
StreetLinks Lender Solutions 800-778-4788
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Comprised of thousands of fully vetted Independent Business Owners who as Appraisers, provide valuation and consulting services in 50 States.
Providing lenders with a suite of valuation services and robust lending technology solutions, including full-service & self-managed appraisal products.
Service provider classifieds
Compliance & Audit Accurate Quality Control, Inc. 770-931-5999
Quality Control, Training, Consulting. Post Closing, Suspected Fraud, Early Default & Repurchase Reviews, Pre-Funding, Test Cases. 49 Combined Years Working for HUD. We do the right thing right! GIVE US A TRY: 2 FREE QC REVIEWS (new clients only)!
Adfitech Inc. 800-880-0456
ADFITECH, has served the Residential Mortgage Industry since 1983, providing Post Closing QC Audits, Due Diligence Reviews, Pre-Funding QC, Default Reviews, Fraud Investigations, Post Closing Fulfillment, and LOANVAULT速 Imaging, of Conventional & FHA products. Clients include Community Banks, Credit Unions, Mortgage Bankers, MI Companies, and Wall Street Investors.
Quality Mortgage Services 615-591-2528
Mortgage Compliance Solutions, Post Closing & Default Audits, HVCC Reporting, QC Software, Federal Regulatory Audits.
Waquis 310-696-9515
We provide HUD Auditing and QC on every loan type.
Branch Opportunities NEW
NEW
AgFirst Farm Credit Bank 800-858-4651
Mortgage Lending for the Homeowner living in Rural America.
American Pacific Mortgage 866-625-9352
Join American Pacific Mortgage and become a direct lender with the option of brokering.
Benchmark Mortgage 972-398-7676
A community of mortgage professionals united by Benchmark core values Relationships, Success, Dynamic, Excellence, and a Positive Attitude specializing in retail branching throughout the United States.
Guaranteed Home Mortgage Co. Inc. 888-572-3602
Specialized Retail Platform for Experienced Loan Officers.
Land Home Financial branchsales@lhfinancial.com
NEW
Direct Lender that has been in business for over 22 years. We have prospered and grown in a climate of turbulence and change. We have adapted and helped our branches adjust to the new rules and regulations that have occurred over the last few years and helped them take control of their future in today's mortgage industry.
Perfect Net Branch 877-282-4577
Tax Resolution, Debt Settlement, Debt Management, Bankruptcy branch opportunity. Monetize every lead and marketing dollar with a full suite of financial services. PNB is committed to providing you with faster results and a greater opportunity.
Sierra Pacific Mortgage 800-447-3386
Retail Branches and Wholesale Lending Nationwide. Privately owned specializing in residential conforming, FHA, VA and Jumbo. Wholesale: www.spm1.com Retail: www.spmloans.com.
Top Flite Financial, Inc. 866-301-0653
National Mortgage Banker - Now hiring experienced Branch Managers with a proven track record. We have answers to the new compensation questions!
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LENDER & RESOURCE DIRECTORY
360 Mortgage Group National Wholesale Mortgage Lender 360mortgagegroup.com 866-418-2997
Accurate Quality Control www.AccurateQC.com Genny Kelly or Judy Nash-Ellis 770-931-5999 GennyK@AccurateQC.net or JudyN@AccurateQC.net
Adfitech Provides Residential Mortgage Post Closing QC, Due Diligence Reviews, PreFunding QC, Default Reviews, Fraud Investigations, Post Closing Fulfillment, and LOANVAULT Imaging of Conventional & FHA Products. www.adfitech.com John Rosenhamer 800-880-0456 sales@adfitech.com
AgFirst Correspondent Lending Mortgage Lending for the Homeowner living in Rural America. www.agfirstmortgageloans.com Janice Buchanan 803-753-2420 jbuchanan@agfirst.com
a la mode, inc. Websites and marketing tools for real estate professionals. www.alamode.com 1-800-ALAMODE info@alamode.com
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March 2011
AllRegs Leading information provider for the mortgage industry. www.allregs.com 800-848-4904 help@allregs.com
American Pacific Mortgage Corporation One of the largest independent retail banking and branching companies in the country. www.apmortgage.com Melissa Arntzen 866-625-9352 info@apmortgage.com
Applied Business Software Origination and Servicing software for hard money lenders. www.TheMortgageOffice.com 800-833-3343 leadsmanagement@absnetwork.com
ATTENTION LENDERS!! Buyers of Distressed Debt. NicheBuyers@gmail.com
Axis Capital Group Inc. Specializing in FHA,203k, Reverse. AZ,CA,CO,FL,HI,TX,WA. AxisCapitalGroupInc.Com Sergio Gonzalez 888-229-4773 sergio@axiscapitalgroupinc.com
Bank of Internet www.bofilendingpartners.com Darin Judis 888-833-0555 xt 1508 Darin.Judis@bankofinternet.com
Benchmark A community of mortgage professionals united by Benchmark core values Relationships, Success, Dynamic, Excellence, and a Positive Attitude specializing in retail branching throughout the United States www.iambenchmark.info Karri Vaught 972-398-7635 contact@iambenchmark.info
Bismark Mortgage Company Residential Construction Loans. www.bismarkmortgage.com James Minarsich 800-350-7199 x106 loans@bismarkmortgage.com
BlitzLocal Provides our clients with every tool necessary to run a profitable internet marketing campaign. www.blitzlocal.com 8-811-2448
DocMagic The largest dedicated loan document production company in the country, delivers a fusion of solutions guaranteed to meet today's complex loan document challenges. www.docmagic.com 800-649-1362
LENDER & RESOURCE DIRECTORY
ENTITLE DIRECT Savings up to 35% or more on title insurance in 30 states. www.EntitleDirect.com/mortgage 877-936-8485 or 877-9ENTITLE SpecialistCenter@EntitleDirect.com
FLS
Financial Lead Services Exclusive Direct Mail Transfers 225K average loan size. www.financialleadservices.com Terry Wilson 877-290-7903 terry@financialleadservices.com
GreenLake Real Estate Fund Private Commercial Lender in CA & NV. Kamau Coleman 310-462-4637 kcoleman@greenlakefund.com
GSF Mortgage Corp Pro Branch, correspondent and wholesale opportunities. www.gsfsales.com Debbie Beier 877-494-4448 dbeier@gsf-mortgage.com
Guaranteed Home Mortgage Company, Inc. Established and well-funded Mortgage Banker since 1992. www.ghmc.com and www.joinguaranteed.com Kelley Berkheiser or Louis Tesoriero 888-329-GHMC ltesoriero@ghmc.com
HTDI Financial Provides credit repair business options to increase revenue. www.outsourcedisputes.com 877-877-4834 opt 6 sales@htdifinancial.com
In Touch Today Full service automated marketing planspostcards, newsletters, greeting cards, brochures, presentations and more! www.intouchtoday.com 800-433-3755 sales@intouchtoday.com
Land Home Financial Services, Inc. Our branches enjoy the satisfaction of being entrepreneurs while reaping the benefits of a wide array of services and support. www.lhbranch.com branchsales@lhfinancial.com
Linear Title & Closing Title Insurance & Settlement Services www.lineartitle.com Nick Liuzza 401-841-9991 nliuzza@lineartitle.com
Mailer Leads Lenders and Brokers who use our mailers are not only surviving -- they are thriving. www.MailerLeads.com 866-783-4053 ext 14
Manaseh, Epharim & Associates Domestic and international financier, offer up to 100% financing to qualified investors/borrowers www.meandassociates.com R.D. Walker info@meandassociates.com 770-840-0112
MortgageCurrentcy.com Interpreting the complicated mortgage rules in plain language. 800-231-4787
The Mortgage Lender Implode-O-Meter Tracking the Housing Finance Breakdown... the WHOLE truth. www.ml-implode.com
Mortgage Insurance Agency, Ltd. State Licensed Surety Bonds, Errors & Omissions, and Fidelity Bond coverages for Mortgage Bankers and Mortgage Brokers nationally. www.mtgins.com David Jackson, President 866-355-9944 info@mtgins.com
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LENDER & RESOURCE DIRECTORY
Mortgage Marketing Animals Coaching and Mentoring Group for Mortgage and Real Estate Professionals. www.MortgageMarketingAnimals.com Carl White 727-787-2275 Carl@themarketinganimals.com
MORTGAGE PLANNER CRM The ultimate contact management system for LOs. Increase your performance with automated marketing and alerts. Sync correspondence from Outlook and mobile devices to one centralized location to track contacts, leads, loan activity and referrals www.mortgageplannercrm.com 888-771-7672
National Valuation Service, Inc Comprised of thousands of fully vetted Independent Business Owners who as Appraisers, provide valuation and consulting services in 50 states. 786-581-9171 info@nvs.coop
Perfect Net Branch Tax Resolution, Debt Settlement, Debt Management, Bankruptcy www.perfectnetbranch.com Terry Wilson 877-282-4577 terry@perfectnetbranch.com
Quality Mortgage Services, LLC Full Service Mortgage Compliance Solutions. www.qcmortgage.com Chip Langley 615-591-2528 info@qcmortgage.com
RateLink Providing mortgage professionals with timely and accurate data as a means to a competitive advantage. www.ratelink.com 800-938-5193
reverseit! www.urbanfinancialgroup.com 888-777-3311 OSI Express / EZMortgageFlyers Not just mortgage flyers and open house flyers, We are a powerful financing analysis tool for refinance and purchase, greatly helping loan originators www.OSIExpress.com and www.EZMortgageFlyers.com OSI Customer Care 866-674-1999 customercare@osiexpress.com
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March 2011
Sierra Pacific Mortgage Retail Branches and Wholesale Lending Nationwide. 800-447-3386 info@spm1.com
StreetLinks Lender Solutions Providing lenders with a suite of valuation services and robust lending technology solutions, including full-service & selfmanaged appraisal products www.streetlinks.com 800-778-4788 sales@streetlinks.com
Top Flite Financial, Inc. National Mortgage Banker - Now hiring experienced Branch Managers with a proven track record. We have answers to the new compensation questions! www.tffinc.net Timothy G. Baise, CMC 866-301-0653 tbaise@tffinc.net
Waquis We provide HUD Auditing and QC on every loan type. www.waquis.com/qc Joe O'Neill 310-696-9515 joe@waquis.com
Windvest Corporation Hard money lender, specializing in Rehab Loans. www.windvestcorp.com Andre Jimenez John Ermin 877-285-0777 andre@windvestcorp.com john@windvestcorp.com
BRINGING UP THE REAR - continued from page 54
August 3, 2010, “Fannie and Freddie’s Foreclosure Barons,” reported that Stern’s non-legal revenues went from $40 million to $200 million, as the company’s employee count shot up from 400 to almost 1,000. But, as court records show and all involved now understand, there were problems with many of these foreclosures. The legal documentation required was seriously lacking, and Stern saw no problem with routinely “fixing” such problems by backdating assignments, changing case chronologies, and in general, doing whatever was necessary to get the job done, regardless of the fraud he was perpetrating on the Florida courts, and to say nothing of the human cost inherent to recklessly putting people out of their homes and onto the streets. As Florida’s foreclosure defense attorneys gradually caused the onion of fraud to unpeel in front of the Florida judiciary, Fannie Mae finally dropped him from their list of foreclosure law firms. Stern’s firm has now withdrawn from an unprecedented 150,000 Florida foreclosure cases. Outspoken Florida foreclosure defense attorney, Matt Weidner says, “the pressure on judges and undue burden placed upon the clerks and others that make up the state’s judicial system is impossible to overstate.” Sitting in the Lee County Courthouse this past week, Weidner told me that he couldn’t help but wonder about the price that Stern will or will not be forced to pay for the chaos that’s resulted from his firm withdrawing from 150,000 foreclosure cases. “The cost to taxpayers is without question untold, and perhaps even incalculable millions… why is this guy still driving around in a Bugatti?” Weidner asks. “And yet to-date, the Florida State Bar Association has said or done essentially nothing.” Weidner says that Stern’s firm averaged roughly $1200 per case, so my calculator shows 150,000 cases to be worth $180 million. Weidner points out that, “There are still houses going to sale because of work Stern’s firm did, work that we now know was at best inadequate and at worst fraudulent. Legal requirements for foreclosure have not been met and these homes should not, in many cases, be sold. How will our state’s courts ultimately handle that?” Another Florida foreclosure mill, Ben Ezra Katz, has now also been delisted by Fannie Mae as a result of ignoring the state’s rules of foreclosure, and Weidner points out that it’s not hard to imagine that many such firms have been gearing up, extending themselves to cash in on their foreclosure fueled
bonanza. A windfall that now won’t be coming as planned. “How many of these firms are now going to find themselves insolvent?” Weidner also quite reasonably wonders. Stern’s professional life is unraveling. He and his firm are being investigated by various agencies, he’s being sued by ex-employees, but April Charney, the Jacksonville Legal Aid lawyer that, perhaps more than any other in the state, has been leading the charge to stop illegal foreclosures and see that the rule of law is upheld, says that she’s not all that interested in Stern one way or the other. “In the scheme of a criminal enterprise Stern’s just a bag-man. And bag-men get paid quite well, but so what?” Charney says as one might explain water being wet or the sky being blue. “We… the people… are the real villains here,” Charney says sadly, “for allowing what’s happened to happen… for not being vigilant… for making sure our regulators were regulating. The Center for Responsible Lending has told Congress of the problems and rampant abuses for years, but basically they were ignored.” “Stern’s just a bunny that’s already been run up the tree. We’re the real game here. We’re still listening to the mortgage servicers and bankers, we’re still allowing the customer service abuses to continue almost unchecked. We’re still allowing the bankers to peek in our window to see if we’re home and our media, although the coverage is certainly better every day, is still too often carrying water for the bankers,” Charney opines. April Charney has fought this battle a long time. And she says that what’s so tragic is that so much of it could have been prevented. “They (the lawyers) could have said no. Why didn’t they just emphatically say NO, we won’t ignore the laws, we won’t commit fraud, and we won’t ignore the rights of homeowners. Some that could have said no, like perhaps the document custodians, could have said no and no one would have listened, but the lawyers could have said no… and others would have listened.” Talking to April Charney always gives me pause. “I don’t think he (Stern) thinks he did anything wrong,” she says. And that, perhaps more than any other reason, is why David Stern is at the very least, a giant rear end. Martin Andelman is a staff writer for The Niche Report. He also writes an almost daily column on ML-Implode called Mandelman Matters. He also publishes a Monthly Museletter and you can follow “Mandelman” on Twitter. Send your responses to Martin@TheNicheReport.com TheNicheReport.com
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BRINGING UP THE REAR
Bringing Up the rear David Stern, The Foreclosure King BY MARTIN ANDELMAN
D
avid Stern has a $16 million Florida mansion on the Intracoastal Waterway, a $20 million plus, 130-foot jet propelled yacht, four Ferraris, four Porsches, two Mercedes Benzes, one Cadillac and a Bugatti. Last year, Stern bought his next-door neighbor’s $8 million home just so he could tear it down and build a tennis court. David Stern is the “Foreclosure King.” Although there are others of his ilk, his company handled 70,382 foreclosures in 2009 alone, which is almost 200 a day, assuming one could work 365 days a year. In a speech Stern was giving last year, he referenced the Obama Administration’s Making Home Affordable foreclosure program, telling the audience… “Fortunately, it’s failing.” Oh, that’s very funny, Mr. Stern, really very funny stuff. Stern is emblematic of everything that’s ugly and wrong with the mortgage banking and finance industries in this country. Whether all the allegations about him are true is irrelevant. In my view, he’s an unethical, arrogant, abusive and callous person who obviously cares nothing about who he harms as he pursues his sole objective of putting people out of their homes as quickly as possible… the sort of person that I personally might gladly go pay-per-view to watch get hit by a fast moving city bus.
Stern’s firm has been accused of gouging homeowners trying to get out of default, as exemplified by the 1998 class action lawsuit filed by Tallahassee attorney, Claude Walker on behalf of tens of thousands of homeowners alleging that Stern piled on excessive fees when they were trying to keep their homes. Stern settled the case for $2.2 million after a couple of years, and both the Florida Supreme Court and Florida State Bar Association reprimanded him for “professional misconduct,” related to the case. And yet, in two consecutive years, 1998 and 1999, Fannie Mae named him “Attorney of the Year,” which is the perfect illustration of what’s gone hopelessly wrong in this country… the total disconnect between “us” and “them”. We the people, at least until recently, have thought that we were still a part of the greatest country on Earth as we pursued the American Dream, while “they” viewed us only as indebted little pawns on their chessboard, forced to play by their rules, moved around as they saw fit and sacrificed without a second thought. Between 2006 and 2008, the number of homeowners thrown into foreclosure doubled as a result of the wildly reckless and entirely unregulated bankers of Wall Street destroyed the credit and bond markets, causing the total destruction of the housing market and leaving prices in the free fall in which they remain today. And Stern’s business, quite predictably, began a meteoric rise, with lenders and servicers sending 12 times as many repossessed homes his way. Andy Kroll, writing for Mother Jones, in his article of - continued on page 53
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March 2011
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