TNR - December 2011 by The Niche Report

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December 2011 TheNicheReport.com

For Mortgage Origination Professionals

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Issue 053

Five Forbidden Words Never again should you say them.

FEATURE ARTICLE! Web 2.0 Marketing Secrets for Mortgage Pros Position yourself to ride the Facebook wave!

Are You Communicating or Are You Connecting? Don't mistake one for the other.

Up 50 Bringing The Rear Edward DeMarco, Acting Director, Federal Housing Finance Agency

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CONTENTS

Issue 53

December 2011

Web2.0 Marketing Secrets for Mortgage Pros Secret #1: Position yourself to ride the Facebook wave! Doren Aldana

NICHE REPORTS prime & FHA Commercial REVERSE MORTGAGE Construction/Rehab HARD MONEY JUMBO Service Providers

pg 41 pg 41 pg 42 pg 42 pg 42 pg 42 pg 43

FOUNDER & PRESIDENT Robert Pegg robert@thenichereport.com CO-FOUNDER & PRESIDENT David Pegg david@thenichereport.com MANAGING EDITOR Stewart Mednick stewart@thenichereport.com

12 22 26

Five Forbidden Words Ralph Lovuolo Sr. Sr. President Mortgage Motivator Never again should you say them.

BJ bounds Sr. Marketing Communications Specialist, Calyx Software Five must-haves for mortgage divisions during expansion.

Twas the Night Before Christmas 2011 The Vegetarian Butcher Amie Wills independent loan processor

Are You Communicating or Just Connecting? Geoff Zimpfer Chief Content Officer Loan Officer MarketingTV Don't mistake one for the other.

Center Stage with Titan List & Mailing Services The Niche Report The Niche Report talks with vice president K. Justin Restaino.

Branching Out

A poem by Martin Andelmann

December 2011

DEPARTMENTS

09 10

note from the founder letters to the editor

Keeping up with the jones

What's your mortgage IQ?

46 50

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 Cartoonist Martin Bradford COLUMNISTS & Contributing Authors Martin Andelman Doren Aldana BJ Bounds Karen Deis Chris Jones Ralph LoVuolo Sr. Amie Wills Geoff Zimpfer

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Published monthly by BODA Publishing, LLC PO Box 494, Bentonville, AR 72712 Phone: 866.964.2695 Fax: 703.991.2362 Email: info@thenichereport.com www.TheNicheReport.com

SUBSCRIPTIONS This publication is intended for real estate finance professionals. If you are a mortgage broker, lender, loan officer, or real estate professional and you do not currently receive The Niche Report, please go to www.thenichereport.com. An annual subscription is $24.99 (twelve months/twelve issues.) For additional copies being mailed to the same address please call 866.964.2695 or email us at subscriptions@thenichereport.com for multi-copy discount. Send address change requests to info@thenichereport.com. Remember to include the old address. To opt-out of receiving The Niche Report, please send your request, including name, company name, and address to opt-out@thenichereport.com.

ADVERTISEMENTS To inquire about advertising in The Niche Report, please call 866.964.2695, or send an email to ads@thenichereport.com. Visit our website, www.TheNicheReport.com to download a copy of our Media Kit.

EDITORIALS / ARTICLES To submit an article for consideration in The Niche Report, please send an email to stewart@thenichereport.com or call 866.964.2695. We are interested in original writings relevant to mortgage brokers and other real estate finance professionals. If you have a comment or question about an article or editorial published in The Niche Report, or if you have a suggestion for a topic you would like to see featured in a future issue, please send an email to stewart@thenichereport.com.

THE NICHE REPORT POLICY The information and opinions expressed by contributing authors and advertisers within The Niche Report do not necessarily reflect those of BODA Publishing, LLC employees and should not be considered as endorsed or recommended by BODA Publishing, LLC.

note from the founder

This issue, because of the time of year, is one of my favorites. First, December means we are right around the corner to starting a new year; a time when new goals, new resolutions and an opportunity to start over with optimistic visions of making the impending new year better than last. Second, Martin Andelman submits his hysterical, annual, center spread poem based on the family classic T’was the Night Before Christmas (2011). He has an uncanny knack and talent for capturing all the craziness that went down in 2011. We also have some very prominent, heavy hitting writers contributing to this end of the year issue. First time TNR contributor, Doren Aldana, writes our feature article - Web 2.0 Marketing Secrets for Mortgage Pros. He talks about marketing techniques using tools that are relevant, easy to implement and impactful - Think Facebook isn’t a game changer? You may want to read this one. As well, Long time mortgage veteran Ralph LoVoulo, another first time TNR contributor, brings us his take on five words you should never say, and as a mortgage coach, he is very convincing. We also have many authors who are coming back to share their wisdom and expertise for our year-end issue to help inspire and send you off for the holidays. Long time contributor and accomplished writer BJ Bounds from Calyx Software discusses what mortgage companies need to know about “branching out.” Amie Wills, a contract loan processor, tells it like is. She explains the meaning of a “vegetarian butcher” as it relates to our industry. And Geoff Zimpfer, another mortgage industry star, explains the differences between communicating and actually connecting with clients. What are you doing to connect with your potential leads? As another year slips by, let us reflect back on what 2011 taught us and how we’ll build upon it and make 2012 better. This is where your experience counts for something. Those who have been left standing over the last couple of years, have no doubt, learned to make use and adapt to all the changes this industry has thrown at you. You are the best and brightest – Let’s make 2012 even better!

Merry Christmas and Happy Holidays from The Niche Report magazine!

Robert Pegg

Official

MEMBER

TheNicheReport.com

letters to the editor

Letters to the editor Putting People Before Profits by Rick Roque, July 2011 Issue, pg 18 Thank you for shining a light on what is positive in our industry. I've been in this industry for over 30 years, and have, at times, experienced the 'used car salesman' lack of respect. Having been chosen Favorite Broker of the Year by a Bay Area magazine made up for some of that! Thanks for writing a great article! S Zander

How Retail Banking Manipulated an Industry by Rick Roque, Aug 2011 Issue, Pg 18 I enjoyed the history of the collapse that you included in your research, it was spot on. Just wish more would blow the trumpet about the CRA and homeownership initiative pushed in the 1990's through the bust, by those in Congress and the administration. Thanks again for your support of the industry B Halbrook Great article! I just wish more people understood things like you do, especially legislators (maybe they do and that is scary!). Consumers are losing. Keep up the good work! B Tata 10

December 2011

CONGRATULATIONS! Well done. I want to thank you for having written a fine article that finally tells the truth about the reality between the Mortgage and Banking industries for the past few decades. The damage is done. Most mortgage brokers have been run out of business with banks refusing to cooperate with them prior to the passage of States and Federal Legislation that finally placed the nail in their collective coffins. Resurrecting a new, talented, fair minded and honest mortgage brokerage industry from the current ruins will be very difficult. G Fiad

Bringing Up The Rear by Mandelman Hello Martin Andelman - It is only a slight exaggeration for me to say, "The only reason I subscribe to The Niche Report is for your 'Bringing up the Rear' column!" I am ashamed that it has taken me this long to express my admiration for your research, your facts and your opinions (occasionally you get a little "snarky" in an attempt to be funny, but that's why ellipses were invented). I forward your columns, under "fair use" to people suffering from the depredations of the banking industry so they know the

real reason they are in trouble... and to get them out of the "I only have myself to blame" mindset the banks (and their allies in HUD and other government agencies) foster. You are a fighter, and you help me to turn my clients into fighters. You give credibility to the magazine and the advertisers. Thank You J Coffin Just a quick word of THANK YOU for your deft, concise dissection of these complex Mortgage Meltdown topics! Though I consider myself an industry veteran with 37 years of Real Estate mortgage lending experience, I still learned a huge amount from your Niche Report series on the meltdown the bond market affect, etc, etcâ&#x20AC;Ś Keep up your great fight! T Hoffman 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.

CONNECT WITH www.TheNicheReport.com

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Five Forbidden Words Never again should you say them

By Ralph LoVuolo Sr.

AN ADMISSION It really galls me to no end that I have to admit that someone had a good idea before me, but it happened. … Ok, it happened. George Carlin, back in 1973 (I looked it up) came up with his “Seven words you can’t say on television” routine as part of an album he recorded. This was a pretty original idea at the time, full of interesting social consequences and a direct foray into the world that has given Howard Stern his head. In my training it has come to my attention that most of you can’t do anything other than what you have been taught. You do exactly what the person in the next office/cubicle/desk does. You do what you were taught by your boss. And he taught you what he learned and nothing more. How much time did you ever spend on thinking of new ways to market your SELF? Bet you can’t prove that you spent more than ZERO minutes in thinking of new ways to make an impact into your market. Ok, you think, that’s my job, as in Ralph’s job. He’s supposed to think for me, because I’m a lazy slob who thinks I know the mortgage business, but really all I want to do is take an application from someone who called me on the phone, charge them every last cent I can and collect my check. Do I really have to talk to 12

December 2011

anyone after I take an application? Do I have to participate in any way with the development of the client? Do I really have to help the client, or is it all about me? Do I have to think about anything? Oh God! Life is so hard!

SOMETHING NEW Lets try something, not quite as dramatic as Carlin’s routine, but almost, and infinitely more important to your business life. You must never say certain words again when attempting to form a relationship with a referral source. Never say them, never, never, never again say them. Please promise me. Even before you read them, PLEASE? When a psychologist told me that by actually doing something over a long period of time, over and over and over, we could actually see how beneficial the actions are and how they affect those we interact with. AN ACTUAL TRUE STORY My nephew passed his real estate license test in New Jersey a couple of years ago. After he got his license, he was assigned to a cubicle in the real estate office that sponsored him. Then the parade started. Day after day, the parade would stop at his desk and the band would play and they always played the same song. There was never once a

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deviation from the tune. It was repeated so often; that he called to ask me if it was the right tune he was hearing or was it just his brain on overdrive. The song went like this (pick your favorite song and just plug in the lyrics): Do you have any clients I can help you with? If you get someone who needs a mortgage, don’t forget me, I give the best service, I have the best rates, and my programs are better than my competition. Don’t waste your time with the other people who come in here, they don’t know what they are talking about, but my rates, points, programs and service are the best, much better than my competition. Oh God, please mute the sound, my brain is fried. STOP Please stop, please? For most of you, nay, the greater majority of you, probably over 90 percent of you, as life goes on day-to-day and week-to-week and month-to-month, it seems apparent that you have a problem. Same-old, same-old, yada-yadayada. You just won’t change what you do. You just won’t. I don’t mean that you can’t, because change is completely under your control. You can change what you think, how you act, what you say, where you go, with whom you interact, what relatives you will or will not spend time with, how you conduct your business…. In almost every way possible, you can change. But you don’t want to and if you don’t want to achieve success, you really are wasting your time reading any more of the ranting of an old soul like me. Why do you waste your time reading all this motivational, organizational crap? It isn’t even funny; no entertainment value, so why bother? For the life of me, if I didn’t really think this stuff was valuable to most of you I would just fold my own tent and slink away.

THE FIVE WORDS Let’s try this! Never say POINTS, PROGRAMS, RATES, SERVICE, AND COMPETITION. Never again

will I say them. You must make this statement to yourself over again till you are sick of the routine. In previous writings, I asked if you think you could ever have a conversation for more then an hour with a possible referral source and not use these five forbidden words. Since I have not heard from any of you, I assume you are all perfect and never use the five forbidden words. LIAR! LIAR! RATES. If I am an educated referral source, do you really think that I don’t already know that almost all mortgage companies have the same rates? Rates are universal, except in short bursts of time. Every mortgage company has to offer the same rates, within a small bandwidth, or they would be out of business in a week. POINTS: The secondary market is the secondary market. Loans are sold to the same end buyers. Points are a function of rates. Since most people want low closing costs most people want zero points. If you really can’t explain why points are important, your lack of knowledge might be costing your clients tens of thousands of dollars. PROGRAMS: Sure, I know you have the most, the best, the most detailed list of unexplainable nonsensical crap that has ever been sent out over the airwaves. No-body gives a crap. No-body! Got it? Nobody! And if you try to bore my busy life with your need to delve into programs that most of you don’t even know how to properly explain, I think I will throw up. COMPETITION: Oh! This is a good one. I have always loved how you all trash the competition. I can/ will do it better than my competition. My competitors are all just making promises that they really can’t keep. My competition is not as good as me. I’m better than the competition. More Crappola! Here’s what you need to know: you have no competition. There is no-one like you.

You are unique. You are special. You do things that no-one else does quite like you. You need to absorb this concept, let it become part of your being. Understand it in ways that become so ingrained in your being that you’ll really stop trying to convince everyone you meet that you are better than your competition. SERVICE: I have saved the best for last. If you have ever heard in your lack of business marketing life that, “…I offer better service than the competition…,” raise your hand. Oops, put your hand down. You look silly. Now maybe you want to raise both your hands if you can truly claim that you have never said: “I will give you the best service that you have ever seen.” Ok, maybe you said it this way: “My service is better than anyone else.” Give it up, will you. Please? Can you now see that this is the most overused promise that any of you use? Alright, I’m done for now.

THE WORDS WE LIVE BY. What is really wrong with these words? These are the

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words we live by, right? These are the words that define our very existence, our very soul, aren’t they? These are the words we were taught to sing whenever we have the chance to croon for our clients. Well, you can look this one up- words have meaning. Words when used in certain ways have meanings far beyond the strict definition found in any dictionary. Words are important and should not be taken in a cavalier way to define what we are, how we think, what we do. Words need to be phrased in such a way that when people hear our words, they can define us. Please write this down: it’s not what you say, it’s what people hear you say. If you wrote it down, you will be able to absorb it into your very being in a short period of time and then be able to carefully choose what you say from now till the day you pass on. People might not hear you say what you said. Maybe you ought to write that one down too. Why shouldn’t you say these five words? What’s wrong with them? What about them is so bad? Everyone else is saying them! If you want to separate yourself from those who try to do what you do for a living, be more professional and form long term relations with referral sources, you need to say different words, play a different tune. Say the following words: I am not like any loan officer.

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Web 2.0 Marketing Secrets for Mortgage Pros

Secret #1: Position yourself to ride the Facebook wave!

By doren aldana

Chances are you have probably heard the buzz about social media marketing being the “NEXT BIG THING,” yet many mortgage professionals are still wondering what all the fuss is about. I can relate. In fact, when I first started hearing all the hype about Facebook, I dismissed it as another passing fad. I just could not see how all this commenting, posting and chatting with so-called friends (most of whom I don’t even know) had any direct correlation to putting dollars in the bank account. So in my ignorance, I just cast the whole thing aside and filed it in the “not doing now” folder, simply because I did not have a clear understanding about how to actually monetize social media and use it to generate sales without wasting a whole lot of time. Well, today all of tha is about to change because I am going to give you a heightened appreciation for the powerful impact Facebook can have on your bottom line – if it's used properly. By the way, in case you were not aware, in March 2010 Facebook surpassed Google in worldwide traffic with over 100 million visitors per month; an insane amount of traffic! Not only that, they currently have over 500 million users, adding a mindboggling 500,000 new users per day! If Facebook were a country, it would be the third largest country in the world, surpassed only by India and China. This is what trend analysts call a Megatrend: a general shift in thinking or approach affecting countries, industries, and organizations. like a massive wave coming towards the breakpoint – you can either paddle like crazy and ride it, or you can just sit there and watch it crash over you, the choice is yours.

With that said, here are a few unique advantages of Facebook marketing: 1. Exposure to a larger network of potential clients. Imagine if you could get in front of your clients’ and your referral partners’ friends, families, associates, colleagues, clients, etc. and have your marketing message (i.e. helpful tips) intermingled alongside their friends’ updates. Instead of being an annoying pest, you’ll be a welcome guest. That is exactly what Facebook allows you to do! In other words, there's no longer a stark separation between advertising and social connection – now they're mixing together. 2. Viral marketing. When you send out your news, tips and updates, etc. to your Facebook fans and/ or friends, your message is posted on the same news feed that these people go to on a daily basis to see what's going on with their Facebook buddies. There is huge power in that because Facebook users are trained to share things they “like” with their friends, allowing your message to spread like a virus, reaching lots of people not reached otherwise, if it was not for the viral nature of Facebook marketing. 3. It allows you to build a herd of friends and fans. This is all about building a following of people who know you, like you and trust you. The mortgage professional who builds the biggest following with the highest level of connection, trust and endearment wins. This is because once you gain mindshare, it’s just a matter of time until you gain walletshare. How do you gain mindshare? Simple. Just stay in touch through frequency and repetition, while providing helpful tips that add value to people’s lives. 4. It’s free – and if done right, it can be extremely profitable! No need to spend a bunch of dough on useless

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advertising that attracts rate shoppers. Instead, just take five minutes to set up your Facebook account and you’re off to the races! There are two primary types of Facebook pages. The first is simply your main Facebook account, which shows your personal profile. The second is called a “Fan Page.” You can have an infinite number of fan pages for different products, businesses, causes, etc., however I find the most profitable type of fan page is a “Realtor Tips” fan page dedicated to helping real estate professionals grow their business. While all your competitors continue to chase Realtors around using R&D – rate sheets and doughnuts – you’ll be earning their trust by sharing killer-effective strategies that actually help them make more money with less time, energy and effort. In doing so, they’ll naturally be more inclined to work with you and send you all their coveted referrals. When setting up your Realtor Tips Fan Page, here are a few helpful tips: 1) Let your fans post to your wall. You want to be interacting back and forth with your fans. This is the default setting so just be sure not to change it. 2) Add a call to action and a benefit in your bio. i.e. “Need help growing your Real Estate business? Call us today at 123-123-1234!” 3) Pick a photo you want to keep for a while. Remember, you are BRANDING yourself. 4) Don’t use the word “Realtor®” in the fan page name. It’s trademarked so it is best to use the words Real Estate Agent instead. For example, you could name your Fan Page something like “Free help for Toronto Real Estate Agents.”

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A little insider secret that most people do not know about, once you hit twenty-five fans on your page, you can create whatis called a Vanity URL. This allows you to take your super long, impossible-to-remember fan page link and shorten it down to something more memorable like www. facebook.com/agentsuccesstips. All you need to do is to go to www.facebook.com/username and it will walk you through the process. Just remember to choose the name wisely (with the correct spelling) because once you select it, you can't change it – it's locked in for life. Once you have your fan page setup, now it's a matter of delivering dynamite content that educates, inspires and motivates your Realtors to want to work with you. It’s all about providing unique value. If all you do is talk about mortgages, mortgages, mortgages, you’re bound to put them into a coma. Stop boring them to death with all that mortgage stuff. Instead, start focusing on what they care about most: growing their business. Here are a few examples of “How to…” hot topics that will grab their attention: 1) How to get more quality listings and sell them fast! 2) How to get more qualified buyer leads 3) How to get a higher success rate at listing

presentations 4) How to attract more referrals 5) How to attract more repeat business 6) How to use technology to do any of the above with less effort You get the idea. Keep giving your fans really cool, helpful tips that put more dollars in their wallet and it won’t be long until they start seeing you as an irreplaceable, indispensible asset on their team. In my next article, I will reveal the most powerful format for delivering your fan page content and more importantly, how to leverage it to get Realtors flocking to you like moths to a porch light. Stay tuned… • Doren Aldana is considered by many to be the nation's leading Mortgage Marketing Coach. Since 2005, Aldana has been dedicated to helping mortgage professionals attract more clients with less effort, regardless of market conditions. Among Aldana’s latest innovations, is a completely done-for-you video marketing solution that allows you to instantly deploy powerful videos through social media that attract mortgage clients like crazy. To see a free demo, visit: www.Done4UVideoMarketing. com

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Branching Out Five must-haves for mortgage divisions during expansion

By bj bounds

ike most mid-tiered mortgage operations, you have probably toyed with the idea of opening additional branches to better serve your customers’ needs. It’s important that your loan operation’s expansion is efficient in order to continue providing your customers the convenience and service they have come to expect from you. Efficient expansion means you can feel confident that all locations are following all the same processes and that you can oversee operations easily from wherever you are—it’s all about your technology. When you consider expansion plans, make sure your mortgage division is fully equipped to sustain them. Loan Origination System (LOS) technology for your mortgage division makes operating from multiple locations streamlined with real-time oversight that management requires for compliance and effective operations. Implementing an LOS that is flexible and can grow with your business is the first step. And you’ll need to secure features that will keep your mortgage loan division humming efficiently, no matter how many branches you open or remote workers you employ. Consider the top 5 22

December 2011

must-haves for any growing mortgage operation. 1. Remote Access. Whether you operate your mortgage loan division out of several offices with multiple users, or you have one loan officer travel from office to office, having remote access to your loan files is crucial. Your LOS allows users 24 hour access to loan files and administrators 24 hour access to the entire pipeline through a web-based administrative dashboard. So no matter where you go, as long as you have a secure Internet connection, you have full access to your files and can review the status of each. 2. Security. Easy access is undoubtedly a benefit, but only if you can control personnel access and access to particular screens, fields and actions. Systems which allow you to restrict access to particular users or groups are indispensible. Add the ability to control user behavior with action and level based rules, and you have a secure platform you can easily manage and monitor. 3. Electronic File Management. The beauty of a server-based LOS platform is that it allows one central repository of all sensitive loan data. What this means to you as a mortgage administrator is that you never need to

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worry about losing files because of computer damage, theft or employee attrition. Additionally, file synchronization enables the system to maintain only one copy of each file within the server. Any changes that are made to a file offline are automatically uploaded to the server file no matter who was working in the file. Every change that is made by each authorized user is logged and visible to administrators. 4. Compliance. Tracking and recording every single transaction or modification in a loan file keeps you on top of your loan pipeline and gives you the ability to correct issues before they become full-blown problems. You must ensure that your LOS gives you the reporting capabilities that you need for compliant reporting, including newer requirements such as NMLS or ULDD electronic reporting. Compliance also entails implementing appropriate processes and enforcing them through business rules within your software. Your LOS should allow you to create and configure rules based on the compliance and functional needs of your company, even if they may constantly need to change. 5. Back office. Maintaining one system of record for your mortgage division saves your company time and money in implementation and maintenance. Your LOS should offer all the products and services you need to complete the loan process through integrated best-of-breed vendors that you can choose. By ordering your documents and services through interfaces without needing to rekey information, you eliminate the potential for data entry errors, greatly improving processing time and accuracy. By taking advantage of mortgage technology, namely your LOS, and the features it offers for flexible growth, you can increase your efficiency to match or surpass your increase in business. You’ll need to make sure your system can grow with you and provide you with the compliance and security you require to maintain the pipeline and

data integrity of all files stored on your server. You’ll also need remote access for complete oversight and the ability to easily order documents and services without the timeconsuming process of rekeying data. This is the season of positive change for the smaller banks, mortgage banks and credit unions. As the large nationwide banks levy additional burdensome fees on their consumers, you have the potential to increase your client base exponentially. If you are considering branching out into more service areas, make sure your mortgage division has the fundamentals required to facilitate growth wherever you go. B.J. Bounds is the Sr. Marketing Communications Specialist for Calyx Software. In addition to media relations and copywriting, Bounds is a contributing author to the Calyx Software blog, CalyxCorner. She 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.

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Twas the Night Before Christmas 2011 By Martin Andelman Twas the night before Christmas, 2011. And I realized this poem began life in ’07. This past year was bad, all the growth curves did flatten, So I mixed up a pitcher and poured my Manhattan. First the shooting, of AZ’s representative, As beginnings go, this one felt rather tentative. Wisconsin’s unions and teachers, they’re more than just talkers, Senators fled, said the idea was Scott Walker’s. Obama had upheld the ban on gay marriage, Causing many supporters to malign and disparage. Did the lawsuits cause Barack to reverse and agree? Or did he just watch this past season of Glee? Three billion saw Prince Willy, wed Mary Kate, And it looked like $3 billion, would be billed to the state. She seemed like a girl who’d soon have her prince trained, Her dress wasn’t the only thing, that looked so restrained. Then Egypt exploded over wealth distribution, Tens of thousands in streets, ready for revolution. “Arab Spring,” it was called, among them not one quitter, It was the first time a regime was overthrown using Twitter. But, Egypt was just, one link in a chain, Because Tunisia and Libya, and which other? Bahrain? Yes, thousands of people had now seen the light, The beacon of freedom, which now shone so bright. And right out of nowhere, came the death of Osama, We smiled when the credit was heaped on Obama. Did G. Bush get mad ‘cause the credit got switched, Dubya said, “Heck no, the win goes to who pitched.” And over in Norway, terror attacks came as twins, I understand how it ended, but not how it begins. And all the world mourning for religion’s guns, Had brought darkness to, the land of midnight suns. Then while I sat eating some rye with pastrami, I saw Japan hit by a giant tsunami. The footage, it made any movie look phony And I resigned to buy Kodak, if I couldn’t get Sony.

And just when it looked like they should build an ark, The concern changed to would people glow in the dark. Fukushima made leaving one’s home not allowed, We feared wind would bring us a radioactive cloud. And throughout the year, although it was annoying, It was Obama’s birth cert, with which we were toying. But born in Hawaii, is what we discovered, And the Birthers are nutcases, that we also uncovered. Casey Anthony got off, and few thought it was groovy, But I’ll bet she’ll be back in her own Lifetime movie. We found MJ’s doctor was really a killer And Michael’s now gone and so heaven got Thriller. Then over in Libya, Qaddafi’s done too, I’m not sure what happened, perhaps a CIA coup? They say making war was one of old Muammar’s vices, But what we hated most, was that he raised gas prices. And throughout the year, the GOP just said NO, They would only agree to keep things status quo. Which was bad for Obama, for hope and for change, The political landscape went from odd to damn strange. With health care behind him and financial reform, The economy, he realized, was far from the norm. So he turned to his team, Larry Summers and Geithner, And asked how come credit was now even tightner. Not one idea raised, that would fix unemployment Obama knew then there would be no enjoyment And banks denied loan mods, seems they’d rather foreclose When Tim at Treasury talks, his nose grows and grows. Watching homeowners who were all underwater, Apply for loan mods, was like watching manslaughter. They cried and they screamed, but their cries were ignored, Bankers blamed borrowers, which left me totally floored. S&P with the meltdown, I can’t help equating, So why allow them to cut our credit rating? Then Republicans said the U.S. should default, Which even made Lieberman exclaim, “Oy gevalt.”

Penn State was so shocking, so I did some research, To see if Sandusky was trained by the Catholic Church. And I know it’s not funny, and I know there’s no reason, But did some say Paterno should finish the season? The GOP’s line up should be like running unopposed, Bachman plays Palin, her mind completely closed. With Paul and Gingrich back, it’s hard to keep a straight face. John Huntsman is “the other Mormon,” and Mitt’s in first place. Santorum, Perry, Herman Cain, others past the comma, There’s no better way to drive voters towards Obama. The wild card is Europe, what if they default, It’s our financial system, they’re going to assault. So, with my wife and children in bed and at peace, I sat by the fire, stressing out over Greece. I refilled my glass, pulling out all the stops, Closed my eyes and was dreaming of defaulting swaps. Then out on the lawn there arose such clatter, I sprang to my feet to see what was the matter. I stared out the window, the glass touching my nose, It was Santa’s real sleigh, pulled by bank CEOs!

Barack tried a Hail Mary, and threw up a jobs bill, But Republicans made sure that it was a clean kill. But what about spending some billions on school, The GOP yelled out NO, which was not at all cool. We remembered 9-11, on its 10th anniversary Shows reviewed every detail, it was far more than cursory. Then Michigan’s straw poll, would the rightwing admit? That a process of elimination, had left them with Mitt. It was time once again, for political season, With a Republican field, that defied rhyme or reason. To understand Cain, you need a sentence contextual, And I assure you I don’t mean to imply something sexual. We can’t chance another Texas Gov sympathizer, ‘Cause that’s how we got a community organizer. I think Perry and Dubya, they’re just too much the same, Either one in the moment, might forget his own name.

I yelled Blankfein! now Stumpf, John Mack, and now Dimon! I didn’t know how long I could keep the names rhymin’. On Lewis! on Davis! on Logue! And on Pandit! Kelly, Davis, Rohr, Gorman… all my favorite bandits! And then there he was, dressed in red suit so fine, I asked him to stay, but he didn’t have time. I was hoping his sleigh, that he’d teach me to fly it, But to the North Pole, he had to get to Occupy it! So, I said Merry Christmas, and with a crack of two whips, Those bankers took off running in their Italian wing tips. I yelled thank you Santa! It was my final remark, He called back, “Cherish the spirit born in Zuccotti Park!” So, I went straight to bed, and fell asleep quite content, Knowing Santa was part of the 99 percent. And I heard him exclaim, as he flew out of sight, Merry Christmas, Happy Chanukah… God bless and good night.

HO, HO, HO! Happy Holidays Everybody!

The Vegetarian Butcher By Amie Wills

have long joked that being a mortgage loan processor who does not own a home makes me the real estate equivalent of a vegetarian butcher. My problem, like many of our clients, had always been that I did not have a sufficient down payment nor did I have a family member who could gift it to me, until recently. I had taken out a personal loan for a use that fell through. Instead of immediately paying back the loan, I decided to keep those funds available in case the right opportunity presented itself. Not two weeks after I had deposited the personal loan funds into my checking account I found myself in a situation that I did not expect – the price on that cute, perfect home Ihave been driving by for months on my way to work had been lowered and was now in my price range. I knew I had to act quickly. I also knew that none of the lenders with whom I work would allow these funds since they were from a personal loan. Surely someone would, right? I asked myself what I would suggest to a 28

December 2011

client who was in a similar situation. Suggestion 1: Call your credit union. I called my credit union, the same one who had lent me the funds for the down payment. My call was answered by a very kind woman who tried to answer my questions, but was not really equipped to do so. When I explained my situation to her, she put me on hold to consult with someone else, and then let me know they had no problem with the source of my down payment. Hooray! However, when I asked her more questions, she regretted that she could not answer them and I would need to talk to a mortgage specialist. After leaving a voicemail, I waited… and waited… and waited… and I am still waiting It was a frustrating dilemma. Though I loved that someone answered the phone immediately, I hated the feeling that my time was being wasted by someone who didn’t know the answers to my questions. While I waited for a call back, I thought I would try again. Suggestion 2: Call one of the big guys. Using the internet and the 800-number I found

on their website, I called one of the big lenders. After following several different prompts I made it to a person who, very similarly to the credit union, was polite but could not answer my questions and put me on hold. After confirming that they too could do this loan, I was surveyed for my basic information (name, phone number, sales price, occupancy) and then was transferred to a loan officer. The LO answered the phone, “Hello, my name is JJ, and my NMLS # is…!” A verbal disclosure? At least I don’t have to do that yet, I thought to myself. Upon explaining my situation to him, he explained that they could not accept these funds as a down payment since it would be sold to Fannie Mae and that they only portfolio jumbo loans. “Maybe try HomePath,” he suggested, then adding, “But I guess it would have to be a HomePath home.” I really appreciated his efforts to steer me in the right direction, but how is it helpful to suggest a loan product that he clearly knew nothing about? Fortunately, I knew it was not what I needed and proceeded to my next plan. Suggestion 3: Use your network of connections. I put out a cry for help on one of the social media websites. Knowing that I had more LO connections than the average buyer, I thought surely I would receive a good response. Not only did I not receive a good response, I got

no response. Not even one person uttered a “Sorry, I can’t do it either.” Not one person? So I wondered how many other LOs are on these sites to “network”, adding connections like they are a precious commodity and then not actually doing anything with those connections once they are made. A connection in and of itself will not get you new business. For example, as of today, I have 473 connections on LinkedIn. I make very few requests, so most of these are people who sought me out - I’m not bragging here, just follow my thought process for a moment. Let’s say that 85 percent of these connections, or 400 people, requested a connection. I assume the connection was made because these people are looking to expand their business and feel they may be of service to me. Of these 400 people, only about a dozen have called, emailed, or added me to a mailer outside of LinkedIn. If my numbers are an indicator of current trends, only about 3 percentage of the general population is using this tool beyond the most basic of usage. Suggestion 4: Try another one of the big guys. Having already struck out with one of big lenders, I took a slightly different approach. I called a friend of a friend, an LO who works for a retail office of one of the big guys. She too quickly confirmed that they could not allow these funds, but promised to double check guidelines and get back to me. She never called. There are clearly flaws in our system. First of all, I am a good buyer; I have high credit scores with no late payments ever, a long employment history with DTIs that fall well within guidelines, and no skeletons in my closet. However, I also happen to be a mother with two young children who chooses to pay high rent so that my sons can attend a good school – for this reason and no other, I have not been able to save up the sizeable down payment required to purchase in my area. Who decided that this made me an unacceptable buyer? Secondly, as those who are left in the real estate lending profession, our actions directly affect the reputation of our industry and more importantly the lives of those we serve. There is business out there, go get it. For now I remain the vegetarian butcher. Amie is a fully licensed independent loan processor in Torrance, CA, who works with both wholesale brokers & retail branches. To contact Amie, email her at amie4loans@gmail.com.

December 2011

Are You Just Communicating or Are You Connecting? Don't mistake one for the other By Geoff Zimpfer

ecently I was sorting through my database of more than 1,000 “contacts,” and made a surprising discovery. Sure, I am communicating with a thousand people, but outside of my family and friends, I am not really connecting or fostering many real relationships at all. My client relationships are “a mile wide and an inch deep” and that’s not how you strike oil in your business! I have been mistaking communication for connection. Are you suffering from this same disease; mistaking the time you spend on Facebook and Twitter as making meaningful connections? Don’t get me wrong—both communication and connection are essential today. But let’s not mistake our activity on Facebook and Twitter as real connection and building relationships in your business. You may be saying to yourself; “but I am connecting with people on Facebook.” Really? How many of those so called ‘Friends’ or ‘Likes’ have you ever spoken with or met in person? I will venture to guess it is less than five percent. You see, everyone communicates but few people

December 2011

connect. The Social Media tools we all know and use today have enabled us to communicate virtually anywhere, anytime with almost anyone. Communicating with people is in our DNA. We have been communicating since the dawn of mankind and that will never change. What has changed are the tools we use to communicate. Social Media is simply another tool which, like any tool; when used incorrectly can hurt you. Too many people mistake fans or followers as having real connections. It is the vocabulary of Social Media – the more ‘Likes’ or ‘Friends’ you have the greater your perceived status. Connecting with people either online or offline is about quality over quantity. You can use tactics to drive up your ‘Likes’ or ‘Followers’ but unless you are providing true value you have simply increased your contacts and not your connections. I think true connection happens face to face, heart to heart, live and in person; sharing an experience together. You have undoubtedly experienced the difference between meeting in person versus a conference call, email—or the one-dimensional experience of reading a Facebook update or a tweet. Recently I heard a wise person say: there are only a

dozen or two relationships that will take you to whatever level of success you want. Not ten thousand, or one thousand or even one hundred. Ask Steve Jobs, Bill Gates, Richard Branson or Oprah Winfrey, and they will tell you that no more than two dozen relationships contributed to their achievements. Ask your agents; “what are the most important relationships that have led to your current success and why?” See yourself as being one of those two dozen key relationships and watch your business transform. You do not want to converse like a 19 year old kid on prom night - you want to build a relationship. To succeed you can not just communicate; you have to connect through actively nurturing deep and meaningful relationships. How does a Mortgage Professional do that in today’s market? Ask yourself these questions: What percent of your loans are local; within 20 miles of your office? What or who is the main source of prospects and closed loans for you? What percentage of your business is purchase vs. refinance? If most of your loans and your source of loans is referrals, including purchase deals from Real Estate Agents - and you want to grow your purchase loans from Agents – need to step-up your local game. Stepping-up your local game means getting off your computer and into your local market. If your business is mostly local, you have to start building your offline social equity by becoming a known brand and leading authority among your local Real Estate Agents and within your local community. If you have local Agents already following you on Facebook or Twitter, reach out and set up a meeting with a few each week. Your ideal process should be to engage and connect offline first – then engage and connect online. You’ll see higher levels of engagement and response by connecting the two. Here’s a sample script for calling agents to set-up a coffee or lunch meeting: “Hi (Agent Name). This is (Your Name/Company) I’m calling because I am looking to connect with a few top agents in the area like yourself {appeal to their ego} to find out what is your biggest current business challenge? I am helping agents gain more control over their transactions, close more deals and thrive in today’s market. Perhaps we can develop solutions that may help you too. I would like to schedule a meeting, perhaps a morning coffee, to discuss

a synergistic business relationship.” You get the idea? The goal is to just get the meeting and show up with your mind, your ears and yes – your heart; open to learning more about this person and how you can help. You, of course, want to be prepared with some questions to guide you along. The real key is not how many questions your ask but that you are authentic in your discovery and not just reading a script. To help you get started, we have posted a list of sample questions on my blog you can download and use. Relationships are built by putting the other person’s needs, want and challenges ahead of yours. You build trust and connection by taking a personal interest in what is most important to the other person right now and in the future. Go ahead and try calling a few agents and arranging these connection sessions. Worst case, you will have another agent in your roster. Best case, you will have a real connection which could be the beginning of a mutually beneficial and profitable relationship. When you have a real connection, people will actively engage with you online by ‘liking’ your posts, leaving comments and sharing your content with others. You will now have both engines of communication with connection working for you – and you will be amazed by the results.

Geoff Zimpfer is the Chief Content Officer for Loan Officer MarketingTV and author of Speed Marketing™ for Loan Officers. Get your FREE Connection Questions Template with 50 questions to ask your agents here: www. LoanOfficerMarketingTV.com

keeping up with the jones

You Are Your Brand by Chris Jones

ack in the 1990s I spent a few years in the insurance/ securities business. It was a decent gig back then; a lot of regulatory oversight, but not so much that I felt like I had an SEC investigator camped out in my lobby. Over the course of time, that changed, and it got to be not so much fun anymore. Because of regulatory creep, I had to stop publishing my newsletter; a little two-pager that I wrote myself, and that was not really all that much about insurance or securities … I got out. At the time, I thought it was because I just don’t tolerate government pinheads (or any other kind, I confess) very well. Now I wonder if I didn’t realize something that has come to be obvious – at times, painfully – about the modern small business: I am my brand. If I can’t distinguish myself, what business can I do? This issue is about branch officing, the good and the bad, and different kinds of compensation models (as if the Feds have left us any wiggle room there). There has been a huge amount of consolidation in the past while in

December 2011

the industry, with the smaller players being squeezed out and the behemoths acquiring everything in sight. When I started in the industry a decade back, I worked for a few different small, one-office brokerages. In 2007 (have I said that sometimes my timing is little off?) I opened and ran my own shop for a while, as a one-man show. While that is not impossible, it was difficult and ultimately I decided that to offer my clients what they really needed, I should ally myself with a larger, more powerful company with better resources than I could get on my own. Now I run a branch of City First Mortgage Services, a medium-sized correspondent lender, and I am happy with the way that has worked out. Your results may vary. I learned something during those few years, though, and especially during that one year as a solo act; that has served me well since. I think that might be of value to anyone who is thinking of joining up with a large entity as a branch, net branch, or satellite office. I said it above, and let me repeat it: you are your brand. The lender is not your brand. The brokerage is not your brand. Although there are two names on your business card, only one of them is your brand, and that is yours. This is not to cast aspersions on the character of

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keeping up with the jones the netbranchers, or the large lenders, or even the small brokerages. They provide wonderful tools for us to use as loan officers, and use them we should. I am a loyal guy, myself; I don’t flirt with other girls when I’m married. But I also don’t think that any of my clients care a moldy banana peel for what company I work. If you follow this column, you are aware I’m happy to take a position completely absent any evidence to support it. In this case, bowing to Niche Report’s reputation for reportorial excellence, I decided to go get some and see if I was right. So I called a few dozen of the clients I’ve worked with over the past year that did business with me for the first time, but who had worked with other lenders previously. After some basic chitchat, I asked them to name the lender they worked with before me. There was one response, albeit in several variations: “are you kidding me? I have no idea.” Then I asked them if they knew the name of the loan officer they worked with. Here I got much better response, with almost half of them being able to tell me at least the first name of the guy they did business with the last time. Then I asked them the real kicker: could they name the company I worked for? Remember, these are all people that did business with me in the last year or so. Um. No. Not really. Some of them could, five or six out of thirty. Another ten could tell me the name of my branch (although it’s kind of cheating, since it has my name in it), and the rest were totally blank. I thought this instructive, but not at all surprising. However, I realized that since this group switched from their other lender to me, that they are a self-selected group of people that weren’t impressed by their former loan officer, and that this likely made the sample worse than it might be otherwise. So for fun, I repeated this process with people that are NOT my clients.

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Same essential results. Out of twenty people, two could name their lender; seven could name their loan officer. Unless they had been to a bank to get their loan (six of them), there was not anyone that could name their lender but not their loan officer. That tracked exactly with my research on my own clients. The message here is clear: at least in mortgage finance, where people are loyal, they are loyal to other people first, and the company second, if at all. Your clients are loyal to you, not necessarily (and probably not at all) to your company. The good news is that if you are considering a company switch, you can probably stop worrying about whether it will hurt your production. The bad news is that if you think your company is the reason your production stinks, you are probably wrong. Now, obviously, if your underwriting takes two months, or fundings do not happen on time, or you do not have access to FHA or USDA or other critical products, then yes, of course, those things may eat into your production. But there are people out there that are successful all the same. If you aren’t one of them, you should look to the source of your troubles: you. As my wife is fond of saying, the common denominator in all your failed relationships is you. Moving your current attitude and work ethic and production level from one place to another is not very likely to result in a massive spike in business, no matter what you’re being told. All of this is to say this one more time: you are your brand. People interact with you. They remember you (or not!). They will stay and do business again with you. They will refer people to you. The hardest work in this and in any sales-oriented business is not to find the right company, or the right niche, or the right alignment of the planets, but to find the right you and put yourself out there where people can find you and learn to love you. Otherwise, blame the government or the market or your lender or the cussed universe all you want; it won’t make things better. Only you can do that. Chris Jones, branch manager with City First Mortgage Services, is a nine-year industry professional in brokering and banking, with a background in financial services, national politics and Main Street entrepreneurialism. He is the author of the forthcoming book The Six Channels of Marketing, available in January. Chris lives in Lehi, Utah, with his wife, Jeanette, and their eight children, and can be found at www. lehimortgages.com, cjones@city1st.com or (801) 850-3781.

Center sTage

Center stage with titan list & mailing services The Niche Report talks with vice president K. Justin Restaino by the niche report

The Niche Report sat down with K. Justin Restaino, the Vice President of Titan List & Mailing Services, Inc. which owns www.Titanlists.com and www. WhatIsDirectMail.com. Justin is a marketing veteran specializing in targeted data & direct mail campaigns specifically for the mortgage industry. With over 12 years’ experience, Justin has the reputation as the ‘go-to guy’ for inside knowledge and expertise to guide his clients to profitable avenues of targeted direct marketing. What does Titan List & Mailing Services Provide? Titan List and Mailing Services is a complete marketing firm with over 13 years’ experience in the mortgage industry and its trends. Our approach to generating business for our clients relies heavily on utilizing targeted credit driven data through all 3 bureaus & pairing the data with effective (and compliant) mail pieces that drive qualified in-bound calls to our clients. Every aspect of our client’s campaigns are handled in-house (all data processing, printing & mailing is done on-site), freeing up much time that would normally be lost trying to coordinate with separate data and mail/print vendors. How is Titan List & Mailing different from the other providers? Unlike our competitors, we go beyond simply filling a

customer’s data & mail request. For example, many clients would like to explore direct mail with an initiative they would like to execute, when, to put it simply, is destined to fail from the onset. Our experience & knowledge gives our customers the added benefit of directing them to campaigns that will yield a consistently profitable return while also steering them away from the ‘doomed from the start’ marketing efforts. Furthermore, because we handle all print, data & mail inhouse, we are able to turn around first time customers in as little as 3 days and repeat customers in as little as 24 hours. How does Titan List & Mailing generate new, qualified business? Let’s face it; times are different. Competition has never been fiercer and lending guidelines more stringent, creating an environment that keeps you in constant struggle for the highest profit yield. Now, more than ever, every dollar invested into generating new business MUST yield significant ROI. The good news is that with the advancements in data mining, direct mailing has become the most reliable resource to produce the lowest cost per closed loan. By utilizing credit driven data you can virtually eliminate borrowers that do not qualify for your underwriting guidelines. For example, without using credit driven information, you can’t control the borrower’s score or eliminate those that have late payments on their loan (both crucial to closing a potential borrower). Only by using this data can you be certain that the borrowers you solicit are TheNicheReport.com

Center sTage truly pre-qualified. But beware; many companies sell ‘credit modeled’ data that has no relation to true bureau info. To be certain you are getting true bureau files, you must sign up & be approved by the bureaus to receive it. If you’re not signed up, you’re not buying true credit data! With Titan you can be sure that you are purchasing true credit data, as we require our customers to take the necessary steps in getting signed up for credit data. So How Do I Control Who Calls me? Unlike other forms of marketing, you can control WHO contacts you with direct mail. With radio, TV and referrals you have no idea of who you are working with until their credit report is pulled. Why waste the time on an unqualified borrower if you could eliminate them from the start? Wouldn’t it be nice to have a referral call you who already met the credit standards for closing a loan? With direct mailing you can have all of the above. Direct mail, in essence, is a ‘pre-qualified’ referral. Think about it…they heard about you, they took the initiative to call you, and they have a sense of trust, as you have given them a pre-qualified offer that is built on their current situation. You too have the added comfort of knowing that the person on the other end of the phone is interested and will meet the stipulations you put forward to close their loan. The key to effective target marketing is to make sure you are partnered with the best professionals in the business. While anyone can provide mail, print or data, it takes a true industry professional to have the knowledge and insight to properly target an effective approach. How reliable can Direct Mailing Be? The best part of direct mailing is the consistency at which it performs. Once you have established a baseline in your campaign performance, similar or greater results can be achieved with relative ease. Unlike other forms of marketing, you can effectively mail on a weekly basis and time and again keep your pipelines full with the type of borrower that will convert. Need more leads? Increase the mail volume. Have your underwriting guidelines expanded to accommodate other homeowners? Simply adjust your criteria to meet the new standard. To end all debate, direct mail will generate the consistent results you need to achieve to remain profitable in today’s mortgage market. Don’t be afraid of the initial investment; after all is said & done it will give you the lowest cost per closed loan. And don’t be afraid to spend top dollar on an effective campaign! Much like high quality cars, you get what you pay for. Don’t expect to get the fit & finish of a BMW at 38

December 2011

the price of a Toyota. The same goes for quality direct mail products. If something seems too good to be true, it is. What other services & products does Titan List & Mailing provide? Titan List and Mailing is a full service list brokerage with access to every database in the country. Due to our tenure in the field, we are aware of the quality & integrity of the data supplied by the vast array of data providers. Because of this we can obtain the highest quality data available for almost any project. Being a full service printer also allows us to do simple print fulfillment as well as customer retention letter, postcards and digital marketing. In addition, we offer complete graphic & website design, SEO and social media marketing. Who is your typical customer? Our products and services can accommodate & benefit lenders of any size, from the ‘One-LO-Show’ to lenders with hundreds of employees. Our typical first time customer is one who have little to no experience with direct mail. It is our goal with these customers is to have an educated conversation about their internal business & experience, as these play key factors in what campaigns to target. From there we educate them as to the different options that we have seen work well for customers with similar operations. We realize that what works for one customer may not work well for another, as it takes more than just great response to deliver closed loans. Where can our readers find more information? You can visit www.titanlists.com or www. whatisdirectmail.com, and request more information though our online requests form. Because each campaign is tailored for each customer’s business, I would recommend contacting one of our representatives directly via phone at 1-800-544-8060 to learn more direct answers to your questions. Our representatives will provide a fresh take on direct marketing and will demonstrate the superior level of expertise our company employs. Joan Piantadosi created Titan List & Mailing Services, Inc. to provide a premium service to help meet the needs of mortgage companies and mortgage originators. For more information or to contact Justin Restaino direct, please email justin@titanlists.com or visit their website wwwtitanlists.com for more information.

WHAT IS YOUR MORTGAGE IQ?

What's your mortgage IQ? BY karen deis

Fannie: Compensating factors. Do you have a current list of what FNMA accepts as comp factors? Fannie does not provide a list of compensating factors. There is a Comprehensive Risk Assessment Worksheet that gives guidance for manual underwriting which might help however. • Reserves: the more the better, but at > 6 months and again at > 24 months are specific points referred to in the guide for particular mortgage types, and I would expect some consistency • Ratios: the lower the better -- helpful for lower credit scores • Credit: over 700, and again over 740 • Payment: or rather lack of payment shock -going down is better • LTV: break at 80 percent LTV, 60-70 percent LTV, and again under 50percent LTV • Property type: Single Family vs. Condo...etc... • Mortgage term: shorter term does matter • Mortgage payment history or rent payment history Be sure to write a cover letter and point them out when you have to go to manual underwriting.

Fannie Multiple Parcels: Do Fannie guidelines prohibit lending on more than one parcel of land? FNMA allows multiple parcels under the following rules: • Each parcel must be conveyed in its entirety • Parcels must be adjoining one another • Each parcel must be zoned residential • Only one parcel may have a dwelling unit (limited nonresidential improvements such as a garage are acceptable) • No excessive value given to the land • Appraisal comps not required, but suggested • The mortgage must be a valid first lien on each parcel VA Cert of Elig. Status: Is there an email address at the VA to check the status of a veteran's eligibility? No email address. If you have a question on a Certificate of Eligibility (COE) that had already been requested, call the number: 1-888-244-6711. You can get to a live person who will look it up for you. If you are looking for info on applying for a COE the link below should help. The instructions on this link are designed for the Veteran, not a lender. A lender would TheNicheReport.com

WHAT IS YOUR MORTGAGE IQ? request the COE using the Veteran's Information Portal: http://www.benefits.va.gov/homeloans/eligibility.asp If you are working with a veteran who isn’t sure whether he/she has enough eligibility left to get a VA loan, here’s a link for the homebuyer to check it out. http://www.benefits.va.gov/ homeloans/eligibility.asp FHA Old Case Numbers: How do I get a client's current FHA case number when they can't find their closing docs? 1. Go into FHA Connection, Single Family Origination>Case Processing>Case Query You can enter the borrower’s info and pull up the case number (if it's over a year old it may be 'archived'). 2. Call your favorite title company. Many counties have electronic records. They can simply look up by legal description and view the image of the Trust Deed/ Mortgage. The front page will have the FHA Case Number. VA Non-Spouse on loan: A veteran has a significant other and they have a child together. Can she be on the VA loan with him? VA will allow what's called a "Joint Loan." This is where a non-veteran, non-spouse is a co-borrower. VA will allow the Veteran borrower to use only 1/2 of his/ her entitlement in this situation AND the Regional Loan Center has to underwrite the file. More info can be found in VA Pamphlet 26-7 Revised, Chapter 7 VA Non-Spouse Co-borrowers: VA will allow a nonveteran, non-spouse to buy a home and use VA financing. But, the veteran borrower can only use ½ of his/her entitlement. VA will also have to underwrite the loan. But don’t let that stop you! Call me for more info. USDA Length of time on job: I have a client that has worked on a farm for two years. He started another job for the last six months, but he is still working at the farm part time. Underwriter says he has to be on BOTH jobs for ONE year. Is that true? Here is what RD regulations say: Determining Repayment Income: Employed Applicant Approved lenders must determine stable and dependable monthly income from verifiable sources. Refer to sections 1980.345(b) and 1980.345(c)(2)(i). There is no minimum length of time an applicant must have held a position to consider employment income 40

December 2011

as dependable. Obtaining two years of documentation for an applicant’s employment and income history will assist lenders in their analysis regarding probable stability and continuance of the present income source. The applicant should not have any gaps in employment of more than a month within a two-year period of loan application. The lender may consider reasonable allowances under the following circumstances: (1) A recent graduate, as evidenced by college transcripts, or a recent member of the military, as evidenced by discharge papers, entering the civilian workforce. Caution must be utilized when the applicant’s employment includes a probationary period; (2) An applicant has recently re-entered the workforce after an absence to care for a family member or minor child, extended medical illness, or other circumstance reasonable to the lender; (3) An applicant will begin a new job with a firm offer letter from the employer indicating a start date within 90 days of loan closing (lenders must verify the applicant will have sufficient income, or cash reserves, to support mortgage payments and other obligations between the time of loan closing and the start of employment). This type of allowance is commonly represented by an applicant entering a teaching position with a contract from the school district; and (4) An applicant frequently changes jobs but demonstrates income continuity. Sources of income the lender cannot verify are not acceptable for the purpose of qualifying applicants for guaranteed loans. Income that is verified, but not considered stable and dependable by the lender, may be considered as a compensating factor for meeting debt ratios. It remains the lender’s responsibility to fully document their analysis and basis for stable and dependable income utilized. The lender must be able to determine the applicant’s income stability based on the available documentation. 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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United Wholesale Mortgage specializes in FHA, VA and Conventional Wholesale Lending. UWM prides itself on having Exceptional Customer Service and an extremely efficient process from loan submission through close!

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Specializing in fix and flips, rehabs, income producing and rental investment properties throughout Southern CA. We lend on SFR residential and COMM property. Simple application process with generous broker commissions. Professional service with funding in 7 days. Call us today for a free quote or visit us online www. windvestcorp.com

ADVERTISE YOUR NICHES HERE WITHIN 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 lenderâ&#x20AC;&#x2122;s information on products, program, procedures, representations, and warranties for details.

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Super Jumbo Loans, Private banking, Asset based lending. Loans to 100 LTV, starting at 2.5% interest only. www.superjumboloans.info Specializing in fix and flips, rehabs, income producing and rental investment properties throughout Southern CA. We lend on SFR residential and COMM property. Simple application process with generous broker commissions. Professional service with funding in 7 days. Call us today for a free quote or visit us online www.windvestcorp.com Investment Rehab Lender. We are a direct lender for Fix and Flip loans in CA, AZ and NV. Funding in as little as 7 days. Easy online submission @ www.zincfinancial.net

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December 2011

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360 Mortgage Group National Wholesale Mortgage Lender. www.360mortgagegroup.com 866-418-2997

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ATTENTION LENDERS!! Buyers of Distressed Debt. NicheBuyers@gmail.com

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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

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Titan List & Mailing Services, Inc. Data provider, printing service & dirct mail house. www.titanlists.com 800-544-8060 titanlms@bellsouth.net

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Zinc Financial, Inc. Investment Rehab Lender. www.zincfinancial.net Todd Pigott 559-326-2509 tpigott@zincfinancial.net

BRINGING UP THE REAR - continued from page 50

Caucasian. I’m not saying that to be a racist, I’m saying it because the combination of all of those factors makes me rock solid sure that this guy knows a lot about real people in this country from reading about them in policy reports. Last year, President Obama and Treasury Secretary Tim Geithner asked Fannie and Freddie to start doing principal reductions for homeowners underwater and at risk of foreclosure. In fact, Geithner even testified that he believed there to be a solid economic case for Fannie & Freddie to participate in the principal reduction programs, such as the new HAMP PRA. But, DeMarco said no anyway. Ed’s rationale was that principal reductions, while positive for Fannie and Freddie in the long run, would be bad for their books in the short run. his is the sort of thing that makes one long for the ghost of Lyndon Johnson to come back and kick DeMarco in the pants… you just don’t say no to both the president AND the most powerful man in the world… Timothy Geithner. Geithner can snap his fingers and Ben Bernanke starts up the printing presses from his nightstand by his bed. Even Lord Blankcheck over at Goldman Sachs takes his calls. And Vikram Pandit over at Citi? Yeah, well I heard he comes over and rubs Geithner’s feet in the evenings. I swear, that’s what I heard. Fannie & Freddie, in my way of thinking shouldn’t even be given the choice. They are both bankrupt. They’ve already been NATIONALIZED, no matter what they want to call it. For God’s sake, Fannie Mae stock is trading OTC right next to Blockbuster! And besides, Freddie and Fannie have been GSEs for years… “Government Spending Entities,” so why stop now? And, since when does Fannie Mae base decisions on whether something is prudent in the short run, or long run for that matter? Because that’s what comes to my mind when I think of the word “prudent”… Fannie Mae. Nice castle, by the way. Regardless of all of this, DeMarco wouldn’t budge. Obama does appoint the head of the FHFA, but he can’t order him to do anything. DeMarco is legally “independent,” he can’t be fired and so far refuses to step down, so at this point he’s singlehandedly preventing our government from doing something to stop foreclosures, as if the Republicans alone weren’t enough of an obstacle in this regard. So, recently DeMarco, in his testimony to congress over the $35 million in bonuses being paid to Fannie and Freddie executives, said that executive compensation at Fannie Mae and Freddie Mac has been appropriate as well as necessary to prevent taxpayer losses. This is the kind of logic that’s obviously the product of a beautiful mind.

DeMarco defended the bonuses, saying that without them, there could be an exodus of talent, which could result in taxpayer losses. And I have just two things to say in response to that: 1. Fannie and Freddie have already cost the American taxpayers roughly $169 BILLION, and estimates are that we’re on our way to a $220 BILLION tab. Last quarter, they needed something like $13 BILLION alone. So, whatever talent you’ve got over there… for God’s sake, let them go. Paying bonuses at the GSEs now is like closing the door after the horses have run out and then opening it back up and shooting the horses that remain inside. 2. I’m absolutely positive that I could have saved the country a fortune here. I’d bet anything that I could have bankrupted Fannie and Freddie for a lot less than $169 BILLION. I would have been more than happy to run the two GSEs into the ground for a few hundred million. Next time, pick up the phone… I’m here to help. At this point Mr. Ed, is standing right smack in the way of programs that could at least start turning around the housing market and that is making me crazy. On this topic, DeMarco recently told Politico.com: “Sweeping plans to help homeowners ‘did not meet our responsibilities as conservator. That doesn’t mean principal forgiveness might not be appropriate… but it does not meet our mandate to return Fannie and Freddie to solvency and guard against another taxpayer bailout.” He also said that the FHFA, “has exercised its responsibilities … to not undertake certain initiatives.” Did I tell you he was an out of touch policy wonk? He was also recently quoted as saying: “Americans, whatever their political stripe is, whether they are lawmakers or businesspeople or citizens, we all are frustrated.” No, Ed… you’ve got that wrong. I’m frustrated… homeowners are frustrated. You? You are frustrating. And he also said: “We are in a set of circumstances in the housing market we have not seen since the Great Depression. It has taken a long time to get to that point, and it’s going to take a long time to recover.” And evidently, Ed is going to do everything in his unchecked power to make sure of that, which more than qualifies him as my end of year REAR.

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

BRINGING UP THE REAR

Bringing Up the rear Edward DeMarco, Acting Director, Federal Housing Finance Agency BY MARTIN ANDELMAN

ell, I’ll tell you what… the economics profession sure has lost some points these past couple of years, wouldn’t you say? Sort of like the intelligence community did during the Bush presidency just a few years back. It pains me to see the profession relegated to being “The Pips,” to Barack Obama’s “Gladys,” if you know what I mean. We’re never even told their names anymore, all we get to know is that when the news is bad, the “economists were surprised by the numbers.” Not any of the economists that I either know personally, or frequently read, but a nameless and faceless band of economists who seem to forecast so poorly, they couldn’t even get hired as the San Diego weatherman. It’s like, “the number of jobs created last month came in lower than economists expected,” or… “Economists were surprised to learn that home prices have fallen for 70 months in a row, that water is in fact wet, and that the sky is blue. Until that news was released today, the consensus answers to those three questions was: “13”… “clean”… and “high.”" Okay, so I’m only bringing this up as a way to introduce this month’s REAR… Edward DeMarco. Ed is currently serving as “Acting Director” of the Federal Housing Finance Agency (“FHFA”), the independent federal

December 2011

agency that placed both Fannie Mae and Freddie Mac into conservatorship in the fall of 2008. And with a Ph.D. in Economics from the University of Maryland and a B.A. in Economics from the University of Notre Dame… he’s an economist. Prior to joining FHFA, he was COO at the OFHEO, where he provided policy advice for the FHA, before that he was Assistant Deputy Commissioner for Policy at the SSA, and before that he was the Director of the OFIP at Treasury where he oversaw analyses of public policy issues involving the GSEs… and before that he conducted economic and financial analyses of the GSEs at the GAO where he developed recommendations for improved safety and soundness related to the government’s exposure to the GSEs. Read that last line again… “he developed recommendations for improved safety and soundness related to the government’s exposure to the GSEs?” Well, did he now? Obviously, that was some absolutely crackerjack work right there. Considering that Fannie and Freddie, so far, have cost us taxpayers about $170 billion in “safety and soundness,” I’d have to say that I sleep better at night knowing that we’ve now got Ed watching out for us at FHFA. Best I can tell, Ed’s never had a job that wasn’t a wonky acronym, and since I want to give you a picture of what he looks like… hmmm… well, if Tim Geithner and Peter Orszag had a child… I mean, the man just screams - continued on page 49

Big changes are coming in how the GSEs will accept your loan files.

Are you ready for UMDP? The GSEs’ Uniform Mortgage Data Program, or UMDP is coming very soon and it will radically change how you submit loan data to the GSEs. They will require that you deliver appraisal data in MISMO XML 2.6 format. If you can’t get the XML, they’ll also accept a first-generation PDF but it’s not preferred and you’ll quickly see why. If your appraisal vendors are still only giving you PDFs or converting PDFs into the preferred XML for submission to the GSEs, you’ve probably already seen the extra expenses and pipeline delays as a result.

There’s a better way, and we can help you for free.

We create, transmit, store, and manage more appraisal data than anyone else. Over half the nation’s appraisers use our formfilling software, so we’ve prepared and trained tens of thousands of them in anticipation of this massive change in appraisal data delivery. We’re also training lenders and underwriters across the country for error-free compliance. We can help you, too. You can avoid fees, pipeline delays, closing delays, and all the headaches and hassles that ill-prepared lenders or AMCs will face. The first step is up to you. Visit our UMDP resource center at www.MercuryVMP.com/UMDP today.

Free tools and training available now at www.MercuryVMP.com/UMDP All the info you need Find all the program details, a deadline calendar, links to other resources, and much more

UMDP Readiness Checklist An .xls tool to help you prepare your organization for a smooth transition

UAD Appraisals Reference Poster We’ll mail you a poster so your underwriters can decipher the new appraisal reports

UMDP Roadmap webinars Register for free half-hour webinars for operations staff and underwriters on a variety of UMDP topics

Mercury Network 1-800-434-7260 • www.MercuryVMP.com AD CODE: MANRMN1011 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.

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