TNR - June 2008 by The Niche Report

Issue 012 June 2008 TheNicheReport.com

The Future of Mortgage Broker Licensing Dramatic changes ahead.

to 21 Getting Know Loan Types Open up your options.

27 Au Contraire

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CONTENTS

Issue 012

June 2008

What You Are Really Selling Isn't Mortgage, It's A Relationship Start with a strong foundation.

NICHE REPORTS PRIME

pg 34

ALTâ&#x20AC;&#x201C;A

pg 35

NONPRIME

pg 35

HARD MONEY

pg 37

COMMERCIAL

pg 39

CONSTRUCTION/REHAB pg 41 DOWN PAYMENT ASSIST. pg 42

STEWART MEDNICK Seasoned Mortgage Banker and Published Author

FOUNDER & PRESIDENT Robert Pegg robert@nichereportonline.com

The Future of Mortgage Broker Licensing George h. marentis president / ceo of compliance made simple, llc. Dramatic changes ahead.

Getting to Know Loan Types andy bogdanoff founder of remington financial group Open up your options.

Streamlined Dreams Michael pavelchik mortgage relationship officer Find your niche in FHA's 203(k) loan program.

June 2008

mark crawford ceo crawford park financial inc. Why would any one want to invest in a mortgage loan today?

Center Stage with Metro Funding the niche report Making hard money easy.

DEPARTMENTS

NOTE FROM THE FOUNDER

CALENDAR OF EVENTS

32 44

Au Contraire

TIP OF THE MONTH LENDER & RESOURCE DIRECTORY

CO-FOUNDER & PRESIDENT David Pegg david@nichereportonline.com EDITORIAL / CONTENT MANAGER Kristen Moser kristen@nichereportonline.com ACCOUNTING MANAGER Shawna Ingram shawna@nichereportonline.com SALES MANAGERS Jason T. Buff jason@nichereportonline.com Lorena Leggett lorena@ml-implode.com DESIGN Plumbline Studios, Inc. Eric Ball ADVISORY BOARD Aaron Krowne President and CEO, IEHI, Inc. CONTRIBUTING AUTHORS Andy Bogdanoff Mark Crawford George H. Marentis Stewart Mednick Michael Pavelchik Steve Richman

Published monthly by BODA Publishing, LLC 6016 Alderdale Place, Haymarket, VA 20169 Phone: 540.657.2632 Fax: 703.991.2362 Email: info@nichereportonline.com www.TheNicheReport.com

SUBSCRIPTIONS This publication is intended for real estate finance professionals. If you are a mortgage broker, lender, loan officer and you do not currently receive The Niche Report, please send your name, company name, and address to subscriptions@nichereportonline.com. To opt-out of receiving The Niche Report, please send your request, including name, company name, and address to opt-out@nichereportonline.com.

ADVERTISEMENTS To inquire about advertising in The Niche Report, please call 540.657.2632, or send an email to ads@nichereportonline.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 kristen@nichereportonline.com or call 540.657.2632. 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 kristen@nichereportonline.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.

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NOTE FROM THE FOUNDER

I’m going to start off this issue of The Niche Report on a positive note. Actually, make that three positive notes. The first: Fannie Mae has just announced that they are removing their requirements for larger down payments in markets designated as declining. This is huge and will benefit many. It will also allow thousands of non-FHA approved brokers to compete within this high LTV arena. Second positive note: new home construction posted its largest gain in over two years. Although this may or may not be short lived, it’s nice to hear some good news on this front. Third positive note: I recently found a new large wholesale lender that has the potential to play with the big boys – Fortes Residential Mortgage. They are owned by Fortes Financial who picked up National City Mortgage; Yes, THAT National City Mortgage. Their business runs deep and they seem to be on good footing, I am rooting for them. The Niche Report is always evolving, and this month is no exception. We have teamed up with Lenderlab.com, an online product search engine that brings an extensive database of lenders to a large audience of mortgage originators. They will be sponsoring and providing our “Lender Listings” located under our premium niche listings toward the back of the magazine. We are doing this to create a more robust tool for you (the mortgage originator) to find an outlet for your loans. In this market, keeping your options open is extremely important. I would like to introduce our second columnist for The Niche Report - George H. Marentis, J.D. George will be our resident expert writing on compliance issues that directly affect mortgage originators. His first column talks about the future of mortgage broker licensing. If you ever have a question regarding a State or Federal licensing regulation, please feel free to contact George Marentis directly at compliancemadesimple@yahoo.com. Our Tip of the Month columnist, Stewart Mednick, has written our feature article this month on the importance of building a strong foundation of honesty and authenticity with your clients because what you are selling them is not a mortgage, but a relationship. This is a fundamental shift in the way to approach business and certainly the way of the future. We also have an article on the FHA 203(k) program which you may or not be familiar with right now, but as FHA grows in popularity, this program will become more widely used. Although we could find only a few lenders that offer this rehabilitation and repair program for single family homes, we anticipate more FHA-approved lenders will begin to market this program. Definitely worth educating yourself about – you never know when this might meet the need of a potential client. So it may be too soon to proclaim the market is improving, but there are signs that things are looking up. Keep up the fight.

Robert Pegg Founder & Publisher TheNicheReport.com

CALENDAR OF EVENTS

Upcoming Key Dates & Events: JUne, july & august ALE< )''/ J D K

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JUNE 16 MAMB offers the "The ABC's of FHA Lending" at the Holiday Inn in Columbia, MD. Visit www.mamb.org for details.

Visit www.cambweb.org for details.

AUGUST 7 CAMB Annual Convention & Grand Exposition, Sacramento, CA. Visit www.cambweb.org for details. Housing Forecast/Pending Home Sales Index releases by the NAR.

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JUNE 18

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Commercial Real Estate Market Forecast released by the NAR.

CAMB Annual Convention & Grand Exposition, Sacramento, CA. Visit www.cambweb.org for details.

JUNE 19 – 23

AUGUST 9

NAMB 2008 Annual Convention at the Indiana State Convention Center, Indianapolis, IN. Visit www.namb.org for details.

CAMB Annual Convention & Grand Exposition, Sacramento, CA. Visit www.cambweb.org for details.

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JUNE 26 May Existing-Home Sales released by the NAR.

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JUNE 3 MAMB’s CMC/CRMS Prep Class at the Holiday Inn in Columbia, MD. Visit www.mamb.org for details.

JUNE 9 Forecast / Pending Home Sales Index released by the NAR.

JUNE 12 & 13 MBA’s Government Housing and

Loan Production Conference at the Hilton Washington in Washington, DC. Visit www.mbaa.org for details.

June 2008

JULY 8 Housing Forecast/Pending Home Sales Index releases by the NAR.

JULY 16 MAMB’s Annual Summer Social, Rockville, MD. Visit www.mamb.org for details.

JULY 24

AUGUST 8

AUGUST 14 Qtr. Metro Home Prices/State Resales released by the NAR.

AUGUST 20 Commercial Leading Indicator released by the NAR.

AUGUST 22 NAMB/Southeast Second Annual Regional Conference, New Orleans, LA. Visit www. Namb.org for details.

AUGUST 22 – 25

June Existing Home Sales released by the NAR.

NAMB/Southeast Second Annual Regional Conference, New Orleans, LA. Visit www. namb.org for details.

AUGUST 6

AUGUST 25

CAMB Annual Convention & Grand Exposition, Sacramento, CA.

July Existing-Home sales released by the NAR.

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THE FUTURE OF MORTGAGE BROKER LICENSING Dramatic changes ahead. BY GEORGE H. MARENTIS

â&#x20AC;&#x2021; he purpose of this article is to provide TNR readers with some incite on the ever changing mortgage lender, broker and loan officer licensing environment. It is not my intent to express an opinion or view at this time. That may come in future articles.

Introduction With the recent collapse of the mortgage lending industry and the dramatic changes that have occurred over the past year as well as unknown future changes, approximately 10 states are now participating in the new Nationwide Mortgage Licensing System (NMLS). This system will influence mortgage lenders, brokers and loan officers licensed in the participating states. Creation of a national mortgage licensing database The NMLS was developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators. NMLS was officially launched in January of 2008. The system is an Internet based system designed to allow you to complete one set of standard comprehensive forms. These forms are then forwarded to all the participating states the mortgage broker intends to conduct business activities in. Ultimately, the NMLS paper forms will be replaced by an online version thus reducing paper submissions at the state level as well as within the NMLS system. NMLS has implemented three separate processing fees. The system processing fees will be assessed at the time an application is submitted to a state when applying for a license, transitioning an existing license onto the system, renewing an existing license, or submitting information to establish a relationship with a

loan officer to sponsor a license.

Streamlining of the licensing process The NMLS is a database where state-licensed mortgage lenders, brokers and loan officers will have the ability to apply for, amend, update and renew licenses. According to the creators of NMLS, the new system would streamline the licensing process since about 48 states currently regulate mortgage lenders, brokers or loan officers in some fashion. Of the 41 state agencies that have signed the Statement of Intent to participate, 30 states are listed below. The NMLS would allow regulators to share information regarding the enforcement of individuals and entities, reduce regulatory burdens on the states and reduce fraud while increasing consumer protection through enhanced financial safety and soundness and ultimately bringing uniformity and transparency to the mortgage industry. In addition to the streamlined licensing application and the information gathered through the application process, any jurisdiction-specific requirements such as surety bonds or financial statements will need to be sent to each participating state separately within 5 business days of submitting the NMLS applications. There are currently 10 participating states Currently, the following states are participating in the NMLS: Idaho, Iowa, Kentucky, Massachusetts, Mississippi, Nebraska, New York, North Carolina, Rhode Island and Washington. If you are currently licensed in a participating state, you will need to transition your current licensing information into the database by the transition deadline. Each state TheNicheReport.com

is different; to find out your states deadline, contact Compliance Made Simple.

Looking into the future There are a number of states that have expressed their commitment to participating in the NMLS. These states are projected to go online with NMLS sometime in 2008 and 2009. States included are Alabama, Arizona, Arkansas, Connecticut, District of Columbia, Georgia, Louisiana, Maryland, Michigan, Missouri, Montana, New Hampshire, New Jersey, North Dakota, Oklahoma, Oregon, Pennsylvania, South Dakota, Vermont and Wyoming. Conclusion The regulatory burdens affecting the mortgage professional are ever changing and this new licensing system has added another layer of requirements with the intent to streamline the mortgage licensing process, enhance consumer protection, and fight fraud and predatory lending practices. George H. Marentis is President/CEO of Compliance Made Simple, LLC, a company that provides licensing services and other compliance related services to the mortgage lending industry nationwide. For more information see www.compliancemadesimple.org or call them at 303.859.8550. Mr. Marentis has a Juris Doctorate and over 15 years of mortgage lending experience ranging from frontline operations, origination to regulatory and legislative compliance. Information provided in this article is not intended to be considered legal advice, seek advice from in-house counsel or outside attorney.

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What you are really selling isn't a mortgage,

IT'S A RELATIONSHIP Start with a solid foundation. BY STEWART MEDNICK

â&#x20AC;&#x2021; ou are not selling a unique product; you are selling a unique relationship. You want to create customers from prospects, strangers, acquaintances or cold calls. You are attempting to do this by promoting the same products from the same vendors as thousands of others doing the same thing; trying to make a living. Retention and service should be a focal point of your business plan (do we all have a business plan?). How is this done if you are not offering a unique product or unique services? Offer a unique relationship! Your current and past clients like you for a reason and will do repeat business with you for a reason; what is that reason? When a person contacts you or if you engage a person with a phone call and they start talking mortgage, the sale is made. The only variable that needs to be determined is if that person will do business with you or someone else. That person is talking about mortgages because they are interested. You do not have to sell a mortgage to that person; they want it! You need to sell a relationship so the customer wants to do business with you. To develop sales relationships successfully, you should consider three questions that will help you understand yourself and determine how to approach potential customers.

SWOT Analysis First, ask yourself why a customer does business with you.

That is, what sets you apart as a unique individual? To answer, you must analyze your strengths, weaknesses, opportunities and threats (SWOT). This is a common tool in marketing and business planning. Strengths and weaknesses are the two categories that focus on you. What attributes and skills did previous customers like about you? What have you not done well? For example, a strength of yours may be your ability to communicate the mortgage process understandably. Perhaps a weakness is your inability to clear loan conditions in a timely manner. I have coached and trained many mortgage professionals over the years. One suggestion I always talked about is a questionnaire that your customers should fill out when the loan closes, so you can have feedback about your performance in serving the customer. Here is a good time to use that information. I will touch on the questionnaire topic a bit further in this article. A weakness most of us have, is the lack of communication with past customers. Even if a good price or the lowest interest rate was the reason a past customer decided to work with you, they stayed working with you because of the relationship you cultivated. Donâ&#x20AC;&#x2122;t loose that customer base. The customers that have worked with you are your best form of repeat business. Opportunities and threats describe your environment. You have no control over these factors, but you need to know them to perform your services successfully. Opportunities refer to favorable conditions in the environment that could produce rewards if acted upon properly. Low interest rates

would be an example. Threats are barriers or conditions that may prevent you from reaching your business goals. Threats can include a weak economy or a saturated market. Opportunities and threats are external conditions that change frequently and must be accepted. Threats, like opportunities, must be acted upon to prevent them from limiting your capabilities. Just because rates are high, for example, does not mean you should stop selling products; just change your product or program offerings to meet the challenges. In the same spirit of acting on a threat, an opportunity also can slip away if not acted upon. When rates dip low enough to refinance that client with whom you have been building a relationship for the past four months, you need to move fast before the rates jump again. You also should understand that not everyone defines the same environmental dynamic the same way. An opportunity to one person might be a threat to another. Still, you can find opportunity in every threat. Ask yourself if customers do business with you because of your strengths. Are you able to convert your weaknesses into strengths and create a value-added proposition for the customer? How do your strengths relate to the opportunities or threats that you are operating within? What I have found to be true through my own experiences is that every weakness can be converted into strength some how and some time. I have also found that the threats that one defines is a parallel to oneâ&#x20AC;&#x2122;s own weaknesses. This is not a literal correlation, but generally it is true. This is because TheNicheReport.com

our weaknesses create our fears. Our fears define what threaten us. This correlation is similar for strengths and opportunities. Using a SWOT analysis is great for understanding who you are and where improvements can be made. Let’s get back to that questionnaire. This is a simple document with six or eight simple questions the customer can answer. The choices for answers can be simple and of three choices: positive, neutral, or negative. The scale of one to ten is too pensive for some one who just closed a loan on their house. Keep it simple. The questions can be and should be straight forward; “Did I meet your expectations in customer service?” “Would you recommend me to others?” And have one question for a fill-in-the-blank; “Use three words to describe how you would sum up this experience.” The only way you can improve your business and relationship skills is to know what to improve. A questionnaire is a good tool to aid you.

Be Authentic The second question you should ask yourself is: Are you being yourself or someone you think customers want you to be? If you are not authentic, it comes across to customers, and you will not gain their business. This is an important aspect of building new relationships, yet it is seldom talked about. Here is how I believe this works. In short, every living thing emits energy (a.k.a., an aura, a presence, a life force, etc.). A network of sorts is created with all living things in this world that blankets our “people space” on this earth. As part of this 18

June 2008

immense network of energy, we can either strengthen the network or disrupt it. This is where I believe gut feelings are derived. Ever meet someone and feel like you have known that person all your life? Ever walk away from a conversation and think to yourself how much your enjoyed being in that person’s presence? On the other hand, ever feel very uncomfortable around someone? Ever wonder why a dog will lick the hand of someone, but growl at another person for no apparent reason? Positive energy is received as a “feel good” sense. If your energy field resonates with someone else, then the two of you will get along famously. When you try to be someone you are not, you emit a false or negative energy. This causes a rift in the energy sent to your clients, and they subconsciously sense something wrong in who you are, or trying to be. They respond defensively or indecisively, and you will have a difficult time earning the client’s trust. But if you are authentic, others sense positive energy and will feel comfortable around you. This feeling is not necessarily a conscious thought or action, but it is present, nonetheless. It is OK to not be the best in most closed loans, or revenue, or years in business. It is important to be authentic in all you say. “…I am not the most experienced mortgage banker in the area, Mr. and Mrs. Homeowner, but I can authentically say that I have a passion for ensuring that my customers are treated with respect, honesty, and with open communication….” If you do not know an answer to a question, tell your customer that you do not know the answer, but you will get it to him

or her within 24 hours. Then call that person back that evening and impress them with your diligence.

Listen to Others Like You Want Them to Listen to You The third question is: Do you listen to customers actively or passively? The difference shows when you answer or respond. When you listen actively, you answer questions based on what you hear. When you listen passively, you respond with affirmations such as, “I understand,” “I agree” or “Good.” This is not a way to engage customers. Often, we respond simply because we subconsciously hear that others stopped talking. The proper way to engage people in conversations is to take notes, repeat what they say and ask open-ended questions that may be as simple as, “why?” Use the questions to direct the conversation in the direction you want it to go. This is also a great time to listen to the “mortgage nonspecific” information. Take note of the spouse’s name, the children’s names, favorite colors, TV shows, foods, past time activities, etc. The next conversation you have with the customer, toss in a trivial bit of information that you gleaned from the conversation. “Hi Robert, how is Janie and Billy today? Did his cut knee heal yet? I bet Fido likes to lick Billy’s knee all the time….” By using personal information that you picked up in the initial conversation, you show that you care and that you have actually listened to what was said. This is also important to drive the conversation so you can learn as much as possible about your customer. Put these simple techniques

Gloom is the New Black. Predictions of economic ruin seem to be very much in fashion these days. But behind all that doom and gloom, there will certainly be some new opportunities. A hard money loan may be the ideal way for your clients to seize an opportunity or solve a problem. Despite these difficult market conditions, Avatar is financially stable and has plenty of capacity to fund new loans. We can fund loans from $1 million and up; with closing in as little as two weeks. So if you’re ready to deal, we’re ready to listen. Call us today at 888.896.0083 to discuss your loan or visit www.avatarfinancial.com for more information.

A different kind of loan. A different kind of lender.

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into action and you have a big piece of the sales relationshipdevelopment puzzle in place. These actions will help create a benefit that will equate to added value in your new customers’ eyes. Read the “Tip of the Month” in the May, 2008 issue of The Niche Report for a bit of insight about how the benefit you offer customers will equate to their perceived value of doing business with you. Remember that the environment in which you operate is ever-changing. Your skills and knowledge change as well, so performing a SWOT analysis monthly is a great idea. Be yourself, and show customers you are interested in them. After all, building a relationship is like building a house; you must start with a solid foundation. If you understand your future clients and your own skill sets, then trust and understanding will be the foundation of your business and client relationships.. Stewart Mednick is a seasoned mortgage banker and published author. His writing focuses on relationship development, customer satisfaction, marketing and sales techniques. Stewart is available for 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.

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GETTING TO KNOW LOAN TYPES Open up your options. BY ANDY BOGDANOFF

t’s a well known fact: a skilled broker can help a good business deal secure great financing. Some of the most significant value a broker can bring to the table can be seen in the early stages when a borrower is deciding what type of loan to pursue for a particular business deal. A skilled broker can help sift through the borrower’s circumstances and requirements in order to approach his investment banking partner with a deal that makes good sense for a particular kind of loan.

Collect Information to Provide Educated Guidance That first phone call with a borrower is full of opportunity to make an initial recommendation on the type of loan a borrower should seek. Brokers should use this as a Q&A session that ultimately provides information to help make this important decision. Questions that should be asked include how quickly the loan needs to close, what percentage of the total budget is going to be borrowed, and details on the property type as well as the condition of the property. With answers to each of these questions, a broker can make an educated recommendation to both the borrower and the lender about the type of loan that will satisfy the borrower’s needs. It’s important to note that this is also an ideal opportunity for the broker to weed out those opportunities that are simply not a good fit for the broker himself or his investment banking partner. The broker should effectively analyze the client’s needs and provide realistic counsel to them. In a perfect world the broker will be able to identify

a loan type that effectively meets the borrower’s needs, but he or she must be able to tell the client if the objective is off the charts. By making sure that he is only sending quality loan requests through the system, the broker is able to protect a well-earned relationship with his investment banking partner.

Loan Types – A Guide to Making a Recommendation The best way for a broker to accurately recommend a loan type to a client is to be intimately familiar with each loan and the circumstances under which it is normally offered. Let’s take a look at some of the more common loan types to understand what they mean and when they are most often used: Hard Money Loan This is typically always an asset based loan, which means that it will generally require a tremendous margin of collateral in order to protect the lender. Most times this type has a very low loan to value (anywhere from 25 percent to 60 percent of the value of the collateral the loan is being lent against), and is often recommended when a borrower needs to close the loan quickly. For instance, a hard money loan might be appropriate for a commercial property owner that is facing foreclosure if he doesn’t pay in the next 30 days. Or, a borrower that has been hit with a surprise situation – perhaps his original lender has backed out of the deal just prior to closing – might consider a hard money loan. Because a hard money loan normally does not entail a full credit review, it does not have to go through the complete underwriting process. This means that the loan can be closed in as few as three to four days. TheNicheReport.com

Bridge Loan This is a temporary loan that is meant to bridge the gap from Point A to Point B, which is usually defined as a finite point of time. These loans are not generally high priced, though the bridge lender might charge more because he is only earning interest for a defined, often short, period of time. A bridge loan would be appropriate for a commercial property owner that wants to sell one property and purchase another. This property owner might take out a bridge loan based on the equity of his existing property, which has not yet sold, in order to cover the gap of the funds needed to purchase the new, more expensive, property. Using the equity in the first property to bridge to the new property enables the property owner to solve a temporary need. Bear in mind that if a borrower requests a bridge loan, but can not define an exit strategy for how and when the lender will be paid back, the lender will most likely convert the loan to a hard money loan. Permanent Financing Much like a home mortgage, permanent financing is a loan type with a long term payout. It is normally used for stabilized income producing properties – office buildings, apartment houses, shopping centers – where there are contractual obligations to make payments every month on the part of a tenant that gives the owner enough money to pay the mortgage. Permanent loans have low, fixed rates and long-term amortization where principal and interest are paid every month. Permanent commercial loans provide a caveat to protect the lender from offering a below market rate for too long a period of time. Unlike a mortgage loan, which offers the same rate for a long period of time such as 30 years, a permanent commercial loan generally requires the borrower to pay a balloon payment after a five, seven or ten year term. The lender often will offer the borrower a new loan, but at a higher rate so that the lender is protected for another term but with a more current interest rate. Construction Loans Obviously stated, construction loans were created to assist in the building or remodeling of commercial properties. These loans generally require the borrower to have expertise in the construction business, are normally interest only and carry a short term. Construction loans are often considered glorified bridge loans because the construction lender provides a loan to 22

June 2008

cover the period of time that the project is being built, but not afterward. In many cases, a construction lender will not provide a loan until they know that permanent financing has been secured and understand all the details of that loan. In short, construction lenders only want to absorb the risk that the project will not be completed, nothing else.

Mezzanine Loans Mezzanine loans are, in essence, second mortgages on commercial properties. With a mezzanine loan, a lender is making a loan behind another loan. For instance, if a borrower is purchasing a property for $10 million and has secured $7 million in permanent financing from his bank and $1 million from private investors, a mezzanine lender might fill in the remaining $2 million investment. Because the risk to value of a mezzanine loan is high, interest rates are typically higher, too. This makes sense when you consider that a mezzanine lender does not receive one cent of payment until the senior lender is paid off in full. Funding Deals That Make Sense Every day, hundreds of times a day, brokers request one or more of these specific loan types from their investment banking partner. No specific type of loan is in vogue or is more popular than another, since defining a loan type truly depends on the circumstance of the borrower and the specific details of a commercial project. That’s why it’s critical that brokers are well educated about loan types and under what conditions each is typically used. Brokers must be able to work with their clients in realistic ways to share the details of different loan types in order to meet the borrower’s needs. Brokers would be doing a disservice to their customers, their banking partners and themselves by taking a loan application that they know will not receive financing. The same is true if a broker walks away from a deal without exploring if an alternate loan type might be appropriate. The best strategy is for a broker to know the lending options and work with a reputable investment banking partner to fund deals that make sense Andrew Bogdanoff has more than 35 years commercial lending experience and founded Remington Financial Group in 1993. He has served as the company’s president since its inception, and under his leadership the company has grown to a closed transaction rate of well in excess of $2 billion. Andy can be reached at andy@ remingtonfg.com or 480-905-3239. For more information on Remington Financial Group, please visit www.remingtonfg.com.

STREAMLINED DREAMS Find your niche in FHA's 203(k) loan program. BY MICHAEL PAVELCHIK

ave you ever had someone call you up looking to purchase a home that needed repairs? Or, maybe they had enough money for a small down payment but the home had a list of things that needed to be done to make it perfect? Well, in the past there were companies that specialized in “Repair and Remodel Loans”. These were problematic for a variety of reasons. Generally, the person wanting these loans would have to be on title for twelve months before they could assume any equity out of a property. In order to help revitalize run down areas, a seasoned FHA lender could use a 203(k) loan to step in and save the day. These were more arduous than the “Repair and Remodel Loans” and involved fee advisors, engineers, multiple appraisals and inspections. The plan would have to be approved by a HUD reviewer. The process could easily frustrate everyone involved. Many people tried to do 203(k)’s and it left many vowing to never do it again. But in today’s market, with all of the foreclosed properties coming to market, now is the time to consider using it again. Bank owned properties offer a great value for home buyers. Often these houses have not been left in the best shape and banks are quick to discount these homes to get them off their books in “As-is” condition. This is where a savvy lender will search out the allusive “203(k) streamline” loan. Imagine being able to call up a Realtor that you have never met before to tell them that you can get a less than perfect borrower qualified to buy a less than perfect house AND get them the money they need to fix up the property using the “As To Appraised Value” while requiring as little as $100 of the borrower’s own money. This program can be used in conjunction with other 24

June 2008

programs. This means that you can buy a HUD REO that is 203(k) eligible; this means that you can use down payment assistance program; and this means you can use the Energy Efficient Mortgage program all together. If you take the time to study and learn, you could set yourself aside from other lenders and position yourself in the forefront of a coming market. In 2005, HUD changed the 203(k) streamline loan. They increased the money available for repairs from $15,000 to $35,000. The money still cannot be used for landscaping, it can not be used to increase the square footage of living space, nor can it be used move or change any structural elements. But, what you can do should earn you enough business to right a sinking ship. Here is what you can do - even on refinances - from “Mortgagee Letter 2005-50”: “The Streamlined (k) program is intended to facilitate uncomplicated rehabilitation and/or improvements to a home for which plans, consultants, engineers and/or architects are not required. The Streamlined (k) program includes the discretionary improvements and/or repairs shown below: • Repair/Replacement of roofs, gutters and downspouts • Repair/Replacement/upgrade of existing HVAC systems • Repair/Replacement/upgrade of plumbing and e lectrical systems • Repair/Replacement of flooring • Minor remodeling, such as kitchens, which does not involve structural repairs • Painting, both exterior and interior • Weatherization, including storm windows and doors, insulation, weather stripping, etc.

• Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens • Accessibility improvements for persons with disabilities • Lead-based paint stabilization or abatement of lead- based paint hazards • Repair/replace/add exterior decks, patios, porches • Basement finishing and remodeling, which does not involve structural repairs • Basement waterproofing • Window and door replacements and exterior wall re-siding • Septic system and/or well repair or replacement” There are a few caveats involved. The money is escrowed for the repairs. You can have up to three contractors that can only get two draws each. They can get up to 50% in their first draw. If the total repairs are less than $15,000, then the owner can sign off with receipts that the work has been done to their satisfaction. If the repairs total more than $15,000 then a third party inspector must

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verify the work has been completed before the final checks will be cut. This loan product is growing and will become a great tool to increase your market share. Any FHA approved lender can originate a 203(k) streamline loan. As more and more companies search for more loan volume you will see more of these offered to brokers and correspondents. In terms of the secondary market for these loans, once the loan is closed it is not limited to clear only through Ginnie Mae, but can also be cleared through Fannie Mae. I urge you to do your research and become knowledgeable with the 203(k) streamline loan. As we all move forward, we can help banks dispose of REO’s. We can make new realtor contacts. And we can help borrowers obtain their dream homes while securing our own futures through these tough times Michael Pavelchik. Mortgage Relationship Officer. Northpointe Bank FDIC Insured. Member FHLB. Equal Housing Lender. www.npbank.com.

AU CONTRAIRE Why would anyone want to invest in a mortgage loan today? BY MARK CRAWFORD

Why would anyone want to invest in a mortgage loan today? Because good loans are made in bad times and bad loans are made in good times. The problem loans the market is currently experiencing were originated in “good times,” years 2005-early 2007. Today’s loans are different. They are originated at substantially lower property values (15-40% decrease) and loan amounts are typically no more than 65% loan to value. Borrowers are also expected to have the ability to repay the loan as future value appreciation is no longer considered. These loans are an alternative for the real estate investor faced with projected flat equity returns for the foreseeable future. The current credit crunch has excluded many borrowers who have substantial equity in their property and the ability to repay the loan. The increased lending standards by the banks have opened an opportunity for private Trust Deed Investors. Who’s the Borrower? The borrower who turns to private equity includes all types. Some have foreclosures and credit problems but many have other circumstances ranging from cash strapped small business owners, “cash generating retail” business owners who show little income on tax returns, probate and estate tax expense needs, medical crisis expense needs, investment property owners, etc. Valuation The best time to invest/lend in the real estate cycle is not at the “top” as we have seen with the current loan problems, but near the bottom with future property

declines limited. 10-30% Market declines have already occurred. Historically, down turns level off at 20-30% so the market bottom is near. Additional down side risk is probably no greater 10%. If one has to foreclose on property originated in 2008, the lender should be well positioned in the market if the loan to value is 65% or less.

Risk Management Underwriting is the key to managing risk. The collateral value must be appropriately verified and the borrower must have the ability to repay the loan with a future exit strategy to either sell the property or refinance into a lower cost loan once credit is improved. Property valuation is a three step process. First, obtain a full appraisal of the property by a licensed appraiser. Second, perform an in-house evaluation of the property value considering its location and condition. Take market factors into account such as areas with unusually high foreclosure rates or other economic issues, e.g., industry shut downs, seasonal work areas, long commutes to work places, remoteness of property, etc. Third, obtain a Broker Price Opinion of the property. These are free and a local real estate agent familiar with the area can provide it. These three valuations can be used to determine a realistic value. The borrower must have the ability to repay the loan. “Stated income” loans are a relic of the past. Today’s loans are underwritten in a traditional mortgage banking manner, the borrower must have the ability/ capacity to repay the loan. Employment and income should be verified. Burdensome consumer debt should be eliminated out of loan proceeds so that the borrower ends up with lower monthly payments subsequent to TheNicheReport.com

the loan. This should effectively increase the borrowers FICO score enhancing the borrowers credit for a future refinance exit strategy into a lower cost loan. Congress passed a relief provision to assist with housing effective June 1, 2008. HUD loan limits were raised in higher priced communities to more appropriate levels, e.g. from 300,000’s to 700,000’s. This act will allow borrowers with credit issues to obtain government products which were not available to them previously. Consequently, if a borrower can remain current on their mortgage payment for 12 or 24 months, they can refinance into a HUD loan at lower interest rates. This is powerful exit strategy for private trust deed borrowers.

Property Types The property types include single family residences, one to four units, 5+ apartment units and commercial properties, owner occupied or non-owner occupied. Investment Trust Deed Investments yield double digit returns. Typical rates are from 12% on 1st liens to 14% on 2nd liens. Mortgages typically begin at amounts of $50,000+

for 2nd Trust Deeds/ HELOC’s. The average 1st Trust Deed typically begins at amounts of $100,000+. The investor receives monthly payments of interest. The loan's average life is 18-24 months.

Foreclosure Costs If the borrower fails to pay interest, foreclosure proceedings might have to occur. The costs range from $2,000-$5,000 for a single family home and take approximately 4-6 months. If the lender lent no greater than 65% of the property value, the lender can typically foreclose and emerge with at least collateral preservation. So why would any one want to invest in a mortgage loan today? Because market values have declined and loans made today are made on a lower loan to value. If borrowers have equity in their homes, they do not walk away; they either sell or find a way to make the payments. Article written by Mark Crawford, CEO Crawford Park Financial Inc. 626-796-7979. Agency representing Mark Crawford is Acro Agency, rick@acroagency.com.

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CENTER STAGE

CENTER STAGE WITH METRO FUNDING Making hard money easy. BY THE NICHE REPORT

his month, The Niche Report would like to introduce you to a hard money lender that sets itself apart from other lenders in the industry by its flexibility, innovation, and outstanding customer service. Perhaps most importantly, Metro Funding Corp. prides itself on JENNIFER SMITH operating with the highest level of integrity. Vice-President of Metro Funding, Jennifer Smith, was kind enough to sit down with us to offer a behindthe- scenes look at the history of the company, the products they offer, and the advantages to utilizing their services in this real estate market.

‘hard’ collateral) that is provided. This differs from conventional lenders in the sense that a hard money lender will not focus on the borrower’s credit and income to qualify a loan and will not require a lengthy, paperfilled, underwriting process. Metro can close loans within a 2 to 3 week timeframe with the focus of the loan being the value of the real estate collateral. Most borrowers come to us because they need a ‘bridge’ to get them from point A to B. Frequently, Point B is a conventional or more permanent lender. Maybe they need time to repair their credit, maybe they need time to establish a steady income stream, or maybe they need working capital. Whatever the problem is, we are their temporary solution.

Give us a little bit of the history of how Metro Funding Corp. was started.

So, what sets Metro apart from its competitors? Bottom line: lower upfront costs. You get a lender that cares. As I mentioned earlier, we are firm believers that we should only make money when our borrowers make money. For that reason, our fees are taken from loan proceeds at loan closing. Having said that, we keep the process simple and we keep the focus on closings. We know issues are going to arise for us or for the borrower, but it’s how you overcome the issues that set lenders apart. Each transaction requires a unique way of thinking. You can’t apply the same rational to a land loan as you do to a restaurant or a hotel. Likewise, each borrower’s circumstances are different and require creative solutions. We feel our borrowers deserve a lender that will “roll with the punches” with them and “think outside the box” when necessary.

As all businesses do, Metro Funding Corp. began as an idea in someone’s head. That someone in our case was David Hecht. After 20 years of working in the real estate industry, David recognized a need in the assetbased lending marketplace and formed Metro Funding under the premise that commitment fees would be paid at loan closing. He firmly believes that a lender should only be paid when the borrower gets paid. What can a borrower or a mortgage broker expect when they come to Metro? Metro offers borrowers quick closings on “nonbankable loans.” By definition, a hard money loan is made using the value of the real estate collateral (or 30

June 2008

CENTER STAGE

What recommendations do you have for borrowers or mortgage brokers that are working to get a hard money loan closed? The major requirements to get a hard money loan closed are a strong asset and the ability to contribute equity to the transaction. Without these, there is no loan. Assuming those requirements are met, then persistence and cooperation are essential. I work with a network of excellent mortgage brokers throughout the country. The brokers that really stand out are the brokers that stay on top of their loans. They work hard for their borrowers and educate them about the options that are out there for their particular loan. My advice to brokers right now is to keep trying and don’t give up. Now, more than ever, is when hard money loans are most useful and can provide the biggest benefit. How does Metro fund loans? Where does the money come from? We write the checks! I say it that way because there seems to be a growing epidemic of companies portraying themselves as lenders, but all they do is take loan applications and shop them to real lenders and collect a fee for this service. That is not the case with us. We have three sources of capital. The major one is our balance sheet - we have a revolving warehouse line from a major institution. The second source is our proprietary capital. Our principals personally participate in the funding of all our loans. Lastly, we have two hedge funds that were started by and managed by our prin-

cipals. The hedge funds are made up of family offices, institutions, and high net worth capital. These three sources make Metro Funding unique in that we are quick to approve loan requests and have the final say. How is Metro affected by the current market swing and what do you foresee for your future? We have been seeing an increase in the amount of loan requests and closings. We attribute this to the fact that institutional banks have tightened their underwriting guidelines and are turning away more loans. A loan that previously would have qualified for a conventional loan is not meeting the new requirements, so hard money is the next avenue for them. In general, we look forward to growing our portfolio in size and strength and offering added flexibility to our borrowers. Recent market conditions opened up some new opportunities for us. Our newest endeavor involves the establishment of a private equity fund designed to acquire distressed properties. Metro strongly believes in corporate social responsibility. As a result, we are also launching a ‘Green Incentive Program’ which will offer borrowers lower rates for projects promoting “environment- friendly” technology. Ms. Smith attended Rutgers University where she received a BA in Psychology and Spanish. Ms. Smith serves as a member of the Garden State Real Estate Investors Association, and is an affiliate of the National Real Estate Investors Association. Jennifer can be reached at jennifer@metrofundingcorp.com.

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TIP OF THE MONTH

TIP OF THE MONTH Cancelling mortgage insurance – who it helps and how it's done. BY STEVEN RICHMAN

orrowers considering financing a house with less than 20 percent down soon learn about mortgage insurance and the other options that make low down payment mortgages possible. But many don’t realize they won’t be locked into mortgage insurance (MI) for the entire term of the loan. MI is usually cancelable once the borrower’s equity in the home reaches 20 percent. It’s one low down payment option that actually saves your customers money in the long term, and can help you close more loans. That’s good news for first-time homebuyers and other borrowers seeking low down payment home financing. Loans secured with mortgage insurance provide the safety and security borrowers want in today’s volatile mortgage market. The past few years have taught today’s buyers to be wary of risky exotic financing tools such as Interest Only, Pay Option ARM and piggyback mortgages. That’s why the idea of a traditional fixed-rate mortgage with MI has become so attractive to so many. MI loans aren’t subject to interest rate resets, and monthly payments decrease when the borrower builds enough equity to cancel the insurance. An analysis by Wharton School of Business Professor Susan M. Wachter earlier this year found that payments on a standard MI loan can drop almost 10 percent over five years. According to Mortgage Insurance Companies of America (MICA), 90 percent of borrowers cancel their mortgage insurance within the first 60 months. As a lending professional, you know that every penny you can save for your customer is a win. Mortgage insur32

June 2008

ance doesn’t just benefit your customers by getting them an affordable, safe low down payment mortgage. It also provides a great selling point for brokers and loan officers who can promise customers that their monthly mortgage payments will go down when the MI is cancelled in the future. MI also provides additional benefits including homeowner assistance programs and job loss protection in times of financial hardship. And the premiums are tax deductible. You might wonder how MI is cancelled. It’s automatic on most recent loans, as mandated by The Homeowners Protection Act of 1998. This law requires that MI on the majority of loans originated on or after July 29, 1999 automatically be terminated when the mortgage is scheduled to amortize to 78 percent of the original value of the house as long as the borrower is current on all monthly payments. Borrowers with loans originated on or after July 29, 1999 may also request cancellation even earlier—when the loan is paid down to 80%—if the borrower has a good payment history, can demonstrate the property has not declined in value, and there is no subordinate lien. Lenders must inform homebuyers about this right to request cancellation at closing, and again on an annual basis. For loans originated before July 29, 1999, borrowers may still be able to request cancellation of their MI once 20 percent equity in the home is reached as long as they meet all requirements established by the owner of the loan (i.e., the investor). These requirements may be similar to those for cancellation under the Act, i.e., good payment history, satisfactory evidence that the property value has not declined and no subordinate lien. However, different investors may have other or different requirements. The cancellation process can be broken down into

TIP OF THE MONTH

three simple steps: First, a borrower should consider the amount of principal paid on the loan, any home improvements which could increase its value, and area home price appreciation. Then, the borrower should gather the necessary paperwork on the property and mortgage and call the loan servicing company to discuss any cancellation requirements, which might include a new appraisal and/ or more information about the home. Finally, the borrower should send the mortgage servicer a written cancellation request. A number of resources exist on www.privateMI. com to help borrowers through this process, including a Cancellation Calculator, sample appraisal and cancellation letter. You should also familiarize yourself with the process so you can inform your customers of this benefit when recommending loan options. Remember, MI 10:08 is a critical MyFHA-F.net 4/22/08 AM stepping Page 1 stone to more

Americans becoming homeowners in a responsible way. But it’s just that – a stepping stone, and often the best solution to get borrowers into a home sooner and more affordably. Steve Richman, Genworth Financial.

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www.jumboFunder.com

Online Financial Group

703-307-7006

www.ofglending.com

Community Commerce Bank (Commercial)

916-648-2680

www.ccombank.com

Royal Crown Bancorp

877-507-6925

www.crownloan.com

Global Lending Group

727-530-0110

www.glgiwholesale.net

Wilmington Finance

405-227-1152

www.wfbroker.com

NONPRIME Premium Listings

Alternative Lending Solutions, Inc. 703.365.7800

Non Conforming allowing cash out to 95% LTV with 620 score, Allowing unlimited 30 and 60 day lates in past 12 mos

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.

TheNicheReport.com

NICHE REPORTS

NONPRIME premium niches continued…

Emigrant Mortgage Company, Inc. 1.800.EMIGRANT (364.4726) Ext Mid-Atlantic

Gregory Funding LLC

NINA financing for applicants with Ficos below 600, max LTV 60%, Loan Amounts up to $1mm+ considered. LowDoc (Income Verification) financing for foreclosure bailouts also available up to Max LTV of 60% Direct Portfolio lender specializing in funding loans traditional lenders cannot. NOD or BK OK. No Credit Score. No Pre-payment Penalty. Up to 75% LTV. Loan amounts up to 3.5M. Lending territory: AZ, CA, CO, ID, NV, OR & WA

888.324.3578

National Business Finance

Guaranteed Permanent Financing for residential Subdivisions at bank rates and terms in conjunction with our Building Materials Program

954.495.4791

New South Federal Saving Bank 866.582.5901

Windvest Corporation

Portfolio Lender, Correspondent and Broker channel, 90% Purchase / 85% Cash-out with 550 Credit Score, 85% Purchase / 80% Cash-out with 550 Credit Score, 80% Purchase / 75% Cash-out with 525 Credit Score, 70% Purchase / 65% Cash-out with 500 Credit Score. States we lend AL, AR, AZ, FL, GA, IN, KY, LA, MD, MO, MS, NC, OK, SC, TN, TX, and VA Specialists in SFRs, small to medium loan amounts. All programs are 30 year fixed with no prepay. No upfront fees and generous broker commission packages. Same day approvals

877.285.0777 NONPRIME Lender Listings Sponsored by Lenderlab.com AgriCap Financial Corporation

213-542-5232

www.agricap.com

JMAC Lending

877-841-0776

Alliance Financial, Inc. (Hard Money)

866-603-5999

www.afiloans.com

Just Mortgage, Inc.

714-860-8867

www.jmaclending.com www.justmtg.com

American Home Equity Corporation

714-661-5800

www.ahedirect.com

Mager Capital (Hard Money)

310-760-6290

www.magercapital.brokerca.com

American Mortgage Exchange

443-375-0973

www.american-mortgage.info

Online Financial Group

703-307-7006

www.ofglending.com

Avant Capital Partners, LLC. (Commercial)

212-219-9419

www.avcapital.net

PB Financial Group Corp. (Hard Money)

310-289-0900

www.pbfinancialgrp.com

Senderra Funding

704-831-3600

www.senderra.com

www.cfacap.com

St. Cloud Mortgage (Commercial)

877- 653-3276

www.farmerloan.com www.titanhardmoney.com

Central Tejas Capital Group, Inc. (Commercial) 317-351-8037 CFA Capital Partners (Commercial)

914-967-5780

Chevy Chase Bank

866-591-4355

www.chevychasewholesale.com

Titan Hard Money (Hard Money)

323-377-0979

Community Commerce Bank (Commercial)

916-648-2680

www.ccombank.com

United Residential Lending

404-661-4632

www.urlending.com

Eastern Savings Bank (Commercial)

800-787-8187

www.easternsavingsbank.com

WholesaleLending.com (Commercial)

866-303-6301

www.wholesalelending.com

Wilmington Finance

405-227-1152

www.wfbroker.com

Eastgate Equities (Commercial)

800-997-7244

Fifth Third Bank

866-492-0072

www.53.com/wholesalemortgage

Flagstar Bank

800-897-7222

www.wholesale.flagstar.com

Gaukroger Enterprises, LTD. (Hard Money)

510-677-9464

Global Lending Group

727-530-0110

www.glgiwholesale.net

Icon Residential Capital

888-639-5641

www.iconrescap.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 lender’s information on products, program, procedures, representations, and warranties for details.

June 2008

NICHE REPORTS

HARD MONEY Premium Listings

Anglo-American Financial, LLC

DIP (Debtor-in-Possession) Financing Available

434.981.1017

Anglo-American Financial, LLC 512.657.9310

Avatar Financial Group 888.896.0083

Fairview Commercial Lending 866.634.1270

First Mount Vernon

Asset-based lending on real estate, consumer receivables and other readily marketable assets Bridge loans for improved commercial real estate from $1 million, terms up to two years with no prepayment penalties. We are a direct lender and brokers are protected. Apply online at www.avatarfinancial.com or simply give us a call No minimum credit score, foreclosure bailouts, Quick Closings nationwide, commitments in 24 hours

866.908.FMV1 (3681)

No seasoning requirements, No upfront commitment or processing fees, Minimum credit score 400

First Mount Vernon

Minimal documentation required, Combined Loan-to-Values to 105%

866.908.FMV1 (3681)

Lansdowne Mortgage

Smart Residential lending in Florida - up to a 65% ltv

305.740.9988

888.456.0246

FC Bailouts - No FICO requirements. Focused strictly on the residential market. Tech oriented direct hard money lender. Consistent Guidelines Great Service!

Manaseh, Epharim & Associates

Private hard money financing for commercial real estate investments

LJL Funding

678.387.3230

Metro Funding Corp 866.302.6360

Fast closing, no points upfront, all commercial properties including land, acquisitions, refis, and development loans

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.

TheNicheReport.com

NICHE REPORTS

HARD MONEY premium niches continuedâ&#x20AC;Ś

Remington Financial Group, Inc.

Up to 65% of valued collateral, fast closing

480.905.3239

Unifund Financial Group Inc.

Direct lender specializing in HELOC 1st and 2nd position loans between 25k-250k

619.987.1083

Windvest Corporation

Specialists in SFRs, small to medium loan amounts. All programs are 30 year fixed with no prepay. No upfront fees and generous broker commission packages. Same day approvals

877.285.0777 HARD MONEY Lender Listings Sponsored by Lenderlab.com Advantage Capital Equity Solutions

800-223-3019

www.adcapequity.com

Investor Funding

864-213-3951

www.4investorfunding.com

AgriCap Financial Corporation

213-542-5232

www.agricap.com

J & J Financial

714-256-4416

www.10dayloan.com

Alliance Financial, Inc.

866-603-5999

www.afiloans.com

Lakeside Financial Inc.

949-297-4180

www.nofico.net

American Acceptance (Commercial)

800-452-9287

www.aamcap.com

Lib Properties, LTD.

404-256-8600 www.libloans.com

Avant Capital Partners, LLC. (Commercial)

212-219-9419

www.avcapital.net

Mager Capital

310-760-6290

www.magercapital.brokerca.com

Bay Equity

800-229-3703

www.bayeq.com

Magnolia Financial Consultants (Conventional) 601-428-1005

www.hardmoneymortgages.com

BFS Capital, LLC. (Commercial)

510-381-1930

www.bfscapital.com

Meridian Group

BlueWater Funding, LLC

301-656-6566

www.bluewaterfundingllc.com

MiStar Financial (Commercial)

720-200-2600

BlueWater Funding, LLC

866-551-2583

www.bluewaterfundingllc.com

My Discount Mortgage

832-276-0979

California Equity Lenders

818-584-2320

www.calequitylenders.com

Normandy Mortgage

760-220-4330

Central Tejas Capital Group, Inc. (Commercial) 317-351-8037

800-901-9301

Pacific Mortgage Funding Corp. (Commercial) 562-864-4006

www.mistarfinancial.com

www.pacificmortgage.com

CFA Capital Partners (Commercial)

914-967-5780

www.cfacap.com

PB Financial Group Corp.

310-289-0900

www.pbfinancialgrp.com

Commercial Hard Capital, LLC (Commercial)

832-607-6778

www.commercialhardcapital.com

Piedmont Capital Lending, LLC.

678-292-6984

www.piedmontcapitallending.com

Commercial Loan Capital (Commercial)

877-473-6984

www.clcloans.net

Porter Bridge Loan Company (Commercial)

866-725-1777

www.porterbridgeloan.com

Commercial Mortgages 101 (Commercial)

800-763-3036

www.commercialmortgages101.com

Remington Financial Group

480-570-0679

www.remingtonfg.com

Crawford Park Financial

626-796-7979

www.crawfordparkfinancial.com

SmartServ Solutions

888-633-4778

www.bronxhardmoney.com

www.cushrex.com

TCRM Commercial Corp. (Commercial)

212-371-3933

www.tcrmcommercial.com www.regd506.com

Cushman Rexrode Capital Corp. (Commercial) 925-988-7200 Diamond Bay Investments, Inc.

702-254-9303

www.diamondbayinvestments.com

The Loan Doctors, Inc. (Commercial)

954-647-7679

Eastern Savings Bank (Commercial)

800-787-8187

www.easternsavingsbank.com

The Money Source, LLC. (Commercial)

480-946-4000 www.themoneysourcellc.com

The Money Tree Financial Services LLC

718-256-3490

Titan Hard Money

323-377-0979

www.titanhardmoney.com

Unifund Financial Group, Inc.

619-573-0289

www.unifundinc.com

Eastgate Equities (Commercial)

800-997-7244

Emerald Financial

714-965-6688

Exeter Holding Ltd. (Construction)

516-338-7500

www.eprivatemoney.com

First Credit Commercial Capital Corp. (Cml.) 407-843-6262

www.fchardmoney.com

WexTrust Capital, LLC

212-643-6190

www.wextrust.com

First Mount Vernon Industrial Loan Association 703-823-6800

www.fmv1.com

WholesaleLending.com (Commercial)

866-303-6301

www.wholesalelending.com

Gaukroger Enterprises, LTD.

510-677-9464

Global Lending Group

727-530-0110

www.glgiwholesale.net

GMC Mortgage Capital

954-332-3567

www.gmcmortgagecapital.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.

June 2008

NICHE REPORTS

COMMERCIAL Premium Listings

AcuPen Financial

High LTVs, and low debt coverage ratio requirements

305.666.1879

Avatar Financial Group 888.896.0083

Fairview Commercial Lending 866.634.1270

Gregory Funding LLC 888.324.3578

Imperial Capital Bank 888.886.3279

Indymac Bank 866.908.3279

Great rates on commercial real estate loans, fully amortizing up to 25 years. Most property types considered including hotels, multi-family and special-use. Full doc is required for these competitive rates. Please call to request a rate sheet No minimum credit score, foreclosure bailouts, Quick Closings nationwide, commitments in 24 hours Direct portfolio lender specializing in funding loans traditional lenders cannot. Loan amount up to 3.5M. No Credit Score Requirement. Up to 70% LTV with full docs. NOD or BK OK. No Pre-payment Penalty. Lending territory: AZ, CA, CO, ID, NV, OR & WA Adjustable & fixed perm programs up to 80% LTV. Hybrid & Bridge loans available for most income property types. Flexible structures to meet the needs of the brokers and borrower Loans for Multifamily / Apartment Complexes (5+ units), Mixed Use (if Commercial is less than 35%), and Mobile Home Parks; purchase and refinance (including cash out); Hybrid ARMs and fixed product choices

877.337.3757

We're the real deal for subprime owner-occupied commercial mortgages to $2M. Credit scores to 500. Up to 90% financing. Low debt-service coverage. Stated & investment programs. Difficult-to-finance industries welcome

Manaseh, Epharim & Associates

Fast, flexible funding for all your commercial financing needs

Ocean Capital

678.387.3230

Metro Funding Corp 866.302.6360

Remington Financial Group, Inc. 480.905.3239

Fast closing, no points upfront, all commercial properties including land, acquisitions, refis, and development loans

Senior financing on existing real estate all property types, competive rates

TheNicheReport.com

NICHE REPORTS

COMMERCIAL premium niches continuedâ&#x20AC;Ś

Unifund Financial Group Inc.

Private money commecial lender specializing in income producing properties. Loan amounts to 4 million dollars

619.987.1083 COMMERCIAL Lender Listings Sponsored by Lenderlab.com Advantage Capital Equity Solutions (Hard Money)

800-223-3019

www.adcapequity.com

Mager Capital (Hard Money)

310-760-6290

www.magercapital.brokerca.com

Magnolia Financial Consultants

601-428-1005

Affinity Bank

877- 862-7245

www.affinitybank.com

(hard money/conventional)

www.hardmoneymortgages.com

AgriCap Financial Corporation

213-542-5232

www.agricap.com

Meridian Group (Hard Money)

800-901-9301

Alliance Financial, Inc. (Hard Money)

866-603-5999

www.afiloans.com

Midwest Financial Capital

317-844-7776

www.midwestfinancialcapital.com

American Acceptance

800-452-9287

www.aamcap.com

Mission Oaks National Bank

951-719-1200

www.missionoaksbank.com

American Commercial Capital

800-601-8801

MiStar Financial

720-200-2600

www.mistarfinancial.com

Arlington Richfield

248-613-7423

www.arlingtonrichfield.com

My Discount Mortgage (Hard Money)

832-276-0979

Avant Capital Partners, LLC.

212-219-9419

www.avcapital.net

National Business Finance

954-495-4791

Berkshire Capital Financial, Ltd.

212-986-9890

www.berkshirecapital.net

Pacific Mortgage Funding Corporation

562-864-4006

www.pacificmortgage.com

BFS Capital, LLC.

510-381-1930

www.bfscapital.com

PB Financial Group Corp. (Hard Money)

310-289-0900

www.pbfinancialgrp.com

800-531-4589

www.nationalbusinessfinance.com

Brownstone Mortgage Capital

800-547-1285

www.brownstoneloans.com

PFA Capital, LLC.

California Equity Lenders (Hard Money)

818-584-2320

www.calequitylenders.com

Piedmont Capital Lending, LLC. (Hard Money) 678-292-6984

Central Tejas Capital Group, Inc.

317-351-8037

PMB Capital, Inc.

818-222-1035

CFA Capital Partners

914-967-5780

www.cfacap.com

PNC ARCS

800-275-2727

www.askARCS.com

Ciena Capital

800-722-5626

www.cienacapital.com

Presidential Bank

301-652-1616

www.presidential.com

CIT Small Business Lending Corp.

404-244-4592

www.smallbizlending.com

Pribank

866-811-9217

www.pribank.com

Colorado Federal Savings Bank Commercial Division

303-771-1031

www.cofedbankcommercial.com

Prudential Mortgage Capital Co.

888-263-6800

Commercial Hard Capital, LLC

832-607-6778

www.commercialhardcapital.com

Remington Financial Group (Hard Money)

480-570-0679

www.remingtonfg.com

Commercial Loan Capital

877-473-6984

www.clcloans.net

Small Business Loan Source, LLC.

512-215-2727

www.adelinerem.com

Commercial Mortgages 101

800-763-3036

www.commercialmortgages101.com

SmartServ Solutions (Hard Money)

888-633-4778

www.bronxhardmoney.com

Community Commerce Bank

916-648-2680

www.ccombank.com

St. Cloud Mortgage

877- 653-3276

www.farmerloan.com

Crawford Park Financial (Hard Money)

626-796-7979

www.crawfordparkfinancial.com

STA Capital Group & Advisors

866-610-4141

www.c-loandivision.com

Cushman Rexrode Capital Corporation

925-988-7200

www.cushrex.com

TCRM Commercial Corp.

212-371-3933

www.tcrmcommercial.com

Diamond Bay Investments, Inc. (Hard Money) 702-254-9303

www.diamondbayinvestments.com

Terrace Capital

212-671-1031

www.terracecapital.com

Direct Lending Group (Hard Money)

888-354-6030

www.dlendinggroup.com

The Money Source, LLC.

480-946-4000 www.themoneysourcellc.com

www.easternsavingsbank.com

The Money Tree Financial Services LLC (Hard Money)

718-256-3490

Real Estate Lending Group, Inc. (Hard Money) 408-718-2218

www.picconefinancial.com www.piedmontcapitallending.com

www.prumortgagecapital.com www.relginc.com

Eastern Savings Bank

800-787-8187

Eastgate Equities

800-997-7244

Emerald Financial (Hard Money)

714-965-6688

www.eprivatemoney.com

Titan Hard Money (Hard Money)

323-377-0979

Equity One Commercial

407-370-7843

www.equity1commercial.com

Trilogy Commercial Lending, LLC.

877-726-9433

www.trilogycl.com

Excelsion Mortgage

888-578-5441

www.excelsionbrokers.com

Unifund Financial Group, Inc. (Hard Money)

619-573-0289

www.unifundinc.com

First Mount Vernon Industrial Loan Association (Hard Money)

703-823-6800

www.fmv1.com

Union Bank of California

877-945-2265

www.uboc.com

www.titanhardmoney.com

Unity Bank, Subsidiary of Unity Bancorp, Inc. 904-727-7535

GMC Mortgage Capital (Hard Money)

954-332-3567

www.gmcmortgagecapital.com

Van Corp Financial Opportunities, Inc.

941-927-3438

Griffin Capital Funding

800-710-6762

www.ysploans.com

WexTrust Capital, LLC (Hard Money)

212-643-6190

www.wextrust.com

Interbay Funding, LLC

877-207-6099

www.interbay.com

WholesaleLending.com

866-303-6301

www.wholesalelending.com

Investor Funding (Hard Money)

864-213-3951

www.4investorfunding.com

World Capital Bancorp, Inc.

888-922-3003

www.worldcapitalbanc.com

Lib Properties, LTD.

404-256-8600 www.libloans.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.

June 2008

NICHE REPORTS

CONSTRUCTION / REHAB Premium Listings

Brookview Financial 877.734.2211

Brookview Financial is a National rehab lender licensed in 37 states, specializing in forming successful financing and mentoring relationships with rehab investors at all levels of experience

Manaseh, Epharim & Associates

Private lender specializing in commercial real estate loans nationwide and internationally

678.387.3230

Metro Funding Corp

Fast closing, no points upfront, all commercial properties including land, acquisitions, refis, and development loans

866.302.6360

100% LTC Worldwide Non Recourse International Commercial and Residential Subdivision Projects (including land acquisition, development, buyouts and mezzanine funding)

National Business Finance 954.495.4791

866.582.5901

Conforming and Non-Prime Single Close Construction Perm, and "Home Improvement Plus", Full Doc only. States we lend AL, AR, AZ, FL, GA, IN, KY, LA, MD, MO, MS, NC, OK, SC, TN, TX, and VA

Remington Financial Group, Inc.

Up to 95% financing construction, rehab, renovation, development

New South Federal Savings Bank

480.905.3239 CONSTRUCTION / REHAB Lender Listings Sponsored by Lenderlab.com Advantage Capital Equity Solutions (Hard Money) 800-223-3019

www.adcapequity.com

Commercial Mortgages 101 (Commercial)

800-763-3036

www.commercialmortgages101.com

Affinity Bank (Commercial)

www.affinitybank.com

Community Commerce Bank (Commercial)

916-648-2680

www.ccombank.com

877- 862-7245

Alliance Financial, Inc. (Hard Money)

866-603-5999

www.afiloans.com

Cushman Rexrode Capital Corp. (Commercial) 925-988-7200

www.cushrex.com

Arlington Richfield (Commercial)

248-613-7423

www.arlingtonrichfield.com

Diamond Bay Investments, Inc. (Hard Money) 702-254-9303

www.diamondbayinvestments.com

Avant Capital Partners, LLC. (Commercial)

212-219-9419

www.easternsavingsbank.com

www.avcapital.net

Eastern Savings Bank (Commercial)

800-787-8187

Berkshire Capital Financial, Ltd. (Commercial) 212-986-9890

www.berkshirecapital.net

Eastgate Equities (Commercial)

800-997-7244

BFS Capital, LLC. (Commercial)

510-381-1930

www.bfscapital.com

Exeter Holding Ltd. (Construction)

516-338-7500

BlueWater Funding, LLC (Hard Money)

301-656-6566

www.bluewaterfundingllc.com

Flagstar Bank

800-897-7222

BlueWater Funding, LLC (Hard Money)

866-551-2583

www.bluewaterfundingllc.com

Gaukroger Enterprises, LTD. (Hard Money)

510-677-9464

Brookview Financial (Rehab)

877-734-2211

www.brookviewfinancial.com

Investor Funding (Hard Money)

864-213-3951

Builders Capital Mortgage (Construction)

877-647-6984

www.builders-capital.com

Lib Properties, LTD.

404-256-8600 www.libloans.com

California Equity Lenders (Hard Money)

818-584-2320

www.calequitylenders.com

Midwest Financial Capital (Commercial)

317-844-7776

www.midwestfinancialcapital.com

National Business Finance (Commercial)

954-495-4791

www.nationalbusinessfinance.com

Central Tejas Capital Group, Inc. (Commercial) 317-351-8037 Commercial Hard Capital, LLC (Commercial)

832-607-6778

www.commercialhardcapital.com

Pacific Mortgage Funding Corp. (Commercial) 562-864-4006

www.wholesale.flagstar.com www.4investorfunding.com

www.pacificmortgage.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 lenderâ&#x20AC;&#x2122;s information on products, program, procedures, representations, and warranties for details.

TheNicheReport.com

NICHE REPORTS

CONSTRUCTION / REHAB lender listings sponsored by lenderlab.com continuedâ&#x20AC;Ś Piedmont Capital Lending, LLC. (Hard Money) 678-292-6984

www.piedmontcapitallending.com

The Loan Doctors, Inc. (Commercial)

954-647-7679

www.regd506.com

PNC ARCS (Commercial)

www.askARCS.com

Titan Hard Money (Hard Money)

323-377-0979

www.titanhardmoney.com

Real Estate Lending Group, Inc. (Hard Money) 408-718-2218

www.relginc.com

United Midwest Savings Bank

614-255-3499

www.umwsb.com

Remington Financial Group (Hard Money)

www.remingtonfg.com

WexTrust Capital, LLC (Hard Money)

212-643-6190

www.wextrust.com

WholesaleLending.com (Commercial)

866-303-6301

www.wholesalelending.com

800-275-2727 480-570-0679

Small Business Loan Source, LLC. (Commercial) 512-215-2727

www.adelinerem.com

TCRM Commercial Corp. (Commercial)

212-371-3933

www.tcrmcommercial.com

Terrace Capital (Commercial)

212-671-1031

www.terracecapital.com

DOWN PAYMENT ASSISTANCE Premium Listings

Futures Home Assistance

Lowest national fee $295.00 complete online processing and FHA training. Use Futures for down payment, closing cost, escrow refund, etc.

800.672.4055

Grant America Program

The only HUD approved and IRS compliant down payment assistance program available

240.780.3333

Partners In Charity

Down payment assistance done the correct way up to 10% nationwide for FHA and conforming loans. Live customer service to answer any questions. EZ online processing and a low low fee of $295.00

800.705.8350

DOWN PAYMENT ASSISTANCE Lender Listings Sponsored by Lenderlab.com Buyers Assistance

888-901-5715

www.buyers-assistance.com

Partners In Charity

800-705-8350

www.partnersincharity.org

PayoutOne

800-945-2495

www.payoutone.com

Purchase Pros

877-323-4929

www.thepurchasepros.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.

June 2008

Where your industry is our priority.

Call us today at 866.452.8800 Toll Free Or go to Mortgageboard.com

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N?8KËJ PFLI E@:?<6 Find out who still offers construction programs on page 41. Get The Niche Report delivered FREE by going to www.TheNicheReport.com.

ÌÌi Ì Ê7 iÃ> iÊ i `iÀÃ\ Advertise your loan programs for a special of $250 per month! Have something to say? Write for The Niche Report and be seen by thousands.

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LENDER & RESOURCE DIRECTORY

AcuPen FINANCIAL, LLC The Premier One-Stop Commercial Mortgage HUB www.acupenfinancial.com

AdvancedMe, INC. www.amibrokerprogram.com 600 TownPark Lane Kennesaw, GA 30144 Contact: Tina Vaughn [phone] 866.490.0488 [fax] 678.564.3067 [e] brokerinfo@advanceme.com

a la mode, inc. www.alamode.com

America one finance www.americaonefinance.com Contact: Matt Simmons [phone] 425.641.4658 x117 [e] matt@americaonefinance.com Anglo-American Financial www.anglofinancial.com 675 Berkmar Court Gardy Bloemers: 434.981.1017 [e] gardybloemers@anglofinancial.com Tom Finnegan: 512.657.9310 [e] tomfinnegan@gmail.com

ASCENT HOME LOANS, INC. www.ascenthomeloans.com 6465 S. Greenwood Plaza Blvd. Englewood, CO 80111 [phone] 866.467.3157 ext. 2605

AVATAR financial group www.avatarfinancial.com 100 Wall Street

June 2008

Seattle, WA 98121 Contact: Allison Payne, Loan Analyst [phone] 888.896.0083 [fax] 206.728.5993 [e] loans@avatarfinancial.com

THEBOARDNETWORK.COM www.mortgageboard.com www.titleboard.com www.bankingboard.com www.creditunionboard.com www.escrowboard.com 101 Continental Blvd. 16 Floor, Suite 1657 [phone] 866.452.8800 [fax] 866.452.8799 Contact: Julie Messina or Jodie Messina [e] info@theboardnetwork.com

brookview financial www.brookviewfinancial.com 2321 Whitney Avenue Suite 101 Hamden, CT 06518 Contact: Paul Carrier [phone] 877.734.2211 [fax] 203.907.4588 [e] rehabs@brookviewfinancial.com

credit plus inc. www.creditplus.com 31550 Winterplace Pkwy Salisbury, MD 21804 [phone] 800.258.3488 [fax] 800.258.3287 [e] beyondbundled@creditplus.com

emigrant mortgage company www.emigrantmortgage.com 7 Westchester Plaza Elmsford, NY 10523 [phone] 1.800.emigrant ext "mid-atlantic" Contact: Terry Auth [e] AuthT@emigrantmortgage.com

Fairview Commercial Lending www.fairviewlending.com 1932 North Druid Hills Road Suite 250 Atlanta, GA 30319 [phone] 866.634.1270 [fax] 404.634.0319

First Mount Vernon I.L.A. www.FMV1.com 6019 Tower Court Alexandria, VA 22304 [phone] 703.823.6800 [fax] 703.997.2499

freedom mortgage www.freedommortgage.com 907 Pleasant Valley Ave. Contact: Angel Bell [phone] 800.220.3333 [fax] 866.816.3538 [e] angel.bell@freedommortgage.com

grant america program www.fhadpa.com 7824 Cessna Ave Gaithersburg, MD 20879 Contact: Peggy Stanly [phone] 240.780.3333 [fax] 202.521.9507 [e] stanley@fhadpa.com

gregory funding llc www.gregoryfunding.com 425 NW 10th Ave. Suite 307 Portland, OR 97209 [e] info@gregoryfunding.com [phone] 888.324.3578 [fax] 503.226.4699

LENDER & RESOURCE DIRECTORY

imperial capital bank www.imperialcapitalbank.com [phone] 888.886.3580

IndyMac Bank www.indymacb2b.com 3465 East Foothill Boulevard Pasadena, CA 91107 [phone] 866.419.4639

Contact: R.D. Walker [e] info@meandassociates.com [phone] 678.387.3230 [fax] 678.302.6444

metro funding corp www.metrofundingcorp.com One Kalisa Way, Suite 310 Paramus, NJ 07652 Contact: Jennifer Smith [e] jennifer@metrofundingcorp.com [phone] 866.302.6360 [fax] 201.262.6910 MYFHA.net www.myfha.net/mortgageclose.com [phone] 866.776.9342

irwin home equity www.ihepartners.com 12677 Alcosta Blvd., Suite 500 [e] wholesalelending@ihe.com [phone] 888.524.7946

lansdowne mortgage www.lansdownemortgage.com 5901 SW 74 St., Suite 310 South Miami, FL 33143 [phone] 305.740.9988 [fax] 305.740.9987 [e] info@lansdownemortgage.com ljl funding www.ljlfunding.com 8880 Rio San Diego Dr #500 San Diego, CA 92108 Contact: Jeffrey Arnold [phone] 888.456.0246 [fax] 866.586.7210 [e] jarnold@ljlfunding.com

national business finance www.nationalbusinessfinance.com 16891 Crestview Lane Weston, FL 33326 Contact: Mitchell Chapman [phone] 954.495.4791 [fax] 954.793.4411 new jersey association of mortgage brokers / mba of new jersey www.njamb.org [phone] 973.379.7447

NEW SOUTH FEDERAL Savings bank www.newsouthfederal.com/wholesale 210 Automation Way Contact: Randy Brown [phone] 866.582.5901 [fax] 205.951.7111 [e] randyb@newsouthfederal.com

LoanAce www.loanace.com [e] info@teravendo.com manaseh, epharim & associates www.meandassociates.com 5932 Hugh Howell Rd. Suite 109 Stone Mountain, GA 30087

ocean capital www.oceancapitalonline.com 2 Altieri Way Warwick, RI 02886 Contact: Christina Agonia

[e] information@oceancapitalonline.com [phone] 877.337.3757 [fax] 401.739.9711 partners in charity www.partnersincharity.com 613 W. Main West Dundee, IL 60118 Contact: Charles Konkus [phone] 800.705.8350 [fax] 800.514.9848 [e] info@partnersincharity.com

plumbline studios inc. www.plumbline.com 1754 2nd Street Suite C Napa, CA 94559 [phone] 888.282.1248 [direct] 707.251.9884

remington financial group, inc. www.remingtonfg.com 8761 E. Bell Rd Suite 103 Scottsdale, AZ 85260 Contact: Aaron Enright [phone] 480.905.3239 [fax] 480.314.3745 [e] apply@remingtonfg.com www.settlementbiz.com www.settlementbiz.com [phone] 877.392.4940

unifund financial group inc. www.unifundinc.com 3694 Midway Drive, Suite B Contact: Tyson Hempel [phone] 619.987.1083 [fax] 619.923.3190 [e] tyson@unifundloan.com

continued on next page TheNicheReport.com

LENDER & RESOURCE DIRECTORY

V12 GRoup www.dmaleads.com 5215 NW 33rd Avenue Contact: Mike Giambattista [phone] 561.807.6909 [fax] 877.984.9401 [e] mgiambattista@v12group.com

The Premier One-Stop Commercial Mortgage Loan Amounts have been Hub extended up to $10,000,000 nationwide

windvest corporation www.windvestcorp.com 3131 Camino Del Rio N Suite 1030 San Diego, CA 92108 Contact: Katiana Jimenez [phone] 877.285.07777 ext 2 [fax] 619.285.0741 [e] katiana@windvestcorp.com

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thank you for visiting us here at AcuPen

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