TNR - May 2008

Issue 011 May 2008 TheNicheReport.com

Hard money for hard times.

Hard Money Lending 101 on page 5

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

13

Insurance Protection A simple approach to financial protection.

Mitigation 24 Reverse 16 Loss Via Loan Mods Mortgages Creating a win-win situation.

Improving the quality of life for many senior homeowners.

Stage 32 Center with Genworth Homeowner Assistance: A mortgage insurer's efforts to keep families in their homes.

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Hard Money Lending 101

Use this guide to save time, close more deals and give your client’s loan the best chance for approval. A well-organized loan summary should include the following essential information: The Executive Summary is a concise, but thorough, overview that includes: • Description of Property & its Estimated or Appraised Value, Square Footage, Number of Units.

• Loan Amount & Use of Funds – Debt owed/Liens on the property/Cash out?

• Date of Purchase & Price – How much cash has the borrower invested?

• Debt Service – How will the borrower make monthly loan payments? Will it produce income or is an interest reserve needed?

• Loan Term Requested – Avatar offers loan terms up to 2 years. Payments are interest only and no prepayment penalties apply.

• Equity – Avatar lends up to 65-70% LTV on purchases and refinances on income producing commercial properties. Avatar requires borrowers to have a minimum of 20% equity in their projects. Some secondary financing is allowed.

Color Photos of the Property and/or Appraisal – At least three shots each of interior, exterior and the neighborhood.

Avatar does not require a current appraisal to review the loan.

Operating Income (P & L) – most recent 2 years on the subject property; summary of lease agreements and rent roll.

If owner occupied, provide operating statement from the business.

1003 Loan Application or Personal Financial Statement on the Borrower/Guarantor.

Upon receipt of the above items, Avatar can issue a Letter of Intent/Term Sheet within 24 hours. Email your submissions to loans@avatarfinancial.com.

If you have questions about a loan, please call us at 866.885.4250 or visit us online at www.avatarfinancial.com.

• Exit Strategy – Refinancing? Selling?

• The Story – Why are you seeking hard money rather than conventional financing? What ‘skeletons in the closet’ or ‘bumps in the road’ does Avatar need to know about in order to provide you with a quick, reliable answer?

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

CONTENTS

16

Issue 011

May 2008

Loss Mitigation Via Loan Mods

NICHE REPORTS PRIME

pg 38

ALT–A

pg 39

NONPRIME

pg 39

HARD MONEY

pg 40

COMMERCIAL

pg 42

CONSTRUCTION/REHAB pg 43

Creating a win-win situation.

CURT MELONE Founder of PacWest Funding and Green Credit Solutions

FOUNDER & PRESIDENT Robert Pegg robert@nichereportonline.com

13

21

Insurance Protection WESley J. CARSON insurance broker for john o. bronson co.

A simple approach to financial protection.

Building Income Through Building Materials

27

bruce backer president of loansifter Does yours deliver?

32

6

Center Stage with Genworth alan goldberg Homeowner Assistance: A mortgage insurer's efforts to keep families in their homes.

MITCHELL CHAPMAN executive director of national builders finance Originating real estate related non-mortgage business.

24

The Marketing Power of Product and Pricing Engines

DEPARTMENTS Reverse Mortgages richard rash reverse mortgage specialist Improving the quality of life for many senior homeowners.

March 2008

09 10 36 44

NOTE FROM THE FOUNDER CALENDAR OF EVENTS 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 Bruce Backer Wesley J. Carson Mitchell Chapman Alan Goldberg Stewart Mednick Curt Melone Richard Rash

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

You may have noticed the new advertisement on the inside back cover of last month’s issue that announced the new teaming of The Niche Report and The Mortgage Lender Implode-O-Meter.

The Niche Report has joined forces with ML-implode.com to bring you the latest and greatest news on non-imploded mortgage lenders – those lenders that are still in business and here to stay.

In this market, this type of information is imperative to your daily origination business. Go to www.non-imploded.com and check out the list of lenders still open for your business. We have big plans for these listed lenders, including adding multiple data fields to highlight loan programs.

A key component of this teaming is the formation of an online forum for The Niche Report.

This forum was created for you, loan originators, to be a part of the online community to post what you want to hear about, learn about, and make suggestions for future article topics in The Niche Report. And believe me, we will be listening. We want to hear about your market concerns, product questions, current originating and marketing trends, and how we can deliver pertinent information to you to help you increase your production.

In this issue, Genworth Mortgage Insurance, a division of Genworth Financial, is on our Center Stage. Genworth Financial provides mortgage insurance to millions of homeowners. The company’s Homeowner Assistance program helped nearly 8,000 financially troubled homeowners avoid foreclosure in 2007, and this year they expect to help even more.

Given the expected default and foreclosure statistics for this year, it is important for us to explore the mortgage insurance options and programs available to your clients.

On to broker-specific topics, Wesley Carson of John O’Bronson Co. Insurance agency discusses the importance of establishing a Professional Liability Insurance Policy. As Wesley states, “These polices are designed to specifically protect Mortgage Brokers and provide financial protection for an actual or alleged wrongful act while acting in the capacity as a mortgage broker.” And Bruce Backer, President of LoanSifter, discusses the advantages of using a product and pricing engine to increase your efficiency, productivity, and most importantly, your profitability.

Our feature article this month focuses on a rapidly growing trend – loan modifications (a/k/a loan mods). I predict this loss mitigation technique will become very common in this market and Curt Melone of Green Credit Solutions discusses the ins and outs – what a loan mod is and how the process works. Definitely take this opportunity to learn about loan modifications.

As Curt states, “This is a monumental time that will define the way the mortgage industry operates for many years to come.”

Robert Pegg Founder & Publisher

TheNicheReport.com

9

CALENDAR OF EVENTS

Upcoming Key Dates & Events: MAY – JUNE D8P )''/ J D K

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JUNE 18

1st Qtr. Metro Home Prices / State Resales released by the NAR.

Commercial Real Estate Market Forecast released by the NAR.

May 14

JUNE 19

Maryland Association of Mortgage Brokers "Selling Skills Seminar" with Ron Vaimberg in Columbia, MD. Visit www.mamb.org for details.

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

May 21

JUNE 20

Commercial Leading Indicator released by the NAR.

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May 23

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

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April Existing-Home Sales released by the NAR.

JUNE 21

may 1

JUNE 3

Legal Issues / Regulatory Compliance Conference at La Costa Resort and Spa in Carlsbad, CA. Visit www.mbaa.org for details.

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

May 6

Forecast / Pending Home Sales Index released by the NAR.

Commercial/Multifamily Capital Markets Spring Conference at the Hynes Convention Center in Boston, MA. Visit www.mbaa.org for details.

May 7 Commercial/Multifamily Capital Markets Spring Conference at the Hynes Convention Center in Boston, MA. Visit www.mbaa.org for details.

Housing Forecast / Pending Home Sales Index released by the NAR.

10

May 13

May 2008

JUNE 9

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

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

JUNE 22 NAMB 2008 Annual Convention at the Indiana State Convention Center, Indianapolis, IN. Visit www.namb.org for details.

JUNE 23 NAMB 2008 Annual Convention at the Indiana State Convention Center, Indianapolis, IN. Visit www.namb.org for details.

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

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INSURANCE PROTECTION A simple approach to financial protection.

BY WESLEY J. CARSON

I

n recent months, the mortgage industry has gone through a whirlwind of turmoil. From loan buybacks to the seemingly endless amount of defaults, the professionals and corporations of this industry have experienced continued anguish over the last six months. On an almost daily basis we are reading about predatory lending, bad investments, or worse, the carelessness in underwriting and failure of major corporations.

Even with all the dreadful news there are still ways to protect your company from a catastrophic hit to your financial statement. One way is to establish a Mortgage Brokers Professional Liability Insurance Policy. These polices are designed to specifically protect Mortgage Brokers and provide financial protection for an actual or alleged wrongful act while acting in the capacity as a mortgage broker. Many suits include errors in the loan application process, failure to disclosure material information, inaccurate / incomplete appraisals and even negligence in recording a payment of the correct amount. A main component is the perception of an unsuccessful transaction. A client may feel they have been financially wronged and will bring a multitude of parties into a suit to try and recap the perceived losses.

In addition to the occasional mistake, even if we believe that we have conducted ourselves in a professional and thorough manner, there is still the need to retain an attorney to defend the claim. With many attorneysâ&#x20AC;&#x2122; fees starting at $250+ / hour, everyone looks to their insurance policy for coverage.

The insurance market as a whole continues to make a conservative commitment to providing insurance for

brokers. From a marketplace perspective, the traditional mainstream insurance companies have been hit hard with losses, mostly related to residential transactions.

Rates have continued to rise while companies limit coverage to try and retain their losses. Still some markets are committed to the long term goal of providing financial protection. Especially with the state of the housing market, underwriters are increasingly concerned with the following items before they release additional capacity into the marketplace:

1. Amount of Commercial vs. Residential Deals Traditionally, from an underwriting perspective there has been a far greater chance of a severity type of loss if a customer is doing more commercial than residential lending (considering the higher dollars, sophistication of clients and the opportunity for a larger loss). As the market continues to move in a downturn pattern, insurance carriers are weighing the residential loans just as risky considering the frequency of smaller claims.

2. Predatory Lending This is clearly one of the most talked about items over the last year. Many insurance companies have taken the position to exclude all items concerning predatory lending, especially when loans were pushed through with poor FICO scores and a lack of due-diligence. Past experience has proven to the insurance community that the coverage is too valuable for the minimal cost.

3. Subprime Loans There are markets that are willing to offer the coverage if a broker is only doing a small percentage

TheNicheReport.com

13

of subprime loans. The quality of paper has drawn the attention of virtually every underwriter in the US and the UK. A broker that continuously provides C and D rated paper would have a hard time obtaining the specific coverage.

4. Experience of Brokers A big part of obtaining the most broad terms and conditions comes from the experience of the firm and brokers. A company will be in a far better position to obtain competitive terms and conditions if it has been in business for more than five-to-ten years, can show they are demonstrating practices such as avoiding predatory lending, has a process to avoid discrimination, and provides appropriate disclosures (where required) concerning the yield spread premiums.

We would all agree that these are difficult times to be in the mortgage brokering business. Regardless if you are conducting residential or commercial transactions, the market is tough and clients are becoming more sophisticated. The ultimate goal is to survive this market based on your merits, not on the outcome of a frivolous lawsuit concerning your professional services.

By knowing the exposures and concerns of the insurance companies, one is able to successfully transfer the uncertainty through a specialized insurance product.

Wesley Carson is a professional liability insurance broker for the John O. Bronson Co. insurance agency in Sacramento, CA. Wesley has assisted many companies with traditional insurance products and alternative risk solutions. He can be reached at 916.480.4185 or wcarson@johnobronson.com.

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Loss Mitigation Via Loan Mods Creating a win-win situation.

BY CURT MELONE

W

e were having a company meeting, and the volume was turned down on all the flat screens broadcasting financial data when CNBC announced that New Century had filed for bankruptcy.

We immediately turned up the volume. Like a war veteran with post traumatic stress syndrome, I flashed back to my days in the dot com industry. I had seen what kind of devastation could happen to an industry and fast. Something told me this was going to hurt.

Over the next few weeks and months, I would turn on the TV only to see cable news minimizing the scope of the problem – no one was predicting a housing bubble and recession to follow. It seemed as if New Century might be a simple case of incompetence or corruption, isolated from the rest of the real estate industry, a one-time anomaly. That wishfulthinking-scenario didn’t last long.

It took a little over 90 days for the sub-prime mess to even be mentioned on cable news.

But events snowballed, more mortgage companies went bankrupt, and suddenly we were facing a full-blown housing and loan crisis – a perfect storm of economic pain. And the whole world was in denial.

I tried to tell myself that somehow my company would be exempt. I spent hours a day on the Implodo-Meter website, alternating between horror at the sheer number of companies going under, and thankfulness that mine was not one of them. Pretty much every entity with which we did business made the Implodo-Meter

list. I knew we wouldn’t be far behind.

It became all too clear that the industry would not be able to absorb this shock. I have seen things fall, then rise, money lost then made, but this was different.

It was like a plague that moved from victim to victim, first subprime, then on to alt-a, then to a-paper, wholesale, insurance, hedge funds -- ultimately no entity involved with real estate was safe.

For six months, maybe more, we tried to find our way. I worried about my company, my employees, and the people with whom we did business. There didn’t seem to be a safe harbor anywhere. By late 2007, I felt that a new chapter was being written in our industry. In my gut, I knew that with all this destruction there must also be a possibility of hope. I just didn’t know where to find it.

As the market evolved (devolved?), I searched for a business model based on what people needed in this environment.

Our clients wanted loans, financial circumstances had driven most of our competitors out of business, and still we could barely get any deals funded. It kept getting worse and worse: Banks were running out of money, home values were plummeting – the only thing going up was foreclosures. I started checking the ImplodoMeter so often I was sure the letter “I” was going to be worn off my keyboard. I expected to see my own company’s name there any day – and then it happened – not my company going out of business, but rather, what the marketing gurus like to call the

“aha moment”.

We needed to get 5% off of a loan balance in order to meet the LTV requirements or else the deal in question wasn’t going to go through. I didn’t know what else to do, so I called the bank holding the note, told them what the problem was, and they cut the note by 5% -- just like that.

Just that simple. It made good business sense (for them as well as us) in a difficult environment, and they did it.

120 days later, we have started a new company specializing in loss mitigation, debt settlement, and credit repair products to brokers who can now help the clients they once turned away or referred to a bankruptcy lawyer.

As we started trying to modify loans via loss mitigation services, the banks became increasingly more helpful, and we became increasingly more useful. We have cut interest rates, extended terms, lowered principle balances, and kept clients in their homes while also keeping a performing loan on various banks’ books.

The service we perform, helps banks, helps brokers, helps people… not a bad concept because we all can use a little help right now.

Early on, we recognized that everybody and their uncle would probably jump on this bandwagon.

We wanted to make sure that our company did it right. We perform loss mitigation services through an attorney. If there is an “I” that needs to be dotted or a “t” that needs to get crossed, they make sure it happens.

Brokers often ask us, “How TheNicheReport.com

17

does this work?” Lots of phone calls, lots of networking, lots of software, and lots of attorney contracts. Inventing a new product that most can’t define, and doing it legitimately, has its challenges.

We have gone to many seminars, met with the CFL, DRE, legislators, you name it. Laws are changing every day, and the only thing consistent… is nothing is consistent. By using attorneys on all our files, we guarantee that the most up-to-date legal practices are the rule rather than the exception.

We don’t look for ways to circumvent the rules, but rather, to embrace them. Loss mitigations helps people, but it can only help if it is done correctly – there is too much at stake to cut any corners.

How does the process work?

Brokers forward us leads with the documentation that we need to underwrite the file. The process is so tedious and delicate that we keep everything in house. The entire work load of loss mitigation is done by us. All we require of the broker is to find someone that needs help and send them over.

Once a case is opened, the process that results is often a classic case of hurry up and wait as we zig and zag uphill, downhill, left side, right side fast and slow as we make our way through various bureaucratic mazes – we move with urgency, but also with complete deliberation and attention to detail and proper process. It doesn’t help anyone if you skip a step and everything falls apart. We do not want the house going into NOD, so time is of the essence, but so is proper 18

May 2008

procedure. To top it off, each bank, servicer, or warehouse has its own procedures for dealing with defaults. Some have staffed up and risen to the occasion, and surprisingly enough, some have not. Some banks want to clear the books, some banks don’t. The key to it all is to speak the language of common business sense – the homeowner and the bank both have needs, and by meeting each other part way, they can avoid a devastating collision.

People have the capability to call the bank themselves and try to work things out.

Depending on the bank and the individual homeowner, the outcome can be positive – or awful. I personally would not recommend a homeowner attempting loss mitigation, and I have heard enough horror stories to be confident in the value of our service.

It has been quite a process educating people about how loss mitigation works. The scams are plentiful, and some brokers are so desperate that they will do and say anything to make a buck. We have total control of the process so even the worst brokers cannot take advantage.

Homeowners need to be careful about whom they do business with these days. In tough times, the public tends to be more vulnerable and gets caught up in scams more easily. If you add in the emotional attachment to a home you own and live in… desperation can take over, and desperate people more often than not make poor decisions.

It is important to do some

research on the company that is representing you. Sometimes this is tough because loss mitigation has only recently appeared in the marketplace – no company has a sign out front that says “Loss Mitigation – For the last 25 years” – they don’t even have a sign (or at least a truthful one) that says, “Loss Mitigation – For the Last three years”. The business is just too new.

The way to find out who you are dealing with if a company is new, is to find out who owns it and what they did before. It is worth the time to do your research; your home is the biggest investment you will ever make. As a Broker/Lender, we have seen our share of modification companies that claim to help and seem to be good at cashing checks, but not so good when it comes to the actual work of modifying loans. If you’re a homeowner, or even a bank, you don’t want to get involved with a company that is incompetent, overwhelmed, or just plain crooked. Due diligence is a must.

If I have one major concern, it is that the focus of the people who will ultimately write the book on how loss mitigation is done, will look to place blame, as opposed to looking how to make the situation better. As a broker/lender, we have been audited in almost every state we are licensed in, and have been scrutinized by various mortgage entities. It is our goal to help regulate, help standardize, and work with all the relevant agencies and businesses in order to develop the right products, and the right rules to protect the public.

This is a monumental time

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that will define the way the mortgage industry operates for many years to come. As the regulators try and regulate, the law makers make more laws, and the home owners find their way back into financial security, I think we all will be a bit more conservative moving forward and rightfully so. There’s a lot of pain out there. Ultimately, you need to make sure the client will be protected from scams that prey on people who need help. Big Banks and legislators, let’s work together and we will get more done. Nobody has a perfect answer – at least not yet.

Curt Melone is the Founder of PacWest Funding and Green Credit Solutions. PacWest Funding is a Broker/Lender established in 2004. It has been noted as an industry leader in technology and customer service with some of the fortune 500 banks and industry leaders.

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BUILDING INCOME THROUGH BUILDING MATERIALS Originating real estate related non-mortgage business.

BY MITCHELL CHAPMAN

R

egardless of the nature of the business or the specific industry they participate in, the goal of any for profit business is to maximize their profitability in every way and in any way possible. In the final analysis there are only two methods of achieving this goal. This is not rocket science as the first method is to increase sales production. The second method is to reduce costs.

Reducing costs is not only by far the most effective method; it is also much easier to accomplish. “Why” or “How can this be”, you ask? Simply stated every dollar in cost reduction goes directly and immediately to the bottom line.

The same even holds true for the progressive mortgage broker and loan officer for their residential or commercial Developer, Builder and or General Contractor clients involved in the Real Estate construction industry or with substantial rehabs. It does not matter if they are large or if they are small. It does not matter the type of the projects your residential or commercial Developer, Builder and or General Contractor clients are involved with or the size. These very same, sound and simple basic business fundamentals apply to all. Their goal is to increase profitability and reduce expenses. By assisting your residential or commercial Developer, Builder and or General Contractor clients to increase their profitability and also reduce their costs you will now have a value added service to offer that will set you apart from everyone else competing for the loan origination business.

There are three methods that you, as a mortgage broker or loan officer,can assist your residential or

commercial Developer, Builder and or General Contractor clients, regardless of size, to immediately become more profitable. Because you are already actively involved as their financial source, you now have the added opportunity to earn an additional RESPA compliant fee and source of income.

Decrease Cost of Materials and Supplies You might immediately dismiss this method by thinking that your residential or commercial Developer, Builder and or General Contractor clients have already achieved this, especially the very large ones. Nothing can be further from the truth! The residential or commercial Developer, Builder and or General Contractor do not actually purchase the building materials and supplies for the structure they are building. This is the function of the subcontractor!

Although the subcontractor may very well purchase their building materials and supplies from a nationally known retailer or lumber yard, they would be provided with only a very nominal discount based on retail pricing, if at all.

If the subcontractor is larger and acquires their building materials and supplies from a regional or local trade wholesaler they would be provided with discounts, if at all, based on distributor pricing. Their costs would be approximately 10% below retail.

The national chain stores and lumber yards do not manufacture what they sell. They are retailers with large mark ups who acquire their inventory of in stock building material supplies from a nationally recognized wholesaler of building materials. They purchase at the deepest discounts, best pricing and most attractive terms TheNicheReport.com

21

available to them. In turn they sell to the subcontractor and may provide them with a discount from their marked-up retail prices.

The trade wholesalers are similar to the national chain stores and lumber yards but they operate on a larger volume with smaller mark ups. The national chains, lumber yards and trade wholesalers rely on nationally recognized suppliers that have decades of experience in their specialty. In turn they also sell to subcontractors.

The subcontractors, in turn, mark up their purchase cost 25% to 40%. This marked up cost becomes part of the winning bid which in turn becomes part of the actual cost to build the residential or commercial structure.

Your residential or commercial Developer, Builder and or General Contractor clients now have two additional layers of cost in their projects: The marked up price from the physical source of acquisition as well as the marked up cost from the subcontractor.

If your residential or commercial Developer, Builder and or General Contractor clients are ready to take their business to the next level and outperform their local market they will readily and heartily pursue the next step. It's so easy and so obvious, but not many companies do this.

What’s the next level? It is simply for your residential or commercial Developer, Builder and or General Contractor clients to purchase the very same quality building materials and supplies, in accordance with local code and specs, from the very same national wholesale building materials and supplies distributors the manufacturers sell to. By doing so your residential or commercial Developer, Builder and or General Contractor clients will have purchased ‘direct’ and by- passed the middleman mark-ups, plus they will have taken advantage of ‘factory direct’ pricing, terms, discounts and services.

In short, if your residential or commercial Developer, Builder and or General Contractor clients are not purchasing their building materials and supplies directly from a national wholesale building materials and supplies distributor, who buys in volume and directly from the manufacturer; they are simply not obtaining the best pricing, terms, discounts and the related services available to them.

Although there are several wholesale building materials and supplies distributors who can offer these services, there is but one national company that readily offers all of these services to the residential or commercial Developer, Builder and or General Contractor, regardless of their respective size 22

May 2008

or sales volume. This national company will pay a RESPA compliant referral fee to the mortgage broker or loan officer.

Here’s the good news: The referral fee is RESPA compliant because it’s a third party service performed outside the actual residential loan process!

Another way in which your residential or commercial Developer, Builder and or General Contractor clients can save money is to purchase their building materials and supplies on credit through extended terms without incurring interest charges. No, I’m not talking about using their current credit cards and paying the full balance each month! I’m talking about establishing a trade line of credit which will allow the residential or commercial Developer, Builder and or General Contractor to generate additional cash flow by paying for the building materials and supplies when the permanent financing is in place. These deferred payments provide an excellent opportunity for your clients to earn interest or have the buying power for other required items.

Decrease Cost of Labor Each and every day your residential or commercial Developer, Builder and or General Contractor clients takes to build their project is another chunk of change and an ongoing direct cost of construction. They have payroll to meet and must pay their valuable subcontractors and or employees or lose them. They try to schedule and economize the best way possible by keeping only those necessary on the job. The most cost effective method of reducing direct labor costs is to simply reduce the number of days required by their subcontractors and or employees on the job.

This can be readily achieved by using time tested less labor intensive alternative methods of construction! We have all likely heard that you can take a horse to water but can’t make them drink. However, you can keep that same horse thirsty by feeding them salt tablets. The salt tablets you can choose to carry in your pocket or purse is helping your residential or commercial Developer, Builder and or General Contractor clients reducing labor costs through alternative methods of construction.

Wouldn't it be wonderful if your residential or commercial Developer, Builder and or General Contractor clients had an industry expert with 25 years experience to look over their blueprints and suggest well known, but seldom used alternative methods of construction to build more effectively and efficiently? These alternative

methods of construction will not sacrifice the integrity of the structure or the good name of your Developer, Builder and or General Contractor the quality.

At this juncture you probably just said to yourself, “If there are alternative construction methods available what are they and why aren’t they being readily used”?

Great question! The character Teyve from The Fiddler on the Roof would provide a simple one word answer, ‘Tradition’. Even though the average residential or commercial Developer, Builder and or General Contractor has likely heard about these methods for years they have simply ‘never done it that way before’ because they incorrectly believe they require a highly skilled and or experienced framing crew. This is another fallacy and there is one national wholesale building materials and supplies company that will provide on the job training for your clients in these methods and at no cost to them.

Some of the alternative methods of construction include wood and steel panels with insulation. These methods combine three separate individual labor steps into one simple process that delivers pre-engineered sections to the job site for easy assembly in a fashion similar to either a large erector set, jig saw puzzle or Lego blocks.

By taking advantage of these methods your residential or commercial Developer, Builder and or General Contractor clients will have a dried in shell completed in drastically less time with less labor resulting in a healthier bottom line.

Increase Production Using the traditional on site stick built method of construction will produce a dried in shell for a 1500 sq ft home in approximately 6 weeks. The certificate of occupancy will follow in another 8 to 20 weeks. After the permit has been issued this house will be completed somewhere between 3 and 6 months. However, using one particular alternative method of construction, even with the most inexperienced crew this very same house can be ‘dried in’, under roof, within 1 week and have a certificate of occupancy delivered in 45 to 60 days. The total building materials package for this home including everything from the slab up to and through the roof and everything in between except for the paint and carpeting, if applicable, is approximately $40 per square foot for an entry level affordable home.

Using this alternative construction method will not only decrease the building and sales cycle, but also

allows your residential or commercial Developer, Builder and or General Contractor clients to build more units with additional profitability. This is where your clients will see the most results. Their income will explode by a combination of reducing costs and increasing production.

They now have the ability to become the ‘Top Dog” in their area.

Now you can start originating real estate related nonmortgage business by building income through building materials!

Mitchell Chapman is the Executive Director of National Builders Finance, a division of National Business Finance, a business consulting services firm who provides alternative financial solutions for small businesses. National Builders Finance specializes in creating building material and supply programs using alternative construction methods, unsecured business lines of credit and providing residential and commercial construction financing programs. He can be reached by telephone at 954-495-4791, or via e-mail at: info@nationalbusinessfinance.com; You can also browse online at: www.nationalbusinessfinance.com.

REVERSE MORTGAGES Improving the quality of life for many senior homeowners.

BY RICHARD RASH

S

ay the words “reverse mortgage” a few years ago, and you got a look that said, “Oh, I’m sorry you had to take one of those.” It was the product of last resort, the product of the destitute.

Today, however, when you say those same words, you will often find yourself drawn into a conversation where those around you are anxious to hear about your experience.

Yes, indeed, reverse mortgages have arrived.

They are enjoying unprecedented popularity, and not only among those who “need” the money. More and more, seniors are using reverse mortgages to finance the “wants” in their retirement years. In fiscal year 2007, there were over 100,000 reverse mortgages originated in our country. That figure represents an astounding 77% increase in volume over the previous year. Indeed, as education about the real benefits of the reverse mortgage has spread, the informed senior as well as their advisors has embraced this innovative product.

The reverse mortgage, a loan product that gives homeowners age 62 and over the ability to tap a portion of the equity in their primary residence without having to sell the property or take on a new mortgage payment, is here to stay. Although the reverse mortgage has existed for many years (the first one done in America was back in the 1960’s), the structure and safeguards of the product today have made it an attractive way for many seniors to finance those golden years.

In a nutshell, the reverse mortgage can provide equity to borrowers who qualify for as long as they live in the home. The borrower controls how the

24

May 2008

funds are taken- either in a lump sum, monthly allowance, line of credit, or any combination of the three. So for example, if a senior wants to eliminate some debt, receive a monthly check, and have some funds in reserve for future needs, the reverse mortgage can satisfy all of these. If there is a mortgage or home equity loan/line on the property, it must be paid off when the reverse mortgage is taken. For many, simply having this mortgage payment “go away” is enough to make a big difference in their monthly budget.

If a senior is currently making a home equity loan payment of $300.00 each month, that $300.00 can now be put toward other monthly obligations or expenses such as prescription medications.

The amount of reverse mortgage funds available to a senior homeowner is based on several factors. First, the age of the youngest applicant is used. Of course, the minimum age is 62. In addition, the home value (as determined by an appraisal) is taken into account.

The location of the property (FHA maximum lending limits vary by county) is another factor.

Lastly, prevailing interest rates (depending on which product is selected) are determined and used in the calculation. These pieces of the puzzle will determine the amount of reverse mortgage proceeds the senior homeowner can take. If there is an existing mortgage or any type of lien, it must be paid in full at the time the reverse is taken. Other than that, the use of the funds is determined by the homeowner. And most importantly, the funds are tax-free (it’s just equity) and do not affect Social Security or Medicare benefits, which makes the reverse mortgage the best option for many of today’s informed seniors.

Just what do seniors use reverse mortgage funds for? The answer to that question is as varied as the borrowers themselves. Some common uses include medical bills, prescription medication expenses and co-pays, real estate taxes, upkeep on their property, and supplementing current monthly income. With nearly 90% of seniors in our country relying on Social Security in some part to meet monthly expenses, proceeds from a reverse mortgage can meet a real need. These uses for reverse proceeds mentioned here represent “needs” that seniors have. But there are many who are using the reverse mortgage to actually enhance their quality of life during their retirement years.

More and more seniors are taking reverse mortgage proceeds and using these funds for travel, purchasing a motor home, gifts to children, funding grandchildren’s college education, and charitable giving. Some are even putting this equity to use in the purchase of a vacation property or second home.

Home improvement or modifying the home to meet the seniors’ needs is another use for reverse mortgage

funds that has increased in popularity recently. Instead of moving out of the home and taking a one level apartment for instance, a Certified Aging in Place Specialist contractor (CAPS) can be called in and make recommendations on how the home can be modified to allow the senior to comfortably remain in the home.

Clearly the uses for reverse mortgage funds are as many and varied as the seniors themselves. As the program continues to grow in popularity, more and more ways to put that stored up equity to good use are sure to evolve. One thing is for certain -- the reverse mortgage is here to stay, and that is good news for both seniors and their families.

Richard Rash is a Certified Reverse Mortgage Specialist, a member of the National Reverse Mortgage Lenders Association (NRMLA), and has been in the mortgage industry for 16 years. For questions about reverse mortgages, contact Richard at tlgreverse@earthlink.net or by calling (954) 272-2006.

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T

oday’s next generation product and pricing engines (PPEs) come with impressive new features and functionality that are proving to be indispensable in helping brokers differentiate themselves to clients and partners.

PPEs offer advanced tools automating the most timeconsuming and cumbersome aspects of the lending process: simple yet elegant solutions that help brokers and other professionals each step along the relationship continuum with clients.

Darren Snow, president of K2Lending.com in Greenwood Village, Colorado, recently commented on the PPE he acquired for his company, saying, “What sets this system apart is the degree of automation it offers. It automatically updates everything and the best part is that all I have to do is push a button.”

‘Dashboard’ Monitoring of Your Pipeline and Client Portfolio With features that enable brokers and other professionals to monitor the status of their entire book of business at a glance, PPEs provide brokers with a dashboard view of key indicators such as pricing, when ARMs reset, or when market conditions warrant refinancing.

Brokers can use the dashboard to track pricing for customers, watching for rates and prices to move from red to green, indicating that a target has been reached. “I am looking for particular rates for my clients and with the monitor I can track when that rate hits, then call them and get them into the pipeline,” said Snow.

Leading PPEs also provide “lock” and “refi” monitors; ensuring brokers won’t miss a rate or price change that could mean a better deal for their clients and higher profit

for themselves.

Grey Valenta, managing partner of Vertical Mortgage in Alpharetta, Georgia, commented, “I love the refi monitor.

I can run a scenario and save it, and the system will automatically monitor when that target rate is available.”

The best of breed PPEs also provide features such as private labeling and a consumer portal. Private labeling enables brokers to maintain their own corporate branding, while enhancing relationships with customers and lenders by providing them with preferred features. The consumer portal feature functions in the same way, attracting online users from the local market to build a competitive advantage. Both can be completely customized and completely integrated into the company’s own website and provide virtually transparent, instantaneous links between the partner, lender or other client to the PPE through the interface at the company’s website.

Another popular effective marketing feature of the new PPEs is integrated email campaign management. Brokers can create automated email communications, including specific pricing, industry trends, or other information the email recipient needs to know.

Said Grey Valenta, “The campaign manager is a terrific tool for someone that is truly invested in building a referral business by keeping real estate agents and other partners informed. I set up campaigns to go out to realtors on Friday afternoons. I set it up once and it runs itself. I say, ‘here’s what going to happen to the rates; give me a call if you’d like to talk about it.’”

Darren Snow added, “Whenever a new client comes in we add them into the campaign manager. It’s a great system for staying in front of realtors, title companies, appraisers, and even regular retail clients. We can set up different TheNicheReport.com

27

campaigns for each client customized to what they need the most. It’s another form of contact management. The realtors love it.”

Return on Investment “I have been searching for almost 10 months for a product to satisfy my need to have a single online pricing tool,” said Valenta. “My initial assessment is that we are earning a half point more on every loan because we used to deal with a group of preferred lenders who got the majority of our business. The perception was that they were paying the most profit on the loan. Once we put all of our lenders into the system and saw how they stacked up against a whole network, we were able to lock loans to other lenders who gave us more profitability. This product has revolutionized my business.”

“I’ve been truly amazed at the accuracy of this system,” commented Walter. “The rates coming from the PPE are dead on when stacked up against actual rates from the lenders. Not to mention, we made close to $25,000 more on just seven loans in two weeks because the product

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recommended lenders that we typically don’t use, only because pricing the loans through them used to take so much time.”

In spite of the increase in productivity and profitability that each of these brokers, Snow, Valenta, and Walter have experienced with their PPEs, they know of many brokers who are still pricing loans by letting their “fingers do the walking.”

“I say to them, ‘How much is your time worth?’” said Walter. “Ask yourself what you make on an hourly basis.

If it takes you a half hour to price one loan, imagine what you could do with a tool like this? For me, it's already paid for a lifetime of use. I don't know who is behind the green curtain, but he is doing a great job.”

Bruce Backer is the President of LoanSifter, the industry’s premier product and pricing engine. LoanSifter is an accurate, easy, and affordable way to price, monitor and communicate your lenders’ rates to your borrowers and lead generators. To learn more, visit www.loansifter.com. You can contact Bruce at 920.687.1222 or bruce@loansifter.com.

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CENTER STAGE WITH GENWORTH Homeowner Assistance: A mortgage insurer's efforts to keep families in their homes.

BY ALAN GOLDBERG

A

djustable rate mortgages resetting to higher interest rates are a major cause of the rising delinquencies and foreclosures in today’s housing market. Foreclosure filings were up 78 percent nationwide last year, and RealtyTrac.com reported over ALAN GOLDBERG 2.2 million foreclosure filings and default notices. More than one percent of all U.S. households were in some stage of foreclosure, almost double the 2006 rate.

With no relief expected in 2008, the fear of foreclosure now looms for many. It’s a costly process that benefits no one, but help is available. At Genworth we’re doing everything we can to keep homeowners in their homes.

While buyers shopping for a mortgage don’t want to think about the possibility of falling behind on their loan some day, it is a possibility. Over the past year, we’ve seen how important it is for them to consider security for the future. Knowing that help is available in times of financial difficulty can be a real selling point for buyers weighing home financing options.

Mortgage insurance through Genworth protects your customers should they face a financial hardship, offering expert, no-cost help to keep them in their homes. It has the potential to save your customers thousands of dollars should times get tough.

Our Homeowner Assistance program helped nearly 8,000 financially troubled homeowners avoid foreclosure in 2007, and this year we expect to help

32

May 2008

even more. A key part of our assistance effort is to proactively engage borrowers facing financial hardship. Under the terms of most of our insurance policies, lenders are required to notify us when a homeowner misses their third payment on their mortgage.

We reach out at the first sign of trouble, attempting to contact the homeowner by telephone and by mail.

Like most problems, the earlier we are able to intervene with a homeowner falling behind on payments, the greater the likelihood we can remedy or “cure,” their mortgage problem. And the sooner a homeowner responds to our outreach, the more flexible we can be in offering a wide range of workouts and solutions.

Unfortunately, homeowners behind on their mortgage payments too often are afraid of the consequences of defaulting and hesitant to discuss their situation with an expert who can help. Our recently launched online Homeowner Assistance website (https://hoa.mortgageinsurance.genworth.com/) provides an easy way for our borrowers to make that initial contact and share the information necessary to determine which solution is best for their individual situation.

After submitting information about their monthly income, expenses and assets, homeowners in financial difficulty usually are more receptive to talking about a solution that’s right for them when one of our representatives calls. “It felt like a weight was lifted off my shoulders,” said Gary, a borrower whose house was saved through the program.

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fered: repayment plan, loan modification, forbearance agreement, short sale and deed-in-lieu of foreclosure.

With a repayment plan, the borrower makes scheduled payments toward the delinquent amount of a loan in addition to regular payments to bring the borrower’s loan current. A loan modification changes one or more of the terms of the note and/or mortgage in order to bring the loan current. A forbearance agreement allows a borrower to either suspend payments or remit less than the scheduled payment for a specified period of time. A short sale enables a homeowner to sell the property before foreclosure, even when the home’s market value is less than the total amount owed. In the case of a deed-in-lieu of foreclosure, the homeowner turns over the title of the property to their lender to avoid foreclosure.

A mortgage default or foreclosure significantly harms a credit score. In cases where the borrower is unable to keep the home, our representatives assist in selling the house before foreclosure, minimizing nega-

tive credit consequences. Foreclosure is the worst-case scenario for all parties involved in the homeownership process. Through our Homeowner Assistance program, Genworth is reducing the number of foreclosures by helping one borrower at a time, helping homeowners keep the equity they’ve worked so hard to build. That’s something to consider the next time you talk to customer about financing options.

Alan Goldberg is Vice President, Default Management, for Genworth Mortgage Insurance. He has over 30 years of experience in default management and loss mitigation, and is responsible for Genworth’s Homeowner Assistance program, which assists borrowers with financial and other hardships. Based in Raleigh, NC, Genworth Mortgage Insurance is a division of Genworth Financial, a leading financial security company meeting the retirement, longevity, lifestyle protection, investment and mortgage insurance needs of more than 15 million customers. It has a presence in 27 countries.

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35

TIP OF THE MONTH

TIP OF THE MONTH "The Formula"

BY STEWART MEDNICK

I

have received many emails and phone calls from across the country in response to this column over the last several months.

The general complexion of these communiqués is same: HELP! So I decided to talk about the basics as I have in many training sessions, college classrooms and consulting gigs.

Early on in the sales process, the loan officer will have to talk to the client over the phone or in a faceto-face meeting. The first moments of the first contact are vital to success. The next few interactions are just as vital. How does a loan officer develop a trusting relationship with a client that will lead to a closed loan and referrals? Let me talk about the first step in doing so.

This is what I simply call ‘The Formula.’

Benefit – Cost = Value This is not a unique concept; it is a basic marketing concept that is all too often overlooked. I have taken this basic analytical equation and created a meaningful social tool to aid in relationship development.

This formula should be looked at like a battle line drawn in the sand straight through “cost.” Cost is a constant. Cost may fluctuate from company to company, broker to broker, but the actual cost of doing business is about the same across the board. If we keep origination at a constant, say one percent, add processing, underwriting, title fees, government fees, and closing fees, the good faith estimate should be similar from company to company. Sure, many companies add junk fees and higher origination, but that is another discussion.

36

May 2008

Cost can also be measured in non-monetary terms such as the time involved, emotional elements, travel time to meet or to attend the closing, or the customer’s effort to gather necessary documents. Regardless with whom the customer does business, the cost of doing business is a constant, which establishes the variables within this equation to be benefit and value.

What do you have control of as a loan officer?

Benefit. What is benefit? It is anything the customer receives in an exchange as a result of the cost of doing business. Control this variable, and you have the key to meaningful contact with customers. If there is no benefit, there is no value. Look at the formula again: If benefit is zero, then subtracting the cost of the transaction, there is a negative value. If the benefit is equal to the cost, then there is zero value. However, if the benefit is substantially greater than cost, then the value is great.

What is value? It is the customer’s perceived benefit in the transaction. The LO has no control over what the customer perceives as ‘of value.’ However, the LO does have control over gaining the necessary information from the customer to know what they hold dear in the transaction. The customer’s goals for the transaction will define his or her baseline for value. In other words, if they get what they want as a minimum, then that is zero value. Anything they get beyond that is a value–added proposition. The more benefit provided to the customer, the more perceived value they gain in the transaction, and the greater chance of getting them to sign an application.

Now that the basic formula is laid out, how do you glean information from the customer so you know what their unique definition of value would be? This is where

TIP OF THE MONTH

I always insist on meeting a client. I would typically drive to their house after business hours to meet with them. Many times this is not necessary, but for the busy professionals that have no other free time during the week, you just added a huge benefit by visiting them at their convenience. Or perhaps it is just enclosing a cover sheet with a brief, easy to understand definition of the documents when you mail or email them to the customer. Benefit can be a number of simple, easy to employ actions, based on customer needs.

The most important and best way to start growing benefit with a customer is to simply employ active listening techniques. When you talk to a client for the first time, listen to them. Establish what their motives are in the transaction. A motive is an internal energizing force that orients a customerâ&#x20AC;&#x2122;s activities toward satisfying their needs or achieving their goals. There may be multiple motives that will inspire a customer to act upon originating a mortgage. By knowing as much

as you can about the customer, you will be able to add maximum benefit to the transaction; therefore, adding maximum value to them. In future articles, I will cover more detail on customer types, active listening techniques and non-verbal communications, all of which help to define a customerâ&#x20AC;&#x2122;s motives, or needs and goals.

Couple this with the â&#x20AC;&#x153;Two Minute MingleSM.â&#x20AC;? (see Tip of the Month in the December 2007 issue of The Niche Report) and you have a powerful combination for developing an adaptive technique to interact with your clients. Email or call to tell me how this technique works for you.

Stewart Mednick is a seasoned mortgage banker and published author. His writing focuses on relationship development, customer satisfaction, marketing and sales techniques. If you have a comment about this column or a question for Stewart, contact him at 651-895-5122 or smednick1@netzero.net.

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TheNicheReport.com

37

NICHE REPORTS

PRIME Alternative Lending Solutions, Inc. 703.365.7800

Freedom Mortgage

Offering all FNMA & FHLMC Programs including Affordable Housing Programs 203K!! FHA/VA CONFORMING!!!

317.537.3289

Gateway Mortgage Group 817.799.0804 A.E. is Jerry Lair

Indymac Bank 866.690.2240

Indymac Bank 866.690.2240

Irwin Home Equity 888.524.7946

MortgageClose.com 866.267.7691

National Business Finance

24hr UW & C2C for Platinum Accts. - Rates and service you expect from an Inc. 500 Co. - Best FHA UW team you will ever work with Aggressive Manual FHA - Jumbo - VA - FNMA - FMAC Visit www.JerryLair.com today!

Agency Conforming and Fannie Mae programs available, including MyCommunityMortgage™ and Flexible 97™ FHA programs available including Reverse Mortgages and new 10-, 20-, and 25-year fixed products Agency cash-out combo to 95% CLTV; Full Doc; Cash Back up to $300K Up to 97% LTV and 95% for declining markets. Common sense underwriting and prompt response

954.495.4791

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

World Alliance Financial

Reverse Mortgage opportunity for non-FHA licensed brokers

877.692.7762 ext. 404

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.

38

May 2008

NICHE REPORTS

ALTâ&#x20AC;&#x201C;A Emigrant Mortgage Company, Inc. 1.800.EMIGRANT (364.4726) x Mid-Atlantic

True Portfolio Lender offering NINA Loan Programs, Max LTV of 75%, Loan Amounts up to $1MM+ considered. Don't forget to mention this ad when calling for special service response!

Griffin Capital Funding

Full Doc and Stated income commercial loans. 3% YSP +2 points paid to brokers

800.710.6762

Indymac Bank

5/1, 7/1, and 10/1 LIBOR ARMs; 15- and 30-year Fixed; temporary buydowns and long-term locks also available

866.690.2242

Full Doc up to 95% LTV with a minimum 660 Decision Credit Score (DCS); Stated Income up to 90% LTV with a minimum 660 DCS; DTI as high as 50%. Purchase, No Cash Out Refinance, and Cash Out Refinance available

Indymac Bank 866.690.2242

Irwin Home Equity 888.524.7946

MortgageClose.com 866.267.7691

National Business Finance 954.495.4791

Agency cash-out combo to 95% CLTV; Full Doc; Cash Back up to $300K Stated Income still alive and well. SISA/SIVA up to 90% LTV. Get it before guidelines change Guaranted Permanent Financing for Residential Subdivisions at bank rates and terms in conjunction with our Building Materials Program

NONPRIME 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

39

NICHE REPORTS

Nonprime niches continued…

Emigrant Mortgage Company, Inc. 1.800.EMIGRANT (364.4726) x 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%

888.324.3578

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

Griffin Capital Funding

Full Doc and Stated income commercial loans. 3% YSP +2 points paid to brokers

800.710.6762

MortgageClose.com

We are still doing loans as low as 550 FICO. Cashout up to 80% LTV

866.267.7691

National Business Finance 954.495.4791

New South Federal Savings Bank 866.582.5901

Windvest Corporation 877.285.0777

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

HARD MONEY 24 Capital 888.333.9923

AgriCap Financial Corporation 213.542.5232

Specializing in commercial real estate bridge loans from $3 M to $100 Million. All property types. 24-Hour commitments. Close in as little as 5 days. Great low rates. No upfront fees beyond out-ofpocket expenses on qualified loans. www.24capital.com Commercial real estate loans, agricultural and farm loans, hard money loans, and bridge financing. Our knowledge and experience gives us greater insight into financing the real estate needs of a variety of persons and businesses

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.

40

May 2008

NICHE REPORTS

Hard Money niches continuedâ&#x20AC;Ś

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

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

757.460.9096 or toll free 888.460.9096

Investor Rehab Loans, Up to 73% Loan to Value, 100% Loan to Cost, Six Month Loan with No Monthly Interest Payments, No Application Fees, No Junk Fees, 660 Minimum Credit Score, Lending in PA, MD, DC, VA, NC, SC, FL, Brokers paid at closing

Fairview Commercial Lending

No minimum credit score, foreclosure bailouts, Quick Closings nationwide, commitments in 24 hours

Equity Development Corp (EDC)

866.634.1270

First Mount Vernon 866.908.FMV1 (3681)

First Mount Vernon

No seasoning requirements, No upfront commitment or processing fees, Minimum credit score 400 Minimal documentation required, Combined Loan-to-Values to 105%

866.908.FMV1 (3681)

Manaseh, Epharim & Associates 678.387.3230

Metro Funding Corp 866.302.6360

Unifund Financial Group Inc. 619.987.1083

Windvest Corporation 877.285.0777

Private hard money financing for commercial real estate investments Fast closing, no points upfront, all commercial properties including land, acquisitions, refis, and development loans Direct lender specializing in HELOC 1st and 2nd position loans between 25k-250k 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

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

41

NICHE REPORTS

COMMERCIAL 24 Capital 888.333.9923

Specializing in commercial real estate bridge loans from $3 M to $100 Million. All property types. 24-Hour commitments Close in as little as 5 days. Great low rates. No upfront fees beyond out-ofpocket expenses on qualified loans. www.24capital.com

AcuPen Financial

High LTVs, and low debt coverage ratio requirements

305.666.1879

AgriCap Financial Corporation 213.542.5232

Avatar Financial Group

Commercial real estate loans, agricultural and farm loans, hard money loans, and bridge financing. Our knowledge and experience gives us greater insight into financing the real estate needs of a variety of persons and businesses

888.896.0083

Great rates on commercial real estate loans, fully amortizing up to 25 years. Most property types considered including hotels, multifamily and special-use. Full doc is required for these competitive rates. Please call to request a rate sheet

Commercial Funding Corp

Stated & Full doc Commercial Lenders, Up to 90% Financing, Will consider credit scores below 600, Most property types considered

973.471.2229

Fairview Commercial Lending 866.634.1270

Gregory Funding LLC 888.324.3578

Griffin Capital Funding 800.710.6762

Imperial Capital Bank 888.886.3580

Indymac Bank 866.908.3279

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 $600K. No Credit Score Requirement. Up to 70% LTV with full docs. NOD or BK OK. No Prepayment Penalty. Lending territory: AZ, CA, CO, ID, NV, OR & WA YSP Commercial Loans, Full doc and Stated income. Earn up to 3% YSP + 2 points.

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

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.

42

May 2008

NICHE REPORTS

Commercial niches continuedâ&#x20AC;Ś

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-tofinance 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

Unifund Financial Group Inc. 619.987.1083

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

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

CONSTRUCTION / REHAB 24 Capital 888.333.9923

Equity Development Corp (EDC)

Specializing in commercial real estate bridge loans from $3 M to $100 Million. All property types. 24-Hour commitments. Close in as little as 5 days. Great low rates. No upfront fees beyond out-ofpocket expenses on qualified loans. www.24capital.com

757.460.9096 or toll free 888.460.9096

Residential Rehab Loans, Non-Owner Occupied Only, No Prepayment, No Monthly Interest Payments, Weekly Inspections and Construction Draws, No Junk Fees & No Inspection Fees, Online Draw Requests, 660 Minimum Credit Score, Lending in the Mid-Atlantic

Manaseh, Epharim & Associates

Private lender specializing in commercial real estate loans nationwide and internationally

678.387.3230

Metro Funding Corp 866.302.6360

National Business Finance 954.495.4791

New South Federal Savings Bank 866.582.5901

Fast closing, no points upfront, all commercial properties including land, acquisitions, refis, and development loans 100% LTC Worldwide Non Recourse International Commercial and Residential Subdivision Projects (including land acquisition, development, buyouts and mezzanine funding) 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

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

43

LENDER & RESOURCE DIRECTORY CONT.

24 Capital Corp. www.24capital.com Two University Plaza, Suite 206 Hackensack, NJ 07601 [phone] 888.333.9923 [fax] 201.881.7221 [e] info@24capital.com

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

AgriCap FINANCIAL corporation www.agricap.com 350 S. Figueroa Street, Suite 501 Los Angeles, CA 90071 Contact: Loan Submissions [phone] 213.542.5232 [fax] 213.687.8333 [e] sales@agricap.com

a la mode, inc. www.alamode.com

alternative lending solutions, inc. www.alendingsolution.com 9625 Surveyor Court #330 Manassas, VA 20110 Contact: Shannon Johnson [phone] 703.365.7800 [fax] 703.365.7801 [e] sjohnson@alendingsolution.com

America one finance www.americaonefinance.com Contact: Matt Simmons [phone] 425.641.4658 x117 [e] matt@americaonefinance.com

44

May 2008

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

AppraiserLoft www.appraiserloft.com [phone] 877.229.7799 [fax] 877.797.0280

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 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 COMMERCIAL Funding corp. www.commercialfundingcorp.com 335 Clifton Ave. Suite 201 Clifton, NJ 07011 Contact: Enrique Gomez

[phone] 973.471.2229 [fax] 973.471.2266 [e] gomez@commercialfundingcorp.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

EQUity development corporation (EDC) www.equitydevelopmentcorp.com 448 Viking Drive, Suite 380 Virginia Beach, VA 23452 Contact: Shawn Skiff [phone] 757.460.9096 [fax] 757.460.4079 [e] info@equitydevelopmentcorp.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

LENDER & RESOURCE DIRECTORY

MYFHA.net www.myfha.net/mortgageclose.com [phone] 866.776.9342 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

GATEWAY MORTGAGE GROUP www.jerrylair.com [e] jlair@gatewayloan.com AE: Jerry Lair [phone] 817.799.0804 [fax] 918.392.8364

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 griffin capital funding www.ysploans.com 1135 Heatherstone Dr. Suite 102 Fredericksburg, VA 22407 Contact: Mike Brewer [e] mbrewer@gcfunding.com [phone] 540.548.1001 ext. 105 [fax] 540.548.1117

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

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

LoanAce www.loanace.com [e] info@teravendo.com

M&i home lending solutions www.mihomelendingsolutions.com Contact: Sonia McClure [e] mihls.brokersupport@micorp.com [phone] 800.827.2654 ext. 2130 [fax] 800.277.2569 manaseh, epharim & associates www.meandassociates.com 5932 Hugh Howell Rd. Suite 109 Stone Mountain, GA 30087 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

mortgageclose.com b2b.mortgageclose.com 1855 W. Katella Ave., Suite 200 Contact: Scenario Desk [phone] 866.267.7691 [fax] 714.453.0219 [e] scenario@mortgageclose.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 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

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 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

45

LENDER & RESOURCE DIRECTORY CONT.

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

AcuPen Financial is a Specialized Commercial Lender focusing on small balance commercial real estate

financing from $100,000 to $5,000,000. Through

While prime is on the rise, AcuPen financial offers Tier 1 & 2 property financing below 8%

multiple SISA and full documented programs, AcuPen

With new flexible underwriting criteria, qualifying for 90% LTV is now even easier

With over 20 years of experience within AcuPen Financial,

AcuPen Financial

6201 SW 70th St. 102

Financial is your one stop commercial mortgage HUB.

we strive to find a solution for all your commercial

scenarios. Please browse through our programs listed

and feel free to contact us via phone, fax or submis-

Miami, FL 33143

sion form with any questions or concerns. We

Phone: 305-666-1879 FAX: 305-704-8348

Financial.

admin@acupenfinancial.com

thank you for visiting us here at AcuPen

world alliance financial www.worldalliancefinancial.com 3 Huntington Quadrangle, Suite 303N Melville, NY 11747

HARD MONEY LOANS Private Money Lender 11.99% 30 year fixed

Hard Money Lender No prepay

$10,000-$500,000

Specializing in properties with low LTV’s, free and clear, O/O & NOO Small loans OK! Fast and friendly service Call today for an immediate quote...same day approvals

877.285.0777

www.windvestcorp.com CA, NV, AZ, WA, OR

YOU ARE HERE

Can’t find your way through the financial labyrinth?

First Mount Vernon will lead you through!

Hard Money Loans from $100,000 to $1,500,000 •Minimum Credit 400 •No seasoning

•No up front fees •48 hour closing

All loans for business or investment purposes only For an immediate online approval and commitment letter, go to WWW.FMV1.COM and fill out our loan qualifier 6019 Tower Cour t, Alexandria, VA 22304 Phone: 703-823- 6800 or 866-908-FMV1 (3681) Fa x: 703-997-2499 Paul Fogle or Ar t B ennet t First Mount Vernon is a privately-owned, equity-based lender which specializes in lending to borrowers who require expedited closings or cannot secure funding from traditional financing sources. Loans typically funded within two business days upon receipt of completed package

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