TNR - November 2007 by The Niche Report

Issue 005 November 2007 TheNicheReport.com

The Importance of Owner's Title Insurance Avoid consequences later by insuring now.

Sale 16 Short Solution Over-leveraged problem opens door of opportunity.

Back to 24 Get True Value Selling Work a lot harder and a lot smarter.

on 29 Spotlight ML-Implode.com Owner Aaron Krowne answers our questions.

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B R O K E R S A R E F U L LY P R O T E C T E D A N D PA I D H A N D S O M E LY

CONTENTS

Issue 005

November 2007

Short Sale Solution Over-leveraged problem opens doors of opportunity. SHARON RESTREPO President of 5th Avenue Financial Group.

NICHE REPORTS NONPRIME

pg 39

PRIME

pg 40

ALT–A

pg 41

COMMERCIAL

pg 42

HARD MONEY

pg 43

CONSTRUCTION

pg 44

FOUNDER & PRESIDENT Robert Pegg robert@nichereportonline.com

The Importance of Owner's Title Insurance

KARLA J. CAMPBELL MARKETING REPRESENTATIVE AND SETTLEMENT AGENT FOR DKS SETTLEMENT GROUP, LLC Avoid consequences later by insuring now.

Get Back to True Value Selling CHRISTOPHER GEORGE PRESIDENT AND CEO OF CMG FINANCIAL SERVICES Work a lot harder and a lot smarter.

STEWART MEDNICK MORTGAGE BANKER AND REVERSE MORTGAGE SPECIALIST AT AMERICAN MORTGAGE CORPORATION W.I.N.ning Strategy.

DEPARTMENTS

NOTE FROM THE FOUNDER

EDITORIAL/CONTENT MANAGER Kristen Moser kristen@nichereportonline.com ACCOUNTING MANAGER Shawna Ingram shawna@nichereportonline.com SALES MANAGERS Jason T. Buff jason@nichereportonline.com Kim Campos kimcampos@nichereportonline.com Kim Lawson kimlawson@nichereportonline.com DESIGN Plumbline Studios, Inc. Eric Ball

CALENDAR OF EVENTS

Spotlight on ML–Implode.com

SPOTLIGHT

PRINTER / CIRCULATION MANAGER The Ovid Bell Press, Inc.

THE NICHE REPORT Owner Aaron Krowne answers our questions.

TIP OF THE MONTH

CONTRIBUTING AUTHORS Karla J. Campbell Christopher M. George Stewart Mednick Sharon Restrepo

45 6

Tip of the Month

CO-FOUNDER & PRESIDENT David Pegg david@nichereportonline.com

November 2007

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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, or other real estate finance professional 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.

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

NOTE FROM THE FOUNDER

Once when I was a child, maybe six or seven years old, my mother took me to a local restaurant for lunch. After we ate, we got up to leave and I grabbed two packets of “Sweet n’ Low” thinking they were actually sugar packets. As we were walking back to our car I tore the packets open and pored the contents into my mouth expecting a sugary, sweet overload. To my horror it was worse than anything I had ever eaten – bitter and very unsavory to say the least. That traumatizing event in time taught me a small yet unforgettable lesson in life – don’t ever eat the pink packets of sugar. Yes, I learned this lesson the hard way, however the valuable point to this story is that I learned the lesson and never repeated this mistake again. As I see it, the current state of the real estate market - the credit crunch and the real estate bubble - is another “pink packet of sugar”. And the effects of this indulgence are clearly manifested for us on the internet. Recently The Niche Report sat down with Aaron Krowne, the owner of ML-Implode.com to discuss his website (see our interview on page 29). Now, if you aren’t one of the over 14 million that have visited this website since its inception in January 2007, let me bring you up to date. Aaron started this website to chronicle the mortgage lenders that were “imploding” due to the overall market conditions and, from what many have said, careless lending practices. I met Aaron through a mutual friend, and from my limited contact with him, seems to be an educated, well informed, conscientious young man who had no clue this site would take off the way it has. Many have differing opinions towards ML-Implode.com. If you work in the industry you probably have a negative, less popular image of this website; however when viewing this website you get the distinct feeling that others seem to revel in the numerous listings of “imploded” wholesale lenders and banks itemized one after another like names on a war memorial. Either way it serves as a stark reminder, and very hard lesson learned, that “there’s no easy money!” The only way to move on is to trudge through it and get past it. There will be no easy solution, just a very real market correction. Those of us in the mortgage industry who will have learned this nasty lesson and persevere will be wiser and more effective in their job, no matter what their capacity, be it a Loan Officer, Underwriter, Processor, Wall Street analyst, or any one of the many occupations that rely on the mortgage industry. Let’s never open that pink packet of sugar again.

Robert Pegg Founder & Publisher

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CALENDAR OF EVENTS

Upcoming Key Dates & Events: NOVEMBER â&#x20AC;&#x201C; DECEMBER EFM<D9<I )''. J D K N

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Local Event: MBAA's Commercial/ Multifamily Capital Markets Conference. Capital Hilton, Washington DC. Visit www.mbaa.org for details.

NOVEMBER 13 Housing Forecast & Pending Home Sales Index Released at the National Association of Relators' annual convention

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NOVEMBER 15 Local Event: VAMB's NOVA Social. Visit www.vamb.org for details.

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NOVEMBER 20

Housing Forecast/Pending Home Sales Index Released by the National Association of Realtors

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November 2007

Local Event: VAMB's NOVA Holiday Party. Ritz Carlton, Tysons Corner, McLean, VA. Visit www.vamb.org for details.

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NOVEMBER 21 3rd Quarter Metro Home Prices/ State Resales Released by the National Association of Realtors

DECEMBER 19 Commercial Real Estate Market Forecast Released by the National Association of Realtors

DECEMBER 20 Local Event: VAMB's NOVA Social. Visit www.vamb.org for details.

NOVEMBER 28 October Existing-Home Sales Released by the National Association of Realtors

NOVEMBER 29 Local Event: MBAA's Commercial/ Multifamily Capital Markets Conference. Capital Hilton, Washington DC. Visit www.mbaa.org for details.

DECEMBER 31 November Existing Home Sales Released by the National Association of Realtors

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THE IMPORTANCE OF OWNER'S TITLE INSURANCE Avoid consequences later by insuring now. BY KARLA J. CAMPBELL

ith all of the stresses and expenses of buying a new home, title insurance is probably the last thing you ever think about, if you ever think of it at all. In my work as a settlement agent, I can say that I only get calls concerning title insurance in one out of every twenty cases. If I do receive a call, most buyers only want to know how much it costs. When I do get those rare calls when someone really wants to understand what title insurance is and what it covers, I find that most buyers know little to nothing before we start our conversation. When they do call, I explain to them what title insurance is, why they need it, and how to protect themselves in this market.

WHAT IS TITLE INSURANCE? Like most insurance, title insurance provides protection to the homeowner against a loss. This loss would arise from any problem associated with the title to the property being different than it was insured. The buyer should also understand that there are three types of policies sold by most title insurance companies. These include: a Lender’s Policy, a Basic Owner’s Policy, and an Extended Coverage Owner’s Policy. If you buy a home and use a national lender, they usually require you to purchase a Lender’s Policy, especially on loans greater than $100,000. The Lender’s Policy only protects the lender against any loss it may suffer if there is a claim. The Owner’s policy is what the buyer needs to protect his or her investment in the property. A Basic Owner’s Title Policy would provide clear title coverage to the property and protect against risks such as forgery and fraud; defective recordation; undisclosed, but recorded liens, mortgages, easements, and use restrictions; a party’s lack of competency, capacity or legal authority to act; a missing or defective legal description; and missing parties to a deed. An Enhanced Owner’s Title Policy usually costs about ten percent more than a Standard Policy, but includes additional coverage regarding access to the

property, zoning violations, easement coverage, encroachment removal, building permit violations, and inflation coverage.

WHY DO YOU NEED TITLE INSURANCE? Once buyers understand the basics of title insurance and what it covers, the next question I always get is “Why do I need it?” The possible title problems I mentioned seem improbable and unlikely so much so that many buyers think they do not need to buy title insurance when they purchase their home. They believe that they are covered by the lender’s title insurance policy. They also believe the title is clear because the title company does a search of the land records and would not let the seller transfer the ownership unless it was free from problems. But these buyers are wrong! An Owner’s Title Insurance is an absolute must for two main reasons. As I stated previously, the Lender’s policy only protects the Lender for the amount of the loan and this coverage declines as you pay down the mortgage. But an Owner’s Policy would protect the homebuyer for at least the value of the property and the coverage does not decrease in value. The second reason Owner’s Title Insurance is a must is because the title search is not always accurate. Humans are involved in the process and the search may be flawed as certain problems may not be obvious from a title search. For example, many claims result from a simple mistake by the title examiner in missing a recorded lien or by the settlement agent typing the wrong parking space number in a legal description. Just like with car insurance, one needs title insurance to cover those “accidents” that just happen, no matter the diligence of the parties. TITLE INSURANCE: MORE IMPORTANT THAN EVER WITH THE CLAIMS ON THE RISE If you are still unsure about why title insurance is a critical purchase for your clients, the current state of the real estate market will show that title insurance coverage is more impor-

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tant than ever. We have all been reading and hearing about the unprecedented rates of foreclosures across the country and many homeowners are desperate to off load their homes. With these desperate times, buyers are led to desperate measures. Even with increased diligence by title insurance and lender underwriters, these desperate homeowners, and the other affiliated parties, are finding ways to defraud and scam the new homebuyers in methods ranging from the simple to the very complex. Some of the more straight-forward and frequently seen crimes leading to claims include identity theft, illegal flips, defalcation/embezzlement by attorneys and agents, forged releases, and intentional delays in recordings. Recently, new warnings have come out about the more complex real estate fraud schemes, especially those involving Foreclosure Rescue Firms. These programs usually involve several versions of a Lease/Buy Back Option. In the different versions, the firms offer to have the title transferred to an investor with good credit. The investor will pay the mortgage while the homeowner rents the property and rebuilds their credit to buy back the home at a later date. Subsequently, the new owner either refinances and pockets all of the equity or sells the property and pockets the equity. Both scenarios result in the homeowner being evicted and losing the home. If these homeowners have title insurance, many will have claims, but they must be innocent parties and never involved in scam. Additionally, it is important to remember that anyone involved in the real estate transaction might be a source of the fraud. Therefore you should encourage your clients to be diligent in monitoring their closing. It is your client’s responsibility to ensure that all parties follow the rules and procedures to prevent even the possibility of fraud. If your client does everything they can to prevent the fraud, but something still goes wrong, then title insurance will protect them. Your clients can avoid the consequences later by insuring themselves now. Karla J. Campbell is a Marketing Representative and Settlement Agent for DKS Settlement Group in Northern Virginia. She holds a B.A. in Political Science form the University of North Carolina at Chapel Hill, a M.A. in International Relations from the University of Wollongong (in New South Wales, Australia), and a J.D. from American University’s Washington College of Law. She is available to conduct Home Buyer workshops or to speak about Home Buying to your local organization’s next meeting. For more information about title insurance and residential real estate closings in DC, Maryland, and Northern Virginia, please contact Karla at 703.338.3301 or by email - karlacampbell@dkstitle. com or visit the company’s website at www.dkstitle.com. 14

November 2007

SHORT SALE SOLUTION Over-Leveraged Problem Opens Doors Of Opportunity. BY SHARON RESTREPO

n a market where so many homeowners are overleveraged, home sales and loan refinancing slow down. Business slows for real estate agents, investors and mortgage brokers. Lenders struggle to come up with new loan solutions for those borrowers in trouble and attempt to change their own lending criteria to avoid making more of the bad loans they encouraged in the first place. As you know, many very low interest rate loans with upward adjusting rates were introduced within the last several years. Borrowers who wanted more house than they could actually afford used these loans to make the

acquisition affordable, believing that as the interest rate increased, so would their income and/or appreciation of the property. When that didn’t happen, consequences followed. For example, borrowers (now homeowners) struggled to make mortgage payments, and many homes went on the market for sale in an attempt to avoid foreclosure. When that happens in large quantity, values drop. That’s what we are watching occur today… the consequence of the pursuit of the American Dream, whether affordable or not.

HOW DO THOSE IN THE REAL ESTATE INDUSTRY CONTINUE TO EARN A PAYCHECK DURING TIMES SUCH AS THESE? They must learn how to help these over-leveraged homeowners use the solutions available to them, such as the short sale solution. Most homeowners in trouble are not aware of all of the solutions available to them. Although their lender is required to send a letter outlining possible solutions to qualifying borrowers when they become delinquent, the solutions mentioned in the letter are not explained. This is where a savvy mortgage broker makes the difference in helping a troubled homeowner with the right solution and being rewarded for that knowledgeable assistance can come with a paycheck. This creates a win-win solution. The homeowner may have a real solution and the mortgage broker may earn more business. The short sale is one of the most valuable solutions in an overleveraged market such as the one covering most of the nation right now.

HOW IS A SHORT SALE ACCOMPLISHED? A short sale is done when the seller of a property whose mortgage is in default cannot sell it for enough to satisfy all of the debt. Based on criteria the seller’s lender reviews, the lender may agree to reduce the loan balance to allow the seller to sell or often times refinance the property through a lender other than them. When the seller and buyer can meet the lender’s short sale criteria, a short sale will be accepted. Lenders would rather take a short sale than take the property through foreclosure and own it. The lender does not allow the seller to earn sale proceeds in a short sale transaction. Although lenders agree to pay the seller’s real estate commission and reasonable closing costs, understandably, they will not tolerate allowing a delinquent seller to profit from the lender’s loss. Additionally, the superior lien-holders accepting a short sale will not allow inferior liens to be paid in full. Keep in mind that a short sale offer may be submitted when a borrower is in default, in foreclosure or in a redemption period. Short sales will be entertained by every lien-holder against the subject property. Note that the more inferior liens are expected to accept the deepest discounts, as they are in the most jeopardy of receiving nothing at foreclosure sale. Some states honor a redemption period, which is a period following the foreclosure sale where the homeowner still has the right to redeem ownership by paying all that is owed the foreclosing lender(s). However, when a property has already been vacated by its’ owners,

the foreclosing lender may plead with the court to receive ownership sooner and it will be granted. In real estate market cycles called buyers markets, short sales are common. Real estate values have dropped for a variety of reasons, making it difficult for sellers to unload over-leveraged properties. With the right ingredients in your package, lenders will entertain your short sale offer. Short sale ingredients look like this…lenders will require the seller to fax or mail them an executed sales agreement stating the price the buyer is willing to pay; an estimated HUD-1 form, also known as a closing statement; real estate listing agreement; the borrower’s (seller’s) two most recent tax returns, bank statements and paycheck stubs; the seller’s letter explaining their current situation (also known as a hardship letter); along with the buyer’s loan pre-qualification letter or proof of funds. In order for the buyer, real estate agent, or mortgage broker to speak with the lender about the short sale offer, the seller must fax an authorization to release form to the lender allowing the buyer to discuss their private loan information. Keep in mind that faxing is the most prevalent and recommended short sale offer delivery method. If you must mail the short sale offer, be sure to use a delivery method that gives the sender proof of receipt, and never send your only copies. Be sure to put the seller’s/borrower’s loan number on every single sheet being submitted to the lender. Always call to confirm receipt as you cannot afford any delays in this already long process. Short sales can be done in one telephone call, but

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more commonly take approximately 90 days. If a foreclosure sale date has been set for the seller’s/borrower’s property already, be sure your fax cover letter requests a foreclosure sale cancellation or postponement in order to close the short sale transaction. The majority of the time, the lender will cancel the sale, especially when the short sale offer package has all of the ingredients mentioned here. Remember, they don’t want to own this property either…let’s help them out. Next, the lender reviews the sales agreement to find any red-flags, such as large seller concessions to the buyer for closing costs or repair costs. Lenders will typically deny an offer with large seller concessions and sometimes any concession at all. The proposed HUD-1 is reviewed because it reflects all of the closing costs the lender is expected to pay and also shows their net proceeds. This net proceeds amount is what the lender is being asked to accept in the short sale offer. A real estate listing agreement is required to verify that the public is aware that this property is available for sale. The hardship letter is reviewed to show why the sellers are in need of the short sale (for example, job loss, medical emergency, mortgage interest rate adjusted upward and it is no longer affordable, or real estate tax or homeowner’s insurance increases); lenders will generally not accept short sales from sellers who can afford to pay but choose not to. The buyer’s loan pre-qualification or proof of funds letter shows the lender that when they accept this offer, the buyer will be able to perform. Lastly, the tax returns, bank statements and paycheck stubs 18

November 2007

are used to verify the seller’s inability to qualify to keep the property. The tax returns may still reflect a time when things were better for the sellers, but the current bank statements and paycheck stubs should reflect a different situation. When a short sale is being requested for refinance purposes, the short sale package would include the refinance pre-approval documentation in place of a real estate sales contract. The net sheet would show the lender what they would receive at closing of the refinance. A typical short sale acceptance is approximately 80% of today’s appraised value, minus closing costs. The lender will order their own appraisal or real estate agent’s opinion of value (called a “BPO”) to be done once they begin to entertain the short sale offer. This is the value they will use and base their short sale decision on, not the owing mortgage balance. Lenders will agree to pay up to 5% in real estate commissions as well as reasonable closing costs. They will typically agree to pay delinquent homeowner’s association dues and items they would be “stuck” paying if they ended up owning via foreclosure proceedings. If there are inferior liens, those must be negotiated to very small amounts. Keep in mind that inferior liens are in jeopardy of being “wiped away” at a foreclosure sale by the superior foreclosing lien, so they are usually agreeable in short sale negotiations. The worse the condition of the home, the more of a discounted short sale may be asked of the lender. When you move away from the typical 80% acceptance rate, the

short sale will become more difficult to accomplish, but not impossible. Absorbing this knowledge will allow those working in the real estate industry to refocus their business efforts in a new direction and begin earning again. Real estate agents can now take listings they would normally not be able to sell and with the lender’s permission, mark down the list price to encourage offers. They are able to increase their inventory of correctly-priced listings and increase their ability to earn commissions. Mortgage brokers can assist homeowners with their short sale in order to obtain a refinance loan for them, and actually close new loans. They can also work along side real estate agents with short sale listings by helping their buyers obtain the financing they will need to close on this new inventory of properties. Mortgage brokers can also benefit by doing the following to prepare their business for short sale refinances and sales. First, learn which lenders (starting with those you already have relationships with) will approve a short sale in order for their borrower to refinance rather than sell as their only option. Once locating the lenders who allow their defaulting borrowers to obtain refinance loans using the short sale solution, make a list. Then, put a plan together to market to and locate delinquent homeowners mortgaged by this list of lenders. This may open a door to a whole new source of refinance mortgage brokerage income. Secondly, network with real estate agents who can bring you their overleveraged sellers along with a buyer/borrower willing to purchase

the home. Explain that you can qualify and obtain financing for their buyer while you are also able to reduce the mortgage balance of the seller’s home to the amount the buyer is willing and able to pay, not to mention the actual appropriate market value. Let’s discuss some additional details regarding the short sale. With respect to the seller’s credit rating as affected by a short sale: in most cases, when the short sale transaction closes, the mortgage credit line will reflect a paid or settled status, which is less damaging to the score than a foreclosure. Credit is still damaged as all of the late mortgage payments already dropped the credit score.

WHAT HAPPENS TO THE DOLLAR AMOUNT THAT THE LENDER DISCOUNTED? In most states, when a homeowner loses their home in foreclosure OR avoids foreclosure by selling in a short sale transaction, the loss taken by their lender will result in either the issuance to them from the lender of an IRS form 1099 reflecting the income earned by the borrower (borrowing on the loan and paying back less for full satisfaction, thereby earning), OR a deficiency judgment, which the lender can pursue at their will. Only a full satisfaction of debt can prevent these consequences. The seller may consult his tax advisor to see how either consequence will affect his financial and/or tax situation. Keep in mind that at the writing of this article, the IRS is changing their rules regarding this loss and its’ affect on the homeowner with regard to the tax consequence.

HOW DO SHORT SALES AFFECT OUR REAL ESTATE MARKETS? When a market is saturated with foreclosures, the market is already negatively affected. The result is an abundance of homes on the market for sale. When this happens, prices must drop to stimulate sales. When folks in trouble owe more than their neighbor is selling for, they find themselves unable to sell, with no solution. A short sale is one of their only options. Their lender(s) will have to agree to accept less than what is owed as payment in full in order for their home to be sold. As this market continues, lower sales begin to be recorded in public records. This new data causes markets to drop because appraisers must use these newly recorded lower values when appraising the next home. In this situation, buyers who can wait to purchase a home will because they become convinced that prices will continue to fall, so they should wait for a better deal. A domino effect takes place and home values as well as home sales drop. This creates what is called a “buyer’s market.” In the big picture, lenders are much better off accepting viable short sale offers and removing defaulting loans from their portfolio rather than suffering the effects of taking the properties through foreclosure and owning them. Once owned by the lenders, they are referred to as REOs, which stands for “real estate owned.” These REOs are listed with real estate brokers and offered for sale to the public. WHAT IS THE MOST IMPORTANT PART OF THE SHORT SALE? In my opinion, the most important short sale piece beside the

written offer package is the lender’s appraisal or BPO of the subject property. It is important to have someone meet the person doing the BPO or appraisal at the property to personally show it to them. It is this opinion of value appraisal that gives the lender their grounds for counteroffering, accepting or denying the short sale offer. In Summary, this “overleveraged” problem opens doors of opportunity. Opportunity for you to help more homeowners find good solutions, learn how to negotiate short sales, and make more beneficial lender contacts than ever. Remember to keep the needs of the homeowner first in any transaction and learn from the mistakes of others so that you don’t fall into this situation yourself. Sharon Restrepo has been investing in foreclosed and distressed real estate for over a decade and has been a nationally-acclaimed real estate educator for nearly ten years, specializing in foreclosure investing and short sales. She is President of 5th Ave Financial Group which specializes in wholesaling distressed real estate to investors; Broker and President of 32 West Realty; President of HomeRescueSolutions.com, a marketing company designed for investors to reach and obtain seller leads; and Vice President of REIP The Rewards®, which provides real estate education resources for investors. Sharon also co-founded the Florida Real Estate Investors’ Association (the “FLREIA”). Additionally, she has authored real estate investment guides and recorded numerous popular audio and video lessons. Find out more about her and her instructional courses at www.flreia. com and www.32westrealty.com.

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Bank Lending Guide and your e-MITS feedback for detailed information on products, programs, procedures, representations and warranties. Non-FHA-approved brokers are not permitted to offer FHA loans. Discuss with your customers the features of loan products offered to ensure that their unique ďŹ nancial needs are met. Sources: U.S. Administration on Aging, Department of Health and Human Services, Department of Housing and Urban Development and RBS Greenwich Capital. 11/2007

GET BACK TO TRUE VALUE SELLING Work a lot harder and a lot smarter. BY CHRISTOPHER M. GEORGE

hirty years ago, mortgage brokers first opened for business. They offered a clear value to borrowers: For a reasonable fee, the broker would shop the client’s loan for them and find them the best deal possible. The borrower saw a true value in paying that fee. As a result, mortgage brokering caught on as a useful addition to the home loan business. Over time, though, we drifted away from that business model. As refi booms came and went, bad practices crept into the profession. Lenders began to compete for broker business by offering compensation, and “no cost loans” hid the fact that the borrower was still paying the broker. To survive today, you need to break out of that less upfront approach and get back to basics. Earn your commissions directly from the borrower by offering true value in exchange. The challenge of finding loans for customers in today’s credit crunch dwarfs any previous market contractions in my twenty years in this business. Yet, in a recent interview, I was quoted as saying “it’s a great time to be in the mortgage business”. I really believe that. I have lived and worked through previous mortgage industry contractions, and the experience taught me that good mortgage brokers can find opportunities in any business cycle to lay the foundation for future success. Surviving a difficult market will make you a better mortgage broker because you will truly regain the selling skills and marketing savvy you need to out-compete competitors long-term. And as weaker competitors exit the business, you will be positioned to expand your market share. Of course, if you want to remain a mortgage broker long-term, “working harder” barely begins to describe what you will have to do over the next year or two. Smart agents are working harder and smarter, 24

November 2007

taking steps today that may not pay off for a couple of years, but will lead to a comfortable, thriving business when they do pay off.

RESIST DESPERATION! You know today’s tight market allows no room for error. You feel like each lost lead or denied file means a lost meal on the table and you may be tempted to chase every available transaction and maximize the return on each. A broker who called me last month to discuss how to sell CMG’s Home Ownership Accelerator® loan was astounded when I laid out the time he needed to invest in building a pipeline of this new loan product. His response: “Who has time for that? I need loans that will fund today!” I strongly urge you to resist that impulse. Never lose your focus on longterm gain. Keep your customer’s needs first, not yours. Happy customers are your best insurance of future income. If you abuse them in an attempt to maximize current income, you are throwing away big chunks of a profitable future. Smart loan agents continue to add real value to their client relationships, even if it costs them some commission on the current deal. They consider that “lost income” to be an excellent marketing investment. Smart loan agents also built up a financial cushion during the refi boom, and are now in a position to invest that money in the future, laying the pipe they need to ensure that when the crunch eases, they will be best positioned to profit from the increase in volume. Even without a financial cushion, however, you have a lot of opportunities to improve your business productivity to lay the pipe needed for future success. The first thing you need to do is break those bad refi

boom habits. Do you: • • • •

Work 9-5, or less? Live off of leads exclusively? Neglect your past clients and referral partners? Sell “no cost loans” and live on YSP?

If so, a smart broker may be in the process of stealing your future business volume.

GET BACK TO WORK. Let’s start with work habits. If you are still working 9-5 today, you will be in a different business by next year. Any person who has been in our business at least ten years remembers how brokers originally made a living. Just like the old family doctor, you were always on call. It is time to get back to that full-service business model. Weekends and evenings are your prime hunting hours for business development. Every weekend should be dedicated to helping realtor partners sell their listings. Every evening should find you at someone’s kitchen table, laying out sound advice about their financing options, becoming a full partner in their financial life and asking for referrals. Your successful financial planner partners are working evenings. You should be working right along with them, if you want to keep them as partners. The second source of opportunity is a bit harder for all of us: Manage your time better. Everyone knows this is important, but it is still easier to busy yourself with an active file than it is to call four or five past clients to reconnect. If you let it, work still expands to fill the available space. You have more time to develop new business because you have fewer files to work, but stay vigilant. Be jealous of your time. Work your loan files as intensely as you did during the boom to keep the rest of your day free for business building projects. A third opportunity lies in education. While you work harder, you should also work hard at being smarter. Use some of your time to learn more about being a full financial consultant, say, through an outfit like the CMPS Institute. Also learn everything about any new loan product that is currently available, and include them in your discussion with every client. A broker who sells a lot of our Accelerator loans told me he mentions it to everyone, even if they can’t qualify for it. He gets two benefits from this approach: First, he looks smarter that a competing agent who can’t talk

intelligently about all available options, and second, the person who doesn’t qualify knows people who may, which primes his referral pump.

REVIVE THE IDEA THAT A BROKER IS PAID A COMMISSION FOR PROVIDING A VALUABLE SERVICE. The fourth opportunity to set you apart lies in actually charging them a commission directly. This, frankly, may be the hardest step to take, because we as an industry have painted ourselves into a corner by selling “no cost loans”, giving borrowers the false impression that brokers work for free. How, then, can you successfully sell a commission today? The answer is surprisingly simple: Tell the truth. One of my favorite business partners has always told her clients that she doesn’t work for free. “I tell my clients up front that I don’t work for free,” she told me. “I always explain in detail what value they will get for that fee, though. Most clients are happy to pay a fee that brings them real value. Of course, you have to truly deliver that value!” Be honest with your clients about how our business works. Make them smarter consumers by explaining how rebates, points and interest rates are really related. Draw up a full schedule of pricing for them on the loans you are recommending. Explain how points are prepaid interest, and rebates are deferred interest paid over the life of the loan through the higher rate. Tell them up front what your fee will be, and (this is critical) why it is worth paying. For the fee, they are buying: Knowledge – You know more than they do, and can find better deals. Time – You shop for them, freeing them for other professional or personal projects that need attention. Effort – You become their advocate, taking charge of the hassles of paperwork and negotiation on their behalf. A smarter client is also able to resist seemingly tempting offers from your competitors, because you have armed them with the needed tools to see through the hype. They won’t forget where they got the help, either, especially when you remind them about it in your ongoing communications to them.

STOP LIVING ON YSP. Frankly, when an agent lives on YSP, they end

TheNicheReport.com

up working for the lender, and the borrower’s needs become secondary. Turn that to your advantage by educating your clients on how YSP really works. Let them know that if a rebate loan is chosen, you will transfer that value to them. In effect, you should stop working for the lender, and return to working for the client. Referrals come from happy clients, not happy lenders.

GIVE TO GET. The ironic result of putting the client first is that each transaction may very well net you less money. It is hard not to try for every dollar in these lean times, but the smart broker resists the temptation. If you clearly lay out for the client just how much money you are saving him or her, both at the funding table and long-term in less total interest paid (the ultimate goal), you will create happier clients and more referrals. More referrals also means less

money spent on leads and other marketing initiatives down the road. So, giving a little now really can result in maximizing income overall. Honesty, placing the client first, and offering an objective menu of loan options all will lay the groundwork for years of productive relationships and referrals. “Back to Basics” may sound like a hackneyed old cliché, but it fully applies to your business model today. If you are truly ready to work a lot harder, and a lot smarter, then 2007 really will turn out to be a great time for you to be in the mortgage business! Christopher M. George is president and CEO of CMG Financial Services, headquartered in San Ramon, Calif. CMG Mortgage Inc., CMG’s wholesale-mortgage-bank division, has six regional offices that lend in 40 states. Find CMG Mortgage at www.cmgbanking.com.

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November 2007

Make more money without selling rate! Selling pay-off solutions can re-energize your business long-term. Use CMG’s revolutionary new Home Ownership Accelerator® loan

to revitalize your business. The Accelerator can build your client’s wealth faster, lower their interest costs and won’t crimp their lifestyle.

Home Ownership Accelerator ® Spend five minutes at www.homeownershipaccelerator.net and see the future of mortgages. Then call your CMG Account Executive and get certified to sell the Home Ownership Accelerator.® 㩵㩷Open doors to high-credit, high net worth prospects 㩵㩷Put your current client list back in play 㩵㩷Attract new referral sources: financial planners, realtors, CPAs

800.501.2001, ext. 3043 The Accelerator will change the way you and your clients think about mortgages and money forever. “Home Ownership Accelerator” and the yellow flying house logo are trademarks of CMG Financial Services, Inc. 2007 CMG Mortgage, Inc. CA Dept. of Corp. Lic. #4150025 under CRLA. This information is for mortgage bokers only. MI, Lic. #FR0989/#SR1689, MO, DFI HUD Exempt, OH, DFI #MB5018/#SM342; OR, ML Lic. #3000, TN, DFI Reg. #2275; VA, Lic. #MLB-760; AZ Mortgage Banker License #0903132.

SPOTLIGHT

SPOTLIGHT ON ML-IMPLODE.COM Owner Aaron Krowne answers our questions. BY THE NICHE REPORT

If you didn’t read the “Note from the Founder” on page 9, please go back and read it as a prelude to the following interview with Aaron.

he Niche Report recently sat down with Aaron Krowne, the owner of ML-Implode.com. MLImplode.com is a website that chronicles the “implosion” of mortgage lenders from the much publicized downturn in the market, and as of this printing, has had over 14 million visitors. I believe Aaron and his site have been misunderstood by many folks in the industry who only see this as a website bent on reveling in others misfortune, coming across as a villain of sorts with the lenders it unassumingly mocks. The site is actually full of up to date industry news and a great deal of satire; one must view ML-Implode.com with this in mind. This website has caused such uproar that a large wholesale lender has banned their employees from viewing this site; but like him or not, he’s getting a message out load and clear. Please give our audience a brief description of Aaron Krowne. Also, please include your age, education and background. "I’m twenty-seven; live in Atlanta, GA (though I’m from the Alexandria, VA area), and was trained as a computer scientist (MS) and in mathematics (BS). I also studied some philosophy and physics. I worked as a computer scientist on grant projects until recently, when I left my job to work on ML and other webbased information ventures. I’ve been investing and studying economics on the side for almost a decade now. I’ve been blogging in various forms since around 2002 (most recently at autoDogmatic.com and the

Wall Street Examiner). I’ve also run the planetmath. org wiki-like site since I co-founded it in 2001. I’m a “unique” blend of technician, scientist, entrepreneur, activist, economist, and investor. Now I guess I could add “media and marketing guy”." When did you launch ML-Implode.com? "January 1, 2007." What was your inspiration and/or motivation for starting ML-Implode.com? "I thought the fate of housing finance was tremendously important to the fate of the economy, and saw that a major turning point had arrived. Since no one else had made a “story” of it, I put together the first cut of the Implode-o-Meter as a simple web page with six lenders, and began posting about it to various blogs. Apparently I made the right call and the site caught on like wildfire. The point of the site is to document the impact of the financial side of the housing bubble, now on its downside, and to cover the causes of the situation and the reaction to it. There has been tremendous success already in raising awareness of housing finance’s importance to the economy, and the issues with how sub-prime was financed. There has been some success in getting people to realize that prices do need to come down, and that the Fed and “dollar recycling” financing by other central banks played a major role in the debacle. There has not yet been much success in getting people to realize that the problems go beyond sub-prime and that banks have not yet admitted too much of the impact – so there is work still to be done." TheNicheReport.com

SPOTLIGHT

website and your motivation behind the acquisition? ML-Implode.com seems to be the flagship site for folks who can’t stop watching the “implosion” of the current state of the mortgage market (much like a car wreck), including industry professionals, why is this? "Well many have told me they check for information that might let them know whether they will have a job tomorrow, or whether their correspondents will still be there. I’m sure most would rather not “have” to look…" Some have referred to ML-Implode as a “doom n’ gloom” website for the mortgage industry. Do you agree or disagree and why? "I agree. But sometimes times are gloomy. We’re trying to provide “constructive” services to help out (by popular demand.)" ML-Implode is known for having the most up-to-date list of defunct and “imploded” lenders. Tell us how this happens. "The community makes it happen. At first, I just skimmed what I could from the news. However, once the broker/LO community (and others involved in mortgage banking) started paying some attention to the site, advance tips started flowing in. We were able to stay on top of events better with those tips. This made the site more useful to that same community, which caused even more tips to come in. Now we get literally hundreds of emails a day. It takes multiple people to go through all that, and we’d like to hire more." With all the attention ML-Implode has received over the last 6 months, where do you see ML-Implode one year, three years or even ten years down the road? "Some people are surprised the site has stayed relevant this long. I don’t know how long the site will stay “active” in the sense of having a huge industry following -- I certainly plan to keep it going as long as there is demand for it. But I certainly plan to leave it up indefinitely as a “time capsule” of what happened. We should never forget!" We heard that you recently bought Casey Serins site IAmFacingForeclosure.com. Can you tell us about his 30

November 2007

"Casey was a blogger who blogged about his own misadventures in attempting to be a big real estate investor at age 24, egged on by all the motivational real estate seminar folks. He was at one point stuck with 8 properties and was $2.2 million in debt. Unfortunately the blog failed to do much more than become a huge distraction in itself, causing him more grief than help, and in the end he couldn’t do much to help others in similar (though typically of smaller scale) situations. He decided to shut it down and I happened to be on his mailing list from some brief earlier correspondence and worked out a deal with him. Foreclosures are unfortunately going to be a growth industry for the next few years, and I thought this would be a reasonable play on the trend. There is still much more to be done to build out the site, but I plan for it to be primarily a free information resource for people in and facing foreclosure, with additional commercial services available if desired. That was a fun week because I had to raise the funds to buy IamFacingForeclosure.com, and at the same time I found out the lawsuit against ML would not be dismissed as per California anti-SLAPP statute, implying much greater total costs for that suit." What’s going on with the lawsuit pending against you and ML-Implode (or as much as you can tell us)? "The suit is from a company (LCC) claiming that they were harmed by a message we posted from an informant claiming various negative things about them to the effect that they were “imploding”. The post generally checked out with other tips we had received and public articles about LCC’s troubles. Nevertheless, we posted an advisory on the entry when LCC complained to us, then took it down within a day. However we are still being held to damages for warehouse lines that were pulled in that brief time interval. It seems odd to us that notice-and-takedown conventions should not apply for “bad” information in this sort of setting, and doubly odd that we should be held responsible for the decisions of bankers who should have been doing their own follow-up research. But the suit is stubbornly not going away. I think the court made a bad call in not dismissing the suit as per California “anti-SLAPP” statute. In our opinion (as

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SPOTLIGHT

per above) there is little substance to the suit – it seems the plaintiff just wants to get back at this contentious “whistleblower” and is putting ML in financial peril to exert pressure. Unfortunately for both of us, we don’t believe in “ratting out” informants for expediency. Anyway, as a sorry consequence of this course of events, our costs (already past $25,000 for a few months of motions) are expected to accelerate. This once again puts the survival of the site in jeopardy. It has also made it very difficult to expand, so ironically, LCC is ending up hurting the quality of the site, while their core claim is effectively that we were not doing a good enough job." What kind of feedback do you get from the folks who visit ML-Implode, any death threats from bank executives (jokingly)? "The vast majority of the feedback is supportive. Most of the complainers seem to largely misunderstand the site. They are the types who buy the simplistic Angelo-Mozilo style argument that anything one does to get a person into a home is legitimate – never mind future foreclosures or bankruptcies or a lifetime of excessive debt burden or out of control home prices. Most others realize that things got out of control, and want to see what the impact is, and try to understand what went wrong." What would you like say to the over 10,000 mortgage brokers, loan officers and industry professionals who receive this magazine? "We’re going through a return to financial prudence, concern for customer well being, and the need to add real value to the housing finance process. Those who were in it for the “easy buck” will be gone. Ultimately it will be a good thing for the industry. "

and evaluation questionnaire. There are spots available at a variety of rates starting at $500/mo, which we think is not bad for a site with 100-300k unique visitors (chiefly in the industry) each day. The industry needs strong hands and stable companies, so please do come forward if this is you!" And last, but certainly not least, what’s with that big, bright “VOTE Ron Paul” banner ad on Ml-Implode (now is your chance to give a “shout out” for Ron)? "I’m glad you noticed. I see the banking system and the Fed in specific as the ultimate causes of the housing finance collapse. One of Ron Paul’s main platform elements is the reform or abolishment of the Fed, to bring sanity back to the banking system. Dr. Paul suggests hard money (a precious metals-based standard). This is little more than going back to what the Constitution spelled out in terms of a monetary system, which was in place from the founding of the Republic until 1913 when the Fed was created, arguably violating the Constitution. During this (pre1913) era, the dollar gained value, workers made more money in real terms every year, and regular folks could accumulate their retirement with simple savings (even without the use of a bank or investments). We also had no major economic depressions or recessions. So going back to such a system is certainly worth considering and not dismissing out-of-hand just because the “mainstream” candidates never discuss these things! Incidentally, Kucinich is also calling for major reform of the Fed, so you have an option on both sides for some meaningful banking and monetary system reform."

I noticed ML-Implode was now allowing the “Top Non-Imploded” lenders (a small beacon of hope for those of us still in the industry). How does one get on this list? "If you are a lender who plans on being around for a while and has some basic evidence to make a good case for that, you should consider putting yourself forward on our list. Just send an email to the address in the non-imploded box on the page, and we will send you our rates

TheNicheReport.com

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Hello.

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Why Guaranteed Rate? Guaranteed Rate has a broad and unique product menu, unparalleled service and price to make a truly dynamic lender. Guaranteed Rate was designed for you, to put you, our client, in the lead in your market place. As a professional, you know that the mortgage business is complex. At Guaranteed Rate we understand that, and we’re here to make it simpler and faster so you can save time and close more loans. Bottom line, Guaranteed Rate and I will make you more efficient and more competitive. Here is some information on just a few of our products.

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TIP OF THE MONTH

TIP OF THE MONTH W.I.N.ning Strategy. BY STEWART MEDNICK

he other day I was chatting with a friend and fellow football coach, Haywood Simmons. Yes, I am an assistant varsity football coach at a local high school. I love the game and as a former football player myself, I believe that many lifelong lessons are learned on the grid-iron. Coach Simmons and I were sitting at my kitchen table sipping morning coffee. Every time he raised his mug for a sip, I was mesmerized by the large, multijeweled National Championship ring adorning his right hand. He earned the ring in the 1993-1994 season as a defensive tackle for the Wisconsin Badgers football team after beating UCLA in the Rose Bowl. “Hey Coach,” I started, “I bet you have some great stories of the glory days, huh?” “Some of the greatest lessons in life I learned from Head Coach Barry Alvarez. He is, to this day, one of the most influential people in my life. He taught me about the ‘W.I.N.ning Strategy’ I use in my everyday life…”.

W.I.N. WHAT’S IMPORTANT NOW. I listened intently as I learned about using time wisely and prioritizing events. I started to think of many motivational and time management gurus and how many of the tips I gleaned from them over years seemed to fit nicely into this framework. Mundane, unprofitable and unanticipated tasks have a way of eating up massive chunks of time in any business day. Here are some suggestions for focusing on profitable and important tasks daily with W.I.N. The wonderful aspect of W.I.N. is the ability to easily customize a system to fit anyone’s needs for any event or length of time. In all situations, the first step is to determine relevance of activities to a specific goal. Perhaps you

November 2007

are prioritizing necessary actions to clear conditions on a loan amongst other daily activities like returning phone calls, keeping appointments outside of the office, or responding to emails. Prioritize these activities. Some activities may be Deleted, Delegated or Deferred. Do the rest. I will explain more on the “Four Ds” later in this article. Assessing which tasks to do immediately can be pooled in two categories: what tasks are prerequisites for goal completion and what tasks make money. Each task should stage the next one on the list when completed, so a natural progression and smooth transition from task to task transpires. When a task is completed, think to yourself, “What’s Important Now?” and move to that task, which should be the next one staged from the newly accomplished task. Seems easy and obvious, but a good way to mentally take a role-call of tasks and the order they will be performed. In the example of clearing conditions on a loan, you should take actions as needed for acquiring necessary papers for clearing each condition and perhaps the next logical step would be to fax or overnight them to the underwriter. What’s Important Now? Call the people involved so they can be updated. Task completed and goal accomplished for clearing conditions. What’s Important Now? Look at your ‘makes money’ or deferred list and attack the next item. Perhaps you have an important email from a prospect to which you need to respond. That took ten minutes and it is done. What’s Important Now? Twenty minutes before you have to leave to meet a client…enough time to call a financial planner or banker acquaintance you have not talked to in months; a deferred list item. Refresh the relationship and inquire about any possible referrals. What’s Important Now? It is now time to leave for the appointment; a ‘makes money’ list item. The appointment took 90 minutes and you are driving back to the office. Perhaps you should stop for lunch and

TIP OF THE MONTH

utilize the ubiquitous business card technique I wrote about in last month’s column to establish a new relationship. Perhaps the same technique can be used when paying for gas. You are back in the office. What’s Important Now? You should be thinking about the next task when driving to the office. I have some of my best ideas when driving. I created six months worth of ideas for “Tip of the Month” in just over 100 miles of total daily commutes. The concept of time management is built in to this simple system so time is always being utilized effectively. A day of condition clearing, phone call making, appointment keeping, and meeting going can be very hectic. How will you stay on task and still leave work on time to pick up the baby from daycare? The Four D’s is a decision making tool for this purpose. Coach Simmons talked about this and how he uses it. He will look at an item and ask himself, “Is it important to my goal?” If “no” is the answer, then assess if it should be deferred for later. If so, defer it. Is it even important? If not, delete it. Can another person do it for you? If so, delegate it. What are left are the money making activities. Prioritize and do it! Sally McGhee, a nationally recognized productivity specialist, talks about this technique as well. She applies it to managing email. Email can occupy an hour or more in our day. She says you can generally delete half the emails you receive daily. Then she will see if any emails require a specific action that can be completed in a two minute period. If so, do it. If you can not delete it or do it, then can the email be delegated? If so, spend no more than two minutes to forward an email to delegate it to someone. If you cannot delegate it in two minutes or a task is required

that will take more time, defer it. With the W.I.N. technique, the Four D’s dovetail nicely into the structure of organizing a day. My dad had a question he would spout off every time I would become frustrated or overwhelmed with many tasks or tight time constraints, “How do you eat a whale?” I would respond, “One bite at a time.” Each time you ask yourself, “What’s Important Now?” you are taking a bite of that proverbial whale. Each bite is decisive, relevant, and timely in accomplishing a goal. Coach Simmons runs a very successful marketing company as a result of his ability to prioritize and stay on task to accomplish goals and satisfy the customer’s needs. He creates and delivers great internet and hard copy products customized to the desires of the clients which include many professional athletes and sports teams as well as mortgage and finance companies. He follows a W.I.N.ning strategy everyday. I laughed when coach finished talking over our coffees. He asked, “What is so funny?” I told him, “From football, I learned to eat a whale!” Stewart Mednick is a seasoned mortgage banker and published author. His writing focuses on relationship development, customer satisfaction, marketing and sales techniques. Mednick is also a business coach and consults on these topics. Mednick can be contacted at 651-895-5122 or smednick1@netzero.net Coach Haywood Simmons is President of Advance Marketing Group and can be contacted at 612-239-2617 or hsimmons @advancemarketinggroup.com

How do you differentiate yourself from other brokers? Call us to learn about alternative commercial financing Toll Free (866) 634.1270 • www.FairviewLending.com

TheNicheReport.com

NICHE REPORTS

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Tribeca Lending

888.285.2536

ADVERTISE YOUR NONPRIME NICHE 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.

TheNicheReport.com

NICHE REPORTS

PRIME

817.545.6153

“Best in Business” Technology giving you 24/7 access to the industry leading rates and service you should expect from an Inc. 500 organization

Gateway Mortgage Group

To EAIIs-VA-Manual FHA Available to 550 Credit-Broker Packet on Rates Page www.nonprimewholesale.com

Gateway Mortgage Group

817.545.6153

Guaranteed Rate 703.989.2276 Ask for John Lovell

Indymac Bank 866.690.2240

Jumbo - Super Jumbo, Full Doc, SIVA, DTI up to 50% Industry leading rates,Work Visa’s accepted

Levels I, II, and III, Flex 97 and 100, NO MI (Lender Paid), Program up to 100%, No hit on SISA w/720+, My Community Rates consistently ranked in top 3 Agency Conforming and Fannie Mae programs available, including MyCommunityMortgage™, Flexible 97™, Flexible 100®

866.690.2240

Reverse Mortgage products available for FHA- and Non-FHAapproved customers. Flexible lending limits for higher value homes

Irwin Home Equity

100% LTV First Mortgage with no PMI, Full Doc, Cash Back up to $200K

Indymac Bank

888.524.7946

Irwin Home Equity 888.524.7946

Combo programs; 100% First with 125% Second for complete ﬁnancing with no PMI, Full Doc, Cash Back up to $100K

ADVERTISE YOUR PRIME NICHE 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.

November 2007

NICHE REPORTS

ALT–A Gateway Mortgage Group 817.545.6153

NOO to 90% @ 625 Cr-SISA to 90% @ 625 Cr-80% NOO to 620 Cr/4 units-No Seasoning of Funds <$15,ooo

817.545.6153

More info @ www.nonprimewholesale.com-ID/PW to GPS Pricing / emial JLair@Gatewayloan.com-Broker Packet on Rates Page www.nonprimewholesale.com

Grifﬁn Capital Funding

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

Gateway Mortgage Group

800.710.6762

Guaranteed Rate 703.989.2276 Ask for John Lovell

Indymac Bank 866.690.2242

Irwin Home Equity 888.524.7946

90% NOO Full Doc, 90% NOO SIVA , Non-Warrantable Condo’s Allowed

Jumbo – Super Jumbo, Full Doc, SIVA, DTI up to 50% Industry leading rates, Work Visa’s accepted

3/1, 5/1, 7/1, and 10/1 LIBOR ARMs; 15- and 30-year Fixed; 10year I/O period available for ARMs and 30-year. Temporary buydowns and long-term locks also available. Full Doc up to 97% LTV with a minimum 680 Decision Credit Score (DCS); Stated Income up to 95% LTV with a minimum 660 DCS; No Ratio up to 95% with a minimum 700 DCS; DTI as high as 55%; NINA doc type also available 100% LTV First Mortgage with no PMI, Full Doc, Cash Back up to $200K

Combo programs; 100% First with 125% Second for complete ﬁnancing with no PMI, Full Doc, Cash Back up to $100K

ADVERTISE YOUR ALT–A NICHE 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.

TheNicheReport.com

NICHE REPORTS

COMMERCIAL AcuPen Financial

High LTVs, and low debt coverage ratio requirements

305.299.7197

Commercial Loan Capital 800.979.4470

Commercial Loan Capital

Loans to $8 million on Multifamily and Commercial Properties, Loans to $5 million on Hospitality Full Doc and Stated Income/Stated Asset Programs

800.979.4470

Equitable Commercial Lender, Inc 213.249.9113 or 626.296.0120

Fairview Commercial Lending 866.634.1270

First Deposit Capital 866.484.7555

Grifﬁn Capital Funding 800.710.6762

Indymac Bank 866.908.3279

Ocean Capital 877.337.3757

Metro Funding Corp 866.302.6360

Strongtower Financial Inc. 800.333.9893 ext. 111

Nationwide Wholesale Commercial Lender. Stated Income, Full Doc & SBA programs available. Loan amounts from $100k - 5 Million. Easy Broker Approval Process No minimum credit score, foreclosure bailouts, Quick Closings nationwide, commitments in 24 hours Nation wide lender, Stated program, No tax returns needed, Full Doc &SBA & Conduit programs YSP Commercial Loans, Full doc and Stated income. Earn up to 3% YSP + 2 points. Loan amounts to $5 million; 3-, 5-, 7, and 10-year Hybrid ARMs (30-year fully amortized with Interest Only option) Multi-family and Commercial property eligible; 3-, 5-, 7, and 10-year Hybrid ARMs (30-year Interest Only option) 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 Fast closing, no points upfront, all commercial properties including land, acquisitions, refis, and development loans Loans for churches, nonprofits, schools and assisted living centers – bond, bridge and permanent loans for purchase, refinance and remodel/renovation.

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.

November 2007

NICHE REPORTS

HARDMONEY Anglo–American Financial 434.981.1017

Anglo–American Financial 512.657.9310

BlueWater Funding, LLC 301.656.6566

Commercial Loan Capital 800.979.4470

Commercial Lending, LLC 800.755.7310 ext. 201

Equity Funding 206.226.5548

Fairview Commercial Lending 866.634.1270

First Mount Vernon 866.908.FMV1 (3681)

Metro Funding Corp 866.302.6360

Miner Capital Funding, LLC 702.466.8952

DIP (Debtor in Possession) Financing, Loans from $1M up to $200M, Nationwide Fast, ﬂexible, full range of real estate collateral accepted, nationwide and international Direct Lender, 65% Loan-To-Value, No prepayment penalty, Brokers Protected , Lending throughout the Mid Atlantic Region Apply online www.bluewaterfundingllc.com, Immediate response, Closing in 7 days, Loan amounts up to 2 million Hard Money on Commercial Properties with no prepayment penalties Direct Lender of Non O/O, Equity-Based, No Prepayment, No minimum credit score, Rehab, Fix & Flip, Construction, Land, Up to 70% LTV, No Payment Programs, Online Broker Portal Commercial Equity Loans, Direct Lender, Low docs, fast evaluation No minimum credit score, foreclosure bailouts, Quick Closings nationwide, commitments in 24 hours No seasoning requirements, No upfront commitment or processing fees, Minimum credit score 400 Minimal documentation required, Combined Loan-to-Values to 105% Fast closing, no points upfront, all commercial properties including land, acquisitions, reﬁs, and development loans Specializing in collateral-based real estate loans nationwide. We get deals done!! As fast as 4 days! Loan amounts 1 million to 20 million

TheNicheReport.com

NICHE REPORTS

CONSTRUCTION Bismark Mortgage 800.350.7199 ext. 103

Commercial Lending, LLC 800.755.7310 ext. 201

Unique programs for new construction ﬁnancing on SFR (1-4 units) and Modular Homes

Equity Based, No Prepayment, No Minumum Credit Score, 6 month and 12 month programs, No pay and interest only pay programs, Up to 70% LTV, Online Broker Portal

888.886.3580

Loan amounts up to $10 Mil, 80% LTC & 75% Stabilized value. Term up to 30 months. Negotiable fee based on LTC and tenor. Common sense underwriting with uncommon ﬂexibility

Indymac Bank

Purchase and Reﬁnance Lot Loans to $1,000,000; Interest Only owner-occupied lot available; Full Doc and Stated Income

Imperial Capital Bank

866.913.3863

Indymac Bank 866.913.3863

Normandy 585.256.2600

Strongtower Financial Inc. 800.333.9893 ext. 111

Construction-to-Permanent (CTP) Loans up to $5,000,000, Owner-builder program; 24/7 Online Draw Requests; Full Doc and Stated Income; dedicated construction support Construction to Permanent, Self Build, Spec, Pre-Sold, Custom Build, Multi-Family Construction and Lot Loans for owner and non-owner occupied properties, Creative financing using additional collateral is also available Commercial construction programs for properties that include but are not limited to office space, restaurants, gas stations and small strip plaza’s New construction and renovation loans for churches, nonprofits, schools and assisted living centers.

ADVERTISE YOUR CONSTRUCTION NICHE 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.

November 2007

LENDER & RESOURCE DIRECTORY

CMG MORTGAGE www.homeownershipaccelerator.com [phone] 800.501.2001 ext. 3043 ACUPEN FINANCIAL, LLC The Premier One-Stop Commerical Mortgage HUB www.acupenfinancial.com ANGLO-AMERICAN FINANCIAL www.anglofinancial.com 675 Berkmar Court Charlottesville, VA 22901 Gardy Bloemers: 434.981.1017 [e] gardybloemers@anglofinancial.com Tom Finnegan: 512.657.9310 [e] tomfinnegan@gmail.com

COMMERCIAL LENDING, LLC www.commericallendingllc.com 7603 Maple Branch Road Clifton, VA 20124 [phone] 800.755.7310 ext. 201 [fax] 703.852.7933 Contact: Will Lansing [e] wlansing@commerciallendingll.com

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

COMMERCIAL LOAN CAPITAL www.clcloans.net 868 West Street Road #401 [phone] 610.272.3553 [fax] 206.350.5900 Contact: Carl Shorley [e] cshorly@clcloans.net

ASCENT HOME LOANS, INC. www.ascenthomeloans.com 6465 S. Greenwood Plaza Blvd. Englewood, CO 80111 [phone] 866.467.3157 ext. 2605 BISMARK MORTGAGE www.bismarkmortgage.com [phone] 800.350.7199 ext. 103

BLUEWATER FUNDING, LLC www.bluewaterfundingllc.com 4925 St. Elmo Avenue Bethesda, Maryland 20814 [phone] 301.656.6566 [fax] 240.766.0609 [e] info@bluewaterfundingllc.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

DIRECT MARKETING ASSOCIATES www.dmaleads.com 5215 NW 33rd Avenue Ft. Lauderdale, FL 33309 [phone] 561.807.6909 [fax] 877.984.9401 Contact: Shanna Glatz [e] jgilbert@dmaleads.com DKS SETTLEMENT GROUP, LLC www.dkstitle.com 15852 Montview Dr. Montclair, VA 22052 [phone] 703.730.9737 [fax] 703.656.4915 Contact: Shanna Glatz DOUBLE POSITIVE MARKETING www.doublepositive.com Corporate Headquarters Tide Point - Cascade Building 1030 Hull St. Ste 300 Baltimore MD 21230 [phone] 888.DPOSITIVE (888.376.7484) [fax] 410.332.1059

EQUITABLE COMMERCIAL LENDER, INC 3250 Wilshire Blvd Suite 1001 Los Angeles, CA 90010 [phone] 213.249.9113 [fax] 213.249.9116 EQUITY FUNDING www.equity-funding.com 2101 Fourth Avenue, Suite 1300 Seattle, WA 98121 [phone] 866.332.3863

FAIRVIEW COMMERCIAL LENDING www.fairviewcommerciallending.com 1932 North Druid Hills Road Suite 250 Atlanta, GA 30319 [phone] 866.634.1270 [fax] 404.634.0319 FANNIE MAE www.efanniemae.com FIRST DEPOSIT CAPITAL www.firstdepositcapital.com 484 South Mobil #25 Camarillo, CA 93010 [phone] 866.484.7555 [fax] 805.456.7701 [e] newaccounts@firstdepositcapital.com

FIRST FINANCIAL MORTGAGE SERVICE, LLC www.ffmloans.com [phone] 703.989.2293 [fax] 703.991.2362 [e] kristen@ffmloans.com FIRST MOUNT VERNON I.L.A. www.FMV1.com 6019 Tower Court Alexandria, VA 22304 [phone] 703.823.6800 [fax] 703.997.2499

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TheNicheReport.com

LENDER & RESOURCE DIRECTORY CONT.

GATEWAY MORTGAGE GROUP www.nonprimewholesale.com 3820 Laurel Lane Bedford, Texas 76021 [e] weirdloans@nonprimewholesale.com AE: Jerry Lair [phone] 972.365.4090 [fax] 918.392.8364 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 GUARANTEED RATE, INC. www.griwholesale.com 3940 N. Ravenswood Chicago, IL 60613 Contact: Tim Dooley [e] tim@teamdooley.com [phone] 877.377.4067 [fax] 877.377.4970 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 LOANBRIGHT.COM www.loanbright.com [e] sales@loanbright.com [phone] 888.330.3330 [fax] 303.265.9683 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 46

November 2007

MINER CAPITAL FUNDING, LLC www.minercapitalfunding.com 144 Winchester Place Fairview Heights, IL 62208 [e] orlando@minercapitalfunding.com [phone] 702.466.8952 [fax] 314.667.3092

PRO SOURCE MORTGAGE MARKETING www.prosourcemm.com [phone] 503.624.4841 [cell] 350.606.8404 [toll free] 866.761.7767 [fax] 503.684.2900 [e] jcarlisle@prosourcemm.com

NORMANDY www.normandy.com Contact: Rodney Buchbinder [phone] 585.256.2600 [fax] 585.256.2836

OCEAN CAPITAL www.oceancapitalonline.com 2 Altieri Way Warwick, RI 02886 [e] information@oceancapitalonline.com [phone] 877.337.3757 [fax] 401.739.9711 OSI EXPRESS www.openhouseflyers.com Orange County, CA [phone] 866.674.1999 or 714.748.4199 [fax] 714.748.4192 PLUMBLINE STUDIOS, INC. www.plumbline.com 830 School Street, Suite 12 Napa, CA 94559

[phone] 888.282.1248 [direct] 707.251.9884

STRONGTOWER FINANCIAL INC. www.strongtowerfinancial.com 7120 North Whitney Avenue, Suite 105 Fresno, CA 93720 [phone] 800.333.9893 ext. 111 [fax] 973.695.9381 TRIBECA LENDING CORP. www.tribeca-wholesale.com [phone] 888.285.2536 (888.2.tlc.lend) TROIKA MARKETING www.mynfcredit.com [phone] 404.949.9598 [fax] 404.949.9450 WEBB INSURANCE AGENCY www.farmersagent.com/pwebb Contact: Pete Webb [phone] 703.753.5526

HIRING LOAN OFFICERS Has your company closed their doors? Are you an experienced Loan Officer with a built-up referral network? Do you check the ten year bond every hour to see if you can make a .125 more in spread? Do you have to charge a minimum or give a minimum portion of the gross commission up front before you get your split?

If you answered YES to any of these questions, then NOW is the time to find a home worthy of your efforts. We pay the best and expect the best. There is no complex split to make you lose sight of what belongs to you – your commission.

• • • •

Hiring experienced loan officers The best loan processors in the industry Solid lender relationships to get your loans closed Licensed in VA and MD

Call 703.989.2293 or fax resume to 703.991.2362

PRSRT STD US POSTAGE PAID FULTON, MO PERMIT # 38

"TheNicheReport currently serves real estate finance professionals licensed in Virginia, Maryland, and Washington DC."