TNR - September 2011 by The Niche Report

Issue 050 September 2011 TheNicheReport.com

For Mortgage Origination Professionals

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Man on the Hill Upcoming regulatory and legislative changes?

FEATURE ARTICLE! The Human Touch Would mortgage fraud be less of an issue if we were more personally engaged?

It's Time for Young People to Jump Start Housing The bubble burst and the fallout became bargains for the survivors.

Up 54 Bringing The Rear Republican House Speaker, John A. Boehner, et al.

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CONTENTS

Issue 050

September 2011

The Human Touch Would mortgage fraud be less of an issue if we were more personally involved?

hunt gersin

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

pg 45 pg 45 pg 46 pg 46 pg 46 pg 46 pg 46 pg 47

FOUNDER & PRESIDENT Robert Pegg robert@thenichereport.com CO-FOUNDER & PRESIDENT David Pegg david@thenichereport.com

12 22

Man on the Hill Marc Savitt President, NAIHP Upcoming regulatory and legislative changes?

The 2011 Outlook for Loan Quality and Compliance

31 37

Tommy Duncan executive vice president, Quality Mortgage Services LLC.

How to Regulate an Industry to Death Chris Jones branch manager , City 1st Mortgage Services Hopefully common sense will prevail.

It's Time for Young People to Jump Start Housing Frank Montufar branch manager , Acre Mortgage The bubble burst and the fallout became bargains for the survivors.

September 2011

Online Lead Generation Dennis Yu CEO, blitzlocal Google+ and the +1 button - Should you care?

Center Stage with Entitle Direct The Niche Report The Niche Report talks with CEO and co-founder Tim Dwyer.

DEPARTMENTS

09 10 34 40 51 54

note from the founder Letters to the editor shh ... frank & brian speak What's your mortgage IQ? LENDER & RESOURCE DIRECTORY BRINGING UP THE REAR

MANAGING EDITOR Stewart Mednick stewart@thenichereport.com EDITORIAL / CONTENT MANAGER Kristen Moser kristen@thenichereport.com ACCOUNTING MANAGER Shawna Ingram shawna@thenichereport.com Advertising Director Jessica Grizzle Jessica@thenichereport.com Advertising sales Heather Bopp Heather@thenichereport.com Production Manager Henry Suchman henry@thenichereport.com Production Assistant Dawn Exner dawn@thenichereport.com Cartoonist Martin Bradford COLUMNISTS & Contributing Authors Martin Andelman Karen Deis Tommy Duncan Hunt Gersin Chris Jones Frank Montufar Frank Garay Rick Roque Marc Savitt Brian Stevens Dennis Yu

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

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

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note from the founder

As I type this, the 30 year rate is near four percent. I can’t get any of my Loan Officer friends to pick up the phone, because they’re running around like this will be the last refi boom this century will see - last month, they had all the time in the world to talk to me. I can’t stop but think how these low rates are making LO’s act like they’re addicted to some low rent drug from the rural mid-west – ohh, let the good times roll!! Don’t get me wrong, I love to see my well dressed brothers and sisters hitting the rate lock desk and closing loans, naturally that big ball of prosperity will roll down to secondary companies who support this industry, including The Niche Report. But at some point that shiny disco ball will stop spinning and those LO’s who thought they were sales geniuses (again), will be forced to be a little more introspective and realize that what they experienced was all about “right place, right time.” Don’t neglect your purchase biz. I met a super-star originator a while back here in Denver, Colorado. Should I say her name?? Hmm… OK, I’ll let it out, but please don’t Google her and send her emails and phone calls. Her name is Jocelyn Predovich. Outside of her utilizing social media and video marketing to its absolute full potential, which by the way, has made her a total super-star with Realtors and Brokers in the Denver area, she is the only LO I’ve ever run across that told me she prefers not to do a refinance for inquisitive clients. If you saw the way she said it, you’d believe her too. Her statement begged the question “why?” Her answer was honest and blindingly obvious – “refi’s cause me to neglect my Realtor partners.” Think about that for a second. Unless you’re one of these LO’s with assistants that do everything and you base your loan volume on every junior LO under you (because I’m not talking to you, only the real working LOs), refinance business WILL cause you to neglect your true referral partners. Jocelyn covets these relationships to the point that she has given up the “easy money” for the much wiser path of the “long haul.” We all have said to ourselves, “go after Realtors and focus on what will keep me doing loans even when rates go up.” But yet, we’re dragged back to the all consuming low rate refi. In fact, if these rates persist, we’ll start to see call centers pop up and mailers by the million. If you’ve found yourself sucked back into the easy draw of the low rate refi as of recent, by all means go after it. Because it probably is the last refi boom of this century, so hopefully I won’t have to write this letter again. But after that four percent rate goes up to five and beyond, promise me this – you won’t neglect your purchase biz.

Keep up the fight!

Robert Pegg

Official

MEMBER

TheNicheReport.com

Letters to the editor

You guys do a great job over there! Maybe you could do an article on why the Rating Services, Moody's & S&P, were so wrong on giving AAA status to Subprime loans, then seemingly skated away with little repercussions--unlike us Brokers, and now have the US in a rock v hard place over this debt deal! My theory is Obama is in "bed" with them and they have come up with the downgrade trying to help Obama! BUT, I could be wrong too! Greta Van Susteren on Fox is the only newscaster I've seen address this. W Cordeau

They Once Were Lenders, June Issue 2011, pg 16 Mr. Andelman, I just got around to reading your article.

Your story was not only accurate and almost spellbinding as to what occurred in the mortgage business it should be required reading. A big thank you for saying what needed to be said. A standing bravo. Thanks, R Kedzierski

Bringing up the Rear by Mandelman, July issue 2011 Martinâ&#x20AC;Ś.big kudos my man. One of the better articles I have read recently. Spot on in every aspect. Bankers are crooks. Politicians are crooks. Wall Street is loaded with more crooks. They all created the housing/mortgage problem and have absolutely no accountability for what they did. Can you imagine if these banks were forced to mark to market

Letters to the Editor may be e-mailed to info@TheNicheReport.com or faxed to 703-991-2362. Include your full name, email address, and daytime phone number. We are unable to publish all letters and may edit letters for length and clarity. Visit us online at www.TheNicheReport.com to subscribe to our magazine and/ or eNewsletter. Or call toll-free at 866-964-2695 for more information.

all of their assets (like residential and commercial mortgages)? Not forcing banks to do this has got to be the biggest fraud being perpetrated on the American people and others that has ever existed. Can you imagine if you or I placed the value of an asset we owned on a financial statement as being worth what it was worth 5 years ago knowing full well it was no longer worth 50% of that amount today? Itâ&#x20AC;&#x2122;s called fraud and jail time. For some reason the bankers do it daily and nobody raises an eyebrow. The failure by Congress to enforce this rule further demonstrates that they are all thick as thieves and the bribes by the lobbyists are still in full effect. Keep up the good work, J Scannell

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man on the hill

Upcoming Regulatory and Legislative Changes? by Marc Savitt

he title to this article is punctuated with a question mark, because the current regulatory environment is filled with uncertainty. Certain rules and regulations already promulgated and implemented by other federal agencies, are now part of the CFPB (Consumer Financial Protection Bureau). The new consumer protection bureau has the authority to change or eliminate any of these rules or regulations, including those already embedded within the Dodd-Frank Act. An example would be the controversial 2010 GFE (Good Faith Estimate), implemented during RESPA reform. The CFPB recognized the unintended consequences associated with the existing form and is close to completion of a new, simplified GFE, which includes a TIL disclosure. Without a “confirmed” Director, the CFPB has limited authority over non-depositories. To be clear, this doesn’t mean you can ignore existing regulations. It means the CFPB can’t enforce them. Conversely, your state banking department still has the authority. Although, the CFPB will be consumed with writing,

September 2011

or re-writing numerous rules and regulations over the next eighteen months, none will be more closely watched than Loan Originator Compensation and Appraiser Independence. On August 16, 2010, the Federal Reserve Board (FRB) finalized a rule concerning loan originator compensation, citing yield spread premiums to be unfair and deceptive. Regardless of the fact their study failed to substantiate their actions, the FRB still moved forward with the rule. The end result was massive job loss in the small business mortgage sector, elimination of consumer loan options and higher costs for borrowers. The FRB chose to ignore two credible studies. The first was conducted by Georgetown University’s Professor Gregory Elliehausen, titled “The Pricing of Subprime Mortgages by Mortgage Brokers and Lenders.” This study included the examination of over one million subprime loans. The study concluded that consumers using a mortgage broker for home financing would save an average of 1.13% on their annual percent rate (APR). The study also dispelled the myth that mortgage brokers overcharged or took advantage of minorities. According to the findings of the study, minorities saved up to a full

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man on the hill 2% on their APR. Ironically, Professor Elliehausen is now employed as an economist by the Federal Reserve Board. The second study was performed by Harvard University, titled “Understanding the Boom and Bust in Nonprime Mortgage Lending.” This study examined what actually caused the housing crisis. The study found several contributing factors, including “relaxed underwriting” and “regulatory and market failures.” It also specifically stated it was not caused by mortgage brokers and/or mortgage bankers. During one of our 5 meetings with the CFPB, we inquired about this harmful rule and the intentions of the CFPB, after they assumed jurisdiction. We were told, “We’ll be looking at it with a fresh set of eyes.” Our meetings produced an exchange of ideas and solutions, rarely witnessed at other federal agencies. The evil twin of this rule is contained in section 1403 of the Dodd-Frank Act and is tied to a borrower’s ability to repay a loan. We have provided the CFPB with substantial documentation clearly showing there is no correlation between a borrower’s ability to repay and originator compensation. Based on our meetings with the CFPB, we expect changes to be made. In addition, NAIHP has submitted an amendment to Congress clarifying the definition of a high cost mortgage, as compared to a traditional mortgage. This amendment is gaining support and may also play a part in changing the current compensation rule, to exclude traditional mortgages. The Home Valuation Code of Conduct (HVCC), was born from an investigation of a federally chartered bank and an unregulated appraisal management company. The investigation revealed conflicts of interest and the influencing of appraisers by banks to fraudulently inflate the value of real estate. This agreement, between then N.Y. Attorney General Andrew Cuomo, Fannie Mae, Freddie Mac and their regulator FHFA, was nothing short of a backdoor plea agreement to keep Cuomo from investigating the GSE’s. HVCC was sold to Congress and the public, as “consumer protection.” Maybe I’m missing something, but since implementation of Cuomo’s code, valuation fraud has INCREASED over 50%, consumer costs have INCREASED by approximately $700.00 per transaction, appraiser business failures have INCREASED by thousands, while real estate values have decreased to levels not seen since the great depression. So if HVCC was so bad for consumers and industry, why was it adopted by Congress into the Dodd-Frank Act? The answer is Chris

man on the hill Dodd. That’s right, this “friend of Angelo” single handedly killed a bipartisan House amendment by Travis Childers and Gary Miller to remove the prohibition of brokers and originators from ordering residential appraisals. The Dodd-Frank Act directed the Federal Reserve Board to issue “interim rules,” on appraiser independence, before the CFPB got up and running. It’s interesting that HVCC’s new name is “appraiser independence,” because it actually destroys an appraiser’s independence. The rule calls for customary and reasonable fees for appraisers, but we all know that will never happen. Appraisal Management Companies have already found a workaround. Sadly, all of the same problems that existed with HVCC, have carried over to the new rule. NAIHP has been meeting with the CFPB on this issue and recently submitted an alternative to the rule. It doesn’t revoke the rule, but it does remove the needless prohibition against brokers and originators from ordering appraisals and communicating with appraisers. If NAIHP’s plan is incorporated, consumer costs will immediately decrease, appraisers will again be allowed to compete in the marketplace for business and fair compensation and real

estate values should start to inch up. On July 13, 2011, I represented NAIHP while testifying before a Congressional subcommittee. The hearing focused on the affect of regulations with respect to homeowners and small business. The committee heard the message from industry loud and clear. Although, the financial services industry has experienced an onslaught of new rules and regulations, particularly with mortgage brokers, originators and appraisers, I believe changes for the better are in the works. Both rules affecting loan originator compensation and appraisals have produced harmful consequences for consumers. Therefore, the CFPB has the benefit of those experiences when determining the fate of these rules moving forward. Marc is the President of the National Association of Independent Housing Professionals. Previously, he served as the 2008-2009 President of the National Association of Mortgage Brokers. He also held the positions of NAMB’s Presidentelect, Vice President, Director, Chairman and Founder of the Consumer Protection Committee and was awarded NAMB’s highest honor, Broker of the Year.

The Human Touch by hunt gersin

love technology. Can you imagine not having your computer, your smart phone, or not checking your Facebook every minute? I can not and will not. Technology makes life better, more informed, and connected. It is a tool to create a connection, and, in my opinion, not the end all solution to true client service, especially in the most important transaction in most people’s life. As the president of Interactive Financial for 18 years, I knew that “interacting” with clients on their mortgage at the highest level was the key to success. When I created the name back in 1993, and a company name has its importance, I envisioned our mortgage industry to be focused on technology at some point, and after all these years, I was right. Now, after all this time, I am officially changing the focal point of the company away from technology and back to where the industry should always be, personal relationships. Let’s face the facts, qualifying for a mortgage is not easy, with tight underwriting guidelines, overlays from most investors, and the general uncertainty of one’s job, there is, unfortunately, a lot more stress involved than ever before. Prospective borrowers, whether it’s a purchase or a refinance, want the personal contact, want the friendly

handshake, without question, want to meet face to face with their mortgage professional. The mind and body interprets a supportive touch and person to person contact, as, “I’ll be there for you.” There is nothing more important to us, as humans; the most social creatures in the universe, as knowing and feeling this support.

Many companies have become lost in the matrix of constant fixation to data and information and are losing the ability to relate to others as human beings. One could ask if mortgage fraud would be less of an issue if we were more personally engaged and connected with people through face to face meetings. The answer is clear, and we are all better able to keep

Would mortgage fraud be less of an issue if we were more personally engaged?

each other in check when we have personal contact. Getting to know the people with whom you do business, and there is no better way than meeting with them, will increase trust, open communication and build a deeper relationship that can withstand the winds of a difficult transaction, and will provide numerous referrals and supportive referral

The popularity of “location based” services such as Foursquare suggest that people want to actually meet with others, want to know where people are so they can meet up, have that social interaction in person. These services also promote spending time in your neighborhood and supporting local businesses. Tweeting, and posting is fun and even productive, many of us do it, yet, there’s nothing like “being there.” The business and psychological benefits of engaging one to one by person to person interaction cannot be underestimated. The concept and delivery of meeting anytime, anyplace is crucial for world class service, and, for creating the trust needed in these challenging times. As much as I spend time communicating via phone, email, and text, with my clients as a mortgage professional nothing beats meeting up with them in person. We have relied too much on the convenience and electronic means of interaction, instead of taking the time and effort to see our clients face to face. Numerous recent studies suggest that meeting personally with clients is the most important part of developing sources. When you truly care about your and maintaining strong client clients, you are investing in the longevity relationships. The mortgage of your own business, and when you care business and offering superior about the people on the most personal level, service, is about trust, and the best you answer a need and actually get people way to earn that is with face to who want to do business with you for life. face meetings. Business success is predicated on making In order to have these important face to face meetings, the extra effort and making a personal a mortgage professional should connection.

focus their energies in offering their services in their own neighborhood. Most prospective clients want to do business with a professional that knows their community, is available to meet, and can have a personal relationship, especially in a financial transaction such as buying or refinancing their own home, their most important financial asset. The ideal place is at their client’s home, yet, meeting at their place of business or at a private conference room at your local library or most anywhere else works fine. One advantage of making “house calls” is that the home is likely to be the place where many, if not most, relevant documents are stored. Most people are very concerned about distributing their own personal confidential information documents over the internet, whether it is through their email or any other process, even with sophisticated encryption systems. Perception is reality. Interestingly enough, the tools of technology, including the smart phone, tablets, and the notebook

September 2011

computer, have made being mobile much easier. By utilizing these tools, we can make any meeting; especially face to face more productive. We are in a mobile society, and the acceleration of “cloud computing” has made using various technology tools, including specific mortgage origination tools, at a client’s home or literally anywhere else attainable. I do not think that it is an “either/or” scenario regarding technology or face to face meeting, I believe itis a “both/and” scenario. I think that they will not only co-exist, I believe that co-existence will be one of the many ways that technology can have a direct pay off to businesses and clients in the future. This pay off, among other ways, comes through the integration of technology with personal meetings. There are many ways for mortgage professionals to seek business in their own neighborhood, including joining a networking group, such as BNI, hosting a seminar on buying your first home or the multiple

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benefits of VA mortgages, doing a direct mail campaign to apartment dwellers, engaging in an opt in email campaign, launching a pay per click campaign or purchasing online leads in your area through various reputable national lead sources. Utilizing social media such as Facebook and Twitter, helps initiate and develop the connection. Through a Customer Relationship Manager (CRM) system and managing of various campaigns, including social media, innovate companies are able to pinpoint leads in specific neighborhoods, and help the marketing effort to create that personal contact. Of course, developing a referral network through former clients, real estate professionals and other local affinity partners is important. By offering numerous niche products such as the 203k; a mortgage that was designed for prospective homeowners who want to rehabilitate or repair a home (typically a foreclosure) so they can live in it as their primary residence, and Hompath Financing; a mortgage that allows a borrower to purchase a Fannie Mae owned property with a low down payment, among other benefits, mortgage professionals can create business for themselves

and help their communities. With foreclosures spiking to unprecedented levels throughout the United States, mortgage professionals can and will make our nation stronger. Mortgage professionals know and want to support their own neighborhood. By strengthening connections and relationships with others in the neighborhood, through personal mortgage services, perhaps to buy their first home, will create positive effects throughout the community. Especially in todayâ&#x20AC;&#x2122;s troubling housing market, which is, and will always be a location centered business, being the mortgage expert, and leading the process from preapproval through closing through personal meetings, and consistent interactions will make a significant impact on neighborhoods across the country. There is no doubt that strong neighborhoods will help restore our national economy back to growth. The housing market is one of the key contributors to a healthy economy by, among many benefits, increasing job growth and stabilizing the community. By helping your neighborhood, we, as mortgage professionals, can make a difference, locally and nationally. Itâ&#x20AC;&#x2122;s a privilege

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“Hi! I’m Meg. to offer our mortgage services, and this leads to greater responsibility. We need to embrace this responsibility that accompanies this place of privilege. There’s no better way than sharing this experience on the most personal level. Earlier this year, I originated a tough (aren’t they all) purchase transaction. This referred loan, from a local business leader, was challenging, and had to close in ten days based on the purchase contract and the dozen other closings that were related to success of this transaction. By far, the most productive and satisfying interaction with my client was when I met with him and his family at their home. Our meeting created comfort, trust, and made this transaction work better for all parties. We had our typical communication by phone, email, and text, but, what created confidence and made for a successful transaction was that personal face to face meeting. When I went to the closing, I was honored to have the real estate agent, sellers, and the buyers clapping as I came into the room. Everyone knew it was challenging, and we got it done. Giving and receiving hugs felt quite satisfying at the closing table, try doing that through the phone or through your computer. Maybe there will be an app on iphone for that down the road, but, for now, embrace your clients, be there for them on a personal level. There’s no better feeling than contributing to your neighborhood and being there for your clients. With the only constant in business and life being change, don’t ever lose sight of the human touch.

Hunt Gersin is President of Interactive Financial, created in 1993, a leading mortgage originator, based in West Bloomfield, Michigan. The company’s recent success includes being honored as an Inc. 5000 award winner for 3 consecutive years—2007, 2008, 2009, and being ranked as the 86thfastest growing financial services company in the United States in 2009. The Company supports Neighborhood Mortgage Experts throughout the nation, by providing marketing, technology tools, and numerous other benefits. Gersin may be reached at 800-520-0432 or hgersin@interactivefinancial.com

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The 2011 Outlook for Loan Quality and Compliance by tommy duncan

oan quality seems to be a reflection of the economy; if the is any improvement up to 2011, it is not much. From a random sampling, the quality control on mortgage loans outlook for 2011 is looking slightly better than 2010. 85.78 percent of the 2011 loans are “excellent and good” a .54 percent improvement from 2010. 1.90 percent of the 2010 loans contained misrepresentation, in comparison to the 2011 loans which increased to 1.33 percent. The potential repurchase is an even 12.9 percent of the total loan volume. The average credit score of the lendees in the “excellent and good” loans category continues to average 746 for both years. Whereas the credit score for the riskier or fraudulent loans average 740 for 2011 and 721 for 2010. The single largest quality control problem for 2011 is the initial 1003 application, which dominates at 20.74 percent defects or errors from all other compliance categories. However, it improved from 2010, where it was 22.19 percent; followed by Truth-in-Lending/Good Faith Estimate defects which was at 22.83 percent in 2010. Overall, the loan quality is looking much better in

September 2011

2011 than it did in 2010. However, there are still many more files to review and audit and 2011 is not over. This data is from a random 10 percent sampling that represents a portion of the mortgage industry’s levels of mortgage banking’s loan production. The FHA loan is predicted to not fare as well as it did in 2010. Currently 18.34 percent of the FHA loans audited are potential repurchases as compared to 2010’s 17.12percent and the files that contain misrepresentation contain 2.46 percent as compared to 3.23percent in 2010. The FHA refinance potential repurchase for 2011 dropped 2.44 percent from 2010’s 12.76 percent. At this time there has been no misrepresentation found in the 2011 FHA refinance loan. At this point of quality control review audits, all misrepresentation has been produced by FHA loans submitted through an automated underwriting system where no fraud for housing or misrepresentation has been discovered with the manual underwritten loans whereas from the quality control review the data supports a higher potential for a repurchase based on technicality from a manual underwritten loan than a FHA loan submitted via

an automated underwriting system. The conventional loan quality control scores are much better as compared to the FHA loans. Not only on risk but also as in regards for compliance. The Disclosures FACTA is 5.66 percent for 2011 as compared to 2010’s 5.45 percent. All other compliance area improved from 2010. There is one significant red flag, the conventional refinance loan has already passed 2010’s .52 percent fraud discoveries to .69 percent and potential repurchases in 2011 improved .82 percent from 2010’s 8.57 percent. This is a result in climbing material defects in appraisals, verification of employment, discrepancies in tax returns and tax transcript, and credit. The conventional loan average credit scores were 767 for 2011 for loan that were excellent and good and the average credit score of 2010 was 768 for the same QC grade. The FHA average credit score for excellent and good for 2011 was 708 and 705 respectively for 2010.

THE FEDERAL HOUSING ADMINISTRATION: Since FHA changed the way correspondents and mortgagees are approved with FHA there has always been confusion at both the broker and lender level on who does the post closing Quality Control (QC) audits. The Department of Housing and Urban Development issued Mortgagee Letter 2011-02 on January 5, 2011 made efforts to further clarify post closing QC efforts and quality control plans. Some of these requirements have been around for a while however, restated because of their importance. 1. The procedures used to review and monitor Sponsored Third Party Originations (STPO) must be included in a mortgagee’s FHA approved Quality Control

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Plan. 2. All FHA-approved mortgagees, including those in a sponsored relationship must have a Quality Control Plan that requires the review of loans that are originated or underwritten. 3. For those mortgagees that have STPO, the Quality Control Plan must require the review of loans originated and sold to the mortgagee by each of its STPO. Mortgagees must determine the appropriate sample amount of each STPO’s loans to review based on volume, past experience, and other factors. 4. In addition, Sponsors must document the methodology used to review STPOs, the result of each review, and any corrective action taken of their review findings. A report of the Quality Control review and follow-up that included the review findings and actions taken, and the procedural information (such as the percentage of loans reviewed, basis for selecting loans, and who performed the review), must be retained by the mortgagee for a period of two years. 5. In addition to the loans selected for routine quality control reviews, sponsoring mortgagees must review all loans that are originated or underwritten by their company and that are originated by their STPO that go into default within the first six payments (referred to as early payment defaults). 6. In order to ensure that sponsoring mortgagees’ operations are in compliance with fair lending regulations, the Department (HUD) requires that rejected applications must be reviewed within 90 days from the end of the month in which the decision was made.

APPRAISAL MANAGEMENT: Last month the Government Accounting Office (GAO) conducted research and its finial opinion on the layout between the appraiser, Appraisal Management Company (AMC), and the lender. Many of the findings are the GAO made is business as usual since the adoption of HVCC. Because of the length of the GAO report I pulled a few things that I thought were of some interest. Lenders may move away from AMCs and start managing the rotation because of the lender’s requirement to ensure AMC compliance. Appraisal quality improved after HVCC although they could not specifically tie the appraisal quality improvements to AMCs.

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Variances between the values in the appraisal reports and values produced by their proprietary AVMs decreased after HVCC went into effect. There is much more to be to gleaned from the GAO report and it is available at http://www.gao.gov/new.items/ d11653.pdf

SERVICING: Now that the industry has moved past loan officer licensing, appraisal management, repurchase claims, loan modifications, and a surplus of Real Estate Owned properties, the servicers are baptized with new compliance changes as the result of â&#x20AC;&#x153;Robo-Signingâ&#x20AC;? and mishandled foreclosures and improperly recorded security instruments to properties. The 14 banks that were recently audited were found to have flaws and are requiring servicers to have outsourced audit teams to evaluate for quality control of how well foreclosures where handled and if homeowners were financially harmed. If so, then the banks may be mandated to pay retribution. This could be staggering to the servicers; whether it be banks or non-banks. Also, the

ripple effect and fear placed on quality control or compliance managers trickles down to the small community banks on reinventing quality control policies, procedures, and practices on servicing. Because of vague guidance on servicing quality control, many servicers are left to devise a process for quality control and audit. This may lead to a lack of continuity between servicers due to no standard being established. However, during the loan modification, seasoned servicers found disconnect between the different servicing functional areas such as work-out, testing period, and foreclosure. Each servicing functional areas had difficulty sharing information resulting in confusion between the borrower and servicer. More compliance requirements are coming to the servicers and the Mortgage Bankers Association is taking note and holding session in committees to collectively address the issues of servicing quality control.

Tommy A. Duncan is executive vice president of Quality Mortgage Services LLC. For answers to your QC and FHA questions, please contact Tommy at (615) 591-2528

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How to Regulate an Industry to Death Hopefully common sense will prevail by Chris Jones

magine for a moment you are a businessman. I know, but go with me here. You have a small crop of beans that you want to sell at a local market. You set off toward it, but as you go a fellow in a blue uniform with a nightstick stops you and measures the wheels on your cart. He finds that your cart wheels are too wide, and you must narrow them. So you stop and change the wheels. Off you go again, when another blue-suited fellow stops you and asks to examine your paperwork for your beans. “I do not have any,” you say. You just picked them and put them in the cart. “How can we know what sort of beans they are?” he asks, and orders you to go back home, get the seed packets and the growing instructions and the manifest from the lot of seeds you ordered, plus fill in a form he gives you, the names of the manufacturers of your hoe and your spade, and the make and model of tractor you used to plow the field. Because you are an agreeable sort, you do this. Off you go again. This time a lady in a snappy business suit stops you and asks for your insurance for the cart and for the crop. “Insurance for the crop?” “Sure,” she says. “What happens if someone gets sick from eating your beans?” So you buy insurance.

When you get to town, you find that although there are empty stalls for you to use to sell your product, the town officials mandate that you have to pay a fee to use them. The fee is large. Capping that, the officials want to make sure you are not making too much money, so they make you provide your cost estimates and they themselves set your prices. You can get around this by partnering with one of the large bean-selling conglomerates if you want, but they also set how much you can make, and it’s even less than you could earn by yourself. Your beans have to be washed a certain way, packaged a certain way, and sold a certain way. Your signage has to be only so large and have a huge amount of information on it. You cannot sell to certain individuals, and you must sell to others, even if they can not pay you. At some point, aren’t you going to wonder if it’s worth it? Yes, my friends, yes you are. And that, right there, is why 75-80 percent of the loan officers that were in the business five years ago are not in it now. You might think that the above represents an oversimplification of the issue, but I would contend that it does not. Regulation and taxation are fairly simple instruments of public policy, and there is not as much difference between beans and mortgages as you might think. There is a fundamental opposition between business and government that cannot be resolved easily. On the one hand you have politicians, who measure their success by the votes

TheNicheReport.com

that they receive. For them to receive votes, what they need is positive outcomes. People do not vote based on intention; they vote on results. But businessmen primarily need opportunity. The results are important, but businessmen are willing to risk the results and do the work necessary to earn them. What they need – what we need – is a chance. We need low costs for entry, simple and fairly static rules, and the right to the fruits of our labor, be it tiny or immense. Given those things, business flourishes. Unfortunately, when politicians receive bad results from their policies, they never … ever … take the blame on themselves. They always blame businessmen, and introduce more regulation to correct the “problem.” This is sort of like performing brain surgery with mittens on. You might, true, be able to remove the clot that was causing the coma, but in so doing you are extremely likely to scatter woolly fuzz all over the place and make new problems that were worse than the one you solved. That is all government can do, though. It simply does not have tools precise enough to create the results – but ONLY the results – that it wants. HVCC, HMDA, HERA, etc. are all attempts to correct problems that really existed, and in some cases still exist. Unfortunately, most of these rules and regulations either did not address the real problem in the first place (quiz: did incidence of appraisal fraud go up or down in the years since HVCC?), or addressed it but created new and more complex problems that harmed the people that were supposed to be protected and helped (another quiz: did closing costs rise or fall during the “simplification” of the application process over the years 2007-2010?). The bad news is that Richard Cordray, or whoever ends up at the top at the brand-new Consumer Financial Protection Bureau will be a great believer in brain surgery, and their mittens are ready. Moreover, they will have been hired for the job because of their willingness to use regulation as a whip, as we have already seen over and over from the Fed, FHA, HUD, and every other regulatory agency and

department. Political pressure to crack down on the mortgage industry is not being observably relieved by the blizzard of regulations already in place. I grew up in politics. My first job was on Capitol Hill, and my first boss was Mitch Daniels, who is now the Governor of Indiana. One of my first assignments was to perform research on a fellow from Delaware named Joe Biden. You might have heard of him. My experience is that regulation practically always increases. The incentives are very strong for government to produce ever-greater volumes of rules, as proof that they are “doing something.” That “something” can and usually does have terrifically negative consequences for the businesses being regulated. And it has for us. It has for our clients, too, which is worse. There is, sort of, good news. The good news is that breaking into the mortgage business is now quite complicated and difficult. Individual licensing is increasingly timeconsuming and complex. Starting a new mortgage company is increasingly expensive. Financial incentives for doing so are smaller than they have ever been. All this combines to make it likely that our competition will be muted for a while, and will mostly come from existing players in the industry. The pie is smaller, but the number of people with forks is smaller still. And the business is still worth it. We still provide a necessary and valuable service to people that need help. There are still ways to make a decent living at it. Ultimately, too, there is the bare possibility that real regulatory reform will come about, and common sense will reduce and modify the rules that are slowly strangling the housing market. Don’t hold your breath. But don’t stop planting beans, either. Chris Jones, , is a seven-year industry professional in brokering and banking, with a background in financial services, national politics and Main Street entrepreneurialism. Raised outside Washington, D.C., Jones lives in Lehi, Utah, with his wife, Jeanette, and their eight children. He blogs for Zillow.com and can be found at www.thechrisjonesgroup.com, chris@lehilender.com or (801) 8503781.

It’s Time for Young People to Jump Start Housing The bubble burst and the fallout became bargains for the survivors by Frank Montufar

rguably, it can be said the Housing Industry initiated the economic breakdown. More specifically, the exercise of lending money to the unqualified to purchase or refinance homes began the slide in the early part of this decade. The aggressive parameters of the no documentation programs, option rate plans and inflated values coupled with “blind eye” underwriting has taken the world economy to itsknees. Of course, there is more to it than people buying homes they should not have bought. It was the start of the chain reaction. The millions of unrealistic dreamers promising to repay and investors expecting that repay defaulted on their loans for whatever reasons; they were as varied as their expectation. Those defaults caused neighborhoods to lose value, which cause Lenders to turn into unwilling landlords with decreasing assets, increasing capital outlay and legal challenges. The recipients of the billions dollars of worthless mortgage paper has included investors; big and small, corporations; big and small, cities; big and small, and countries; big and small. Very few escaped the trickling down effects. The result: we are in a predicament that will not go

away. Houses are sitting empty while banks lament. Lower and lower the prices go while people wait and wait for basement level bargains. It’s my opinion we are at the bottom, for the affordable crowd. The affordability sectors are the people, mostly young and mostly first timers, who can purchase homes inexpensively and maintain a stable level of their already existing comfortable living. Mortgage payments less than rent payments and cash investments slightly more than a first month rent and a month and a half of a security deposit, including Seller’s concession for Borrower’s cost, has resulted in the beginning age of affordable homeownership. Incidentally, for those naysayers who sound off and caution the low cash investments in purchasing Real Estate, I say baloney. The VA zero down payment loans have been the steadiest of stability in terms of repayment while demonstrating the lowest rate of delinquency statically. It’s not about the cash investment; it’s about the ability to repay with documented capability. In addition, the “experts” who proclaimed mortgage money is simply not available unless the applicant has a 20 percent down payment and mid700’s scores are wrong. There is ample amount of money available to the qualified FHA applicants. This is a refreshing reversal of the “want it all and want it now” generation; their own parents, perhaps. Maybe TheNicheReport.com

this age bracket will recognize what homeowners in the 60’s, 70’s and 80’s seem to have understood—it’s about maintaining an affordable and sensible level of comfort. Not possible? Yes, it is possible. Foreclosed homes and file cabinets full of distressed homeowners willing to sell to escape their mortgage payments, while the Lender takes the loss, has created a new stream of affordability. Yes, it is possible! The reality is it’s going on around you. Homes are selling for half of their value of five years ago; the bubble burst and the fallout became the bargains for the survivors. Many of these homes are broken and need help. The good news is there is a program that includes repair money along with mortgage money to purchase; closing on the home is an ‘as is’ condition. The repair cost can include upgrading and repairing; customizing. Specifically, the 203-K Streamline is the more practical of the two plans. The Streamline affords the ability to include up to $35,000 in repair cost while releasing 50 percent of the construction funds at closing to purchase materials. The premise of releasing funds is to ensure construction begins immediately and to avoid the overbearing globs of

paperwork that had slowed the process down in the past. Or perhaps, a complete makeover tearing the home down and rebuilding; or adding square footage. Construction cost in excess of $35,000, or structural issues requiring attention, falls under the guides of the 203-K Standard plan. A program more restrictions in terms of the draw process, but a necessary safeguard given the large cost involved. An added bonus is today’s cost of money; interest rates are in the mid to upper four percent range with 30 year fixed terms. The program is the FHA 203-K; the underused and underappreciated jump start plan. Not unappreciated for the resilient and patience of the young and the professional Realtors with the foresight of possibilities. Yes, it’s absolutely possible! Frank Montufar is branch manager of Acre Mortgage in Galloway Township, N.J. Montufar has championed the benefits of the 203-K rehabsince 1993. It’s his contention the 203-K Streamline plan will be astandard means of buying homes in the near future. He can be reached at fmontufar@ acremortgage.com.

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Google+ and the +1 button: Should you care?

ou’re a business professional with limited time and technical resources. Practically speaking, you can’t follow every new technology, gadget, or social network out there. So let’s consider what Google+ is and how you can benefit. If you don’t already have an optimized Facebook page and LinkedIn profile, forget about Google+ for now. Focus on the basics first, where there is a lot more traffic - and, therefore, more leads available. Better to have a strong presence on one or two strong social networks versus a skeleton on ten of them. Google+ is still in beta. Yes, there are 20 million users already, but one could argue that even Gmail was listed as being in beta for years after it was truly widespread. However, there are many things you will need to generate leads that just aren’t baked into Google+ yet, at Google’s own admission. The name of the game is traffic. That means advertising for most of us, unless we have built such a strong web presence that we dominate in local search

results. Google+ results will show automatically in Google AdWords. Thus, you don’t need to do anything, except perhaps click on the + link to help your ad clickthrough rate, should your friends with Google accounts see it.

Don’t install the Google+ button on your website yet. Should you see traction on household names, then go for it. Doing it now just yields confusion - too many buttons can encourage users to ignore all of them. Yes, we have the +1 button on our websites, but that’s just so we can test it out and write articles for you guys. Our job is to try everything out and recommend what works. TheNicheReport.com

Online Lead Generation Yes, Google Analytics now automatically reports how many people are clicking on the +1 buttons. Now let’s spend some time on the social network aspects of Google+: Yes, it is another social network, not a search engine. You’ll have to decide how much more time you’ll have to maintain another social network.

Google+ is quite similar to the Facebook of 3 years ago, and they are making the same mistakes. One of them is core to the platform and is called Circles. Anyone who is part of your network you have to add to a Circle, which is akin to a Facebook list. What Facebook learned a few years ago is that categorizing your friends into lists is a pain in the rear and that few people do it. A list doesn’t allow for nuances. What if someone is a golf buddy, a co-worker,

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and a church friend—what Circle should you add them to? What if things change? Facebook learned that engineers enjoyed lists, but the Average Joe does not. Google, being engineer-heavy, continues to make product decisions based on what engineers would like. Google+ is like Twitter in the sense that friendship is not mutual. You can “follow” someone without them needing to follow you back. On Facebook, friendship must be mutual. But like Facebook, in Google+ you can have only 5,000 connections. From a business perspective: are people using Google+ to research financial services or generate leads? We don’t see any strong examples. (If you do, please let me know.) The conversation on Google+ appears mostly to be about Google+ itself and whether people think it will succeed or not. Certainly, this article adds to that. You can do a live video chat via Hangouts; probably a cool feature among friends who would otherwise Skype with each other or use Google Video Chat. But I don’t see someone who is looking to refinance their house wanting to get on video chat with a mortgage broker unless they are comfortable with that person and have met them in real life.

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Online Lead Generation If you have over 500 friends, followers, and connections (respective on Facebook, Twitter, and LinkedIn), then let’s talk about what you should do on Google+. Google+ is for connecting with people that you know. Almost by definition, a new homeowner lead is not someone who is already a friend of yours. Thus, this social network is for connecting with existing friends—to enhance your relationship—not to generate new leads. Who are those people you see in real life on a regular basis? Maybe you have networking associates or know members of the Chamber of Commerce, Rotary Club, and so forth. Connect with them on Google+ to deepen those relationships. But you are probably already connected to them on LinkedIn, so you’ll have to painstakingly go through LinkedIn to invite these colleagues. Now you see why anyone who is not already strong in other networks should not be on Google+. It’s a weak secondary business network that isn’t about to displace LinkedIn anytime soon. Start following (adding to your Circles) folks who are prominent in your industry, town, and client base. This is less about wanting to follow what’s going on or what they’re saying, and more about showing up in their notifications so that they’ll add you back. This social network is so new that getting added to a Circle is novel enough that people will notice. Eventually, users will tire of it and turn off email notifications. It took me a while to figure out how to turn off this setting, which is pre-checked for us. I still can’t figure out how to turn off the alerts in the universal status bar (the red square with a number in it that sits staring at you in the top right corner).

Yes, Google’s secret weapon for the social network is that it’s installed this black bar across all of your Google services—so you’ll mainly notice it in your Gmail. If you add people, I would stick to just two circles— “friends” (real ones) and everyone else. Some people go crazy and create dozens of circles—compulsive list makers; you know who you are. The trouble with this is that the more lists you have, the harder it becomes to maintain. Plus (pun intended), when you’re sharing content, you have

to choose which circles to share it with. Now you see why Circles are a pain in the rear—you have to manage your circles every time when adding friends and when sharing content. The verdict? If you are a social networking junkie and have thousands of friends and plenty of time, embark on a mission to add as many friends as you can and click +1 on everything they do. You’ll be able to boost existing relationships, but likely won’t generate any new business. If you have other Google services, know that you don’t have to do anything to take advantage of some cool new features—Google+ stats are automatically incorporated into Google Analytics, +1 button results are added to Google AdWords, and the black status bar is added into your Gmail. If you have any questions, feel free to reach out to me at facebook.com/getfound, twitter.com/dennisyu or info@ blitzlocal.com.

Dennis Yu is Chief Executive Officer of BlitzLocal, a Webtrends partner that builds social media dashboards to measure brand engagement and ROI, specializing in the intersection of Facebook and local advertising. You can reach him on Facebook, Twitter, LinkedIn, his blog, or good oldfashioned email at dennis@blitzlocal.com. BlitzLocal is a leader in social and local advertising and analytics, creating mass micro-targeted campaigns. Mr. Yu is an internationally soughtafter speaker and author on all things Facebook, and has been featured in National Public Radio, TechCrunch, Entrepreneur Magazine, CBS Evening News, and other venues.

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Oh where oh where has our marketing gone? by frank garay & brian stevens

arketing? Where did it go? It seems to me that it's disappeared for the vast majority of originators. Now when I say disappeared, it's not as if folks have just pulled up stakes, packed up their marketing and left. No, that's not the case at all. It’s quite the contrary. Originators, by in large, have continued with their marketing in the same old fashion manner of marketing in your local obsolete newspaper or local real estate magazine. If you’re fancy, you'll put a billboard up on a bus, or an ad prior to your movie at the local cinema, or maybe shopping carts at your "smash and grab," or an occasional canned letter with a follow- up phone call. As if anyone is driving in their car, getting ready to watch a movie, or buying a gallon of milk, and they're gonna find inspiration in your ad. It's not gonna happen. Here's what you need to know: it's the consumers that have pulled stakes, packed up and left your marketing. When buyers are in the mood to buy a home, they're not at the movies they're at their computer. Over the past few years Frank & I have traveled the country speaking with thousands and thousands of Brokers, Managers, Account Reps, Agents, and yes, Originators. Our message has been that our success can be your success if you simply embrace technology. The reason is simple; the world wide web is the single location where your clients are assembling. It's widely agreed upon that upwards of 80 percent of potential homebuyers begin their search for 34

September 2011

a home, or make their "home buying" intentions known, online. So you should be placing your efforts and marketing dollars where your potential clients congregate. Let’s put it this way, if you're going fishing and you absolutely must catch a fish, go fish the stock pond. It’s the same with your marketing, if you have to capture a new client, embrace marketing that is outside of your comfort zone. Of course I'm talking about effective Internet Marketing. Now internet marketing consists of all your social sites (facebook, real estate marbles, twitter, linked, etc....), blogging, videos, and even the ever so stupid and totally ineffective "e-newsletter." One of the first and most common areas of push back we hear is “I'm just not that type of person that's gonna do a video.” OK, if you’re reading The Niche Report, there’s a good chance you're a loan officer. If that's the case you're a sales person. PERIOD. Even with all the new and restrictive regulations your primary job is to secure the deal; I assume you already can close the deal. So if your primary function is sales, your focus needs to be getting your face and product in front of as many people interested in buying your product as possible. Video affords you that option. Keep in mind that you are “the product” so putting yourself on video is the only completely effective way of allowing people to know, like, and trust you, outside of actually talking to them. You need to understand that right this moment your competition is making videos and effectively marketing to your clients. Since

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frank & brian speak we both know your clients are on line, it's safe to assume that your clients are receiving that message. So, not making videos as a long term strategy is fraught with problems. Of course that was not the case 10 years ago, but like underwriting, guidelines, and the very language we use in our industry ... things have changed. Another frequent gripe comes from those that believe social networking as it pertains to effective marketing is pointless. “Brian, twitter? Facebook? I don't care where someone is having coffee, or what someone did last weekend.” Well, my answer would be “me neither” but the fact remains that even if you don't like social sites, your clients do and they are using these sites with higher frequency every day. How often have you called clients at the end of your day as a means of drumming up business? Probably not as often as you should; because it sucks. Nevertheless, what are the possible options of calling your clients at the end of your work day? It's also the end of their work day. Often times the last thing they want to do is have a conversation with their loan officer. Have you ever had a car salesman call you? I have and I've never wanted to talk to them. So I can only assume it’s the same for you and your clients. With that said, how many people get home at the end of a long work day and sign-in to Facebook? The answer is a lot! For some strange reason, people are more receptive to receiving an instant message on Facebook than they are fielding a call. So even if Facebook is not your cup of tea you need to remember it's your clients. Also keep in mind, this is your job, your livelihood, so even if Facebook is like pulling teeth for you its fertile soil that you need to sew. The same can be said about Twitter. Hell, Frank and I use to call twitter users “Twittiots!” That was until we discovered that some users have thousands of followers. In case you're not aware, if one of those Twitter users “re-tweets” your message, it stands to go to their thousands of followers. When those followers click on your tweet, it takes them back to your message and your information. Again, Twitter is another powerful tool that needs to be adopted by loan officers who want to stay relevant in 2011 and beyond. Finally the last major area of push back comes from the technology itself. “I don't know how to set up a blog, Facebook ...” whatever. The simple answer is, you need to sit down and figure this stuff out. Honestly, if my twelve year old son can do it with remarkable efficiency, so can you. Now, he may very well have an advantage over you. That is, he's never seen a world without technology so it is second nature to 36

September 2011

him. Nevertheless, HE'S 12! Now blogs in particular is somewhat complicated. The reason is, a blog dashboard is fairly complicated. What you need to know is a blog is the most effective tool you can use as far as your online presence is concerned. So not surprisingly it’s the most difficult. The advantage is, because blogs are the most difficult it is the least adopted by your competition. Because blogging is the least adopted technology yet the most effective, blogging is the most vital component of any future marketing plan. Here's the kicker. I also realize that your highest and best use of time is actually talking with clients and not building blogs. Though you need a blog, I am not suggesting that you should spend all your time building blogs and not closing deals. So for the solution, Frank and I have built a site called www.realestatemarbles.com that creates shortcuts and a streamlined process for you to build blogs quickly and efficiently. In the course of less than a day, you can not only create a blog but also link it to a Facebook, Twitter, and any other social sites you have. That will allow you to create one stream of information and syndicate it to all your other social sites. The system creates an immediate online presence and allows you to explore marketing tools that you are probably not using as effectively as possible. Now this article is not a shameless attempt to get you to use our product. You can use it or not. In fact you can use it for free with no strings attached. Also there are other platforms you can use to create an online presence. Ours is not, by any means, the only option. I would only suggest that whatever your course of action is, it includes you getting plugged-in. At the end of the day, internet marketing is but a tool that you need to use. It is a tool that is intended to put you in a position to have more conversations with potential clients that want to purchase your product. I'm not suggesting you only market online, but make it part of your marketing arsenal. Technology is not going anywhere and if you don't embrace it, your nineteen year old receptionist will, and she will take your clients over a long enough course of time. Thinkbigworksmall.com (TBWS) was founded in 2007 by a group of highly successful real estate and mortgage industry entrepreneurs. Born in the most battered market in the real estate and mortgage industry history, Thinkbigworksmall.com was conceived after decades of observing how the most successful professionals always seem to work smarter not harder. Frank & Brian can be reached at tbwsdaily@gmail.com

Center sTage

Center stage with Entitle Direct The Niche Report talks with CEO and founder Tim Dwyer

by the niche report

The Niche Report was able to visit with Tim Dwyer, CEO and founder of Entitle Direct Group, Inc., the first direct-toconsumer title insurance company, which issues policies nationwide through its underwriter EnTitle Insurance Company. Tim Dwyer

We’ve heard about ENTITLE DIRECT’s unique model for title insurance. Can you explain the platform? We have broken through the traditional model for title insurance. No more title agents - through ENTITLE DIRECT, EnTitle Insurance Company (previously Guardian National Title Insurance Company), is the first and only title insurance company to sell title insurance and settlement services directly, at savings of up to 35% or more compared to the competition. We offer a new way of doing things, but we are a veteran in the title insurance industry with more than thirty-years of experience issuing title insurance policies and a Demotech Financial Stability Rating of A’ (Unsurpassed). Think of us as the GEICO of title insurance. With such a long history of the agent model in the title insurance industry, how were you able to execute this new model which eliminates the middleman? We obtained Certificates of Authority to transact business forty states plus the District of Columbia. Then we filed our title insurance premium rates with state title

insurance regulatory bodies at 35% below the competition. We are able to offer title premiums at reduced costs because our direct model eliminates the significant commissions paid by underwriters to their title agents. Commissions are typically 60% to 90% of the title premium. Finally, we changed our operations to fit this new business model. Now the mortgage professional deals directly with our Title and Closing Specialists. We’ve proven that a better, more streamlined model means better service and lower cost. A lot of confusion exists about your current model. Competitors have challenged ENTITLE DIRECT’s model. To clarify, can you comment on the validity of the model and rectify the points of confusion you commonly encounter? Our model is welcomed by regulators, consumer advocates and mortgage professionals alike. Thousands of consumers have benefitted from the reduced closing costs the ENTITLE DIRECT model affords. I think the confusion stems from some common myths. Competitors may assert that states set title insurance premium rates, otherwise known as promulgated rates. This belief is incorrect. The truth is, in all states except two, rates are not set by the state. However, some states may require rates to be approved by the state’s Department of Insurance. Our filed rates were approved at 35% below the competition. Another myth is that ENTITLE DIRECT is not local and title insurance companies must have a local presence. TheNicheReport.com

Center sTage This is not true and the fact is that ENTITLE DIRECT is local through a nationwide network of local title searchers, attorneys and closing agents who are experts with extensive experience in local customs and practices. In reality, as a mortgage professional, the benefit of going through ENTITLE DIRECT for title and settlement services is that you will deal with the same company no matter where the property is located. We take the guesswork out of finding a title provider near the property. Mortgage professionals come to expect the same great service from ENTITLE DIRECT across the country. We provide confidence that their deals will close. At the same time, when utilizing ENTITLE DIRECT, mortgage professionals do not sacrifice the advantages of using a title provider with a local presence.

The originators we work with also like the idea that they deal with the same Specialist as the point person for all their deals no matter where in the country the property is located. In that way, we’re local across the country and our Title and Closing Specialists are excellent to work with - they ensure the transaction is smooth.

What made you challenge the status quo and start ENTITLE DIRECT? I had served the insurance industry for over 22 years, advising both domestic and international companies on matters of strategy, mergers and acquisitions, equity and debt raising, restructuring and private equity. Entitle Direct Group, Inc. was founded in 2006 when I closed on my own home and was surprised at the cost of title insurance. In researching the industry structure, I found government regulators and consumer advocates calling for a change in the anti-competitive nature of the industry and its pricing practices. Through my research I also realized that mortgage professionals wanted a way to reduce closing costs to help them win more deals. Plus, mortgage originators are always looking for ways to earn the trust of consumers. What better way than to save clients hundreds or thousands of dollars? This was the inspiration behind ENTITLE DIRECT.

Where do you see the title insurance industry in ten years? In the very near future we are going to see a steady decline in policies issued through commission-based agents and more policies issued directly from the underwriter. We will see increased competition for the best price and the best service within the title insurance industry. Consumers have become savvier when it comes to purchasing or selling a home and refinancing a mortgage. I think this trend will continue. Consumers already request ENTITLE DIRECT, a phenomena not before seen in the title industry. In fact, a lot of the mortgage originators who use ENTITLE DIRECT first learned about our pricing and unsurpassed level of service through a consumer who requested that we provide the title and settlement services on their deal. After working with us once, originators realize the strategic advantage we bring and how important it is to be out in front of educated consumers. Mortgage originators build trust with their borrowers when they use ENTITLE DIRECT. This speaks volumes to where the title insurance industry is headed.

How do mortgage professionals benefit from working with ENTITLE DIRECT? Mortgage originators enjoy using ENTITLE DIRECT because of our superior service model and reduction in costs. Many of the mortgage professionals we work with jokingly tell me not to get the word out because ENTITLE DIRECT is their secret weapon. Mortgage originators who use ENTITLE DIRECT are able to show significantly lower GFEs when compared to their competitors and very often win the deal because of closing cost savings. At the same time, these closing cost savings do not impact their bottom-line – originators do not have to shave off any of their own fees to beat the competition. Also, with the new HUD regulations, ENTITLE DIRECT’s guaranteed rates come in handy. We stand behind our quotes, assisting originators to remain in compliance with the new tolerance levels when disclosing. 38

September 2011

How has ENTITLE DIRECT shifted the paradigm of the title insurance industry? The mere fact that we’re in forty states plus the District of Columbia speaks to ENTITLE DIRECT’s impact. Regulators have welcomed the change in the industry. Through our success, we are debunking the myth that title insurance rates are fixed by law.

Entitle Direct Group, Inc., founded in 2006, is headquartered in Stamford, CT. All title insurance policies are issued by EnTitle Insurance Company, which holds all licenses and approvals. EnTitle Insurance Company was founded in 1978 as Guardian National Title Insurance Company and is located in Independence, OH. The company sells title insurance and can provide settlement services in forty states and the District of Columbia through a nationwide network of local title searchers, attorneys and closing agents. Other central operational locations include Pittsburgh, PA and a fullservice escrow office based in Corona, CA. Contact ENTITLE DIRECT by email at specialistcenter@entitledirect.com, by phone at 877-9ENTITLE (877-936-8485) or online at www. entitledirect.com

WHAT IS YOUR MORTGAGE IQ?

What's your mortgage IQ? BY MortgageCurrentcy

I always recommend that when you read a new mortgage rule, that you review your files in process and your pre-approved files. Because here’s the dealio, there can be a delay in DU (both Fannie & Government) and LP to update the rules on their system. When Fannie, Freddie, FHA and VA changes or updates a mortgage rule, quite a few of them are effective immediately. However, it could take up to 60-90 days for the programmers (yes programmers) to update the underwriting systems. So, when you run something thru DU, you do not receive the “findings” with the NEW rule update, it is because it is not programmed yet. So, that is tripping up loan officers up these days—and unfortunately, they do not find out until the underwriter comes back with new or additional conditions (or heaven forbid, denies the loan). If it’s happened to you, that is the reason why.

VA Rental Income: What are VA rules when a Veteran is receiving rental income on another home? This is from Chapter 4 of the VA Handbook.

September 2011

Verification: Rental of Other Property Not Securing the VA Loan Obtain the following: • Documentation of cash reserves totaling at least 3 months mortgage payments (principal, interest, taxes, and insurance - PITI), and • Individual income tax returns, signed and dated, plus all applicable schedules for the previous 2 years, which show rental income generated by the property.

Analysis: Rental of Other Property Not Securing the VA Loan Rental income verified as stable and reliable may be included in effective income. If there is little or no prior rental history on the property, make a determination based on review of: • Documentation of the applicant’s prior experience managing rental units or other background involving both property maintenance and rental • Any leases on the property, and • The strength of the local rental market.

WHAT IS YOUR MORTGAGE IQ? FHA Contingent Liability – I have a borrower who is co-owns a property with his ex-girlfriend. She is making the payments. I have 12 months cancelled checks. Can this loan be approved without including the mortgage payment? Per the guideline from the 4155.1 Handbook, FHA allows the mortgage to NOT be included in your borrowers’ income if the guideline below is met: (Quit claiming the property to her will not help and will not be necessary, nor will proving he is renting elsewhere.)

4.C.5.e. Contingent Liability on Cosigned Obligations Contingent liability applies, and the debt must be included in the underwriting analysis, if an individual applying for an FHA-insured mortgage is a cosigner/coobligor on a • car loan • student loan • mortgage, or • Any other obligation. If the lender obtains documented proof that the primary obligor has been making regular payments during the previous 12 months, and does not have a history of delinquent payments on the loan during that time, the payment does not have to be included in the borrower's monthly obligations.

Fannie/Freddie Non-Owner Occupied: On Conventional - My client owns two other properties. He wants to buy a 4-unit home that is fully occupied. Can I use an offset of the rent from each unit to qualify since he has prior experience? Short answer -- yes -- using supporting leases and/ or appraisal Operating Income statement with a 25 percent vacancy ratio applied. Fannie does not have an experience requirement, but Freddie does require a two year history of property management. You may also need rent loss insurance and six months PITI in reserve.

USDA Home with two Kitchens: I have a client looking to buy a home that is all one level. The right side has the normal rooms. Walking thru the laundry room is a larger room that has a small kitchen a bedroom and bath with a separate entrance. Would this be considered an “in-laws” quarters and be allowed with USDA?

It is possible to go an RD GRH loan but you need to check with your investor and more importantly I would confirm in advance property eligibility with your local USDA field office since regulations did not specifically address what is known as "Accessory Dwelling Units." I have actually done this before using an RD loan but I confirmed in advance the property’s eligibility. The property I had did not generate income, was on a single lot and was on a single electrical meter (the couple’s parents were going to live in the other side and yes we did count all household income). We knew we could take it FHA but we wanted to go RD. Ultimately it was determined that the property was acceptable but since there is no specific regulation addressing this and there is the potential for property to be what is known as "income producing" I would check with your local USDA field office as to their opinion on property eligibility. I can foresee this all coming down to an opinion issue. FHA has always preferred to this as an "Accessory Dwelling Unit" or more commonly known as an "mother-in-law" quarters. In the "Improvements" section of the appraisal the appraiser refers to it as "One with Accessory Unit." According to FHA an "Accessory Dwelling Unit" is defined as a habitable living unit added to, created within, or detached from a singlefamily dwelling that provides the basic requirements for living, sleeping, eating, cooking, and sanitation. Accessory Dwelling Units (ADUs) are commonly understood to be a separate additional living unit, including separate kitchen, sleeping, and bathroom facilities, attached or detached from the primary residential unit, on a single-family lot. ADUs are usually subordinate in size, location, and appearance to the primary unit and may or may not have separate means of ingress or egress. Attached units, contained within a single-family home, known variously as "mother-inlaw quarters" are the most common type of accessory dwelling unit. Accessory units usually involve the renovation of a garage, basement, or small addition to a single-family home. If they generate income, they are not considered accessory units, but a second unit. As for RD… if it generates income it is not eligible at all. TheNicheReport.com

When Was the last time you Were recognized for your efforts?

for a complete list of benefits, please visit www.tffbranch.com or call us at 866-301-0653

Top Flite Financial, Inc. (NMLS #4181) is a Licensed Mortgage Lender in AL (MC 20407), AR (37008), AZ (910742), CA (603-E727), CO (MB100020065), CT (19570), GA (I9468), FL (CL0700521), IA (MBK-2007-0051), IL (MB6759955), IN (ELB-000191), KS (MC0025049) KY (MB19307) LA (RML2640-0), MA (MB4924), MI (FL3326/SR1700), MN (20619001), MO (101792), MS (58/2008), ND (MB102066), NH (14260-MB), NM (03190), OH (MB.803839.000), OK (MB001942), OR (ML-4427), UT (6818424-MLCO), SC (MB.803839.000), TN (5735762), TX (78413), WI (600267). Top Flite Financial, Inc. is a Licensed Mortgage Broker in DE (9875), RI (20070072LB), WV (MB-23570).

WHAT IS YOUR MORTGAGE IQ? Credit Revolving Accounts: How long does it take for the credit bureaus to generate a score for a new revolving account? Here is a short answer, if you have NO credit reporting (high school student fresh out of school) then it CAN take up to six months to generate a score. I actually have a credit report showing one credit card reporting for five months with NO scores on any of the three bureaus!!! (The sixth month it scored) That being said, if you have older closed accounts or prior credit, and do not have any scores, opening a credit card the first month reporting it will typically generate a score.

Compliance HMDA: If I send out an application by mail and never receive the application back signed what is the received that I should use in my mortgage system? Currently we use the date the applicant signed the application as the received date but if it is never sent back, what date do you use? If you sent out a “blank” application by mail, but it is not returned, you should not have anything in your system -- no application occurred. Application by mail is only input to your system when it is received back in the mail. The way you ask your question leads me to believe you did an application by phone -- that is the date of application. You then mailed that application to the borrower and they did not return it. The application date is the date you input the borrower's information. Your application by phone does not change to an application by mail because you mailed the documents for review and signature

Written and contributed by Karen Deis of Mortgagecurrentcy.com. Provided monthly by www. MortgageCurrentcy.com – Interpreting the Rules and Regulation Changes for loan officers, processors, underwriters, and owners/ managers. Mortgage Talking Points TM, charts and checklists included.

Subscribe to The Niche Report at www.thenichereport.com

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NICHE REPORTS

Prime & FHA 360 Mortgage Group 866-418-2997

Bank of Internet

Conv, FHA, VA and portfolio products. To become an approved broker or to view a rate sheet, visit our website www.360mortgagegroup.com.

Jumbo and Super Jumbo Loans 5/1 - 7/1 and 10/1 options.

888-833-0555 ext 1508

First Cal

FNMA Direct - No Lender overlays.

707-238-3720

Icon Residential www.iconwholesale.com

NEW

United Wholesale Mortgage (800) 981-8898

National Wholesale Lender offering a full line of Conforming and FHA products. We offer personalized customer service where our client is our primary focus. United Wholesale Mortgage specializes in FHA, VA and Conventional Wholesale Lending. UWM prides itself on having Exceptional Customer Service and an extremely efficient process from loan submission through close!

REverse Mortgages ReverseIT 888-777-3311

Reverse Mortgages, fastest turn times in the industry. Training and lead support available.

ADVERTISE YOUR NICHES HERE WITHIN Financing may not be available in all states. The above summaries are intended for Mortgage Professionals only, and not intended for distribution to consumers, as defined by Section 226.2 of Regulation Z, which implements the Truth-In-Lending Act. Information is subject to change without notice. Refer to each lenderâ&#x20AC;&#x2122;s information on products, program, procedures, representations, and warranties for details.

TheNicheReport.com

NICHE REPORTS

HARD MONEY/Construction/Rehab Windvest Corporation 877-285-0777

Specializing in Investor Loans & Rehabs, Income Property, Rentals, Probate, Cash Out Refis and now doing Owner Occ throughout CA. Direct lender offering generous broker commissions. Fast and Friendly service since 1994. We offer same day approvals and 7 day closings. Call us today or visit us online www.windvestcorp.com. NMLS # 394407 Investment Rehab Lender. We are a direct lender for Fix and Flip loans in CA, AZ and NV. Funding in as little as 7 days. Easy online submission @ www.zincfinancial.net

ZINC Financial 559-326-2509

JUMBO Bank of Internet 888-833-0555 ext 1508

Jumbo and Super Jumbo Loans 5/1 - 7/1 and 10/1 options.

First Cal

80% LTV up to $2M. Call for Guidelines

707-238-3720

Rural lenders NEW Agfirst Farm Credit Bank

Mortgage lending for the Homeowner living in Rural America.

800-858-4651

September 2011

Service provider classifieds

Service Provider Classifieds Technology

NEW

a la mode 800-252-6633 ext 309

Mercury Network, the premier vendor management platform for lenders and appraisal management companies. a la mode also provides the leading mortgage websites, eSignature solutions, and mortgage marketing systems.

Applied Business Software 800-833-3343

Origination and Servicing software for hard money lenders.

Byte Software 800-695-1008

Byte Software offers a complete mortgage solution from lead generation to selling loans on the secondary market enabling lenders to close more loans in less time with a SQL database, customization, enterprise scalability, compliance and security.

Calyx 877-862-2599

Affordable software that streamlines and optimizes all phases of the loan process â&#x20AC;&#x201C; from loan marketing through closing.

Mortgage Payment Protection, Inc. 866-JOB-LOSS

The leader for risk management and loss mitigation products for the residential mortgage industry. Mortgage Payment Protection, Inc. was the first to develop the MortgageGuardian concept in 1999. It is backed by "Excellent"- rated insurance companies, and widely accepted by the GSEs, FHA, and investors. MortgageGuardian provides a layer of protection on mortgages against loss of income due to involuntary unemployment.

StreetLinks Lender Solutions 800-778-4947

Providing lenders with a suite of valuation services and robust lending technology solutions, including full-service & self-managed appraisal products.

DocMagic 800-649-1362

The largest dedicated loan document production company in the country, delivers a fusion of solutions guaranteed to meet today's complex loan document challenges.

Appraisal & AMC a la mode 800-252-6633 ext 309

StreetLinks Lender Solutions 800-778-4947

Providing lenders with a suite of valuation services and robust lending technology solutions, including full-service & self-managed appraisal products.

TheNicheReport.com

Service provider classifieds

title work & insurance Entitle Direct 877-936-8485 or 877-9ENTITLE

NEW

Hundreds of mortgage professionals have saved their borrowers up to 35% or more on their title insurance by recommending Entitle Direct.

Linear Title & Closing 401-841-9991

Linear Title & Closing, Ltd., is a recognized leader and national provider of Closing, REO, Title Insurance and Settlement Services. Our streamlined RESPA compliant process utilizes flexible software tools that are easily integrated with your system.

Mortgage Insurance Agency 866-355-9944

State Licensed Surety Bonds, Errors & Omissions and Fidelity Bond coverageâ&#x20AC;&#x2122;s for Mortgage Bankers and Mortgage Brokers nationally.

United Guaranty 877-642-4642

We provide mortgage risk management products and services, including Mortgage Insurance, to a comprehensive range of mortgage lenders

marketing & lead Gen In Touch Today 800-433-3755

NEW

Lead Gen Concepts www.leadgenconcepts.com

Mailer Leads 866-783-4053 ext 14

NEW

Mortgage Planner CRM 888-771-7672

Titan List & Mailing Services, Inc 800-544-8060

Delivering complete marketing education, valuable products to grow your business and exceptional service to make marketing an easy, enjoyable, and profitable experience. We provide full service automated marketing plans to fit your budget and business goals incorporating postcards, newsletters, greeting cards, brochures, presentations and more! Marketing consultations are available to help strategize the best marketing plan for your individual needs, whether just starting a marketing campaign, or enhancing your current plan. Lead Gen Concepts is different from our competition because we do not sell leads. We work with our customers to generate their own exclusive leads in their market using our proprietary direct-to-consumer lead generation websites and pre-build platforms. Our markets are exclusive so our customers will be on the only company in their market using our concepts to generate leads. Please visit our website at www. leadgenconcepts.com to learn more or sign up to use one of our concepts in your market today at www.leadgenconcepts.com/signup! Imagine having 50 prospects per loan officer that are already pre-approved calling you within 10 days from today! Our mailers are FICO and AVM based and are prequalified based on credit data. Prospects will be ready to finance when they call you! The ultimate contact management system for LOs. Increase your performance with automated marketing and alerts. Sync correspondence from Outlook and mobile devices to one centralized location to track contacts, leads, loan activity and referrals. Over 12 years of experience catering exclusively for the mortgage industry delivers consistent results from our turn-key campaigns. Our Pre-screened data, 24 hour turn around and custom pieces design continue to lead the industry for mortgage marketing efforts.

Training & education MortgageCurrentcy.com 800-231-4787

September 2011

Interpreting the complicated mortgage rules in plain language (Fannie, Freddie, FHA, VA, Compliance, Credit) that ONLY affect the loan origination side of the business. Help Desk. Rule Change Calendar. Automatic Face Book posts & Mortgage Talking Pointsâ&#x201E;˘ for your real estate agents. Online e-zine published 2X month. Try for $1.

Service provider classifieds

Compliance & Audit Accurate Quality Control, Inc. 770-931-5999 Adfitech Inc. 800-880-0456

Quality Control, Training, Consulting. Post Closing, Suspected Fraud, Early Default & Repurchase Reviews, Pre-Funding, Test Cases. 49 Combined Years Working for HUD. We do the right thing right! GIVE US A TRY: 2 FREE QC REVIEWS (new clients only)! ADFITECH, has served the Residential Mortgage Industry since 1983, providing Post Closing QC Audits, Due Diligence Reviews, Pre-Funding QC, Default Reviews, Fraud Investigations, Post Closing Fulfillment, and LOANVAULT® Imaging, of Conventional & FHA products. Clients include Community Banks, Credit Unions, Mortgage Bankers, MI Companies, and Wall Street Investors.

Branch Opportunities Benchmark 972-398-7676

First Cal 707-238-3748

Freedom Mortgage Corp

NEW

A community of mortgage professionals united by Benchmark core values Relationships, Success, Dynamic, Excellence, and a Positive Attitude specializing in retail branching throughout the United States. First First Cal Loan Officers enjoy a unique environment where everyone is invested in each other’s success. If this sounds like a fit for you and your business you owe it to yourself to contact First Cal today.

800-220-9498

Freedom Mortgage Corporation is a full service mortgage banker engaged in the origination of residential mortgage loans. Freedom’s strategy is simple; to be the best service and quality-oriented lender in the continental United States.

GEM Mortgage

Retail Mortagage Banking Branch Opportunities www.gemcorp.com.

800-320-1758

Sierra Pacific Mortgage 800-447-3386

Top Flite Financial, Inc. 866-301-0653

Retail Branches and Wholesale Lending Nationwide. Privately owned specializing in residential conforming, FHA, VA and Jumbo. Wholesale: www.spm1.com Retail: www.spmloans.com.

National Mortgage Banker – Now hiring experienced Branch Managers with a proven track record. We have answers to the new compensation questions!

Credit Repair & Restoration HTDI Financial 877-877-4834 opt 5

Start your own credit repair company with our state of the art tracking software and dispute outsourcing options. Top notch support by a dedicated Account Expert.

SX3 Software

The most powerful windows based Credit Repair software that has taken the industry by storm!

1-855-SX3-SOFT, 855-793-7638

TheNicheReport.com

LENDER & RESOURCE DIRECTORY

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

Accurate Quality Control www.AccurateQC.com Genny Kelly or Judy Nash-Ellis 770-931-5999 GennyK@AccurateQC.net or JudyN@AccurateQC.net

Adfitech Provides Residential Mortgage Post Closing QC, Due Diligence Reviews, Pre-Funding QC, Default Reviews, Fraud Investigations, Post Closing Fulfillment, and LOANVAULT Imaging of Conventional & FHA Products. www.adfitech.com John Rosenhamer 800-880-0456 sales@adfitech.com

AgFirst Correspondent Lending Mortgage Lending for the Homeowner living in Rural America. www.agfirstmortgageloans.com Janice Buchanan 803-753-2420 jbuchanan@agfirst.com

September 2011

a la mode, inc. Websites and marketing tools for real estate professionals. www.alamode.com 800-ALAMODE info@alamode.com

Applied Business Software Origination and Servicing software for hard money lenders. www.TheMortgageOffice.com 800-833-3343 leadsmanagement@absnetwork.com

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

Bank of Internet www.bofilendingpartners.com Darin Judis 888-833-0555 x1508 Darin.Judis@bankofinternet.com

Benchmark A community of mortgage professionals united by Benchmark core values Relationships, Success, Dynamic, Excellence, and a Positive Attitude specializing in retail branching throughout the United States. www.iambenchmark.info Karri Vaught 972-398-7635 contact@iambenchmark.info

Byte Software End-to-end Mortgage Loan Origination Software www.bytesoftware.com 800-695-1008 sales@bytesoftware.com

Calyx Software Affordable software that streamlines and optimizes all phases of the loan processâ&#x20AC;&#x201D; from loan marketing through closing. www.calyxsoftware.com 877-862-2599 point72@calyxsoftware.com

DocMagic The largest dedicated loan document production company in the country, delivers a fusion of solutions guaranteed to meet today's complex loan document challenges. www.docmagic.com 800-649-1362

LENDER & RESOURCE DIRECTORY

ENTITLE DIRECT Savings up to 35% or more on title insurance in 30 states. www.EntitleDirect.com/mortgage 877-936-8485 or 877-9ENTITLE SpecialistCenter@EntitleDirect.com

HTDI Financial Provides credit repair business options to increase revenue. www.outsourcedisputes.com 877-877-4834 opt 6 sales@htdifinancial.com

First Cal Mortgage Banker Wholesale and Retail. www.firstcal.net 877-224-3262 info@firstcal.net

In Touch Today Full service automated marketing planspostcards, newsletters, greeting cards, brochures, presentations and more! www.intouchtoday.com 800-433-3755 sales@intouchtoday.com

Freedom Mortgage Corporation Mortgage Lender. www.fmbranch.com Lynn Tucker, Vice President 800-220-9498 info@fmbranch.com

GEM Mortgage Retail Mortgage Banking. www.gemcorp.com Joe Ewens 800-320-1758 jewens@gemcorp,com

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Linear Title & Closing Title Insurance & Settlement Services. www.lineartitle.com Nick Liuzza 401-841-9991 nliuzza@lineartitle.com

Mailer Leads Lenders and Brokers who use our mailers are not only surviving -- they are thriving www.MailerLeads.com 866-783-4053 ext 14

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The Mortgage Lender Implode-O-Meter Tracking the Housing Finance Breakdown... the WHOLE truth. www.ml-implode.com

Mortgage Insurance Agency, Ltd. State Licensed Surety Bonds, Errors & Omissions, and Fidelity Bond coverages for Mortgage Bankers and Mortgage Brokers nationally. www.mtgins.com David Jackson, President 866-355-9944 info@mtgins.com

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LENDER & RESOURCE DIRECTORY

Mortgage Payment Protection, Inc. Mortgage Payment Protection provides a layer of protection on mortgages against loss of income due to involuntary unemployment www.mortgage-payment.com Sandra Tabares 866-JOB-LOSS (568-5677) info@mortgage-payment.com

National Association of Mortgage Brokers www.namb.org

RateLink Providing mortgage professionals with timely and accurate data as a means to a competitive advantage. www.ratelink.com 800-938-5193

reverseit! www.urbanfinancialgroup.com 888-777-3311 52

September 2011

SX3 SOFTWARE Business level software applications for the Credit Repair, Debt Settlement, Loan Modification & Short Sale Industries. www.SX3software.com 1-855-SX3-SOFT 1-855-793-7638 info@sx3software.com

StreetLinks Lender Solutions Providing lenders with a suite of valuation services and robust lending technology solutions, including full-service & self-managed appraisal products. www.streetlinks.com 800-778-4920 sales@streetlinks.com

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

United Guaranty We provide mortgage risk management products and services, including Mortgage Insurance, to a comprehensive range of mortgage lenders www.ugcorp.com 877-642-4642 customerservice@ugcorp.com

Top Flite Financial, Inc. National Mortgage Banker - Now hiring experienced Branch Managers with a proven track record. We have answers to the new compensation questions! www.tffinc.net Timothy G. Baise, CMC 866-301-0653 tbaise@tffinc.net

United Wholesale Mortgage Specializing in FHA, VA and Conventional Wholesale Lending. www.uwmco.com Allen Beydoun 800-981-8898 info@uwmco.com

Windvest Corporation Hard money lender, specializing in Rehab Loans. NMLS # 394407 www.windvestcorp.com Andre Jimenez/John Ermin 877-285-0777 andre@windvestcorp.com john@windvestcorp.com

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

BRINGING UP THE REAR - continued from page 54

And they did… for a few hours, anyway. According to Carl Hulse, whose writing for The New York Times in July, the deal they fleetingly struck was “transformational,” and I think it’s safe to say that right about now, “transformational” would be a good thing. Obama and Boehner’s compromise would have cut our government’s spending by up to $4 trillion over the next 10 years, made significant changes to the tax code, and taken steps toward the shoring up of Medicare and Social Security. Of course, that “bi-partisan compromise” came apart at the seams one Saturday night when Speaker Boehner, citing the White House’s insistence on tax increases, walked away from the deal. Listening to him explain why he was backing out, I could have sworn that I heard beeping in the background. Clearly, the Republicans in the House are never going to be okay with allowing the Bush tax cuts to expire, and it doesn’t matter what that means to the nation in other areas. The tax cuts I’m referring to should be seen as a relatively minor issue… allowing the top bracket to return to paying roughly thirty nine percent instead of thirty five percent, as they did during the Clinton administration would hardly signal the end of the world as we know it… and there’s no question as to whether the rich, and by “rich” I do mean the top one percent… have disproportionately benefited from their largesse. But, to the GOP’s leaders, allowing the Bush tax cuts to expire would drive a stake through the heart of the economic recovery that’s not occurring by not allowing them to expire. If the whole thing makes no sense to you, that’s only because it makes no sense… period. The GOP likes to refer to those that benefit most from the tax cuts as “job creators,” which when you look at the unemployment numbers over the last four years plus, is just laughable. But yet, Speaker Boehner was quite clearly told over that weekend by others in his “party” that he would not be supported as long as the Bush tax cuts were expendable. Clearly… and incredibly… the GOP would rather see anything else get cut, including Medicare. And on the other side of the aisle, the Democrats would rather see the tax cuts expire than anything else. It’s very much as if the unstoppable force has met the immovable object… and we… you and I… are paying the price as our nation continues to circle the drain in a race to the bottom. Republicans viewed Speaker Boehner’s ideas as a harbinger for political disaster. First and foremost, they

saw the deal as having the potential to hand the Democrats what could be seen as a major victory by extending the Bush tax cuts ONLY for the middle class. That horrific reality, they believe, would end up costing House Republicans the majority in 2012 by throwing out the tax breaks for the wealthiest Americans. And to that I can only say, shut up, shut up, shut up. Look, I’ve been an “employer” for some 20 years, and I’d just like to assure everyone that breaking the collective back of our nation’s middle class is precisely what is stopping America’s employers from spending the massive amounts of cash in their coffers on plans to expand and grow. I don’t care what you do about corporate taxes, Best Buy isn’t expanding until America’s middle class can afford to shop there again. Capisce? Speaker Boehner must know this to be the case as well, after all, it’s not exactly a sophisticated concept, but his party’s unity on this and other issues is akin to shattered crystal being held together with superglue. The Republicans, if there even is such a thing as “the Republicans,” and I would argue there is not, have made it clear that they will do anything to maintain the status quo for big business, too-big-to-fail bankers and the wealthiest Americans. Now there’s a platform I’m sure will do very well in 2012… not. What we should all have learned from watching the debt ceiling debates and our House Speaker run from a deal of his own making, is that we need politicians willing to take political chances, and in that regard we are woefully lacking. Mr. Boehner is but one example of where we’re coming up short, but if we the people don’t start speaking out soon, demanding that decisions be made in our country’s interest and not to appease the banking class, the price we will be forced to pay will exceed our available balance. And so I give you this month’s rear… House Speaker John Boehner… and our next President of the United States, Barack Obama. Martin Andelman is a staff writer for The Niche Report, and a feature writer for ML-Implode.com, where you’ll find his almost daily column, Mandelman Matters. Questions or comments? Send them to: martin@thenichereport.com TheNicheReport.com

BRINGING UP THE REAR

Bringing Up the rear Republican House Speaker, John A. Boehner, et al. BY MARTIN ANDELMAN

irst let me just say that I am not really picking on Rep. Boehner so much individually, as I am picking on both him and his GOP cohorts, collectively. That is to say that President Obama will be re-elected to a second term in 2012 because… well, because he’ll be running unopposed… essentially. If you’re someone generally predisposed to vote for the GOP’s candidate, or if you’re just someone who feels major disappointment over what has transpired during Obama’s first term and is therefore ready to jump ship in ‘12, do you not see that as being the case? If not, I would only suggest it’s a case of willful blindness. Obama will win because the guys on the right side of the aisle are no longer a “political party,” in fact, they’re barely an “informal get together.” The GOP has degenerated into a divided-you-fall group of confused ideologues, unsure of what’s right and what is politically expedient. In plain terms, you guys on the right are a mess... an embarrassing mess. Anyone who reads me regularly knows that I have been no fan of the Democrats or the Obama Administration’s attitude, acts or even attempts at solving our nation’s significant economic issues. As administrations go, Obama’s has been anything but transparent, and that alone is offensive enough, but his

decision to flat out ignore the housing and mortgage crisis has placed this country in real economic danger going forward, and that is, in my mind unforgivable. And yet, here I sit, prepared to ignore the upcoming political season, at least as far as the contest for president is concerned, because there’s nothing to be gained one way or the other by attending to it. Unless Obama is caught on video wearing his own “blue dress,” he’s our prez for another four. The Debt Ceiling Debacle… Watching the debate over the debt ceiling was emblematic of the situation we face. The whole thing was maddening, there’s no question about that, but beyond that… well, it was stupid. I mean, if Goldman Sachs and Bank of America were “too big to fail” in ’08, then why wouldn’t the United States in its entirety fall under the same sort of policy in 2011? Our banks are too big to be allowed to fail, but our nation’s treasury… nah, let it default? Oh, come on… stop it right now. Speaker Boehner, telling Congress and the American people that he had worked his way into the top spot in the House in order to do more than just go to fancy meals and play golf, leapt into action. I don’t know what it looked like to you, but to me it appeared that he contacted the White House and asked for a tee time. Next thing I knew, Mr. Speaker and the Prez were out on the links hammering out a bi-partisan save-the-world type of deal. - continued on page 53

September 2011

WHO SAYS

W E ’ R E A LL T HE S AME

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