NMP Jan11eedition

P R E S O R T E D S T A N D A R D
U . S . P O S T A G E P A I D
N M P M E D I A C O R P .
N M P M E D I A C O R P .
1 2 2 0 W A N T A G H A V E N U E
W A N T A G H , N E W Y O R K 1 1 7 9 3
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FHA Insider: REO Investors An FHA Referral Source
You Must Have in Todays Market
By Jeff Mifsud 28
Remembering the REO Basics
By David Shelton 29
Structuring Effectively for REO Disposition
By Derrick Logan 30
The Need for Transparency Has Never Been Greater
By Damien Chiodo 31
The New Solution
By Bruce Norris 8
Lykken on Leadership
By David Lykken 12
The Challenges of International Real Estate Appraisals
By Charlie W. Elliott Jr., MAI, SRA, ASA 14
11 Ideas to Ignite Your 2011 16
The Secondary Market Overview: From Bonds
to Production Why Did They Go Up?
By Dave Hershman 18
The Fatal Flaw in HAMP
By Steven Gillan 21
Regulatory Compliance Outlook: January 2011
New Risk-Based Pricing Rules
By Jonathan Foxx 22
Forward on Reverse: FIT for Reverse Mortgage
Lenders (Part V) Holes in the Safety Net
By Atare E. Agbamu 25
NMP News Flash: January 2011 4
Heard on the Street 18
New to Market 26
NMP Mortgage Professional Resource Directory 40
NMP Calendar of Events 44
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Visit
NationalMortgageProfessional.com.
COMPANY WEB SITE PAGE
ACC Mortgage .................................................. www.weapproveloans.com ....................................8
Accurate Quality Control .................................. www.accurateqc.com ............................................7
BankFinancial .................................................. www.bankfinancial.com ........................................8
Bay Equity LLC ................................................ www.bayeq.com ..................................................38
CallFurst Conferencing...................................... www.callfurst.com ..............................................36
Calyx Software ................................................ www.calyxsoftware.com ......................................31
Comergence Compliance Monitoring, LLC .......... www.comergencecompliance.com ..................4 & 39
Elliott and Company Appraisers, Inc................... www.appraisalanywhere.com ................................20
Envision Direct ................................................ www.envisiondirect.net/catalog/mortgage.htm ......32
Flagstar Wholesale Lending .............................. www.wholesale.flagstar.com ....................Back Cover
Freedom Mortgage .......................................... www.fmbranch.com ......................Inside Back Cover
Frost Mortgage Lending Group .......................... www.frostmortgage.com/nmp ................................4
GSF Mortgage Corporation ................................ www.gsfprobranch.com ........................................35
Guaranteed Home Mortgage.............................. www.joinguaranteed.com ......................................9
HVCC Appraisal Ordering .................................. www.hvccappraisalordering.com ..........................19
MBA-NJ/NJAMB ................................................ www.mbanj.com ..................................................34
MortgageProShop.com .................................... www.mortgageproshop.com ..................................23
Mortgage Concepts .......................................... www.mortgageconcepts.com ................................11
Mortgage Insurance Agency .............................. www.mtgins.com ................................................31
Mortgage Planner CRM/ MPC ............................ www.mortgageplannercrm.com ............................27
Mortgage Services III, LLC.................................. www.msiloans.biz ................................................27
Nationwide Equities Corp. ................................ www.nwecorp.com ..............................................37
NMLF, Inc. ...................................................... www.nmlf.us ......................................................21
PB Financial Group Corp. .................................. pbfinancialgrp.com ..............................................21
Radian Guaranty .............................................. www.radian.biz ..................................................27
REMN (Real Estate Mortgage Network)................ www.remnwholesale.com ......................................5
StreetLinks National Appraisal Services .............. www.streetlinks.com/SCORe ..........Inside Front Cover
Terrace Mortgage Company .............................. www.terracemortgage.com ..................................10
United Northern Mortgage Bankers Ltd. ............ www.unitednorthern.jobs .............................. 6 & 13
Windvest Corporation ...................................... www.windvestcorp.com ........................................15
National Mortgage Professional Magazine
TABLE OF CONTENTS
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Special Focus on
Managing and Selling REOs
Features
Columns
January 2011 Volume 3, Number 1
A Message From NMP Media Corp.
Executive Vice President Andrew T. Berman
2011: The Year of Leadership
According to Chinese Zodiac, 2011 is the Year of the Rabbit. However, we at National
Mortgage Professional Magazine have dubbed 2011, The Year of Leadership. This
year, you will see the pages of National Mortgage Professional Magazine focusing on
the new leadership of the mortgage industry, as well as provide guidance and
insights for the future leaders. Sure, we still will provide tactical guidance on specif-
ic topics such as valuations and appraisals (like Charlie W. Elliotts The Challenges
of International Real Estate Appraisals on page 14), to secondary market (like Dave
Hershmans Why Did They Go Up? on page 18), default management (like Steven
Gillans piece, The Fatal Flaw in HAMP on page 21), rules and regulations (like Jonathan Foxxs
Regulatory Compliance Outlook on page 22 focusing on New Risk-Based Pricing Rules) and more. But
the overall theme of National Mortgage Professional Magazine will be focusing on the newly-crowned
leaders of the mortgage industry. However, you will see more of the articles like David Lykkens new
column, Lykken on Leadership on page 12. David talks about the need for leaders to step up and grab
the bull by the horns and start leading!
Managing and selling REOs
The pages of National Mortgage Professional Magazine covers everything from origination to settlement to
the servicing sector of the industry. However, we received an overflowing handful of requests to dedicate
an issue on managing and selling real estate-owned (REO) and in this issue, we deliver. Part of this was
obviously from the readers who are working at servicers; however, there was also a large number of our
production-focused readers who also want to learn more about REOs.
For production-focused readers, Jeff Mifsuds REO Investors ... An FHA Referral Source You Must Have
in Todays Market is a must-read on page 28. For a back to the basics look at servicing, be sure to turn to
page 29 for David Sheltons Remembering the REO Basics. Derrick Logan shares with us some insights on
property preservation and asset management on page 30 with his article, Structuring Effectively for REO
Disposition. Our REO section is wrapped up by a great commentary from Damien Chiodo on page 31 and
his piece, The Need for Transparency Has Never Been Greater.
11 ideas to ignite your 2011
Our first issue of 2011 also brings you the special two-page spread on pages 16-17, 11 Ideas to Ignite Your
2011. Here, you will find some quick tips on how to ensure that 2011 will be one of your best years in the
mortgage biz.
Until next month
Andrew T. Berman, Executive Vice President
NMP Media Corp.
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January 2011
Volume 3 Number 1
1220 Wantagh Avenue Wantagh, NY 11793-2202
Phone: (516) 409-5555 / (888) 409-9770
Fax: (516) 409-4600
Web site: www.nationalmortgageprofessional.com
Mortgage
PROFESSIONAL
N A T I O N A L
M A G A Z I N E
Your source for the latest on originations, settlement, and servicing
STAFF
Eric C. Peck
Editor-in-Chief
(516) 409-5555, ext. 312
ericp@nmpmediacorp.com
Andrew T. Berman
Executive Vice President
(516) 409-5555, ext. 333
andrew@nmpmediacorp.com
Domenica Trafficanda
Art Director
domenicat@nmpmediacorp.com
Karen Krizman
Senior National Account Executive
(516) 409-5555, ext. 326
karenk@nmpmediacorp.com
Jon Blake
Advertising Coordinator
(516) 409-5555, ext. 301
jonb@nmpmediacorp.com
Jennifer Moeller
Billing Coordinator
(516) 409-5555, ext. 324
jenniferm@nmpmediacorp.com
ADVERTISING
To receive any information regarding advertising rates, deadlines and require-
ments, please contact Senior National Account Executive Karen Krizman at
(516) 409-5555, ext. 326 or e-mail karenk@nmpmediacorp.com.
ARTICLE SUBMISSIONS/PRESS RELEASES
To submit any material, including articles and press releases, please
contact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or e-mail
ericp@nmpmediacorp.com. The deadline for submissions is the first of
the month prior to the target issue.
SUBSCRIPTIONS
To receive subscription information, please call (516) 409-5555, ext.
301; e-mail orders@nmpmediacorp.com or visit www.nationalmort-
gageprofessional.com. Any subscription changes may be made to the
attention of Circulation via fax to (516) 409-4600.
Statements, articles and opinions in National Mortgage Professional Magazine
are the responsibility of the authors alone and do not imply the opinion or
endorsement of NMP Media Corp., or the officers or members of National
Association of Mortgage Brokers and its State Affiliates (NAMB), National
Association of Professional Mortgage Women (NAPMW), National Credit
Reporting Association (NCRA) and/or other state mortgage trade associations.
Participation in NAMB, NAPMW, NCRA, and/or other state mortgage
trade associations events, activities and/or publications is available on
a non-discriminatory basis and does not reflect the endorsement of the
product and/or services by NMP Media Corp., NAMB, NAPMW, NCRA,
and other state mortgage trade associations.
National Mortgage Professional Magazine, NAMB, NAPMW, NCRA,
and/or other state mortgage trade associations do not make any misrepre-
sentations or warranties concerning the regulatory and/or compliance
aspects of advertisers, products or services and/or the editorial content con-
tained in NMP Media Corp. publications. National Mortgage Professional
Magazine and NMP Media Corp. reserve the right to edit, reject and/or post-
pone the publication of any articles, information or data.
is published monthly by NMP Media Corp.
Copyright 2011 NMP Media Corp.
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National Credit Reporting Association Inc.
125 East Lake Street, Suite 200 O Bloomingdale, IL 60108
Phone #: (630) 539-1525 O Fax #: (630) 539-1526
Web site: www.ncrainc.org
The National Association of
Mortgage Brokers
11325 Random Hills Road, Suite 360
Fairfax, VA 22030
Phone #: (703) 342-5900 O Fax #: (703) 342-5905
PresidentMichael DAlonzo, CMC
Creative Mortgage Group
1126 Horsham Road, Suite D
Maple Glen, PA 19002
(215) 657-9600 O mjdalonzo@hotmail.com
Vice PresidentDonald J. Frommeyer, CRMS
Amtrust Mortgage Funding Inc.
200 Medical Drive, Suite D
Carmel, IN 46032
(317) 575-4355 O dfrommeyer@amtrust.net
SecretaryVirginia Ferguson, CMC
Heritage Valley Mortgage Inc.
5700 Stoneridge Mall Road, Suite 225
Pleasanton, CA 94588
(925) 469-0100 O hvm1@msn.com
TreasurerJohn Councilman, CMC,CRMS
AMC Mortgage Corporation
2613 Fallston Road
Fallston, MD 21047
(410) 557-6400 O jlc@amcmortgage.com
Immediate Past PresidentJim Pair, CMC
Mortgage Associates Corpus Christi
6262 Weber Road, Suite 208
Corpus Christi, TX 78413
(361) 853-9987 O jlpair@aol.com
Michael Anderson, CRMS
Essential Mortgage
3029 S. Sherwood Forest Boulevard, Suite 200
Baton Rouge, LA 70816
(225) 297-7704 O mikea@essentialmtg.com
Donald Fader, CRMS
SMC Home Finance
P.O. Box 1376
Kinston, NC 28503-1376
(252) 523-5800 O dfader@smchf.com
Deb Killian, CRMS
Charter Oak Lending Group LLC
3 Corporate Drive, P.O. Box 3196
Danbury, CT 06813-3196
(203) 778-9999, ext. 103 O debkillian@snet.net
Olga Kucerak, CRMS
Crown Lending
222 East Houston, Suite 1600
San Antonio, TX 78205
(210) 828-3384 O olga@crownlending.com
Walter Scott
Excalibur Financial Inc.
175 Strafford Avenue, Suite 1
Wayne, PA 19087
(215) 669-3273 O wscott.afcs@gmail.com
Tom Conwell
President
(248) 473-7400
tconwell@credittechnologies.com
Donald J. Unger
Vice President
(303) 670-7993, ext. 222
don@advcredit.com
Daphne Large
Treasurer
(901) 259-5105
daphnel@datafacts.com
Marty Flynn
Ex-Officio
(925) 831-3520, ext. 224
marty@ccireports.com
William Bower
DirectorTenant Screening Chair
(800) 288-4757
wbower@confinfo.com
Mike Brown
DirectorTechnology Chair
(800) 285-6691
mike.brown@ncogroup.com
Susan Cataldo
DirectorEducation & Compliance Chair
(404) 303-8656, ext. 204
susancds@cdsusa.net
Janet Curtis
DirectorNew Membership
& Elections Co-Chair
(212) 224-6121
jcurtis@sarma.com
Renee Erickson
DirectorTenant Screening Co-Chair
(800) 311-1585, ext. 2101
renee@zipreports.com
Nancy Fedich
DirectorConference Chair
(908) 813-8555, ext. 3010
nancy@cisinfo.net
Judy Ryan
DirectorNew Membership
& Elections Chair
(800) 929-3400, ext. 201
jryan@kroll.com
Tom Swider
DirectorLegislative Co-Chair
(856) 787-9005, ext. 1201
tswider@creditlenders.com
Terry Clemans
Executive Director
(630) 539-1525
tclemans@ncrainc.org
Jan Gerber
Office Manager/Membership Services
(630) 539-1525
jgerber@ncrainc.org
President
Gary Tumbiolo, CMI
(919) 452-1529
garytumbiolo@aol.com
President-Elect
Laurie Abshier, GML, CMI
(661) 283-1262
E-Mail: lauriea@gemcorp.com
Senior Vice President
Candace Smith, CMI, CME
(512) 329-9040
csmith@wrstarkey.com
Vice PresidentNorthwestern Region
Jill M. Kinsman
(206) 344-7827
jill.kinsman@usbank.com
Vice PresidentWestern Region
Tim Courtney
(760) 792-5620
desertranchrealty@hotmail.com
Vice PresidentCentral Region
Lisa Puckett
(405) 741-5485
lpuckett@ameagletitle.com
Vice PresidentEastern Region
Christine Pollard
(646) 584-8332
cpollard1046@gmail.com
Secretary
Murielle Barnes, CME
(806) 373-6641
napmw123@yahoo.com
Treasurer
Hulene Bridgman-Works
(972) 494-2788
hulene137@yahoo.com
Parliamentarian
Dawn Adams, GML, CMI
(607) 737-2584
dawnvadams@live.com
NAMB Board of Directors
National Association of Professional
Mortgage Women
P.O. Box 451718 O Garland, TX 75042
Phone #: (800) 827-3034 O Fax #: (469) 524-5121
Web site: www.napmw.org
Officers
Directors
2011 Board of Directors & Staff
National Board of Directors
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Zillow Study Finds Homes
Set to Lose $1.7 Trillion
in Value During 2010
U.S. homes are
expected to lose
more than $1.7
trillion in value
during 2010, which
is 63 percent more than the $1 trillion
lost in 2009, according to analysis of
recent Zillow Real Estate Market Reports.
That brings the total value lost since the
market peaked in June 2006 to $9 tril-
lion. By comparison, from 2001 to the
end of September 2010, the war in Iraq
has cost $750.8 billion, according to a
September report by the Congressional
Research Service.
The bulk of the total value lost dur-
ing 2010 was in the second half of the
year. From January to June, the housing
market lost $680 billion. From June to
December, Zillow projects residential
home value losses will top $1 trillion.
Less than one-fourth (31) of the 129
markets tracked by Zillow showed
gains in total home values during
2010. Among those were the Boston
metropolitan statistical area (MSA),
which gained $10.8 billion in value,
and the San Diego MSA, which gained
$10.2 billion.
Despite a strong start to 2010, by
the end of the year homes lost more
of their value in 2010 than they did in
2009, said Zillow Chief Economist Dr.
Stan Humphries. Government inter-
ventions like the homebuyer tax cred-
it helped buoy the market during the
second half of 2009 and the first half
of 2010, but we saw a renewed down-
turn in the last half of this year. Its a
testament to the nearly irresistible
force of the overall market correction
that government incentives can only
temporarily hold back the tide, and
that the market will ultimately find its
natural equilibrium of supply and
demand. Unfortunately, with foreclo-
sures near an all-time high in late
2010 and high rates of negative equi-
ty persisting, it does not appear that
the first part of 2011 will bring much
relief.
Declines in home values have led to
increases in the percentage of home-
owners in negative equity. At the end of
2009, 21.8 percent of single-family
homeowners with mortgages were in
negative equity, meaning they owed
more on their mortgage than their
home was worth. In the third quarter of
2010the last time Zillow calculated
negative equity23.2 percent were
underwater.
For more information, visit www.zillow.com.
NRMLA Announces New
Certified Reverse Mortgage
Professional (CRMP)
Designation
Consumers interested
in exploring reverse
mortgages can now
turn to a loan origina-
tor who has commit-
ted to a new, high standard of training
with the implementation of the
Certified Reverse Mortgage Professional
(CRMP) designation by the National
Reverse Mortgage Lenders Association
(NRMLA). After two years of prepara-
tion, NRMLA awarded CRMP designa-
tions to a first class of 13 members at its
Annual Meeting & Expo on Nov. 3 in
New Orleans. With the support of its
board of directors and membership,
NRMLA has invested more than
$200,000 to create the program.
In our ongoing effort to assure
Americas seniors that they can borrow
with confidence from a NRMLA lender,
we have made a significant investment
of both human and financial resources,
and created a rigorous program focused
on solid experience, continued educa-
tion and ethical training, said Peter
Bell, NRMLA president.
Eligibility to apply for a CRMP desig-
nation requires that a loan originator
have at least two years of experience
and closed 50 reverse mortgages. Only
then can they enter the process which
includes 12 hours annually of contin-
ued education, participating in a three-
hour interactive ethics training semi-
nar, a background check and sitting for
an exam. The certification is valid for
three years, but a designee must recer-
tify every year and obtain 12 hours of
continuing education credits annually
over that period.
The CRMP designation process was
designed in collaboration with
Professional Testing Inc. of Orlando,
Fla., international experts on creating
licensure and certification programs.
The program is administered by an
Independent Certification Committee
comprised of NRMLA members that
Multiple National Lenders
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If you would like to learn more about our
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Tired of lling out
broker applications?
Introducing One-For-All

from Comergence.
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W E A R E R E M N W H O L E S A L E
At REMN, we understand that theres nothing
ordinary about focusing on whats important:
our customers. We recognize that continued
business from our satisfied customers is the
lifeblood of our business. We believe that every
application is precious and treat each file with
the respect and urgency it deserves.
Even better, at REMN, same-day approvals
are guaranteed. We promise extraordinary
service in an ordinary world.
Real Estate Mortgage Network, Inc. is located at 499 Thornall Street, Second Floor, Edison, NJ 08837. NMLS #6521. This information is for use by mortgage professionals only and should not be distributed to or used by consumers or third
parties. Information is accurate as of date of printing and is subject to change without notice.
* Same-day decisions guaranteed if file is received by 11 a.m. EST.
Learn more at www.remnwholesale.com
Were not
afraid to be
different.
oversee the establishment of criteria,
eligibility, testing and recertification. In
accepting their responsibility in govern-
ing this credentialing organization,
committee members must understand
that their fiduciary responsibility
includes safeguarding the publics trust
through the administration of a credi-
ble credential and in exercising due
diligence to uphold the integrity of the
certification program.
For more information, visit www.nrm-
laonline.org.
Shadow Inventory Rises
More Than 10 Percent in
One Year According to
CoreLogic Study
Photo credit: Comstock
CoreLogic, a provider
of consumer, finan-
cial and property
information and business services, has
reported that shadow inventory of resi-
dential property as of August 2010,
reached 2.1 million units, or eight
months worth of supply, up from 1.9
million, or a five-months supply, from
one year earlier. With visible inventory
remaining flat at 4.2 million units, the
change in shadow inventory increased
the total supply of unsold inventory by
three percent.
CoreLogic estimates shadow invento-
ry, sometimes called pending supply,
by calculating the number of properties
that are seriously delinquent (90 days
or more), in foreclosure and real estate-
owned (REO) by lenders and that are
not currently listed on multiple listing
services (MLSs). Shadow inventory is
typically not included in the official
metrics of unsold inventory.
According to CoreLogic, the visible
supply of unsold inventory was 4.2 mil-
lion units in August 2010, the same as
the previous year. The visible inventory
measures the unsold inventory of new
and existing homes that were on the
market. The visible months supply
increased to 15 months in August, up
from 11 months a year earlier due to
the decline in sales during the last few
months.
The total visible and shadow inven-
tory was 6.3 million units in August,
up from 6.1 million a year ago. The
total months supply of unsold homes
was 23 months in August, up from 17
months a year ago. Although it can
vary and it depends on the market
and real estate cycle, typically a read-
ing of six to seven months is consid-
ered normal so the current total
months supply is roughly three times
the normal rate.
The weak demand for housing is
significantly increasing the risk of
further price declines in the housing
market, said Mark Fleming, chief
economist for CoreLogic. This is
being exacerbated by a significant
and growing shadow inventory that
is likely to persist for some time due
to the highly extended time-to-
liquidation that servicers are cur-
rently experiencing.
In its analysis, CoreLogic also found
that the highest levels of distressed
months supply, which is the ratio of
the number of properties that are 90-
plus days or more delinquent to the
number of sales, are in Florida,
Michigan, and California. Although
Phoenix and Las Vegas have high
months supply of total housing inven-
tory, they are not among the markets
with the highest distressed months
supply because of the increased num-
ber of distressed sales that have been
occurring in those markets. The mar-
kets with the lowest distressed supply
are all in Texas, which largely
bypassed the housing boom and sub-
sequent bust.
For more information, visit
www.corelogic.com.
TransUnion: Mortgage
Delinquencies Expected
to Experience Double
Digit Decreases
Through 2011
Tr ans Uni on
has released its
annual fore-
casts on consumer credit, which indicate
that national mortgage loan delinquen-
cies (the ratio of borrowers 60 or more
days past due) will drop nearly 20 per-
cent by the end of 2011 to 4.98 per-
cent from an expected 6.21 percent at
the conclusion of 2010. The projected
decrease in 60-day mortgage delin-
quencies, a statistic generally consid-
ered a precursor to foreclosure,
would more than double the 9.87
percent yearly decline that is expect-
ed between the end of 2009 and 2010
(from 6.89 percent to 6.21 percent).
This is a welcome contrast to the
year-over-year increases of 54 per-
cent between 2006 and 2007, 53 per-
cent between 2007 and 2008 and 50
percent between 2008 and 2009.
TransUnion is projecting double-
digit declines in mortgage delinquen-
cies for every state and the District of
Columbia through 2011. Interestingly,
the states projected to experience the
greatest decreases in mortgage delin-
quenciesNevada (-24.77 percent), Arizona
(-24.27 percent) and Florida (-23.90 per-
cent)are the same areas expected to
continued on page 7
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About working with United Northern Mortgage Bankers
Ongoing training and consultation with top industry executives
Access to in-house marketing services
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Proven leading-edge technology (built on Encompass 360
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Virtual office support
Licensing and regulatory compliance services
An in-house team to monitor SAFE Act compliance
In-house underwriting
Most loans underwritten in 24 to 48 hours
Multiple valuation tools to research value
In-house valuation desk to help ensure accurate
values and responsive turnaround time
Multiple established warehouse lines
Limited room available for established Team Leaders and
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888-600-8808, ext. 1 or by e-mailing info@unitednorthern.jobs.
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7
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have the highest 60-day mortgage delin-
quency rates at the end of next year
(Florida11.06 percent; Nevada
10.87 percent; Arizona7.59 percent).
North Dakota (1.12 percent), South
Dakota (1.80 percent) and Nebraska
(2.05 percent) should continue to
rank among the states with the lowest
delinquency rates at the end of next
year.
We believe the nation will experi-
ence an improvement in mortgage
delinquencies during 2011, said Steve
Chaouki, group vice president in
TransUnions financial services busi-
ness unit. This will be driven by a
slowly improving unemployment pic-
ture and continued stabilization in
housing prices. While there is contin-
ued price pressure in many markets,
we expect a growing number of areas
of the country to experience a rise in
property values along with some stabi-
lization of values in those states and
markets hardest hit by the recession.
For more information, visit www.tran-
sunion.com/trenddata.
Mortgage Fraud SARs
Rise Seven Percent in the
First Half of 2010
The Financial Crimes
Enforcement Network
(FinCEN) has released
two mortgage fraud
reports entitled Mortgage
Loan Fraud SAR
Filings, which together cover the first
six months of 2010; one report covers
January through March 2010, and the
other covers April through June 2010.
Taken together the reports show that
suspicious activity reports (SARs) indi-
cating mortgage loan fraud (MLF)
climbed seven percent, rising to 35,135
in the first half of 2010 compared with
32,926 in the first half of 2009. In part,
the increase can be attributed to
increased attention to older loans
spurred by repurchase demands. In the
first quarter of 2010, 78 percent of
reported activities occurred more than
two years prior to filing, compared with
44 percent in the same period of 2009,
showing a continued focus on loans
originated from 2006-2008.
SARs are one of the most important
sources of lead information for mort-
gage fraud investigations available to
law enforcement, said FinCEN Director
James H. Freis Jr. As a member of the
Presidents Financial Fraud Enforcement
Task Force, FinCEN remains active with
law enforcement and other partner
agencies in the task force to provide
lead information and to identify poten-
tial abuses in order to combat mortgage
loan fraud.
Other key findings of FinCENs latest
reports include:
O References to bankruptcy in SARs
have steadily increased, rising to
seven percent of MLF SAR filings in
2010, compared to one percent in
2006 and 2007.
O SAR reports referencing short sale
and broker price opinion
appeared 827 times and 41 times in
SARs respectively during the first
quarter of 2010. Short sales and bro-
ker price opinions mentioned in
SARs are sometimes associated with
a particular type of flipping scheme
known as flopping. Flopping
occurs when a foreclosed property is
sold at an artificially low price to a
straw buyer, who quickly sells the
property at a higher price and pock-
ets the difference.
www.fincen.gov.
George Washington
University Study
Examines the FHA
Just days after U.S.
Department of Housing
& Urban Development
(HUD) Secretary Shaun
Donovan presented
Congress with its annual report on the
financial status of the Federal Housing
Administration (FHA), the George
Washington University Center for Real
Estate and Urban Analysis has announced
a new research project whereby the
Center will release a series of reports ana-
lyzing the FHA.
Entitled, FHA Assessment Report:
The Role and Reform of the Federal
Housing Administration in a
Recovering U. S. Housing Market, the
report series seeks to analyze and
interpret FHA reforms underway to
improve the agencys performance. In
2010, Congress made several reforms
to the FHA to better manage risk amid
growing demand for FHA-insured mort-
gage loans. As the 112th Congress con-
venes in January, the reports will eval-
uate FHA residential mortgage activity
and examine steps the agency is taking
or may consider to ensure its long term
viability, while fulfilling its goals of
enabling low and moderate income
home buyers to qualify for mortgage
financing. The project will be under-
taken by Dr. Robert Van Order Ph.D. at
the George Washington University
School of Business and chair of the
Center for Real Estate and Urban
Analysis, Vanessa Perry, associate pro-
fessor of marketing and Anthony Yezer,
professor of economics.
The FHA served a critically impor-
tant role in the economic downturn to
ensure that low downpayment lending
continued, but, as in past cycles, there
is concern that current policies may
push the FHA toward instability, said
Dr. Van Order. Steps have been taken
to manage risk, but there are many
components of the system and no one
news flash continued from page 5
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Quality Control Services Training Consulting
continued on page 9
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Homeownership has lost its luster. Need proof? Pick
up a newspaper or ask any Jane on the street; youll
soon figure out the industry is not viewed in a par-
ticularly good light these days.
Youll also figure out that everyone has a fix, like
scrapping interest rate deductions or requiring a 20
percent downpaymentwhich is great if you want
homeownership to decline another 10 percent, as
history suggests they would.
Heres another idea youll hear: Simply wait ... I
can hear a stampede of buyers just around the cor-
ner.
Yes, there are some who still speak of the mythi-
cal pink unicorn that is pent-up demand. As if during
this time of record-breaking bad news of delinquen-
cies, unemployment, underwater homeowners, etc.,
there is a reserve of money-hungry homebuyers
waiting for the stars to align before they break out
their checkbooks.
Not so. In truth, we have the least capable and
least willing group of buyers since the Great
Depression.
But despite all of this, our woes can be solved by
thinking outside of the box and getting to the root of the problem: Creating suffi-
cient capable demand for the coming inventory.
Before we begin, just a quick note: Your first instinct will be to dismiss this idea
as pure nonsense. Give it a chance. If these suggestions were implemented, wed
have the housing problem whipped in 24 monthsand those in the business of
making loans would have all the clients they could handle.
Heres the plan: For the next two years, we create a zero-down loan program
with two special features that will assure it creates virtually no foreclosures. The
loans, of course, would require real qualifyingthus avoiding more garbage
paper.
First, lets start with our target demographic. In the chart below, youll notice
that the under-35 group has the smallest percentage of homeownership. That
being the case, their credit is the least damaged coming out of the housing crash.
(You cant lose what you dont own.)
Homeownership rates by age of householder
Source: U.S. Census Bureau
With zero-down and an interest rate of five percent or less, many would see their
monthly obligation actually decrease. By leaving the variable (and often acceler-
ating) rental market in favor of fixed housing costs, over time, this payment would
shrink. Itd almost feel like a car payment, freeing up money for other consumer
purchases. In short, they would be enjoying the American dream.
But what about virtually no foreclosures, youre wondering? Good question. In the
highly unlikely event that 10 percent of the borrowers stopped making their housing
payment, lenders wouldnt lose a dime. Theyd simply move the loan to someone will-
ing to cover the missed payments and assume the remaining loan balance.
Once upon a time, the Federal Housing Administration (FHA) had something
called simple assumption. (Never was anything more perfectly named.) The new
The New Solution
By Bruce Norris
our woes can be
solved by thinking
outside of the box and
getting to the root of
the problem: Creating
sufficient capable
demand for the com-
ing inventory.
continued on page 10
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part should become overextended. Our
research project will take a close look
at some of the tough questions: Should
FHAs loan limits remain at pre-housing
crash levels? How should FHA limit risk
to the fund? What products should FHA
insure? What types of borrowers should
FHA serve?
Secretary Donovan recently present-
ed Congress with its annual report on
the financial status of the FHA Mutual
Mortgage Insurance Fund. The inde-
pendent actuarial analysis contains
projections of the capital reserve ratio
of the FHA MMI Fund, which, in recent
years, has been below the congression-
ally mandated two percent ratio. This
years report found that the MMI fund
ratio has changed minimally; at 0.50
percent today, down from the 0.53 per-
cent in fiscal year 2009. The decline
over last year is the result of a drop in
performance of the Home Equity
Conversion Mortgage (HECM) business
(which has a negative ratio) that was
largely offset by improvement in the
single-family portfolio from 0.42 per-
cent to 0.79 percent (before the trans-
fer of 0.20 per cent to the HECM
account).
business.gwu.edu/creua.
FTC Issues Rule to Protect
Struggling Homeowners
From Foreclosure Rescue
Scams
Homeowners will be pro-
tected by a new Federal
Trade Commission (FTC)
rule, the Mortgage
Assistance Relief Services
(MARS) Rule, that bans providers of mort-
gage foreclosure rescue and loan modifica-
tion services from collecting fees until
homeowners have a written offer from
their lender or servicer that they decide is
acceptable.
At a time when many Americans
are struggling to pay their mortgages,
peddlers of so-called mortgage relief
services have taken hundreds of mil-
lions of dollars from hundreds of thou-
sands of homeowners without ever
delivering results, said FTC Chairman
Jon Leibowitz. By banning providers of
these services from collecting fees until
the customer is satisfied with the
results, this rule will protect consumers
from being victimized by these scams.
The FTC is issuing the MARS Rule to
protect distressed homeowners from
mortgage relief scams that have sprung
up during the mortgage crisis. Bogus
operations falsely claim that, for a fee,
they will negotiate with the consumers
mortgage lender or servicer to obtain a
loan modification, a short sale or other
relief from foreclosure. Many of these
operations pretend to be affiliated with
the government and government hous-
ing assistance programs. The FTC has
brought more than 30 cases against
operations like these, and state and
federal law enforcement partners have
brought hundreds more.
The most significant consumer pro-
tection under the FTCs new rule is the
advance fee ban. Under this provision,
mortgage relief companies may not col-
lect any fees until they have provided
consumers with a written offer from
their lender or servicer that the con-
sumer decides is acceptable, and a writ-
ten document from the lender or ser-
vicer describing the key changes to the
mortgage that would result if the con-
sumer accepts the offer. The companies
also must remind consumers of their
right to reject the offer without any
charge.
The MARS Rule requires mortgage
relief companies to disclose key infor-
mation to consumers to protect them
from being misled and to help them
make better informed purchasing
decisions. In their advertising and in
communications directed at individual
consumers (such as telemarketing
calls), the companies must disclose
that: They are not associated with the
government, and their services have
not been approved by the government
or the consumers lender; the lender
may not agree to change the con-
sumers loan; and if companies tell
consumers to stop paying their mort-
gage, they must also tell them that
they could lose their home and dam-
age their credit rating.
Companies also must explain in
their communications to consumers
that they can stop doing business with
the company at any time, can accept
or reject any offer the company
obtains from the lender or servicer,
and, if they reject the offer, they dont
have to pay the companys fee. The
companies also must disclose the
amount of the fee.
The FTC rulemaking proceeding was
conducted pursuant to Congressional
legislation sponsored in 2009 by Sens.
EXECUTIVE OFFICES:
108 Corporate Park Drive, Suite 301
White Plains, NY 10604
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Louis Tesoriero at (888) 329-GHMC
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Here's to new beginnings.
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the new solution continued from page 8
buyer put $35 in the mail and the loan was transferred from the current owner to
the new owner; no formal qualifying or assumption paperwork required. The only
stipulation was that the loan be made current. Simple indeed.
Lets take a look at a typical example, with a property that has a $150,000 loan
at five percent interest:
$805 (principal and interest) + $195 (taxes and insurance) = $1,000 monthly payment
Assume the owner is three months behind when the lender gives notice of its
intent to start foreclosure. Instead of losing the home, the owner finds someone
willing to make the payments current and deeds them the property. The lender is
made whole, and the new owner goes from being a renter to a homeowner.
Take a look at this foreclosure chart. How many buyers do you think might
jump at the chance to own a homewithout having to formally qualify?
Trustees deeds recorded: Southern California
Source: Real Estate Research Council of Southern California, Cal Poly Pomona
There are record numbers of former owners whose credit was damaged credit in
the past few years. Each is a family who lost property to foreclosure, and theyre
perfect candidates to again become homeowners via simple assumption.
Of course, no lender will make them a new loan because of their credit history. But
that doesnt necessarily make them a risk to lose another home. If theyre able to bring
five to 10 percent cash to the deal, they have skin in the game. Not only have they made
a substantial financial commitment, but they are overjoyed to get a chance to own again.
Only this time, their payment is less than rent.
As an aside, didnt we just have a zero-down homeownership program when we gave
an $8,000 tax credit to the buyer of a $100,000 house? Buyers didnt need $8,000 to close
escrow, so in essence, thats a zero-down purchase. The problem is that the loan cannot
be easily transferred in case of a default, and that loan program will create foreclosures
on top of the $8,000 bill for each sale. The tax rebate program created artificial demand.
My nothing-down program would create real demand and permanent benefits.
Overjoyed-ness aside, its possible that the new owner could stop making loan
payments. They hide their head in the sand and the lender takes the property to
a trustee sale. Bad news.
Or is it? Under this system, the opening bid at the trustee sale will only be the
late payments and feesnot the entire principal amount plus late charges and
everything else. On our hypothetical $150,000 loan, the back payments wouldnt
exceed $7,000 and the fees $2,000.
By show of hands, how many investors would pay $9,000 for a chance to own
a positive cash flow rental with five-percent financing for 30 years?
I am an investor, I can tell you the number would be unlimited. Whats more,
each property would likely see overbids, which normally go to the owner.
For this loan program, however, borrowers who default get none of the overbid. Call
it provisional ownership. If they live rent-free for six months, thats reward enough. Let
the overbid fund an insurance policy that backs any losses for the new loan program.
One important element is to allow the participation of Realtors. Give them the
assurance that the former owner will have no residual liability by allowing the
loan to transfer to the new owner. This would assure huge demand for the inven-
tory across all price sectors of the market. It would also save the lenders a ton of money.
Instead of foreclosing and losing money, the loan will be brought back in good stand-
ing; just with a different owners name. For the time being, the lenders should care
more about having a loan payment being made than whose name is on the check.
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US Mortgage Corporation DBA Mortgage Concepts Corporate Oce is located at 4170 Veterans Memorial Highway,
Suite 201, Bohemia, New York 11716; 800-562-6715.
HELPING YOU MAKE IT HOME
HELPING YOU MAKE IT HOMETM TM
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I am going start off with a bold asser-
tion that we (our nation and our
industry) are facing a serious leader-
ship crisis. I am also going to assert
that this is the result of the unusual
and extended season of prosperity and
good times we have enjoyed from
1996 through 2006. It has been my
observation that in times of great pros-
perity such as this period, we rarely see
new leadership emerge. If anything,
leadership development seems to go
into remission. That is not to say that
there are new potentially strong lead-
ers walking among us, but the absence
of a perceived or real crisis doesnt
seem to foster or allow an opportunity
for those leaders to emerge i.e., the
need for their existence did not exist
(or so we thought). Regrettably, the
catalysts for leaders to arise seems to
be when we have the emergence of a
new crisis. I will even assert that when
we, as a society, have extended periods
of great prosperity as we have become
confused on what strong leadership
looks like.
For those of you questioning this,
consider this question: During your
life, when have you experienced your
greatest times of development and
growth? Isnt it during those unpleas-
ant seasons when youre going through
some difficulty that feels like a crisis?
There is no question that we all
enjoy the good times and want them
to continue for as long as possible. But
when you do a honest analysis of what
actually happened during the decade
between 1996 and 2006 where we all
enjoyed such an extraordinary extend-
ed time prosperity, we witnessed our
nation increasingly subscribe to the
mistaken notion that greed is good
and he who dies with the most toys
wins. Overindulgence, greed and
materialism cause us as a society to
become lazier, more complacent and
less disciplined the characteristics
opposite of true leadership. In fact,
capitalism that gives way to excess is
an enemy to leadership development.
Economists have said that we entered
the current recession in December,
2007, and some would suggest that we
have begun to emerge from that reces-
sion. Whether we are or not, having
unemployment hovering around 10 per-
cent and the most recent Case-Shiller
report advising that some real estate
markets are likely going to experience a
double-dip in housing prices, theres no
question that the good times are over.
Most economists advise that we are no
longer in a recession and have begun a
recovery, albeit a modest recovery.
Others are not so easily convinced, sug-
gesting that things are going to get much
worse before they get any better. If the
latter is true, could this actually be a
blessing in disguise? Or maybe another
way to look at it is the old expression
where is the pony in this pile (my
apologies if you havent heard the story
with that as the punch line). If it is true
that we are heading into more troubled
economic times, than the topic of lead-
ership and leadership development is
more critical now than ever. It is for this
reason that I have chosen to write a new
series of articles on leadership. It is my
hope that you will enjoy and benefit
from reading this column in the months
ahead. Whether we have an economic
downturn or an economic recovery, it is
important either way to develop the
leaders amongst us. Good leadership is
key to our future and survival as an
industry and as a country.
If I were to ask you to quickly start
naming list of some of the greatest lead-
ers in history, what names would come
to mind? Would names like George
Washington, Abraham Lincoln, Winston
Churchill, Gen. Douglas MacArthur,
Martin Luther King, Nelson Mandela,
Golda Meir or Mahatma Gandhi come to
mind? For those who are more sports-
minded, names like Vince Lombardi or
John Wooden might come to mind. In
reality, it wouldnt be very difficult for
most of you to quickly compile a list of
individuals you consider to be leaders.
Now, if I were to ask you to give me
a list of the qualities that make for a
great leader, I dare say that most would
find that exercise a bit more challeng-
ing. Why is that? Most of us immediate-
ly recognize leadership when it shows
up. However, when you asked most of
us to logically explain or identify what it
is about someone that makes that per-
son a leader, we struggle. Leadership is
something that we intuitively or instinc-
tively recognize when experienced. It is
not something we arrive at logically.
Okay, now lets take this discussion to
the mortgage industry. If I were to ask
you who is or has been a great leader in
the mortgage industry, who comes to
mind? With tongue-in-cheek I ask,
Does anyone come to mind? If some
names do come to mind, ask yourself:
Why do I consider these people lead-
ers? As I suggested at the opening of
this article, many years of prosperity
skews our definition of what makes for a
strong leader. When I ask myself the
question, Who in the mortgage industry
do I consider to be a leader I strug-
gle for an answer. Several individuals
surface in my thinking; however, recent
revelations about some of these individ-
uals lack of character cause me to say to
myself, You know, they may not have
been the leader that I thought they
were. History has a tendency to qualify
or disqualify genuine leadership.
Allow me if you will, to share a per-
sonal story about someone influential
early in my career. When I started my
career in mortgage lending, one of the
very first bosses I had seemed like any-
thing but a leader. To say that we didnt
start off on the right foot is an under-
statement. From my perspective, he
seemed to enjoy making my life miser-
able. I was right out of college, and in
hindsight, I now recognize that I was def-
initely rough around the edges, but I
had an intense desire to succeed in mort-
gage lending. The harder I tried, the
more difficult this new boss seemed to
get. He was rough on me, and from my
perspective, was harder on me than any-
one else. I just assumed he didnt like me
and there was nothing I could do about
it. Nonetheless, he was extremely really
good at what he did and I wanted to
learn from one of the best, so in my
mind, I was going to put up with him.
With that attitude, theres no telling what
he was thinking about me at the time.
However, it wasnt long before I realized
I was growing and getting better and bet-
ter. It wasnt too long that I started get-
ting promoted and eventually started
receiving job offers from the competi-
tion, some of which were really attractive
offers. To my own amazement, every
time I was offered a bigger salary or bet-
ter opportunity, I chose to stay put.
While we never grew close, I had grown
to respect boss as a leader. I saw mort-
gage lending as my long-term profession
and my desire to grow and be mentored
by one of the best in the business
exceeded anything else. As a result, I
ended up staying with that company for
a number of years despite numerous
attractive offers from competitors.
For that company for whom we
both worked, my boss good leadership
paid great dividends for me and the
company we worked for, as I stayed
there and produced a good amount of
revenue for that company. Leadership
does matter. I had the privilege of
reconnecting with that old boss many
years later after he had retired and a
short time before he passed away. I
By David Lykken
Overindulgence, greed and
materialism cause us as a society
to become lazier, more complacent
and less disciplined the
characteristics opposite of true
leadership. In fact, capitalism that
gives way to excess is an enemy to
leadership development.
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or call (888) 600-8808 ext 1.
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the new solution continued from page 10
Bottom line this program creates housing demand in three important ways:
O First, it gets young adults involved in homeownership much earlier than nor-
mal. This creates part of the demand we need to turn the percentage of home-
ownership headed in a positive direction.
O Second, when a borrower defaults on this new loan program, it actually allows
a former owner to once again own a home. All they have to do is make the loan
current and record a grant deed. Call it forgiveness or amnesty or a failing long-
term memory, but the group of credit-damaged former owners is huge and
needs to be considered. (And theres no way the new program would generate
enough foreclosures to fill the demandthats a guarantee.)
O The third way is taking the property to a trustee sale with an opening bid of
only the back payments and fees. Buyers, with cashiers checks in hand, bid
against other trustee sale buyers. The starting bid is the total of the late pay-
ments plus foreclosure costs, not the principal under this new loan program
(approximately six percent of the balance of the loan.
Compare that to todays typical downpayment requirement for investors: 20 to
30 percent with a limit of 10 loans, which eliminates the best and brightest
investors from helping with the economic recovery. If this new loan program would
be allowed, investors would be able to prevent a foreclosure from happening and
get better financing than they could anywhere else ... and in unlimited quantity.
The more buyers are interested in a property, the higher the bid would go.
Then, take the overbid and build a fund to do something worthwhile fund
Habitat for Humanity or green building, etc.
Now, do you still think this nothing-downpayment idea is ridiculous?
Bruce Norris is an active investor, hard money lender and real estate educator with
over 30 years of experience. Bruce has been involved in more than 2,000 real estate
transactions as a buyer, seller, builder and money partner. For more information,
call (951) 780-5856 or visit www.thenorrisgroup.com.
found myself getting somewhat choked
up as I thanked him for all he had done
in the early days of my career. I cannot
tell you how many times I have looked
back and appreciated his contributions
to my career and my life. Leadership may
not yield friendship, even though I wish
it had in this case, but it did yield divi-
dends well beyond this mans time on
this earth. Heres the point of me telling
you this story. History and time provides
us with the best optics to clearly
see/recognize the leaders in our lives.
Here are the questions I now have
for you, Do you want to be a leader?
Do you see yourself as a leader or a
potential leader? To make the point
more clearly, let me rephrase the ques-
tion this way, Do you want to be suc-
cessful in this business? If you do, you
MUST learn how to become a GREAT
leader. That is what this series of arti-
cles is going to be dedicated to accom-
plishing developing great leaders. I
believe we are entering a season where
those who have developed strong lead-
ership skills will not only prosper and
do well, but will also have amazing
opportunities for growing strong com-
panies that will dominate the next mar-
ket cycle.
While speaking at the Mortgage
Bankers Association (MBA) Annual Expo
in Atlanta late last fall, I made the fol-
lowing prediction and it bears repeat-
ing as I start this new series of articles
on leadership:
One of the most interesting things about
2011 will be which companies survive
and thrive, and which ones will fail. The
primary determining factor between suc-
cess and failure in the days ahead will be
leadership or the lack thereof.
Again, I look forward to writing on
the topic of leadership each month in
this publication in the year 2011. It is my
hope and prayer that 2011 will be your
best year ever. Again, happy new year!
David Lykken is president of mortgage
strategies and managing partner with
Mortgage Banking Solutions. He has more
than 35 years of industry experience and
has garnered a national reputation, and
has become a frequent guest on FOX
Business News with Neil Cavuto, Stuart
Varney, Liz Claman and Dave Asman with
additional guest appearances on the CBS
Evening News, Bloomberg TV and radio.
He may be reached by phone at (512) 977-
9900, ext. 101 or e-mail dlykken@mort-
gagebankingsolutions.com.
To listen to author David
Lykkens online radio show,
log on to www.blogtalkra-
dio.com and type in Lykken
on Lending in the Search box on
the right-hand side of the page.
History has a tendency to qualify
or disqualify genuine leadership.
recognizes the support of those Mortgage
Professionals who have stepped up to pay tribute
to the men and women who have fought to
preserve freedom for our great country.
We will be featuring these Mortgage Professionals in our Mortgage
Heroes feature in National Mortgage Professional Magazine.
We want to hear from you if you:
#Make signifcant donations to any veteran's organizations
#Hosts or sponsors events recognizing and paying tribute to veterans
#Provides support for the families of veterans
#Any other noteworthy assistance to help improve the lives of
veterans and their loved ones
To be considered for Mortgage Heroes, visit
NMPMag.com/mortgageheroes.
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Jay Rockefeller and Byron Dorgan. The
Final Rule applies only to entities with-
in the FTCs jurisdiction under the
Federal Trade Commission Act, which
excludes, among others, banks, savings
and loans, federal credit unions, com-
mon carriers, and entities engaged in
the business of insurance. In June
2009, the FTC issued an Advance
Notice of Proposed Rulemaking seek-
ing comment on the practices of for-
profit mortgage relief companies. In
February 2010, the FTC announced a
Notice of Proposed Rulemaking and
sought comments from interested per-
sons, including advocates for con-
sumers, the business community, and
the legal profession.
For more information, visit www.ftc.gov.
Ginnie Mae Reports
Increases in Revenue,
Net Income and Loan
Loss Reserves in 2010
Ginnie Mae has report-
ed revenues of more
than $1 billion for fis-
cal year 2010, up from
$657.3 million in
2009. The increased
revenues are driven primarily by
increases in guaranty fee income and
interest income. Net income for 2010
reached $541.5 million, surpassing the
$509.6 million net income total for
2009. The company increased its provi-
sions for loan losses to slightly more
than $1 billion in 2010, up from $559.9
million in 2009.
Given the continued slow pace of
growth in the U.S. economy, Ginnie
Maes increase in both revenue and net
income is quite an accomplishment,
said Ginnie Mae President Ted Tozer.
This year weve increased our loan loss
reserves, and we believe this increased
provision is more than sufficient to off-
set losses on servicing portfolios taken
over by Ginnie Mae due to Issuer
defaults.
Ginnie Mae, a self-financed, wholly-
owned corporation within the U.S.
Department of Housing & Urban
Development (HUD), earns revenue
from fees collected on the mortgage-
backed securities (MBS) issued under
the Ginnie Mae full faith and credit
guaranty. The corporations business
volume reached a historic milestone in
2010 by surpassing $1 trillion in MBS
outstanding. The trillion dollar portfo-
lio supports more than eight million
housing units for families across the
country. During the housing crisis, the
corporation helped stabilize the largest
segment of the market by pumping
more than $900 billion in liquidity into
the single-family housing market since
June of 2008.
Our goal is to be the best-in-class
conduit for bringing capital into the
U.S. housing finance system, while
minimizing risk to U.S. taxpayers, said
Executive Vice President Mary Kinney.
During this incredibly challenging
housing market, Ginnie Mae has over-
seen tremendous business growth,
while simultaneously implementing
strong risk management practices and
providing efficient solutions to our
business partners.
Ginnie Mae raises capital from
investors in the global credit markets to
ensure liquidity for affordable rental
and homeownership opportunities
across the country. Its business is to
finance housing mortgage programs
run by the Federal Housing
Administration (FHA), the Department
of Veterans Affairs (VA), the Office of
Public and Indian Housing (PIH), and
the Department of Agricultures Rural
Development Housing and Community
Facilities Program (RD).
For more information, visit www.gin-
niemae.gov.
HUD to Launch
Investigation Into 22
Discriminatory Lenders
The U.S. Department
of Housing & Urban
Development (HUD)
has announced that it
is launching multiple
investigations into the
practices of certain mortgage lenders
to determine if their home loan poli-
cies illegally deny qualified African-
American and Latino borrowers access
to credit.
The investigations are in response to
22 complaints the National Community
Reinvestment Coalition (NCRC) filed
with HUD alleging that the loan activi-
ties of the mortgage originators showed
that their home lending practices deny
Federal Housing Administration (FHA)-
insured loans to African-Americans and
Latinos with credit scores as high as
640. FHA guidelines allow mortgages to
borrowers with credit scores above 580,
provided the borrowers have downpay-
ments equaling 3.5 percent of the loan
amount, or above 500, provided the
borrowers have down payments equal-
ing 10 percent of the loan amount.
FHA is an important vehicle for
Americans who want to purchase or
refinance a home. We thank NCRC for
bringing these complaints to HUD. For
lenders to deny responsible home seek-
ers this source of credit, without regard
for their capacity to repay the loans,
would raise serious fair housing con-
cerns and, if proven, undermine our
nations recovery efforts, said HUD
Assistant Secretary for Fair Housing and
Equal Opportunity John Trasvia. HUD
will take appropriate action against any
lender found to be engaging in discrim-
inatory practices.
Prior to the recent downturn in the
economy, FHA-insured mortgages com-
prised less than three percent of new
home loans. Since the economic crisis,
The Challenges of International
Real Estate Appraisals
Recently, I had the opportunity to per-
form an appraisal in Costa Rica. The
function of the appraisal was to evaluate
a property to be used as collateral for a
mortgage loan; in much the same way as
it would be done here in the United
States. While Costa Rica is a foreign coun-
try and offers many differences, it has
much in common with our country, if for
no other reason than that much of the
real estate there is owned
by United States citizens.
Actually, the client on the
project was a United
States-based bank and the
property owner was a
United States citizen.
The fact that the
assignment was in anoth-
er country did not relieve
me of the obligation of
preparing a professional
appraisal. While the client
making the loan will have
collateral outside the
country, the lending regu-
lations are the same, if not
more stringent, and there
is every expectation that
the appraisal conform the
Uniform Standards of
Professional Appraisal
Practice (USPAP), a very
U.S. requirement. That
having been said, it would
be fair to point out that
appraising property in
other countries, especially
countries with fewer or different regula-
tory requirements, offers challenges over
and above those that appraisers are typ-
ically subjected to when appraising in
the United States.
Before getting into some of the spe-
cific challenges, one of the questions
that I am sometimes asked in doing
such an appraisal is: How would you
know enough about the area to do an
appraisal there? This brings up a sub-
ject typically referred to as geographic
competence. In the United States, it is
not uncommon for a lender to com-
plain about an appraiser traveling 30
miles to do an appraisal, especially if
the results do not turn out to favor the
closing of a loan transaction. When this
is contrasted to the traveling of hun-
dreds or even thousands of miles, the
question would likely seem more apro-
pos. My response to such a question is
that it is better for a proven profession-
al to perform an appraisal
in a somewhat unfamiliar
territory than assigning
the task to a local person
who lacks the qualifica-
tions to perform the
appraisal correctly. Many
countries, including Costa
Rica, do not have licensed
real estate brokers or cer-
tified real estate apprais-
ers. Furthermore, the pro-
fessional appraiser from
another country would
likely be ill-equipped to
follow the requirements
of an appraisal used for a
mortgage loan in this
country. USPAP would be
unknown to such an indi-
vidual, and this is the
basic requirement of any
appraisal used for collat-
eral here.
To carry the subject a
bit further, it is not unusu-
al for a certified appraiser
to cover more geographic
territory for more unusual or demand-
ing assignments. The fewer local profes-
sionals there are available to perform a
task, the more need there is to bring in
a professional from a greater distance.
This is especially true for appraisals of
commercial properties. The challenge of
following USPAP alone would seem
almost insurmountable to an outsider
not steeped in the education and regu-
latory environment of our country.
By Charlie W. Elliott Jr., MAI, SRA, ASA
While geographic
unfamiliarity offers
the traveling apprais-
er a challenge, per-
haps one of the biggest
obstacles for the
appraiser to overcome
in less developed
areas, whether one is
local or from out of
town, is finding a
source of reliable
market data.
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www.windvestcorp.com
FHA and the government-sponsored
enterprises (GSEs) have insured or guar-
anteed nearly 95 percent of new mort-
gage loans being originated. By the end
of 2008, almost half of new home pur-
chase loans and one quarter of new
refinance loans were FHA or Veterans
Administration (VA) insured.
According to NCRC, an association of
more than 600 community-based
organizations that promote access to
basic banking services, their fair lend-
ing testers evaluated the practices of
national lenders, financial services cor-
porations, and other regional and local
FHA-approved lenders. In the com-
plaints filed, the NCRC states that
lenders were chosen according to their
market share and volume of FHA loans,
as well as through discussions with
community leaders.
Under the Fair Housing Act, HUD
impartially investigates allegations of
housing discrimination and, during
every phase of investigations, attempts
to settle complaints through concilia-
tion efforts.
www.hud.gov.
HOPE NOW: More Than
1.5 Million Loan Mods
Completed in 2010
HOPE NOW, the pri-
vate sector alliance of
mortgage servicers,
investors, mortgage
insurers and non-profit counselors, has
released its October 2010 survey data which
estimates that the industry has completed
more than 1.54 million permanent loan
modifications for at-risk homeowners from
January through October 2010.
That translates to an average of
154,000 homeowners per month who
have been able to remain in their
homes with an affordable loan modifi-
cation solution. The reported data for
October shows mortgage servicers com-
pleted approximately 101,000 propri-
etary loan modifications for homeown-
ers and 24,000 Home Affordable
Modification Program (HAMP) modifi-
cations (as reported by U.S. Treasury
Department), for an estimated total of
125,000.
There were anomalies in the
October data that affected 60 day plus
delinquency, as well as foreclosure,
metrics which we believe may be large-
ly attributed to widespread foreclosure
delays across the country, said Faith
Schwartz, executive director of HOPE
NOW. Despite these irregularities the
mortgage industrys efforts to keep
homeowners in their homes and offer
viable mortgage solutions continues to
show strong results each month. Far
more homeowners are receiving work-
out solutionsincluding loan modifi-
cationsthan are going to foreclosure
sale each month.
Of particular note in Octobers data is
the effect foreclosure delays and pauses
(initiated by some mortgage servicers
nationwide) had on the delinquency and
foreclosure numbers for the month.
Specifically foreclosure starts and sales
dropped to 205,000 and 69,000, respec-
tively while the number of homeown-
ers more than 60 days delinquent
increased slightly to 3.4 million.
Here are the highlights of the
October 2010 monthly data (based on
industry estimates):
O Proprietary loan modifications
decreased117,000 in September
compared to 101,000 in October.
O 60-plus days delinquencies increased
3.2 million in September compared to
3.4 million in October.
O Foreclosure starts decreased from
245,000 in September to 205,000 in
October.
O Completed foreclosure sales
decreased from 118,000 in
September to 69,000 in October.
O Loan modifications outpaced foreclo-
sure sales in October 125,000 to 69,000.
www.hopenow.com.
Ginnie Mae to Enhance
Disclosure Transparency
on HECM Securities
Ginnie Mae has announced
that it will soon release
enhanced disclosure infor-
mation on its Home
Equity Conversion Mortgage
(HECM) securities program. Ginnie
Maes HECM securities program sup-
ports a growing number of govern-
ment-insured reverse mortgages, an
important financial solution for many
seniors.
For Ginnie Mae HECM pools, the
additional disclosure information will
include the number of HECM Saver
loans and their remaining principal bal-
ance (RPB). Ginnie Mae will also disclose
the HECM Saver RPB as a percentage of
the total HECM RPB. The new disclosure
information is aimed at helping
investors better predict the perform-
ance of the underlying mortgage collat-
eral and evaluate the performance of
HECM Saver loans relative to that of
standard HECM loans.
Investors will certainly appreciate
the additional information, but ulti-
mately consumers should benefit the
most from the more robust disclosures
especially in terms of lower financing
costs, said Ginnie Mae President Ted
Tozer. We believe more detailed and
timely disclosure information on this
segment of the market should
enhance investors ability to assess the
performance of these securities and
allow Issuers to sell their loans into
the secondary market for better
prices.
For more than 40 years, the industry
has turned to the stability of the Ginnie
Mae mortgage-backed security (MBS),
allowing Ginnie Mae to provide home-
ownership opportunities for millions of
Americans. Ginnie Mae securitizes loans
insured or guaranteed by the Federal
Housing Administration (FHA), the
Department of Veterans Affairs, the
Department of Agricultures Rural
Development, and the Department of
Housing and Urban Developments
Office of Public and Indian Housing.
For more information, visit www.gin-
niemae.gov.
Your turn
invites you to submit any information on
regulatory changes, legislative updates,
human interest stories or any other
newsworthy items pertaining to the
mortgage industry to the attention of:
NMP News Flash column
Phone #: (516) 409-5555
E-mail:
newsroom@nmpmediacorp.com
Note: Submissions sent via e-mail are
preferred. The deadline for submissions
is the 1st of the month prior to the tar-
get issue.
PROFESSIONAL
.TV
MORTGAGE
COMING IN 2011!
16
J
A
N
U
A
R
Y
2
0
1
1
O
N
A
T
I
O
N
A
L
M
O
R
T
G
A
G
E
P
R
O
F
E
S
S
I
O
N
A
L
M
A
G
A
Z
I
N
E
O
N
a
t
i
o
n
a
l
M
o
r
t
g
a
g
e
P
r
o
f
e
s
s
i
o
n
a
l
.
c
o
m
M
a
rk
M
a
d
se
n
Raintree Mortgage Services Las Vegas, Nev.
Get your real estate agents to fall in love with
you by assisting in their social media efforts
I am
a firm
believer in getting your real estate
agents to fall in love with you by helping their
social m
edia efforts. You can win over the
hearts of agents by providing m
ortgage-related
content to their potential buyers. You can offer
to m
ake guest posts on their blog. Besides the
exposure with their clients, you will also be in
front of their team
and create the perception
that you are a trusted resource.
Donald J. From
m
eyer, CRM
S
Amtrust Mortgage Funding
Carmel, Ind.
Support you community
Talk to your communitys elementary
schools to see about local advertising or
look into sponsorship opportunities to pro-
mote your company to the families in the
school and surrounding area.
Chip Cummings
Chip Cummings Unlimited
Grand Rapids, Mich.
Make more videos
Use video in everything you can from
Web marketing, social media outlets,
customer retention and referral, client
support, and newsletters. People have
come to expect video, and it can create
an instant bond in a business
relationship that can only be beat
with personal meetings.
T
a
m
m
y

G
r
o
s
s
m
a
n
T
h
e

M
o
r
t
g
a
g
e

M
a
r
k
e
t
i
n
g

A
n
i
m
a
l
s
T
a
m
p
a
,

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l
a
.
G
e
t

o
v
e
r

y
o
u
r

f
e
a
r

o
f

t
h
e

p
h
o
n
e

P
i
c
k

u
p

t
h
e

p
h
o
n
e

a
n
d

m
a
k
e

y
o
u
r

c
a
l
l
s
!
T
e
c
h
n
o
l
o
g
y

h
a
s

m
a
d
e

u
s

e
f
f
i
c
i
e
n
t
,

b
u
t
t
h
e
r
e

i
s

n
o
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h
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n
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l
i
k
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t
h
e

s
o
u
n
d

o
f

s
o
m
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o
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v
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i
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a
t

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o

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e

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s
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t
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i
n
s
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p

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a

F
a
n
P
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f
o
r

e
a
c
h

o
f

y
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r

p
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r
s

a
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d

t
e
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c
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t
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m

h
o
w

a
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d

w
h
a
t

t
o

p
o
s
t
)

a
n
d

v
i
d
e
o
m
a
r
k
e
t
i
n
g
;

h
o
w
e
v
e
r
,

n
o
t
h
i
n
g

w
i
l
l

r
e
p
l
a
c
e

t
h
e

p
e
r
s
o
n
a
l

c
o
m
m
u
n
i
c
a
t
i
o
n
o
f

a

p
h
o
n
e

c
a
l
l
.
Jason M
. Klaskin
Academy Mortgage Corporation
Harleysville, Pa.
Help your agents in their business planning
Set up a business planning session with each
of your real estate agent partners. Lay out
some goals for what they expect from you
this year and what you expect from them.
Many agents have more listings than buyers
right now, and those listings are not moving
very quickly. One area that you can focus on
is turning those listings from stagnant
business into buyer generators.
S
a
n
d
y
G
a
r
c
ia
T
e
rra
ce
M
o
rtga
ge
W
h
o
le
sa
le
Le
n
d
in
g
T
a
m
p
a
, Fla
.
G
et b
a
ck to
b
a
sics
A
s clich
as it so
u
n
d
s, 2
0
1
1
w
ill b
e a
tim
e to
get b
ack to
th
e b
asics fo
r m
e
an
d
m
y sales team
. Y
o
u
b
asically h
ave
to
see six to
eigh
t b
u
sin
ess p
artn
ers p
er
d
ay. W
e are reach
in
g o
u
t to
real estate
agen
ts, title p
artn
ers an
d
n
etw
o
rkin
g
like crazy. Y
o
u
h
ave to
b
rin
g valu
e in
th
e fo
rm
s o
f ed
u
catio
n
, train
in
g an
d
excep
tio
n
al service to
get ah
ead

in
th
is m
arket.
17
N
a
t
i
o
n
a
l
M
o
r
t
g
a
g
e
P
r
o
f
e
s
s
i
o
n
a
l
.
c
o
m

O
N
A
T
I
O
N
A
L
M
O
R
T
G
A
G
E
P
R
O
F
E
S
S
I
O
N
A
L
M
A
G
A
Z
I
N
E
O
J
A
N
U
A
R
Y
2
0
1
1
M
ik
e
G
u
litz
M
ortgage Planner CRM
San Diego, Calif.
Determ
ine to be consistent
Consistency is the reason that the sam
e
loan officer in a com
pany is the top pro-
ducer m
onth after m
onth and year after
year. Consistency m
ay not be fun or sexy,
but it has the potential to transform
an
originator with average ability or talent
into a top producer.
Jeffrey J. Jaye
First Cal Mortgage
San Ramon, Calif.
Educate real estate agents
Implement educational programs to
target real estate professionals. The
critical component to establishing new
real estate relationships as well as
solidifying current relationships is
education. It is not sitting on open
houses, cold calling closed offices, buying
bagels and pizza its bringing
educational value to your
core partners.
T
im
D
a
v
is
T
h
e
O
rigin
a
to
rs G
u
id
e
N
a
sh
ville
, T
e
n
n
.
D
o
n
t d
o
to
o
m
u
ch

Co
m
m
it to
o
n
ly w
o
rkin
g th
ree active
m
arketin
g strategies. To
o
m
an
y lo
an
o
fficers lo
se fo
cu
s b
y tryin
g to
d
o
to
o
m
u
ch
, to
o
so
o
n
. A
n
active m
arketin
g
strategy is o
n
e w
h
ere yo
u
are req
u
ired
to
p
articip
ate, su
ch
as atten
d
in
g n
etw
o
rkin
g
m
eetin
gs. B
e o
n
p
u
rp
o
se in
2
0
1
1
b
y
ch
o
o
sin
g o
n
ly th
ree strategies an
d
stickin
g w
ith
th
em
th
e en
tire year.
G
re
g
Fro
st Sr.
Frost M
ortgage Lending Group
Albuquerque, N.M
.
Set up your 2011
Spend the first two m
onths of the year
re-recruiting your key personnel. Your 2011
business plan is probably written, but what
happens to it if you lose one or two of your
key people? Schedule a breakfast or lunch
with each of them
. Ask them
to share their
goals for 2011, offer to noodle on them
for a few days and then schedule a
follow-up m
eeting to discuss fulfillm
ent.
If they achieve their goals, you should
achieve yours.
R
a
y
m
o
n
d

B
a
r
t
r
e
a
u

B
e
s
t

R
a
t
e

R
e
f
e
r
r
a
l
s
L
a
s

V
e
g
a
s
,

N
e
v
.
E
m
b
r
a
c
e

d
i
r
e
c
t

m
a
i
l

a
g
a
i
n
!
T
h
e

f
a
c
t

t
h
a
t

l
e
s
s

a
n
d

l
e
s
s

p
e
o
p
l
e

a
r
e

l
e
f
t

i
n
t
h
e

i
n
d
u
s
t
r
y
,

t
h
i
s

h
a
s

m
a
d
e

d
i
r
e
c
t

m
a
i
l
r
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s
p
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s
e
s

n
o
t

o
n
l
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g
o
o
d
,

b
u
t

t
h
e

a
d
d
i
t
i
o
n
o
f

h
i
g
h
l
y

f
i
l
t
e
r
e
d

p
r
e
-
s
c
r
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n
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d

c
r
e
d
i
t

d
a
t
a
(
t
h
e

r
i
g
h
t

a
u
d
i
e
n
c
e
)

a
r
e

h
e
l
p
i
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g

m
o
r
t
g
a
g
e
p
r
o
f
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s
s
i
o
n
a
l
s

k
i
l
l

i
t

w
i
t
h

d
i
r
e
c
t

m
a
i
l

o
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r
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f
i
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s
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d
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.

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n

t
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e

p
u
r
c
h
a
s
e

s
i
d
e
,
o
u
r

c
l
i
e
n
t
s

h
a
v
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b
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n

s
p
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t
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t
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f

m
a
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t
o

h
i
t

h
i
g
h
l
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t
a
r
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e
t
e
d

h
i
g
h
i
n
c
o
m
e
,

h
i
g
h

c
r
e
d
i
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r
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n
t
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r
s

b
y

s
p
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f
i
c

g
e
o
g
r
a
p
h
i
e
s
.
18
J
A
N
U
A
R
Y
2
0
1
1
O
N
A
T
I
O
N
A
L
M
O
R
T
G
A
G
E
P
R
O
F
E
S
S
I
O
N
A
L
M
A
G
A
Z
I
N
E
O
N
a
t
i
o
n
a
l
M
o
r
t
g
a
g
e
P
r
o
f
e
s
s
i
o
n
a
l
.
c
o
m
Calyx Announces the
Acquisition of Loan-Score
Decisioning Systems
Calyx Software
has announced
the acquisition of
Loan-Score Decisioning Systems Inc. The
addition of a product and pricing engine,
an automated underwriting system, as
well as Federal Housing Administration
(FHA) eligibility decisions to the number
one mortgage origination platform, fur-
ther solidifies Calyxs end-to-end offering.
This is a historic move for Calyx
Software; a very significant and strate-
gic move to better serve our customers
and further our presence in the lending
industry, said Doug Chang, president
of Calyx Software.
Beginning immediately, Calyx will
execute on the integration of the two
companies and will be working to lever-
age the value of this acquisition to
bring new and better products to the
market. The service experience for
Loan-Score customers will be business
as usual, contact numbers and person-
nel will remain the same.
Loan-Score Decisioning Systems is a
10-year old company out of Irvine,
Calif. that offers their clients a full suite
of decisioning solutions satisfying
small, medium and large production
and servicing organization needs. The
modular suite includes a product &
pricing engine (PPE), automated under-
writing system (AUS), portfolio analysis
engine (PAE), channel focused point-of-
sale (POS) Web portals, a system-to-
system integration bridge and more.
Loan-Score maintains a comprehen-
sive, up-to-date library of investor
guidelines and pricing to ensure eligi-
bility is met and market conditions are
adjusted to deliver precision-based
underwriting that result in fundable
and saleable loans. These options are
available via software-as-a-service
(SaaS) and self-hosted technology mod-
els. Loan-Score integrated with Point in
September of 2010 giving mutual cus-
tomers added efficiencies as well as cost
saving opportunities.
Loan-Scores AUS and its interface to
FHA TOTAL Scorecard, are two major
differentiators from their competitors,
said Dennis Boggs, senior vice president
of business development of Calyx. This
is what made our initial integration
important and now underscores the
value and significance of the acquisi-
tion. We are extremely pleased to be
gaining a stronger foothold in the
industry. By combining the number
one loan origination suite of products
from Calyx with the Loan-Score product
offerings we are maximizing our value
positioning for both our current and
prospective customers.
As a result of this purchase, Calyx
will be adding staff within the next sev-
eral months to accommodate the busi-
ness and customer needs of both com-
panies while optimizing the two talent
pools of current staffing.
For more information, visit www.calyx-
software.com.
Ellie Mae and
SOURCECORP Partner
on Doc Management
Solution
Ellie Mae Inc. and
SOURCECORP Inc.
have announced
a partnership to develop an integrated
solution to enable Ellie Mae customers
to securely and efficiently transfer elec-
tronic loan files. Customers using Ellie
Maes Encompass360 can securely sub-
mit their electronic loan files into FAS-
TRIEVE, SOURCECORPs Web-based
electronic document repository and
workflow management system.
The integrated solution enables
loan file images to be automatically
batched and delivered to correspon-
dent lenders and servicers as needed.
Secure data transmission ensures that
all proper images are transferred;
eliminating missing documents and
saving the time and cost associated
with manually copying and uploading
individual documents.
Previously, the process of export-
ing images from Ellie Mae Encompass
into FASTRIEVE was time and labor
intensive. But with the new integrated
solution, the process is automatic and
seamless, saving Ellie Mae customers
anywhere from five to 15 min. per
file, said Michael Zwall, director of
Mortgage Services for SOURCECORPs
BPS Division. With an unparalleled
level of configurability, our industry
leading technology enables integra-
tion with key service providers, like
Ellie Mae, to support a paperless
workflow throughout the origination
process.
www.sourcecorp.com or www.elliemae.com.
There have been two important mes-
sages delivered on a consistent basis
from this column. First, no one can pre-
dict the future, and second, you must
be prepared for the future. An expert is
not in position to predict the future. An
expert is in position to know what
could affect the future. An expert is also
prepared for what could happen in the
future. Last month, I discussed the
need to be prepared for the transition
from a refinance to a purchase market.
I certainly was not predicting that rates
would go up immediately. However, it
did happen. The next question is
why did it happen?
I asked our resident secondary tech-
nical expert, Eric Holloman of RateLink
and here is what he had to offer
Rates came under a double whammy
following the announcement from the
Fed where they published the amount of
bonds they intended to buy. There is a
saying on the Street, buy the rumor, sell
the news. Rates fell following Ben
Bernankes hint at further quantitative
easing. That sparked a firestorm on Wall
Street on how much the Fed would buy.
Remember QE1 was a whopping $1.75
trillion, including $1.25 trillion in mort-
gage-backed securities (MBS) and $500
billion in Treasuries? Some market
experts were forecasting the number as
high at $2 trillion for the second quarter
The $600 billion was in the middle of
what the Street was expecting. Rates
came under pressure following the
announcement because the Feds num-
ber was not shocking. Adding to the
pressure on rates is the VERY REAL con-
cern that QE2 may spark inflation, the
number one enemy to rates. The infla-
tion concern in very real, even within the
Fed. Several Fed districts dissented (voted
no) on further easing citing inflation as
the reason for their dissent.
Eric makes some great points. I
would add that most of the experts
were saying that rates would stay low
and you should always bet against the
experts. That sounds good and many
times this is a good bet; however, it
does not give us a substantive reason as
to why the experts are wrong. It does
explain why I refuse to predict the
future. It did look as though rates were
staying low, especially with the econo-
my faltering, the addition of the fore-
closure crisis to an already weak real
estate market and the Federal Reserve
announcing a plan to start purchasing
up to $600 billion in assets in order to
keep rates down. The stage was set for
low rates as far as the eye could see.
Dont get me wrong. I dont think that
rates are high right now, but why did
they rise so quickly?
The rate spike is a reminder that
the all-important powerful govern-
ment cannot control as much as it
would like. For example, the Federal
Reserve Board cannot control rates.
Yes, it can control short-term rates,
but it cannot control long-term rates.
We may have forgotten this important
fact in the past few years because the
Feds plan to purchase mortgages and
Treasuries worked so well as the
financial crisis peaked. However, the
key was that the Fed was purchasing
these instruments while the economy
was in shambles. The markets accept-
ed the move. The markets do not
seem to be as accepting of the Feds
plan to purchase another $600 billion
in assets over the coming months
with many concerned that this stimu-
lus could fuel inflation, as Holloman
has indicated. It should be noted that
this inflation scare came right at the
time that the government reported
the lowest level of consumer inflation
since 1957.
The markets are highly psychologi-
cal, especially in the short-run. That is
why you can never predict the future of
the stock market and rates. If the mar-
ket sees a Fed move such as lowering
short-term rates or purchasing assets as
inflationary, long-term rates can rise in
reaction. The fact that rates went up
sharply was a surprise to many.
On the other hand, there was anoth-
er fundamental reason for this move.
Buried in a very busy week in early
November was the employment report.
It was buried because we had an elec-
tion that week and the Federal Reserve
announcement as well. However, the
employment report was very impor-
tant. While the increase of 150,000-plus
private sector jobs was welcome, it cer-
Why Did They Go Up?
19
N
a
t
i
o
n
a
l
M
o
r
t
g
a
g
e
P
r
o
f
e
s
s
i
o
n
a
l
.
c
o
m

O
N
A
T
I
O
N
A
L
M
O
R
T
G
A
G
E
P
R
O
F
E
S
S
I
O
N
A
L
M
A
G
A
Z
I
N
E
O
J
A
N
U
A
R
Y
2
0
1
1
CampusMBA Extends
Partnership With
Insurance Advisors for
Online Education
CampusMBA, the
a wa r d - wi n n i n g
education division
of the Mortgage
Bankers Association (MBA), has announced
that it has extended its partnership with
Stamford, Conn.-based Insurance Advisors
LLC. Under the agreement, CampusMBA,
in conjunction with Insurance Advisors,
will offer live online workshops address-
ing insurance issues for commercial/mul-
tifamily real estate loans.
MBA remains committed to offering
a wide variety of industry education
and this partnership with Insurance
Advisors illustrates our continued com-
mitment to these efforts as we offer
focused classes on commercial insur-
ance issues that are so vital to our com-
mercial and multifamily members,
said Gail Cardwell, MBAs senior vice
president of commercial/multifamily.
Each workshop will cover both
broad topics as well a specific issues
that industry professionals face on a
daily basis. The workshops are
designed to provide practical informa-
tion that is useful to commercial/multi-
family loan originators and underwrit-
ers, loan closers, drafting attorneys and
loan servicers.
The Commercial Insurance LIVE
Online Workshops are a great resource
for our members to enhance their
knowledge base through the expertise
provided by CampusMBA and Insurance
Advisors, said Paul Green, MBAs senior
Vice President of corporate relations,
education and business development.
We are delighted to renew our joint
venture with MBA to put on Live Online
Workshops related to commercial real
estate insurance. This has been a great
partnership and we look forward to our
third year together in this endeavor,
said Bernie Brown, president of
Insurance Advisors LLC. We are com-
mitted to providing superior educa-
tional assistance to MBA members and
we are proud the MBA has chosen to
continue our partnership with them.
For more information, visit www.mort-
gagebankers.org or www.ins-adv.com.
Equifax and BlackBox
Logic Partner on
Borrower Credit
Transparency Product
E q ui f a x ha s
announced that
it is working with BlackBox Logic to give
investors greater transparency into bor-
rower credit health. ABS Credit Risk
Insight Direct, Equifaxs data solution
for the mortgage-backed securities
(MBS) market, now leverages BlackBox
Logic performance data on more than
21 million loans across nearly 7,600
deals. By linking anonymous borrower
credit information to BlackBox Logics
extensive MBS performance data, ABS
Credit Risk provides a more complete
picture of the collateral health underly-
ing non-agency MBS.
This relationship represents the lat-
est step Equifax Capital Markets has
taken to equip investors with powerful
data solutions. ABS Credit Risk Insight
provides leading indicators of loan per-
formance such as updated credit scores
and detail on all mortgage and home
equity payments, owner-occupancy
and performance on past mortgages.
Now, Equifaxs solution statistically
matches up-to-date borrower credit
information to BlackBox Logics data-
base of MBS performance data to help
investors improve model accuracy, bet-
ter predict loan default and prepay-
ment and enhance deal surveillance.
More than ever before, investors
are focused on addressing industry and
policy requirements while looking for
ways to increase their confidence in the
collateral behind securities. This is
where solutions that provide trans-
parency into collateral risk play a criti-
cal role, said Steve Albert, vice presi-
dent of Equifax Capital Markets. The
combined strength of Equifaxs indus-
try-leading solution and BlackBox
Logics extensive loan-level MBS data
gives investors the insight they need to
better predict securitized loan perform-
ance and make more confident trading
decisions.
In addition to making ABS Credit
Risk Insight available to investors using
various types of loan-level data,
Equifax continues to find new ways to
enhance its data solutions for the sec-
ondary market. Over the past year,
Equifax has added several new and
unique data variables to its ABS Credit
Risk product line, including owner-
occupancy and bankruptcy indicators
as well as the FICO credit score and the
FICO Mortgage Industry Option known
as the BEACON Mortgage Score.
VantageScore, a consumer credit scor-
ing model developed by Equifax and
the other major credit reporting com-
panies, is also available through ABS
Credit Risk Insight Direct.
Equipping investors with tools that
allow them to conduct more granular
analysis of collateralized mortgage
obligations is essential for this indus-
try, said Wyck Brown, chief marketing
officer of BlackBox Logic. Working
together, we are delivering to the sec-
ondary market powerful solutions that
leverage very unique data attributes
and highly accurate risk models.
www.equifax.com or www.bbxlogic.com.
Clayton Holdings to Offer
Special Compliance
Servicing Through Its
Quantum Division
Clayton Holdings
LLC, a provider of
customized risk analysis, loss mitiga-
tion, operational solutions and staffing
services to the mortgage and fixed-
income industries, has announced that
its Quantum Servicing unit is now offer-
ing a full-range of loan administration
and asset management services to
I REAL TIME COMMUNICATION OF APPRAISAL STATUS
I NATIONWIDE SERVICE WITH LOCAL APPRAISERS IN ALL COUNTIES
I IMMEDIATE SERVICE FROM QUALIFIED STAFF
I COMPETITIVE FEES
I OFFERING "REALVIEW" THE MOST ADVANCED UNDERWRITING AND
GRADING SYSTEM IN THE INDUSTRY
I QUALITY APPRAISALS AND REVIEW
I STAFFED BY APPRAISERS WITH OVER 150 YEARS COMBINED EXPERIENCE
NATIONWIDE APPRAISAL MANAGEMENT CENTER
866-396-6260
www.hvccappraisalordering.com
EMAIL: orders@hvccappraisalordering.com
Is local knowledge required to per-
form a creditable appraisal? Some say
yes, and in principal, I agree. To be more
succinct, I would prefer subscribing to
the term possessing adequate local mar-
ket information. Generally, the term
local knowledge is used because it
makes doing an appraisal easy. One does
not have a need to do nearly so much
market research when local knowledge
is available. Said another way, local
knowledge is cheaper and quicker than
exhaustive research. Finally, once the
proper research has been completed,
those from outside the market will pos-
sess the necessary local knowledge to
perform a creditable appraisal.
While geographic unfamiliarity offers
the traveling appraiser a challenge, per-
haps one of the biggest obstacles for the
appraiser to overcome in less developed
areas, whether one is local or from out of
town, is finding a source of reliable market
data. In many localities, the Multiple
Listing Service (MLS) is foreign to the vocab-
ulary of local real estate practitioners, and
having access to an online property tax
database is either non-existent or not read-
ily available. In these markets, data is usu-
ally horded by a few people who have
small snippets of information, which they
develop firsthand from transactions they
handle. In these cases, they are among the
few who know about specific transactions;
however, there are tons of transactions
that they just do not know about. In these
situations, everyone suffers, since no one
can know about the entire market. This
makes for a less efficient system and pro-
duces fewer professional appraisers who
have complete knowledge of the local
market. This problem seems to be less of
an issue for local banks in these areas.
Perhaps this is because they do not have
the same appraisal requirements as do
banks in the United States.
Given the above scenario, my chal-
lenge in Costa Rica was not just my
unfamiliarity with the market, but my
need to obtain information in a timely
and cost-efficient manner. Fortunately,
I was able to befriend three of the most
active real estate brokers in the local
value nation continued from page 14
market and they helped me get up to
speed quickly on what was happening
in their market.
Another challenge in such markets is
the language barrier. U.S. lenders expect
their appraisals to be delivered in English,
even if the property is located in a land
where few, if any, people, who refer to
themselves as appraisers, read, write and
speak English. Since all public records in
Costa Rica are written in Spanish, this
necessitates a bit of translating. Along the
same line, the local money is not meas-
ured in U.S. dollars. There, it is measured
in colones, a completely different medi-
um from what we are accustomed to. At
the time of my visit, a U.S. dollar was
worth 516 colones. This required transla-
tion and further calculation.
In the end, the boundaries between
countries offer challenges to those mak-
ing mortgage loans, regardless of who
does the appraisal. This will almost
always equate to a more expensive, time-
consuming and complicated appraisal
assignment, no matter who does the
work. In foreign countries, there will
sometimes be local professionals compe-
tent enough to provide professional
appraisals which conform to the stan-
dards of the lending community in the
United States, but usually not.
The difficulties in appraising interna-
tionally, created by lack of accessible mar-
ket data, local customs, language, differ-
ent monetary systems and related issues,
make for an interesting stew frequently
favoring the travel of United States profes-
sionals over hiring local appraisers in
parts of the world that do not conform to
the requirements of our own system.
In closing, I would like for the record
to show that the country of Costa Rica is
a beautiful place, and that it is under-
standable why those fortunate enough
to have property there do so.
Charlie W. Elliott Jr., MAI, SRA, is president
of Elliott & Company Appraisers, a nation-
al real estate appraisal company. He can
be reached at (800) 854-5889, e-mail char-
lie@elliottco.com or visit his companys
Web site, www.appraisalsanywhere.com.
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Web: www.appraisalsanywhere.com
heard on the street continued from page 19
Mortgage Builders clients benefit from
closing documents that are guaranteed
to be in compliance with the latest reg-
ulatory updates.
Our goal is to streamline the origi-
nation process so our lenders can
work more efficiently and cost-effec-
tively, said Liz Fafette, vice president
of operations for Mortgage Builder.
By integrating with MRG, our cus-
tomers are able to easily move the
data between the LOS and doc prep
system, improving accuracy and sav-
ing time. Accuracy is essential to pre-
vent repurchase demands in the cur-
rent environment. And with the addi-
tional oversight we can expect as the
Dodd-Frank Act is enacted, lenders
will benefit from the precision this
integration brings.
Data such as escrow setup, title
insurance premiums and county tax
stamps can easily be misread and re-
entered into the system incorrectly,
said Kathleen Mantych, senior market-
ing director for MRG. Direct export
from the LOS into MIRACLE Online is
especially beneficial for those lenders
producing loans in states that require
attorneys to prepare closing packages
because it cuts a step out of the
process. We look forward to assisting
Mortgage Builders clients with the
quicker, streamlined production of reg-
ulatory compliant documents.
gagebuilder.com or www.mrgdocs.com.
Wipro Gallagher
Solutions Partners
With Mortech Inc.
Wipro Gallagher
Solutions (WGS), a
provider of cost-
effective, end-to-
end loan origination technology and
fulfillment services for mortgage
lenders, has announced an integrated
joint offering with Mortech Inc., a
mortgage technology software compa-
ny specializing in daily pricing, product
decisioning and lead management
solutions for secondary marketing
teams and mortgage bankers.
The collaborative effort offers users
of WGS loan origination system (LOS),
NetOxygen, to access Mortechs
Marksman loan product and pricing
engine and compare real-time pricing
quotes from multiple investors for any
type of loan program within seconds.
The Marksman-NetOxygen joint offer-
ing increases conversion rates through-
out the sales cycle and optimizes the
loan closing process for originators and
secondary desks.
Our partnership with WGS offers a
dynamic solution for efficiently origi-
nating and closing loans, said Don
Kracl, president of Mortech. The inter-
face combines the best features of both
tainly was not Earth-shattering since
we lost more than seven million jobs
during the recession. It did represent a
small move in the right direction. The
weeks following this announcement
saw first-time unemployment claims
continue to drop as well.
We have also indicated previously
that employment is key to our econo-
my recovery. The real estate market
will not recover without the economy
creating jobs. Of course, it is hard for
the economy to create jobs when the
real estate market is suffering. This
Catch-22 means that we must take
tiny steps out of this vicious cycle.
Creating more than 150,000 jobs per
month is one of these steps. This fun-
damental, coupled with the skittish-
ness of the markets regarding the Fed
plan and inflation could be what con-
tributed to the spike.
So where do we go from here? Well,
we need the economy to create
150,000-plus jobs per month on a con-
sistent basis. In other words, the num-
ber cannot go back below the 100,000
mark and it must move towards
200,000. That is exactly what hap-
pened in November, as the economy
actually created less than 50,000 jobs.
However, lets take a look back for
some perspective. Just over 18 months
ago, we were losing more than
500,000 jobs per month. The fact that
we consider the creation of 50,000
jobs bad news is actually good news at
this point.
Of course, we are not out of the
woods and this is why rates are not
likely to continue to rise indefinitely.
If they do, we may never get out of
the woods. The foreclosure crisis must
be resolved because we must get rid
of the shadow inventory. Like the
overall recovery, this should take
some time. Early reports on holiday
retail sales were encouraging.
Consumer spending is another key
factor in the recovery process.
Does it sound like we are rooting for
rates to go up? If rates are going up
because the economy and real estate
markets are recovering, then that is a
good thing. But as we emphasized, they
cannot rise too fast without jeopardiz-
ing the recovery. Will rates remain at
this level or go back down somewhat?
Again, you cannot predict the future.
What if Korea breaks out in an all-out
war? What if the European debt crisis
gets worse? These are factors that theo-
retically could bring rates back down in
a flight to safety. One event could cause
everything to go out the window with
regard to the fundamentals. We may
have already have seen some move-
ment from the time I write this column
until the time it is published.
For now, the fundamentals have
not changed that much. There is no
inflation. The economy is still very
slow and will slow further temporarily
due to the foreclosure crisis. Of course,
the reminder we received last month
of what can happen to rates in an
instant should be taken seriously for
those who are waiting to purchase a
house or a car and think they can wait
because they believe rates will remain
low forever. Blink an eye and the
world can change.
That goes for loan officers as well. Go
back to my message regarding the tran-
sition to a purchase market. If you are
not getting ready for this transition at
some time in 2011, then you will be left
behind. It will be too late to make the
transition after it already happens
and November was a month which
reminded us of how just quickly it can
happen.
Dave Hershman is a leading author for the
mortgage industry with eight books and sev-
eral hundred articles to his credit. He is also
head of OriginationPro Mortgage School and
a top industry speaker. Daves NewsletterPro
Marketing System can be found at
www.webinars.originationpro.com. If you
would like to stay ahead of what is happen-
ing in the markets, visit ratelink.origination-
pro.com for a free trial or e-mail
success@hershmangroup.com.
the secondary market overview continued from page 18
investors in small balance commercial
real estate loans.
Quantums Commercial Servicing
Division, based in Tampa, Fla., will pri-
marily handle non-performing com-
mercial loansacquisition, develop-
ment and construction (ADC), multi-
family, shopping center and strip
mallvalued at $5 million or less.
According to Fitch Ratings, commercial
real estate losses in 2010 have already
reached $21.66 billion so far this year,
surpassing the 2009 levels of $17.75
billion. The number of defaults
through 3Q 2010 (1,452) nearly equals
the total for all 2009 (1,464).
Paul Bossidy, chief executive officer
of Clayton, said that Quantum was
preparing to enter this market when
several large investors approached the
company and asked them to coordi-
nate their efforts. As a result, Quantum
is already servicing approximately
6,000 non-performing and performing
small balance loans.
We are approaching this new mar-
ket the same way we approached resi-
dential special servicing, said Bossidy.
Were not trying to be all things to all
clients. Instead, were focused on a
growing but under-served part of the
market, not the mega deals. Our goal is
to be the best-in-class option for
investors looking for customized servic-
ing programs, and higher levels of col-
laboration and transparency from their
servicer.
Scott H. Kramer, a commercial real
estate veteran with 20-plus-years expe-
rience will direct Quantums commer-
cial default servicing operations. He
will report to Quantums President
Scott Conradson.
For more information, visit www.clay-
ton.com or www.quantum-servicing.com.
MRG Announces
Integration With
Mortgage Builders LOS
MRG Document
Technologies (MRG), a
provider of mortgage
document prepara-
tion software and compliance technology
to banks, credit unions and other lenders
nationwide, has announced that its MIRA-
CLE Online electronic document prepara-
tion system is integrated with Southfield,
Mich.-based Mortgage Builders award-
winning loan origination software (LOS)
system.
For lenders operating in several
states, such as Texas, closing document
packages must be prepared by a
licensed attorney. Through the integra-
tion, loan data can now be imported
directly from the Mortgage Builder LOS
into MIRACLE Online where MRGs in-
house staff of attorneys creates the
content for the closing packages. This
automation alleviates the risk of inac-
curacy that can develop with the man-
ual re-keying of data. In addition, continued on page 22
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is evident at the Treasury and in Congress
with the failure of the servicer to follow
guidelines as designed yet the servicer
claim they are doing everything possible.
Now we have the robo-signing issue
which they (the servicers) have admitted
to being part of.
Lets review after 20 months of fail-
ing to implement loan
modifications, several mil-
lion Americans who have
lost their homes, millions
of below-market real
estate-owned (REO) prop-
erties waiting to hit the
housing market, and abus-
es like robo-signing, why
is the government still not
physically overseeing the
work of servicers? What is
the Treasury to do? They
can leave it up to the
courts or the attorneys
general around the coun-
try, but that will take
months if not years.
The Treasury could
implement a component in
HAMP that deals with com-
pliance. It is a tool that has
been built into the guide-
lines for compliance of poli-
cy by the servicer. This job is
contractually the responsi-
bility of Freddie Mac. It is a
tool that allows Freddie Mac
to review the servicer oper-
ation and procedures to
assure that all applications
for HAMP are given the same treatment.
This compliance operation is part of the
Servicer Participation Agreement (SPA) that
more than 100 servicers have signed with
the U.S. Department of the Treasury. Part of
this guideline is the Escalation process
where a homeowner that has been denied
a modification has the ability to have their
case reviewed by the Treasury. The Treasury
has hired the Homeownership Preservation
Foundation (HPF) to handle those calls.
According to the Treasury, it is the job of the
HPF to work with the homeowner and ser-
vicer to try and iron out differences and act
as an advocate of the homeowner with the
servicer.
Approximately 20 months into the Home
Affordable Modification Program (HAMP)
and the Obama Administrations efforts
to slow foreclosures with its many trou-
bles still exist. This is evident from all of
the processing problems we still see and
hear about on a daily basis, from lost
documents; improper calculation of
income; poor knowledge
and implementation of the
underwriting guidelines;
four, six, 12 and 20 months
for approval; and now, the
robo-signing situation. The
list continues, but yet after
all this time, we do not see
improvement. Now, we
find a fatal flaw in HAMP
that could be our last
chance to fix the problems.
What we do see is a level
of frustration from all inter-
ested parties; we have the
investor who hired the ser-
vicer under a Master Servicing
Agreement (MSA) who cannot
get their service provider to
even respond to their
inquiresplus a continuous
stream of fees to deal with
the foreclosure process. We
have the homeowner who is
making every effort to com-
ply with the servicers contin-
uous request for documen-
tation. Then, there is our
government representatives
wondering just exactly what
is going on?
The plan in the beginning was to cre-
ate the MHA/HAMP where the Treasury
would provide an overall strategy, guide-
lines, policy directives and alterations as
required to try and meet the overall
objectives of stabilizing real estate values
nationwide. The Treasury hired Fannie
Mae and Freddie Mac to run the pro-
gramsFreddie as its compliance team
and Fannie as the agency responsible for
implementation. After all this time, it is
evident the program is failing for reasons
as mentioned earlier, what is to be done.
To the Treasurys credit, they have tried
to work with the servicing industry to
make the plan workable. The frustration
The Fatal Flaw in HAMP
By Steven Gillan
after 20 months of
failing to implement
loan modifications,
several million
Americans who have
lost their homes, mil-
lions of below-market
real estate-owned
(REO) properties wait-
ing to hit the housing
market, and abuses like
robo-signing, why is
the government still not
physically overseeing
the work of servicers?
This Escalation process would also
give the Treasury the information they
need to verify if the servicer is doing the
right job and take action on those that are
not. It would let the servicing industry
know that they cannot continue to per-
form their job poorly because no one will
check on them. The hope would be to get
the servicer, due to competition the
knowledge that they no longer have a
monopoly on the process, to act properly.
Unfortunately at this time, the Treasury
has stated clearly they have no intention of
performing this function even though it is
mandated by HAMP. It makes sense to
actually review a file for accuracy and
they have been presented with a plan to
implement a program immediately by our
organization, the American Alliance of
Home Modification Professionals (AAHMP).
Without this, what recourse is left to the
investor and homeowner? The answer is
possibly the courts, but that takes a long
time which will continue to just further
slow the process. This does not benefit
anyone but the servicer. This Fatal Flaw
needs to be corrected.
Steven Gillan is executive director of the
American Alliance of Home Modification
Professionals (AAHMP), an association
formed to establish nationwide, newly ele-
vated, lasting and consistent operational
and behavioral standards for the profes-
sional mortgage loan modification indus-
try. Steven may be reached by phone at
(631) 875-3181, e-mail steve@aahmp.org
or visit www.aahmp.org.
The troubling part of the above process
is this during that Escalation process,
no one checks the servicer work product.
When this homeowner was denied a
HAMP modification, or the process is tak-
ing 10-20 months, no one checks if the
servicer underwriting was correct to begin
with, no one request to see the files to
determine if that homeowner does or
does not actually meet the guidelines.
Again, are we just to believe that the ser-
vicer did the job correctly or that the file
is not being dragged on for financial gain.
This is the Fatal Flaw in HAMP which
will doom it to failure because no one is
checking on the servicer. How can the
Treasury assure the homeowner or the
American taxpayer that the particular file
did not in fact qualify for a HAMP mod-
ification if no one determines that it was
underwritten properly? The servicer can
do and say whatever they want and the
Treasury or the homeowner has not
recourse but to accept their conclusion.
A strong Escalation process per-
formed by a neutral third party can
either affirm or dispute those finding.
With cases that the decline is valid based
on HAMP underwriting guidelines, every-
one knows where they stand and they all
can move on. In a case where the ser-
vicer did in fact make a mistake, a
completed modification application,
fully underwritten by a U.S. Department
of Housing & Urban Development (HUD)
Direct-Endorsed Underwriter would be
given to the servicer for them to review
and complete the process.
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NetOxygen and our Marksman loan
product and pricing engine, reducing
the time and resources many lenders
and secondary desks currently devote
towards the processing of loans in their
pipeline. Were confident this synergis-
tic collaboration will promote a unique
and efficient work-flow process for the
mortgage community.
The new integration will allow users
to perform various lender tasks more
effectively, such as instant rate search-
ing and re-pricing, viewing detailed
pricing summaries, accessing product
guidelines and gaining product eligibil-
ity intelligence. Data is transmitted
seamlessly between the two solutions
through an exclusive bi-directional
process. NetOxygen can be enhanced
so that customers can trigger price
requests to their Marksman account
based off of a particular loan status.
Marksman then transmits critical data
back to NetOxygen. The free flow of
data exchange allows for an end-to-end
loan closing experience.
By adding the Marksman interface
to its already robust vendor ecosystem,
WGS has enhanced the overall loan
closing process by providing lenders
the opportunity to access all loan rates
across all channels through a single at-
a-glance portal, said Anil Raibagi,
business head for WGS. By eliminating
such time-consuming search processes
associated with pricing rates and prod-
uct guidelines, NetOxygen provides
greater workflow automation and
helps lenders to focus more on their
lending and closing deals.
For more information, visit www.gogal-
lagher.com or www.mortech-inc.com.
MDA DataQuick Acquired
by TPG Capital
MDA DataQuick, a
division of MDA
Lending Solutions
and an independ-
ent provider of property data to real
estate and mortgage professionals, has
announced that it has been acquired
by TPG Capital (TPG), based in Fort
Worth, Texas. This acquisition is part of
a larger sale to TPG of MacDonald
Dettwiler & Associates Ltd.s (MDA)
Information Products business. The
Information Products group includes
several businesses across the United
States, United Kingdom, Canada and
Europe. Properties acquired in the
deal, which services the lending indus-
try in the United States, includes MDA
DataQuick, MDA Mindbox, MDA
Lending Solutions as well as Marshall &
Swift, a provider of data and analytics
to the insurance industry.
The Information Products group will
benefit from joining TPG, which has
extensive experience in the market and
ownership of complementary compa-
nies. TPG is very knowledgeable about
the data and financial services sector
and is interested in investments that
will grow the business.
We are very excited about investing
in these high-quality property informa-
tion businesses. MDA and the respec-
tive management teams have done an
excellent job growing these compa-
nies, said Bryan Taylor, a partner at
TPG Capital. This investment fits very
well within our broader data services
portfolio, and we look forward to work-
ing with management in the US,
Europe and Canada to continue grow-
ing these businesses.
TPG Capitals acquisition of MDA
DataQuick reaffirms the strength of our
business model and will help us to
grow our leadership position as an ana-
lytics and data provider in the real
estate and lending markets, said John
Walsh, president of MDA DataQuick.
Were positioned to compete and win
in these challenging markets, because
of operational performance and the
stability of our client base. TPGs own-
ership and guidance helps set the stage
for future growth.
For more information, visit www.mda-
solutions.com.
Embrace Home Loans
Reaches Goal of 3,200-
Plus SAFE Act Compliant
Employees
Embrace Home
Loans, a direct
lender for Fannie
Mae and Freddie Mac, approved by FHA
and VA, and an issuer for Ginnie Mae,
recently achieved a corporate goal of
meeting the licensing requirements to
date of the Secure and Fair
Enforcement for Mortgage Licensing
(SAFE) Act. More than 275 of the com-
panys loan officers successfully com-
pleted the required paperwork, sub-
mitted the appropriate documentation
for the Nationwide Mortgage Licensing
System (NMLS), and passed professional
licensing exams in multiple states. In
total, the company achieved more than
3,200 licenses that all meet or exceed
the requirements of the regulation.
We have been preparing for the
SAFE Act for more than a year, and con-
sequently have invested thousands of
man-hours and millions of dollars in
resources to ensure all of our loan offi-
cers are ready to meet the require-
ments of the SAFE Act, said Embrace
Home Loans President Kurt Noyce. We
are in favor of the regulations and
believe this is an important step in
terms of protecting consumers and
ensuring only credible and professional
loan officers remain employed. We
believe the entire industry, not just
non-depository lenders, should be held
to this standard in an effort to restore
professionalism and ensure the con-
sumers best interest is honored.
Overview
Risk-based pricing (RBP) refers to the practice of using a con-
sumers credit report, which reflects his or her risk of non-
payment, in setting or adjusting the price and other terms of
credit offered or extended to a particular consumer. The
risk-based pricing rules implement Section 311 of the Fair
and Accurate Credit Transactions Act of 2003 (FACTA), which
amends the Fair Credit Reporting Act (FCRA).
The Federal Reserve Board (FRB) and the Federal Trade
Commission (FTC) proposed regulations in May 2008 that
generally would require a creditor to provide a consumer with a risk-based pric-
ing disclosures (RBP Disclosures) when, based in whole or in part on the con-
sumers credit report, the creditor offers or provides credit to the consumer on
terms less favorable than the terms it offers or provides to other consumers.
On Dec. 28, 2009, the FRB and FTC announced the final risk-based pricing rules,
with the effective compliance date of Jan. 1, 2011. Publication in the Federal
Register of the final rules took place on Jan. 15, 2010.
1
The new rules apply to mortgage brokers (if they are credit grantors), corre-
spondents, and lenders and impact all consumers that have credit data and/or
scores accessed for a risk-based pricing decision, regardless of loan approval status.
Indeed, risk-based pricing rules apply, with certain exceptions, to all creditors
that engage in risk-based pricing. A risk-based pricing notice would generally be
provided to the consumer after the terms of credit have been set, but before the
consumer becomes contractually obligated on the credit transaction.
The rules provide a number of different approaches that creditors may use to
identify the consumers to whom they must provide risk-based pricing notices.
In addition, the rules include certain exceptions to the notice requirement, the
most significant being an exception that permits creditors, in lieu of providing a
risk-based pricing notice to those consumers who receive less favorable terms, to
provide all of their consumers with their credit scores and explanatory information.
As an alternative to providing risk-based pricing notices, the final rules permit
creditors to provide consumers who apply for credit with a free credit score and
information about their score. Today, most consumers must pay a fee to obtain
their credit score.
Companies that use a credit report or score in connection with a credit decision
must send notice, containing specified information, to a consumer when, based
on a credit report or score, the company grants credit on material terms that are
not the most favorable terms offered to a substantial proportion of consumers.
For instance, in most cases, the rule defines material terms as the loans annual
percentage rate (APR).
What are Material Terms?
With respect to closed-end (residential real property) credit, there are two specific
categories:
1) Material Terms: The Annual Percentage Rate (APR) required to be disclosed.
2
2) Materially Less Favorable: The terms granted, extended or otherwise provided
to a consumer differ from the terms granted, extended or otherwise provided to
another consumer from or through the same person (i.e., original creditor) such
that the cost of credit to the first consumer would be significantly greater than the
cost of credit granted, extended, or otherwise provided to the other consumer.
New Risk-Based Pricing Rules
Effective January 1, 2011
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Atare Agbamu is one of only a handful of people in the reverse mortgage arena
who possesses a commanding understanding of the reverse mortgage industry.
As an originator, he has hands-on experience educating seniors and their advisors.
As author of the Forward on Reverse column in The Mortgage Press since 2002,
Atare Agbamu communicates nationally with the housing finance community,
bringing the unique insights and experience of an ardent reverse mortgage expert
into a wider business context.
This book combines Atares keen insights and know-how with extensive research to create a first
of its kind resource for the reverse mortgage industry. It offers a comprehensive overview of the indus-
try plus detailed information on marketing and originating reverse mortgages.
Present and future reverse mortgage professionals and senior advisors will profit from
decades of experience skillfully woven into this book. If you plan to succeed in this industry, this
book is the place to start.
Sarah F. Hulbert, President, Senior Financial Corporation and former four-term Co-Chair of NRMLAs Board
of Directors
When I first began reviewing the contents of this book, I became quite jealous ... Atare Agbamu
has set down an impressive amount of information ... And he delivers it in an easy-to-read, simple-
to-understand style that will make this book essential reading for all reverse mortgage
professionals.
from the Foreword by Jim Mahoney, Co-Founder and Former Chairman, Financial Freedom Senior Funding
Corporation, and former four-term Co-Chair of NRMLAs Board of Directors
The stories [Chapter 15: Profiles in Satisfaction] are the best vehicle to increase understanding and
acceptance of reverse mortgages among us laypeople. They are very compelling ...
Therese Cain, Executive Director, Minneapolis/St. Paul Chapter of Little BrothersFriends of the Elderly
This book should be required reading for all new loan consultants originating reverse mortgages and
is recommended for experienced ones as well. This book provides excellent insight and information
on preparing ahead to provide the service our seniors deserve, to ensure a smooth loan process and
shorten the time to closing. Most of the problems caused in the processing and closing of reverse
mortgages come from inadequate preparation.
Deanne Opstad, AVP, Senior Underwriter, Generation Mortgage Company
Think Reverse!
Table of Contents
Part I:
The new pillar of retirement security
Part II:
Marketing reverse mortgages: Its all about education
Part III:
Originating reverse mortgages
Part IV:
Enhancing freedom: The essence of reverse mortgages
Part V:
A new frontier in mortgage lending
Only
$
49
.95
Plus Postage
& Handling
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Factors relevant to determining the significance of a difference in cost: the type of
credit product, the term of the credit extension, if any, and the extent of the dif-
ference between the material terms granted, extended, or otherwise provided to
the two consumers.
3
Who provides the RBP Disclosures?
Two-prong test
There is a two-prong test to determine the RBP compliance requirement, and both
conditions must be met:
(1) Determine that a consumer report is being used in connection with an appli-
cation for, or a grant, extension or other provision of, credit (for personal, house-
hold, and familynot businesspurposes) to a consumer; and
(2) Based in whole or in part on the consumer report, determine if credit is grant-
ed, extended or otherwise provided to that consumer on material terms that are
materially less favorable than the most favorable terms available to a substantial
proportion of consumers from or through the credit grantor.
Who receives the RBP Disclosures?
A consumer must receive the RBP Disclosures by determination of the following
methodologies:
Direct comparative analysis
Directly comparing the material terms offered to each consumer and the materi-
al terms offered to other consumers for a specific type of credit product.
4
Credit score proxy
5
(A) Determining the credit score (cutoff score) that represents the point at which
approximately 40 percent of the consumers to whom it grants, extends or provides
credit have higher credit scores and approximately 60 percent of the consumers to
whom it grants, extends or provides credit have lower credit scores; and
(B) Providing a risk-based pricing notice to each consumer to whom it grants,
extends or provides credit whose credit score is lower than the cutoff score.
Two or more credit scores used
Determine the cutoff score using the same method the creditor uses to evaluate
multiple scores when making credit decisions. Evaluation methods may include,
but are not limited to, selecting the low, median, high, most recent or average
credit score of each consumer to whom it grants, extends or provides credit.
No credit scores
When using the credit score proxy method (see above) to grant, extend or provide
credit to a consumer for whom a credit score is not available, an assumption is
made that the consumer is receiving credit on material terms that are materially
less favorable than the most favorable credit terms offered to a substantial pro-
portion of consumers from or through that original creditor and a risk-based pric-
ing notice to the consumer must be provided.
Tiered-pricing method
Tiered-pricing occurs when the creditor places the consumer within one of a dis-
crete number of pricing tiers for a specific type of credit product, based in whole
or in part on a consumer report. If the consumer is not placed within the top pric-
ing tier or tiers, the RBP Disclosures compliance are met, as follows:
O Four or fewer pricing tiers: Providing a risk-based pricing notice to each con-
sumer who does not qualify for the top tier (that is, the lowest-priced tier).
Example: A creditor that uses a tiered pricing structure with annual percentage
rates of eight, 10, 12 and 14 percent would provide the risk-based pricing
notice to each consumer to whom it grants, extends, or provides credit at annu-
al percentage rates of 10, 12, and 14 percent.
6
O Five or more pricing tiers: Providing a risk-based pricing notice to each con-
sumer who does not qualify for the top two tiers (that is, the two lowest-priced
tiers) and any other tier that, together with the top tiers, comprise no less than
the top 30 percent, but no more than the top 40 percent of the total number
of tiers. Each consumer placed within the remaining tiers must receive a risk-
based pricing notice. Example: If a creditor has nine pricing tiers, the top three
tiers (that is, the three lowest priced tiers) comprise no less than the top 30 per-
cent, but no more than the top 40 percent of the tiers; therefore, a creditor
using this method would provide a risk-based pricing notice to each consumer
to whom it grants, extends, or provides credit who is placed within the bottom
six tiers.
7
regulatory compliance outlook continued from page 22
The SAFE Act requires that all resi-
dential loan officers who are employees
of agency-regulated institutions be
licensed through a series of require-
ments recently put into place by the
NMLS. The SAFE Act standards are
designed to enhance consumer protec-
tion by promoting transparency in
mortgage lending, though licensing
requirements apply only to non-depos-
itory lenders. Officers working for fed-
erally regulated and insured institu-
tions are considered registered by the
SAFE Act and do not have to take the
steps to obtain licensure. All loan offi-
cers working outside the banking sys-
tem are subject to new training, testing
and extensive licensing requirements.
The process for compliance begins
with pre-licensure education courses,
which the loan officer must then sus-
tain annually in continuing education
courses. A written exam is required to
evaluate competence, as well as a cred-
it check for financial responsibility and
a criminal background check. Issues
such as bankruptcy could affect a loan
officers chances at being licensed. A
loan officer then obtains a unique iden-
tifier, which remains with them
throughout any changes in employ-
ment. Once the new Registry system is
fully operational, a mortgage loan offi-
cer must provide in certain circum-
stances, their unique Registry identifier
to consumers. This identifier provides
access to all requirements the officer
met in the licensing process, including
such information as the background
check and financial history.
www.embracehomeloans.com.
Calyx and CCMC
Announce Strategic
Alliance Aimed at
Workflow Efficiency
Calyx Software has
announced a strategic
alliance with CCMC to
provide interfaces with
other critical systems such as core pro-
cessing, core servicing or back-office
software. CCMCs bridge products will
enable even more efficient workflow
and increased productivity for financial
institutions using Calyx for their mort-
gage platform as information is easily
shared between systems.
Calyx mortgage solutions combine
the latest technology with the function-
ality that mortgage professionals require
for loan marketing, prequalification,
origination, and processing. As a robust
server-based solution designed with
added security required by financial
institutions, PointCentral protects busi-
ness integrity from the simplest access
restriction to ensuring that all employ-
ees follow specified business rulesall
with the easy-to-use screens and compli-
ance features of Point that meet the
needs of all mortgage professionals.
I am very excited about our alliance
with CCMC, said Wade Brantley,
national sales director for Calyx
Software. Many of our clients operate
in sophisticated environments and
need to bridge Calyx with other critical
business software. CCMC provides us
with a highly respected and talented
bridge builder. Our clients have been
thrilled with the results as Calyx contin-
ues to reap market share gains with
mortgage banks, banks and credit
unions.
CCMC provides bridge solutions that
link core banking systems with special-
ty applications such as Point and
PointCentral, providing a streamlined
data flow backed by a sophisticated
middleware engine that ensures that
transactions are complete and error
free as they are shared across multiple
software applications. CCMC bridge
solutions also connect Calyx Software
products with back-office software used
by many mortgage banks. Additionally,
CCMC can build a customized bridge
from any other critical system to Point
or PointCentral, giving all financial
institutions the opportunity to utilize
the number one mortgage platform in
the nation with the end-to-end func-
tionality, efficiency, and data flow they
need to increase productivity.
Competition and industry regula-
tions have developed a need for real-
time information exchange between
systems, said Dana Giesler, vice-presi-
dent of sales for CCMC. Bridging critical
systems with Calyx products gives Calyx
clients the fast, accurate data flow that
will keep them competitive.
For more information, visit www.calyx-
software.com or www.ccmcinc.com.
CIS Group Announces
the Acquisition of
Cornerstone Appraisal
Services
CIS Group LLC, a sub-
sidiary of CIS Holdings LLC
and an affiliate of CEP,
has completed its acquisi-
tion of Cornerstone
Appraisal Services of Valparaiso, Ind. This
acquisition marks the third property inspec-
tion services company that CIS Group has
acquired, including GPL Solutions in 2005
and Advanced Field Services in 2008.
Cornerstones core products are a
perfect complement to our existing
field underwriting services, said
Michael Stanley, chief executive officer
of CIS Holdings. The acquisition of
Cornerstone broadens CIS product
offering and gives our clients access to
a best-in-class high-value appraisal
product. More importantly, our clients
will continue to have the Perfect
Customer Experience they associate
with CIS Group.
Cornerstone continues CIS Groups
consolidation strategy in the field serv-
ices sector. We see an increasing
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Sen. Fred Thompsons commercial
pushing government-insured reverse
mortgages did it for Tom and Bertha
Akuna of Lake Matata, Minn.*
Tom Akuna, 69, retired two years
ago because of chronic back problems
from decades of back-breaking odd
jobs. Bertha Akuna, 63, is a dedicated
homemaker from the old school. The
couple has no children and no pets.
During pre-lending counseling, the
counselor, Sonia Hudloom, uncovered
two gaping holes in the Akunas safety
net: No life insurance policy and no
pension benefits for a surviving spouse.
Although Tom Akuna gets about $900
from Social Security (which covers their
basic monthly living expenses) and their
home is paid for, the absence of life
insurance policies (which the Akunas
religion forbids) and pension benefits for
a surviving spouse means the Akunas
need to manage their home equity wise-
ly to support the surviving spouse.
In new the Financial Interview Tool
(FIT) process no life insurance policy
and no pension benefits for a surviving
spouse, is risk-factor number two.
Along with other risk factors discovered
in counseling, it will appear on the FIT
summary the Akunas will take to their
loan application interview, and their
loan officer should find a way to bring
up the issue. Here is a sample question:
Mr. and Mrs. Akuna, the paper from
your loan counselor says your home
equity is the largest support you both
have for retirement, how would you keep
it for whoever survives the other?**
This question should achieve the FIT
objective of getting the Akunas and
their loan officer to think through and
discuss the Akunas long-term financial
survival. It may help them and their
loan officer to come up with the right
mix of loan-advance options (a.k.a. pay-
ment plans) to conserve their equity,
while giving them the means to meet
any monthly budgetary shortfall they
may have, a need that resonated when
they watched the Law & Order actor
and former U.S. Sen. Thompson pitch-
ing reverse mortgages on TV.
Suppose the Akunas had come to the
loan interview with the intention of
requesting a lump sum, thinking they
can invest it for maximum profit. The
above question and the ensuing con-
versation should give the loan officer
an opportunity to ask a number of fol-
low-up reality-testing questions with
the aim of getting the Akunas to be
more careful with their home equity.
It bears repeating that one or two FIT
risk factors or yellow flags may not be
a problem, but a number of them could
be a red flag.
A Fred Thompson commercial may
have motivated the Akunas to consider
a reverse mortgage, but a FIT question
could help them and their loan officer
think through and discuss the holes in
their retirement safety net.
*Tom and Bertha Akuna, as well as Lake
Matata, Minnesota, are fictional.
**Please give me your feedback (e-mail
me at atare@thinkreverse.com) on the
strengths and weaknesses of this ques-
tion, as well as your suggestions for
improvement.
Atare E. Agbamu is author of Think
Reverse! and more than 140 articles on
reverse mortgages. Since 2002, he writes
the nationally-distributed column,
Forward on Reverse. A former director
of reverse mortgages at Minneapolis-
based AdvisorNet Mortgage LLC, Agbamu
has years of hands-on experience market-
ing and originating reverse mortgages.
Through his advisory, ThinkReverse LLC,
Agbamu advises financial professionals,
institutions and regulators across the
country. In a 2007 national report on
reverse mortgages, AARP cited Agbamus
work. He can be reached by phone at
(612) 203-9434 and e-mail at
atare@thinkreverse.com.
Visit author Atare E. Agbamus
blog at thinkreverse.com for
his thoughts and insights
on the reverse mortgage
marketplace.
FIT for Reverse Mortgage Lenders:
Part V
Holes in the Safety Net
opportunity to add specialty service
providers to the CIS portfolio, said
David Rollins, president of CIS Group.
Because CIS conducts over two million
inspections a year across the entire
United States, servicing most of the top
insurance carriers, we believe that con-
solidating complementary service com-
panies onto the CIS platform will
enable us to continue to provide a
superior level of service to our cus-
tomers at extremely competitive prices.
We are passionate about increasing
route density with complementary
products for our inspector-vendors,
and sharing those resulting efficiencies
with our vendors and our customers.
www.cisgroup.net.
HomeGain and
AgencyLogic Announce
Web Partnership
HomeGain, a
Web site that
connects real
estate agents with homebuyers and
sellers, has announced that it has part-
nered with AgencyLogic to provide sin-
gle property Web sites to its real estate
agent and broker members. The
HomeGain Property Web sites enable
real estate agents and brokers to show-
case a single home listing to potential
buyers and sellers. Each single property
site provides a custom domain name,
ability to add videos and unlimited
photos, syndication to the major search
engines, and sharing on social network-
ing sites.
We are always searching for ways to
help our agent members, and these single
property websites are an excellent mar-
keting tool for them to help sell their
clients homes, said Louis Cammarosano,
general manager of HomeGain.
This partnership builds upon our
existing and long standing relationship
with HomeGain, a premium brand in
the real estate industry, said Stephen
Fells, chief executive officer and co-
founder of AgencyLogic. Single proper-
ty Web sites are a perfect addition to
the existing HomeGain product line
and compliment the many other ways
the company helps Realtors.
For more information, visit www.agen-
cylogic.com or www.homegain.com.
Annaly Capital Announces
the Formation of
Shannon Funding LLC
Annaly Capital
Management Inc.
has announced
the formation of Shannon Funding LLC, a
wholly-owned subsidiary that intends to
provide warehouse financing and other
services to residential mortgage origina-
tors in the United States. Shannon will be
led by Bruce E. Watterson, a veteran
mortgage finance executive who most
recently was a managing director at LPS
Capital Markets, a division of Lender
Processing Services Inc. (LPS). Shannon,
which will operate out of offices in
Bellevue, Wash., plans to begin opera-
tions in the first quarter of 2011.
Now more than ever, new mort-
gage origination activity is dominated
by the handful of large money center
banks with ready access to capital,
said Michael A.J. Farrell, chairman,
chief executive officer and president of
Annaly. Small- and medium-sized
mortgage companies with good credit
cultures and successful track records
are challenged to source warehouse
funding in this environment. Shannon
plans to provide funding to these
smaller participants in order to help
them generate well-underwritten mort-
gage product. As opportunities present
themselves in the future, Shannon will
expand its strategy and operations into
additional markets.
Watterson has more than 25 years of
experience in mortgage banking, due
diligence, servicing and technology. He
was founder of Watterson-Prime LLC
which provided due diligence, portfolio
stratification and other consulting serv-
ices to buyers and sellers of financial
residential and commercial mortgage
assets, and also launched Watterson-
Prime Software Inc., a software and
technology company serving the asset-
backed finance industry. Wattersons
prior experience includes senior posi-
tions in the mortgage, hedging and
structuring groups at First Boston and
Shearson Lehman Hutton, as well as
head of the due diligence practice at
PricewaterhouseCoopers LLP. Watterson
received his BA degree at Miami
University in Oxford, Ohio.
Annaly manages assets on behalf of
institutional and individual investors
worldwide. The companys principal
business objective is to generate net
income for distribution to investors
from its Investment Securities and from
dividends it receives from its sub-
sidiaries. Annaly is a Maryland corpora-
tion that has elected to be taxed as a
real estate investment trust (REIT).
For more information, visit www.annaly.com.
Mortgage Professionals
to Watch
O Rory Lane has been named director
of community engagement for
MortgageDashboard where he will
be responsible for customer support
and corporate objectives through
social media.
O American Home Mortgage Servicing
Inc. has named David M. Applegate
as its new president and chief execu-
tive officer.
O Kislak Mortgage LLC has appointed
Edward Scott as its new senior vice
president and southeast divisional
manager.
Rory Lane
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MortgageDashboard
Announces LOS Upgrade
MortgageDashboard,
an on-demand loan
origination system
(LOS) enabling straight-
through, paperless mortgage processing for
lenders, credit unions and banks, has
released a major upgrade to its SaaS
LOS. The new functionality will allow
originators to attract new business, take
applications, process and close the loans
without leaving the software. The new
version offers contextual navigation
based on fully customizable templates
that streamline the process and ensure
compliance.
Advancements like this are possible
because were approaching software
development from a totally different
perspective, said MortgageDashboard
Chief Technology Officer Jorge Sauri.
Our template-based approach will
make it possible to customize
MortgageDashboard quickly and easily
to fit the kind of lending our clients are
doing. Were providing niche-based
marketing power in a Web-based tool
that delivers bullet-proof compliance
in an interface so easy to use it wont
even feel like work.
The new version was rolled out to
existing clients in early October and is
now ready for new clients. Pricing is
currently on a per-transaction basis
and there is no upfront fee for the use
of the platform.
We set out to build a more intelli-
gent, powerful and flexible enterprise
resource than our industry has ever
seen before, said Rene F. Rodriguez,
MortgageDashboard chief executive
officer. Ultimately, the success of
lenders in the future will depend
directly on the success of the loan offi-
cers working within their companies.
Solid loan origination technology is the
cornerstone of the loan officers suc-
cess. With this new version, were pro-
viding them with a strong foundation.
Rodriguez said that MortgageDashboard
would be providing both support for the
companys LOS technology, as well as other
forms of support for loan officers using
the companys products, including
sales training, marketing support and
motivation tools. Much of this sup-
port will be provided through the
companys new Web site at
www.mortgagedashboard.com.
In addition, Sauri said
MortgageDashboard would maintain
an aggressive schedule of future
updates, rolling out new functionality
for the LOS about every 30 days.
Updates to the software that are
already scheduled include:
O A Quality Coach that follows
each originator through the trans-
action, warning them of compli-
ance violations in real time and
making suggestions that will help
the company originate the best
possible loans.
O A new eBriefcase that will collect
and manage all of the documents
that go through the transaction,
keeping everything in its place and
warning the loan officer when an
expected document isnt in the file
yet.
O A more complete borrower summa-
ry that will tell originators and man-
agers at a glance what they need to
know about their customers to turn
them into customers for life.
gagedashboard.com.
Coester Appraisal Group
Announces the Launch of
CoesterReverse.com
Coester Appraisal Group, a nationwide
appraisal management company (AMC),
has announced the launch of
www.CoesterReverse.com, a Web site
for reverse mortgage professionals to
order appraisal products that are spe-
cialized for reverse mortgage transac-
tions. Among the services offered on
the site is Coester Appraisal Groups
ValueSafe Appraisal Program, an inno-
vative appraisal program that can save
borrowers hundreds of dollars on
upfront reverse mortgage fees.
Unlike traditional mortgages,
reverse mortgages are not based on the
borrowers credit or income. However,
the value of the property is of prime
importance. The vast majority of
reverse mortgage lenders have a full
appraisal conducted on the subject
property prior to initiating the transac-
tion. This can cost the borrower $350 to
$450, on average. When added to the
approximately $200 for counseling
When are the RBP Disclosures sent?
With respect to close-end (residential real property) credit:
O The RBP Disclosures are provided before consummation of the transaction, but
not earlier than the time the decision to approve an application for, or a grant,
extension or other provision of, credit, is communicated to the consumer by
the creditor.
8
O RBP Disclosures are required to be sent individually and separately. These dis-
closures cannot be combined with any other non-FACTA documents and/or
required disclosures.
What are the Model Forms?
With respect to closed-end (residential real property) credit, there are four Model
Forms provided. Technical modifications to the language of the forms are permit-
ted, providing a safe harbor, as long as the substance of the model forms is not
modified.
9
1. Model Form for Risk-Based Pricing Notice
2. Model Form for Account Review Risk-Based Pricing Notice
3. Model Form for Credit Score Disclosure Exception for Loans Secured by One to
Four Units of Residential Real Property
4. Model Form for Loans Where Credit Score is Not Available
Are there exceptions?
There are five exceptions to the RBP Disclosure compliance requirements.
1) Application for specific terms: A creditor is not required to provide a risk-
based pricing notice if the consumer
10
applies for specific material terms
11
and is
granted those terms, unless those terms were specified by the creditor using a con-
sumer report after the consumer applied for or requested credit and after the
creditor obtained the consumer report.
2) Adverse action notice: A creditor is not required to provide a risk-based pric-
ing notice to a consumer
12
if the creditor provides an adverse action notice to the
consumer under section 615(a) of the FCRA.
13
3) Prescreened solicitations: A creditor is not required to provide a risk-based
pricing notice to a consumer
14
if the creditor:
(i) Obtains a consumer report that is a prescreened list as described in sec-
tion 604(c)(2) of the FCRA; and
(ii) Uses the consumer report for the purpose of making a firm offer of cred-
it to the consumer; or, provides more favorable material terms.
This exception applies to any Firm Offer of Credit offered by a creditor to a con-
sumer, even if the creditor makes other Firm Offers of Credit to other consumers
on more favorable material terms.
4) Loans secured by residential real propertycredit score disclosure: A credi-
tor is not required to provide a risk-based pricing notice to a consumer
15
if:
(i) The consumer requests from the creditor an extension of credit that is
or will be secured by one to four units of residential real property; and
(ii) The creditor provides a notice to each consumer containing the following:
A. A statement that a consumer report (or credit report) is a record of the con-
sumers credit history and includes information about whether the con-
sumer pays his or her obligations on time and how much the consumer
owes to creditors;
B. A statement that a credit score is a number that takes into account infor-
mation in a consumer report and that a credit score can change over time
to reflect changes in the consumers credit history;
C. A statement that the consumers credit score can affect whether the con-
sumer can obtain credit and what the cot of that credit will be;
D. The information required to be disclosed to the consumer pursuant to sec-
tion 609(g) of the FCRA;
16
E. The distribution of credit scores among consumers who are scored under
the same scoring model that is used to generate the consumers credit score
using the same scale as that of the credit score that is provided to the con-
sumer, presented in the form of a bar graph containing a minimum of six
bars that illustrates the percentage of consumers with credit scores within
the range of scores reflected in each bar or by other clear and readily
understandable graphical means, or a clear and readily understandable
statement informing the consumer how his or her credit score compares to
the scores of other consumers. (See Model Form # 3, hereinabove.)
27
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Automate your Marketing! Double your Sales!
(888) 771-7672
www.MortgagePlannerCRM.com
www.msiloans.biz
www.radian.biz | 877.723.4261
mandated by the U.S. Department of
Housing & Urban Development (HUD),
the borrowers upfront fees can total
$500 or more with no assurance that
the transaction can be fulfilled.
Coester Appraisal Group helps bor-
rowers get an approximate valuation
of their home without incurring a
major investment. Through Coesters
unique appraisal program, ValueSafe,
borrowers may purchase a preliminary
desktop appraisal for $100, which is
approximately one-fourth the cost of a
traditional appraisal. If the desktop
appraisal indicates enough equity to
fulfill the transaction requirements,
the borrower can apply the amount
paid on the ValueSafe desktop
appraisal to the full appraisal if
ordered through Coester Appraisal
Group. If the desktop appraisal indi-
cates that the property is lacking the
required amount of equity, the bor-
rower has only paid $100, as opposed
to the full appraisal fee.
Borrowers are risking hundreds of
dollars in preliminary fees for transac-
tions that may not even qualify for a
reverse mortgage, said Brian Coester,
chief executive officer of Coester Appraisal
Group. We created CoesterReverse.com
to provide reverse mortgage professionals
with direct access to money-saving valua-
tion alternatives. If completed prior to
counseling, a ValueSafe appraisal can
save upwards of $500 in upfront fees.
That is a huge amount of money, par-
ticularly for those relying on retire-
ment income. Were hopeful that this
money-saving option will become the
new standard for evaluating property
values for reverse mortgages.
For more information, visit www.coesterap-
praisals.com or www.coesterreverse.com.
Ellie Mae and
Closing.com Launch New
Encompass Assured GFE
Ellie Mae and
C l o s i n g . c o m
have announced
the launch of
Encompass Assured GFE service powered
by Closing.coms SmartGFE Service. With
Encompass Assured GFE, Encompass360
users can now create Good Faith
Estimates (GFEs), which are backed by a
ClosingCorp compliance guarantee,
directly from their Encompass360 sys-
tems. The January 2010 changes to the
Real Estate Settlement and Procedures
Act (RESPA) have created new compli-
ance challenges for mortgage lenders
and brokers. One such change involves
the disclosure of fees provided to the
borrower on the GFE and HUD-1 forms,
which now must fall within certain
accuracy tolerances.
Encompass Assured GFE utilizes the
same platform as Closing.coms
SmartGFE Service and is private-labeled
for use by Encompass360 customers.
Once the borrowers information is
entered into Encompass360, users sim-
ply click the Assured GFE button,
select the service providers from whom
theyd like to receive quotes, and within
seconds, Encompass Assured GFE gener-
ates a GFE with real-time settlement
service fees for local, state and national
closing services.
Encompass Assured GFE can be con-
figured to offer a companys preferred
providers, and is backed by a
ClosingCorp compliance guarantee that
rates and fees are presented in real-
time and will not result in a HUD-1 tol-
erance violation. Users can easily order
these services through Encompass360
and a compliance guarantee certificate
is saved in the users Encompass360
eFolder.
We believe that the number one
concern of lenders today is how to stay
compliant and how to control the costs
of staying compliant, particularly with
so many changing and new regula-
tions, said Jonathan Corr, chief strategy
officer for Ellie Mae. Were here to help
our customers with compliance. Our
customers rely on us to provide the
tools they need to maintain compliance
and promote total loan quality.
Encompass Assured GFE is one more
way were responding to our customers
needs.
Integrating this simple but powerful
compliance tool within a loan origina-
tors workflow, allows lenders to pre-
pare GFEs quickly, select their trusted
providers, and access live rates along
with recording fees and transfer taxes,
in a few easy steps, said ClosingCorp
President Paul Mass. Borrowers tend to
select lenders who respond rapidly to
their loan requests; this new service not
only helps drive more business but
assures the lender that the data used
will meet HUDs RESPA accuracy
requirements.
www.elliemae.com or www.closingcorp.com.
Kroll Launches Risk-Based
Pricing Compliance
Service
Kroll Factual Data, a provider of inde-
pendent verification solutions, has
announced a new service to help clients
save time and efficiently comply with
the Fair Credit Reporting Risk-Based
Pricing Regulations that take effect Jan.
1, 2011. Customers can now take advan-
tage of the ability to automatically gen-
erate Risk-Based Pricing Notices with
each credit report request at no charge
and an optional automated fulfillment
service to print and mail notices to
applicants for a nominal fee.
We have been paying close atten-
tion as this new regulation was being
created, and working to educate our
customers about their need to
respond, said Dennis Littlejohn, chief
operations officer of Kroll Factual Data.
Once the scope of the Fair Credit
Reporting Risk-Based Pricing
Regulations was clearly defined, we cre-
ated this convenient way for our users
to meet the new obligations it created
for them.
O Joe Adamaitis has been appointed
state of Florida FHA 203k representa-
tive for Academy Mortgage Home
Loan Corporation.
O ICBA Mortgage Solutions has named
Michael Azzarello as its new execu-
tive vice president of national sales.
O Susan Anderson has been named
vice president of sales for the north-
east region for InHouse Solutions.
O Pulaski Financial Corporation has
named Brian Boyles president of
Pulaski Banks mortgage division.
O Patrick Harrigan, CMB of Franklin
American Mortgage Company has
been named chairman of the Mortgage
Action Alliance Steering Committee,
the grassroots advocacy affiliate of the
Mortgage Bankers Association (MBA).
O Vinod Thomas has been named sen-
ior vice president, default strategy
and execution for ServiceLink.
O Equi-Trax Asset Solutions LP has
announced the hiring of Greg Musso
as national sales director.
O Ron Zaccaria has been appointed
vice president of sales for BluFi
Direct Mortgage.
O Brad Farris has joined Guaranty Bank
Mortgage Center as a residential lender.
O Mortgage Harmony Corporation has
named former Mortgage Bankers
Association (MBA) chairman David G.
Kittle, CMB to its advisory board and
has also announced the appointment
of Marlisa Senchack as senior vice
president of product management
and strategic outreach.
O MDA Lending Solutions has named
John Hosey as its chief appraiser.
O Valuation Partners has announced the
hiring of Dawn Svedberg as vice presi-
dent and national account executive.
O Williston Financial Group LLC (WFG)
has named William Moody execu-
tive vice president of WFGs lender
services division, New Millennium
Title and has named Moody to
WFGs executive committee.
Your turn
invites its readers to submit any infor-
mation, events, passages, promotions,
personal or professional occurrences
that seem appropriate and/or other per-
tinent data to the attention of:
Heard on the
Street/Mortgage
Professionals to Watch
column
Phone #: (516) 409-5555
E-mail:
newsroom@nmpmediacorp.com
Note: Submissions sent via e-mail are pre-
ferred. The deadline for submissions is the
1st of the month prior to the target issue.
Joe Adamaitis
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FHA Insider: REO Investors
An FHA Referral Source You Must
Have in Todays Market
You have a great opportunity in 2011 to
help improve neighborhoods by help-
ing investors get their buyers approved
with Federal Housing Administration
(FHA) loans! As the economy chugs
along and banks continue to release
their real estate-owned
(REO) inventory in waves,
great FHA origination
opportunities will exist
for mortgage loan origi-
nators (MLOs) in the fore-
seeable future.
There are three reasons
why investors and MLOs
make a great partnership.
To begin with, my expe-
rience has shown that
investors generally do not
possess a great deal of
knowledge about buyer
financing. Your expertise is
important to, and wel-
comed by, investors, allow-
ing them to focus on get-
ting the renovations com-
pleted and the property
ready for market.
Secondly, investors
are not inundated with
calls from MLOs, as is
often the case with real
estate agents. While
investors do tend to be
harder to find, once you
find them, you may find
it easier to arrange a meeting with
them. This is especially true if you have
a clear message that communicates
how much you can help them.
And finally, investors are often chal-
lenged with a lack of resources to prop-
erly handle the marketing of their
properties. Many are trying to simulta-
neously perform the jobs of real estate
agent, general contractor and market-
ing director. In fact, many investors
often have primary employment in
other fields and form amateur REO
investment groups with peers. Thus,
offering ways in which you can assist
them with marketing removes a large
burden from them, and is always
appreciated.
Finding real
estate investors
The following are five
ways to locate real estate
investors:
1. Real estate investor
associations
If you havent attended
these events, its time you
start! These groups consist of
investors coming together to
share ideas. There is usually
a feeling of camaraderie,
making networking simpler.
To find an association,
search the Internet for your
area. One good resource is
www.reiclubdirectory.com.
2. REO agents
REO agents have listing con-
tracts with banks to sell
their foreclosed properties.
Contact these agents,
explain that you assist
investors with helping them
understand how FHA can
help them be more prof-
itable, and ask them for names and num-
bers of investors they work with.
Additionally, insofar as investors often use
agents to buy property but not to sell it, you
may end up generating the agents curiosity
and setting up a meeting with them as well.
Your goal is to get the names of investors,
but if you end up setting an appointment
with the agent too, thats a bonus!
3. For Sale signs
Often, For Sale signs are posted at
vacant homes and homes being reno-
vated. This is a good indication the
home is investor-owned. Call the num-
ber on the sign or stop by when you see
workers at the property to get the name
of the investor.
4. Business networking groups
These groups are great ways to get referred
to investors. Once, at a BNI group meeting,
when I asked for referrals to investors, I
received three right on the spot!
5. Sphere of influence
If you dont belong to a networking
group, inquire within your own con-
tacts to find investors. You may be sur-
prised at how many investors you find
this way.
Now that you have arranged a meet-
ing now what? Give them four rea-
sons why FHA is the loan of choice for
investors:
1. There is only a 90-day seasoning
requirement calculated from the date
the deed is signed. Because of the histo-
ry of fraud with property flipping, many
lenders have a 12-month seasoning.
2. Through the use of government
agency down payment assistance pro-
grams, the entire amount of the buyers
funds can be covered with no expense
to the seller. Check you area for local
homebuyer programs.
3. Their buyer gets a better loan. This cre-
ates a happier client who may refer friends
to buy other homes the investor offers.
4. With FHA, there is a lower credit
score requirement.
Give them five ways to market their
properties:
1. Finance signs
Get signs made that state clearly how
much they need to put down and the
amount of the monthly payment. Have
signs printed with the spaces for down
payment and monthly payments blank
so you can customize each sign to its
property. Its worth the extra effort and it
generates more leads. Be sure to follow
Real estate Settlement Procedures Act
(RESPA) guides and include the annual
percentage rate (APR), the loan type and
terms of the loan.
2. Flyers
Create flyers for the property advertis-
ing financing information and the fact
that buyers need little money down.
Distribute them to homes in the sur-
rounding neighborhood.
3. A call capture system
Advertise your investors properties with
a toll-free number, offering information
about the property, thereby creating
leads. Again, note to adhere closely to
RESPA guidelines. This may sound old
fashioned, but signs still generate leads.
You never see an agent list a home with-
out a sign well no home should go
without a finance sign as well.
4. Brochures
Create a personal brochure for poten-
tial buyers.
5. Homebuyer guides
Publish informational homebuyer guides,
educating clients about homeownership.
I highly recommend LoanToolbox.com
to help you with your marketing efforts.
True to their name, no company in the
country provides more tools for the origi-
nator looking to grow their business. With
just a few clicks, you can create powerful
marketing pieces, and then get back to
what you do best: Originating loans.
The FHA Streamline K
Finally, I want to make you aware of
the enormous market that exists right
now in many metropolitan areas for
an FHA product called the Streamline
K. Also known as the Baby K, this is a
203k rehabilitation loan for primary
occupants only. The loan allows the
buyer to finance up to $35,000 for the
purpose of cosmetic repairs only.
Some items eligible for financing
include: Kitchens, bathrooms, roofing,
windows and even appliances (sorry,
no wall mounted plasma TVs). For fur-
ther information, go to HUD.gov and
search for HUD Handbook 4155.2 and
Mortgagee Letter 2005-50. For a full
list of 203k Mortgagee Letters, visit
www.hud.gov/offices/hsg/sfh/203k/20
3kltrs.cfm.
This product has tremendous poten-
tial for two major reasons: One, the
banks that price their REO properties
too high leave little or no room for
investor profit. Two, there are more
consumers than investors available to
By Jeff Mifsud
REO agents have
listing contracts with
banks to sell their
foreclosed properties.
Contact these agents,
explain that you
assist investors with
helping them under-
stand how FHA can
help them be more
profitable, and ask
them for names and
numbers of investors
they work with.
Working With Investors and FHA Loans
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Remembering the REO Basics
purchase these homes. The Streamline
K has the potential to be a key factor in
improving neighborhoods: It allows
the investors buyers to use govern-
ment funds to finance renovations, it
puts a primary occupant in the home
(rather than a renter), and it leaves the
buyer with a great loan product.
Fellow originators you have a
great opportunity to create a very prof-
itable and stable niche for yourselves
by creating a group of investors who
rely on you to help them finance the
buyers of their homes. Create an plan
of action for 2011 to develop your net-
work of real estate investors.
Go FHA!
Jeff Mifsud is founder of Michigan-based
Mortgage Seminars LLC, a former FHA
underwriter with 15-plus years of experi-
ence originating FHA loans, an FHA expert
for LoanToolbox.com and creator of The
FHA Originator, a monthly FHA newsletter.
Jeff may be reached by phone at (248) 403-
8181 or visit www.MortgageSeminars.com.
By David Shelton
that today, every agent out there
wants to be an REO agent. That is
understandable since that is where
the sales are, but wanting to sell REOs
and being qualified to sell REOs is very
different. Its kind of like the dentist
from the United Kingdom that I met a
couple of years ago while on vacation.
He told me that Botox injections were
all the latest rage in the UK and a lot
of money was being made. He was
going to take a two-day training
course and start administering Botox.
Maybe there are some folks out there
that will get Botox injections from a
dentist, but I think Ill pass! In addi-
tion to understanding local market
conditions and the special challenges
associated with marketing REOs, a
good REO agent is also up to date on
the latest code requirements, vacant
property registration requirements,
city-required inspections and all of
the other ever-changing local require-
ments for REO/vacant properties.
Keeping the property in compliance
with local codes and requirements
can save the seller a lot of unneces-
sary expense from fines and assess-
ments, as well as keep the migraines
to a minimum. We have a number of
agents that do a great job selling
properties in the $30,000-$150,000
range but do not do well on the high-
end luxury properties. Other agents
are great on the high-end, but not on
the average properties. To obtain the
best results, we always want to use the
specialists.
Maximize value
The age old question do we rehab
the property? If so, to what extent?
What kind of repairs are really neces-
sary? The old adage of throwing good
money after bad is true so you have to
be careful. Likewise, you have to
spend money to make money is also
true, but again, you have to be careful.
The key is to understand which one
applies so that you are making an
investment rather than incurring an
added expense. I have worked with
institutions that had hard and fast poli-
cies on REO repairs and rehab. I
worked with one that wanted every
property rehabbed to AS IS means
AS IS, and outside of required preser-
vation, wouldnt spend a dime. Neither
had any real flexibility. In todays mar-
ket, common sense, flexibility and
good judgment are the keys to maxi-
mizing value on your REO sales.
Extremes in either direction will end
up costing you money. You have a lot
of information available to you to
assist in making these decisions that
may not be obvious. For example, a
good BPO will tell you, based on prop-
erty condition, value and location, who
the most likely buyer will be. Are we
marketing to an investor or an owner
occupant? The agent will provide rec-
ommendations as to the minimum
repairs needed to attract the target
buyer. The BPO should also tell you if
the property will qualify for most
financing types in its current condition,
and if not, what issues must be
addressed in order to qualify.
Additional information is available in
the BPO that can be used to solidify
your decision. Is the neighborhood sta-
ble or on the decline? How many prop-
erties are currently for sale in the area
and how many of these properties are
REOs? Are there boarded up properties
in the immediate vicinity, and if so,
how many? What is the percentage of
rental properties compared to
owner/occupied properties in the
neighborhood? Use the information
available to identify your target market
and understand what is necessary to
meet the needs of that market.
For years, the primary market for
REOs was investors. Over the past few
years, we have seen a large increase in
the number of buyers looking to pur-
chase a primary home. Sales to owner
occupants are generally going to bring
a higher sales price, but there are also
generally more issues to be addressed
on these sales. Most homebuyers are
going to require financing. While you
can get the buyer to insure that they
have the required funds for downpay-
ments and a pre-approval from a rep-
utable lender, the property also has to
qualify for the loan. By recognizing and
addressing any property issues that
would limit financing upfront, not only
are you going to save time in getting
the deal closed, but will often generate
higher offers. Your asset managers
need the information to develop an
effective marketing plan for each prop-
erty and the flexibility to implement it.
Evaluating performance
One thing that I was taught and have
never forgotten is that you cannot
manage what you cannot measure.
You have to know if your disposition
strategies are working effectively so
that adjustments can be made as need-
ed to maximize performance. We con-
stantly evaluate our performance and
the performance of our partners
(agents, closing companies and valua-
tion specialists) against a standard for
our key performance indicators. While
a number of areas are tracked, our key
measurements for the disposition
process are average days on the mar-
ket, average sales price to list price,
It was probably 1974 when I managed
my first real estate-owned (REO) prop-
erty. Foreclosures were rare and there
was plenty of time to give individual
attention to each REO asset. How times
have changed! The one thing that has-
nt changed for anyone managing an
REO portfolio is the need to dispose of
the inventory as quickly as possible,
while at the same time, maximizing
recovery. Which of these
two areas takes priority
at any given time is based
on the makeup of your
portfolio and internal
goals. Your marketing
strategies will be formu-
lated based on that prior-
ity. As your inventory
swells, every market
seems to be saturated
with REOs, and every-
thing starts getting really
complicated, it is tempt-
ing to start looking for a
gimmick. Oftentimes, the
key to keeping things
manageable is simply
remembering the basics.
Ive broken this down
into some areas that I
think every REO manager
must consider.
1. Obtain reasonable val-
uations and price your properties to
reflect current market conditions.
2. Choose the right partner for the job.
3. Maximize value.
4. Evaluate performance.
Obtain reasonable
valuations
You notice that I said reasonable rather
than accurate. I really dont know how
to determine if a broker price opinion
(BPO) or appraisal value is accurate; only
if it is reasonable. Experience shows that
if you have a reasonable valuation, you
most likely also have an accurate one.
We determine reasonableness by review-
ing the valuation for certain factors. Are
the sold and listed comps used really
comparable to the subject property? Are
the comps the same age, style, condition
and location? Are the sold comps used
reflecting current sale dates or stale?
How long have listed comps been on the
market? Have reasonable
adjustments been made
for differences in the
comps used and the sub-
ject property? We are sell-
ing an REO are we using
REO comps? Because hav-
ing a high confidence level
in the valuation is so criti-
cal to pricing, we always
recommend getting multi-
ple valuations. A little
extra money spent in this
area can make a big differ-
ence in your overall recov-
ery rates. I have worked in
environments where the
acceptable sales prices
were based on a percent-
age of the remaining prin-
cipal balance of the loan.
In todays market, I believe
that acceptable sales
prices must better reflect
the current local market
conditions and pricing set based on cur-
rent valuations. Otherwise, your proper-
ties sit and carrying costs escalate.
Choose your partners
carefully
It doesnt matter if you manage your
inventory in-house or outsource to
asset management companies, you
have to rely on partners nearby the
property. We have found that the key
partnership is in selecting the right
listing agent for the property. It seems
By recognizing and
addressing any prop-
erty issues that would
limit financing
upfront, not only are
you going to save time
in getting the deal
closed, but will often
generate higher offers.
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We are now three years into the
nations retreat from historically high
homeownership rates, with millions of
homes transferring out of the hands of
delinquent borrowers and back into
the banks that held their mortgages. In
the third quarter of last year, the last
period for which data is currently avail-
able, the Mortgage Bankers Association
(MBA) reported that 13.78 percent of all
borrowers were either in
foreclosure or at least one
payment behind on their
mortgage.
The MBA has estimated
that nearly two million
bank-owned properties
were on the market at the
end of 2010, with twice
that many at least 90 days
delinquent and heading
down the path to foreclo-
sure. Guhan Venkatu of
the Federal Reserve Bank
of Cleveland has estimat-
ed that the shadow inven-
tory, those real estate-
owned (REO) properties
that banks already own
but have not yet released
into the market, accounts
for another four million or so homes.
That many homes would take well
over a year to sell in the current envi-
ronment. RealtyTrac reported last year
that roughly one-quarter to one-third
of all real estate sales in the first half of
2010 were homes in some state of fore-
closure. If nothing changes, it could
take years for the industry to cycle
through the REO lot that we already
have coming into the market, and
thats if the shadow inventory doesnt
set off another round of foreclosures.
Fortunately, things are changing.
A new approach to REO
It was at the National Property
Preservation Conference in November
that the U.S. Department of Housing &
Urban Development (HUD) reiterated its
plans to split its property preservation
and asset management
groups into separate
departments. It was a
move that put the federal
agency in line with the
best of the industrys asset
management companies
and one that will likely
make the agency more
successful in the future.
Until recently, the
two departments operat-
ed as a single unit within
HUD. Separating proper-
ty preservation and asset
management is a strong
move that will allow
HUD to deal more effec-
tively with the influx of
foreclosures, disposing
of properties faster and
more efficiently than in the past.
There was a time when the older
model made sense and many asset man-
agers utilized a similar internal structure.
With fewer REO properties to deal with,
companies could operate with smaller
teams and cross-train them for increased
efficiency. But it makes much less sense in
todays market.
Todays asset managers are flooded
with properties, many of which are
The truth is that the
structure of an REO
asset management firm
must be a reflection of
how it approaches the
work it does.
Structuring Effectively for
REO Disposition
By Derrick Logan
average sales price to valuation, and
average days to close once under con-
tract. These measurements are drilled
down to the individual agent, title/clos-
ing company, or appraiser level and
allow us to base our partnership deci-
sions on objective data. This also allows
us to recognize when we need to mod-
ify our processes or partner relation-
ships to meet specific client needs.
With everyone from the federal gov-
ernment to local municipalities and
homeowners associations (HOAs) get-
ting involved and imposing obstacles to
the REO management process, you will
either already in a state of disrepair or
at risk of becoming so. Banks are tak-
ing back homes of every description in
neighborhoods of every kind all over
the country.
There are critical tasks that must be
completed for both preservation and
disposition of the REO. With the work
coming in so rapidly, it would be easy
to overload and overwhelm a firm that
tried to accomplish both functions
within the same department.
Over the past 18 months, most com-
panies working in this space have
found that there is sufficient work to
employ full-time teams in both areas.
In fact, because of the time-related
expenses involved, it makes good sense
to do so. Time is a critical concern in
this business. The longer a non-per-
forming asset is held in portfolio, the
more money is sacrificed on a daily
basis.
An effective structure
for success
Over the past 13 years, we have been
developing the systems in use my com-
pany, REO Allegiance. We believe that
HUDs move to separate these two
departments will make the agency
more effective because we have
become more effective and successful
when we began to separate the various
functions that go into the work we do
for servicers and investors. But HUDs
move is only the beginning.
With todays high REO volume and
the need to dispose of every property
as quickly as possible, it is imperative
that asset managers isolate every criti-
cal function required for both property
preservation and REO disposition and
scrutinize the processes that lead to
successful outcomes. When this is
done, it becomes clear that there is a
single set of steps that leads to the opti-
mum outcome in the shortest period of
time. In fact, the goal is to visualize the
workflow as a sequence of steps lead-
ing directly to accomplishing that goal.
In the end, the best companies have
found that separating property preser-
vation from REO disposition is only the
beginning.
When we consider the work pertaining
to property preservation, the goal is
clearly to protect and preserve the prop-
erty. To achieve this goal, the work
required for each property must flow
through several departments, each with
its own specific list of tasks. For instance,
in our firm, we utilize an order place-
ment team, a property preservation
team, a quality assurance team, a recur-
ring service team and an eviction team.
There are also auxiliary functions that
must be considered, such as vacant prop-
erty registration and utility management.
By breaking the work down and distrib-
uting it effectively across these teams, were
able to process thousands of orders at any
given time efficiently and without errors.
On the other side of our business,
REO disposition has its own set of com-
plicated issues that must be carefully
analyzed and then managed to achieve
the goal of 100 percent REO disposi-
tion. To meet that goal, real estate bro-
kers are assigned, marketing plans are
formulated, a selling price is agreed
upon for each property, contracts and
closing issues are resolved, rehabilita-
tion issues may be referred back to us
for preservation and many other tasks
and processes must be accomplished
quickly and correctly. It doesnt make
sense for all of these functions to reside
within the same department in an envi-
ronment like the one were experienc-
ing today.
Of course anytime you decentralize any
operation, communications and informa-
tion technology become critical concerns.
Without the right technology to keep infor-
mation flowing freely across the enterprise,
firms with any number of departments are
just as sure to fail. To be successful, its
important that the companys IT specialists
also have a complete understanding of
REO preservation and disposition.
The perfect structure for
success
Given this discussion, it may yet be
unclear how many departments it actual-
ly takes to be effective at both maintain-
ing properties and effectively disposing of
bank-owned real estate. There can be no
question that structuring a firm to deal
effectively with the work it will face as it
fulfills its function is an important part of
being an industry leader. At REO
Allegiance, weve spent a great deal of
time and effort making sure that our
structure is conducive to efficiency and
error-free operation.
The truth is that the structure of an
REO asset management firm must be a
reflection of how it approaches the
work it does. Firms that take a special-
ists approach to their business are like-
ly to have more departments, each
focused on the critical tasks that are
crucial to their part of the business.
It will be interesting to see what HUD
does next in regard to their portfolio of
real estate. Its heartening to see that the
agency has taken the first step in the right
direction.
Derrick Logan is director of business devel-
opment of Bayonne, N.J.-based REO
Allegiance, a nationwide property preserva-
tion and eviction services company. He may
be reached by phone at (201) 746-8734, e-
mail derrick.logan@reoallegiance.com or
visit www.reoallegiance.com.
certainly continue to be thrown curve-
balls and flexibility will be required. In
this ever-changing environment, a con-
tinued focus on the basics will general-
ly serve you well. Keep in mind, you can
try the trick plays, but it is more often
the best blocking and tackling that wins
the close games.
David Shelton is chief operating officer of
Turnkey Asset Management Solutions in
Newport, Ky. Turnkey manages the preser-
vation, valuation, and disposition of REO
properties on a nationwide basis. He may
be reached by phone at (859) 815-6905 or
e-mail dshelton@turnkeyams.com.
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e-mail: sales@calyxsoftware.com
visit: www.calyxsoftware.com
Mortgage Insurance Agency, Ltd. is the largest writer of State
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coverage for Mortgage Bankers and Mortgage Brokers.
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Phone: (866) 355-9944 / E-Mail: info@mtgins.com
as open and honest as possible. The local
Broker is usually the only contact a bor-
rower will have with an industry profes-
sional. It hasnt helped that the agenda
gap between servicer and agent continues
to widen, even while real estate agents are
the group that servicers depend upon the
most to carry out their initiatives.
Thats why, if we are to change the per-
ception of our industry, it must be on a local
level. This is the key point that most finan-
cial institutions have missed. After all, it
does no good to have lofty initiatives if the
people you are asking to carry them out,
simply dont care.
So, how do servicers and banks get local
agents to comply with their initiatives?
A good place to start would be the
traditional stance of non-disclosure
that is widely accepted as the norm in
real estate markets across the country. I
dont know how or why someone con-
vinced all real estate agents that non-
disclosure was the only way to uphold
their fiduciary duty to their clients. A
closed door policy will never calm the
nerves of the consumer.
This practice has made it more diffi-
cult for families to buy an REO property
during what should have been one of
the more satisfying half decades for
first-time homebuyers. Non-disclosure
has propped open the door and let
agent fraud and deception stroll right
in. It has eliminated the fairness and
honesty in what should be a complete-
ly transparent process.
After all, we are selling someones
dreams, not widgets. If I make a trans-
action involving a 30-year commitment
and my life savings, I want it to be total-
ly transparent.
I first fell in love with the idea of
transparency as a rookie REO broker. I
couldnt understand why agents would
fail to return calls, be courteous or dis-
close offers. When I finally got my first
REO listing, I was determined to not be
one of those agents. I listed the home
on the local MLS and included the
remarks open negotiation and pro-
active communication is encouraged,
call agent anytime for the current high-
est offer.
Not so stunningly, I received a call
days later from my local MLS associa-
tion. Apparently, a rival agent didnt
like my philosophy of total openness
and had called her local association to
complain.
It seems that the supposed stan-
dards of real estate negotiation had
become so jaded, that even the associ-
ation responsible for its policing
thought the radical idea of full disclo-
sure was illegal or against its rules. It
was at that moment that I realized the
industry needed a breath of fresh air.
Eventually, I got my
way and I continued on
with my transparent
model. It was pretty clear
that by being transparent,
I was swimming against
the current.
Never one to join the
herd, I instructed my entire
staff to conduct business in
a transparent fashion. We
created disclosures that
outlined our written policy
and philosophy of total
transparency. We felt that
while we couldnt change
an entire industry, we
could certainly set an
example. And truthfully,
the multi-offer process
became a lot more fun. The agents and
buyers I worked with were grateful for a
stress-free process, where they knew the
stakes from start to finish and nothing was
concealed or withheld. We felt good about
the way we conducted business.
Since then, I have urged everyone I
have come in contact with to do busi-
ness this way, knowing that with each
sale, we can slowly change the percep-
tion of an entire industry and gain the
trust of a public that stopped believing
anything we had to say years ago.
Even Fannie Mae has recently
released an online portal where buyers
and their agents submit offers directly
to the seller, bypassing the listing agent
all together. I can only assume that they
felt it necessary to put this
portal in place after years
of struggling to get local
listing agents to comply
with their agenda.
Its time that we all chal-
lenge ourselves to be pro-
active in finding ways to
improve the process of buy-
ing and selling real estate
on a local level. Ultimately,
no matter what actions ser-
vicers take to improve per-
formance and execution, it
wont matter if we dont
gain the confidence of the
common consumer.
Albert Einstein said, The
significant problems we
face cannot be solved at the
same level of thinking we were at when we
created them. Im not about to pick a
fight with Albert Einstein Ive already
picked a fight with an entire industry.
Damien Chiodo is managing director
and founder of KeyLink Asset
Management. He may be reached by e-
mail at damienchiodo@gokeylink.com
or visit www. gokeylink.com.
The Need for Transparency
Has Never Been Greater
Years from now, when all of the real
estate-owned (REO) agents, asset man-
agers, vice presidents and directors are
back to originating loans, will we have
learned anything?
Ironically, many of the same leaders in
the default industry had a hand in a lot of
the originations that ultimately became
foreclosures. I certainly applaud those
individuals for evolving with the market.
Heck, I am one of those individuals. But I
didnt write this piece to scold bad mort-
gage bankers or real estate agents. Every
industry has its good and bad apples. My
question is simple What can we, the
people on the front lines, do to better our
industry?
Servicers and banks have certainly at
least appeared to do their share. Under the
direction of the Obama Administration,
the government-sponsored enterprises
(GSEs) have been able to slow the bleeding
and curb the drastic reduction in property
values by slowly releasing their bank-
owned inventory to the market. Servicers
and banks around the world have
increased their staff and have changed
their policies to accommodate the wave of
underwater borrowers in their portfolios.
Short sales are being conducted three
times faster than they were just two years
ago and 10 times faster than they were
just four years ago. Laws have changed to
give more relief and options to tenants
who are victims of foreclosure. The regu-
lations and requirements needed to orig-
inate loans have increased as well.
In other words, lots of things have been
and are being done to improve the current
process. But while progress has been made,
our industry has never been seen in such a
skeptical, negative light as it is viewed now.
Considering the past reputation of the
financial industry, thats saying a lot.
Loan officers and real estate agents
have often been generalized as over-
paid crooks. To the general public, loan
originators and agents just fill out some
forms, make some calls and get paid
thousands of dollars to do it. Well, 80
percent of the time theyre right. After
all, we are all aware of the 80/20 rule.
Whether you think thats true or not is
irrelevant. Its clear we have a lot of work
to do if we ever want to erase the nega-
tive stigma that our industry carries.
A home purchase is the single most
important investment most people will
make in their lives. As an industry, we
owe it to the public to make that process
By Damien Chiodo
My question is sim-
ple What can we,
the people on the
front lines, do to bet-
ter our industry?
a consumer reporting agency, which must be identified by name, general-
ly due to insufficient information regarding the consumers credit history;
I A statement that the consumer is encouraged to verify the accuracy of the
information contained in the consumer report and has the right to dispute
any inaccurate information in the consumer report;
I A statement that federal law gives the consumer the right to obtain copies
of his or her consumer reports directly from the consumer reporting agen-
cies, including a free consumer report from each of the nationwide con-
sumer reporting agencies once during any 12-month period;
I The contact information for the centralized source from which consumers
may obtain their free annual consumer reports; and
I A statement directing consumers to the web sites of the Board and Federal
Trade Commission to obtain more information about consumer reports.
The following documents may be downloaded from the FCRA/FACTA section of
our firms Web site Library (http://lenderscompliancegroup.com):
I Fair Credit Reporting Risk-Based Pricing Regulations, Final Rule, FR 75/10
(01/15/10)
I Fair Credit Reporting Risk-Based Pricing Regulations - Agency Notice
(12/28/09)
I Model FormsRisk-Based Pricing, Agency Notice (12/28/09)
I Fair Credit Reporting Risk-Based Pricing Regulations: Correction, FR 73/104
(05/29/08)
I Fair Credit Reporting Risk-Based Pricing Regulations, Proposed Rule, FR
73/97 (05/19/08)
Submit your questions
Do you have a regulatory compliance issue that youd like to see addressed in the
Regulatory Compliance Outlook Column? If so, e-mail your issue or concern to
Jonathan Foxx at jfoxx@lenderscompliancegroup.com.
Jonathan Foxx, former chief compliance officer for two of the countrys top
publicly-traded residential mortgage loan originators, is the president and
managing director of Lenders Compliance Group, a mortgage risk manage-
ment firm devoted to providing regulatory compliance advice and counsel to
the mortgage industry. He may be contacted at (516) 442-3456 or by e-mail
at jfoxx@lenderscompliancegroup.com.
Footnotes
1This outline is based on information provided in Fair Credit Reporting Risk-
Based Pricing Regulations, Federal Register, 75/10, 01/15/2010, Rules and
Regulations, pp. 2724-2784. The FTC is placing the final regulations and guide-
lines in the part of its regulations implementing the FCRA, specifically 16 CFR Part
640. This is the source document used herein for citations.
2See 12 CFR 226.17(c) and 226.18(e).
3Op. cit. 1, p. 2753.
4That is, one or more credit products with similar features that are designed
for similar purposes.
5The credit score proxy method must be used to recalculate the cutoff score(s)
no less than every two years, by considering the credit scores of all or a represen-
tative sample of the consumers to whom it has granted, extended, or provided
credit for a specific type of credit product, or within one year after using a cutoff
score derived from market research, third-party data, or information from a party
which it acquired, with which it merged, or from which it acquired the portfolio.
6Op. Cit. 1, p 2754. Actual example is in the Federal Register.
7Idem, Actual example is in the Federal Register.
8RBP Disclosures are provided before the first transaction is made under the
HELOC plan, but not earlier than the time the creditor communicates to the bor-
rower its approval decision.
9Op. Cit. 1, Part 698-Model Forms and Disclosures, Appendix B(3), p 2776. Any
rearrangement or modification of the language of the model forms may not be
so extensive as to materially affect the substance, clarity, comprehensibility, or
meaningful sequence of the forms.
10Pursuant to 640.3(a) or (c).
11Specific material terms means a single material term, or set of material
terms, such as an annual percentage rate of 10 percent, and not a range of alter-
natives, such as an annual percentage rate that may be eight percent, 10 percent,
or 12 percent, or between eight percent and 12 percent.
12Pursuant to 640.3(a), (c), or (d).
13FCRA 615. Requirements on users of consumer reports (15 U.S.C. 1681m),
(a) Duties of users taking adverse actions on the basis of information contained in
consumer reports.
16FCRA 609. Disclosures to consumers (15 U.S.C. 1681g), (g) Disclosure of
Credit Scores by Certain Mortgage Lenders.
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F. A statement that the consumer is encouraged to verify the accuracy of the
information contained in the consumer report and has the right to dispute
any inaccurate information in the report;
G. A statement that federal law gives the consumer the right to obtain copies
of his or her consumer reports directly from the consumer reporting agen-
cies, including a free report from each of the nationwide consumer report-
ing agencies once during any 12-month period;
H. Contact information for the centralized source from which consumers may
obtain their free annual consumer reports; and
I. A statement directing consumers to the Web sites of the Federal Reserve
Board and Federal Trade Commission to obtain more information about
consumer reports.
5) Credit score not available: a creditor is not required to provide a risk-based
pricing notice to a consumer
17
if the creditor:
I. Regularly obtains credit scores from a consumer reporting agency and provides
credit score disclosures to consumers in accordance with the final rule, but a cred-
it score is not available from the consumer reporting agency from which the cred-
itor regularly obtains credit scores for a consumer to whom the creditor grants,
extends, or provides credit;
II. Does not obtain a credit score from another consumer reporting agency in con-
nection with granting, extending, or providing credit to the consumer; and
III. Provides to the consumer a notice that contains the following:
I A statement that a consumer report (or credit report) includes information
about the consumers credit history and the type of information included in
that history;
I A statement that a credit score is a number that takes into account infor-
mation in a consumer report and that a credit score can change over time
in response to changes in the consumers credit history;
I A statement that credit scores are important because consumers with high-
er credit scores generally obtain more favorable credit terms;
I A statement that not having a credit score can affect whether the consumer
can obtain credit and what the cost of that credit will be;
I A statement that a credit score about the consumer was not available from
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d
Major East Texas Mortgage Fraud Scheme: Out of Florida
203(k) Rehab Loan Program: Foreclosures Present Challenges, Opportunity
NMLS and State Testing for Mortgage Professionals
33
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new to market continued from page 27
Depending on each users Risk-
Based Pricing policy, they can select
any of the five pre-formatted letters
available. Letters automatically popu-
late with information specific to the
type of notice and transaction. For
transactions with more than one appli-
cant, multiple applicant-specific letters
are generated, as required by the regu-
lations.
For users who access Kroll Factual
Datas services directly through the
internet, pre-formatted notices are
available directly from each credit
report. For those who access services
via a system integration, three options
are available, depending on the sys-
tem, including: notices appended to
the credit report; inclusion of cus-
tomer score rank, score model per-
centile data and the disclosure as a
Portable Document Format (PDF); or
as a Hypertext Markup Language
(HTML).
The optional mail fulfillment serv-
ice relieves clients operational staff
of the burden of printing and mailing
letters to applicants. Monthly man-
agement reports included with this
service provide standardized, ongo-
ing documentation to easily demon-
strate compliance in response to an
audit.
For more information, visit www.kroll-
factualdata.com.
New HUD Web Site
Provides In-Depth
Economic and Housing
Market Data
The U.S. Department
of Housing & Urban
Development (HUD) has
unveiled a new Web site
that consolidates a
wide variety of eco-
nomic and housing market data at the
regional, state, metropolitan area and
county levels. Using data from the U.S.
Census Bureau, U.S. Department of
Labor Department, state and local gov-
ernments, housing industry sources, as
well as HUDs own field economists,
the new site, hud.gov/datamap,
employs interactive maps that allow
visitors to access a variety of reports
from a region-wide look at employ-
ment and housing activity to individual
county-level figures on population
trends, rental activity and vacancy
rates.
This is a powerful new tool thats
easy to use and offers the public a
remarkable look at their local econom-
ic and housing markets, said Dr.
Raphael Bostic, HUDs Assistant
Secretary for Policy Development and
Research. Current and reliable data
shouldnt be hard to come by. This is
precisely why this site will be so helpful
to state and local leaders, developers,
the real estate industry, and the gener-
al public who need the latest available
data on their markets.
HUDs new site displays an interac-
tive map of the U.S. allowing visitors an
intuitive way to seek data in a number
of areas of geographyfrom an entire
region down to a particular county. In
particular, the portal offers the follow-
ing reports:
O Market at a Glance reports contain
economic and housing market data
trends for every metropolitan area
and county nationwide with
employment data updated on a
monthly basis. Employment data is
provided from the Bureau of Labor
Statistics and housing data is
derived from the Census Bureaus
American Community Survey. Some
adjustments are made by HUD field
economists based on regional infor-
mation. The data are expected to be
released on monthly basis for most
of the metropolitan areas and coun-
ties. Eventually these reports will
become live documents enabling
field economists to include analysis
as they complete more in-depth
research for specific areas and mon-
itor local conditions.
O Regional Housing Market Profiles
are based on the quarterly U.S.
Housing Market Conditions report
and include non-farm employ-
ment, population changes, and
building activity. These regional
profiles also focus on the most
recent housing rental and sales
activity for the past two years. In
addition, approximately 10-12 indi-
vidual metropolitan areas are
specifically profiled each quarter to
provide these same data down to
the metro area level.
O Regional Narratives are broad
overviews of economic and housing
market trends within ten regions of
the U.S. These narratives are based
on information obtained by HUD
economists from state and local
governments, from housing industry
sources, and from their ongoing
investigations of housing market
conditions.
O Comprehensive Housing Market
Analysis: Periodically, HUD field
economists focus on particular met-
ropolitan housing markets to pro-
duce counts and estimates of
employment, population, house-
holds, and housing inventory. Each
housing market analysis considers
changes in the economic, demo-
graphic, and housing inventory
characteristics during three periods:
from 1990 to 2000; from 2000 to the
as-of date of the analysis; and from
the as-of date to up to up three
years in the future.
hud.gov/datamap.
Headlines and breaking news from
NationalMortgageProfessional.com.
Headlines and blogs from
around the web.
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Mortgage Contracting
Services Launches New
Photo Inspection Feature
Mortgage Contracting
Services LLC (MCS), a
provider of property
preservation, inspections and real estate-
owned (REO) property maintenance to
the financial services industry, has
announced that it now provides photo
inspection services to supplement the
traditional data required for valua-
tions, proof of property condition and
other verification reporting.
MCS photo inspection capabilities
add value to several industry practices,
including appraisals for valuation
providers, substantiation of policies for
insurance companies, confirmation of
a propertys existence and condition, as
well as fulfillment of re-certification or
due diligence requirements for origina-
tion and servicing shops.
These parties have historically relied
on local field contractors to provide
necessary photo documentation, but
have been challenged with securing
coverage in all areas, especially for
minimal cost and quick turnaround.
MCS is positioned to alleviate those
concerns as it maintains a nationwide
network of inspection subcontractors
to improve workflow processes and
provide clients with cost savings.
MCS strives to be proactive in pro-
viding solutions to the needs of its
clients. Photo evidence of a property
and its condition is a critical validation
measure to support written documen-
tation and provide depth to any form
of reporting, said Caroline Reaves,
chief executive officer of MCS.
www.mcs360.com.
CoreLogic Introduces
Fraud Management
Platform
CoreLogic, a provider
of consumer, financial
and property informa-
tion and business
services, introduced
the next generation of
LoanSafe Fraud Manager, a customiz-
able platform that builds upon the
CoreLogic LoanSafe Fraud Manager and
empowers lenders with more access,
speed and control over their fraud
management systems. LoanSafe Fraud
Manager leverages patented pattern
recognition technology and offers com-
prehensive business intelligence and
decision-making by harmonizing data,
analytics, policy, strategy and opera-
tional workflow. This Web-based plat-
form makes mortgage fraud prevention
easily adaptable by fraud managers by
minimizing reliance on information
technology departments to address the
everyday needs of fraud prevention
teams.
CoreLogic is again raising the bar on
fraud by giving lenders the power to
adapt their strategies and policies to
respond within minutes as new fraud
schemes appear, said Tim Grace, sen-
ior vice president, Fraud Analytics, at
CoreLogic. New and sophisticated
mortgage fraud schemes can emerge
overnight. We want to empower
lenders to be able to stop those
schemes through their own flash fraud
rules and alerts. With next generation
LoanSafe Fraud Manager, lenders can
change their rules, add an alert or
change a workflow within minutes of
finding a new fraud trend.
Once lenders have identified the
population of loans that most need
attention, LoanSafe Fraud Manager pri-
oritizes and determines the optimal
action steps needed for each. The fraud
managers ability to create strategies
that combine scores and alerts along
with action steps for the analyst that
are specific to each lenders best prac-
tices helps ensure that the optimal
group of loans is worked in the best
way in every instance.
Operational workflow is optimized
by ensuring fraud prevention is
repeatable and reproducible every
time, as directed by the system and
the lender-supplied best practices.
An interactive workspace presents
loan, borrower and collateral infor-
mation within an easy to use brows-
er-based interface. This workspace
includes clickable, drill down infor-
mation on all relevant fields (e.g.,
Social Security number, address,
phone, etc.) and gives access to a cus-
tomizable menu of third-party tools
(e.g., maps, verifications, reverse
lookups, etc). Next generation
LoanSafe Manager includes user-
friendly screens that summarize inte-
grated loan risks, integrated risk
action and disposition details.
LoanSafe Fraud Manager offers flexi-
ble integration with internal and exter-
nal systems while minimizing IT involve-
ment. A white paper on The Next
Generation of Fraud Management pro-
vides more detail on limitations of cur-
rent fraud prevention technologies and
how lenders can now be in control of
their fraud prevention management sys-
tem. For additional information, please
visit www.corelogic.com/nextgenfraud.
For more information, visit www.corel-
ogic.com.
Hartford National Title
Launches Free GFE and
HUD-1 Calculator
Hartford National Title Inc., a provider
of title insurance and real estate clos-
ing services, has announced the launch
of OneSourceQuote, its new Good Faith
Estimate (GFE) and HUD-1 title calcula-
managing in the
brave new world
of mortgage finance
attend the
28
th
Annual Regional Conference of
Mortgage Bankers Associations
March 15 - 17, 2011
Trump Taj Mahal Casino Resort, Atlantic City, NJ
For The First Time: The Residential Program Will Include A
Commercial Track So That Attendees Will Have A Choice As
To Which Sessions To Attend. Both Cocktail Receptions And
The Exhibit Hall Will Be For Both Residential And Commercial
Programs.
Tuesday
Opening Residential Networking Cocktail Reception
in the Exhibit Hall

Wednesday
General Session Topics
The Future of the Securitization Market, Risk Retention,
TBA Market, Reforming the GSEs, Government
Guarantees & More
MBAs Report on Current Legislative/Regulatory Issues
Banks in the Mortgage Market
How to Use Social Networking:
Facebook, Twitter, LO Websites, Blogs
Exhibit Hall with Lunch
Afternoon Session Topics
LO & Broker Compensation
Labor Law Issues (LO Overtime, Department Of Labor
Opinion, Minimum Wage)
Mortgage Bankers & Financial Institutions Panel:
Independent Mortgage Bankers
Mortgage Brokers
(FHA Business, Use Of Compare Ratios, Etc.)
Regulators Roundtable
Regulators from NJ, PA & NY
Mortgage Fraud Panel:
How To Detect And Avoid Mortgage Fraud
Networking Cocktail Reception
Thursday
Critical Issues Day
An in Depth Look at Financial Regulatory Reform
LO Compensation
Risk Retention
Ability To Repay
CFPB Regulations
Fed Reserve Rules
SAFE Act And Related Issues
MIs: Future Of The Private MI Industry
Residential Mortgage Lending For Financial Institutions
Subsidiary vs. Division
Registration Of LOs
Obtaining HUD Approval
Investor Approvals
Underwriting
A View From The Regulators:
OCC, FDIC, State Reg
For Registration Information
visit www.mbanj.com
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tor. This free online application is
the byproduct of many months
worth of developmental efforts and
testing by programmers, staff, and
beta clients. OneSourceQuote pro-
vides users with the reissue rate cal-
culation on refinances and exact
recording fees through an integra-
tion with a national recording data-
base that is updated daily. These
two features ensure that lenders and
mortgage brokers using the calcula-
tor will not be over-disclosing by
providing a borrower with higher-
than-actual settlement charges on
the GFE.
OneSourceQuote was developed
due to the lack of free, accurate title
calculators available to mortgage bro-
kers and retail lenders. With increased
disclosure standards required by the
changes to the Real Estate Settlement
Procedures Act (RESPA), which were
implemented in January 2010, it is
now more critical than ever for mort-
gage brokers and lenders to accurate-
ly estimate the closing costs and fees
for all real estate transactions.
With the onset of the new GFE we
realized that there was a real need for
an accurate title calculator for the
mortgage broker and lender commu-
nities, said Beth Grassette, in-house
counsel for Hartford National Title.
The complexity of the closing cost
estimation process, especially when
conducting business in multiple
states, is such that even small errors
could cost an originator thousands of
dollars as well as credibility in the
marketplace. We conducted extensive
research on existing calculators, but
did not find one that we considered a
viable solution. Therefore, we built
our own Good Faith Estimate (GFE)
and HUD-1 title calculator that we feel
best satisfies the requirements of
RESPA and mitigates risk for mortgage
originators.
Hartford National Title guarantees
its online application to be accurate,
and will bear the financial responsibili-
ty for any errors in calculations when
the Company is being used to close and
insure the transaction. Hartford
National Titles calculator utilizes inte-
gration with Ernst Publishing
Companys Real Estate Recording
Calculator, which is considered the gold
standard for recording fee calculations.
Hartford National Titles calculator will
estimate all state, city, and county
recording fees and taxes, transfer taxes
and stamps, title services, and title
insurance costs and will automatically
update in the event a municipality
changes its recording fees or other
costs.
Other important features of the cal-
culator include: One-click ordering for
title services, documentation and
recording notes that provide all neces-
sary legal requirements, and a PDF
output that provides the quote in
both a GFE and HUD-1 format for use
by originators.
For more information, visit www.hart-
fordtitle.com.
Equator Releases Invoice
Solution for Mortgage
Servicers
Equator, a provider
of default servicing
sol ut i ons, has
announced the launch of its EQ Invoice
Module for the servicing industry. Using a
rules-based approach, the system sim-
plifies the invoicing process and expe-
dites reimbursements. Servicers can
easily configure different rules per port-
folio and communicate with agents and
vendors online to streamline the
approval process.
Equators Invoice Module has an
intuitive workflow that instructs users
on which actions to take and when to
fulfill each task. Automated workflow
decisions are based on client config-
urable factors such as duplication, fre-
quency and dollar amounts of claims,
enabling custom rule sets to be estab-
lished for each portfolio. Pre-deter-
mined value thresholds and automated
decisioning result in quicker reimburse-
ments for invoices complying with these
specific terms. Additionally, the solu-
tion rapidly identifies invoices that
should be rejected and addressed on an
individual basis.
The Equator platform has allowed
agents and vendors to submit expens-
es for years, said Chris Saitta, Equator
chief executive officer. Now, rather
than pass expenses to other systems,
they can easily be reviewed and
approved right in Equator. This
streamlines approvals and makes the
expense data readily available for
strategy decisions.
The EQ Invoice Module is available
for all existing Equator clients as well
as companies that have yet to leverage
Equators solutions. Users benefit from
a full investor-based rules engine and
a complete end-to-end paper trail pro-
viding them with unprecedented audit
control. They can also set auto-
approval thresholds for the system to
immediately approve invoices that fall
within the specified parameters, saving
Becoming a GSF Pro-Branch
grants you access to many of
the services that may not be
obtainable in your current
environment.
GSF ofers total support:
Payroll
Accounting
Compliance
Marketing
Processing
Lead Generation
State of the Art Technology
Free Education & Licensing
Live Securities Pricing
On Staf Legal Counsel
GSF Mortgage approved for:
FHA
VA
USDA
Freddie Mac
Fannie Mae Seller Servicer
Jumbo Non-Conforming
Reverse Mortgages
203k
GSF is licensed in CO, DE, DC, IA,
IL, IN, KS, KY, MA, MD, MN, MO,
NC, ND, NE, NH, PA, SD, TX, VA,
WI, WV
Adding more state
licensing monthly.
Be in business for yourself, but not by yourself. Join GSF Mortgages Professional
Branch Network! Enjoy freedom and stability and reap the rewards!
Contact our Client Relations Manager
1-877-494-4448
www.gsfprobranch.com
Become part of GSF Mortgages
Professional Branch Network
Signing Bonus for Branch Managers
Retain 100% of Your Commissions
(Absolutely NO le fees, NO splits)
ssionnnnaaaaal
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time and money. Agents and vendors can
easily submit and track invoices, ulti-
mately resulting in faster approvals and
payments.
For more information, visit www.equa-
tor.com.
MDA DataQuick Updates
Its PropertyFinder 2G
Research Tool
MDA DataQuick, a
division of MDA
Lending Solutions,
has updated its PropertyFinder 2G, the
companys flagship property and owner-
ship research tool. MDA DataQuick
PropertyFinder 2G gives real estate
professionals and title companies
access to a nationwide database of
detailed property and ownership
information, which includes property
profiles, sales comparables, demo-
graphic information and property his-
tory. To support the increase in dis-
tressed properties on the market,
PropertyFinder 2G now offers expand-
ed property history details on dis-
tressed sales transactions. Users can
more accurately track activities, such
as notice of default, notice of trustee
sale, or short sale as well as the trans-
action that led to the activity.
In todays economy and housing
market, the number of properties in
some stage of default is at historical
highs, said John Walsh, president of
MDA DataQuick. Whether the proper-
ty is REO or in default, real estate pro-
fessionals and title companies need a
clear understanding of the property
history. With PropertyFinder2G, users
identify distressed properties and
make quicker, more accurate deci-
sions, while providing their clients
with a professional, easy-to-read
report.
PropertyFinder 2Gs expanded histo-
ry also adds loan assignment transac-
tions and flags suspicious property
transactions, such as unusually large
changes in price or properties with
multiple sales in less than 30 days.
Instead of personally visiting county
offices, users can search online for
single or multiple properties with a
diverse range of functions, such as
text, document, or Google map
search. Typeahead technology within
PropertyFinder 2G makes search crite-
ria entry quicker.
Real estate professionals manage
their real-time search results in cus-
tomizable, professional reports and
sales comparables that can include a
cover page, photos, Web links and
notations. Report editing makes
adding and modifying sales compa-
rables, schools, or businesses easier,
and report archive eliminates the
need to reproduce a report. Reports
can be e-mailed, opened as an Adobe
PDF document, or downloaded to
Excel.
For more information, visit www.mdaso-
lutions.com, www.dataquick.com or
www.mindbox.com.
ServiceLink Announces
New Default Solution
Options
ServiceLink, a
provi der of
or i gi nat i on
and default-
related solutions and technology has
announced its new comprehensive
default solution. This solution empow-
ers servicers to bridge their current
technology to ServiceLinks opti-
mized loss mitigation and default
technology and outsourcing services.
ServiceLink is well-prepared to man-
age to the quickly shifting regulatory
guidelines, quality control, and
audit requirements around workout
options from HAMP processing
through foreclosure.
ServiceLinks wrap-around technolo-
gy solutions, combined with proven
loss mitigation and disposition process-
es, allows them to assist servicers
throughout the entire default process.
Their Commerce Velocity technology
aggregates all pertinent information,
analyzes the data based on the cus-
tomized rules, and provides the opti-
mal workout decision from the point
of default. This technology also pro-
vides business users the ability to
manage workflow changes, regulatory
rule changes and other product
changes instantaneously. Combined
with customized outsourcing compo-
nents including HAMP processing,
loan modifications, short sale, and
deed in lieu, ServiceLink can provide
capacity on a continual or as-needed
basis, acting as an extension of the
servicers organization.
The goal of our complete default
solution is to help servicers and
investors make the optimal workout
CallFURST Audio Conferencing enables your mortgage company to communicate
immediately. We have a versatile suite of products that can support meetings of any size. We
offer Reservationless Audio Conferencing, Operator Assisted and Event conferencing all with
24 x 7 x 365 live help available.
How mortgage companies are using CallFURST Audio Conferencing
I Branch manager meetings
I Sales training and coaching
I Addressing problems with active loans in the pipeline
CallFURST Web Conferencing can be used to conduct live meetings, perform training,
provide remote help or give presentations via the Internet. In a web conference, each
participant sits at his or her own computer and is connected to other participants via the
internet. CallFURST live help is available 24 x 7 x 365.
How mortgage companies are using CallFURST Web Conferencing
I Borrower presentations
I First time homebuyer webinars
I Software and systems training for employees
We offer:
CallFURST Video Conferencing supports features such as Video Reservations, video
streaming and the latest technology allowing you to connect with end users regardless of
their platform or technology. Video conferencing is key to keeping business connected as
travel budgets tighten and the time we have to get things done is ever-decreasing. Using
Video Conferencing, you can be sure you have access to more personal attention and
training through our team of video experts, the latest in product innovation and proven
service and reliability to ensure your message is successfully communicated.
How mortgage companies are using CallFURST Video Conferencing
I Presentations to large groups
I Educational programs for branch ofces
I Software and systems training for employees
For more details on how CallFURST Conferencing
helps to improve your company's communications,
contact Joel Furst, Esq., President at
888-9-ITS-YOUR-CALL (888-948-7968)
or at jfurst@callfurst.com
Visit CallFURST.com
Lowest Price Guarentee
If we can't meet or beat your
conferencing servicing pricing, I will
give you a $10 Starbucks gift card.
Call us at
888-948-7968
to see how
we can start
saving for you
Call FURST Conferencing
solutions for Mortgage Companies
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decision while maximizing asset value
and remaining in compliance, said
Jeff Coury, president and chief execu-
tive officer of ServiceLink. Our
Commerce Velocity technology, along
with our proven products and servic-
es, eliminates the need for manual
tracking and auditing or reporting in
disparate systems. All loan workout
rules, programs and processes are
maintained through a single wrap-
around application.
For more information, visit www.ser-
vicelinkfnf.com.
XINNIX Offers Comprehensive
Complete Loan Application
Online Class
XINNIX, a
pr ov i der
of interac-
tive online training for mortgage sales
and leadership development programs,
has announced the availability of The
Complete Loan Application class.
This Web-based class ensures loan
officers understand the value of a
complete loan application and
enables lenders to gain more control
of their business.
Having a sound understanding of
the loan underwriting process is
absolutely critical for loan officers
today as a means of ensuring repeat
business. Lending organizations inter-
ested in creating an efficient operations
team, while also mitigating errors in
the loan process, have utilized The
Complete Loan Application class as a
means to accomplish these goals. As
evidenced by a Top Five mortgage
lender sending 600 of its loan officers
nationwide through the course, quality
assurance is top of mind for all mort-
gage executives today.
By equipping loan officers with the
skills and knowledge of the benefits a
complete loan application brings, we
are also creating a desire to systemati-
cally deliver exceptional customer serv-
ice on the front end, said Casey
Cunningham, president of XINNIX. The
Complete Loan Application allows loan
officers to focus on boosting their refer-
rals as well as gaining respect from
their processing teams.
The Complete Loan Application
underscores the six fundamental steps
that deliver success in the loan process:
proper and effective preparation of the
borrower, completion of the critical
elements of the 1003, thorough recon-
ciliation of all borrower documenta-
tion, timely collection of required bor-
rower signatures, communication of
next steps to the borrower and the
organization and preparation of the
loan file for loan submission. Business
growth is nurtured when loan officers
invest the time and effort to accurately
complete the application at the outset.
The Complete Loan Application joins
XINNIX existing family of interactive,
online training programs, including
XINNIX EDGE Online, the mortgage
sales workshop that empowers loan
officers to grow their production; and
XINNIX LEADERSHIP Online, which pro-
vides sales managers strategies in busi-
ness planning, recruiting and retention
of loan officers, coaching skills and sales
force management tactics. In addition
to these programs, XINNIX provides
clients with a host of training services
on a monthly basis for loan officers and
managers.
www.xinnix.com.
GCC Servicing Systems
Launches Electronic
Payment Assistance Module
GCC Servicing Systems,
a provider of mortgage
servicing technology
and solutions, has announced the addition
of its Unapplied Payment Tracking
Module (UPT) to its Professional Services
Suite in order to assist mortgage
bankers and servicers with the process-
ing of electronic payments. The UPT
Module enables servicers to quickly and
accurately handle electronic payment
errors. Through a workflow system, the
payment errors are routed to the desig-
nated departments and employees for
correction. The UPT Module is cus-
tomizable for each companys payment
rules and can also be used to track
errors that come from online bill pay-
ment programs, as well as rejected
manual payments.
As consumers continue to move
their financial management online, it is
important for mortgage loan servicers
to be prepared to handle electronic
payments, said Glenn Liebowitz, presi-
dent of GCC. The Unapplied Payment
Tracking Module was created to help
our clients manage electronic payments
that present processing issues. Errors
typically occur with electronic payment
such as from a Lock Box and our clients
need to cut down on the time payments
sit in limbo waiting to be cashed and
applied. The UPT Module helps stream-
line these payments and assists users in
quickly deciding how the payment
should be processed, thus saving our
clients time and money.
Complete Mortgage Solutions
Introduces Our
REVERSE MORTGAGE
PARTNERSHIP PROGRAM
Become a Reverse Mortgage Partner Today!
Call Samara Gabbay 201-529-1401
or email: samara@nwecorp.com
Work for yourself, not by yourself
For Licensed Mortgage Brokers in: NY, NJ, CT, PA and FL
No HUD Approval Required
72 Hour Broker Approvals
Great YSP Pricing
Will Provide State of the Art Training at Our Location
or Yours
48 Hour Underwriting
Live Help Desk to Assist You Throughout the Loan
Process; Reverse Mortgages Made Simple
Marketing Materials to Help You Sell
Get Paid Within 48 Hours of Funding
Member of NRMLA
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Equal Housing Lender. 2010 Nationwide Equities Corporation. Trade/service marks are the property of Hamilton Management Group and/or its subsidiaries.
Some products may not be available in all states. NMLS Company ID:1401, Licensed Mortgage Banker: CT: License# 12304, FL: License# ML0701076, NJ:
License# L046060, NY: License# B500883, PA: License# 22104
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The Unapplied Payment Tracking
Module is the newest of GCCs stand-
alone modules that also include
Collateral Tracking and Final Docs. The
stand-alone modules are cost-effective
ways for servicers to integrate useful
technology into their existing process-
ing systems.
GCCs G/SERV is a comprehensive
platform that automates all functions
of loan servicing, including loan set-
up, cash management, escrow and
insurance administration, investor
reporting and accounting, default
management and federal and state
reporting.
For more information, visit www.gccservic-
ing.com.
Visionary Apps Releases
Complete Realty Suite 2.0
Smart Phone Apps
Visionary Apps LLC, cre-
ators of innovative
smart phone tools that
aim to improve peoples
lives, has announced the third release
of its suite of real estate-related
smart phone applications (apps),
called the Complete Realty Suite 2.0.
User features have been added and
the apps now run with increased
speed, stability and functionality.
With millions of listings nationwide
per app, Complete Realty Suite apps
have revolutionized the way that
people conduct their home buying
searches, and the way real estate pro-
fessionals connect with and assist
potential homebuyers.
Free to consumers, the suite
includes three separate applications for
download: Complete Foreclosures,
Complete Homes and Complete
Rentals. Within the first week of
release, Complete Realty Suites apps
rose to the top 10 most downloaded
Business Apps in the iTunes App Store.
The suite was released for the iPhone,
iPad and iPod Touch, and has revolu-
tionized the way that people conduct
their home search, and the way real
estate and management professionals
connect with and assist potential
homebuyers/renters.
Complete Realty Suite 2.0 brings
detailed information on new foreclo-
sures to the palm of your hand more
efficiently and effectively, said Dan
Burrus, technology forecaster, busi-
ness strategist and founder of
Visionary Apps. Weve worked with
top technology experts to redefine
our apps to better suit the needs of
the users.
The new features of Completely
Realty Suite 2.0 include: A new inter-
active map that updates listings in
real-time as users pan and zoom; a
customizable search criteria function
that allows users to only see the prop-
erties that match their needs; a
revamped sort feature that ensures
users see the listings that best match
their criteria first; and new high-reso-
lution images and icons for the
iPhone 4.
For more information, visit www.vision-
aryapps.com.
Berkadia to Expand
Products Offerings With
Addition of CMBS Loans
B e r k a d i a
C o mme r c i a l
Mortgage has
announced the
expansion of its commercial real estate
financing options offered through its
nationwide mortgage banking network
with the addition of a new product
fixed-rate loans for inclusion in the new
generation of commercial mortgage-
backed securities (CMBS). The new
product, expected to be available at the
beginning of 2011, will give Berkadias
clients superior access to capital as they
continue to benefit from mortgage
banking expertise and service.
Senior Vice President Joseph
Franzetti will manage the fixed-rate
loan origination program. Franzetti,
formerly with Cohen Financial,
joined Berkadia earlier this year to
establish and manage the companys
relationships with capital markets
lenders.
Berkadias fixed-rate loan program
is unique in the market, said
Franzetti. We are in discussions with
potential capital markets partners,
and Berkadia is poised to be the only
mortgage banking firm providing pro-
prietary capital for CMBS loans. This
gives our clients the best of both
worldsaccess to the capital markets
delivered by local mortgage bankers.
An additional option under devel-
opment is a short-term floating-rate
loan program to provide interim
financing to select multifamily bor-
rowers with pending Fannie Mae or
Freddie Mac executions. The bridge
loan program will be managed by
Berkadias Agency Lending Group
under the leadership of Executive
Vice President John Cannon.
These programs are positive devel-
opments for our clients, said Cannon.
Following more than two years charac-
terized by extremely limited financing
options, Berkadia is pleased to provide
additional choices.
www.berkadia.com.
Wipro Announces
Enhancements to
NetOxygen Cloud LOS
Wipro Gallagher
Solutions (WGS)
has announced that
it has updated its
NetOxygen SaaS loan origination system
(LOS) to remain in full compliance with
the latest industry regulations. The
Whether youre actively searching for a new job or not, dont miss
what could be your next career opportunity. Post your anonymous
resume now to start building a better career in the mortgage industry.
Search the vast number of career possibilities available in the origination, settle-
ment, secondary & servicing areas of the Mortgage Business or create a personal
job alert to be notifed of new jobs that match your search criteria.
Be available for your next career opportunity. Post your
resume at FindMortgageJobs.com-
where employers search for mortgage professionals.
Post your resume. Find a job. Be happy.
39
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LOS has been upgraded to fully comply
with the latest regulations, including
the U.S. Department of Housing &
Urban Developments (HUD) Real
Estate Settlement Procedures Act
(RESPA), Upfront Mortgage Insurance
Premium (UFMIP) for Federal Housing
Administration (FHA) loans, Regulation
Z changes for higher priced loans and
the Federal Reserve Boards Mortgage
Disclosure Improvement ACT (MDIA).
In addition, WGS incorporates new
workflow management features for
retail and broker lending channels.
These are in addition to workflow tools
already in place to support the entire
origination life cycle. Furthermore,
new interfaces to Fannie Maes
Desktop Originator and to Interthinxs
FraudGUARD were integrated.
WGS also made updates to its loan
modification application available
through the NetOxygen platform,
which guides lenders through every
step of the Home Affordable
Modification Programs (HAMP) loan
modification process including pre-
qualification, initial borrower contact,
eligibility, underwriting, the trial peri-
od and the official modification. The
loan modification application now
includes portfolio analytics, automated
waterfall and NPV calculations and
extensive pipeline management and
workflow management.
We developed many of NetOxygens
new features as part of our response to
lenders requests for an LOS that fur-
ther boosts efficiencies in order to max-
imize profitability, said Anil Raibagi,
business head for WGS. We constantly
look to improve our functionality to
simplify the loan origination process
for users.
NetOxygen incorporates a multi-ten-
ant platform where the companys
solutions can run on a single server,
serving multiple customers while keep-
ing proprietary data separate. This
offers significant cost savings to users
and enables each customer to work
with a customized virtual application
instance while ensuring each cus-
tomers loan data is isolated and pro-
tected from other users.
For more information, visit www.gogal-
lagher.com.
planetRE Launches
Integrated CRM and
Social Media Platform
planetRE, a technology provider for
online real estate, has announced
planetRE CM, one of the industrys first
interactive unified client communi-
cation management platforms. The
new SaaS platform consists of
planetRE RealFacean agent-brand-
ed Facebook property search engine;
a next generation CRM integrating
leading social networks like
Facebook, Twitter and LinkedIn, and
others with predictive modeling and
analytics. According to the company,
CRM is still a one-dimensional tool,
featuring e-mail for direct agent-
client relationship management.
CRM should include new network
channels made possible through the
proliferation of social networking
with high consumer engagement.
planetRE CM provides agents and bro-
kers with multi-channel campaigns with
prospects via e-mail, Facebook, Twitter
and instant messaging. Combining pow-
erful backend predictive analytics, it lets
the user determine which campaigns
provide better return on investment
(ROI). CM has provisions for single sign
on with multiple user-defined external
apps like Google Calendar allowing for
the first-time single calendaring and task
management.
Social media has forced its way
into the world of marketing, and its
here to stay, said Subrao Shenoy,
chief executive officer of planetRE.
planetRE CM opens up the idea to
salespeople that relationships with
clients are developed across multiple
platforms through multiple chan-
nels. Having an agent branded prop-
erty search page in Facebook gives
great exposure to agent listing and
services.
We are a strong believer in social
media revolution, said Chatty
Arrieta, chief operating officer of
Partners Trust, a real estate brokerage
firm in Brentwood, Calif. planetRE
CM allows our company the ability to
manage high end clients with these
new channels, giving us a huge com-
petitive edge.
For more information, visit www.planetre.com.
Your turn
invites you to submit any information
promoting new niche loan programs,
new products or any other announce-
ment related to the introduction of a new
program, to the attention of:
New to Market column
Phone #: (516) 409-5555
E-mail: newsroom@nmpmediacorp.com
Note: Submissions sent via e-mail are pre-
ferred. The deadline for submissions is the
1st of the month prior to the target issue.
Comergence is preferred by leading lenders nationwide.
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Ahh yes
the broker
approval desk.
At Comergence, helping lenders holistically manage relationships with their
mortgage broker clients is the most important thing we do. And with FHA
now holding lenders accountable and responsible for approving brokers,
theres no better time than the present to have us show you how we can
help with this important change to your business.
For more information and to schedule an appointment, call 714.740.9000
or visit us at www.ComergenceCompliance.com
Gets you all warm and fuzzy just thinking about having to
approve and reapprove your brokers, now doesnt it?
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Appraisal Management
Company
We are a premier National Appraisal Company since 1970.
We have a complete product line for your entire organization.
We guarantee HVCC and FHA regulatory compliance.
Let our experience work for you. The way valuations should be.
Coester Appraisal Group
7650 Standish Place, Suite 107 Rockville, MD 20855
www.coesterappraisals.com
(888) 485-1999 Ext. 2
Branch Recruitment
Continuing Education
Contact Management/CRM
Branch Manager
Branch Manager
Freedom Mortgage Corporation, The BEST Branch Solution, Period.
Freedom Mortgage Corporation
www.fmbranch.com
info@fmbranch.com
800.220.9498
iServe offers a complete product mix - aggressively priced, with
hassle-free service & turntimes. Branching & Loan Offcer
opportunities available nationwide. For a change, focus on
production, quick closes & a good night's sleep!
iServe Residential Lending
www.iservelending.com
afriedman@iservelending.com
415-298-2500
Be in business for yourself, but not by yourself. Join GSF Mortgage's
Professional Branch Network. Enjoy freedom and stability and reap
the rewards. Signing bonus for Branch Managers, retain 100% of
your commissions. Absolutely NO files fees, NO splits
GSF Mortgage
15430 W Capitol Dr. Brookfield, WI 53005
1-877-494-4448
www.gsfprobranch.com
Find out what Guaranteed can do for you.
Branch Program for Professionals. It's what we do.
Guaranteed Home Mortgage Company, Inc.
108 Corporate Park Drive, Ste 301
White Plains, NY 10604
888-329-GHMC www.joinguaranteed.com
Established in 1993 and headquartered in Waukesha, Wisconsin,
Inlanta Mortgage is a multi-state mortgage banking company com-
mitted to delivering superior service to our branch clients.
For more information, call 262-513-9853 or visit www.inlanta.com.
Inlanta Mortgage
W229 N1433 Westwood Drive, Suite 103
Waukesha, WI 53186
www.inlanta.com 262-513-9853
United Northern Mortgage Bankers......888-600-8808
Limited room available for established Team Leaders and
Licensed Mortgage Originators. Become part of an established
30-year Mortgage Banker with a proven track record and success.
RealEstateBestJobs.com....................201-489-0256
Currently working with various bankers & federally chartered banks.
Seeking established, new branches & Loan Officers Nationally. We
are a top recruiting firm handling all types of mtg positions.
WorkCenter CRM ....................................877.498.6888
A CRM & contact management solution designed for mortgage
professionals. Automated campaigns & LOS synchronization make
WorkCenter an intuitive timesaver for staying in touch with clients.
Church Financing
Church Purchase & Construction $100,000 to $2,500,00
Church Refnance & Cash Out Churches all 50 states
75% of Appraised Value 20 Yr. Fixed Rate
CONCORD CHURCH FINANCE
NATIONWIDE FINANCING FOR CHURCHES
ONLINE Pre-qualify@ConcordAcceptanceCorp.com
800-926-0399 Fax: 858-756-8108
Brokers United ........................................877-710-0948
Consulting & Branch opportunities. Exclusive opportunities with a
top Federally Chartered Bank, Mortgage Banker and/or Mortgage
Banker/Broker Platform. Email Jeff Flees at jeff@brokersunited.net.
Closing Gifts
Increase your Loans,Get the Edge & Generate More Referrals!
Offer your clients a 5 Day 4 Night Cruise certificate for Two to Mexico,
the Bahamas or the Western Caribbean (up to a $1798.00 value) only
when they close a loan with you. Only $159.00 per certificate!!
Cruise4Two-Loan Incentives
1-866-541-8077
www.Cruise4Two.com
Compliance Consultants
The first full-service, mortgage risk management firm
in the country, specializing exclusively in mortgage compliance.
Pioneers in outsourcing solutions for mortgage compliance.
Our Compliance Team Will:
Leverage your existing employees.
Improve your productivity.
Collaborate on projects.
Make the most of your current technology.
Bring innovation to your company.
Be a strong cultural fit.
Free you to focus on your core competencies.
Give you access to world-class expertise.
Lower your total operational costs.
LENDERS COMPLIANCE GROUP
167 West Hudson Street - Suite 200
Long Beach | NY | 11561 | (516) 442-3456
www.LendersComplianceGroup.com
Theres only one avenue to guaranteed appraisal performance!
With a commitment to doing business the RIGHT way, StreetLinks
is bringing real value as a PARTNER, not a vendor.
We attract and retain the best appraisers Our appraisers set
their own fees and our peer-to-peer approach attracts appraisers
that simply wont work for other AMCs
IQ Select proprietary order assignment methodology assigns
based on proximity, service and quality not lowest fee!
100% Manual Quality Control every report is manually
pre-underwritten by a USPAP certifed appraisal underwriter
Certifed compliance with appraiser independence requirements
AND INTRODUCING SCORe - a revolutionary approach to
appraisal validation. Credible 2nd opinions on comp selection
from licensed, local appraisers. Stop Guessing. Start Knowing!
StreetLinks National Appraisal Services
(800) 778-4788
www.StreetLinks.com
sales@streetlinks.com
NMLS approved 20 hour Prelicensing Education
NMLS approved Continuing Education
Live Classroom Instruction, Web Delivery and Private Events
The SAFE-Smart ExamCram, Powerfully Innovative Test Prep
Abacus Mortgage Training and Education
PO Box 780
Summerfield, NC 27358
888-341-7767 www.GetYourEd.com
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Education
North Lake College - Specialized Education In Mortgage Banking.
Earn An Associates Degree in Mortgage Banking From the First Fully
Accredited Mortgage Banking Degree Program in the U.S. For
Information About Our 30 Year Program email:kbaker1@dcccd.edu.
North Lake College
5001 North MacArthur Blvd, Room T-231-C
Irving, TX 75038
(972) 273-3467 http://www.northlakecollege.edu/
Direct Mail
Specializing in Official Snap Packs for Greater Open Rates
Envelope Mailers, Business Reply, Postcards and Much More
Targeted Mortgage Lists with Many Selects
Complete Design, Printing and Mailing Services
Your Complete Mortgage Marketing Solution.
Call Us Today!
(800) 922-9860
www.envisiondirect.net/catalog/mortgage.htm
Document Preparation
Document Preparation (SaaS)
ProClose provides compliant closing documents and software for
Residential Mortgage Lending. Created with closers in mind,
we help make a lenders staff more efficient and supported.
Mortgage Banking Systems - ProClose
1360 Beverly Rd. Ste 200, McLean, VA 22101
800-783-2283 sales@proclose.com
www.ProClose.com
Mortgage Loan Closing Document Preparation & Compliance Services
Fulfillment Services Including Pre-Funding Review & Post-Closing
Interfaces with Leading Loan Origination Software Systems
Foreclosure Loss Mitigation Services
Robertson | Anschutz
800-343-7160
sbertrand@radocs.com
www.radocs.com/info.html
Mortgage Loan Closing Document Preparation & Compliance Software
Loan Documents and Compliance Web-based/SaaS Easy to Use
Intuitive Secure and Reliable Integrates with Leading LOS
Free Setup and Support Extensive Compliance Audits
Docs on Demand
800-343-7160
stephen.bertrand@docsondemand.net
www.docsondemand.info
Errors and Omissions
Insurance
Doc Management
DocVelocity is an end-to-end paperless solution designed to sim-
plify the loan origination experience. Imagine having all your doc-
uments in the loan process as electronic files, all online, from pre-
approval to closing. DocVelocity provides: Fast and easy loan
delivery to any lender Automatic doc sorting, naming and filing
Real-time online document sharing for anyone you choose
Friendly and intuitive user interface No start-up fees, and free
training and support. DocVelocity addresses important compli-
ance issues while giving your office the competitive advantage of
being paperless. It streamlines all aspects of the mortgage
process and most important, it does so in one easy-to-use and
inexpensive package. Its newest version, DocVelocity 2.5, adds
over 50 new features and enhancements to make the best paper-
less office even better. DocVelocity is the flagship product of
Paperless Office Solutions, Inc., a wholly owned subsidiary of
Flagstar Bancorp. Visit www.docvelocity.com to find out more.
DocVelocity
www.docvelocity.com
(877) 362-8356
sales@docvelocity.com
Events
The Expo for Real Estate Professionals"
For ongoing Networking Events throughout the year please visit
www.nycnetworkgroup.com.
NYC Real Estate Expo LLC
Anthony Kazazis - Director
apkazazis@optonline.net www.nycrealestateexpo.com
646.210.2545 914.763.8008
Hard Money/Private Lending
ACC Mortgage, Inc.
932 Hungerford Drive #6 Rockville, MD 20850
240-314-0399 240-314-0336 fax
WeApproveLoans.com
We are doing traditional subprime lending, fix & flip lending and
hard money lending.
Income Verication Services
Advanced Data
(800) 537 - 0458
www.advanceddata.com
verifications@advanceddata.com
Advanced Data is a leading national provider of data services,
streamlining income and employment verification with proprietary
software. Clients can submit 4506-T directly through Encompass360.
Also ask about our AVM and flood services!
CB Malaga Insurance Services LLC......877-245-5887
Insurance broker providing errors & omissions (E&O)
insurance to mortgage brokers and bankers. All loan types.
Available in 22 states. www.CBspecialty.com
Windvest Corporation ............................877-285-0777
Specializing in rehab loans for property investors in So. CA.
Up to 60% ARV, 12.99% fixed rate, 3.5-5 points, 1 yr. term.
Fast & professional service since '94! Visit windvestcorp.com!
Platinum Credit Services, Inc.................631-299-2084
Tax return vertification (4506 tax transcript done in less than
24 hours in most cases). Call Lorenzo Pugliano, President
and CEO at 631-299-2084.
Continuing Education
Time is running out...are you ready?
Pass the S.A.F.E. Act Test, meet your 20 hours of Pre-licensure,
and complete the 8 hours of Continuing Education you need
The Ultimate Test Prep Kit and Test Prep Boot Camps Cover
everything to pass the S.A.F.E. Act Test on your frst try.
20-hour Pre-licensure - Packed with everything to successfully
complete your pre-licensure requirements.
Continuing Education - Exciting, NMLS approved courses that
meet your Continuing Education needs and build your business.
MSS Learning Center
(800) 963-1900
www.MortgageSuccessSource.com
Email: info@MortgageSuccessSource.com
Best Rate Referrals ............................................800-811-1402
Mortgage marketing company with decades of combined expe-
rience providing quality leads, mailers, lists and dialer products.
www.bestratereferrals.com & www.mortgageleads.org
Bookmark this!
Access these
listings online at
nmpmag.com/directory_list
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Title
Intracoastal Abstract Co. Inc. ................516-358-0505
Privately owned & operated full service title insurance agency
in NY, NJ and FL, with affiliates throughout the US & Canada.
Escrow Agent in Florida. www.intracoastalabstract.com.
Retail Branch
Are you a broker/owner or current branch manager looking to
expand your business into Mortgage Banking with FHA capabilities?
Then our PARTNER BRANCH ADVANTAGE program is perfect
for you. We are offering you all the benefts of partnering with an
established lender while still enjoying your independence.
Mortgage Concepts is a nationwide FHA Direct Lender with a 16
year long reputation of excellence.
YOUR SUCCESS IS OUR SUCCESS!
For more information contact THOMAS R. SIRICO, Vice President
of Business Development at (917) 923-1472 or email at
tsirico@mortgageconcepts.com.
We look forward to sharing our services with you!
(800) LOANS-15
www.mortgageconcepts.com
Regulatory/Compliance
Comergence Compliance Monitoring is the mortgage industrys only
Complete broker desk management software and outsource solution
for TPO management and monitoring. We can supplement lenders in-
house management and monitoring resources departments.
Comergence Compliance Monitoring, LLC
630 The City Drive South, Suite 205 Orange, CA 92868
Office: 714-740-9000
www.ComergenceCompliance.com
Secondary Marketing Consulting
Broker to Banker Services.com ..........(951) 746-3075
We complete your applications for approval
Save the time and hassle
contact: brokertobankerservices.com
Loan Incentives
Increase your Loans,Get the Edge & Generate More Referrals!
Offer your clients a 5 Day 4 Night Cruise certificate for Two to Mexico,
the Bahamas or the Western Caribbean (up to a $1798.00 value) only
when they close a loan with you. Only $159.00 per certificate!!
Cruise4Two-Loan Incentives
1-866-541-8077
www.Cruise4Two.com
Loan Origination Systems
Calyx Software, the #1 provider of mortgage solutions is dedicated
to offering reliable and affordable software that streamlines, inte-
grates and optimizes the loan process. Find out how PointCentral
can streamline your business and create compliant processes today.
Calyx Software
800-362-2599
sales@calyxsoftware.com
www.calyxsoftware.com
End-to-end LOS system for multi-channel lending.
PreQual thru Interim Servicing. Includes all back-office functionality;
Underwriting,Secondary Marketing,Post Closing and much more
SaaS, ASP and Client Server delivery options.
Mortgage Builder Software
24370 Northwestern Highway, Suite 200
Southfield, MI 48075
800-460-5040 www.mortgagebuilder.com
Loan Management Systems
Xetus ....................................................877-GO-XETUS
XetusOne is a powerful, easy-to-use loan management system
that streamlines loan processing. Our affordable SaaS applications
are lenders #1 choice for origination, subordination & modification.
42
Jumbo
Sign up with the
Premier Jumbo Lender
www.ingloans.com
877.464.0555, option 2
Move your Jumbos to a better neighborhood. ING Mortgage is
your home for Portfolio loans up to $3,000,000. We offer aggressive
pricing and simple guidelines in all 50 states.
Big Loans. Low Rates. Great Value.
Leads
Our network attract over one million visitors per month. Our paid
lead program as well as our free lender directory will help you con-
nect with targeted new consumer traffc from with high-intent con-
sumers searching online for the right mortgage lender.
MortgageLoan.com
SM
www.mortgageloan.com 877-390-4750
MortgageLoan.com is the largest online directory
for mortgage professionals and a favorite of
consumers shopping for mortgage loans.
Reach affluent and creditworthy consumers who are in-market and
ready to transact. Bankrate is a consumer direct Web site, NOT a
lead aggregator. Qualified leads for every sized budget, and pay
only for performance. No set up fees! No contracts! No risk!
Reach self directed, highly qualified consumers that are actively
searching for mortgage loans
Geo-targeting reach the right consumers in the right markets
Our proprietary Advertiser Portal gives you complete control
over your campaigns, budgets, and performance reports.
YOU determine your daily/weekly/monthly budget
Pay only for consumers who click on your listing
NO cancellation fees
Try us risk-free! Call 561-630-1257
or visit www.bankrate.com/cpcprogram/ for more details.
Internets Leading Consumer Mortgage Marketplace
Attracting over 7 million unique
consumers every month
www.Bankrate.com 561-630-1257
AAA Refi Leads.....AAA Refi Leads.....AAA Refi Leads
Learn how I went from failure to success by mailing cheap refi
letters from home, closed 71 loans & made $248,954.62 last yr.
Ill show you exactly how I did it. Go to: www.Refi-Leads.NET
Wholesale/Correspondent
BankFinancial ..........................................800-894-6900
We have money to lend for apartments, $250M to $2MM, up to
75% LTV. We offer competitive rates, fees & terms. Were com-
mitted to helping you and your clients close the deal. Call us.
The Resource Registry is a directory of lenders (wholesaler or retail that
are recruiting), affiliated services and resources that is seen
by more than 191,181 active Professionals.
Call 888-409-9770 ext 4. to register your company.
If your ad was here, you would be seen by 191,181 Mortgage
Professionals looking for resources to help them in their business.
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Wholesale/Residential Wholesale/Residential
Flagstar Wholesale Lending, a division of Flagstar Bank, is one of
the nations largest wholesale and correspondent mortgage
lenders, providing the technology, products, service and support
that independent mortgage brokers, correspondents, and bankers
need in todays mortgage arena. In the ever-changing environ-
ment of mortgage banking, Flagstar takes pride in accommodat-
ing the specific needs of each customer. At Flagstar, we under-
stand that you need every available advantage to stay ahead of
the competition. This is why we provide multiple technology
options to meet your needs to register, lock, underwrite, close,
fund and deliver your loans. Our wholesale website
(wholesale.flagstar.com) and the loan processing tool Loantrac
provides our customers with the functionality that make it easier
and faster to close loans, saving you time and money! Visit whole-
sale.flagstar.com to learn more.
Flagstar Wholesale Lending
www.wholesale.flagstar.com
(866) 945-9872
WLSC@flagstar.com
We offer competitive pricing and fast turn-times for FHA, VA,
Conventional, and USDA programs without having a retail pres-
ence in the industry. We are a wholesale lender with 22 years of
experience and believe in exceptional service.
Terrace Mortgage
4010 W. Boyscout Blvd., Suite 550
Tampa, FL 33607
866-934-4631 www.terracemortgage.com
Wholesale Reverse Mortgages
For Licensed Mortgage Brokers in NY, NJ, CT, PA and FL
No HUD Approval Required Live Help Desk
Will Provide Training at Our Office or Yours
48 Hour Underwriting - Get Paid Within 48 Hours of Funding
NATIONWIDE Equities
Nationwide Equities Corporation
201-529-1401
www.nwecorp.com
Lykken on Lending is a weekly 60-minute show hosted by mortgage
veteran of 37 yrs, David Lykken, along with special guest Alice Alvey &
Joe Farr as well as featured special guests. Each week we provide our
listeners with up-to-the-minute information of what is happening in
mortgage and housing industry.
Sign-on weekly at
nmpmag.com/lykkenonlending
Call 888-409-9770 ext 4.
to register your company. PROFESSIONAL
.TV
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FEBRUARY 2011
Sunday-Wednesday, February 6-9
Commercial Real Estate
Finance/Multifamily Housing Convention
& Expo 2011
Manchester Grand Hyatt San Diego
One Market Place San Diego, Calif.
For more information, call (800) 793-
6222 or visit www.mortgagebankers.org.
Wednesday, February 16
Florida Association of Mortgage
Professionals Broward Chapter 2011
Annual Trade Show
The Broward Convention Center
1950 Eisenhower Boulevard
Fort Lauderdale, Fla.
6360 or visit www.browardfamp.org.
Tuesday-Friday, February 22-25
Mortgage Bankers Association National
Mortgage Servicing Conference & Expo
Gaylord Texan Hotel & Convention Center
1501 Gaylord Trail
Grapevine, Texas
MARCH 2011
Tuesday-Thursday, March 15-17
2011 Regional Conference of Mortgage
Bankers Associations
Trump Taj Mahal
1000 Boardwalk at Virginia Avenue
Atlantic City, N.J.
7447 or visit www.mbanj.com.
Wednesday, March 16
Maryland Association of Mortgage
Professionals 2011 March Mortgage
Madness
Martins Crosswinds
7400 Greenway Center Drive
Greenbelt, Md.
6262 or visit www.mdmtgpros.org.
Wednesday-Thursday,
March 23-24
National Policy Conference
Hyatt Regency Washington
on Capitol Hill
400 New Jersey Avenue NW
Washington, D.C.
For more information,
call (800) 793-6222 or visit
www.mortgagebankers.org.
Sunday-Wednesday, March 27-30
Mortgage Bankers Associations National
Technology in Mortgage Banking
Conference & Expo
The Westin Diplomat Resort & Spa
3555 South Ocean Drive
Ft. Lauderdale, Fla.
Sunday-Wednesday, March 27-30
Fraud Issues Conference
The Westin Diplomat Resort & Spa
3555 South Ocean Drive
Ft. Lauderdale, Fla.
MAY 2011
Sunday-Wednesday, May 1-4
Secondary Market Conference & Expo
The New York Marriott Marquis
1535 Broadway New York, N.Y.
Mortgage Bankers Associations Loan
Production Conference
The New York Marriott Marquis
1535 Broadway New York, N.Y.
Commercial/Multifamily Servicing &
Technology Conference
Chicago Marriott Downtown Magnificent Mile
540 North Michigan Avenue Chicago, Ill.
Mortgage Bankers Associations Legal
Issues/Regulatory Compliance Conference
Boca Raton Resort
501 El Camino Real Boca Raton, Fla.
OCTOBER 2011
Sunday-Wednesday, October 9-12
Mortgage Bankers Associations 98th
Annual Convention & Expo
The Hyatt Regency
151 East Wacker Drive Chicago, Ill.
To submit your entry for inclusion in the National Mortgage Professional
Calendar of Events, please e-mail the details of your event, along with
contact information, to newsroom@nmpmediacorp.com.
FHA Commissioner Stevens
clears the air: David H. Stevens
details the new RESPA rule and
the role of the broker and
stabilization in housing
http://goo.gl/vZzR4
The future of the mortgage
broker and correspondent
http://goo.gl/PRHpa
FHA issues guidance for lender
approvals
http://goo.gl/yBqOH
Did HVCC lead to more fraud?
http://goo.gl/nI5mc
The HUD hammer hits hard:
FHA withdrawals FHA approval
status from 905 lenders
http://goo.gl/NKgUE
NationalMortgageProfessional.coms
Top Five Articles in 2010
What are these weird boxes?"
QR Codes, when scanned with a mobile device, these unique bar codes
will open articles in a Web browser with the proper reader software.
Now enjoy the top five viewed stories that appeared on
NationalMortgageProfessional.com in 2010 by scanning the
QR Codes with your mobile device.

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