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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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Ours are 35% LESS.
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* Except in NM where rates are set by statute.
OUR RATES THEIR RATES
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SAFE Smart Testing, Education and Licensing: Are You
Certifiable? By Paul Donohue, CRMS
Value Nation: Appraisals, BPOs and AVMs
By Charlie W. Elliott Jr., MAI, SRA
Forward on Reverse: Forensic Counseling Tools for
Whole-Person HECM Lending: Part I
By Atare E. Agbamu, CRMS
Compliant Business Systems: Part I of III By Don DeRespinis
The Trusted Mortgage Professional: Trust But Verify
Understanding the Wholesale Lender Mindset on Broker
Credit By Greg Schroeder
Department of Labors Reversal Requires Creative
Approach to Compensation for Mortgage Loan Officers
By Tim Watson and Barry Miller
The NAMB Perspective
NMP Mortgage Professional of the Month: Michael Maida,
National Sales Director, GSF Mortgage Corporation
Regulatory Compliance Outlook: June 2010Fannie Mae
Revises Quality Control Requirements By Jonathan Foxx
The Secondary Market Overview: The Wild Ride: Just the
Beginning? By Dave Hershman
Successful Seminar Marketing Through Social Media
By Gibran Nicholas
A View From the C-Suite: Social media So Show Me
De Money! By David Lykken
Why is Social Media Integral to Your Media Campaign?
By Josephine Nicholas
Social Media: A New Pillar of the Mortgage Business
By William C. Reichard, MBA
A Bit About Social Media By Brian Bluff
Ask Tommy: Your QC Expert By Tommy A. Duncan, CMT
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MAIN STREET
MAIN STREET
MAIN STREET
MAIN STREET
62+
Visit NationalMortgageProfessional.com.
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A Message From NMP Media Corp.
Executive Vice President Andrew T. Berman
Opportunities abound in social media for mortgage professionals
Its pretty safe to say that social media has deeply impacted the way we communicate on
a daily basis. Through social media outlets, such as LinkedIn, Twitter and Facebook, peo-
ple can get a more personal and up-to-the-minute glimpse into the lives of friends, busi-
ness partners and even the no longer-so-private lives of celebrities and athletes.
Many use the terms social media and social networking interchangeably. I believe
Mark Madsen said it best at last years NAMB/WEST conference in Las Vegas when he said,
Social media is an online platform that allows us to participate in social networks as sites
that use artificial intelligence to help us connect to other like-minded users. Social media
can even be your blog, a platform that allows comments and interactivity with readers.
This month, we shine the spotlight on social media and social networks and how they have become very
effective in helping mortgage professionals market to borrowers and their referral partners.
Our focus starts off with Gibran Nicholas as he shares a four-step plan to Webinar marketing through social
media (want a shortcut to this idea then check out the Webinar mentioned at the bottom of this page).
Gibrans article is followed by David Lykkens latest installment of A View From the C-Suite entitled Social
Media So Show Me De Money! where David lists 24 facts about the growth of social media, followed by
some simple first steps to take on using social networking. Josephine Nicholas shares her ideas on how to cre-
ate your own local celebrity status by sharing your opinions and engaging with others on social networks.
William C. Reichard, MBA shares some basic ways to using social media and actually determine a return-on-
income (ROI). The last contributed piece, A Bit About Social Media from Brian Bluff, discusses the basics in
getting started in the worlds of social media and social networking.
Still not getting your fill of social networking? Then I urge you to log on to our Web site,
www.NationalMortgageProfessional.com, create a profile for yourself and take part in commenting on our
articles with your peers and sharing your thoughts by writing a blog. Dont be shy! If you have opinions on
the state of the industry or issues you feel need to be addressed, do not hesitate to use our site as a launch-
ing pad as you embark into the new world of social media and networking.
Sincerely,
Andrew T. Berman, Executive Vice President
NMP Media Corp.
June 2010
Volume 2 Number 6
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
contained 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.
National Mortgage Professional Magazine
is published monthly by NMP Media Corp.
Copyright 2010 NMP Media Corp.
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CMPS

WEBINAR Financial Planning


With Low Mortgage Rates
Visit NMPMag.com/cfpwebinar for details.
61% of Financial Advisors want to meet you and 81% of their clients want to be referred to you!
What if YOU could be the local housing and mortgage expert
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to generate more qualified leads IMMEDIATELY!
Webinar Title: Financial Planning With Low Mortgage Rates
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Target Audience: You and your current and potential Financial Advisor referral partners
Purpose of this webinar: To educate and motivate Financial Advisors to send you more mortgage referrals!
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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
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The National Association of
Mortgage Brokers
7900 Westpark Drive, Suite T-309 O McLean, VA 22102
Phone: (703) 342-5900 O Fax: (703) 342-5905
Web site: www.namb.org
PresidentJim Pair, CMC
Mortgage Associates Corpus Christi
6262 Weber Road, Suite 208
Corpus Christi, TX 78413
(361) 853-9987
jimpair@namb.org
President-ElectWilliam Howe, CMC, CRMS
Howe Mortgage Corporation
9414 E. San Salvador Drive, #236
Scottsdale, AZ 85258
(602) 200-8100
billhowe@namb.org
Vice PresidentMichael DAlonzo, CMC
Creative Mortgage Group
1126 Horsham Road, Suite D
Maple Glen, PA 19002
(215) 657-9600
michaeldalonzo@namb.org
SecretaryGinny Ferguson, CMC
Heritage Valley Mortgage Inc.
5700 Stoneridge Mall Road, Suite 150
Pleasanton, CA 94588
(925) 469-0100
ginnyferguson@namb.org
TreasurerDon Frommeyer, CRMS
Amtrust Mortgage Funding Inc.
200 Medical Drive, Suite D
Carmel, IN 46032
(317) 575-4355
donfrommeyer@namb.org
Joe Camarena
The Mortgage Source
10120 Southwest Nimbus Avenue, Suite C-7
Portland, OR 97223
(503) 443-1060 O joecamarena@namb.org
John Councilman, CMC, CRMS
AMC Mortgage Corporation
2613 Fallston Road O Fallston, MD 21047
(410) 557-6400 O jlc@amcmortgage.com
Olga Kucerak
Crown Lending
8700 Crown Hill Boulevard, Suite 804 O San Antonio, TX 78209
(210) 828-3384 O olga@crownlending.com
Walt Scott
Excalibur Financial Inc.
175 Strafford Avenue, Suite 1 O Wayne, PA 19087
(215) 669-3273 O waltscott@namb.org
Don Starks
D.C. Starks Mortgage Associates Inc.
141 South Main Street O Bourbonnais, IL 60914
(815) 935-0710 O donstarks@namb.org
Marty FlynnPresident
(925) 831-3520, ext. 224
marty@ccireports.com
Tom ConwellVice President
(248) 473-7400
tconwell@credittechnologies.com
Daphne LargeTreasurer
(901) 259-5105
daphnel@datafacts.com
William BowerDirector
(800) 288-4757
wbower@confinfo.com
Mike BrownDirector
(800) 285-6691
mike.brown@ncogroup.com
Susan CataldoDirector
(404) 303-8656, ext. 204
susancds@cdsusa.net
Nancy FedichDirector
(908) 813-8555, ext. 3010
nancy@cisinfo.net
Sanford (Sandy) LubinDirector
(805) 481-3155
slubin@cbslo.com
Judy RyanDirector
(800) 929-3400, ext. 201
jryan@kroll.com
Tom SwiderDirector
(856) 787-9005, ext. 1201
tswider@creditlenders.com
Donald J. UngerDirector
(303) 670-7993, ext. 222
don@advcredit.com
NCRA Staff
Terry ClemansExecutive Director
(630) 539-1525
tclemans@ncrainc.org
Jan GerberOffice
Manager/Membership Services
(630) 539-1525
jgerber@ncrainc.org
President
Liz Roberts-Fajardo, GML
(702) 498-8020
lvlizrf@aol.com
President-Elect
Gary Tumbiolo, CMI
(919) 452-1529
garytumbiolo@aol.com
Senior Vice President
Sharon Patrick, MML, CMI
(386) 985-1620
howell@cfl.rr.com
Vice President/Northwestern Region
Jill M. Kinsman
(206) 344-7827
jill.kinsman@usbank.com
Vice President/Western Region
Tim Courtney
(760) 792-5620
desertranchrealty@hotmail.com
Vice President/Central Region
Candace Smith, CMI
(512) 329-9040
csmith@wrstarkey.com
Vice President/Greater Northeast
Region
Colleen-Therese McKeever, CMI
(646) 584-8332
colleenmckeever@aol.com
Vice President/Southeastern Region
Jessica Edmonston
(919) 414-3028
jedmon3601@yahoo.com
Secretary
Laurie Abisher, GML, CMI
(661) 283-1262
lauriea@gemcorp.com
Treasurer
Kay Talley, MML
(919) 846-4294
kay.talley@genworth.com
Parliamentarian
Hulene Bridgman-Works
(972) 494-2788
hulene137@yahoo.com
NAMB Board of Directors
National Association of Professional
Mortgage Women
P.O. Box 140218 O Irving, TX 75014-0218
Phone: (800) 827-3034 O Fax: (469) 524-5121
Web site: www.napmw.org
Officers
Directors
2010 Board of Directors
National Board of Directors
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HUD releases April loan mod
report: 13 percent increase
in permanent mods over
Marchs numbers
The U.S. Department of the
Treasury and the U.S.
Department of Housing &
Urban Development (HUD)
have released April data for
the Administrations Home Affordable
Modification Program (HAMP) showing that
permanent modifications for almost
300,000 homeownersan increase of
68,000 or almost 13 percent over March.
New in this months report is information
about servicer-specific conversion rates to
permanent modifications and servicer per-
formance in giving homeowners timely
decisions. The data show that there is wide
variation among servicers in these areas,
further demonstrating the need for trans-
parency regarding servicer performance.
The number of homeowners receiving
significant relief through a mortgage mod-
ification continues to rise, said Chief of
Treasurys Homeownership Preservation
Office (HPO) Phyllis Caldwell. Our focus
now is on improving the homeowner
experience and holding servicers account-
able for their performance. Increased
transparency through more robust report-
ing of servicer-specific data will contribute
handily to those efforts.
As the number of homeowners receiving
permanent modifications continues to
increase, the Administrations comprehen-
sive efforts are making an impact in the
housing markets overall recovery, said FHA
Commissioner and HUD Assistant Secretary
for Housing David H. Stevens. Today, mort-
gage rates remain at historic lows, around
five percent; foreclosure starts are down 27
percent from last year this time; and home
prices and the pace of home sales have sta-
bilized in recent months.
As part of a continued effort to improve
servicer performance, the Administration
hosted a summit with representatives
from participating mortgage servicing
companies to discuss ways to move quali-
fied homeowners into permanent modifi-
cations, improve homeowners HAMP
experience, quickly implement the Second
Lien Modification Program and Home
Affordable Foreclosure Alternatives (HAFA),
and maintain the pace of new trial modi-
fication starts. The Administration also
outlined for servicers its plans to begin
reporting more detailed performance
measures. By July 2010, this reporting will
include the eight largest servicers and will
focus on servicer compliance, program
execution and homeowner experience.
In the coming months, the Administration
will continue to enhance its methods of hold-
ing servicers accountable for their obligation
to provide helpful and timely assistance to
struggling homeowners. While enabling eli-
gible homeowners to modify their mort-
gages is vital to addressing the housing cri-
sis, this program is just one part of the
Obama Administrations multi-faceted
approach to assisting homeowners and
stabilizing the housing market, which also
includes state and local housing agency
initiatives, tax credits for homebuyers,
neighborhood stabilization and communi-
ty development programs, mortgage refi-
nancing, and support for Fannie Mae and
Freddie Mac.
For more information, visit www.finan-
cialstability.gov.
HOPE NOW reports
476,000-plus loan mods
in first quarter of 2010
HOPE NOW, the pri-
vate sector alliance of
mortgage servicers,
investors, mortgage
insurers and non-profit counselors has
announced that its first quarter 2010 data
shows a surge in solutions for troubled
homeowners, including completed loan
modifications, trial modifications and
other workout plans. In all, the industry
completed almost half a million loan mod-
ifications for homeowners (476,192) in the
first quarter of 2010a 29 percent
increase from same quarter last year. These
modifications combine proprietary modifi-
cations with Home Affordable
Modification Program (HAMP) perma-
nent modification solutions, as reported
monthly by Treasury.
In the first quarter of 2010, the
industry completed 312,329 propri-
etary loan modifications and 163,863
permanent HAMP modifications.
Since July of 2007, over 2.88 million
borrowers have been offered modifica-
tions that allow them to stay in their
homes. HOPE NOW and its Alliance
partners recently expanded and
retooled survey data reporting, collect-
ing only proprietary modifications and
Are You Certifiable?
Certification through the Nationwide Mortgage Licensing System (NMLS) allows
mortgage loan originators (MLOs) to use their previously completed education
and state testing to satisfy certain state and national SAFE Act requirements. If
your state is participating and certifies your past completion of education, you
may not have to take the required 20 hours of NMLS-approved pre-licensure ed-
ucation (PE). If your state certifies that you have previously passed a state licens-
ing test, you may not be required to take your states SAFE test component.
Certification does not cover national testing. Every state-licensed MLO must take
and pass the National Test Component by the prescribed state deadline. In short, if you
intend to obtain a state license to originate, you will be taking the national test. If your
state is participating in certification, you may not need to take PE or a state test.
Are you eligible?
If you are an MLO in one of the 35 states that have chosen to participate in
certification, you may be eligible to participate. This includes certification of
state testing and/or education. Certification is optional and some states have
decided not to participate.
If your state has elected to participate, they are required to communicate
with whom they intend to certify. Each state has set deadlines by when you
must have completed your previous education and/or state test in order to
qualify. In order to participate, you must perform certain prescribed tasks to
be certified and recorded in the NMLS.
Your next steps
1. MU4 filing
To begin, you must apply for licensure with one state that will certify your past
education and/or testing. To do so, make a MU4 filing through the NMLS. Ac-
cess the Getting Started: MLOs section on the NMLS Web site for assistance.
2. Determine your states participation
States began submitting certification with the NMLS in May of this year. Check
the Certification State List section of the NMLS site to determine if the state
in which you want to obtain a license in is participating in certification. Once
you have filed your MU4 with that state, the NMLS should notify you that your
certification invoice can be paid.
3. Pay invoice
The invoice must be paid directly by the MLO following the step-by-step in-
structions in your NMLS notification. The costs are:
O Education certification: $15
O Each state test certification: $5
4. Verify
To confirm that you are PE compliant and/or state test component compli-
ant, you can see your records by going to Confirmation of Testing or Educa-
tion Certification Quick Guide section on the NMLS Web site.
A SAFE Smart shortcut
Certification is one SAFE Act shortcut allowed to MLOs by the State Regulatory
Registry (SRR) Board, which approves NMLS policies. By taking advantage of
the certification process, you save the time, money and stress of the 20-hour
PE and state testing requirements. The fly in the ointment is that you will still
be required to take and pass the national test.
Paul Donohue, CRMS is a 23-year industry professional and founder of Abacus
Mortgage Training and Education. Paul served on two NMLS working groups, es-
tablishing the new national education protocols. Go to AbacusMortgageTrain-
ing.com to find out more about your obligations for testing, education and
licensure, or call (888) 341-7767.
continued on page 6
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Appraisals, BPOs and AVMs
It seems that the opinions of those in the
lending community, involving the different
methods, procedures and practices per-
taining to the evaluation of collateral, vary.
Most of us have grown accustomed to
appraisals; however, there are other meth-
ods being used that many of us never have
had reason to become aware of.
In todays evaluation environment, we
have many so-called appraisal techniques,
that the scope of this article cannot con-
tain all of them. Recent technological
advances in computers and the Internet
have been a game-changer in the proper-
ty evaluation arena. There is a much
broader array of products than there has
been in the past. This can be a good thing,
but it is not necessarily good. Each product
has its strengths and shortcomings.
This discussion may not have been as
necessary as it is if we hadnt had the
recent economic crisis and mortgage
meltdown. Over the decades, we have had
other economic downturns, and with
each downturn has come a review of why
there were so many bank failures, foreclo-
sures and other financial setbacks. With all
of the safety nets, just what is it in our sys-
tem that seems to make the banking
industry so vulnerable to risk and loss? In
most every occasion of this type, the
microscope is placed upon appraisers.
Even though I am an appraiser, I admit
that this is a perfectly legitimate area to
explore. Having said that, the industry is
filled with those who suggest that collater-
al should be evaluated in some other way
than the traditional appraisal. Issues, such
as turnaround time, cost and trust, are
always touted as areas where the tradi-
tional appraisal comes up short.
Among the smorgasbord of evalua-
tion techniques available, there are
three that seem to be talked about the
most, and which are probably used the
most. They are as follows, and included
is a brief statement as to their strengths,
weaknesses and primary uses.
1. The traditional appraisal
Strengths ....Highly accurate, uses human
judgment and thorough.
Weaknesses..Higher cost and slower turn-
around time.
Use..............First mortgage originations
and many other alternative
uses.
2. The broker price
opinion (BPO)
Strengths ....Moderately accurate and
uses human judgment.
Weaknesses..Less detail, slow turnaround
time.
Use..............Mostly used in cases of loss
mediation and foreclosure.
3. The automated
valuation model (AVM)
Strengths ....Very fast and economical.
Weakness....No human inspection or
judgment and less certainty.
Use..............Secondary or support to
appraisal or BPO.
The traditional appraisal is the most
thorough and arguably the most accu-
rate. It is generally used when it is impor-
tant to get the most accurate evaluation,
such as in the origination of a loan. It is
the most expensive of the three methods
and takes much longer to obtain than an
AVM, which is available almost instantly.
Most, but not all, appraisals are prepared
after a thorough interior inspection.
Appraisers are not expected to have any
interest in the property and must con-
form to Uniform Standards of
Professional Appraisal Practice (USPAP).
The BPO is prepared by a real estate
broker who has less evaluation training
than an appraiser. It is usually prepared
after an exterior-only or drive-by inspec-
tion. It is not subject to USPAP and is most
often prepared by a broker with an interest
in listing the property for sale. BPOs are not
normally accepted by secondary market
entities, such as Fannie Mae, Freddie Mac
and the Federal Housing Administration
(FHA) when they buy paper.
The AVM has been more widely used
lately, given the availability of more com-
parable data. It uses zero human judg-
ment, rather a series of formulas that
compare the subject to other sales of
properties. There are no property inspec-
tions, and usually it is not proven that the
property actually exists. If there has been
By Charlie W. Elliott Jr., MAI, SRA
a fire that burned the home down or if
there has been a mistake in the address, it
is possible that there is minimal property
value. The AVM is used mostly to support
or to provide additional data when other
collateral assessment tech-
niques are employed as a
second opinion.
Sound confusing? What
does all this mean to the
lender making a decision
relative to a mortgage loan?
First, it is no more con-
fusing than we as people
make it. If it is necessary to
obtain a value indication
immediately at little cost,
then the AVM may be the
best alternative. This
should only be tried pro-
vided that the decision
does not require verifica-
tion of the existence of the
property, an evaluation of
the condition of the property or human
judgment relative to the comparing prop-
erty to comparable sales.
It may also be appropriate to purchase
and use a BPO in evaluating a property
under some circumstances. If the property
is subject to foreclosure, then a broker,
taking a look at it and rendering an opin-
ion as to its market value and what price
range the property will likely fall into, may
be appropriate. The BPO can serve as sup-
port to an appraisal or an AVM can also
serve as support to a BPO. In some cases,
all three may be appropriate.
Finally, if it is important to get the best
and most accurate opinion of value for a
property, choose an appraisal by a licensed
appraiser. The appraiser is trained for the
task, verifies the existence of the property,
typically performs a thor-
ough inspection of a proper-
ty, has access to all of the
most recent comparable
data, has been trained to
offer superior judgment
about a property, prepares a
product that is USPAP com-
pliant and should be an
unbiased party with no
interest in the property.
Appraisers are people, and
they are not perfect. They
can make mistakes and they
sometimes do. Other evalu-
ation methods have their
place, depending upon
their intended purpose, but
should not be considered
an alternative to an appraisal when it is crit-
ical to get the most professional and accu-
rate opinion relative to a property.
If you, like I, want to help prevent anoth-
er mortgage meltdown, support the use of a
thorough appraisal by a licensed appraiser
on all purchase and refinance transactions.
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.
The BPO can serve
as support to an
appraisal or an AVM
can also serve as
support to a BPO.
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the performance of sub-prime residential
mortgage-backed securities (RMBS).
Goldman Sachs failed to disclose to
investors vital information about the CDO,
in particular the role that a major hedge
fund played in the portfolio selection
process and the fact that the hedge fund
had taken a short position against the CDO.
The product was new and complex
but the deception and conflicts are old
and simple, said Robert Khuzami, direc-
tor of the division of enforcement.
Goldman wrongly permitted a client that
was betting against the mortgage market
to heavily influence which mortgage
securities to include in an investment
portfolio, while telling other investors that
the securities were selected by an inde-
pendent, objective third party.
Kenneth Lench, chief of the SECs struc-
tured and new products unit, said, The
SEC continues to investigate the practices of
investment banks and others involved in
the securitization of complex financial
products tied to the U.S. housing market as
it was beginning to show signs of distress.
The SEC alleges that one of the
worlds largest hedge funds, Paulson &
Company, paid Goldman Sachs to struc-
ture a transaction in which Paulson &
Company could take short positions
against mortgage securities chosen by
Paulson based on a belief that the secu-
rities would experience credit events.
According to the SECs complaint,
filed in U.S. District Court for the
Southern District of New York, the mar-
keting materials for the CDO known as
ABACUS 2007-AC1 (ABACUS) all repre-
sented that the RMBS portfolio underly-
ing the CDO was selected by ACA
Management LLC (ACA), a third-party
with expertise in analyzing credit risk in
RMBS. The SEC alleges that undisclosed
in the marketing materials and unbe-
knownst to investors, the Paulson &
Company hedge fund, which was poised
to benefit if the RMBS defaulted, played
a significant role in selecting which
RMBS should make up the portfolio.
The SECs complaint alleges that after
participating in the portfolio selection,
Paulson & Company effectively shorted
the RMBS portfolio it helped select by
entering into credit default swaps (CDS)
with Goldman Sachs to buy protection
on specific layers of the ABACUS capital
structure. Given that financial short
interest, Paulson & Company had an
economic incentive to select RMBS that
it expected to experience credit events
in the near future. Goldman Sachs did
not disclose Paulson & Companys short
position or its role in the collateral selec-
tion process in the term sheet, flip book,
offering memorandum, or other mar-
keting materials provided to investors.
The SEC alleges that Goldman Sachs
Vice President Fabrice Tourre was princi-
pally responsible for ABACUS 2007-AC1.
Tourre structured the transaction, pre-
other non-HAMP Industry solutions, to
show the breadth of workouts the
industry is offering and implementing
for at-risk homeowners.
Data highlights: 1Q 2009 vs.1Q 2010:
O Total workout solutions increased
from 0.71 million to 1.36 million
(+92 percent)
O Modifications completed increased
from 370,440 to 476,190 (+29 percent)
O Foreclosure starts decreased from
728,780 to 691,020 (-5 percent)
O 60 days-plus delinquency increased
from 2.85 million to 3.99 million
(+40 percent)
O Completed foreclosure sales increased
from 201,310 to 291,380 (+45 percent)
At the beginning of 2009, after a
tremendously challenging 18 months
ramping up to meet the crisis, HOPE
NOW and its Alliance partners prom-
ised distressed borrowers that we
would re-double our efforts to help
struggling homeowners, said Faith
Schwartz, executive director of HOPE
NOW. We continue to work collabora-
tively with Treasury, HUD, the Federal
Reserve Banks, regulators and non-
profit counseling agencies to reach bor-
rowers at-risk and implement propri-
etary and government loan programs,
such as Making Home Affordable.
HOPE NOW members are working
aggressively to manage multiple solu-
tions to avoid foreclosure. These
include outreach through support of
(888) 995-HOPE, more than 70 home-
ownership preservation events held
nationwide to date, loan modifications
which include P&I reductions and liq-
uidation alternatives for borrowers
seeking a graceful exit to homeowner-
ship. It is clear our work is far from
over. Alliance members have demon-
strated their commitment to helping
homeowners, their ability to find work-
able solutions and their willingness to
implement multiple intervention solu-
tions to stabilize markets and home-
owners. We will continue to report on
our progress and work with borrowers
via all of the tools at our disposal.
For more information, visit
www.hopenow.com.
SEC charges Goldman
Sachs with fraud tied to
sub-prime mortgages
The Securities and
Exchange Commission
(SEC) has charged
Goldman Sachs &
Company and one of
its vice presidents for
defrauding investors by misstating and
omitting key facts about a financial product
tied to sub-prime mortgages as the U.S.
housing market was beginning to falter.
The SEC alleges that Goldman Sachs struc-
tured and marketed a synthetic collateral-
ized debt obligation (CDO) that hinged on
news flash continued from page 4
For some seniors who take out reverse
mortgages, potential financial problems
are often rooted in non-financial matters.
Slowly, financial problems ooze out of
everyday issues. Soft issues that financial
people may not always appreciate, such as
losing a spouse, living alone, staying far
away from relatives, having difficulty get-
ting up from bed or getting dressed, tak-
ing a lump sum reverse mortgage
advance, relying on reverse mortgage
funds for too many needs, having fre-
quent falls and being in poor health, and
lacking information about private and
public benefits programs for which they
may qualify, among others. Before
long, these issues mushroom into an
inability to meet borrower obligations.
Yes, they become financial problems.
Built around traditional budget
analysis and information about reverse
mortgage alternatives and disclosures
of obvious borrowers risks, the best
conventional Home Equity Conversion
Mortgage (HECM) counseling often miss
these existential issues and their finan-
cial implications, let alone address
them. That is about to change, thanks
to two evolving forensic reverse mort-
gage counseling tools developed by the
National Council on Aging (NCOA): The
Financial Interview Tool (FIT) and
BenefitsCheckUp (BCU).
Any day now, Federal Housing
Administration (FHA) Commissioner
David H. Stevens could issue a Mortgagee
Letter mandating their use in HECM coun-
seling. To understand these vital and
emerging front-end HECM-borrower risk
management tools and to share that
understanding with you, I spoke with Dr.
Barbara Stucki, vice president of home
equity initiative at NCOA. NCOA is one of
four U.S. Department of Housing & Urban
Development (HUD) HECM Counseling
Intermediary organizations, and Dr.
Stucki runs the national reverse mortgage
counseling network for NCOA.
A former researcher for the American
Council of Life Insurers and AARP, Dr.
Stucki directed NCOAs highly-regarded
2005 study on aging-in-place via reverse
mortgages, Using Your Home to stay at
Home. She has testified before Congress
and the Federal Reserve Board, and her
research has been quoted in The New
York Times, Wall Street Journal, USA
Today, BusinessWeek, Fortune Magazine,
Bloomberg News, The Washington Post,
Money Magazine, Kiplingers Personal
Finance Magazine and National Public
Radio, among other media.
What are FIT and BCU, and what are
their purposes?
FIT is an acronym for Financial
Interview Tool. It is a series of addition-
al questions that reverse mortgage coun-
selors will ask their clients in discussion
about immediate financial shortfalls, as
well as their ability to stay at home over
time. These questions help to inform the
decision older homeowners make about
the appropriateness of a reverse mort-
gage for their situation and the loan fea-
tures that might meet their needs.
BCU stands for BenefitsCheckUp. It
is the nations most comprehensive Web-
based service to screen for benefits pro-
grams for seniors with limited income
and resources. Using a simplified version
specifically designed for reverse mortgage
counseling, counselors can quickly screen
more than 1,800 public and private ben-
efits programs from all 50 states and the
District of Columbia. For seniors with lim-
ited incomes, benefits from existing fed-
eral, state, and local programs could be
an important alternative or supplement
to a reverse mortgage.
Are FIT and BCU creations of the
National Council on Aging?
Thats right. We developed and started
using the original questions for FIT when
we began as a HECM Counseling
Intermediary in 2007. Our national reverse
mortgage counseling network is distinctive
because it consists of agencies that prima-
rily serve seniors. From the beginning, we
Forensic Counseling Tools for
Whole-Person HECM Lending: Part I
A conversation with NCOAs Barbara Stucki
continued on page 8 continued on page 8
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THE
MORTGAGE
PROFESSIONAL
TRUSTED
By Greg Schroeder
Trust is imperative in todays lending environment. However,
the adage trust but verify promises to dictate the relationship
between third-party originators and their wholesale lenders.
Brokers need to understand and adapt to the conditions that
define this all-important relationship, not by becoming passive,
but by becoming better informed.
With consumer confidence at an ebb and investors in a state of extreme cau-
tion, and in consideration of the U.S. Department of Housing & Urban
Developments (HUDs) recent memo regarding third-party originator (TPO)
due diligence and management, the onus is on wholesale mortgage bankers to
verify beyond a shadow of a doubt their TPO/broker partners trustworthiness.
It follows, then, that to achieve a competitive advantage and enhance their over-
all appeal as a mortgage lending partner, brokers need to be acutely aware of the
criteria wholesalers are using to evaluate potential TPO partners. They must
also be prepared to negotiate additional consideration when the criteria used
gives an incomplete or misleading picture.
When determining whether a mortgage professional (i.e. a broker) should, in
fact, be trusted, there are several areas of that professionals background that
wholesale lenders typically investigate. Among the most obvious and telling are
the brokers licensing status and loan performance history.
Thanks to the SAFE Act and the creation of the Nationwide Mortgage
Licensing System (NMLS), mortgage broker licensing is now the norm rather
than the exception. However, everyone knows that a brokers licensing status can
change in the blink of an eye. Many lenders are adopting a policy of conducting
ongoing checks of brokers license status, knowing that a spotty licensing histo-
ry could signify big trouble.
Additionally, wholesalers are zeroing in on brokers loan performance histo-
ry. Granted, given the tsunami of foreclosures resulting from the current finan-
cial crisis, a couple of blemishes on an otherwise pristine record will not neces-
sarily tank a potential relationship. However, a history of loans with high EPDs,
FPDs or fraud is a clear indicator to wholesalers that a broker should not be
admitted to their list of trusted mortgage professionals. Therefore, brokers
should be especially diligent in executing advanced quality control protocols on
their loans to weed out the bad loans.
Okay, verifying licenses is reasonable and tracking loan performance makes
sense, but what about personal credit history? Should brokers be surprised that
some wholesale mortgage bankers view their personal credit problems as a huge
red flag? Maybe yes, maybe no. The point is that wholesale lenders are under
pressure on several fronts (investors and regulators are particularly inquisitive
about wholesalers broker relationships) to thoroughly vet and err on the side of
caution when considering a broker relationship. A credit report is a treasure
trove of insight, to be certain. There is common sense in the notion that a debt-
burdened broker is at greater risk than a financially-stable broker, especially if
evidence of the debt burden co-exists with recent loan problems. However,
counterintuitive as it may sound, basing a partnership decision on a brokers
personal credit history alone could be bad businessfor the lender. It is impor-
tant that brokers understand the wholesalers need to know as much as possible,
but in the event a broker believes their credit report is working against them, it
is advisable to respond proactively with a well-articulated explanation.
Of all the mortgage industry, brokers have been, without a doubt, the most
adversely affected personally by the sub-prime meltdown. Both from within and
outside of the industry, experts, critics, politicians and the media have all been
eager to deposit blame primarily on brokers shoulders for a systemic failure. As
Trust But Verify: Understanding the
Wholesale Lender Mindset on Broker Credit
continued on page 12
Federal laws now require every covered
business to have a compliant system in
place at all times. Covered business includes
mortgage brokers and lenders. Mortgage
originators are also required by law to have
compliant systems for the origination of
mortgage loans. When I started my business
15 years ago, I began a mis-
sion of defining and using a
Compliant System. This has
resulted in the establishment
of my companys Business
Operating Principals. One of
the main principals is the
Principals of Compliance.
Principals of
Compliance
According to the many con-
sumer protection laws, a
compliant operation has a
system in place to document
and apply the following:
1. Safe handling of all
documents;
2. Well-documented com-
munications between
all parties;
3. Safe handling of all
electronic documents,
e-mails, faxing and
texts received and sent;
4. Well-documented poli-
cies and procedures;
5. Generally Accepted Accounting
Principles (GAAP)-compliant finan-
cial controls;
6. Training and oversight of opera-
tions; and
7. A Red Flags procedure.
Every mortgage broker or lender
business in the country must do some-
thing about implementing such a sys-
tem. I would like to establish a starting
point by which a small company would
embark on such a mission.
According to federal laws, every
mortgage originator has a legal
responsibility to deter, detect and
defend the information of every per-
son they serve. This requires compa-
nies to closely follow all relevant laws
covering the operation of their busi-
ness. At this time, excluding individ-
ual state laws, there are about 75
major federal laws and regulations
that govern some aspect of the mort-
gage origination business.
The following laws required
increased compliance for businesses
that have access to non-public person-
al information:
USA Patriot Act
(USAPA) 2001
The Patriot Act requires
every company to identi-
fy, through appropriate
documentation, the actu-
al identity of a person.
SAFE Mortgage
Licensing Act
2008
The SAFE Act mandates
that all states enact laws
governing the qualifica-
tions and licensing of all
state-licensed and regis-
tered mortgage loan orig-
inators. The individual
states are in the process
of implementing the spe-
cific requirements over
the course of the coming
year. In addition, the U.S.
Department of Housing
& Urban Development
(HUD) has published the
proposed rule for mini-
mum standards as man-
dated by the SAFE Act in order to facili-
tate the responsibilities placed on HUD
under the Act. State laws passed during
2009 and 2010 place requirements on
all mortgage loan originators to comply
with both federal and state laws. The
education and testing requirements of
the new laws make it clear that an
understanding of the laws, are the min-
imum requirement for entry into the
profession. It is the implementation of
the SAFE Act that provides states with
the authority to enforce compliance
with the laws.
Real Estate Settlement
Procedures Act (RESPA)
RESPA now requires a new Good Faith
Estimate (GFE) and HUD-1 form that
requires lenders to make certain that
the actual costs disclosed on the GFE at
Compliant Business Systems:
Part I of III
By Don DeRespinis
According to federal
laws, every mortgage
originator has a legal
responsibility to deter,
detect and defend the
information of every
person they serve.
This requires compa-
nies to closely follow
all relevant laws cov-
ering the operation of
their business.
continued on page 9
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major concern in 2010. Increased Fair
Lending Exam scrutiny rounded out the
top five with 31 percent of lenders
claiming it as a major concern.
Ryan said one surprising result was
the lack of concern for the multi-state
exams many lenders will be facing by
the end of 2010; with only 15 percent
reporting it as a major concern.
Even though 70 percent of QuestSofts
client base will be subject to multi-state
exams by the end of 2010, it ranked at the
bottom of the survey, Ryan said. The
placement of Truth-in-Lending changes
planned for this summer as the second
highest concern suggests that compliance
professionals are being forced to deal with
one new compliance crisis at a time.
Ryan added that since lenders are so
worried with the next immediate change,
they will have to rely on their compliance
partners to look ahead and prepare for
more long-range compliance changes.
For more information, visit www.quest-
soft.com.
RealtyTrac finds
decrease in foreclosure
activity in April
RealtyTrac, an online
marketplace for fore-
closure properties,
has released its U.S.
Foreclosure Market
Report for April 2010,
which shows that foreclosure filings
default notices, scheduled auctions
and bank repossessionswere report-
ed on 333,837 properties in April, a
nine percent decrease from the previ-
ous month and a two percent decrease
from April 2009. One in every 387 U.S.
housing units received a foreclosure fil-
ing during the month.
There were two important mile-
stones in the April numbers that show
foreclosure activity has begun to
plateaubut at a very high level that
will not drop off in the near future, said
James J. Saccacio, chief executive officer
of RealtyTrac. April was the first month
in the history of our report with an
annual decrease in U.S. foreclosure activ-
ity. Secondly, bank repossessions, or
REOs, hit a record monthly high for the
report even while default notices
dropped substantially on a monthly and
annual basis. We expect a similar pattern
to continue for most of this year, with
the overall numbers staying at a high
level and ripples of activity hitting the
various stages of the foreclosure process
as lenders systematically work through
the backlog of distressed properties.
During the month a total of 103,762
properties received default notices, a
decrease of 12 percent from the previous
month and a decrease of 27 percent
from April 2009when default activity
peaked at more than 142,000.
Foreclosure auctions were scheduled for
the first time on a total of 137,643 prop-
pared the marketing materials, and com-
municated directly with investors. Tourre
allegedly knew of Paulson & Companys
undisclosed short interest and role in the
collateral selection process. In addition,
he misled ACA into believing that Paulson
& Company invested approximately $200
million in the equity of ABACUS, indicating
that Paulson & Companys interests in the
collateral selection process were closely
aligned with ACAs interests. In reality,
however, their interests were sharply
conflicting.
According to the SECs complaint, the
deal closed on April 26, 2007, and
Paulson & Company paid Goldman
Sachs approximately $15 million for
structuring and marketing ABACUS. By
Oct. 24, 2007, 83 percent of the RMBS in
the ABACUS portfolio had been down-
graded and 17 percent were on negative
watch. By Jan. 29, 2008, 99 percent of
the portfolio had been downgraded.
Investors in the liabilities of ABACUS are
alleged to have lost more than $1 billion.
The SECs complaint charges Goldman
Sachs and Tourre with violations of
Section 17(a) of the Securities Act of 1933,
Section 10(b) of the Securities Exchange
Act of 1934, and Exchange Act Rule 10b-5.
The Commission seeks injunctive relief,
disgorgement of profits, prejudgment
interest, and financial penalties.
For more information, visit www.sec.gov.
QuestSoft survey finds
RESPA tops compliance
concerns for second
consecutive year
According to QuestSofts annual compli-
ance survey of lenders, the recently
enacted fee tolerance changes to the Real
Estate Settlement Procedures Act (RESPA)
continue to pose the greatest mortgage
compliance concern in 2010. This marks
the second year that RESPA has held the
top spot among the lenders surveyed.
The poll rated the level of concern
among 464 lenders for 12 regulatory
changes affecting the mortgage industry
this year. Eighty percent of respondents
cited the adjustments to fee tolerance
rules set forth in RESPA as a major con-
cern for lending practices. Rounding out
the top three concerns were Truth-in-
Lending Act (TILA) changes (74 percent
cited major concern) and other RESPA
issues (66 percent cited major concern).
Even though RESPAs new rules have
been active for a few months, lenders are
still concerned with how to comply with
the fee tolerance rules and properly dis-
close loan terms to consumers, said
Leonard Ryan, president of QuestSoft.
Lenders are also closely watching preda-
tory lending laws and new regulations at
the state and local levels.
Changes to federal, state and local
lending laws remained the fourth high-
est concern, with 37 percent of lenders
citing these potential changes as a
news flash continued from page 6
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felt that reverse mortgage counselors
should discuss this loan using a holistic
perspective that looks at factors that could
affect a seniors stay in the home and their
level of dependence on the loan funds.
BenefitsCheckUp was developed and is
maintained by NCOA. Since 2001, more
than 2.4 million people have used this
online tool to find benefits programs that
help them pay for prescription drugs,
health care, rent, utilities, and other needs.
We streamlined both FIT and BCU so
they do not overwhelm our clients and
help them look at the big picture. Seniors
who have received counseling through
NCOA have all gone through this process.
Many have told us how
much they appreciate the
additional discussion. We
have never received any
complaint on this approach
from lenders.
Why is FIT an improve-
ment on existing HECM
counseling model?
For people in dire financial
straits, a traditional budget
analysis can be important
to solve their immediate
problems. HUD also recog-
nizes the long-term conse-
quences of taking a reverse
mortgage, and FIT will help
counselors engage their
clients in this deeper con-
versation. It is a tool to pro-
mote discussion, not just a
checklist. It is a way of get-
ting people, whose judg-
ment may be clouded by
immediate needs, to think
long-term about how they
plan on staying at home so they can get
the full value of this loan.
FIT has counselors ask seniors a series of
questions relating to risk factors that may
not be considered a normal part of the dis-
cussion in taking out a loan. For example,
is the person living alone? Have they had a
recent fall? Do they live in a house with
stairs or other barriers?
By themselves, each of these issues
may not be a risk, but they can add up.
For example, seniors who live alone may
have few other resources so they may be
overly dependent on a reverse mortgage.
If they are also in poor health and their
financial needs exceed their expectations,
they may soon find themselves unable to
fulfill their borrower obligations, such as
paying property taxes, homeowners
insurance and home maintenance. These
types of risks, which we call yellow
flags, are important and should be
added to the overall assessment of a per-
sons needs and goals.
BenefitsCheckUp produces a cus-
tomized report which describes federal,
state and some local programs for which
a client may be eligible; it also provides
contact information to help them apply
for these benefits. For many middle-
income families, the types of public pro-
grams they can get may be modest. But
getting help with programs, such as
weatherization, home repairs or with
Meals-on-Wheels, can make the differ-
ence between being able to stay at
home, and not.
Is HUD going to make
FIT and BCU mandatory
tools for counselors?
That is our understanding.
HUD is partnering with NCOA
and the Administration on
Aging (AoA) to provide the FIT
and BCU as budget tools for
reverse mortgage counsel-
ing. Counselors will be
required to complete a
budget with every client
during the counseling ses-
sion based on information
obtained from the client
using these tools. As part
of FIT, counselors will
review their clients
monthly budget shortfalls,
including extra cash need-
ed for everyday expenses,
health needs, family sup-
port and property taxes.
They will also review their
need for a lump sum
amount to pay off existing
debt, make home modifications, and to
meet other financial goals.
Atare E. Agbamu, CRMS is author of
Think Reverse! and more than 130 arti-
cles on reverse mortgages. Since 2002, he
writes the nationally distributed column,
Forward on Reverse. Through his adviso-
ry, 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 thinkre-
verse.com for his thoughts
and insights on the reverse
mortgage marketplace.
forward on reverse continued from page 6
FIT will help coun-
selors engage their
clients in this deeper
conversation. It is a
tool to promote dis-
cussion, not just a
checklist.
Dr. Barbara Stucki, Vice
President of home equity
Initiative, National Council
on Aging (NCOA)
continued on page 11
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time of application, harmonize with
the Settlement Statement the borrower
sees at closing. In the past, the forms
routinely differed, causing consumer
complaints that led to the new regula-
tions. If the amounts are expected to
differ during the loan process due to
verifiable changes in circumstances,
the lender is required to re-disclose
and issue a revised GFE. At the same
time, all the calculations must be con-
sistent on the system to make certain
the HUD-1 accurately reflects the
changes. Failure for compliance will
require mortgage brokers and lenders
to detect such violations and reim-
burse customers within 30 days of clos-
ing or face penalties and increased
rescission periods. Failure to comply
will increase costs to brokers.
Truth-in-Lending Act (TILA)
The final rule regarding TILA changes
should be published at some point in
2010. The final rule will redefine fees
and charges considered finance charges
for annual percentage rate (APR) pur-
poses, change the TIL Statement con-
tent and format, including amortization
types, prohibit payments to mortgage
brokers or creditor loan officers based
on the interest rate or other loan terms,
prohibit steering consumers to less
favorable loans in order to increase
compensation, require 60-day notifica-
tion of ARM loan changes, require
monthly statements on loans where
negative amortization is possible,
replace home equity line of credit
(HELOC) disclosure, enhance periodic
statements for open-end credit, require
45-day notice for changes to HELOC
terms and change protections regarding
credit line suspensions or reductions.
Fair and Accurate Credit
Transactions Act of 2003
(FACTA)/Red Flags
FACTA directed financial regulatory
agencies, including the Federal Trade
Commission (FTC), to promulgate rules
requiring creditors and financial
institutions with covered accounts to
implement programs to identify,
detect, and respond to patterns, prac-
tices, or specific activities that could
indicate identity theft. FACTAs defini-
tion of creditor applies to any entity
that regularly extends or renews cred-
itor arranges for others to do so
and includes all entities that regularly
permit deferred payments for goods or
services. Accepting credit cards as a
form of payment does not, by itself,
make an entity a creditor. Some exam-
ples of creditors are finance compa-
nies, automobile dealers that provide
or arrange financing, mortgage bro-
kers, utility companies, telecommuni-
cations companies, non-profit and gov-
ernment entities that defer payment
for goods or services, and businesses
that provide services and bill later,
including many lawyers, doctors and
other professionals.
Gramm-Leach-Bliley Act
The Gramm-Leach-Bliley Act imposed
strict guidelines for the security and
disclosure of Non-Public Private
Information (NPPI). Privacy laws
changed dramatically under this new
law passed in 1999. The Gramm-Leach-
Bliley Act imposed strict guidelines for
the security and disclosure of NPPI. The
complete law can be found at
www.ftc.gov/privacy/glbact/glbsub1.htm.
Responsible Information
Management
Every person in your organization must
be held accountable and every organiza-
tion must create a system of Responsible
Information Management. This system
must be in use every day and by every
employee. In order to meet the require-
ments, every company must:
1. Raise awareness
2. Create policies and protections
3. Train its staff
4. Hold all employees and vendors
accountable
5. Monitor and re-train employees on
policy breaches
6. Actively protect customers
7. Detect risks
8. Respond to violations and breaches
In developing a compliant system,
just as in any other process, it starts at
the top. In this case, the top begins
with the Responsible Individual.
Responsible Individuals
The federal SAFE Act, as implemented by
many states, created a new classification
of individuals for employment purposes
in mortgage lending operations. The
Responsible Individual (RI) or a branch
manager is required to have two to three
years of experience in the mortgage
business, within the five years immedi-
ately preceding the application.
compliant business systems continued from page 7
continued on page 12
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Ellie Mae files registration
statement for proposed
IPO and is approved by
Wells Fargo as a
technology partner
Ellie Mae Inc. has
announced that it
has filed a registra-
tion statement on Form S-1 with the
U.S. Securities & Exchange Commission
(SEC) relating to a proposed initial pub-
lic offering (IPO) of shares of its com-
mon stock. The number of shares to be
offered and the price range for the
offering have not yet been determined.
The shares of common stock to be sold
in this offering are proposed to be sold
by Ellie Mae and certain stockholders.
The underwriters of the offering will be
Goldman, Sachs & Company; William
Blair & Company, Keefe, Bruyette &
Woods, Macquarie Capital, Piper Jaffray
and ThinkEquity LLC.
The offering will be made only by
means of a prospectus. When available,
a copy of the preliminary prospectus
relating to the offering may be
obtained from Goldman, Sachs &
Company, 200 West Street, New York,
NY 10282-2198 Attention: Prospectus
Department.
A registration statement relating to
these shares of Ellie Mae common stock
has been filed with the SEC but has not
yet become effective. These shares may
not be sold nor may offers to buy be
accepted prior to the time the registra-
tion statement becomes effective. This
press release shall not constitute an
offer to sell or the solicitation of an
offer to buy, nor shall there be any sale
of the shares of Ellie Maes common
stock in any jurisdiction in which such
offer, solicitation or sale would be
unlawful prior to registration or qualifi-
cation under the securities laws of any
such jurisdiction.
Ellie Mae has also announced that
Wells Fargo Funding has approved
Encompass360, Ellie Maes mortgage
management solution, for e-signing
and e-delivery of disclosure docu-
ments. Users of Encompass360 can now
meet Wells Fargo Funding submission
requirements after not only electroni-
cally delivering disclosure documents
to borrowers, but also having borrow-
ers electronically upload, sign and
deliver disclosures back to the lender
via Ellie Maes WebCenter, a consumer
portal that securely connects borrowers
to their originators Encompass360 sys-
tem.
Wells Fargo Fundings correspon-
dents are able to leverage
Encompass360s robust capacity for
fully auditable, transparent and secure
e-signing and e-delivery of disclosure
documents, says Jonathan Corr, chief
strategy officer for Ellie Mae.
Encompass360 was created to provide
the built-in ability to leverage the
power and speed of the Internet, so all
Wells Fargo Funding needed to do was
provide its best-practice guidelines and
requirements.
In order to comply with Wells Fargo
Fundings certification requirements,
Ellie Mae made several adjustments to
Encompass360s e-signing process. For
the DOL does have the power to with-
draw its prior guidance regarding mort-
gage loan officers, and there is little
doubt that employers now have less
certainty regarding the exempt status
of the position than they did before the
DOL issued its Administrative
Interpretation. For that reason, many
employers in the mortgage lending
industry that have taken
the DOLs new position at
face value, are beginning
to analyze how it will
affect their employees.
In considering whether
to shift loan officers to an
overtime-eligible status,
employers first need to
assess the type of work that
the loan officers are doing.
The DOLs Administrative
Interpretation leaves in tact
a prior finding that loan offi-
cers may meet the outside
sales exemption to federal
overtime pay requirements, if
their jobs require that they
spend a significant portion
of their working time
engaged in sales and pro-
motional activities outside
of their employers office.
Yet, in the modern business
environment, face-to-face
meetings with clients and
prospects have often been
replaced by phone calls, e-
mails and text messages.
For that reason, many
employers will find that their loan officers
spend much of their time working the
phones, online and meeting with cus-
tomers in a stationary office. Even those
lenders that have loan officers who spend
a significant amount of their time in the
field find themselves in an uncertain posi-
tion because the exact amount of time
that an employee must spend outside to
meet the exemption remains unclear.
Thus, many mortgage loan companies
have begun to consider reclassifying loan
officers as non-exempt and eligible for
overtime compensation. This raises a
number of legal and business issues that
these employers must address in order to
ensure the continuing profitability of the
loan officer position, while steering clear
of prohibitions in other provisions of the
state and federal wage laws.
Generally, an overtime-eligible
employee is paid overtime pay at one-
and-a-half times his regular hourly rate.
In addition to the many other new reg-
ulations in the finance industry, mort-
gage lenders now also find themselves
wrestling with an old employment
issue that until recently had been
resolved in their favor. On March 24,
2010, the U.S. Department of Labor
(DOL) announced a drastic change in
the agencys views about how mort-
gage loan officers must
be paid. During the prior
administration, the DOL
issued a number of opin-
ion letters based on spe-
cific facts finding that
mortgage loan officers
are exempt from federal
overtime pay require-
ments. In March, howev-
er, the DOL reversed
these findings and reject-
ed the decades-old prac-
tice of issuing opinion
letters based on specific
factual circumstances.
Instead, the DOL issued
a new Administrative
Interpretation making
the blanket statement
that mortgage loan offi-
cers generally are not
exempt from federal over-
time pay requirements
under the Administrative
Exemption to overtime
paythe most common
exemption applied by
employers to their mort-
gage loan officers, in
addition to many other similar posi-
tions. While the interplay of the vari-
ous federal overtime exemptions can
be complicated, the bottom line to the
DOLs new position is that many mort-
gage loan officers who have long been
paid on a salary plus commission basis
now arguably must be paid overtime
pay for any hours in excess of the 40
that they work in a week.
1
As a result,
mortgage lenders are struggling to find
a way to reconcile the shift in the DOLs
position with the realities of the lend-
ing marketplace.
The first challenge that employers
face is understanding the significance
and impact of the DOLs new
Administrative Interpretation. The DOL
does not have the power to change fed-
eral law merely by issuing interpretive
guidance, and some employers may use
the courts to challenge the validity of
the DOLs reversal in position. However,
even if the DOLs new view is vulnera-
ble to legal challenge, it is likely that
Department of Labors Reversal
Requires Creative Approach to
Compensation for Mortgage
Loan Officers
By Tim Watson and Barry Miller
The DOL does not
have the power to
change federal law
merely by issuing
interpretive guid-
ance, and some
employers may use
the courts to chal-
lenge the validity of
the DOLs reversal in
position.
Tim Watson, Partner, Labor
& Employment Department,
Seyfarth Shaw LLP
continued on page 12
continued on page 21
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$36.5 billion, or 44 percent of the lend-
ing total.
Relatively few commercial mort-
gages were made in 2009, as the reces-
sion curtailed both the supply of and
demand for new mortgage debt, said
Jamie Woodwell, MBAs vice president
of commercial real estate research. As
the recession has receded, origination
volumes have picked up slightly, but
the absolute levels remain low.
Among the key findings are:
O Decreases were seen across most
property types and investor groups,
and were led by declines in loans
O Lending for office properties had the
largest percentage decrease in origina-
tions by property type, followed closely
by retail properties and hotels/motels.
Year-over-year changes are based on
the changes in volume among repeat
reporters that participated in both the
2008 and 2009 surveys.
For more information, visit www.mort-
gagebankers.org.
MARI reports mortgage
fraud still on the rise
Reported incidents of
mortgage fraud and
misrepresentation by
professionals in the
mortgage industry in
erties during the month, a decrease of
13 percent from the previous month
when auction activity peaked with more
than 158,000 properties scheduled for
auction for the first time. Auction activi-
ty was up one percent from April 2009.
Bank repossessions and real estate-
owned (REO) properties hit a record
monthly high for the report in April, with
a total of 92,432 properties repossessed
by lenders during the monthan
increase of one percent from the previ-
ous month and an increase of 45 percent
from April 2009. Bank repossessions were
less than one percent above their previ-
ous peak of 92,182 in December 2009.
Nevada posted the nations highest state
foreclosure rate for the 40th straight
month, with one in every 69 housing units
receiving a foreclosure filing in Aprilmore
than five times the national average. A 57
percent monthly increase in REO activity
pushed the states overall foreclosure activ-
ity up 10 percent from the previous month,
but overall foreclosure activity was statisti-
cally unchanged from April 2009.
Arizona foreclosure activity decreased
nearly 15 percent from the previous
month, but the states foreclosure rate
moved from third highest in March to
second highest in April thanks to an even
bigger decrease in California. One in
every 169 Arizona housing units receiv-
ing a foreclosure filing in Aprilmore
than twice the national average.
Florida posted the nations third
highest foreclosure rate, with one in
every 182 properties receiving a foreclo-
sure filing, despite monthly and annual
decreases in foreclosure activity.
California posted the nations fourth
highest foreclosure rate, with one in
every 192 housing units receiving a
foreclosure filing, and Utah posted the
nations fifth highest foreclosure rate,
with one in every 221 housing units
receiving a foreclosure filing.
For more information, visit www.realty-
trac.com.
MBA finds
commercial/multifamily
originations down 46
percent in 2009
Commercial and
multifamily mort-
gage origination
volumes decreased
46 percent in 2009
among repeat reporters, with mortgage
bankers reporting $82.3 billion of closed
commercial and multifamily loans,
according to the Mortgage Bankers
Associations (MBA) 2009 Commercial
Real Estate/Multifamily Finance: Annual
Origination Volume Summation report.
Commercial banks and savings institu-
tions were the largest single investor
group for commercial and multifamily
mortgages, responsible for $19.8 billion,
or 24 percent, of the closed loan vol-
ume. Multifamily properties were the
dominant property typerepresenting
news flash continued from page 8
intended for: Credit companies;
REITS, mortgage REITs and invest-
ment funds; and Commercial mort-
gage-backed securities (CMBS), col-
lateralized debt obligations (CDO)
and other asset-backed security
(ABS) conduits.
O $15.9 billion of multifamily loans
were closed for Fannie Mae, a 32
percent decline from 2008.
O $15.2 billion of multifamily loans
were closed for Freddie Mac, a 24
percent decline from 2008.
O $5.8 billion of loans were closed for
the Federal Housing Administration
(FHA)/Ginnie Mae, a 168 percent
increase from 2008. Loans for Fannie
Mae and Freddie Mac accounted for
85 percent of the total reported mul-
tifamily volume in 2009. continued on page 15
Photo credit: Stockbyte
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a result, mortgage broker business channels have all but dried up. Some in the
industry were even predicting the end of broker originations less than a year ago.
Given an overall economic malaise and the near decimation of their livelihood, it
shouldnt be any wonder that many surviving brokers did not emerge personally
unscathed, although their practices and their loan performance stats were high.
Taking these circumstances into account could help persuade a potential
wholesale partner that a brokers personal credit score is not wholly, or even
largely, indicative of trustworthiness. In other words, it is incumbent on brokers
to come to their own defense, to professionally explain their record and to per-
suade wholesalers to take a more balanced perspective on subjective trust indi-
cators, such as credit score when, in fact, objective trust indicators such as
licensing and loan performance are more reliable measures.
Another useful strategy for countering wholesalers reliance on brokers personal
financial information is for brokers to shift attention instead to their business credit
report. Clearly, a broker could contend, a business credit report illustrates the financial
stability of the enterprise and is more likely relevant to the wholesale lenders TPO risk
management strategy. Regardless of their personal financial profile, brokers have a
vested interest in the standardization of TPO due diligence criteria and need to advo-
cate for fairness. One way to turn the conversation to the brokers business credit would
be to provide wholesalers with their business credit report.
Does this mean suggesting to wholesalers that they completely ignore a brokers
personal credit report? Absolutely not, that is no way to earn credibility. A brokers
strategy to establish trust must include acknowledging personal credit history as a
viable source of clues as to a particular brokers fidelity. However, it must also
include making a persuasive argument to wholesale partners that placing too much
weight on personal credit history and failing to take business credit into account
could prevent lenders from engaging in relationships with reputable brokers.
Trust but verify just may be a quality brokers best advice to wholesale
mortgage bankers.
Greg Schroeder is president of Comergence Compliance Monitoring. To learn more
about how the Comergence Compliance Trusted Mortgage Professional program
can help, call (714) 495-4720.

THE
MORTGAGE
PROFESSIONAL
TRUSTED
continued from page 7
There are many references to
Responsible Individuals or branch man-
agers, but there is no information on
what a Responsible Individuals actual
responsibilities are. The RI is pretty much
responsible for everybody involved in all
loan transactions that happen in the
branch. The parties can include origina-
tors, processors, customers, appraisers,
lenders, attorneys, title companies, ven-
dors, landlords and the list continues.
They must be responsible for the appli-
cation of the laws, and for the preven-
tion and detection of fraud. They must
be responsible for reports required by
state banking departments, and most
importantly, notifying the banking
department about key changes and
actions by originators, including felonies
and other events, such as bankruptcies
or other conditions.
In Part II of this series, Compliant
Business Systems, I will cover the require-
ments of a Responsible Individual to know
the key components in implementing a
compliant system.
Don DeRespinis is a certified public account-
ant (CPA) and a Certified Residential Mortgage
Specialist (CRMS). He and his wife Deb Killian
have operated Charter Oak Lending Group
LLC, a mortgage broker and correspondent
lender with licenses in Connecticut, New York
and Florida for the past 15 years. They have
also developed a comprehensive and integrat-
ed business operating system used to operate
all aspects of a mortgage origination branch,
including integrated document management,
communication management, accounting,
compliance and controls. For more informa-
tion, visit www.mortgagecenter.net or e-mail
danbury@snet.net.
compliant business systems continued from page 9
One problem created by treating loan offi-
cers as overtime-eligible employees is that
commissions and certain other incentive
compensation will generally be included
in the employees regular rate in calcu-
lating their overtime pay. This may create
unpredictability in loan officers compen-
sation and the profitability of the loans
that they close. Common sense and expe-
rience reflect that loan officers generally
sell and close more loans in
the weeks during which
they work the most hours.
This can create a multiply-
ing effect on the cost of
overtime pay by driving up
the hourly rate of pay dur-
ing weeks in which loan
officers are also working the
largest number of overtime
hours. This means that loan
officers compensation for
each loan closed during
high volume weeks may be
artificially inflated, and the
profitability of those loans
to the lender may decrease
as a result. This dynamic
may be amplified by the
fact that the lending indus-
try is inherently cyclical and
prone to periodic lulls and
surges in activity, with the
result that a lenders entire
workforce will often be
busy at the same time.
Having all employees
become busy at the same
time may, in addition to
creating a companywide
spike in overtime cost, limit
the lenders ability to use
creative or adaptive sched-
uling of employees to limit
the number of overtime hours worked.
Given that profit margins on mortgage
loans have decreased in the current econ-
omy, many lenders view these aspects of
paying overtime to loan officers as a seri-
ous business challenge.
There are many changes to a lenders
business operations that may lessen the
impact of treating loan officers as over-
time eligible. One such measure is to
manage loan officers working hours and
attempt to reduce the number of over-
time hours worked. Lenders that have
always treated the position as exempt
may have had no reason to analyze or
manage those employees efficiency in
the past and allowed them to set their
own schedules without much direction or
oversight. Those employers may find that
there are efficiencies to be gained by hav-
ing managers more actively engaged in
the supervision of loan officers day-to-
day activities. However, employers must
be mindful that this approach may
threaten to decrease a loan officers level
of production or encourage them to
improperly under-report their working
hours, creating additional potential legal
exposure. Another approach would be to
hire additional loan officers or support-
ing employees in order to spread the
work over a larger number of employ-
ees. Increased staffing, of course, comes
with its own costs and may lead to dis-
satisfaction among current employees
who may see their total individual com-
pensation reduced.
In view of the challenges posed by
decreasing the number of overtime hours
that mortgage loan officers
work, some lenders may
consider measures that
they can take to design a
compensation program for
loan officers that preserves
the profitability of the
lenders operations and
increases the predictability
of overtime compensation
costs, while complying with
the DOLs new position
regarding overtime pay
requirements.
One measure that will
reduce the cost of includ-
ing commissions in over-
time pay is to provide a
significant level of hourly
compensation to loan offi-
cers that is independent of
loan volume, in addition
to some commissions on
loans sold or closed. This
approach would reduce
the multiplying effect of
including commissions in
overtime pay for busier
working weeks. The exact
balance between hourly
compensation and com-
mission rates that best
serves to control overtime
costs, while preserving
appropriate incentives for employees,
will vary based on the nature of each
lenders operations.
More innovative employers that are
willing to more fundamentally redesign
the way that loan officers are paid may
move away from traditional commission
formulas tied directly to production of
loan volume and calculated on a week-
by-week basis. For example, a lender
might adopt a quarterly incentive com-
pensation program that takes into
account a variety of performance factors,
such as quality of customer service, cap-
ture rates, timely documentation of
transactions, and promotional activities,
in addition to overall level of production.
If properly constructed, such a compen-
sation program would allow employers
to spread out incentive compensation
across factors that will have less week-
to-week variation than simple produc-
tion and also to average incentive com-
pensation over the weeks in each quar-
ter in a way that blunts the multiplying
effect of the week-to-week variations in
activity. The design of such programs
department of labors reversal continued from page 10
Even those lenders
that have loan offi-
cers who spend a sig-
nificant amount of
their time in the field
find themselves in an
uncertain position
because the exact
amount of time that
an employee must
spend outside to meet
the exemption
remains unclear.
Barry Miller, Associate,
Labor & Employment
Department, Seyfarth
Shaw LLP
continued on page 15
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even during times of massive origination
volumes.
The top fraud incident type in 2009
representing 59 percent of all reported
fraud typeswas application misrepre-
sentation. This is the sixth year in a row it
has topped the list. In second place were
frauds related to appraisal and valuation
misrepresentation, which increased from
22 percent of reported misrepresentation
in 2008 to 33 percent; with an 11 percent
increase, this is the most notable increase
in reported fraud types in 2009.
Additional documented fraud types
included, in order of volume, verifications
of deposit, verifications of employment,
escrow or closing costs, and credit reports.
Overall there has been a slight downward
trend in total application fraud and mis-
representation moving from a high of 67
percent in 2005 to 59 percent in 2009.
Lenders are facing hurdles with com-
pliance, loss mitigation and staving off
additional financial losses due to poor
loan performance, said Denise James,
LexisNexis Risk Solutions director of real
estate solutions and co-author of the
report. This is not to say that mortgage
fraud is going away; it is still a serious
problem, and new trends continue to
emerge. It remains critical for those in the
mortgage industry to reassess their
processes, work together by sharing infor-
mation and reporting incidents of fraud-
ulent activity, and ready themselves for
more complex schemes in order to con-
tinue the fight against mortgage fraud.
These results are further evidence that
lenders need to reconsider who they
engage to perform appraisal assignments,
said Appraisal Institute President Leslie
Sellers, MAI, SRA. The best way to mitigate
real estate valuation fraud is to hire a com-
the U.S. are continuing to climb and
increased by seven percent from 2008 to
2009, according to a new report released by
the Mortgage Asset Research Institute
(MARI), a LexisNexis service. While the
pace has slowed since the 2007-2008
increase of 26 percent, the continued
increase is believed to be attributed to
better industry reporting and policing.
The 12th Periodic Mortgage Fraud
Case Report examines the current state
of residential mortgage fraud and mis-
representation in the U.S. committed
by professionals, based on data sub-
mitted by LexisNexis MARI subscribers.
Florida, ranked number one in 2006
and 2007, has moved back into first place
in the country for mortgage fraud and
misrepresentation after being displaced
in 2008 by Rhode Island. Florida also has
close to three times the expected amount
of reported mortgage fraud and misrep-
resentation for its origination volume.
Rhode Island is not ranked on the top 10
list for 2009 because the states sample
size did not meet the minimum require-
ments set for the survey.
New York moved into second place,
followed by California, Arizona,
Michigan, Maryland, New Jersey, Georgia,
Illinois and Virginia. This is the first
appearance on the LexisNexis Mortgage
Asset Research Institute Report top 10 list
for New Jersey and Virginia.
The data suggests that in 2009 there
was a seven percent increase in the num-
ber of incidents of fraud reported to the
LexisNexis Mortgage Asset Research
Institute on top of the 26 percent increase
reported in 2008, said Jennifer Butts,
LexisNexis Mortgage Asset Research
Institute manager of data processing and
co-author of the report. While this is a
noticeable increase, we believe that mort-
gage fraud is significantly understated,
news flash continued from page 11
involves the balancing of a number of
competing factors, including ensuring
that features designed to control over-
time costs do not create undue cash flow
problems for employees or jeopardize
the employers ability to recruit and
retain top performers. Employers can
take some of the guesswork out of the
process of redesigning compensation
programs through statistical analysis of
historical compensation and productivity
data, in order to better understand their
employees working patterns and com-
pensation expectations.
Employers that are proactive in
responding to the DOLs reversal in its posi-
tion regarding loan officers and overtime
compensation will be in the best position
to avoid costly litigation and may also find
themselves at a competitive advantage in
the marketplace by ensuring that their
compensation practices are well-aligned
with their business objectives.
Tim Watson is a partner in the labor and
employment department of Seyfarth
Shaw LLP in Houston, Texas. He may be
reached by phone at (713) 860-0065 or
e-mail twatson@seyfarth.com. Barry
Miller is an associate with the labor and
employment department of Seyfarth
Shaw LLP in Boston. He may be reached
by phone at (617) 946-4806 or e-mail
bmiller@seyfarth.com.
Footnote
1Many states have their own wage and
hour statutes that have more onerous
overtime requirements. For example, in
California, employers must pay overtime
to non-exempt employees for each day an
employee works in excess of eight hours.
department of labors reversal continued from page 12
continued on page 20
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FDIC and is an Equal Opportunity Lender. All product names, company names and logotypes are servicemarks or trademarks of Emigrant in the
United States and other countries. The information, products and services contained in this advertisement are believed to be correct but may
include inaccuracies, typographical errors and/or omissions. Emigrant does not guarantee the accuracy of the data contained herein. This
information is intended for mortgage and/or real estate professional use only and should not be distributed or presented to consumers or any
other third parties. This is not an offer or guarantee to extend consumer credit. Program guidelines, terms and/or conditions are subject to change
by Emigrant without notice. All loans are subject to submission of a complete application, underwriting review and credit and property approval
by Emigrant. Not all products and/or programs are available in all states and/or localities and/or for all loan amounts. Certain products / program
are offered through third parties. Other restrictions and limitations may apply. New York Licensed Residential Mortgage Lender: Exempt.
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A Look Back at the Past Year in NAMB
A Message From NAMB President Jim Pair, CMC
I cannot believe that 12 months have passed so quickly. It seems like
yesterday that I took the oath of office as president of the National
Association of Mortgage Brokers (NAMB). During this last year, we have
faced many challenges, but these challenges have presented us with
many opportunities to build a better future.
Many of you have stepped forward as volunteers and worked tire-
lessly to ensure our industry remains a viable channel of distribution for the con-
sumer. Through your efforts, you have built a stronger relationship with Congress
and the regulatory agencies. Our relationship with them is better than ever thanks
to the dedication of our volunteers and staff.
I wish I had the space to name all of the volunteers who have worked so hard this
past 12 months. I do want to thank Harry Dinham, Government Affairs Committee Co-
Chair and Mike Anderson, Government Affairs Committee Co-Chair, for their work this
past year. It has been a very busy year in Congress and with the regulatory agencies,
and both Harry and Mike have lead us through this regulatory maze, volunteering long
hours to protect our interests and that of the consumer.
George Hanzimanolis has worked tirelessly with NAMB Enterprises to find new
companies that will not only provide benefits to our members, but will be a
source of new revenue for the association.
John Councilman, chairman of the FHA/VA Committee, has been a star working with
the U.S. Department of Housing & Urban Development (HUD) and the Federal Housing
Administration (FHA) on all the changes that have occurred this last year. If you ever
have a question about HUD or FHA, John is the expert. His knowledge and expertise
has built a close working relationship with these two governmental agencies.
Olga Kucerak, chair of the Membership Committee, stepped in to take over the
committee early in my term. She immediately picked up where she left off from serv-
ing as chair last year, and has guided us through many changes over the past year.
There are so many others who should be recognized, but space just does allow
me the opportunity to give you the credit you each so richly deserve. We all know
who you are and what you have done for the association.
The glue that has held our association together this past year has been the staff of NAMB,
lead by Chief Executive Officer Roy DeLoach. Roy, along with Assistant Director of
Government Affairs Jon Otto, Director of Membership and Marketing Paul Niermann,
Finance Coordinator David Breedlove, and Director of Certification Anika Sallinas need spe-
cial recognition for all they have done and under some very difficult changes that NAMB has
experienced this year. They are truly dedicated to the mission of NAMB and our industry.
Roy has provided the leadership and cohesion that was needed to see us through this year.
Last June at our annual meeting, I presented Roy with the Energizer Bunny
Award. This year, he should receive at least three Energizer Bunnies as he has
done the work of three people and has managed to be everywhere at the same
time. We are very fortunate to have such a dedicated staff. When you see them,
please give them a big thank you for all they do for us.
Congratulations to Bill Howe, our incoming president, and NAMBs 2010-2011
officers and directors as they take office at the annual meeting in June. It will be
an exciting time for all of us as we work with Bill to implement his plans and
objectives for the coming year.
Again, I thank you for the opportunity to have served as your president. It has been dif-
ficult for all of us these last few years. I know there are better times ahead for us. Reading
this means you have survived the worst and proven that you are a true professional. Our
channel of distribution is needed by the industry and the consumer. We will continue our
efforts to strengthen our industry and protect the consumers we serve every day.
Jim Pair, CMC is with Mortgage Associates Corpus Christi and is president of
the National Association of Mortgage Brokers. He may be reached by e-mail at
jimpair@namb.org.
Certification? Certainly!
Time
A Message From NAMB Certifications Committee
Chair Pava J. Leyrer, CMC, CRMS
As I approach this, my last article as Certification Committee Chair of
the National Association of Mortgage Brokers (NAMB), I am amazed at
how quickly time seems to fly by in our daily lives. As we have all been
preparing for SAFE Act Licensing and watching events in our industry
unfold, time seems to be moving more for us than we may expected.
Reflecting on the basic priorities this past year or two has strengthened
some individuals, saw others leave our industry, and still has everyone evaluating
what we should continue to do.
I have seen 33 years of change, but yet one thing has remained constant and that
is the passion I see in those who still fight to maintain the professional independ-
ence to service consumers. It seems that many, especially in our government, view
the past few years as something that could occur again, but they would be wrong
in my opinion.
The circumstances of unlicensed, educated and certified individuals coupled
with the magnitude of greed from Wall Street and lenders is now so tightly regu-
lated that those individuals have moved on. I believe that the majority of us still
here hold our experience and knowledge as a great importance and are extreme-
ly proud of what we do for families and our communities.
It is also now more important than ever to keep our reputations and businesses
above the rest. The integrity and trust mortgage brokers and their loan originators
have displayed is the backbone of what continues to be of great importance in the
financing of the American dream of homeownership. Now, more than ever, the vol-
untary certifications and required licensing of our profession sets us apart from oth-
ers. Set time aside today to become certified. I have seen a difference from it and I
believe you will too.
Thank you for the opportunity to serve you this past year!
Pava J. Leyrer, CMC, CRMS, is president and owner of Heritage National Mortgage
Corporation in Grandville, Mich., and Certifications Committee chair for the
National Association of Mortgage Brokers. She may be reached by phone at (616)
534-4993 or e-mail pava@heritagenational.com.
For more information on the National Association of Mortgage Brokers, visit www.namb.org.
18
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Each month, National Mortgage
Professional Magazine will focus on one
of the industrys top players in our
Mortgage Professional of the Month
feature. Our readers are encouraged to
contact us by e-mail at newsroom@nmp-
mediacorp.com for consideration in
being featured in a future Mortgage
Professional of the Month column.
This month, we had a chance to chat
with Michael Maida, national sales
director of GSF Mortgage Corporation.
Michael has a long history of work-
ing in the mortgage industry, with near-
ly 20 years invested in the industry. His
background includes working with some
of the largest wholesale brokers in the
Wisconsin area. He then went on to
serve in the capacity of an account exec-
utive for lenders such as Countrywide.
His expertise in both the sub-prime and
conforming arena made him one of the
leading AEs in his region, helping loan
originators in expanding their customer
base and knowledge of the industry. He
earned several awards for his accom-
plishments of reaching new highs in
production levels and closing ratios.
Having been able to not only origi-
nate business, but teach others how to
do the same, along with his vast knowl-
edge of the industry guidelines and reg-
ulatory issues continuing to change, led
him to his current position as national
sales director for GSF Mortgage
Corporation. At GSF, he directs a staff of
AEs, as well as gets involved with all
Michael Maida, National Sales Director, GSF Mortgage Corporation
pending legislation and is influential in
implementing legislative changes within
the company. Michael also has been
actively involved with local banks and
credit unions to help them with their
mortgage divisions and implement qual-
ity control within their organizations.
Please tell us how you first got into
the mortgage business.
In 1992, I entered the industry as a loan
originator. After a year or so in the industry,
I was then given the opportunity to manage
branch development. Being involved with
retail for approximately six years, I then
entered the wholesale arena, starting with
a regional lender, which gave me the
opportunity to hone both my personal
underwriting and loss mitigation skill sets
that have proven to be one of the best
things Ive learned from my wholesale
experience. As my experience grew, I was
given the opportunity to work for one of
the largest wholesale lenders at that time.
That experience taught me best practices
in employing analytics to measure busi-
ness partner performance from a prof-
itability standpoint.
Give us a brief history about GSF
Mortgage Corporation.
GSF Mortgage was created in 1995. The
principals of the company, as well as
most of the branch management
team, have worked together over 35
years, going back to a finance compa-
ny that exited the lending arena. GSF
Mortgage opened GSF Funding to fund
and source FHA, FNMA, FLMC, USDA,
VA and conforming products for its
retail division. GSF Mortgage manages
ancillary companies that compliment
the retail platform, from real estate,
title and funding, along with real
estate development.
GSF now offers various solutions for
mortgage companies of all sizes, from
branch management opportunities, to
wholesale programs, to correspondent
programs.
What was the genesis for this all-
encompassing platform?
In 2007, we had a vision of encompass-
ing both wholesale, delegated and non-
delegated correspondent lending to our
funding platform. Our successes in
those arenas were contributed to the
development of stewardship programs
for both wholesale customers develop-
ing FHA lending sponsorship and mort-
gage bankers developing robust corre-
spondent platform.
Over the last two years, our whole-
sale business partners have suffered
substantial headwind from both regula-
tory and market-driven challenges.
Being quick to react to environmental
and economic challenges, we added the
Professional Branch Opportunity to our
product suite. We are welcoming both
existing wholesale customers who we
have matured along the years, as well
new business partners to our retail
branch environment. That has been
extremely successful for both GSF and
the business partners new to banking.
What role does your wholesale sale
account executives play in managing
these platforms?
One of the roles our AEs provide is to ini-
tiate the first line of defense in risk miti-
gation, by holding the business partner
to the highest standard of submission.
They also assist operationally through
aggressive pipeline management. GSF
also provides our account executives with
a professional marketing and public rela-
tions team to assist in vetting potential
clients. My philosophy in getting the
most out of our sales staff is to compen-
sate commissioned employees on the
higher end of the scale. Although our
comp expense percentage may seem
higher than what we deemed acceptable
in the past, what we gain is an increase in
operational effectiveness due to a higher
quality product entering our system. You
take out most of the loan level challenges
most AEs typically deal with, thus freeing
up more time to train our business part-
ners on GSFs policy and procedural effi-
ciencies that help maximize the overall
velocity of submission to consummation.
The end result is this greatly reduces your
cost to produce, which in turn, results in
lower margins necessary to maintain
profitability.
Training our AEs in managing multiple
customer groups (wholesale, correspondent
and retail branch management) insulates
our sales force from a changing landscape
that threatens their livelihood, or second-
ary market appetite which, from time to
time, impacts each business channel.
What are your current efforts given
the unstable environment of mort-
gage lending today?
We have, until most recently, focused on
our existing wholesale customers for
branch opportunities, reaching out
through normal prospecting measures to
deliver the message from our AEs. We now
provide our AEs with a professional mar-
keting and PR team to assist in vetting
potential clients. We have also expanded
our outreach through various vehicles,
including advertising in National Mortgage
Professional Magazine and other outlets.
This message we are trying to deliver again
is to say: No matter what you are, you
have a home with GSF Funding and we are
going to properly back your loan and pro-
vide the tools necessary to be successful in
todays industry.
At GSF, we are able to offer things that
are not typically available on the second-
ary market for the smaller mortgage bro-
kers and mortgage bankers. For a small
correspondent who does $2-$3 million
per month in funding, to be provided live
security pricing, bid ask pricing and bulk
trade transactions is unique and not often
an option for that size of customer. As we
look to increase our servicing portfolio,
we have accomplished that goal through
hedging strategies typically reserved for
the most robust of customers.
No matter what division it is, whole-
sale, retail or correspondent, I think
each one of those provides a very
unique structure that is different than
what our competitors do.
My philosophy in getting the most
out of our sales staff is to compen-
sate commissioned employees on
the higher end of the scale.
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1. Go to www.ruralhomeloan.com
2. Pick a low xed rate for your borrower
3. Enjoy an easy closing, and then relax!
Innovative Rural Financing since 1993
Lending in TX, NM, and OK
Are there any books that have guided
your business philosophy?
I can sum all of our philosophy up with
two great books. One of them is Blue
Ocean Strategy, by W. Chan Kim and Renee
Mauborgne, which we use as our company
mantra ... the simultaneous pursuit of dif-
ferentiation and low cost. To summarize
the Blue Ocean Strategy or BOS, all of our
competitors are sharks, and we are com-
peting for the same customer. You can
resort to lowering your profitability or
increase operational staffing to accommo-
date faster turn times. You can compare
this competition between like companies
to sharks who are out there biting each
other. Pretty soon, we all compete right
into a non-profitable product. One compa-
ny will perform a transaction for a quarter
of a point less, while one will do same-day
closings ... all of those things take away
from profitability within your company.
You tend to follow the leader, so to speak,
when it comes to defining a business-part-
ner relationship.
We thought that moving outside of
this bloody, shark infested ocean and
into the blue ocean, swimming away
and doing something unique, would be
the key to our success.
The second book would be The Fred
Factor by Mark Sanborn, a great book that
defines customer service. If you can adopt
a business model that works around the
BOS and can provide customer service,
similar to what is described in The Fred
Factor, you are really guaranteed success.
Having worked at one of the countrys
top wholesalers, how have you taken
those experiences and business envi-
ronment, and moved it over to the
day-to-day operations of GSF Funding?
I was always in the top five percent
nationally from a production measure
while working with my former employ-
er. The successes that we had as a
wholesale branch directly resulted from
a customer service standpoint. Being a
self-proclaimed workaholic, I felt the
entire team shared the same dedication
to success as I did. We built our compa-
ny from the ground up, with customer
service being paramount to everything
else. If we could duplicate the service
and had increased flexibility and
maneuverability, success was inevitable.
To be honest with you, the only thing
I left behind was the challenge of mak-
ing change when change was due.
Whether it is environmental or econom-
ic, something always changes in the
mortgage industry. The only thing con-
sistent is change. As these issues came
up, such as downpayment assistance
going away, USDA capitalization issues,
the 2010 Good Faith Estimate (GFE) ...
those types of things that are radical
changes to the industry and to be able
make changes operationally on a dime
and quickly disseminate the new policy
or producer to our customer quickly.
To what do you attribute the success
of GSF Funding?
I find our success in beneficially melding
with our business partners. We learned a
lot from the successes of the large national
aggregators, and offered a lot of the tools
we have earned to our business partners,
we liken our company to a speedboat, large
aggregators are too big to adopt flexibility
in policy, they are the ocean liner that is
very slow to move and adapt to change. On
a dime, we are able to create policies and
procedures that aid in our success and to
the success of the wholesaler market. For
that, we feel that we earn some form of loy-
alty out of the broker industry.
Do you feel that brokers are more
loyal these days than they were dur-
ing the times of the industry boom?
Brokers are much more loyal nowadays.
From a competition standpoint, there is
less out there. You can earn business,
buy business or scare someone into
doing business with you. Some of the
larger aggregators employ the scare tac-
tic, rather than earn business from a
service standpoint. The fact that there is
less competition is the number one rea-
son contributing to the loyalty factor.
What specifically does GSF Funding
do to implement a partnership strat-
egy versus just having brokers?
We continually take care of our business
partners by giving them a hand up.
Whether it is creating collateral pieces they
can distribute to their referral sources, to
developing hedging strategies that allow
them to offer more aggressive pricing in a
longer-term lock period. In a purchase
transaction, you are typically dealing with
a 35-40 day lock, and we develop hedging
practices that allow them to fit more com-
fortably into that scenario.
Our ratio of purchases to refis is
extremely high. As a company, we do more
purchases than refis. Weve had a higher
purchase concentration over refis by help-
ing our business partners in developing
their purchase money marketing strategies.
I think that by doing more of a bulk
style transaction, this allows the business
partner the ability to spend more quality
time processing the file and less time
waiting for an underwriter to make a
decision on the file. They know that when
they deliver the file to us, they have guar-
anteed service they can expect. That all
lends to a better customer, higher pull-
through ratio, thus contributing to our
success and it takes out the environmen-
tal roller-coaster of highs and lows.
For those looking to join a growing
company through our professional
branch opportunity, we adopt the phi-
losophy that you can be in business for
yourself not by yourself.
I find our success in
beneficially melding with our
business partners.
No matter what you are, you
have a home wit h GSF Funding
and we are going to properly back
your loan and provide the tools
necessary to be successful in
todays industry.
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munity organizations. The questions
will also be published in a Federal
Register notice requesting public com-
ments, and information on the process
for submitting comments will be
included in that notice.
A well-functioning housing finance
system is critical to the long term stabil-
ity of the housing market, said U.S.
Department of the Treasury Secretary
Tim Geithner. Hearing from a wide
variety of perspectives as we embark on
this process is an important part of
establishing a more stable and sound
housing finance system for the
American people.
The Obama Administration will seek
input in two ways. First, the public will
have the opportunity to submit written
responses to the questions published
in the Federal Register online at
www.regulations.gov. Second, the
Administration intends to hold a series
of public forums across the country on
housing finance reform. Together,
these opportunities for input will give
the public the chance to deepen the
federal governments understanding
of the issues and to shape the policy
response going forward.
This open process will help shape
the future of our housing finance sys-
tem, said U.S. Housing & Urban
Development (HUD) Secretary Shaun
Donovan. The Obama Administration
is committed to engaging the public as
we consider proposals for reforming the
housing finance system in the context
of our broader housing policy goals,
and the best steps to get from where we
are today to a stronger housing finance
system.
This effort is both in keeping with
this Administrations commitment to
openness and transparency and the
Presidents Open Government Initiative.
This initiative represents a major
change in the way federal agencies
interact with the public by making
agency operations and data more trans-
parent and creating new ways for citi-
zens to have an active voice in their
government.
For more information, visit www.regula-
tions.gov.
Your turn
National Mortgage Professional Magazine
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 target
issue.
petent, ethical appraiser. Regardless of
how many of these disciplinary actions
were fraud-related, these figures further
drive home the point that appraiser com-
petence and ethics are vital.
For more information, visit www.lexis-
nexis.com or www.marisolutions.com.
Federal Reserve to con-
sider changes to HMDA
The Federal Reserve
Board has announced
that it will hold four
public hearings, begin-
ning in July, on potential
revisions to Regulation
C, which implements the Home Mortgage
Disclosure Act (HMDA). The act requires
mortgage lenders to provide detailed
annual reports of their mortgage lending
activity to regulators and the public.
Consumers, community and consumer
organizations, mortgage lenders, and
other interested parties will be invited to
participate in the hearings.
The hearings will serve three objec-
tives: The Board will gather informa-
tion to evaluate whether the 2002 revi-
sions to Regulation C, which required
lenders to report mortgage pricing
data, helped provide useful and accu-
rate information about the mortgage
market; the hearings will provide infor-
mation that will help the Board assess
the need for additional data and other
improvements; and the hearings will
help identify emerging issues in the
mortgage market that may warrant
additional research.
The hearings will take place at the
Federal Reserve Bank of Atlanta on July
15, the Federal Reserve Bank of San
Francisco on August 5, the Federal
Reserve Bank of Chicago on Sept. 16,
and the Federal Reserve Board in
Washington, D.C. on Sept. 24.
All hearings will include panel dis-
cussions by invited speakers. Other
interested parties may deliver oral
statements of five minutes or less
during an open-mic question and
answer period. Written statements of
any length may be submitted for the
record.
For more information, visit www.feder-
alreserve.gov.
Obama Administration
seeking public input on
housing reform
The Obama Admin-
istration has released
questions for public
comment on the
future of the hous-
ing finance system, including Fannie
Mae and Freddie Mac, and the overall
role of the federal government in hous-
ing policy. The questions have been
designed to generate input from a wide
variety of constituents, including mar-
ket participants, industry groups, aca-
demic experts, and consumer and com-
news flash continued from page 15
Thursday, June 24, 2010
Friday, June 25, 2010
AAMB welcomes NAMB to beautiful Phoenix!
Come see the new NAMB President and the new
NAMB Board installation, while participating in some
great networking opportunities. State delegates can
also participate in the NAMB Delegate Council Meeting.
Phoenix Airport Marriott

1101 North 44th Street


Phoenix, Arizona 85008 USA
Rooms are $99 per night, and will be honored at the
same rate if you wish to extend your stay.
Hotel Toll-Free: 1-800-228-9290
Visit
www.NAMB.org
for details.
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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
Signing Bonus for Branch Managers
Retain 100% of Your Commissions
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Become part of GSF Mortgages
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Becoming a GSF Pro-Branch
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GSF oers total support:
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federal topics regulations. Courses are
delivered via instructor-led and self-
study online learning courses, class-
room programs, audio conferences,
certifications and more.
We are very excited to partner with
Lenders One and help its members meet
their compliance, underwriting and train-
ing needs, said Dan Thoms, senior vice
president for AllRegs. The companies
comprising the Lenders One membership
want to stay apprised of federal and state
regulatory changes. AllRegs tools, services
and resources support this mission-critical
requirement in the industry.
For more information, visit www.lender-
sone.com or www.allregs.com.
CMPS Institute and
Mortgage Coach create
Certified Mortgage Coach
certification
The Certified Mortgage Coach certification
course was recently created as a joint ven-
ture between the CMPS Institute and
Mortgage Coach to help loan originators
stand out from their competition and
make more effective sales presentations to
clients, prospects, and referral partners.
This is the all-inclusive online train-
ing, testing, and software solution that
the mortgage industry has been wait-
example, the borrower and co-borrow-
er can no longer e-sign simultaneously.
Once one borrower completes and is
confirmed for the e-signing process, the
co-borrower(s) will then be able to start
the next e-signing process. Before bor-
rowers can view loan disclosures and
documents, they must review an e-dis-
closure agreement. This ensures that
the borrower consents to receiving cer-
tain disclosures in electronic format
rather than in paper form. Borrowers
are also required to review each page of
Wells Fargo Fundings disclosure pack-
age before they can e-sign and accept
the terms of the documents.
Borrowers must click on a signature
point at the bottom of each page
before they can proceed to the next
one, and if they try to skip a page, there
are error prompts that inform the bor-
rower that a signature or initial point
was missed, said Corr. This helps
ensure that borrowers review each and
every page of the disclosure package.
For more information, visit
www.elliemae.com.
Lenders One and AllRegs
partner for compliance
solutions
Lenders One Mortgage Cooperative, a
national alliance of independent mort-
gage bankers, correspondent lenders
and suppliers of mortgage products
and services, has announced a partner-
ship with AllRegs, an information
provider for the mortgage industry, as
its newest preferred vendor.
Compliance training and education
are a vital part to the success of any
mortgage banker in this market, said
Scott Stern, chief executive officer of
Lenders One. Consistent modifications
to state and federal legislation, as well
as recurring new regulation, can threat-
en the profitability and the effectiveness
of any lender if not proactively con-
fronted. Teaming with AllRegs, our
members have access to the compre-
hensive knowledge and preparedness
tools they need to be well-informed and
compliant with guidelines at any level.
AllRegs provides a searchable, online
information resource of federal and
state statutes, with analysis, commen-
tary and how-to manuals. Lenders One
members will benefit from AllRegs
diverse compliance training programs
and the ability to access a central repos-
itory for single and multifamily under-
writing and insuring guidelines, as well
as federal compliance laws and regula-
tions. AllRegs Academys compliance
training programs focus on issues such
as the Real Estate Settlement
Procedures Act (RESPA), Truth in
Lending Act (TILA), Home Mortgage
Disclosure Act (HMDA), Federal Housing
Administration (FHA) updates and other
heard on the street continued from page 10
ing for, said Gibran Nicholas, chair-
man of the CMPS Institute, an organiza-
tion that trains and certifies mortgage
bankers and brokers.
The new Certified Mortgage Coach pro-
gram is the mortgage industrys latest solu-
tion to help homeowners and buyers bet-
ter evaluate their mortgage options and
make smart financial choices. Todays con-
sumer does not want to be sold; they want
to be educated, said Nicholas.
CMPS Institute provides the training
and testing, and Mortgage Coach pro-
vides the software and real-time mar-
ket information to help mortgage pro-
fessionals better educate their clients.
Our goal is to help homeowners
continued on page 22
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follow the example of Bayview, Ocwen
and the six other member servicers in
adopting the HOPE LoanPort technolo-
gy to further their loan workout solu-
tion efforts.
For more information, visit
www.hopenow.com.
Wells Fargo expands
its RMBS platform
and authorizes
Encompass360 as
technology partner
Wells Fargo has announced
that it has expanded
its Residential Mortgage-
Backed Securities (RMBS)
platform. The RMBS
group now provides a full suite of advi-
sory, structuring, research, distribution
and trading services to our residential
origination and investing clients and to
Wells Fargo Home Mortgage (WFHM),
the countrys largest residential mort-
gage originator. The group has added a
number of key hires to oversee the
business.
Mike Buttner has been appointed head
of Residential Mortgage Backed Securities.
A 19-year veteran of Wells Fargo, Buttner
was most recently responsible for manag-
ing the hedging activities of WFHMs serv-
icing rights and pipeline/warehouse
assets. He reports jointly to Tim Mullins,
head of fixed income trading and Julie
Caperton, head of asset-backed finance
and securitization, two divisions within
the securities and investment group.
Reporting to Buttner are Doug Lucas,
head of residential mortgage trading,
and Dash Robinson, head of residential
mortgage finance structuring & lending.
Lucas has more than 20 years of experi-
ence managing residential risk and most
recently ran structured products trading
in London for Bear Stearns, where his
team set up a mortgage company in
Europe. Robinson was previously respon-
sible for the execution, surveillance and
restructuring oversight of Wells Fargos
structured finance transactions.
Wells Fargos dominance in mortgage
origination combined with strong investor
demand for all types of residential product
made this an obvious area to expand with-
in Wells Fargo Securities, said Mullins. We
are excited to have the in-house capabili-
ties in place to offer these services to our
mortgage company in addition to our
external originating and investing clients.
For more information, visit www.wells-
fargo.com.
Byte names 10 new
providers to BytePro and
integration with LSSIs
doc prep software
Byte Software has added
10 new service providers
to BytePro, its flagship
loan origination soft-
and buyers create more wealth by inte-
grating the mortgage decision into their
financial plan, said Dave Savage, chief
executive officer of Mortgage Coach, a
technology and information services
provider for the mortgage industry.
All originators seem to be selling the
same products with the same guidelines,
and the industry is rife with confusion in
light of new regulations and turbulent
market conditions, said Nicholas.
Certified Mortgage Coach Graduates are
equipped to help their clients cut
through the confusion and make
informed financial decisions. A mortgage
professional who dedicates the time and
effort to properly educate themselves is
much more qualified, committed, and
equipped to serve the complex needs of
todays homeowners and buyers.
The mortgage is most peoples single
largest debt, and their home is often
their single largest asset, said Savage. A
Certified Mortgage Coach is uniquely
trained to indentify the challenges that
consumers are facing, and clearly
demonstrate solutions that motivate
those consumers to take action.
For more information, visit www.cmpsin-
stitute.org or www.mortgagecoach.com.
HOPE LoanPort comes to
terms with Bayview and
Ocwen
HOPE LoanPort, the Web-
based housing counselor
tool that streamlines sub-
mission of completed
loan modification appli-
cations, has announced
that Bayview Loan Servicing LLC and
Ocwen Loan Servicing LLC have agreed to
use its proprietary technology. The
signing of Bayview and Ocwen moves
HOPE LoanPort closer to its goal of hav-
ing more than a dozen mortgage ser-
vicers using the Web portal by the end
of 2010. The two companies join charter
members American Home Mortgage
Servicing Inc., Chase, GMAC, PNC
Mortgage, Saxon Mortgage Services and
SunTrust Mortgage Inc. The portal also has
commitments from more than 100 coun-
seling organizations across the country.
We have been a member of HOPE
NOW since the beginning and have
been very active in borrower out-
reach, said Jamie Holland, community
relations manager of Ocwen. With the
introduction of HOPE LoanPort into
our arsenal, we will have another way
to communicate with borrowers and
counselors in order to reach decisions
on loan modification documents.
I have personally worked with both
companies for several years and I am
happy that they have given HOPE
LoanPort their support, said Larry
Gilmore, chief executive officer of HOPE
LoanPort. We truly believe that HOPE
LoanPort is the next generation of
effective loan modification solutions.
We hope that other mortgage servicers
heard on the street continued from page 21
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A PRMI Company
If you would like to learn more about our BranchPartner business model, please inquire:
http://FrostMortgage.com/NMP
"Every time we had an issue during our migration, it
was immediately attended to and resolved in a most
professional manner."
- Chuck Murphy, Lewisville, TX
"We felt that the Frost/PRMI business model was the
most competitive out there, as we planned to transition
from brokering to banking. So far, everything has been,
as advertised. Very strong training and branch support.
- Ronnie Ray, Greenwood Village, CO
I've never worked for a lender with such a hard work-
ing closing department. I really appreciate all they do
to help keep my business running smoothly.
- Ryan Morrow, Palmdale, CA
"Greg came out and helped me recruit, just like he
said he would. My numbers are up by 35%."
- Ed Kampf, Bellaire, TX
"I've known Greg since 1992. After an exhaustive
search, I found the Frost/PRMI business model to
be the very best. I should easily double my income
in 2010."
- Robert Shaffer, Lancaster, CA
"I've already recommended Frost Mortgage to a for-
mer colleague. He agrees with me that this business
model works."
- Dan Sampson, Jupiter, FL
Regulation and Licensing Department, Financial Institutions Division #621 Branch License #00621
Multiple National Lenders
RESPA/Compliance Training
Weekly Production Training
Multiple Warehouse Lines
24
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SAVE THE DATE!
Join the 2010 NAMB/WEST Conference
December 4-6, 2010 at the MGM Grand Las Vegas!
Stay tuned for more information in July and visit
www.NAMBWEST.comfor updates.
For more details on Exhibiting and Sponsorship, please contact
Kinsley at 303-798-3664 or registration@kinsleymeetings.com
Exhibitors will receive a complimentary ad in the
December issue of the National Mortgage Professional
Exhibitors and Sponsors
Lender Support Systems Inc. (LSSI) to offer
mortgage document preparation services.
This strategic alliance with Byte
Software assists us in delivering on the
promise of service-oriented architec-
ture, said Cary Burch, president and
chief executive officer of LSSI. The
soon-to-be-released integration of our
loan document preparation services in
BytePro will provide seamless commu-
nication between our companies and
full value-add for our shared clients.
LSSI offers its clients multiple solu-
tions for mortgage closing documents
and preliminary disclosures. All docu-
ments are compliant in all 50 states and
the Virgin Islands. LSSIs next generation
for document preparation solution is
termed Docs3D. It was developed with
the latest technologies in ASP.NET and
C# to create a robust, easy to manage
Web-based application. Docs3D will
seamlessly interface within BytePro by
utilizing such standards as XML and
MISMO. Once Docs3D is interfaced with
BytePro, LSSIs customers will have full
access to compliant loan documents that
can be completed 24 hours a day, seven
days a week, and 365 days a year. The
easy one-click access will simplify the
process and benefit mutual customers.
For more information, visit www.byte-
software.com.
ServiceLink expands to
accommodate growing
loss mitigation operations
ServiceLink, a pro-
vider of origina-
tion and default
services and Fidelity National Financials
national lending platform, has
announced the opening of one new
office in Rancho Cucamonga, Calif. and
the expansion of an existing operation
in Buffalo, N.Y. to support their grow-
ing loss mitigation operations.
Outfitted with ServiceLinks leading
technology and top-level talent from
across the mortgage servicing industry,
both locations will provide flexible,
specialized loss mitigation services to
ServiceLinks lending clients.
ServiceLinks new facilities in Buffalo
and Rancho Cucamonga demonstrate
ServiceLinks commitment to expanding
our loss mitigation services, said Jeff
Coury, ServiceLink president and chief
executive officer. This expansion has
doubled our loss mitigation capacity and
allows ServiceLink to focus on assisting its
clients in managing their troubled assets
as the market continues to stress the
capacity of lenders and servicers.
ServiceLink also has existing loss miti-
gation operations in Kansas and Virginia
that provide outsource loss mitigation
services including Home Affordable
Modification Program (HAMP) process-
ing, HAFA, short sales, and deeds in lieu.
For more information, visit www.ser-
vicelinkfnf.com.
Valligent announces
new appraisal
consulting division
Valligent, a pro-
vider of proper-
ty valuation and risk management solu-
tions, has launched a consulting division
aimed at helping lenders develop strate-
gies for providing accurate, compliant,
and cost-effective valuation solutions. The
new division will be headed up by
Valligent Chief Executive Officer and Chief
Valuation Strategist Jeremy McCarty, a val-
uation expert with extensive experience
providing regulatory compliance, techni-
cal, and marketing advice in the fields of
appraisals and appraisal management.
McCarty is a Residential Certified Appraiser
and holds an SRA designation from the
Appraisal Institute.
Lenders today are looking for more
comprehensive answers to their valuation
needs, and theyre reaching out to com-
panies like ours for help, McCarty said.
Our new consulting practice is a direct
response to this demand. Whether or not
a lender chooses our companys products,
we can help create and implement collat-
eral strategies that enable them to quick-
ly choose the correct valuation solution
for every property, every time. We can
also help lenders take their existing collat-
eral strategies one step further, protecting
them against loan failures, noncompli-
ance and wasted resources.
Valligents new consulting services
are available for collateral policy and
process improvement; identifying
ware solution. The new service providers
offer a range of real estate settlement serv-
ices, from credit reporting to appraisal serv-
ices to flood determination. The new serv-
ice providers in BytePro are: Accurate
Financial Services (credit reporting),
AppraiserLoft (appraisal valuation), Cal
Coast Credit Reports (credit reporting),
KCB Information Services (credit report-
ing), Credit Information Systems (credit
reporting), Credit Data Corporation
(credit reporting), Document Express
(flood determination), LPS Flood (flood
determination), StreetLinks National
Appraisal Services (appraisal valuation)
and 1 Source Data (credit reporting).
The new partner interfaces were
added using ByteLink, Byte Softwares
partner program, which uses standard-
ized Mortgage Industry Standards
Maintenance Organization (MISMO)
transactions to communicate informa-
tion from BytePro to the service
provider. The interfaces allows for two-
way communication so that the com-
pleted documents, such as appraisal
reports, are accessible directly from
within BytePro. ByteLink also allows for
instant deployment of newly developed
interfaces to the BytePro user base,
eliminating the need for the end user
to manually update their software.
Byte also announced a partnership with
heard on the street continued from page 22
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expectations for flexible and comprehen-
sive functionality. PowerSite is very user-
friendly, and it can be tightly integrated
with LoanQuestwhich eliminates
redundant data entry. Ultimately,
PowerSite helps our clients position them-
selves to expand their market share.
For more information, visit www.mort-
gagebot.com or www.mortgageflex.com.
FHA to accept DocuSign
for real estate contracts
nationwide
DocuSign, an
o n- de ma nd
electronic sig-
nature solutions, has announced that
e-signed third-party documents,
including real estate contracts, are now
being accepted by the Federal Housing
Administration (FHA). DocuSign spear-
headed an industry-wide effort to
move the FHA to formally recognize e-
signed third-party documents. The
April 8, 2010-dated FHA Mortgagee
Letter is the first in what is expected to
be a series of responses to this initia-
tive. With this policy statement from
the nations largest mortgage insurer,
real estate professionals can use
DocuSign to get real estate contracts,
addenda and other documents signed
electronically, and their buyers can
apply for FHA insurance with confi-
dence.
We commend FHAs action today.
By clarifying its position on electronic
signatures, the process of buying, sell-
ing and financing of homes across the
country will be greatly improved, said
Ken Moyle, chief legal officer at
DocuSign. Buyers, sellers and agents
can use DocuSigns online process to
eliminate the time, expense and envi-
ronmental impact of printing, deliver-
ing and signing large stacks of paper
documents, and mortgage lenders can
take comfort in knowing that
DocuSigns e-signature process is
designed for legal compliance in all 50
states and is fully evidenced by a com-
prehensive audit trail.
Real estate agents can quickly access
the DocuSign e-signing service from
any laptop with Internet access, drag
appropriate risk tolerance; collateral
underwriting; fraud detection and pre-
vention; automated valuation (AVM)
product analysis, testing and imple-
mentation; vendor management; non-
performing loan evaluation; portfolio
evaluation; and regulatory, HVCC and
USPAP compliance. For a limited time,
Valligent will provide initial off-site
consultations with lenders and ser-
vicers, including a brief report of its
findings, at no cost.
For more information, visit www.valli-
gent.com.
Mortgagebot forms
referral alliance with
MortgageFlex
Mortgagebot LLC
has announced
a new referral
alliance with MortgageFlex Systems Inc., a
provider of loan origination software
(LOS) systems to mortgage lenders
nationwide. Under the terms of the
agreement, MortgageFlex will recom-
mend Mortgagebots integrated, multi-
channel mortgage origination platform
to its clients and prospects as a pre-
ferred solution.
Mortgage lenders are increasingly
looking for ways to increase lending
volume and reduce costs all while
delivering a better borrower experi-
ence, said Dan Welbaum, chief mar-
keting officer for Mortgagebot. And
theyre finding that our advanced
mortgage point-of-sale solutions deliv-
er those results. Our alliance with
MortgageFlex gives their customers
more convenient access to the
advanced technology they need to
grow their businesses in todays com-
petitive mortgage market.
As an industry veteran, MortgageFlex
has a unique business perspective,
said Craig Bechtle, executive vice presi-
dent and chief operating officer for
MortgageFlex. Weve seen many ven-
dors come and go, so we choose our
partners carefully. Were confident that
this alliance will benefit both of our
organizations.
The new alliance gives MortgageFlex
clients ready access to mortgage POS
tools from Mortgagebot that can help
them serve borrowers better, increase
application volume, and maintain full
regulatory compliancewhich of are all
mission-critical business requirements
in todays turbulent marketplace. In
addition, MortgageFlex clients that
license PowerSite have the option to fur-
ther boost efficiency by implementing
automated integration software, which
enables PowerSite application data to be
automatically transferred to the
LoanQuest Residential Lending
Systemalso known as LoanQuest.NET.
We consider our clients long-term
partners, said John McCrea, vice presi-
dent, director of business development at
MortgageFlex. This alliance gives them
room to grow and a way to extend their
reach through a consumer-facing solution
that requires minimal time and effort to
set up and maintain. Our alliance with
Mortgagebot helps us fulfill our clients
W E A R E R E M N W H O L E S A L E
These days, not many mortgage companies
are talking product. Naturally, REMN has FHA,
VA and Conventional solutions to fit the needs
of your customers. But, at REMN, our most
valuable product is our people. The REMN
Sales and Operations teams give you and
your loans the time and attention you
deserve. Even better, at REMN, same-day
approvals are guaranteed.* You can rely on us
to get the little, yet vital, things taken care of
on time. Its time to get to know our people.
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
The difference
is we care.
continued on page 26
26
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information that incorporates borrower
data as well as property and economic
data to more accurately predict loan per-
formance.
Retreat Capital Managements pre-
dictive modeling services were created
for lenders and servicers that want to
implement targeted mortgage restruc-
turing, retention and originations. This
service, which is fully configurable,
integratable and flexible, offers
improved service scoring and early
warning indicators for mortgage valua-
tion models, while ensuring that any
chosen alternative solution is successful
on a net present value basis.
One of the big problems in loss mit-
igation is that lenders and servicers have
been relegated to a reactive, wait-and-
see stance when it comes to delinquen-
cies and foreclosures, said Arvin Wijay,
chief executive officer of Retreat Capital
Management. Accessing the risk level of
mortgages gives lenders the power to
determine the appropriate solution.
This type of proactivity would make a
huge impact on not only the number of
defaults and foreclosures, but also the
speed in which cases get handled.
For more information, visit www.retreat-
capital.com.
Mortgage Professionals
to Watch
O Luanne Cruse has joined Georgia
Mortgage Professional Magazine,
the Official Publication of the
Georgia Association of Mortgage
Professionals (GAMP) as a regional
account executive.
O Rene F. Rodriguez has been named
and drop familiar yellow StickEtabs
onto the contract and send the enve-
lope. The recipient immediately
receives an email notification that can
be accessed through a computer or any
Web-enabled mobile device, including
Apple iPhone, RIM BlackBerry, Google
Android, Windows Mobile, adopts an e-
signature and signs the document.
Once completed, an e-mail notification
is sent to all parties with a link to the
final executed document. The result is a
legally binding, fully ESIGN-compliant
document supported by a comprehen-
sive audit trail.
As on-demand software-as-a-service
(SaaS), DocuSign requires no additional
software or hardware purchases and no
downtime for training.
For more information, visit
www.docusign.com.
Retreat Capital
implements AnswerMines
analytic software for loss
mitigation
Retreat Capital
Ma na g e me nt
Group, a provider
of loss mitigation and portfolio manage-
ment products and other services for
lenders, servicers, asset managers and
investors, has deployed AnswerMines
analytic software to power its predictive
modeling services for mortgage lenders
and servicers. By utilizing the compa-
nys powerful predictive modeling serv-
ice, lenders and servicers can proactive-
ly determine risk levels for mortgage
loans and take decisive action to pre-
vent delinquencies, defaults and fore-
closures, rather than reactively respond-
ing to troubled loans after the loan is
already at risk.
Theres been a huge shift in the way
mortgages are evaluatedweve moved
from a property-centric approach to focus-
ing much more on the borrower, which is
exactly why lenders need to use the appro-
priate analytics said Stuart Cornew, man-
aging director for AnswerMine. Whether
evaluating entire portfolios or individual
loans, AnswerMine provides bottom-up
heard on the street continued from page 25
SAVE THE DATE!
Mortgage Brokers and Loan Originators
Attend the 2010 NAMB/WEST Conference
December 4-6, 2010 at the MGM Grand Las Vegas.
Stay tuned for more information in July and visit
www.NAMBWEST.comfor updates.
NAMB/WEST
Fannie Mae has announced revisions to its Selling Guide for Lender Quality
Control Standards
1
by issuing an update on March 29, 2010 as part of its Loan
Quality Initiative (LQI).
2
The LQI identified policies, processes, and technological
enhancements involved in originating mortgage loans to Fannies underwriting
and eligibility standards, with the further goal of mitigating repurchase risk. One
consequence of the LQI was a substantial revamping of Fannies quality control
(QC) policies specified in Part D of the Selling Guide.
3
The ostensible purposes of
the revisions are primarily to update outdated policies and create more compre-
hensive audit findings.
4
The new quality control requirements affect all lenders
that deliver mortgage loans to Fannie Mae for purchase and therefore, by exten-
sion, virtually all residential mortgage originators that originate conventional
mortgage loans.
Effective: July 1, 2010
Highlights of changes
There are eight areas that have undergone change:
1. Lenders must have written procedures for approving third-party originators
and management procedures for third-party originations (TPOs).
2. Revisions have been made to the QC process and the QC plan.
3. Revisions have been made to outsourcing the QC audit.
4. There is a new requirement for a pre-funding QC review.
5. Revision to the sampling methodology and the timing of selection and comple-
tion of the post-closing QC audit.
6. Revision to the post-closing review process.
7. Update to Fannies Mortgage Loan File Document Submission Requirements.
8. New requirement pertaining to the QC audit process.
Lets take a brief look at these important requirements.
Outline of LQI requirements
1. Accountability for third-party originations
5
O Written procedures for the approval of third-party originators
O Review of specific documents (i.e., financial statements, licenses)
O Quarterly reviews of third-party-originated loans
2. QC process and plan
6
O Defines standards and establishes processes, as well as controls, for originations
O Provides a higher level of specificity
3. Outsourcing the QC audit
7
O Establish a process to review the QC auditors work and procedures
O Determine the QC auditors knowledge and competencies
O Codify policies and procedures of the auditors review methodologies
continued on page 30
Fannie Mae Revises
Quality Control Requirements
continued on page 29
Luanne Cruse
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Mortgage Training and Education
Dont let the
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Entitle Direct releases
new guide for
comparison shopping
Entitle Direct has
created an infor-
mational guide to help consumers ben-
efit from the new Good Faith Estimate
(GFE). This is the first in a series of
guides from the industry innovator to
help demystify real estate financing
and empower consumers to take con-
trol of the mortgage closing process.
The new GFE, which went into effect on
Jan. 1, 2010, encourages consumers to
first shop and then compare fees from
various lenders before choosing a mort-
gage. It helps consumers understand
what services they can shop for, so they
not only receive the lowest interest rate
and best terms, but save significantly
on their closing costs as well.
We published The Smart
Consumers Guide because we want
borrowers to aggressively compare fees
from different lenders and third-party
service providers, including title insur-
ance companies, before choosing a
mortgage, says Timothy Dwyer, chief
executive officer of Entitle Direct Group
and founder of Entitledirect.com. Our
guide will help consumers shop for a
mortgage, and then compare, analyze
and finalize. This important process
will help borrowers avoid overpaying in
closing costs what they might save with
a lower interest rate.
The Smart Consumers Guide pro-
vides a step-by-step explanation of the
new GFE, including clear definitions of
the documents financial jargon and
layout. It walks readers through each
section of the GFE, highlighting ways
consumers can compare and lower
their financing and closing costs.
For more information, visit www.enti-
tledirect.com.
Generation Mortgage
offering new zero
origination and servicing
fee reverse product
Gener at i on
M o r t g a g e
Company has
announced the introduction of a new
fixed-rate reverse mortgage product with
no origination fee and no servicing fee to
provide senior clients more upfront loan
proceeds at a lower cost. The new Home
Equity Conversion Mortgage (HECM) loan
offering is now available in Generation
Mortgages retail and wholesale channels.
Generation Mortgage is pleased to sup-
port our senior community by ensuring we
evolve as our industry evolves with
improved product options, said Scott
Peters, president and chief executive officer
of Generation Mortgage. We are very
happy to provide access to more equity to
our senior clients with these new changes.
The new zero origination fee, zero
servicing fee product applies to
Generation Mortgages Federal Housing
Administration (FHA)-insured HECM
fixed-rate product and allows qualified
borrowers age 62 and older to receive
additional, upfront loan proceeds of up
to $10,000 or more, depending on the
equity in their home. For its wholesale
channel, as of April 1, Generation
Mortgage began offering its brokers
and correspondents a fixed-rate HECM
loan product option with no servicing
fee and no origination fee.
For more information, visit www.genera-
tionmortgage.com.
Flagstar to offer Job Loss
Protection product
on low downpayment
mortgages
Flagstar Bank has
announced a new
low downpayment
mortgage benefit designed to cover a
homebuyers mortgage payments if he
or she becomes involuntarily unem-
ployed. Called Job Loss Protection,
the benefit is available at no charge on
new loans with mortgage insurance
provided by Genworth Financial.
Mortgage insurance is required on
loans with downpayments of less than
20 percent.
Were happy to work with Genworth
to offer this enhancement to our low
downpayment loans. It will protect
what is often a persons single largest
investmenttheir home, said Bill
Robinson, executive vice president of
Flagstars home lending division. The
job loss insurance will provide peace of
mind for buyers concerned about the
employment situation in todays
volatile economy.
The program covers a borrowers
mortgage payment (principal, interest,
taxes and insurance) of up to $2,000 a
month for up to six months during their
benefit period, with a maximum of
three monthly payments per job loss
occurrence in the event of involuntary
unemployment. Benefits are paid
directly to the mortgage company just
continued on page 28
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as if the borrower had made the pay-
ment. The borrower vesting period is 60
days after closing, and payments begin 30
days from the date of involuntary unem-
ployment. Coverage stays in place for up
to three years after the loan closes and
the mortgage insurance remains in place.
Most unemployment events covered
by state unemployment benefits are
covered under the new Flagstar Bank
program. Seasonal, temporary and vol-
untary jobs or self-employment are not
covered, however.
For more information, visit www.flagstar.com.
Ellie Mae launches
new Encompass
Compliance Service
Ellie Mae has
a n n o u n c e d
the Encompass
Compl i anc e
Service, a comprehensive compliance
service that provides automatic compli-
ance checks for each and every mort-
gage in an originators pipeline,
throughout the entire mortgage cycle,
via the users Encompass360 system. By
creating the Encompass Compliance
Service, Ellie Mae is moving forward
with its initiative to provide users of
Encompass360 with an integrated set of
capabilities aimed at helping promote
total loan quality.
The Encompass Compliance Service
is powered by an automatic compliance
engine from Mavent, which was
acquired by Ellie Mae in December
2009. With the integration of Mavents
technology into Encompass360, users
get the convenience and security of
seamless, automated compliance
checks from point of sale through
investor delivery. The services can be
accessed via any Encompass360 system,
and can run at preset points in the cycle
or configured to accommodate other
loan stages, according to each compa-
nys needs.
Automated compliance checks are
becoming a standard part of the mort-
gage origination processa progression
thats been underscored by the regula-
tors use of compliance technologies in
their review and audit processes, said
Jonathan Corr, chief strategy officer for
Ellie Mae. Ellie Mae supports the regu-
lators in their choice of compliance solu-
tions. In fact, Encompass360 will be able
to easily export files in formats that are
compatible with the compliance tech-
nologies used by the regulators. Im sure
our users will find that Ellie Maes origi-
nator-specific compliance solutions are
just as easy, if not easier, for originators
to use as those used by the regulators.
The Encompass Compliance Service is
Ellie Maes next move in its strategy to
expand the capabilities of Encompass360.
Ellie Mae is focused on total loan quality,
and thats something that does not occur
in a vacuum, said Corr. There are capa-
bilities outside of traditional mortgage
origination system functions that are inte-
gral to originating high quality loans. The
more of those capabilities we can auto-
mate throughout the mortgage cycle, the
easier it will be for our customers to be
transacting high integrity loans.
For more information, visit www.elliemae.com.
New Xerox services to assist
in paperless transition
Xerox Corporation
is making the mort-
gage industrys transition to paperless eas-
ier than ever with new on demand servic-
es that help industry participants over-
new to market continued from page 27
If the markets dont have our economy
to worry about, then those who are per-
petual sky is falling characters must
find another focus.
Does that mean we are out of the
woods yet? It is a stretch to argue that
the markets wild ride is really a vote of
confidence with regard to our economy.
I will go back to what I said at the begin-
ning of this column. Expect more
volatility as a residual effect from the
fiscal crisis. We will not recover in a
straight line and the curves are poten-
tially steep. Our own debt levels are a
burden we will carry for a long time. It
may take two to four years for the shad-
ow inventory of homes to go away, but
it will take many, many more years for
the shadow of the debt we have run up
to disappear. Not that I am not opti-
mistic. A stronger economy will cause
tax receipts to go up and will also cause
the need for stimulus to go away. But
we have several deep holes to dig out
from. They are so deep that they are
best described as huge craters.
Another word of caution consider
the fact that our economic recovery was
forcing rates and oil prices up before
the markets became fixated on the
European Debt Crisis. That means we
are subject to big swings in the opposite
direction if and when the panic quiets
down. These moods can turn so fast
that it is likely we may see such a swing
or two back between the time I finish
this column and you read this article. It
will interesting to see if I get feedback
(success@hershmangroup.com) on this
issue?
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 Certified
Mortgage Advisor Program 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.
Last month, we talked about the Fed
pulling the plug and pondered what
would happen with regard to the mar-
kets. Of course, predictions about the
future are all but impossible in any
market. However, we were quite com-
fortable letting everyone know to be
prepared for a higher level of volatility.
Despite this level of comfort, we were
not prepared for what we will now dub
Scary Thursday. Who could have fore-
seen the Dow plummeting 400 points
in a matter of minutes? Who predicted
that the 10-year Treasury would move
from almost four percent to under 3.5
percent in just a few weeks?
What is behind all this volatility?
Well the European debt crisis certainly
was the spark and focal point. But I
would say that this goes deeper than
that. There were additional factors that
came into play:
O For one, we dont think that it is an
accident that the Fed has exited
from the markets just before this
wild ride began. It may be illogical
to some that rates actually headed
down after the Fed quit purchasing,
however, the Feds actions had pro-
vided more stability in the markets.
We should also note the fact that
mortgage rates did not move down
as quickly as Treasuries, widening
the spread.
O Also, though the Treasuries have
provided a flight to quality during
this crisis, it is interesting to note
that our debt levels are not so signif-
icantly below the levels of countries
such as Greece. Could the markets
be thinking not that the European
crisis may stall our recovery, but that
our debt could be next? Again, quite
illogical thinking because of the
flight to quality, but where else was
the money going to go?
O Let us not forget that the stock mar-
ket had rallied substantially in the
past year. For many, stocks were due
for a correction for quite some time.
Actually, overdue for such a correc-
tion. We cannot really label stocks as
a bubble because the highs reached
this year are still substantially below
where they were just a few years
ago. However, let us not forget that
stocks were still up well over 50 per-
cent from their bottom reached not
long ago.
What does our resident secondary
expert, Eric Holloman, chief executive
officer of RateLink, have to say about
all of this? Erics insight on the Wild
Ride and Scary Thursday:
As we have been saying for months, the
situation in Europe is not going away
any time soon. Greece is just the begin-
ning, as Spain, Portugal and Ireland are
also under pressure and may be facing
defaults as well. Of interest is the size of
the economies in question, Spain is much
larger than Greece. If you take a look at
all the turmoil surrounding both the dol-
lar and interest rates in the United States
on the Greek crisis, a larger economy
such as Spain could cause the volatility
seen in late April and early May look
tame. The real concern here is how
quickly the news affects rates. A loan
officer must let borrowers know the
potential for volatility is VERY HIGH and
take steps to protect themselves.
Yes, this all sounds scary, but we also
think there is good news to be found
here. If the focus is Europe, it means
that the focus has been taken away
from our economy. Could it be that the
markets are now satisfied as to where
the recovery is headed? They seemed to
be more concerned that Europe could
derail our recovery, as opposed to the
real estate marketplace. Indeed, in the
past 30 days, we have had good news
with regard to the first quarter econom-
ic growth, jobs growth, factory orders,
inflation, personal spending and more.
The first economic report of May
showed jobs being added at the highest
rate in four years in April. The employ-
ment rate increased because more
workers returned to the workforce
and even that is considered a good sign.
The Wild Ride: Just the Beginning?
Expect more volatility as a
residual effect from the fiscal
crisis. We will not recover in a
straight line and the curves are
potentially steep.
continued on page 31
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Contact one of our Regional Managers in your area
TX, OK, LA: David Walden 1-214-878-6300 dwalden@iservelending.com
Southeast & East Coast: Ken Michael 1-931-222-8023 kmichael@iservelending.com
CA, OR, WA, NV: Allen Friedman 1-415-298-2500 afriedman@iservelending.com
UT, CO, ID, WY, MT: Tony Moore 1-801-824-7243 tmoore@iservelending.com
KEY #1
Offer your borrowers full product line,
BEAT THE STREET PRICING and
dedicated service support
FHA, Conventional, Jumbo, Super Jumbo,
USDA, VA and Reverse Mortgage products
& more coming!
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Full 24/7 access to processing and under-
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KEY #2
Have a POWERFUL lender behind you
Full service Direct Lender
Multi-state lending
As a HomePath Lender we can deliver
leads directly from FannieMae
Experienced underwriters and staff to as-
sist with your loans
Non-Disclosure of YSP on HUD
Appraisals ordered in-house through our
appraisal department and using local ap-
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In-house licensing department to handle all
State Licensing and Compliance
The security and stability of a big lender
with the personal touch of a small lender
KEY #3
Maximize Branch PROFITABILITY and
Branch Manager COMPENSATION
Generous commission split
Branch managers are able to control their
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enue model for the four sources of income
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W-2 Employee with group health, dental,
vision and disability benefts
Matching 100% dollar for dollar 401K con-
tributions with vesting in 3 years
Support for all accounting, human resources,
payroll, licensing and operations
Chuck Wells director of compliance
and Greg Vincent as account execu-
tive, sales and marketing.
O Phil Deol has joined Paramount
Residential Mortgage Group (PRMG)
as chief strategy officer.
O Adolfo Carrion has been named
regional director for New York and
New Jersey by the U.S. Department
of Housing & Urban Development
(HUD).
O Meridian Capital Group LLC has
named Moshe Majeski as the firms
managing director, and Marty
Lanigan as senior managing direc-
tor of origination and strategic ini-
tiatives.
O The Mortgage Bankers Association
(MBA) has promoted Josh Denney,
AMP to the position of vice president
of public policy and has named Gail
Cardwell senior vice president of
commercial/multifamily.
O Mike Landon has joined the Dallas
loan origination office of Berkadia
Commercial Mortgage as a senior
vice president.
O Reverse Mortgage Solutions has
announced the hiring of Marc Helm
as president, Michael Clendennen
as chief financial officer and
Michael Kent as senior vice presi-
dent of portfolio retention.
O Bruce Van Fleet has been named
senior vice president of real estate
sales for PHH Mortgage Corporation.
O Loan Value Group LLC has named
Craig Lipsay as managing partner.
O Steve Bailey has joined Private
National Mortgage Acceptance
Company (PennyMac) as chief serv-
icing officer.
O GMAC has named Jeffrey Lemieux sen-
ior vice president of fee-based servicing.
O Equator has announced the hiring of
John Vella as chief operating officer.
O Expert Group Inc. has announced
the addition of five new loan offi-
cers: Jorge De Los Rios, Jose
Hernandez, Martha Irias, Parnell
Peace and Vendora McPherson.
O Chase has named three new senior
lending managers for retail mortgage,
including Bernadette Catanzano for
the Long Island, N.Y. region; Kerry
Dawson for the New York
City/Manhattan area; and Darin
Lugat for the New Jersey region.
Your turn
National Mortgage Professional Magazine
invites its readers to submit any informa-
tion, events, passages, promotions, per-
sonal or professional occurrences that
seem appropriate and/or other pertinent
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.
new chief executive officer of
MortgageDashboard.
O
Iwayloan LP has named Jonathan
W. Fowler as its new director of
national production.
O Chicago Bancorp Direct, the direct-
to-consumer lending platform for
Chicago Bancorp, has named Jeffrey
Walker as its new president.
O The StoneHill Group has named
heard on the street continued from page 26
Rene F. Rodriguez Chuck Wells
Marty Lanigan
Greg Vincent
Jonathan W. Fowler
30
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were committed
to brokers!
#SPOYt#SPPLMZOt.BOIBUUBOt'BJSmFME
8FTUDIFTUFSt3PDLMBOEt1VUOBN
IN:
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or email bfarassat@ridgewoodbank.com
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IN:
Call Lisa Constant at 516-640-8375
or email lconstant@ridgewoodbank.com
Member FDIC
A Member of the New York
Association of Mortgage Brokers
Markets may be volatile, but theres one thing you can always count on, the total commitment
of our Mortgage Team. Loyalty, continuity of service and our dedication to protecting the
integrity of our relationships are just a few of the things that set us apart.
Ridgewood understands the needs of its communities and develops specic product benets
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4. Pre-funding QC reviews
8
O Pre-funding reviews established
O Provide senior management with findings
O Determine appropriate selection methods
O Review to provide information to detect and prevent:
O Misrepresentation
O Inaccurate data
O Inadequate documentation
5. Post-closing QC timing and loan sampling
9
O Selections must be made within 30 days of closing
O Reviews completed within 60 days
O Notification to Fannie if QC is not done within 30 day cycle
O Statistical sampling now available, versus 10 random sampling
6. Post-closing QC review process and data integrity
10
O Owner occupancy verification
O Red Flags from Desktop Underwriter or other sources
7. Mortgage loan file document Submission Requirements
11
O The 2007 Selling Guide form listing the document requirements for submitting
loan files for QC auditing is reactivated
8. QC reviews and audit review of the QC process
12
O Within 30 days after the review, findings must be reported to senior management
O QC process must ensure that QC audit s procedures are followed and
that assessments, conclusions, and findings are consistent and accu-
rately recorded
O Management responses and corrective actions must be documented and
implemented
Compliance Considerations
Given the above-outlined updates and requirements to QC, there are certain meas-
ures that should be reviewed in the quality control plan and, where required,
management should reduce to writing the appropriate revisions affecting Fannie
loan originations, including:
O Ratifying written procedures governing the approval of third-party originators,
which should include, at a minimum, an annual review of their financial state-
ments, current licenses, rsums of principal officers, background checks, and
the TPOs quality control procedures.
O Precise, clearly defined procedures for monitoring loan quality through quality
control auditing.
O Written policies and that document the loan selection process, the verification
of data, and the reporting process with respect to pre-funding quality control.
O Affirming senior managements responsibility to ensure that the quality control audi-
tor is meeting all requirements as set forth by FNMA by reviewing all findings report-
ed by the auditor and at least annually reviewing the auditors Operating Procedures.
O Affirming that loans selected for audit: (1) will be made within 30 days of
closing; (2) will be completed by the quality control auditor within 60 days
of the selection; and (3) will be reported to senior management in the
quality control findings within 30 days after the completion of the audit.
O Re-verification in quality control of the borrowers credit history by obtaining a
new in-file credit report for all loans selected for audit, including manually
underwritten loans and loans underwritten through DU or any other automat-
ed underwriting systems. If a borrowers credit history was evaluated by using
a nontraditional credit process, the quality control auditor should re-verify a
nontraditional mortgage credit report, or written references from creditors, for
each of the credit references on the report and each credit reference.
O Enumerating Red Flags and incorporating them into the auditors process doc-
uments and quality control audit procedures.
O Affirming that all loans selected for a quality control audit will be checked
to ensure the execution of all loan origination documentation, information,
and verifications. Recite particularly all forms, disclosures, and procedures
relating thereto, as well as specifically state the compliance review proce-
dures for any federal or state laws subject to quality control audit.
Prompt action
The revisions will require mortgage loan originators to change their quality con-
trol plans. The substantial rewriting of Part D of the Selling Guide affects several
areas of the Loan Quality Initiative, including pre-funding, post-closing, sampling
continued on page 33
regulatory compliance outlook continued from page 26
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EXECUTIVE OFFICES:
108 Corporate Park Drive, Suite 301, White Plains, NY 10604
CALL: Louis Tesoriero at 888-329-GHMC.
www.joinguaranteed.com
Branch Program for Professionals
IT'S ALL WE DO.
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5 Questions You Must Ask!
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4. Can they license your branch in multiple states?
5. Will they pay the next day, on funded loans?
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named in the Inc. 500 list of fastest growing companies in the United States.
Last year, we moved to a larger headquarters to support our expansion.
Call Louis Tesoriero today to learn about our winning team, and nd out
why so many professionals have joined Guaranteed.
come the hurdles of eMortgage adop-
tion by requiring little set up and
upfront investment. Xerox Mortgage
Services eVault is a virtual repository
that directly connects to the Mortgage
Electronic Registration System (MERS)
eRegistry system, giving loan partici-
pants instant access to information
related to the status of an eMortgage.
EVault users have the ability to securely
store and manage electronic promis-
sory notes (eNotes) for funding, post-
closing, servicing and custodial purpos-
es. The MERS integration also allows
loan stakeholders to verify the authen-
ticity of the eNotes, resulting in secure
and legally enforceable transactions.
Xerox currently stores more than 35,000
eNotes in its eVault, making it one of the
largest eVaults in the industry. The eVault
leverages industry standards and plat-
forms, including the Mortgage Industry
Maintenance Standards Organization
(MISMO) and the MERS eRegistry, making
the system agnostic to document provider
or closing platform. In addition, the eVault
has undergone integration testing with
Fannie Maes eMortgage Delivery system,
offering Fannie Mae sellers a streamlined
approach to delivering eMortgages.
By introducing the eVault, with
established connectivity to MERS, were
accelerating the move to eMortgages
and delivering the mortgage industry
access to the technology it needs with-
out a major capital investment, said
Greg Smith, vice president, Xerox
Mortgage Services.
For more information, visit www.xerox-
xms.com.
MRG to offer guaranteed
compliant reverse mort-
gage documentation
MRG Document
T e c h n o l o g i e s
(MRG), a provider
of mortgage tech-
nologies to banks, credit unions and
other lenders, has announced that it
now offers reverse mortgage docu-
ments in compliance with federal and
state regulations for all 50 states.
Recent concern regarding the potential
for predatory lending within the
reverse mortgage market has led many
states to adopt new laws and regula-
tions governing reverse lending. The
Federal Housing Administration (FHA)
has also responded to demands for
increased consumer protection by
tightening up its reverse lending
requirements. MRGs mortgage docu-
ments are designed to carry the compli-
ance burden associated with these con-
sumer protections.
With the Baby Boomers rapidly
approaching retirement age, we expect
to see an increase in reverse mortgage
lending, said Marsha Williams, an
attorney at MRG. As both federal and
state regulations governing reverse
mortgages continue to evolve, lenders
must ensure that their documentation
is fully compliant with all changes.
MRGs staff of attorneys constantly
monitors the regulatory landscape and
automatically updates the forms, pro-
viding our clients full compliance with
reverse mortgage laws and regulations
now and in the future.
MRG offers a browser-based system
for the preparation and delivery of
compliant document packages, elec-
tronic disclosures, loan modifications
and other services for mortgage
lenders, banks and credit unions
nationwide. MRG guarantees that its
products are in compliance with the
most recent legislative and regulatory
changes.
For more information, visit
www.mrgdocs.com.
ISGN and EquityRock
partner on loss
mitigation product
ISGN Corporation, a
provider of mortgage
services and technol-
ogy products, has
partnered with EquityRock, a residen-
tial real estate equity sharing company,
to create RESET, a unique loss mitiga-
tion solution that helps lenders reduce
losses from properties in imminent
danger of foreclosure, while also keep-
ing the borrower in the property. The
solution provides a viable alternative to
outright principal forgiveness, and
offers borrowers a way to erase nega-
tive equity.
RESET (Real Estate Shared Equity
Transaction) gives a borrower who is
qualified for a loan modification a prin-
cipal reduction in exchange for a share
in equity with their lender. With RESET,
in addition to modifying or refinancing
the borrowers mortgage, the lender
writes down the borrowers principal
balance so that the borrower no longer
owes more than the property is worth,
therefore ensuring they have equity in
their property. As part of the transac-
tion, the lender will gain a stake in any
continued on page 32
new to market continued from page 28
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Demonstrate your higher
standards by joining today!
4LTILYZOPW)LUL[Z!
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- Borrowers can veriIy your IrusIworIhiness online
ProIecI yourselI Irom Ines in sIaIe audiIs
- We'll Irack your L.O. licenses
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Consumers want to work people
they can trust and believe.
Trust starts by setting higher
standards for the mortgage industry.
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NOTE: NoI all MorIgage Brokers will be approved Ior Ihe TMP Seal as minimum qualiIcaIions
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SPECIAL OFFER FOR NMP READERS
Use promo code NMP to pay only $49 for
your initial application fee (normally $295)
Consumers want to work with people
they can trust and believe.
Trust starts by setting higher
standards for the mortgage industry.
future appreciation should the proper-
ty be sold or refinanced. When the
transaction is complete, the borrower
gets to stay in the home and keeps a
monetary stake in the property. As is
typical in a corporate debt restructur-
ing, the essential feature of the RESET
modification is a fair, debt-for-equity
exchange that benefits both the lender
and the homeowner.
RESET provides lenders and borrow-
ers with a much needed win-win solu-
tion to negative equity, said Niraj
Patel, group president of ISGN.
Borrowers get to stay in their homes
and have pride of ownership. And
lenders have an alternative to the loss-
es associated with short sales and fore-
closuresthey finally have a way to
recoup at least some of the deficit that
results from addressing the seriously
delinquent or underwater loans in their
portfolios.
RESET was created by combining
ISGNs automated NPV (net present
value) technology, call center capabili-
ties, and loan modification processing
centers with EquityRocks equity shar-
ing product technologies. The result is a
turnkey, innovative set of solutions that
keep homeowners with troubled loans
in their homes, while also maximizing
value to the lender.
RESET is a natural evolution of a
technology we developed, which pro-
vided the first introduction of pure real
estate equity as an investable asset
class to institutional investors in the
United States, said James Riccitelli, co-
chief executive officer of EquityRock.
RESET supports public policy, as it is
focused on permanent loan modifica-
tions and home retention, whereas REO
and short sale result in home abandon-
ment. We believe the majority of
underwater mortgages that are fixed
with RESET will stay fixed.
For more information, visit
www.ISGN.com.
Wolters Kluwer releases
StateLink tool for
compliance
Wolters Kluwer
F i n a n c i a l
Services has
added new functionality to its StateLink
tool to help mortgage lenders prepare
to comply with pending state and fed-
eral regulatory changes. StateLink,
which provides actionable information
on enacted and pending legislation,
will now offer lenders additional clarity
about legislative changes before they
take effect. A Web-based compliance
knowledge base, StateLink monitors
regulatory requirements surrounding
first mortgages and closed-end second
mortgages, such as those tied to disclo-
sures, fees and recordation. It offers
continuously updated information for
all 51 U.S. jurisdictions and now also
provides text highlights to emphasize
upcoming regulatory revisions.
StateLink reported 53 regulatory
updates in 28 states through March.
Mortgage lenders receive e-mail
alerts from StateLink about upcoming
rule changes in the states where they
do business. This can help them adjust
their compliance policies and proce-
dures before new requirements take
effect.
In addition, StateLink enables
lenders to see how regulatory changes
will affect their mortgage documents.
StateLink provides links to sample ver-
sions of Wolters Kluwer Financial
Services electronic VMP Mortgage
Solutions documents to illustrate the
changes that will be made. Built upon
more than 40 years of industry experi-
ence and expertise, VMP Mortgage
Solutions forms are regularly updated
to reflect regulatory revisions.
Financial institutions are working to
address increasingly complex and rap-
idly changing regulatory challenges
with far fewer resources and shorter
turn times than in the past, said Jason
Marx, vice president and general man-
ager of mortgage for Wolters Kluwer
Financial Services. As a comprehensive
electronic resource on current and
pending legislation, StateLink helps
lenders plan for and meet regulatory
requirements and manage their com-
pliance research more effectively.
For more information, visit www.wolter-
skluwerfs.com/statelink.
Prudential Mortgage
Capital launches program
for multifamily properties
P r u d e n t i a l
M o r t g a g e
Capital Company has launched the
Agency Gateway program, a new short-
term loan program for multifamily
property owners seeking to refinance or
acquire properties that do not current-
ly qualify for a Fannie Mae or Freddie
Mac permanent loan. Under this new
program, the company will target loans
of $5 to $25 million secured by fully-
constructed or renovated multifamily
new to market continued from page 31
continued on page 41
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methodologies, QC reporting and outsourcing, timing, TPO reviews, document
requirement forms, and other specific, auditing aspects of mortgage quality control.
Review and implementation of Fannie Maes new quality control policies and
procedures, along with updating quality control plans, must be arranged now and
ratified by senior management.
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 management firm devoted to provid-
ing 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
1Fannie Mae, Announcement SEL-2010-03, Selling Guide Updates for Lender
Quality Control Standards, 03/29/10.
2Fannie Mae, Lender Letter LL-2010-03, Lender Letter, An Introduction to
Fannie Maes Loan Quality Initiative, 02/26/10.
3Selling Guide, Part D, Ensuring Quality Control.
4A copy of Fannies Announcement SEL-2010-03 may be obtained from my
firms Fannie Mae section in our Web site Library at www.lenderscompliance-
group.com or Fannies Single Family Guides 2010 Lender Announcements and
Letters section of www.efanniemae.com.
5Selling Guide A3-3-01: Outsourcing of Mortgage Processing and Third-Party
Originations; D1-1-02: Lender QC Process.
6Selling Guide D1-1-02: Lender QC Process.
7Selling Guide D1-1-03: Lender QC Staff and Outsourcing of the QC Process.
8Selling Guide D1-2-01: General Information on Lender Prefunding QC Review Process.
9Selling Guide D1-3-02: Lender Mortgage Selection Process for Post-Closing QC
Mortgage Reviews.
10 Selling Guide D1-3-03: Lender Post-Closing QC Review of Underwriting
Documents; D1-3-04: Lender Post-Closing QC Review of Data Integrity; D1-3-07:
Lender Post-Closing QC Review of Closing Documents.
11D2-1-02: Fannie Mae QC File Request and Submission Requirements; E-2-07:
Post-Closing Mortgage Loan File Documentation.
12Selling Guide D1-3-08: Lender Post-QC Review Reporting, Record Retention,
and Audit.
regulatory compliance outlook continued from page 30
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
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Successful Seminar Marketing
Through Social Media
One of the best ways to use social media is
to add value to your target audience in a
classy, non-threatening way. Endless status
updates about miniscule details of your
life or sending out mass invites to non-first-
time homebuyers about your first-time
homebuyer workshops is not classy. In fact,
it can be annoying. Your
social media contacts will
quickly tune you out and
hide your status
updateseffectively cut-
ting off your ability to com-
municate important mes-
sages that may be relevant
to them. Remember the
story of the man who cried
wolf too many times?
On the other hand,
there are tasteful ways to
harness the power of
social media to market
your events and services.
Step 1: Establish your
target audience
One of the greatest tools
of social media is the
ability to group your con-
tacts and friends into cat-
egories. For example, you
could create groups for your Facebook
friends such as:
O Family
O Friends
O Financial advisors
O Realtors
O Business associates
O Local
For example, assume you want to con-
duct a workshop for Realtors. You could
send an event invite to your Facebook
friends in the Realtor category. If you
want to conduct a client appreciation
event or networking mixer for all your
contacts, you could send out an invitation
to all your Local Facebook friends. You
can place your friends in more than one
category. For example, all the Realtors
who are local to your marketplace can be
placed in both the Local and Realtor
categories. LinkedIn also allows you to fil-
ter your contacts by geographic location.
Step 2: Pick a hot topic that is impor-
tant to your target audience
Assume that you want to earn more refer-
rals from financial advisors.
Your target referral is some-
one with credit scores over
700 and a 50 percent LTV.
What are the issues that are
important to financial advi-
sors right now? What are
the strategies that are
important to their clients
with credit scores over 700
and a 50 percent LTV on
their home mortgage?
One hot topic that a lot
of financial advisors could
use some help with right
now is Roth IRA conversion
opportunities. You see,
there are some unique tax
benefits this year (2010) for
high net worth clients to
convert a lot of their retire-
ment savings into Roth IRAs
(the limits on conversions
are lifted in 2010). Most
people arent aware of these opportuni-
ties. The exciting thing is that low mort-
gage rates present a unique opportunity
for you to team up with financial advisors
in order to help their clients use a mort-
gage today to pay the taxes on the conver-
sion. This will save the clients tens of thou-
sands of dollars (if not hundreds of thou-
sands of dollars) when compared with not
converting and paying hefty taxes later
when they need retirement income.
For example, assume a client in a 25
percent tax bracket has a retirement
account worth $200,000. This is down
from a peak of $300,000 when the mar-
ket was higher. If they convert these
funds into a Roth IRA in 2010, they will
be subject to approximately $50,000 in
taxes. They can pay half the taxes on
their 2010 tax returns, and half the
taxes on their 2011 tax returns. You can
bump up their mortgage by $50,000 in
order to pay the tax bill. For example, if
their current mortgage is $200,000, you
could refinance it into a $250,000 mort-
gage and pull $50,000 of cash out to
pay the taxes. This way, they will have
the full $200,000 from the conversion
left in their new Roth IRA.
When the financial market recovers
and the retirement account grows back
to $300,000, the clients can withdraw
the entire amount without paying a
dimes worth of taxes! In this example,
you were able to help the client save lit-
erally over $25,000 in taxes, plus the
opportunity cost of $50,000 that they
were able to reinvest due to your strat-
egy of using a mortgage to pay todays
tax bill on the conversion.
The bigger the retirement account,
the bigger the savings from the conver-
sion (and the bigger mortgage balance
needed to pay the taxes today). In other
words, clients with higher balance
retirement accounts save the most
money. And what types of clients have
high balances in their retirement
accounts? Clients who are likely to have
credit scores over 700 and a 50 percent
LTV on their home mortgage!
In short, this presents a tremendous
opportunity in 2010 to conduct a joint
workshop with a financial advisor who is
knowledgeable in this area for everyone
who has a retirement account. You could
invite your social media contacts and the
financial advisor could invite their contacts.
Step 3: Develop an effective market-
ing strategy
You could consider inviting the media
(newspapers, radio, TV) and splitting the
costs of the event if you are conducting
an event with a referral partnersuch as
a joint workshop with a financial advisor
for people with retirement accounts (as
outlined above) or a first-time homebuy-
er workshop with a Realtor.
If you are conducting a workshop for
potential referral partners, such as a
seminar for financial advisors or a sem-
inar for Realtors, you could collect
everyones business card at the event
and then you could add these individu-
als as social media contacts. You could
also team up with your local trade asso-
ciations and have them post a link to
the event on their Web sites and social
media pages. Oftentimes, trade associa-
tions like CPA/financial planner groups
or Realtor groups have their own
Facebook Fan Pages or group pages
on various social media sites. Its a
smart idea to tap into these resources
when available.
A few successful people I know fre-
quently conduct client appreciation
events at unique locations across
townsuch as museums and local hot
spots. Part of the event is networking
and fun (wine and cheese tasting, for
example) and part of the event is a short
market update (45 min. discussion or so)
on topics of interest to clients and the
target audience. You could team up with
referral partners such as CPAs, financial
advisors and Realtors, and organize
events like this to generate some more
business for both you and the referral
partner. You could also get local estab-
lishments to sponsor or support the
event (such as a wine distributor supply-
ing the wine for the wine tasting). Your
commission on one mortgage origina-
tion should more than cover your costs.
Step 4: Implement!
Its one thing to read articles like this
and say, Wow thats a good idea. Its
another thing to actually take some
action and make it happen. If you dont
take any action, you wont make any
money. CMPS certification equips you
with unique knowledge, training, tools,
PowerPoint slides and marketing
resources to help you implement these
ideas and more to make your events a
smashing success!
Gibran Nicholas is the founder and
chairman of the CMPS Institute, which
administers the Certified Mortgage
Planning Specialist (CMPS) designation.
The CMPS Institute has enrolled more
than 5,500 members since its founding
in 2005. Gibran is also the chairman of
Published Daily, a customizable online
magazine, newsletter and marketing
service that helps professionals trans-
form their clients and prospects into a
referral-generating sales force. He may
be reached at (888) 608-9800, ext. 101 or
e-mail gibran@cmpsinstitute.org.
Visit author Gibran Nicholass blog
at http://gibrannicholas.com
where he shares his insights on
economics, real estate and
financial issues, including the current
mortgage and credit crises.
By Gibran Nicholas
Oftentimes, trade
associations like
CPA/financial plan-
ner groups or Realtor
groups have their
own Facebook Fan
Pages or group pages
on various social
media sites.
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www.qcmortgage.com
800-939-5383
Q
Full Service QC/QA
Q
Default Reviews
Q
HVCC Reporting
Q
IRS & SSA Reports
Q
Contract Underwriting
Q
Loan Imaging Storage
Q
Software Lease/Purchase
Q
Modication Reviews
Q
Q
Q
Q
Q
Q
Q Q
Okay, lets face it, more and more of us
have become addicted to one or more
social media Web sites than we care to
admit. Social media sites have gone
way beyond something of a fad or a
passing fancy. I believe it represents
the biggest shift since the industrial
revolution seriously! Theres real
tangible value to social media Web
sites and it is time that you get on
board with this train before it leaves
the station. Our industry hasnt been
known as the early adopters of tech-
nology far from it. But if you will
invest the time reading this article and
doing some research on the Internet,
you will discover an immense number
of people are already participating in
social media Web sites it is astound-
ing, and the numbers are increasing
exponentially. As a result, an increas-
ing number of mortgage companies
are waking up and beginning to incor-
porate social media plans into their
core business strategies. Why? Because
it is the future! Not yet convinced, con-
sider the following two dozen facts:
1. By 2010, Generation Y will out-
number Baby Boomers 96 per-
cent of them have joined a social
network.
2. Social media has overtaken porn as
the number one activity on the Web.
3. One out of eight couples married
in the U.S. last year met via social
media.
4. Years to reach 50 millions users:
Radio (38 years), TV (13 years),
Internet (four years), iPod (three
years). Facebook added 100 mil-
lion users in less than nine
months. iPhone applications hit
one billion in nine months.
5. If Facebook were a country, it
would be the worlds fourth largest
between the United States and
Indonesia (note that Facebook is
now creeping up, having recently
announced 300 million users.
6. A 2009 U.S. Department of Education
study revealed that, on average,
online students outperformed those
receiving face-to-face instruction.
7. One in six higher education students
are enrolled in online curriculum.
8. The percentage of companies
using LinkedIn as a primary tool to
find employees80 percent.
9. The fastest-growing segment on
Facebook is 55-65 year-old females.
10. Generation Y and Generation Z
consider e-mail pass. In 2009,
Boston College stopped distributing e-
mail addresses to incoming freshmen.
11. The number two largest search
engine in the world is YouTube.
12. Wikipedia has more than 13 million
articles. Some studies show its more
accurate than the Encyclopedia
Britannica and 78 percent of these
articles are non-English.
13. There are more than 200 million
active blogs.
14. Because of the speed in which
social media enables communica-
tion, word of mouth now becomes
world of mouth.
15. Thirty-four percent of bloggers post
opinions about products and
brands.
16. Seventy-eight percent of consumers
trust peer recommendations.
17. Only 14 percent of consumers trust
advertisements.
18. Only 18 percent of traditional TV
campaigns generate a positive
return-on-investment (ROI).
19. Ninety percent of people that can
TiVo ads do so.
20. Twenty-four of the 25 largest news-
papers are experiencing record
declines in circulation because we
no longer search for the news, the
news finds us.
21. In the near future, we will no longer
search for products and services
they will find us via social media.
22. More than 1.5 million pieces of con-
tent (Web links, news stories, blog
posts, notes, photos, etc.) are shared
on Facebook on a daily basis.
23. Successful companies in social
media act more like Dale Carnegie
and less like David Ogilvy listen-
ing first, selling second.
24. Successful companies in social
media act more like aggregators
and content providers than tradi-
tional advertisers.
If you send me an old fashion pass
e-mail, Ill be happy to provide you the
source for each of the above statistics.
The above statistics tell the story,
social media isnt a fad, and its a fun-
damental shift in the way we communi-
cate. It may make the difference in your
business expanding or contracting, and
as the old saying goes, Adapt or die!
Consider this innovative approach
selling airline tickets at a time when the
airline industry struggling for survival.
Last year, United Airlines found a new
way to use Twitter to reward customers
and fill empty seats. In May, the
A View From the C-Suite
By David Lykken
Social Media So Show Me De Money!
continued on page 36
Chicago-based airline began offering a
limited number of Twitter-exclusive
fare deals, or t-wares, to domestic and
international destinations. The last-
minute specials are sent out once or
twice a week and typically expire within
one or two hours. United said that most
sell out in seconds!
In an interview with a United
Airlines executive, they said that, We
want to give our followers something
special that no one else
can get, while allowing
the airline to fill seats
that might otherwise go
unoccupied.
Harnessing social media
tools can give a huge boost
to your business by connect-
ing with potential customers
in new ways. Also, it will help
increase your mortgage
companys brand recogni-
tion which has become
standard operating proce-
dure in Corporate America.
More than 60 percent of
Fortune 1,000 companies
with a Web site will connect
to or host some form of
online community to build
customer relationships,
according to Gartner Inc., a Connecticut-
based information technology research
company. Theres a saying that (in the world
of technology) if youre standing still, youre
actually moving backwards.
The three social media tools I am going
to recommend you consider using imme-
diately are LinkedIn, Facebook and
Twitter. Whether you are an individual
working as a loan originator, a small mort-
gage company or a large financial institu-
tion, my recommendation is for you to
start creating your community via these
three social networking platforms.
LinkedIn is, in my opinion, the most
important business-oriented social net-
work on the web. While Facebook and
Twitter have been more in the limelight,
LinkedIn has been quietly refined and
shaped into a very impressive platform.
How to use LinkedIn
1. LinkedIn Groups
A Group can be established around
almost any topic related to your busi-
ness, but keep in mind, you want to
attract members to your group to make
sure your group is centered on a com-
pelling topic that will draw members.
Begin adding discussions
and news items to make
sure there is always worth-
while content available to
those who have or interest-
ed in joining. At some
point, based upon the
compelling nature of the
group, your group will just
grow and grow on its own.
2. LinkedIn Q&A
Once you start getting
connected to people (I
have more than 1,000
LinkedIn connections),
you can start polling
them to get all kinds of
valuable information.
Just dont go overboard
on creating a long list of
questions. It is better to just write one
carefully worded question. You will get
a far greater number of respondents.
3. Sharing Web content via LinkedIn
You can share content from your Web
site via LinkedIn. It is a way to draw
people to your site, as well as a way to
increase your ranking in many leading
search engines.
4. Advertising on LinkedIn
In a sense, simply using LinkedIn in the
ways Ive described above already pro-
vides some free advertising, but you
can also set up paid, targeted advertis-
Theres a saying
that (in the world of
technology) if youre
standing still, youre
actually moving
backwards.
David Lykken is president, mortgage
strategies and managing partner with
Mortgage Banking Solutions. David has
more than 35 years of industry experi-
ence and has garnered a national repu-
tation. David 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@mortgagebank-
ingsolutions.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.
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game. That is where combining Twitter
with LinkedIn and Facebook can be of
value. Your objective is to get your past
and present customers following you.
The key to getting them to follow you is
one thing. Keeping them following you
is all about content and regular posts
where you are providing them informa-
tion.
How to get started
Start with a plan
Determine your goals and objectives
and what role social media will play in
your overall marketing plans. Then,
find ways to share content and bring
communities together. Market and pro-
mote your companys blog, Twitter con-
tacts, Fan Pages, YouTube channels,
and any other media to targeted
prospects and clients. Be strategic and
purposed.
Identify which social media sites your
customers are using
Search for your brand name, your com-
petitors names, keywords or industry. On
Twitter, tools such as Advanced Search,
Twitter Grader and Twellow can help you
find people who may be interested in what
you have to say. Join Facebook, Flickr or
LinkedIn groups relevant to your business
and become part of the conversation.
Register your name on as many social
media sites as possible
It doesnt matter whether or not you
plan to use them. Oh, and be sure to
use the same name on each Web site.
Dont chase technology
Social media changes rapidly and its
hard to keep up with. Dont chase every
new social media Web site out there.
This is NOT in conflict with the point
above. Registering with every social
media site is different than chasing
every social media site. Use only that
which your customers use. Instead, com-
mit to one or two social media sites and
work on creating regular content.
Readers, viewers and search engines will
better recognize your expertise if youre
consistent. And you can very quickly
overextend your capacity by being in too
many places and not doing it effectively.
Generate compelling content
It all comes down to having compelling
content. You dont have to write it
simply reference it. Besides, there is so
much info available on the Internet that
you dont need to be creating content
use what is already out there and readi-
ly available, and most importantly, what
is compelling to your target audience.
Post regularly and frequently
This, combined with the point made
above, is key to getting people coming
ing on LinkedIn. This allows you to tar-
get your audience by various means.
How to use Facebook
1. Manage your profile
First and foremost, fill out your profile
completely to earn trust. Set up a busi-
ness and a personal profile and use
common sense in what you have in your
business profile. Being personable is
different than being too personal.
Create lists, such as Work, Family
and Limited Profile for finer-grained
control over your profile privacy. It goes
a long way to connect with people when
you post professional or business casual
photos of yourself. It reinforces your
brand (you)! Depending on the type of
photos you post, you may want to con-
sider limiting your business contacts
seeing your personal photos.
2. Connect and share with others
Obtain a Facebook vanity URL so that
people can find you easily. Add your
Facebook URL to your e-mail signature
and any marketing collateral (business
cards, etc.) so prospects can learn more
about you. Post business updates on
your Facebook Wall. Focus on business
activities. Share useful articles and
links to presentation and valuable
resources that interest customers and
prospects on your Wall, to establish
credibility. Combine Facebook with
other social media tools like Twitter.
Find experts in your field and invite
them as a guest blogger on your blog.
3. Use Network, Group and Fan Pages
Start a Group or Fan Page. Add basic infor-
mation to the Group or Fan Page, such as
links to a company site, newsletter sub-
scription information and newsletter
archives. Post upcoming events, including
Webinars, conferences and other pro-
grams where you or someone from your
company will be present. Update your
Group or Fan Page on a regular basis with
helpful information and answers to ques-
tions. Join networking, industry and
alumni groups related to your business.
Use search engines to find Groups and
Fan Pages related to your business.
How to use Twitter
1. Start following people
Most of us want to be leaders and not
followers, but when it comes to Twitter,
following the right people is really the
key. Following people is really easy, but
following the right people is so impor-
tant in the Twitter world. You might
say, You will be known by the people
you follow more so than the company
you keep!
2. Get followers
Getting others to follow you, especially
the right ones, is a whole different
back to you which is the primary goal
and objective of developing an effective
and sustainable social media initiative.
Content in a Web site that isnt updated
regularity has about the same shelf
life as fresh bread very short.
When I started my social media jour-
ney, it was slow going at first. I didnt
see any of the benefits for almost a year.
But slowly and surely, my efforts are
paying off. Now, I am a believer and
have caught the vision. My efforts to
learn how to use LinkedIn, Facebook
and Twitter (more are being considered
as they become proven) are beginning
to pay big dividends. I encourage you to
do get involved and adapt to this rapid-
ly expanding digital world in which we
live. As a C-Level executive, it is the right
thing to do for your business!
Consider, for a moment, your next
Facebook, Twitter or other social media
status update declaring: [Your name
here] was featured on CNN today!
A seed of excitement that they know
someone famous is now planted in the
brains of whoever reads that post; that
seed will sprout one day
and find itself growing into
a conversation they may be
having with a co-worker,
friend or family member of
theirs. Picture this person
talking to their friend say-
ing, A mortgage lady
friend of mine, [your name
here], was just featured on
CNN how cool is that?
Picture their friend being
impressed with this infor-
mation and responding,
No kidding; wow, do you
have her number? I need a
mortgage, maybe I should
call her. You think shell
take my call?
The above scenario isnt
too off the wall, and this is
the celebrity status image
you could build by simply
using your social media
presence wisely. I have been a social
media geek and a public relations agent
for quite some time now. In this article, I
will share some tips to help you inte-
grate your media exposure campaign
with your social media outlets. These
tips have stood the test of time for my
clients and me, and I look forward to
watching as they help you in your mort-
gage practice.
Establish celebrity status
through media exposure
We are all a celebrity in our own way;
you need to believe and
embrace that concept in
order to make social
media work for you.
As a mortgage profes-
sional, there is something
you know that no one
else does that unique
knowledge can make you
famous. Others may even
be exposed to the same
education and tools as
you, but there is one sub-
ject or tool that you
understand or use from
that information which
no one else uses. Your
first job in integrating
your media campaign
with your social media
outlets is to find out what
that niche is that sets you
completely apart from
the rest. Once you cap-
ture this, you need to go out and capi-
talize on your social media presence by
talking about that topic or niche to
your social media database and gain-
ing the celebrity status you deserve.
At the same time, your celebrity sta-
tus will create and feed upon itself if
Why is Social Media Integral to
Your Media Campaign?
By Josephine Nicholas
Its important to note
that you want to be
cautious about being
too businesslike in
your social media sta-
tus updates and posts.
After all, it is called
social media for a
reason.
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O Quick tip: If you are uncomfortable
posting business-related status
updates to your personal social media
profiles, create a fan page on any of
the social media sites. Just dont
become one of those annoying social
media users who constantly invite
people to their fan page, even after
that person has decided not to join.
Post on group walls
Did you know that most social media sites
integrate with search engines in such a
way that you can use to your advantage?
While many are complaining about priva-
cy in relation to social media, and I under-
stand that is a major concern, I have cho-
sen to use social medias public nature to
mine and my clients advantage.
Not many people know that, fre-
quently, when you post to a group page,
and then search your name later on a
search engine, your post comes up in
the search results. The exposure you
gain from this has a number of benefits.
A couple examples of the benefits are:
O A prospective client who searches for
you online (and, believe me, the major-
ity of them are doing so) will come
across your information, see your
celebrity status, and that will increase
their desire to do business with you; or
O A consumer who has never heard of
you before, but is searching for a mort-
gage professional in your area, will
come across your post in those search
engine results and that will have a pos-
itive affect on their decision.
O Quick tip: For a group page, some of my
suggestions would be to post links to
places in the media where youve been
featured, upcoming events where you
will be speaking, and a paragraph from
your blog, with a link to the rest of the
blog post.
Mix it up
Its important to note that you want to be
cautious about being too businesslike in
your social media status updates and posts.
After all, it is called social media for a rea-
son. If you are always posting about why
interest rates are low, how you used an
industry tool to save your client money, or
even that you were on TV yesterday, you
will quickly lose the interest of your social
media contacts. Its a very fine line between
what qualifies as enough celebrity status
information and what qualifies as enough
day to day information in order to keep
your databases engaged.
You will need to gauge your particular
database to find out what appeals to
them; however, just remember, now that
youve established the celebrity status,
youll want to mix up your status updates
and posts. Just as the masses are fascinat-
ed about the details of their most
you go out with your one thing and
gain media exposure through tradition-
al media outlets, then take that expo-
sure and broadcast it to the masses
through your social media platform.
Everyone likes to be affiliated with a
celebrity, and pretty soon, your social
media and traditional media platforms
will feed off of each other, creating an
unstoppable force in your benefit.
O Quick tip: Start one small step at a
time. Talk to a media expert or pub-
lic relations agent who will help you
sort through your knowledge and
find out what will appeal to the
media and the general market. The
media expert will see things that
you may not automatically think of
and the personalized attention the
PR expert provides will give you the
confidence you need to jumpstart
your celebrity status. Or, start by
writing a note to the editor of your
local paper about how the mortgage
market is affecting your own city.
When that gets printed, post it on
your social media profilesthe
attention you will get from that will
inspire you to do more the next time
and continue on your celebrity sta-
tus journey.
Use social media to dis-
pense your opinion on
the market
Take a minute and answer the follow-
ing questions:
O What is your opinion on the current
state of the market?
O What are you already writing about,
via a blog, newsletter, about the
market?
O What is going on in the market
today that you personally feel
smarter by knowing?
O What tools are you using in your
business today that saved you or
your clients money?
Now, take a moment and think about
how much your social media database
would benefit and/or be impressed with
the answers you just gave.
When you pause to think about the
vast array of knowledge you have
inside of you, it is truly amazing, espe-
cially as compared to the average per-
son in your social media database.
Social media is such a non-threatening,
yet relatively untapped, way to get that
information out to people. Experts in
any industry who are familiar with how
the media works are outputting value
on a daily basis through all outlets
they recognize it is only by communi-
cating this knowledge to the masses
that they will earn the media exposure
and presence in the market that will
ultimately bring in more clients.
beloved celebrities, when your social
media contacts find out they know some-
one famous (you), they will be looking for
the fun details about your life, too. Keep
them entertained with stories about
other things happening in your life.
O Quick tip: A good way to stay engaged
with your social media contacts is to
interact with them; you can keep those
interactions short and sweet. Make sure
you reply to their comments, questions,
and most importantly, to their own
posts, blogs, status updates, etc.
Imagine if your favorite celebrity com-
mented on any of your social media
platformshow would you feel?
Josephine Nicholas runs her own public
relations agency, icheadlines.com. She
specializes in helping map out individu-
alized media campaigns, and offers a
comprehensive array of services to han-
dle the diverse PR needs of her clients.
Josephines clients have also appeared in
other national and local media outlets,
including, but not limited to, MSNBC,
Fox Business News, CNN, NPR; in The
Wall Street Journal, Reuters, The New
York Times, The Washington Post,
Financial Advisor Magazine, Financial
Planner Magazine, CPA Magazine, and
various entertainment and lifestyle out-
lets. She may be reached by e-mail at
josephine@icheadlines.com.
Among leaders in the mortgage indus-
try, social media are quickly becoming
an integral part of almost every aspect
of operations. The change is happening
for a number of reasons, including:
1. Social media
are ideal for
B2C (business to
consumer)
applications
Much of the growth of
social media is driven by
the mass market, making it
a perfect place to address
the general mortgage shop-
per. The best companies to
watch in this space are the
big automakers, all of
which have strong teams of
social media practitioners,
many of whom are leading
the way in best practices.
2. Social media
are conversa-
tional
Salespeople get social media intu-
itively, recognizing that they are simply
a new channel for communications,
enabling them to reach out to more
people than ever before, more quickly
than ever before. Feedback is often
instantaneous, allowing them to hone
their pitch quickly.
3. Social media let
organizations send their
message to supporters
In what is increasingly being called
brand journalism, social media allow
organizations to craft their own messages.
In the past, organizations had to get lucky
to get media coverage. Today, informa-
tion is a free market, and as a result, the
mortgage industry is able to communicate
directly with consumers. When you con-
sider that thousands of
people in our communities
each day are making the
most important decisions
of their lives, youll agree
its pretty important infor-
mation that traditional
media havent done a great
job of explaining to the
consumer.
4. Social media
allow origina-
tors to react
faster
Search tools make it pos-
sible to monitor conver-
sations in real-time so
issues can be addressed
quickly and effectively
and trends discovered
and understood.
5. Social media are
measurable
Hits, visits, commentseverything in
social media can be automatically
tracked, meaning information can be
studied and can become the basis for
productive experimentation.
6. Social media is at work
for you 24/7 and tap the
power of trusted networks
When you gain supporters to your cause,
Social Media: A New Pillar of the
Mortgage Business
By William C. Reichard, MBA
Much of the growth
of social media is
driven by the mass
market, making it a
perfect place to
address the general
mortgage shopper.
continued on page 38
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Thursday, June 24, 2010
Friday, June 25, 2010
AAMB welcomes NAMB to beautiful Phoenix! Come see the new NAMB President and the
new NAMB Board installation, while participating in some great networking opportunities.
State delegates can also participate in the NAMB Delegate Council Meeting.
Phoenix Airport Marriott

Rooms are $99 per night, and will be honored


at the same rate if you wish to extend your stay.
Hotel toll-free: 1-800-228-9290
Visit www.NAMB.org
for details.
Qualifed Candidates with a proven track record will get:
Guaranteed Salary
Full Benefts Package
Bonus based on proftability of branch offce.
Assistance with recruiting and training team.
Call Dane Basham today 888-544-0034
Gateway Mortgage Group is seeking
more leaders to run a retail branch ofce.
If I was in the market to become a branch manager or work as a loan ofcer, Dane would be on the short
list of friends I would contact. His positive attitude is infectious. You cannot have a conversation with Dane
and NOT be motivated. November 28, 2006
Andrew Berman, Executive Vice President, The Mortgage Press
was a consultant or contractor to Dane at Gateway Mortgage Group LLC
So, how are organizations adapt-
ing? The best advice is to approach it
as you would any other management
problem:
O What are your goals?
O Whats the right strategy to achieve
them?
O What are the right tactics to carry
out those strategies?
O How do you know if youre making
any progress?
Social media generally work at a tac-
tical level, supporting larger communi-
cations strategies. For instance, a mort-
gage company looking to achieve its
goal of higher revenue may as a strate-
gy target upwardly mobile families. A
variety of tactics could support this
goalfamily-friendly events, articles in
the local newspaper, sponsorship of
school activities. Or, the organization
may target families who are online in
social networks talking about life deci-
sions. The key is matching tactics to
strategies, which requires deep
research and careful consideration at
each phase. Who are your target audi-
ences, for instance? Do you thoroughly
theyll be selling for you all the time, not
just when youre physically at work. And
sales via trusted connectionswhat we
once might have called word of mouth
are the most effective kind there is.
7. Social media are how
recruiting is done today
If you want to stay connected with the best
and the brightest in the business as you
hunt for, say, branch partners, you have to
find them online and engage them in con-
versation through social media.
8. Social media allow
remote teams to work
together more effectively
With teams of brokers, partners and loan
officers across the country, a company
can use intranets to build cohesion, share
best practices and celebrate wins.
There are many more reasons that
social media are quickly becoming a pil-
lar of the mortgage industry, but the
biggest difference in comparing social
media with traditional forms of commu-
nication such as telephones, advertising
and direct mail is simply the speed and
the scope with which they take place.
understand the ways they consume
information? Can you successfully
become part of their conversations?
As tactics, though, social media are
clearly great new tools for the mortgage
industry. And like any new tool, they
require new skillsand lots of practice.
After all, content creation for instance is
a new competency for organizations
whose work has been primarily busi-
ness transactions.
Some fear that social media will con-
sume large amounts of time, for exam-
ple. Whats becoming clear in the field,
though, is that the new communications
channels must be approached much as
you have the existing ones: by budgeting
time and energy. Social media are a lot of
work, but theyre really not optional, any
more than getting out and meeting peo-
ple is optional. This is where todays cus-
tomer is. Facebook is nearing half a bil-
lion users, half of whom log in on a given
day and who spend an average of 55
minutes each on the site. Its not a ques-
tion of if any longer.
ROI or return on investment is
another term that frequently crops up
when considering social media. Yet, no
one asks what the return on investment of
his or her telephone is, its simply a com-
munications tool one uses to reach partic-
ular audiences. Once upon a time, the
telephone was a new invention that was
called a toy with no useful application.
So, what are some of the ways the
mortgage industry can apply these new
tools? Youre bounded only by your cre-
ativity, ultimately. For instance:
O You can use LinkedIn for profession-
al networking, prospecting, recruit-
ing and education.
O You can create a Facebook fan page
to keep fans updated on education-
al news, such as homebuyer tax
credits or to run special offers. You
can share photos of special events
that followers will then share with
each other, extending your reach.
O You can use Twitter accounts for
shorter, more conversational materi-
al and to alert followers to news.
O Videosboth at YouTube and in many
other locationsare soaring in popu-
larity, and we see many clients success-
fully using them. YouTube is now the
worlds number two search engine.
O A blog can be regularly stocked with
new information for both con-
sumers and mortgage professionals,
and a blogs content is easily repur-
posed for other uses.
O You can use the search function of
most social media networks (e.g.,
http://search.twitter.com) to watch
how conversations take place before
you leap in.
O In addition to work on search engine
optimization (SEO), you can also practice
SMO, or social media optimization,
which means that social elements (such
as a Bookmark & Share button or the
Like button on Facebook) are incorpo-
rated into all of your companys efforts.
The final piece of the puzzle is meas-
urement. Fortunately, social media are
more quantifiable than anything weve
seen before in marketing terms. Today,
we can track which social networks drew
visitors, how long they stayed, whom
they recommended the information to
and a myriad of other data that can help
create a fuller picture of your customers.
Measurement also enables new
means of integrating traditional and
new media. For example, Frost
Mortgage Lending Groups ad in
National Mortgage Professional
Magazine includes a link to a landing
page, http://frostmortgage.com/nmp,
that is personalized to the magazines
readers. This enables the company to
see exactly what traffic the ad is driv-
ing, and adds to the effectiveness of
the landing page in converting view-
ers. Visitors will also find links to the
companys various social outlets.
From my vantage point as a social media
and communications practitioner, I can
vouch for the fact that mortgage companies
practicing social media are securely on the
cutting edge. I recently had the opportunity
to speak as part of a panel at the Crittenden
National Conference, which gave me a
chance to meet a number of leaders in the
mortgage and real estate industries and see
the current state of the art. The interest level
in social business (a broader term than
social media that includes such things as
social customer relationship manage-
ment, or SCRM) is enormous, and a very
few companies have quickly seized the high
ground in these areas. There is still tremen-
dous opportunity.
The best advice ultimately is the sim-
plest just get started and dont get
left behind!
William C. Reichard, MBA, president of
Albuquerque, N.M.-based CrossCut
Communications LLC, helps develop,
implement and manage social business
strategy for industry leaders, such as
Frost Mortgage Lending Group. Reichard
has a broad background in social media,
strategic communications and market-
ing, public relations, development,
fundraising and business management
and has become a sought-after speaker
and adviser on the field of social media
and business. He writes a blog on social
media, public relations, marketing and
technology. He may be reached by phone
at (505) 796-8184, e-mail info@
CrossCutCommunications.com or visit
http://CrossCutCommunications.com.
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Here are some tips to get you started
with LinkedIn:
O Remember that LinkedIn is a profes-
sional place. Use a professional
headshot, not one that your col-
league took at the last happy hour.
O Take the time to fill-in all of the
blanks. Every bit of information is
important.
O Recommendations are required, not
optional if you want to do this right.
Youre good at what you do and let
other people vouch for that. Ask col-
leagues and clients alike for their
recommendations, and be sure to
return the favor.
O When building your connections, do
a double take on each person. Make
sure that you do actually know them
and that you are okay with your rep-
utation being associated with theirs.
O Join groups and participate in dis-
cussions. This will help you build
your confidence in the social media
world and help you become a
thought leader in your industry.
O Make use of the apps. If you write for
a blog for instance, install one of the
blog apps. Its another free way to
push out your content and build
your following.
Twitter
Founded on the principles of text mes-
saging and blogging, Twitter has quick-
ly become a 140 character powerhouse
of Web content. Its messages are not
localized, contained or personal. They
have become legitimate sources of
information that are broadcast interna-
tionally through other news sources,
mobile phones, and of course, search
engines. Why then are some people so
reluctant to Tweet?
Twitter, from a business standpoint,
should never be 100 percent self-promo-
tion. People dont care about your trip
to the dentist unless you are recom-
mending a good one. Think of Twitter as
a way for you to get personal with the
leaders of your industry, and in
exchange, become a leader yourself. In
the mortgage business nowadays, there
are all kinds of bits and pieces of infor-
mation floating around out there, and
much of it is being discussed on Twitter.
Find a way to get in on the conversation.
Here are some tips to get started with
Twitter:
O First things first, observe the conver-
sation. Visit www.wefollow.com and
do a search for the term mortgage.
Are you surprised at how many users
are listed under that term? Now go
through that list and start follow-
ing people who are active partici-
pants in the mortgage conversa-
tions. Think of it like job shadowing.
O Go to Google and do a search for
mortgage blogs. Find a few blogs
that you like and subscribe to their
RSS feed. Use this as a way to start a
conversation.
O Build out your Twitter page the
same way you did your LinkedIn pro-
file, making sure all the blanks are
filled in.
O Start Tweeting and re-Tweeting!
People like when other people push
out their message. If you read a blog
that is relevant, Tweet about it. If
you read a Tweet that is relevant, re-
Tweet it. But make sure you are
Tweeting in your own voice, not
theirs.
O Make use of the tools that are out
there. Third-party tools, like Hootsuite
for instance, allow you to stay current
on multiple conversations at once
through the use of search columns,
allow you to shorten links and sched-
ule Tweets all from one dashboard.
The gist of it
The moral of the story is not to get so
caught up in everything thats happen-
ing in the social media world all at once.
Instead, do your research and find out
which elements of social media are rele-
vant to you and your industry and move
in that direction. LinkedIn and Twitter
are two musts in the mortgage industry,
maybe use this as a starting point.
At my company, our sales team has
seen great results out of these two Web
sites, both from a lead-generating stand-
point and from a purchasing standpoint.
Many of our vendors, partners and clients
were discovered through conversation on
Twitter, and many of our testimonials
reside on the LinkedIn profiles of our
employees. We have found a way to make
social media our own, and so will you.
Social media is nothing to fear. It can be
overwhelming in the beginning, but all you
need to do is focus on one thing at a time.
Dont try and jump in with both feet. There
is a lot out there and even more coming
with each passing day so it is important to
pick a path and stay the course.
Brian Bluff is president and co-founder
of New Hartford, N.Y.-based Site-Seeker
Inc., an Internet marketing firm that has
been recognized as being one of Central
New Yorks fastest growing small busi-
nesses. Site-Seeker specializes in SEO,
SEM, social media and Web develop-
ment, with a strong focus on the B2B
and manufacturing arena. For more
information, call (315) 732-9281 or e-
mail info@site-seeker.com.
In an age where the act of being social
actually does happen in the comfort of
your own home, office or car, the oppor-
tunity for business growth is increasing-
ly more obtainable. Today, more than
ever, the sales and marketing field has a
real opportunity to take public relations
to the next level, the individual level.
The days of group catego-
rization by way of one
brand are long gone. In
our current economy, we,
as sales professionals, rep-
resent our companys
brand along side our own.
For those of you cur-
rently utilizing social
media, do a quick search
for your name in Google,
and make sure that
youre sitting down. Are
you surprised at the
interest that the worlds
largest company has
taken in you? You, as a
social media participant,
are contributing to the
news, promotion, debate
and other forms of con-
tent that circle the globe
by way of the Internet
today. Social media gives
us as users, the ability to
contribute to nearly
everything happening in the world.
For those of you who are not cur-
rently utilizing social Web sites like
LinkedIn and Twitter, its about time
you considered it. Some people may
recall the dial and smile days. It was
a time in the careers of nearly all sales
professionals when they spent all of
their day on the phone calling count-
less numbers of random people in an
effort to establish a pipeline. Back
then, Google wasnt a verb, in fact, it
was nothing more than a misspelled
mathematical term. In this technology-
driven environment, the dreaded gate-
keeps of yesterday should be the least
of your worries. For sales professionals
today, not having your own online pro-
fessional brand is like never picking up
the phone. You can not expect to build
your pipeline if you are not engaging
with your prospects.
It is all well and good to say that you
need to be participating in social
media, but it is not enough to leave it
at that. Each social media outlet has its
own influence in the marketplace, and
in order to start developing your own
success story, you have to know which
ones will work for you and your per-
sonal brand, and which ones will leave
you spinning your wheels.
When I travel throughout the
Northeast helping audiences of people
find their success story online, it never
ceases to amaze me how many profes-
sionals are afraid of social media. There
are always excuses:
O I dont have time for
all that Tweeting.
O Im not looking for a
job, so I dont need
LinkedIn.
O Facebook is a place for
college kids to make
fools of themselves.
Comments like this typ-
ically come from people
who have not invested the
time into growing their
own personal brand. They
are comfortable with
things just the way they
are and they are afraid of
the consequences change
can bring. But what they
neglect to realize is that
sometimes not changing
can have more harsh con-
sequences than the latter.
To help guide you down
the right path, I suggest
taking some time to build on two of the
most popular social media sites current-
ly out there, LinkedIn and Twitter.
LinkedIn
For nearly every professional out
there, my first recommendation is to
build out a LinkedIn profile. It is not
just a place for job hunters, LinkedIn
is a credibility statement for you and
your company.
Those of us who are in the business
world today, understand that credibili-
ty is one of the most crucial elements
in the sales process. A product or serv-
ice can be a perfect match for your
consumer, but if the company name is
one that no one has heard of, you are
going to have to work much harder on
building confidence in it than you are
the product or service you are trying to
sell. Because so many decision-makers
are doing research online now before
meetings, LinkedIn is a great way to
build that credibility before you even
step in the door.
A Bit About Social Media
By Brian Bluff
Each social media
outlet has its own
influence in the mar-
ketplace, and in order
to start developing
your own success
story, you have to
know which ones will
work for you and your
personal brand
Chris Brown
Social networking stats
O Facebook (facebook.com/ConnectWithChris):
1,635 friends
O Twitter (@Chris_Brown_): 2,580 followers
Why you should connect with Chris?
Chris dominates the FHA landscape in Orlando though a
mix of high-quality blog posts and dangerously power-
ful Facebook pages. Hes a wonderful person who shares
the ideas that have helped him become so successful
with his peers.
Tim Davis
Social networking stats
O Facebook (facebook.com/timwdavis): 1,410 people
O Twitter (@MKTGEvangelist): 354 followers
Why you should connect with Tim?
Tim is a sales trainer who offers advice on building
your business including lots of great tips on working
with real estate agents.
Naoma Doriguzzi
Social networking stats
O Facebook (facebook.com/ndoriguzzi): 1,587 friends
O Twitter (@NaomaDoriguzzi): 5,835 followers
Why you should connect with Naoma?
Naoma shares updates from other mortgage industry insid-
ers and is just an all-around great person to connect with.
Brian Stevens & Frank Garay of
Think Big Work Small
Social networking stats
O FacebookBrian (facebook.com/TBWSBrian): 864 friends
O FacebookFrank
(facebook.com/profile.php?id=100001147785190):
324 friends
O Twitter (@TBWSD): 1,760 followers
Why you should connect with Brian and Frank of TBWS?
Are you serious? Do you now know why you should
connect with them? Love them or hate them, they pro-
vide fresh news with a dose of real world mortgage
originator experience and opinion.
Dan Green
Social networking stats
O LinkedIn (linkedin.com/in/mortgagereports):
426 connections
O Twitter (mortgagereports): 3,777 followers
Why you should connect with Dan?
Dan has been blogging for a long before it was cool to blog
(back when they called it a Web log. Between his relevant
blog posts, timely interest rate indicators and funny movie ref-
erences, he is, as us tweeter folks like to call follow-worthy.
Anny Havland
Social networking stats
O Facebook (facebook.com/annyhavland): 1,443 friends
O Twitter (@annyhavland): 728 followers
Why you should connect with Anny?
Anny shares relevant articles, with a mix of family and
fun with her company and around her local market.
Mark Madsen
Social networking stats
O Facebook (facebook.com/mark.madsen1): 593 friends
O Twitter (@mark_madsen): 1,481 people
Why you should connect with Mark?
While Mark claims not to be an expert on social media,
there are many of us who strongly disagree. His strate-
gies have helped countless mortgage professionals
build their business through social media.
Khai McBride
Social networking stats
O Facebook (facebook.com/khaimcbride): 1,562 friends
O Twitter (@KhaiMcBride): 581 followers
Why you should connect with Khai?
Khai is a time-management master who shares the secrets
of his success as a mortgage professional through Tweets
and Facebook updates.
Justin McHood
Social networking stats
O Facebook (facebook.com/jmchood): 473 friends
O Twitter (@jmchood): 1,966 followers
Why you should connect with Justin?
Justin is a mortgage guy who also really gets search
engine optimization.
Mike Mueller
Social networking stats
O Facebook (facebook.com/MikeMueller): 3,427 people
O Facebook Page
(facebook.com/MikeMuellerConsulting): 1,857 people
Why you should connect with Mike?
Mike shares his secret sauce on how to build powerful
Facebook pages. Hes got a really powerful Facebook
landing page at Facebook.com/MikeMuellerConsulting.
Rhonda Porter
Social networking stats
O Facebook (facebook.com/mortgageporter): 750 friends
O Twitter (@mortgageporter): 2,818 followers
Why you should connect with Rhonda?
Rhondas updates includes insights to her local Seattle
marketplace, real live quotes she is giving to her borrow-
ers (great idea to let her real estate partners know she is
active and has decent pricing) and amazing recipes!
Chik Quintans
Social networking stats
O Facebook (facebook.com/teamcq): 101 people
O Twitter (@chikquintans): 8,198 followers
Why you should connect with Chik?
Chik shares with his news, economic updates and his
special brand of humor with his followers. Plus, hes
got a really slick company page.
Scott Schang
Social networking stats
O Company Twitter (@HomeBuyerEd101): 187 followers
O Personal Twitter (@scottschang): 1,174 followers
Why you should connect with Scott?
Scott uses Twitter as an educational platform to teach
potential and existing homeowners.
Shashank Shekhar
Social networking stats
O Facebook (facebook.com/LendingExpert): 755 friends
O Twitter (@ShashankTweets): 486 followers
Why you should connect with Shashank?
Shashank has been killing it, showing users of social
media how to connect with first-time homebuyers and
referral partners to invite them to his Webinars.
Steve SchraderBachar
Social networking stats
O Facebook (facebook.com/MortgageMinute):
1,714 people
O Twitter (@MortgageMinute): 8,204 followers
Why you should connect with Steve?
Steve shares great quotes, progress of his loan files and
his blog posts on his Facebook and Twitter accounts.
Naomi Trower
Social networking stats
O Facebook (facebook.com/NaomiTrower): 1,717 friends
O Twitter (@NaomiTrower): 15,337 followers
Why you should connect with Naomi?
Naomi provides a fresh stream of mortgage, real estate
and social media content.
Tom Vanderwell
Social networking stats
O Facebook (facebook.com/tom.vanderwell):
473 friends
O Twitter (@tvanderwell): 2,167 followers
Why you should connect with Tom?
Tom has a deep understand of the mortgage market from
Main Street to Wall Street. The insights he shares on
Twitter can be very helpful in keeping you well informed.
Jeremiah Wean
Social networking stats
O Facebook (facebook.com/jwean): 1,486 friends
O Twitter (@JWean): 945 followers
Why you should connect with Jeremiah?
Jeremiah shares updates from other mortgage industry
insiders and is just an all-around nice guy and great
person to connect with.
Carl White
Social networking stats
O Facebook (facebook.com/MasterMindRetreat):
1,277 friends
O Facebook Page
(facebook.com/MortgageMarketingAnimals):
7,325 people
Why you should connect with Carl?
Carl has been sharing with thousands of mortgage pro-
fessionals, foolproof methods of turning Facebook into
a lead generating machine.
And five more important
Twitter feeds
@NatlMortgagePro
Official Twitter account of National Mortgage Professional
Magazine.
@NAMBLive
Official Twitter account of the National Association of
Mortgage Brokers.
@MortgageJobs
Get Tweets of mortgage jobs.
@HUDNews
Official Twitter feed for the U.S. Department of
Housing & Urban Development (HUD).
@REALTORS
Main Twitter account for the National Association of
REALTORS (NAR).
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properties that are well-located but
have not yet reached stabilized occu-
pancy levels. Prudential Mortgage
Capital is the commercial mortgage
lending business of Prudential
Financial Inc.
We are excited to offer this new
source of financing for multifamily
properties which addresses a clear need
of multifamily owners and investors in
todays market, said David Durning,
senior managing director of Prudential
Mortgage Capital Company. In addi-
tion to offering our multifamily bor-
rowers more flexibility for financing
higher-quality properties, we believe
this program compliments Prudentials
existing Fannie Mae DUS Lending
Program, as well as our Freddie Mac
Program Plus program offered through
Prudential Johnson Apartment Capital
Express.
Prudential Mortgage Capital has pro-
vided more than $16.4 billion in multi-
family mortgages over the last five
years, originating more than $2.4 bil-
lion in 2009.
For more information, visit www.pru-
mortgagecapital.com.
Del Mar DataTrac adds
new options to its ExTrac
product
Del Mar DataTrac Inc.
(DMD), a provider of afford-
able end-to-end mortgage
lending automation solu-
tions, business intelligence,
document imaging and management,
and loan process workflow tools, has
added four new DataTrac ExTrac
options. These ExTracs facilitate the
extraction, quality control and
exchange of mortgage loan data
between mortgage bankers and ware-
house lenders or servicing vendors.
In Q1 2010, the DataTrac ExTrac was
developed by DMD to streamline the
funding process with Comerica, Texas
Capital Bank and FiservWireXchange;
and to support the servicing process
with Dovenmuehle Mortgage Inc. The
funding ExTracs are designed to send
data from the DataTrac central data-
base to the warehouse lenders before
funds can be disbursed. For servicing,
ExTracs are designed to transfer loan
data to a servicing system used to man-
age the servicing of loans.
DataTrac ExTracs perform many
functions: capture required DataTrac
data; perform a quality control check
against defined vendor requirements;
and translate the data in a required for-
mat to the other system. This results in
a seamless transfer of information
eliminating data integrity issues.
Avoiding data errors is the single
most important component to the risk
management strategy for a mortgage
banker, said DMD Vice President for
Client Services Sue Sroka. DMD always
strives to share information with other
services to eliminate rekeying of data
and streamline the process.
For more information, visit www.dmd-
inc.com.
GMAC Mortgage
announces launch of its
Virtual Sales Network
GMAC Mortgage LLC has announced that it
has launched a Virtual Sales Network (VSN)
to market its suite of mortgage products.
This innovative new sales channel is
expected to attract more home buyers to
GMACs mortgage lending services by offer-
ing a more flexible alternative to tradition-
al branches. The VSN will consist of a team
of seasoned sales managers and loan offi-
cers operating on a remote, mobile basis
in order to quickly enter markets and
adapt to shifting industry conditions, while
keeping occupancy costs low. The team
will cultivate and leverage existing rela-
tionships with realtors within their regions
to generate originations.
We are excited to introduce this innova-
tive new platform, which is the first of its kind
among larger lenders, said Steve Abreu,
president of GMAC Mortgage Operations.
With the Virtual Sales Network, we are able
to better accommodate how customers
chose to do business with us. We see the net-
work as a catalyst to diversifying our mort-
gage lending revenues and introducing more
prospective home buyers to GMAC.
GMAC will initially launch the VSN in
California, North Carolina, South
Carolina, Pennsylvania and Arizona. The
company is exploring expansion oppor-
tunities in other states across the country
with a goal of building the team to 200
associates by the end of 2010.
For more information, visit www.gmac-
mortgage.com.
Valligent and Global DMS
join forces for new valua-
tion service
Valligent, a
provider of
collateral valuation and risk manage-
ment solutions, and Global DMS, a
provider of appraisal process manage-
ment solutions, have jointly announced
an end-to-end valuation service for
ordering, managing and delivering a
full range of valuation products in
MISMO-sanctioned XML data format
all in full compliance with the Home
Valuation Code of Conduct (HVCC),
Federal Housing Administrations (FHA)
appraisal guidelines, and Fannie Mae
and Freddie Macs Collateral Data
Delivery (CDD) program that is sched-
uled to be in effect as of July 1, 2010.
This collaborative service, called
MISMO-Connect, provides companies
with the valuation services of Valligent
and additional select valuation providers,
new to market continued from page 32
What is the biggest trend you see in quality control audits
for 2010?
So far in 2010, we are seeing exactly what we expected to see. The big numbers are with
violations with the final Truth-in-Lending and annual percentage rates (APRs). In
2009, this category did not register in the top 10. In 2010, it ranks number three with
a 183 percent increase from 2009 which includes all loan types and loan purposes.
Federal Housing Administration (FHA)
In the FHA loans department, Truth-in-Lending/APR violations rank fourth with
a 138 percent increase from 2009. It appears the problem with FHA is coming from
loan purchases and not from refinances. The FHA refinance does not register any
final Truth-in-Lending violations in the 10 category yet.
Conventional
Conventional loans rank higher. Truth-in-Lending/APR violations ranked third
with a 270 percent increase from 2009. It appears the conventional purchases are
not sharing with refinances because it is not registering within the top 10 categories
with conventional loan refinances.
Non-supervised mortgagee vs. supervised mortgagee
(non-bank lenders vs. bank lenders)
Violations by non-bank lenders ranked sixth in its top 10 categories with a 69 percent
increase from 2009. Bank lenders jumped to 154 percent in the same category.
Non-supervised loan correspondents vs. supervised loan correspondents
(brokers vs. bank brokers)
Brokers have the largest numbers of all. Brokers have a 413 percent increase in final
Truth-in-Lending violations since 2009. Bank brokers have a 160 percent increase
since 2009.
This means that violations with the final Truth-in-Lending/APR calculations
will continue to grow for all mortgage entities. This category did not register in the
top 10 for anyone and has spiked considerably. Also, we are only seeing part of the
story. There are many who have not performed their post-closing quality control
checks for the first quarter of 2010.
The mortgage professional may see steep fines from the state and other oversight
agencies if these issues are not resolved quickly. Quality Mortgage Services is only
auditing 10 percent of the FHA files and 10 percent of the conventional loans of
seller/servicers. The problem could be a lot worse based on the small sampling that
is has viewed in quality control. The FHA has announced a grace period for the first
quarter in order for its correspondents and mortgagees to get used to the new reg-
ulatory reform. The first quarter is over and those who have not performed their
post-closing QC checks will be overcome by events due to APR miscalculations and
steep fines from the state.
I recommend that principals or QC managers take control of this problem very
quickly. Those who are current on the post-closing QC checks are putting policies
and procedures in place based on the Q1 of 2010 quality control reports and will
weather the storm and come out stronger. Those who have a weak QC program will
be surprised when they are hit by the state or other agencies audits.
By Tommy A. Duncan, CMT
Sponsored by
Tommy A. Duncan, CMT is executive vice president of Quality Mort-
gage Services LLC. For answers to your QC and FHA questions, please
contact Tommy at (615) 591-2528 or e-mail taduncan@qcmortgage.com.
You may also visit Quality Mortgage Services LLC on the Web at
www.qualitymortgageservices.com.
continued on page 42
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and is powered by technologies from
Global DMS. The service streamlines the
entire valuation process and all products
are delivered in the MISMO-sanctioned
format. Rather than ordering and man-
aging various individual valuation prod-
ucts, mortgage companies can create
their own custom valuation workflow
seamlessly integrated with their loan
management system in a format fully-
compliant with the new GSE require-
ments and all other major guidelines
and regulations.
This is much more than a one-stop
service that covers valuation reports for
the full spectrum of lender needs, says
Jeremy McCarty, chief executive officer
and chief valuation strategist of
Valligent. Its also a way for lenders to
ensure that their valuation processes
are fully compliant with all of the relat-
ed regulations, including the Collateral
Data Delivery requirements set forth by
Fannie Mae and Freddie Mac.
For more information, visit www.valli-
gent.com or www.globaldms.com.
Valuation Partners
launches appraiser
proximity certifications
Valuation Partners, a
national real estate
valuations provider,
announced that it is providing certifi-
cations on all new orders that pro-
vide proof that the appraiser chosen
for each particular assignment has
the local knowledge and expertise to
complete the assignment. The com-
pany will provide these certifica-
tions, called an Appraiser Proximity
Certification, on every order at no
additional cost.
Using geocoding technology, each
Appraiser Proximity Certification
includes an automatically generated
map showing the location of both the
subject property and the appraisers
place of business. Prior to accepting
the order, the appraiser will acknowl-
edge the distance between his or her
office and the property is correct,
which helps ensure that the appraiser
has sufficient knowledge of the area
to provide an accurate valuation.
In the current environment, we
believe its extremely important to fully
certify the local expertise of our fee
appraisers, said Bill Fall, chief execu-
tive officer of Valuation Partners. Our
Appraiser Proximity Certifications will
provide lenders extra piece of mind
and assurance that the right expert is
on the job.
For more information, visit www.valua-
tionpartners.com.
PLATINUMdata announces
update to REALview Plus
appraisal tool
PLATINUMdata, a collateral solutions
provider to the financial industry, has
announced the update of its automat-
ed appraisal review product, REALview,
to REALview Plus to better assist lenders
and investors in scrutinizing the valua-
tion accuracy of their appraisals.
REALview is an automated underwrit-
ing and quality control appraisal review
tool that checks appraisals for compli-
ance, completeness and accuracy while
integrating public record and MLS data
to benchmark the value on the apprais-
al. In addition to providing the capabil-
ities of REALview, REALview Plus is an
enhanced version that provides an
automated method of best compara-
ble selection and an appraisal quality
score, based on sales comp relevance,
which can be used for bump logic work-
flow applications.
In the current market, lenders and
investors know that they cant just look
at property appraisals, said Rocky
Donathan, president of PLATINUMdata.
REALview Plus enables reviewers to be
more confident in an appraisal,
because our technology allows them to
cost-effectively and efficiently improve
appraisal quality with a standard
methodology that objectively evaluates
their valuation results.
REALview Plus offers an automated
quality score that accelerates the
appraisal review process with less risk by
providing a probability that an
appraised value is accurate. It performs
a sales comparables check that ensures
fewer valuation issues by utilizing the
most relevant sales comps near the sub-
ject property. The product uses multi-
sourced public record data and MLS data
when available to automate due dili-
gence, cutting down on research time
while still providing a diverse and thor-
ough review of data points.
For more information, visit
www.platdata.com.
Appraisal Institute
releases new book on the
appraisal review process
A new book
published by
the Appraisal
Institute pro-
vides practical
instruction on the appraisal review
process and helps promote greater
understanding between reviewers and
appraisers. Appraising the Appraisal:
The Art of Appraisal Review, second edi-
tion, is written by Richard C. Sorenson,
MAI. In his book, he describes common
deficiencies in appraisal reports and
offers tips for preparing careful and
constructive appraisal reviews that can
be applied by appraisers, lenders and
other professionals.
The guide includes updated infor-
mation on scope of work and data veri-
fication, real-world examples that high-
light the qualities of both effective and
ineffective appraisal reports, a new
case study, handy checklists and sample
review forms.
Sorenson is the principal of
Appraisal Management Consultants, a
firm that assists financial institutions
with appraisal review, real estate valua-
tion management and training. Sorenson
was previously with First Chicago Bank
(1958-1996), now Bank One, in various
appraisal and management positions and
was the 1995 national president of the
Appraisal Institute. He teaches appraisal
courses and commercial and residential
review seminars and has published
numerous articles in appraisal and bank-
ing journals.
For more information, visit
www.appraisalinstitute.org.
Blueberry Systems
announces integration
with CRMnows
Mortgage iQ
Blueberry Systems
LLC has announced
that it has integrated
its loan production
platform, RELAY, with
Mortgage iQ cus-
tomer management technology developed
by CRMnow. The integration lets Mortgage
iQ users access customized views of real-
time loan data within the RELAY system,
allowing them to manage both cus-
tomer relationships and loan produc-
tion from one system.
We are excited to offer our users
such an enhanced workflow, said
CRMnow President Chris King. With
RELAY, our users now have uniform
business rules in place from application
through production. This allows them
to be more efficient, have tighter con-
trol over loan data, and be of greater
assistance to borrowers than ever
before.
RELAY offers a complete loan origi-
nation system featuring a universal
data model, providing the most accu-
rate data in the industry. In contrast
to most systems that present an out-
dated database of record, the univer-
sal data model combines the various
systems and applications involved in
the production process, eliminating
data silos and the need for duplicate
or staggered data entry. And whereas
most systems only make available the
most recent data, the combined sys-
tems allow RELAYs data audit frame-
work to see a true side-by-side com-
parison of the various states of a loan
as it evolves, in real time, and high-
lights the discrepancies. The bottom
line is much higher data quality that
prevents costly pricing variances and
buybacks.
This integration is another valida-
tion of our commitment to data
integrity, and its great to see
CRMnow shares that commitment,
said Blueberry Systems President
Lloyd Booth. Combine that with user
efficiencies, and the dollars saved
really start to add up.
CRMnow previously purchased and
new to market continued from page 41
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Helping you do more.
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*Larger loans considered on a case-by-case basis.
Work with a financial partner committed to
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Jonathan Willems 630-242-7249 jwillems@bankfinancial.com
Baltimore, Philadelphia, Kansas City, St. Louis, Raleigh/Durham
Jennifer Colon 630-242-7248 jcolon@bankfinancial.com
Columbus, Louisville, Minneapolis/St. Paul, Oklahoma City/Tulsa
Photo credit: John Foxx
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& Handling
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 advi-
sors. As author of the Forward on Reversecolumn inThe Mortgage Press since
2002, Atare Agbamu communicates nationally with the housing finance commu-
nity, 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 re-
search to create a first of its kind resource for the reverse mortgage industry. It offers a comprehen-
sive overview of the industry 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 infor-
mation 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 clos-
ing 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
embedded Blueberry Systems financial
calculations engine into Mortgage iQ,
enabling users to calculate various
annual percentage rate (APR) scenarios
at their point of sale.
For more information, visit www.blue-
berrysystems.com or www.crmnow.com.
New service from
ClosingCorp assists lenders
with accurate GFEs
Closing Corp has
announced the
launch of its the SmartGFE Service. The
SmartGFE Service provides real-time fees
from local, regional and national vendors
in nine categories such as title insurance,
settlement services, closing attorneys,
home inspections, pest inspections,
appraisers, and more, as well as local
taxes and recording fees calculated
specifically for each transaction to help
create GFEs that meet the U.S
Department of Housing & Urban
Developments new mandated toler-
ance limits.
The SmartGFE Service is currently
integrated with Calyx Point 7.2, one of
the nations leading loan origination
software (LOS) platforms, with more LOS
integrations in development. Non-Calyx
Point users can access the data at the
newly-launched SmartGFE.com Web
site.
New Real Estate Settlement
Procedures Act (RESPA) regulations
require mortgage originators to provide
borrowers with binding GFEs for loan
origination costs, fees and taxes, which
cannot vary from the final costs on the
HUD-1. Estimates for required third-
party services such as title insurance or
closing attorney fees have a 10 percent
tolerance limit. Estimates must be pro-
vided within three business days of a
loan application and lenders must, sub-
ject to certain changed circumstances,
make up the difference if final costs
exceed the GFE tolerances.
SmartGFE helps solve many of the
widespread problems originators have
encountered with the new forms and
regulations. Now lenders can create
estimates that are competitive because
they are based on the most up-to-date
data available, said Paul Mass, presi-
dent of ClosingCorp. We utilize sophis-
ticated technology and vast databases
of fees for closing service providers
combined with recording fees and
transfer tax county record data to pro-
duce a broad, extremely accurate cost
estimate that is, in our opinion, unpar-
alleled in the industry.
For more information, visit www.closing-
corp.com.
Altisource announces
enhanced property
inspection report
A l t i s o u r c e
P o r t f o l i o
Solutions has
announced the launch of its enhanced
property inspection report which offers
servicers and asset managers detailed
information to enable more targeted
marketing efforts to expedite the sale of
residential properties. Unlike a tradi-
tional property inspection report which
provides a general evaluation of the
propertys condition, Altisources
enhanced property inspection report
includes a description of any physical
aspect that may significantly affect the
sale of the property. Details include the
existence and working condition of
major appliances, condition of the car-
pets or flooring and information, such
as whether electrical outlets and light
switches are properly working.
Theres a big difference in the
approach to marketing properties that
need minor cosmetic work as opposed
to those that need major repairs and
replacement of appliances, said Tara
Williams, vice president of field services
for Altisource. By getting detailed
information about the properties con-
dition upfront, servicers and asset man-
agers are able to market the properties
to the right buyers from the start and
avoid the surprises that can lead to the
property falling out of escrow.
As an example, Williams explained
the Federal Housing Administration
(FHA) maintains certain standards for
the propertys condition. If the buyer
seeks to obtain FHA financing, sellers of
residential assets typically cover the
costs of necessary repairs to bring the
property up to FHA standards.
Servicers and asset managers can
leverage the detailed information pro-
vided in our enhanced property inspec-
tion report to support their marketing
efforts. If the property needs extensive
repairs, sellers may choose to target
cash buyers or investors who are less
likely to make repair demands, said
Williams.
The enhanced property inspection
report also includes periodic updates
from on-site inspectors as frequently as
every two weeks. The report is complet-
ed by a real estate professional inde-
pendent from any other party providing
services in support of the property sale.
Altisources property inspection and
preservation services are nationwide
and is led by a team of professionals
averaging 15 years of real estate dispo-
sition experience. Altisource manages a
large scale distributed network of ven-
dors and performs tens of thousands of
inspections monthly.
For more information, visit www.alti-
source.com.
Your turn
National Mortgage Professional Magazine
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
preferred. The deadline for submissions
is the 1st of the month prior to the tar-
get issue.
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JUNE 2010
Thursday-Friday, June 24-25
National Association of Mortgage Brokers
2010 Mid-Year Meeting
Phoenix Airport Marriott
1101 North 44th Street Phoenix, Ariz.
For more information, call (703) 342-5900
or visit www.namb.org.
JULY 2010
Wednesday-Saturday, July 7-10
Florida Association of Mortgage
Professionals 50th Anniversary Annual
Convention & Trade Show
From FAMB to FAMP 50 Golden Years
Rosen Shingle Creek
9939 Universal Boulevard Orlando
For more information, call (850) 942-6411
or visit www.famb.org.
Wednesday, July 14
Lets Make a Deal Tri-State Wholesale
Lending Fair
Trump Taj Mahal Casino Resort
1000 Boardwalk Atlantic City, N.J.
For more information, call (973) 379-7447
or visit www.mbanj.com.
SEPTEMBER 2010
Thursday, September 9
Minnesota Mortgage Association 2010
Convention & Exhibitor Showcase
Sheraton Bloomington Hotel
Minneapolis South
7800 Normandale Boulevard
Bloomington, Minn.
For more information, call (952) 345-3240
or visit www.themma.org.
Thursday-Saturday, September 9-11
Texas Association of Mortgage Professionals
2010 Annual Convention & Marketplace
All Roads Lead to Texas!
The Hilton Austin Hotel
500 East 4th Street Austin, Texas
For more information, call (800) 850-8262
or visit www.ttamp.org.
Thursday, September 16
Iowa Association of Mortgage Brokers
2010 Annual Convention
White Oak Vineyards
15065 Northeast White Oak
DriveCambridge, Iowa
For more information, call (515) 210-4675
or visit www.iowamortgagebrokers.org.
Monday-Wednesday, September 20-22
Second Annual Northeast Conference of
Mortgage Brokers
Trump Taj Mahal Casino Resort
1000 Boardwalk
Atlantic City, N.J.
For more information, call (973) 379-7447
or visit www.mbanj.com.
Tuesday, September 21
New York Association of Mortgage Brokers
22nd Annual Convention
The Melville Marriott
1350 Old Walt Whitman Road Melville, N.Y.
For more information, call (914) 315-6644
or visit www.nyamb.org.
Tuesday-Wednesday, September 21-22
Illinois Association of Mortgage
Professionals 21st Annual Fall Conference
Location to be determined
For more information, call (630) 916-7720
or visit www.iamp.biz.
OCTOBER 2010
Thursday-Friday, October 14-15
Kentucky Association of Mortgage
Professionals 2010 Annual Convention
Location to be determined
For more information, call (270) 929-2836
or visit www.kyamp.net.
Tuesday-Wednesday, October 19-20
Utah Association of Mortgage Brokers
2010 Annual Expo
Location to be determined
For more information, call (801) 787-6611
or visit www.uamb.org.
Sunday-Wednesday, October 24-27
Mortgage Bankers Association 97th Annual
Convention & Expo
Atlanta Georgia Congress Center
285 Andrew Young International
Boulevard NW Atlanta
For more information, call (800) 793-6222
or visit www.mortgagebankers.org.
NOVEMBER 2010
Monday-Wednesday, November 8-10
Mortgage Bankers of Pennsylvania Conference
Wyndham-Conference Center
95 Presidential Circle Gettysburg, Pa.
For more information, call (973) 379-7447
or visit www.mba-pa.org.
DECEMBER 2010
Saturday-Monday, December 4-6
NAMB/WEST 2010
MGM Grand Las Vegas
3799 Las Vegas Boulevard South Las Vegas
For more information, call (703) 342-5900
or visit www.namb.org.
APRIL 2011
Sunday-Wednesday, April 3-6
2011 National Association of Mortgage
Brokers 2011 Legislative & Regulatory
Conference
Hyatt Regency Washington on Capitol Hill
400 New Jersey Avenue NW
Washington, D.C.
For more information, call (703) 342-5900
or visit www.namb.org.
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.
COMPANY WEB SITE PAGE
Abacus Mortgage Training and Education .......... www.getyoured.com ......................................4 & 27
ACC Mortgage .................................................. www.weapproveloans.com ....................................16
BankFinancial .................................................. www.bankfinancial.com ......................................42
Calyx Software ................................................ www.calyxsoftware.com ........................................19
CAAMP ............................................................ www.mortgageconference.ca ................................13
Comergence Compliance Monitoring, LLC .......... www.comergencetrustedmember.com ..............7 & 32
Credit Mastery Event ........................................ www.creditmasteryevent.com ..............................11
Emigrant Mortgage Company ............................ www.emigrantmortgage.com ................................17
Entitle Direct Group.......................................... www.entitledirect.com ..................Inside Front Cover
First Source Capital Mortgage, Inc. .................... www.fscmortgage.com ..........................................19
Flagstar Wholesale Lending .............................. www.paperless.flagstar.com ......................Back Cover
Freedom Mortgage .......................................... www.fmbranch.com ......................Inside Back Cover
Frost Mortgage Banking Group .......................... frostmortgage.com/nmp ........................................23
Gateway Mortgage Group, LLC .......................... www.gatewayloan.com ........................................38
GSF Mortgage Corporation ................................ www.gsfprobranch.com ........................................21
Guaranteed Home Mortgage.............................. www.joinguaranteed.com ....................................31
iServe Residential Lending, LLC ........................ www.iservecompanies.com ..................................29
Mortgage Concepts .......................................... www.mortgageconceptsonline.com ........................22
MortgageProShop.com...................................... www.mortgageproshop.com ..................................43
NAMB.............................................................. www.namb.org..............................................20 & 38
NAMB/WEST .................................................... www.nambwest.com ....................................24 & 26
NAPMW .......................................................... www.napmw.org ..................................................33
PB Financial Group Corp. .................................. pbfinancialgrp.com ..............................................10
Quality Mortgage Services ................................ www.qcmortgage.com ..................................35 & 41
REMN (Real Estate Mortgage Network)................ www.remnwholesale.com ....................................25
Ridgewood Savings Bank .................................. www.ridgewoodbank.com ....................................30
Shore Financial Services, Inc. ..........................................................................................................9
Titan Lists and Mailing Services, Inc................... www.titanlists.com ..............................................15
United Northern Mortgage Bankers Ltd. ............ www.unitednorthern.jobs .............................. 5 & 14
Xetus Mortgage Corporation.............................. www.xetus.com ....................................................22
MRev Orlando, FL
July 8-9
Brian and Frank from TBWS, Carl White,
Chris Brown, Sue Woodard, Todd Duncan,
Tim Davis and lots more!
Visit MRev.org for more details.
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