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
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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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Value Nation: Appraisal Review Goes High-Tech
By Charlie W. Elliott Jr., MAI, SRA
Is the Broker-to-Banker Business Really Dead?
By Elaine Roccio
SAFE Smart … Is the Light Worth the Candle?
By Paul Donohue, CRMS
Forward on Reverse: FIT for Reverse Mortgage Lenders:
Part II … The Fuss Over FIT By Atare E. Agbamu, CRMS
Ask Tommy: Your QC Expert By Tommy A. Duncan, CMT
The NAMB Perspective
NMP Mortgage Professional of the Month: Paul Donohue,
Founder of Abacus Mortgage Training and Education
Trend Spotter: The Three Numbers That Really Matter
By Gibran Nicholas
The Secondary Market Overview: The Short-Term and the
Long-Term By Dave Hershman
A New Era of Mortgage Reform … Part III: Consumer
Financial Protection—Bureau and Bureaucracy
By Jonathan Foxx
The Trusted Mortgage Professional: Bonded and Insured
… A Foundation for Rebuilding Trust By Greg Schroeder
Taking Control of Your Marketing By Rene F. Rodriguez
A View From the C-Suite: Marketing vs. Sales …
Understanding the Difference By David Lykken
What Are You Marketing For? By Andy W. Harris, CRMS
The Truth About Direct Mail By Joy Gendusa
Turning a Headache on Its Head By John A. Woloshen
How the Consumer Experience is Driving Change in the
Mortgage Industry By Jeff Solomon
A Message From NMP Media Corp.
Executive Vice President Andrew T. Berman
This month’s edition starts off with a great piece by Elaine Roccio on a topic we haven’t
covered in a long time ... broker to banker. Read her article see just what “broker to
banker” means in today’s world. How’s your ADDP? There’s a new word that is pro-
nounced “Add-Pee” and stands for “Appraisal Defect Detection and Prevention.” Turn to
this month’s “Ask Tommy: Your QC Expert” column to learn what this word means to
you and your LQI. This month’s NAMB Perspective has some details on the NAMB/WEST
program in Las Vegas in December from NAMB/WEST Conference Chair, Donald
Frommeyer, CRMS, as well a great piece from Deb Killian, CRMS issuing a call to action
for wholesalers. Another must-read piece is Gibran Nicholas’s installment of Trend
Spotter. Gibran reveals three crucial numbers that you should know by heart as they can help serve as
motivation to finish this year off strong. Dave Hershman shares his thoughts on the short-term and long-
term direction of the marketplace in this month’s Secondary Market Overview. This month, we wrap up the
three-part series where Jonathan Foxx dug his hands deep into the 2,000-plus pages of the Dodd-Frank Act.
It is wrapped up by a look at the Consumer Financial Protection Bureau (CFPB).
This month’s Mortgage Professional of the Month
We had a chance this month to shine the spotlight on a legend in lending and training, Paul Donohue. Paul
shares his roots from being a builder, to being active in the North Carolina Association of Mortgage
Professionals, to using his philosophy of using teams to help close a loan.
It’s all about the marketing
What does this phrase mean? Technically, everything you do is marketing. Sure, there are many things about
outbound communication, such as direct mail, e-mail marketing, Web site promotion, search engine opti-
mization (SEO), etc., however, it so much more than that. It’s how you communicate on the phone with your
clients, its about the appearance of your e-mails to your borrowers from your processors, how a servicer rep
deals with payment issues on the phone, and basically any interaction you have with your borrowers and
potential referral sources.
This month, we collected articles from some of the leading minds in the mortgage business to share
their thoughts, strategies and secrets on marketing. The section starts off with Mortgage Dashboard Chief
Executive Officer Rene F. Rodriguez sharing his thoughts on controlling your marketing processes. Renee is
followed by the “View From the C-Suite” by David Lykken discussing the difference between sales and mar-
keting, and developing a powerful marketing strategy that fits you business plan. Further in the section,
Andy W. Harris, CRMS from Vantage Mortgage Group Inc. teaches us about executing long-term marketing
strategies which include personal development. Direct mail maven, Joy Gendusa from PostcardMania talks
about how direct mail is still relevant in today’s marketing environment. While we are on the subject of
direct mail, be sure to check out the piece by John A. Woloshen of RATA Associates on using HMDA and CRA
data for target marketing. The section is wrapped up with a piece from Jeff Solomon of Leads360 about
cultaivating consumer experience from the early stages of the sales process.
An opportunity to share and grow
At the beginning of this year, I saw video by Carl White of Mortgage Marketing Animals about sharing your
ideas. In the video, Carl lights a candle and shares the flame with others in the room. As he shares, the
light becomes stronger, yet his flame does not go down. You can see the video at nmpmag.com/flame. As
an example, taking what you’ve learned in your market and sharing these successful strategies with others
from around the country. This year, I witnessed this firsthand at the Mortgage Revolution events that have
been held nationwide. I mention this because one of the last chances to meet with other mortgage pro-
fessionals from around the country is coming up Saturday-Monday, Dec. 4-6 at NAMB/WEST 2010 in Las
Vegas. For more details about this event, visit www.NAMBWEST.org.
Until next month ...
Andrew T. Berman, Executive Vice President
NMP Media Corp.
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October 2010
Volume 2 • Number 10
1220 Wantagh Avenue • Wantagh, NY 11793-2202
Phone: (516) 409-5555 / (888) 409-9770
Fax: (516) 409-4600
Web site: www.nationalmortgageprofessional.com
Mortgage
PROFESSIONAL
N A T I O N A L
M A G A Z I N E
Your source for the latest on originations, settlement, and servicing
STAFF
Eric C. Peck
Editor-in-Chief
(516) 409-5555, ext. 312
ericp@nmpmediacorp.com
Andrew T. Berman
Executive Vice President
(516) 409-5555, ext. 333
andrew@nmpmediacorp.com
Domenica Trafficanda
Art Director
domenicat@nmpmediacorp.com
Karen Krizman
Senior National Account Executive
(516) 409-5555, ext. 326
karenk@nmpmediacorp.com
Jon Blake
Advertising Coordinator
(516) 409-5555, ext. 301
jonb@nmpmediacorp.com
Jennifer Moeller
Billing Coordinator
(516) 409-5555, ext. 324
jenniferm@nmpmediacorp.com
ADVERTISING
To receive any information regarding advertising rates, deadlines and require-
ments, please contact Senior National Account Executive Karen Krizman at
(516) 409-5555, ext. 326 or e-mail karenk@nmpmediacorp.com.
ARTICLE SUBMISSIONS/PRESS RELEASES
To submit any material, including articles and press releases, please
contact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or e-mail
ericp@nmpmediacorp.com. The deadline for submissions is the first of
the month prior to the target issue.
SUBSCRIPTIONS
To receive subscription information, please call (516) 409-5555, ext.
301; e-mail orders@nmpmediacorp.com or visit www.nationalmort-
gageprofessional.com. Any subscription changes may be made to the
attention of “Circulation” via fax to (516) 409-4600.
Statements, articles and opinions in National Mortgage Professional Magazine
are the responsibility of the authors alone and do not imply the opinion or
endorsement of NMP Media Corp., or the officers or members of National
Association of Mortgage Brokers and its State Affiliates (NAMB), National
Association of Professional Mortgage Women (NAPMW), National Credit
Reporting Association (NCRA) and/or other state mortgage trade associations.
Participation in NAMB, NAPMW, NCRA, and/or other state mortgage
trade associations events, activities and/or publications is available on
a non-discriminatory basis and does not reflect the endorsement of the
product and/or services by NMP Media Corp., NAMB, NAPMW, NCRA,
and other state mortgage trade associations.
National Mortgage Professional Magazine, NAMB, NAPMW, NCRA,
and/or other state mortgage trade associations do not make any misrepre-
sentations or warranties concerning the regulatory and/or compliance
aspects of advertisers, products or services and/or the editorial content con-
tained in NMP Media Corp. publications. National Mortgage Professional
Magazine and NMP Media Corp. reserve the right to edit, reject and/or post-
pone the publication of any articles, information or data.
National Mortgage Professional Magazine
is published monthly by NMP Media Corp.
Copyright © 2010 NMP Media Corp.
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National Credit Reporting Association Inc.
125 East Lake Street, Suite 200 O Bloomingdale, IL 60108
Phone #: (630) 539-1525 O Fax #: (630) 539-1526
Web site: www.ncrainc.org
The National Association of
Mortgage Brokers
11325 Random Hills Road, Suite 360
Fairfax, VA 22030
Phone #: (703) 342-5900 O Fax #: (703) 342-5905
President—William R. Howe, CMC, CRMS
Howe Mortgage Corporation
13322 East Paradise Drive O Scottsdale, AZ 85259
(602) 200-8100 O bill@howemortgage.com
President-Elect—Michael D’Alonzo, CMC
Creative Mortgage Group
1126 Horsham Road, Suite D O Maple Glen, PA 19002
(215) 657-9600 O mjdalonzo@hotmail.com
Vice President—Donald J. Frommeyer, CRMS
Amtrust Mortgage Funding Inc.
200 Medical Drive, Suite D O Carmel, IN 46032
(317) 575-4355 O dfrommeyer@amtrust.net
Secretary—Virginia Ferguson, CMC
Heritage Valley Mortgage Inc.
5700 Stoneridge Mall Road, Suite 225 O Pleasanton, CA 94588
(925) 469-0100 O hvm1@msn.com
Treasurer—John Councilman, CMC,CRMS
AMC Mortgage Corporation
2613 Fallston Road O Fallston, MD 21047
(410) 557-6400 O jlc@amcmortgage.com
Immediate Past President—Jim Pair, CMC
Mortgage Associates Corpus Christi
6262 Weber Road, Suite 208 O Corpus Christi, TX 78413
(361) 853-9987 O jlpair@aol.com
Michael Anderson, CRMS
Essential Mortgage
3029 S. Sherwood Forest Boulevard, Suite 200
Baton Rouge, LA 70816
(225) 297-7704 O mikea@essentialmtg.com
Donald Fader, CRMS
SMC Home Finance
P.O. Box 1376 O Kinston, NC 28503-1376
(252) 523-5800 O dfader@smchf.com
Deb Killian, CRMS
Charter Oak Lending Group LLC
3 Corporate Drive, P.O. Box 3196 O Danbury, CT 06813-3196
(203) 778-9999, ext. 103 O debkillian@snet.net
Olga Kucerak, CRMS
Crown Lending
222 East Houston, Suite 1600 O San Antonio, TX 78205
(210) 828-3384 O olga@crownlending.com
Walter Scott
Excalibur Financial Inc.
175 Strafford Avenue, Suite 1 O Wayne, PA 19087
(215) 669-3273 O wscott.afcs@gmail.com
Donald Starks
D.C. Starks Mortgage Associates Inc.
141 South Main Street O Bourbonnais, IL 60914
(815) 935-0710 O donstarks@starband.net
Marty Flynn
President
(925) 831-3520, ext. 224
marty@ccireports.com
Tom Conwell
Vice President
(248) 473-7400
tconwell@credittechnologies.com
Daphne Large
Treasurer
(901) 259-5105
daphnel@datafacts.com
William Bower
Director
(800) 288-4757
wbower@confinfo.com
Mike Brown
Director
(800) 285-6691
mike.brown@ncogroup.com
Susan Cataldo
Director
(404) 303-8656, ext. 204
susancds@cdsusa.net
Nancy Fedich
Director
(908) 813-8555, ext. 3010
nancy@cisinfo.net
Sanford (Sandy) Lubin
Director
(805) 481-3155
slubin@cbslo.com
Judy Ryan
Director
(800) 929-3400, ext. 201
jryan@kroll.com
Tom Swider
Director
(856) 787-9005, ext. 1201
tswider@creditlenders.com
Donald J. Unger
Director
(303) 670-7993, ext. 222
don@advcredit.com
NCRA Staff
Terry Clemans
Executive Director
(630) 539-1525
tclemans@ncrainc.org
Jan Gerber
Office Manager/Membership Services
(630) 539-1525
jgerber@ncrainc.org
President
Gary Tumbiolo, CMI
(919) 452-1529
garytumbiolo@aol.com
President-Elect
Laurie Abshier, GML, CMI
(661) 283-1262
E-Mail: lauriea@gemcorp.com
Senior Vice President
Candace Smith, CMI, CME
(512) 329-9040
csmith@wrstarkey.com
Vice 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
Lisa Puckett
(405) 741-5485
lpuckett@ameagletitle.com
Vice President—Eastern Region
Christine Pollard
(646) 584-8332
cpollard1046@gmail.com
Secretary
Murielle Barnes, CME
(806) 373-6641
napmw123@yahoo.com
Treasurer
Hulene Bridgman-Works
(972) 494-2788
hulene137@yahoo.com
Parliamentarian
Dawn Adams, GML, CMI
(607) 737-2584
dawnvadams@live.com
NAMB Board of Directors
National Association of Professional
Mortgage Women
P.O. Box 451718 O Garland, TX 75042
Phone #: (800) 827-3034 O Fax #: (469) 524-5121
Web site: www.napmw.org
Officers
Directors
2010 Board of Directors
National Board of Directors
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www.protelus.com
sales@protelus.com
(866) 381-9519 Ext. 106
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Rep. Cardoza seeking
mass refinance of all
mortgages to prevailing
low rates
California Rep. Dennis
Cardoza has announced
legislation to stabilize the
foreclosure crisis through
the federal government’s
conservatorship of Fannie
Mae and Freddie Mac
with support of two of the nation’s lead-
ing economists, Columbia Business
School Senior Vice Dean Christopher
Mayer and Moody’s Analytics Chief
Economist Mark Zandi. The Housing
Opportunity and Mortgage Equity
(HOME) Act would use the federal gov-
ernment’s conservatorship and backing
of Fannie and Freddie mortgages to
secure the current low market rates for
longer fixed terms.
Mortgages currently held by Fannie
Mae and Freddie Mac that meet the
basic criteria will also qualify for the
opportunity to refinance without
penalty fee barriers. To fund the pro-
gram, Fannie and Freddie would issue
new mortgage-backed securities (MBS)
to fund the refinanced mortgages and
use the proceeds to pay off the existing
mortgages. Fannie and Freddie would
receive the same cash flow to cover
default risk that they do now, passing
along the reductions in financing costs
to borrowers.
The proposed legislation would
impact nearly 30 million mortgages
held or backed by Fannie and Freddie.
The HOME Act would allow for refi-
nances of 30-year, fixed-rate mortgages
at the current record-low rates in the
4.4 percent range for anyone seeking to
refinance a government-backed loan.
“With mortgage rates near record
lows, the quickest and most effective
way policymakers can help the economy
is to facilitate more mortgage refinanc-
ings,” said Zandi. “The HOME Act does
this at little or no cost to taxpayers.”
The HOME Act would also help sta-
bilize the housing market by decreas-
ing the inventory of foreclosed homes
and reducing declines in property val-
ues from issues surrounding blight and
abandonment. At the same time, those
with mortgages backed by Fannie and
Freddie would have additional dispos-
able income, providing a direct eco-
nomic stimulus.
“No solution to date has addressed
both foreclosure prevention and the
decline of home equity. The reality is
the housing crisis has spread far beyond
the subprime market, hindering our
economic recovery,” said Rep. Cardoza.
“None of the Administration’s current
housing programs have been far-reach-
ing enough to make a dent in the worst
foreclosure crisis in U.S. history. Until
we see a program that cuts to the heart
of the recession, we will continue to see
little growth in our economy, families
losing their homes and lifetime invest-
ments with lost equity.”
The legislation was initially intro-
duced in January 2009. It has been
modified based on new input received
from leading economists and the House
Financial Services Committee. It also
reflects changes in the housing market.
It was reintroduced with contributions
from Mayer and Zandi. The proposal
has gained increased interest as more
economists realize that measures
aimed at addressing the foreclosure
meltdown have not been sufficient.
For more information, visit
http://cardoza.house.gov.
FHA announces new
affordable HECM Saver
reverse mortgage option
The Federal Housing
Administration (FHA) has
announced a new modified
version of its Home Equity
Conversion Mortgage (HECM)
product. The HECM loan is a reverse mort-
gage-insured by the federal government. It
allows older home owners to tap into their
equity to cover living expenses and health-
care costs, while continuing to live in their
home without having to make the mort-
gage payments that are required with a tra-
ditional mortgage or equity loan.
The FHA designed HECM Saver as a
second reverse mortgage option for the
purpose of lowering upfront closing
costs, for homeowners who want to
borrow a smaller amount than what
would be available with a HECM
Standard loan. This option will be
available for all HECM case numbers
assigned on or after Oct. 4, 2010.
“Despite the popularity of our HECM
loan product, we have noted concerns
that some senior citizens find that our
continued on page 7
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MortgageCompanySpecialist@amertoner.com
www.amertoner.com
Appraisal Review Goes High-Tech
This month’s column is the first of three
installments that I am writing to bring
attention to and to extol the virtues of
the three most-commonly used apprais-
al review reports as a quality control
tool. These tools are:
O The Electronic Appraisal Review,
O The Desk Review, and
O The Field Review.
They are listed in the order of the
least comprehensive to the most com-
prehensive. This series of
columns is designed to
assist the reader in mak-
ing the proper decision as
to which review tool is
best for a given situation.
With all the concern
today about the mortgage
meltdown and what
caused it, much discussion
has been focused on the
accuracy of appraisals.
While we would all agree
that there are many con-
tributing factors to one of
the largest banking disas-
ters in history, the real
estate appraisal undoubt-
edly deserves its share of
the blame. While there are
many different types of
shortcomings associated
with appraisals, most can
be detected with a proper appraisal
review. It is the responsibility of the
financial institution to monitor the quali-
ty of all appraisals it uses in connection
with its collateralized loans.
This responsibility does not come
without a monetary cost. Realizing that
the bank must make an investment in the
quality of its appraisals is one thing. How
much should be invested is this quality
control another. It would be very easy to
for a bank spend more on the review of
an appraisal, than it did for the appraisal
itself. These costs manifest themselves in
a variety of ways, including office over-
head, technology services, staff costs and
review appraisers. More than half of the
appraisals, considered for collateralized
loans, require specialized review atten-
tion. A few of them will require a lot of
review and scrutiny. I would go so far as
to say that the 80/20 rule is alive and well
in the appraisal review business. Said
another way, it is probable that 20 per-
cent of the appraisals require 80 percent
of the review resources invested by a bank
for a given lot of loan applications. The
process of resource allocation and the
directing of scrutiny toward specific
appraisals requiring the most attention
can be an onerous one.
How does one determine
which of the appraisals rep-
resent the 20 percent that
cause most of the heavy lift-
ing? How do we tell if a
given appraisal justifies a lot
of review time and expense?
Those in charge of the
appraisal review budget
may be interested to learn
that there is a safe and eco-
nomical way to perform
reviews without betting the
farm on each deal. It is
called the Electronic
Appraisal Review and is an
electronic screening tool
that serves to identify the
qualities that are out of sync
with the norm or the typi-
cal. Electronic review tools
are offered by a number of
mortgage IT companies,
including ACI and FNC. These review sys-
tems only work on standard appraisal
forms, such as the Fannie Mae 1004 (stan-
dard) or its 2055 (drive-by) formats. They
hone in on the fields of each form and
address each part of the appraisal with
what are called rules. If a field does not
conform to the pre-prescribed rule, it will
receive a demerit for that part of the
appraisal. The demerits are cumulative
depending what field a rule is broken in.
Some review systems have their own for-
mula that is used to grade an appraisal.
Some fields carry more weight than others.
Once the review is complete, depending
upon the software program, a decision can
By Charlie W. Elliott Jr., MAI, SRA, ASA
“Realizing that the
bank must make an
investment in the
quality of its
appraisals is one thing.
How much should be
invested is this quality
control another.”
continued on page 14
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W E A R E R E M N W H O L E S A L E
At REMN, we understand that mortgage
companies perform best when they focus on
what’s important: their customers. We are
industry veterans and FHA specialists who
understand that every application is precious.
We treat each file with the respect – and
urgency – it deserves. Even better, at REMN,
same-day approvals are guaranteed.*
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
It’s about
time.
fees are too high for them,” said FHA
Commissioner David H. Stevens. “In
response, we created HECM Saver
which will provide seniors with a
reverse mortgage option that signifi-
cantly lowers costs by almost eliminat-
ing the upfront Mortgage Insurance
Premium (MIP) that is required under
the standard HECM option.”
HECM Saver will have an upfront
premium of only 0.01 percent of the
property’s value. Under the HECM
Standard option, the upfront premium
will remain at two percent. The MIP for
both HECM Saver and HECM Standard
will be charged monthly at an annual
rate of 1.25 percent of the outstanding
loan balance.
The reduction in upfront fees will be
accomplished while substantially lower-
ing the risk to the FHA insurance fund
because the principal limit or amount of
money available to a borrower under
the HECM Saver program will be
reduced. Borrowers will receive approx-
imately 10 to 18 percent less under the
HECM Saver option, than they would
receive under HECM Standard.
HECM borrowers may opt to receive
funds as a lump sum at loan origina-
tion, establish a line of credit or request
fixed monthly payments that are dis-
bursed for as long as they continue to
live in the home. Funds are advanced to
the borrower and interest accrues, but
the outstanding amount does not have
to be repaid until the borrower dies,
leaves the home or sells the property. At
that time, if the balance due on the
loan exceeds the value of the home,
FHA insurance pays the difference.
For more information, visit www.hud.gov.
CoreLogic’s short sale
survey finds lender loss
amounts to $300 million-
plus annually
CoreLogic has announced
the release of its 2010
Short Sale Research Study,
a scientific, data-driven
approach to analyzing mortgage short
sales to identify trends, risks and oppor-
tunities for mortgage lenders. The esti-
mated industry financial impact of short
sale fraud is $310 million annually with
the risk of ‘unnecessary losses’ occurring
in one in every 53 short sale transactions.
The average amount of unnecessary loss
is $41,000 per short sale transaction.
“A jobless economic recovery and
weak home prices are fueling short sales
volume,” said Craig Focardi, senior
research director, consumer lending at
The TowerGroup. “In many instances,
government-sponsored or private short
sale programs are a preferable alterna-
tive to foreclosure. However, important
aspects of the short sale transaction are
disclosure of all potential buyers to the
seller and accurate home price compa-
rables. The long duration of mortgage
defaults and potential loss upon home
sale mandates automation and out-
sourcing of technology to reduce loss
and risk for lenders.”
The results are derived from
CoreLogic’s examination of a represen-
tative data sample of single family resi-
dence (SFR) short sale transactions from
the past two years. The CoreLogic trans-
action data used for the study repre-
sents 98 percent of real estate transac-
tions and 85 percent of mortgage
financing details. This large collection
of historic and current data gives
CoreLogic the ability to analyze seg-
ments of transactions, such as short
sales, with tremendous precision.
“By definition, short sales constitute
a financial loss to lenders but will con-
tinue to be a necessary part of the
mortgage industry as it seeks stabiliza-
tion. The primary objective for lenders
is to eliminate unnecessary loss,” said
Tim Grace, senior vice president of
fraud analytics for CoreLogic. “The best
way to mitigate fraud risk and unnec-
essary loss is through a collaborative
effort where lenders collectively share
pre-closing and post-closing informa-
tion. Lenders in the CoreLogic Mortgage
Fraud Consortium will benefit greatly
from sharing knowledge of concurrent
transactions pending on short sale
properties in real-time.”
Highlights of the study include:
O The number of short sales in the
market has more than tripled since
2008 with the estimated annual vol-
ume at 400,000. Multiple variables
indicate short sales will continue to
be a frequent and important part of
the mortgage industry.
O Over half (55.8 percent) of all short sales
occur in just four states (California,
Florida, Texas, and Arizona).
O Approximately four percent of short
sales have a subsequent resale with-
in 18 months.
Investor driven short sales are not
inherently bad. Investors provide the
industry with necessary liquidity.
continued on page 8
news flash continued from page 4
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news flash continued from page 7
O Short sale transactions may be deemed
risky to the lender when either: The
second sale amount is vastly higher
than the short sale amount, and/or the
two sale transactions are executed
within a very short window of time.
O Short sale fraud exists. While the
exact definition of what constitutes
fraud continues to evolve, CoreLogic
analysis indicates lenders are consis-
tently incurring more loss than nec-
essary. Approximately one in every
53 (1.9 percent) short sale transac-
tions was part of an egregious flip
and therefore deemed risky.
O It is estimated that lenders are incur-
ring unnecessary losses of $300 million
in short sale transactions annually.
O Group, consortium analysis and report-
ing are necessary to fully leverage mul-
tiple-lender data and mitigate risk.
For more information, visit www.corel-
ogic.com/shortsalestudy.
Interthinx study finds the
stain of mortgage fraud
tough to wipe away
Communities that are currently strug-
gling from the effects of fraudulent
mortgage transactions may still be suf-
fering years from now, according to
research released by Interthinx. In its
quarterly Mortgage Fraud Risk Report,
Interthinx notes that six of the 10 riski-
est metropolitan statistical areas (MSAs)
in the nation were in the top 10 just a
year ago, and all 10 of the MSAs that
were at the top of the list for fraud last
year are still in the top 20 today.
The report analyzes national fraud
risk and indices for the four most com-
mon types of mortgage fraud risk.
Overall, analysts found that fraud risk
increased by 12 percent, compared
with the same period a year earlier.
Currently, the national fraud risk index
is 145.
“As a result of our commitment to
high-quality fraud detection and risk
mitigation analytics, we are able to
provide our lender clients a deeper
analysis of the data that we collect,”
said Kevin Coop, president of
Interthinx. “The data distributed
through our most recent report is
designed to help lenders identify and
plan for trends that will affect their risk
mitigation strategies—and help assure
their success.”
Other findings in the quarterly
report include:
O Nevada replaces Arizona as the state
with the highest fraud risk, though
both states have indices about 40
points greater than that of third-
place California. The high indices in
Nevada and Arizona are due mostly
to the disproportionately high refi-
nance risk in those states.
O ZIP-code-level analysis showed that
the majority of the 10 riskiest ZIP
codes are, not surprisingly, located
within MSAs that are in the “very
risky” category. However, two of the
three riskiest ZIP codes are located
in Chicago, which at the MSA-level
has an index less than the national
value.
O The identity fraud risk index had a
quarter-on-quarter increase of 10
percent for the second consecutive
quarter, the only type-specific fraud
index to display a strong increasing
trend over the last three quarters.
O The occupancy fraud risk index
decreased by nine percent from the
previous quarter. It fell 11 percent
between the fourth quarter of 2009
and the first quarter of 2010.
The Mortgage Fraud Risk Report is
an Interthinx information product that
the company’s team of fraud experts
created. The report was prepared with
input from Constance Wilson, Ann
Fulmer, Shane De Zilwa, and the
Interthinx analytics team. This is the
fifth time the company has released its
quarterly report. The information is
designed to provide deeper insight into
current fraud trends through analysis
of the extensive pool of data the com-
pany amasses from the industry’s use
of the Interthinx FraudGUARD loan-
level fraud detection tool.
“For lenders, the report has become
a must-read because of its analysis and
its relevance to their businesses,” said
Mike Zwerner, senior vice president for
Interthinx. “The report also serves
Interthinx as a road map for product
innovation on behalf of lenders. We’re
keeping a close eye on the identity
fraud risk index, but more important,
we’ve observed and responded to the
disturbing trend of the valuation fraud
index with development of such prod-
ucts as CVM, ValueGUARD, and
Interthinx Review Appraisal Services.”
For more information, visit
www.interthinx.com.
ALTA reports dip in title
insurance premiums in Q2
The American Land Title
Association (ALTA) has
reported title insurance
premiums written dur-
ing the second quarter
of 2010 decreased 8.5
percent when compared
to the same period a year ago.
According to ALTA’s preliminary Market
Share Analysis, the title insurance
industry generated $2.3 billion in title
insurance premiums during the second
quarter of 2010, down from $2.5 bil-
continued on page 10
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Please send resume to:
hr@mortgageinvestors.com
or call 877-215-9950
news flash continued from page 8
lion during the same period last year.
For the first half of 2010, the industry
reported $4.4 billion in title insurance
premiums, down 2.9 percent when
compared to the first half of 2009.
“The latest market share analysis
reflects an on-going recession in the
housing market, with further down-
ward pressure on home prices,” said
Kurt Pfotenhauer, chief executive offi-
cer of ALTA. “With mortgage rates at
record lows, we noticed a shift in more
refinance transactions toward the lat-
ter part of the quarter. While an abun-
dance of affordable homes and low
interest rates make the market attrac-
tive, people need jobs to obtain credit
and purchase homes.”
The states generating the most title
insurance premiums during the second
quarter of 2010 were California ($350.7
million, down 13.6 percent compared
to second-quarter 2009), Texas ($266.1
million, up 0.1 percent), Florida
($169.9 million, down 2.2 percent),
New York ($150.8 million, up 2.4 per-
cent) and Pennsylvania ($97.1 million,
down 19.2 percent). Only five states
and the District of Columbia reported
increases in title insurance premiums
written when compared to second-
quarter 2009.
“The varying results demonstrate
real estate is a local business and each
market performs differently depending
on local economic conditions,”
Pfotenhauer said. “Title companies in
each market will continue to produce
policies that provide assurance to
homeowner they have clear ownership
to their property and that they will be
insured against any mistake, fraud, risk
or defect, whether it is known or
unknown.”
For more information, visit www.alta.org.
State Foreclosure
Prevention Working Group
finds re-default rates on
loan mods improving
According to a report
issued by the State
Foreclosure Prevention
Working Group, increased
use of loan modifications
resulting in significant payment reduc-
tion has succeeded in creating more
sustainable loan modifications. The
number of foreclosures continues to
outpace the number of loan modifica-
tions being made, but there are reasons
to be optimistic about the improvement
in loan modification performance. The
State Working Group’s data indicate that
some recent modifications are perform-
ing better than loan modifications
made earlier in the mortgage crisis.
In addition, the State Working Group
found that modifications which signifi-
cantly reduce the capital balance of the
loan have a lower rate of re-default com-
pared to loan modifications overall.
Currently, however, only one in five loan
modifications reduce the loan amount,
and the vast majority of loan modifica-
tions actually increase the loan amount
by adding servicing charges and late
payments to the loan balance.
Despite these positive develop-
ments, the numbers of foreclosures
continue to far outpace the number of
loan modifications. The State Working
Group finds that more than 60 percent
of homeowners with serious delinquent
loans are still not involved in any loss
mitigation activity. Absent additional
improvements in foreclosure preven-
tion efforts, the State Working Group
anticipates hundreds of thousands of
foreclosures will occur later this year.
“The report certainly indicates there are
positive developments with regard to loan
modifications,” said Neil Milner, president
and chief executive officer of the
Conference of State Bank Supervisors
(CSBS). “However, there is still a tremen-
dous amount of work to be done to prevent
unnecessary foreclosures. Servicers must
continue to perform meaningful outreach
to those homeowners who are seriously
delinquent and to perform modifications
with significant principal reduction.”
For more information, visit www.csbs.org.
Record number of 269,960
bank repossessions record-
ed in Q2 of 2010
Bank Foreclosures Sale,
an online provider of
bank-owned home list-
ings and foreclosure
information industry,
has announced that bank foreclosures
were up five percent in the second quarter
of 2010. With 269,960 bank repossessions
recorded, a new quarterly record was set
for bank repossessions, which are up a
staggering 38 percent from the second
quarter of 2009.
The news comes as a good sign for
buyers and foreclosure investors looking
at buying real estate-owned (REO) or
bank-owned property. While the larger
foreclosure property market actually
decreased four percent during the second
quarter, bank foreclosure repossessions
mark an area where a surplus of proper-
ties could be a source of better deals.
“Due to mortgage refinancing and loan
modification programs, we’re not seeing
as many new foreclosure properties come
on to the market right now,” said Simon
Campbell, a market analyst for Bank
Foreclosures Sale. “But what we are seeing
is homes that have been in foreclosure for
a while are being repossessed by banks
trying to work through thousands and
thousands of defaulted loans.”
With banks now clearing their back-
log of foreclosures through reposses-
sion, they will soon look to sell them off
to regain the capital lost on unpaid mort-
gages. Experts believe this could lead to
record low prices on bank foreclosures
and bank owned properties for foreclo-
sure buyers.
“I’d say this summer and fall are the
times to look for bank owned homes
and bank REOs,” said Campbell. “With a
big surplus, banks will be looking to
unload properties, so it’s a good chance
to find a low and competitive price.”
According to Bank Foreclosures Sale,
California led the nation in REO home
filings during the second quarter, with
over 45,700 currently inventoried
throughout the state, especially in
areas like Modesto, Los Angeles and
Fresno, Calif. Florida was close behind
with 32,860 REO properties, with
hotspots in Fort Myers, Cape Coral and
Fort Lauderdale, Fla.
Other top states for bank reposses-
sions and REOs during the second quar-
ter were Michigan, Arizona, Georgia,
Illinois and Nevada, all of which are
expected to see continued foreclosure
growth over the rest of 2010.
For more information, visit www.bank-
foreclosuressale.com.
GAO releases report on
mortgage scams
Rep. Doris Matsui (D-CA)
announced that the
Government Accountability
Office (GAO) has released a
report on the current situa-
tion of mortgage foreclosure scams occur-
ring around the country, and an analysis of
the government’s efforts to prohibit such
deceptive financial practices. In May 2009,
Rep. Matsui and House Commerce, Trade
and Consumer Protection Subcommittee
Chairman Bobby Rush (D-IL) sent a letter to
the GAO requesting a thorough report on
these mortgage scams, which the
California Department of Real Estate (DRE)
had described as the biggest consumer
fraud it faced that year. The report docu-
ments that because of the dramatic
increase in foreclosed homes across the
country since 2005, opportunities for scam
artists were in abundance. But such valu-
able information had been kept out of the
public record—until now.
“I am pleased that the GAO has com-
pleted this long-overdue report that I
requested, and have finally put neces-
sary information out into the public
domain,” said Rep. Matsui. “It is imper-
ative that we understand the nature of
the size, scope and type of mortgage
scams so that we can help put in place
necessary measures to stop them, and
promote awareness for American
homeowners about how to avoid them.
In many instances, the report found
that the same individuals that initially
steered homeowners into sub-prime
loans are the same bad actors who are
offering false promises to struggling
homeowners attempting to save their
home. These unlawful and deceptive
financial practices must stop. The GAO
report sheds light on this serious prob-
lem occurring in Sacramento, and
across the nation. I look forward to
working with my colleagues on the
Energy and Commerce Committee in
reviewing this report and enacting legis-
lation to address the loopholes that
continued on page 13
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banker business, but it appears that
the time has come around once again.
From the ashes of the spectacular and
abrupt meltdown of the mortgage
industry, has come the tinkering of the
federal government with matters that
are really beyond their level of expert-
ise. From the new legislation, which
has yet to prove that it is a benefit to
anyone remaining in this industry,
comes the ever resourceful mortgage
broker.
The mortgage brokers who under-
stood the value of “quality control” or
“compliance performance” for the
most part, are still standing and thriv-
ing and trying to figure out what to do
next. Those who invested in advanced
computer software programs, like Ellie
Mae or Pro Lender Solutions, to assist
them with pipeline management and
the constant drum of “quality control”
have reaped the reward of their invest-
ment.
The industry no longer resembles
itself from even two years ago, except
in one regard … the constant drive to
find a way to “make money.” The crazy
thing about the mortgage business is
that if you love what you do, and it gets
into your blood, you will stick with it
no matter what. The “high” comes not
only from helping borrowers achieve
their goals of homeownership in what-
ever form that takes, but also from
how to “beat the system” and remain
profitable under incredibly adverse
conditions.
Slowly but surely, the new rules and
regulations are re-shaping the condi-
tions under which the mortgage indus-
try will function for many years into
the future. Good, bad or indifferent,
we learn to live with them and adapt.
Slowly but surely, the warehouse
lenders that retreated or were put out
of business are beginning to test the
waters again for business. As always,
the question is, “Can we make a profit
and not get burned?” The answer is
increasingly, “Yes.”
Ginnie Mae, Fannie Mae and
Freddie Mac have raised their net
worth requirements from $1 million to
$2.5 million, an unreachable number
even for most of the existing mortgage
bankers. One has to wonder the logic
of that strategy, given that their future
existence remains in doubt.
Be that as it may, the correspondent
lenders who also raised their net worth
requirements, and are now starting to
think “volume” and becoming “com-
petitive” once again.
For those mortgage brokers who did
transition to mortgage banker status
and still remain open for business, are
Is the Broker-to-Banker Business
Really Dead?
By Elaine Roccio
“The industry no longer resembles
itself from even two years ago,
except in one regard … the
constant drive to find a way to
‘make money.’”
overhead, realign their loan production
strategy and have maintained a clean
record, is also a viable applicant for
consideration. Again, more options
become available each month.
The loss of jobs in the mortgage
industry has also resulted in the loss of
licensed loan officers, who have just
decided to give it up. The demand for
loans, however, is still strong, as
opposed to what is quoted on the news
or through mainstream media cover-
age. The fewer the “players,” the
greater the share of loan production is
to the remaining few.
The future may look bleak to some.
It may look as though there are no
more options, but the mortgage busi-
ness is, and always has been, made up
of resilient, hard-working people who
like to exercise their “options” to
remain profitable.
Elaine Roccio is a mortgage banking con-
sultant with 25-plus years of mort-
gage experience and 10-plus years
specializing in the broker-to-banker
business. She may be reached by
e-mail at elaineroccio@aol.com or
visit www.brokertobankerservices.com.
At United Northern, we give you the freedom to originate and succeed with our winning team.
About working with United Northern Mortgage Bankers
• Ongoing training and consultation with top industry executives
• Access to in-house marketing services
• Pricing support desk to ensure maximum profitability on each
loan, while maintaining a competitive advantage over the street
• Proven leading-edge technology (built on Encompass 360
technology)
• Virtual office support
• Licensing and regulatory compliance services
• An in-house team to monitor SAFE Act compliance
• In-house underwriting
• Most loans underwritten in 24 to 48 hours
• Multiple valuation tools to research value
• In-house valuation desk to help ensure accurate
values and responsive turnaround time
• Multiple established warehouse lines
Limited room available for established Team Leaders and
Licensed Mortgage Originators. Become part of an
established 30-year Mortgage Banker with
a proven track record and success.
Learn about the great opportunities
available by making an appointment with
United Northern Mortgage Bankers Executive
Vice President Julio de Cardenas by calling
888-600-8808, ext. 1 or by e-mailing info@unitednorthern.jobs.
United Northern Mortgage Bankers, Ltd. Corporate NMLS ID# 7230 New York State Banking Dept. - Licensed Mortgage Banker – License #100724 New Jersey Dept. of Banking and Insurance – Mortgage Lender – License #L0046623 Penn-
sylvania Dept. of Banking – Mortgage Lender – License #20887 Connecticut Dept. of Banking - Mortgage Lender - License #20372 Massachusetts Div. of Banks and Loan Agencies - Mortgage Lender & Mortgage Broker – License #MC5070
North Carolina Commissioner of Banks – Mortgage Lender – License #L140365 South Carolina State Board of Financial Institutions – Supervised Lender – License #S7,461 Florida Dept. of Financial Institutions - Mortgage Lender - License
#ML0700679 Senior Security Home Advantage is a lending area of United Northern Mortgage Bankers, Ltd. Direct FHA Endorsed Lender
13
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Is the Light Worth the Candle?
Shockingly, there have been more than 72,000 failed SAFE test attempts ac-
cording to reports from the Nationwide Mortgage Licensing System (NMLS). If
one of the objectives of SAFE was to raise the bar of entry into the industry
and thereby protect consumers from originators who don’t test well, then
mission accomplished. Here’s a question we should ask, “Is the light of pro-
tections worth the candle of energy, time and cost?”
The latest data indicates more than 28,700 people have given up and/or
have failed out of the licensing process altogether. A pattern has emerged
that once a person fails their initial test attempt, there is a less than 45 per-
cent chance of passing on the next attempt. We should wonder if these peo-
ple are now migrating to the banks. If the SAFE Test is a mechanism for
consumer protection, then who will be protecting the future borrowers of
these originators?
Cost of the candle
The figures indicate only 65 percent of total national test attempts are suc-
cessful. It’s better on the state tests at 79 percent. When calculating test re-
takes, the costs exceed $3.6 million. This does not include the 28,700
people who have quit trying and the money they have spent on education
and testing. My conservative estimates for these losses are approximately
$6.73 million.
None of these figures take into consideration the cost of travel, hotel ex-
penses, study materials or test prep tools. There is also no way to account for
the heartache of failing or the anxiety of the licensing process in general. If
you were to look at the total cost for education, testing and licensing of the
approximately 111,000 mortgage loan originators who are SAFE Act compli-
ant thus far, the figures go above $80 million. These costs will surely soar past
$100 million by the Dec. 31 deadlines.
Is it worth the light?
Every shop is bearing the cost. Many companies are spending millions of dol-
lars on education and licensing. No one can calculate the cost of lost pro-
duction, frustration and disruption to its organization, or the costs of
examination and enforcement that has just begun. The question remains,
what is all this energy, time and dollars being spent for? Will this massive ef-
fort result in a better industry?
We hope the SAFE Act has built a brand new stadium with a higher play-
ing field on which to work. You will no longer be competing against short-
sighted amateurs, dishonest fraudsters or those that lack the ability or
commitment to learn this business. The candle of licensure is meant to illu-
minate a new profession where knowledgeable loan originators have chosen
to compete.
SAFE brand
You are paying a high price for your license. Frame it proudly knowing you
have earned it, when not everyone could. Use it to differentiate yourself.
Think about it; if you were borrowing $350,000 and you could choose be-
tween an unlicensed or a licensed professional originator, which would you
choose? My guess is you’re going with the SAFE brand. It will be up to you,
to make the “Light Worth the Candle.”
Paul Donohue, CRMS is a 23-year industry professional and founder of Abacus Mortgage
Training and Education. Paul served on two NMLS working groups, establishing the new
national education protocols. Go to AbacusMortgageTraining.comto find out more
about your obligations for testing, education and licensure, or call (888) 341-7767.
news flash continued from page 10
allow these scams to continue.”
In the Spring of 2009, Chairman Rush
introduced HR 2309, the Consumer
Credit and Debt Protection Act, which
would help address many of these loop-
holes. Rep. Matsui, an original cosponsor
of HR 2309, included a provision to the
bill which would direct the Federal Trade
Commission (FTC) to develop standards
to prohibit mortgage foreclosure scams.
Rep. Matsui’s provision also puts an
end to so-called advance-fee loan modi-
fications so homeowners do not pay an
advanced fee, ranging from $500 to
more than $5,000, for a loan modifica-
tion service never rendered. Many
Sacramento homeowners were tricked
into paying an upfront fee for the false
promise of modifying their mortgage
loans, only to not receive a service. The
Matsui provision would end that practice
for good. This legislation is now before
the Energy and Commerce Committee.
The GAO report found two principal
types of foreclosure rescues and loan
medication schemes perpetrated against
consumers: the advance-fee loan modifi-
cation schemes, as well as sales-lease-
back schemes. The advance-fee scheme
occurs when a person charges a fee in
advance of renegotiating someone’s
mortgage with a lender, and then pro-
vides little or no service. The sales-lease-
back scheme involves someone convinc-
ing a homeowner at risk of foreclosure to
transfer the deed of their home to them.
The GAO report also found two newer
schemes that have been emerging. The
first is a forensic mortgage loan audit
scam, which the report explained as a
“new twist on foreclosure rescue fraud.” In
this scam, someone charges a fee to con-
duct an “audit” intended to find regulato-
ry violations in the mortgage loan origina-
tion in order to allow the homeowner to
use the “audit” results to avoid foreclo-
sure, accelerate the loan modification
process, reduce the loan principal, or even
cancel the loan. The other is described as
a variation of advance-fee scams in which
a person promises to eliminate a home-
owner’s mortgage or other debt on the
premise that the debts were illegal or the
government would assume responsibility.
For more information, visit www.gao.gov.
Class action suit filed
against Charles Schwab
for high-risk MBS
Hagens Berman Sobol
Shapiro LLP has announced
that it has filed a class-
action lawsuit against
Charles Schwab & Company on behalf of
investors who owned shares in the
Schwab Total Bond Market Fund as of
Nov. 30, 2006. The suit, filed in the U.S.
District Court for the Northern District of
California, accuses San Francisco-based
Charles Schwab of causing the fund to
deviate from its fundamental business
objective to track the Lehman Brothers
U.S. Aggregate Bond Index.
“We intend to prove that Charles
Schwab caused investors to suffer losses
when it began investing in volatile, high-
risk mortgage-backed securities without
informing shareholders or seeking
shareholder approval through a vote,
which the company was obligated to do,
according to the fund’s prospectus,” said
Hagens Berman Managing Partner and
plaintiffs’ attorney Steve Berman.
The plaintiffs contend that the fund
deviated from its stated investment
objective by investing a material per-
centage of its portfolio in high-risk, non-
agency collateralized mortgage obliga-
tions, or CMOs, which were not part of
the Lehman Bros. U.S. Aggregate Bond
Index, according to the complaint.
Plaintiffs attorneys also contend that
the fund deviated from its stated funda-
mental investment objective by investing
more than 25 percent of its total assets in
non-agency mortgage-backed securities
and CMOs, the suit alleges. Schwab’s devi-
ation from the fund’s primary investment
objective led to tens of millions of dollars
in shareholder losses due to a long-term
decline in the value of non-agency mort-
gage-backed securities, the lawsuit con-
tends.
Plaintiffs’ attorneys believe that the
fund’s deviation from its stated invest-
ment objective caused investors to expe-
rience a negative 12.64 percent differen-
tial in total return for the fund compared
to the Lehman Bros. U.S. Aggregate Bond
Index from Aug. 31, 2007 to Feb. 27,
2009, the lawsuit contends. During that
period, the suit states, the fund’s share-
holders suffered a negative total return
of 4.8 percent, compared to a positive
total return of 7.85 percent for the
Lehman Bros. U.S. Aggregate Bond Index.
The suit accuses Charles Schwab of viola-
tions of the California Business & Professions
Code. Plaintiffs have asked the court to
award restitution to all class members, to
order Charles Schwab to return any man-
agement or other fees collected after the
fund’s alleged deviation from its fundamen-
tal business objectives and to order Charles
Schwab to cover the class’ legal costs.
A separate action was previously
filed against Schwab by other counsel,
but the Ninth Circuit Court of Appeals
recently remanded that case back to
district court, ruling the plaintiff could
not pursue its claim under the
Investment Company Act of 1940.
For more information, visit www.hbss-
law.com.
Bankrate study finds New
Yorkers pay the most to
close a home
Photo credit: Comstock
A study released by
Bankrate Inc. has revealed
that the costs associated
with buying a home may are on the rise.
Bankrate’s 2010 Closing Costs Survey
continued on page 15
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be made relative to whether the appraisal
has passed scrutiny.
This is where the electronics stop and
humans begin. If there are few deficien-
cies listed, the appraisal may pass the
review test and the appraisal may be con-
sidered appropriate to qualify the proper-
ty for collateral. Conversely, if a number of
rules are broken, the appraisal may fail
the test. In such a case, the appraisal will
be subject to more tests. What happens
next will vary with those performing the
quality control test. Some may contact the
appraiser for explanations; others may
order additional higher-level review
appraisals, while others may simply reject
the appraisal from further consideration.
It is at this juncture where the compe-
tence of the review staff can be the deter-
mining factor as to whether the lender
makes a good or bad loan. Whether it is
an underwriter, the chief appraiser or an
outside quality control vendor, the lender
is investing its future in the hands of those
making this call. This responsibility should
be assigned only to highly-trained experts,
who have a depth of risk management
and appraisal review experience.
Institutions without adequate in-house
expertise may consider outsourcing this
risk management function to an inde-
pendent appraisal review service provider,
to insure high-quality results and meet
regulatory compliance mandates. In addi-
tion, it is not just this one deal, but all of
the deals that are approved or rejected by
the institution that make up the organiza-
tion’s track record and determine its eco-
nomic success.
It is also important to note that when
properly used, the Electronic Appraisal
Review is blind to bias and can help
reduce fraud. Even the most sophisticat-
ed review provided by a certified
appraisal does not carry a guarantee
against bias with it. This factor is a big
plus for the Electronic Review, where
regulatory compliance is an issue.
Cost is another important factor when
considering Electronic Reviews. Typically,
they can be purchased at a fraction of that
of a review by a human with state certifi-
cation credentials. Costs vary, but depend-
ing upon the quality and details, the raw
report can be purchased at prices of $10
or less. Depending upon the amount of
labor required in the handling and inter-
preting the review report, an Electronic
Review, complete with critique, can usu-
ally be completed for under $50, and, in
some cases, substantially less.
Electronic Appraisal Reviews are not
subject to Uniform Standards of
Professional Appraisal Practice (USPAP),
since they are not prepared by people.
Appraisal Reviews, such as the Desk
Review and the Field Review, do require
USPAP-reviewer compliance.
In summary, the Electronic Appraisal
Review, in many cases, may provide all of
the information needed for a lender to
make a final decision, regarding the qual-
ity of the appraisal under consideration.
It can save a lender a great deal of money
that may have otherwise been needlessly
spent on in-depth appraisal reviews for
perfectly good appraisals. Since Electronic
Reviews are not prepared by humans,
there is less potential for fraud. That, cou-
pled with the fact that it is less expensive,
makes the Electronic Appraisal Review a
powerful quality control tool, something
that cannot be ignored.
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 company’s
Web site, www.appraisalsanywhere.com.
value nation continued from page 5
So, what is the fuss over FIT? We look
at seven fusses and counter-fusses
before moving on to the FIT risk factors
and questions in other articles in the
series. As designer of the Financial
Interview Tool or FIT, the counter-fuss-
es are the National Council on Aging
(NCOA’s) responses to the fuss over FIT.
Fuss # 1: FIT is addressing a demo-
graphic that no longer exists (field
data says average HECM borrower age
is now 63).
Counter-Fuss: Younger borrowers are
taking out fixed-rate Home Equity
Conversion Mortgages (HECMs). As other
products are developed, the demo-
graphic profile of borrowers may
change again. FIT reminds seniors that
their life circumstances may change
rapidly because of an accident, illness
or the loss of a spouse.
Fuss #2: FIT is too invasive. Seniors
might refuse to answer the questions
if a third person (family or an advi-
sor) is present.
Counter-Fuss: Seniors can decide who
will participate in the counseling ses-
sion. Family members and advisors
often find it difficult to discuss sensi-
tive issues such as declining health
with a senior. The FIT review may be a
good opportunity to begin to address
these issues and their implications for
the senior’s well-being.
Fuss #3: FIT is static; it does not
anticipate changes.
Counter-Fuss: As with many budgeting
tools, FIT focuses on a client’s current
financial situation. We may add ques-
tions about post-retirement income
changes.
Fuss #4: FIT could add to counseling
time.
Counter-Fuss: Absolutely! A good
counseling session should last at least
an hour.
Fuss # 5: FIT is borderline “financial
planning,” but HECM counselors are
not trained and certified financial
planners.
Counter-Fuss: At one point, the U.S.
Department of Housing & Urban
Development (HUD) was considering
having counselors conduct a very
detailed budget analysis to determine
the suitability of a reverse mortgage
for their client. FIT brings a more holis-
tic perspective to a client’s financial
situation. It helps them understand
their risks and options in taking out a
reverse mortgage.
Fuss #6: FIT takes away the HECM
counselor’s discretion.
Counter-Fuss: FIT helps to standardize
counseling, a concern of the lending
community for years. The goal of the
FIT review is to stimulate discussion
about issues that may impact the sen-
ior. In addition, FIT collects data about
the characteristics of potential borrow-
ers, which can help both lenders and
policymakers to better understand the
needs and vulnerabilities of older
homeowners.
Fuss #7: Prospects’ failure to answer
FIT questions could cost them their
HECM Counseling Certificates, thus
the ability to get HECMs.
Counter-Fuss: FIT questions have no
right or wrong answers. It will be
impossible for counselors to conduct
a budget analysis as required by HUD
if seniors refuse to answer FIT ques-
tions. Seniors can provide approxi-
mate income if this is a problem for
them. Besides, there is no relation-
ship between the FIT questions and
FIT for Reverse Mortgage Lenders:
Part II
The Fuss Over FIT
Lord HUD’s new FIT mandate for HECM
counselors is giving some originators a fit
hands-on experience marketing and orig-
inating reverse mortgages. Through his
advisory, ThinkReverse LLC, Agbamu
advises financial professionals, institu-
tions and regulators across the country.
In a 2007 national report on reverse
mortgages, AARP cited Agbamu’s work.
He can be reached by phone at (612)
203-9434 and e-mail at atare@thinkre-
verse.com.
Visit author Atare E.
Agbamu’s blog at thinkre-
verse.com for his thoughts
and insights on the reverse
mortgage marketplace.
the five comprehension questions (out
of 10) HECM prospects are required to
answer to be issued a certificate.
The fuss over FIT is understandable
as FIT is fairly new. It is change. Change
has come to reverse mortgage counsel-
ing (and lending).
Atare E. Agbamu is author of Think
Reverse! and more than 140 articles on
reverse mortgages. Since 2002, he writes the
nationally-distributed column, “Forward on
Reverse.” A former director of reverse mort-
gages at Minneapolis-based AdvisorNet
Mortgage LLC, Agbamu has years of
• Daily updated mortgage industry news
• Industry blogs
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reveals that the average origination
and title fees on a $200,000 mortgage
this year totaled $3,741, up from
$2,732 in 2009. In the study’s geo-
graphical breakdown, New York leads
the nation at an average fee of $5,623,
with Texas, Utah, San Francisco and Los
Angeles rounding out the top five.
Arkansas is the least expensive area
with an average fee of $3,007, replac-
ing Nevada, now number 34, at the
bottom of the list.
One of the reasons for such a dra-
matic rise in the average estimated
closing costs across the nation has to
do with new regulations implemented
in January of this year. When providing
a potential borrower a Good Faith
Estimate (GFE) of costs, regulations now
require lenders to provide a Title and
Closing Fee estimate within 10 percent
of what the final cost will be; in previ-
ous years, estimates could fall lower on
the spectrum without penalty for the
lender.
“The big rise in average closing costs
may scare some homebuyers, but it’s
important to keep things in perspec-
tive,” said Greg McBride, CFA, senior
financial analyst for Bankrate.com.
“Increased regulation on lenders’ GFEs
means more accurate estimates and
less expenses popping up for con-
sumers on the back end.”
For this study, Bankrate surveyed
one area in 49 states, two areas in
California (Los Angeles and San
Francisco) and the District of Columbia.
Researchers picked a ZIP code in some
of the largest cities in each state and
requested information on the closing
costs for at $200,000 loan. They
requested fees on a 30-year, fixed-rate
mortgage for a borrower with a 20 per-
cent downpayment and good credit to
buy a single-family house. Bankrate’s
survey includes lenders’ origination
fees and title and settlement fees, and
not taxes or prepaid items.
For more information, visit
www.bankrate.com.
Federal Reserve Board
revises disclosure
requirements for
closed-end mortgages
The Federal Reserve
Board (FRB) has
issued an interim
rule that revises the
disclosure require-
ments for closed-end mortgage loans
under Regulation Z (Truth-in-Lending).
The interim rule implements provisions
of the Mortgage Disclosure Improvement
Act (MDIA) that require lenders to disclose
how borrowers’ regular mortgage pay-
ments can change over time.
The MDIA, which amended the
Truth-in-Lending Act (TILA), seeks to
ensure that mortgage borrowers are
alerted to the risks of payment increas-
es before they take out mortgage loans
with variable rates or payments.
Accordingly, under the interim rule,
lenders‘ cost disclosures must include a
payment summary in the form of a
table, stating the following:
O The initial interest rate together with
the corresponding monthly payment;
O For adjustable-rate or step-rate
loans, the maximum interest rate
and payment that can occur during
the first five years and a “worst case”
example showing the maximum rate
and payment possible over the life
of the loan; and
O The fact that consumers might not
be able to avoid increased payments
by refinancing their loans.
The interim rule also requires
lenders to disclose certain features,
such as balloon payments, or options to
make only minimum payments that
will cause loan amounts to increase. All
of the disclosures required in the inter-
im rule were developed through several
rounds of qualitative consumer testing,
including one-on-one interviews with
consumers around the country.
Lenders must comply with the inter-
im rule for applications they receive on
or after Jan. 30, 2011, as specified in the
MDIA. Lenders have the option, howev-
er, of providing disclosures that comply
with the interim rule before that date.
The Board is also soliciting comment on
the interim rule for 60 days after publi-
cation in the Federal Register before
considering the adoption of a perma-
nent rule.
For more information, visit www.federal-
reserve.gov.
Fannie Mae clarifies undis-
closed liabilities policy
Fannie Mae has issued Selling Guide
Announcement SEL-2010-11, which
clarifies that lenders are not required to
obtain a second credit report just
before loan closing. Rather, Fannie Mae
is reminding lenders to have processes
in place to facilitate borrower disclo-
sure of changes in financial circum-
stances throughout the origination
process.
“This is an important update,
because every mortgage loan delivered
to Fannie Mae has to be underwritten
to establish that the borrower is able to
repay the debt,” said Deborah Slade-
Horsey, vice president for single-family
risk policy. “Our primary objectives are
to support borrowers’ ability to sustain
homeownership and to strike a reason-
able balance between requirements
that may reduce loan repurchases and
requirements that might over-burden
lenders’ origination processes.”
The updated policy reminds lenders
that Fannie Mae expects them to have
Fannie Mae recently hosted its inaugural Quality Control Vendor Summit that
included the leading quality control (QC) vendors in the county. Fannie Mae is
very serious about improving loan quality and improving the Loan Quality Ini-
tiative (LQI).
One discussion we had was how to monitor the effectiveness of pre-fund-
ing QC because many tools involved in pre-funding QC are there to help fix
loan defects in order to get the loan through underwriting or to deny it. One
of the most effective pre-funding QC tools available is the tax transcript which
is pulled when the borrower signs the 4506-T. The lender is able to affirm
much of the applicant’s information, such as the borrower’s Social Security
Number, past residences, past income, past employers and can check amended
returns.
What if the mortgage industry was to apply a similar methodology to ap-
praisals in order to reduce loan defects from the appraiser or appraisal? This
process is called Appraisal Defect Detection & Prevention (ADDP) or “Add-Pee.”
ADDP is the new up and coming pre-funding QC process that will change the
way appraisers, appraisal management companies (AMCs), and lenders will han-
dle appraisals and appraisers. This new process may even evolve the Home Val-
uation Code of Conduct (HVCC) as we know it today.
ADDP can be used on the front end of the loan process, prior to funding,
and on the back end in the post-closing QC process. ADDP may also reduce
the requirement for a Field Review Appraisal and automated valuation model
(AVM).
I foresee the appraiser being held accountable for the quality of the valuation
with technologies behind ADDP. The appraiser’s valuation may hold higher cred-
ibility if he or she submits the appraisal to an AMC or lender with data behind
the ADDP. The lender wants to reduce the amount of underwriting stipulations
and conditions on the appraisal in order to expedite the closing. The AMC and
appraiser do not want to touch or revisit the appraisal again and the broker and
the borrower is left hanging waiting on the appraisal so they can close the loan.
In many loan and underwriting scenarios, it is the appraisal or appraiser that de-
lays a closing.
Those wholesale lenders who have incorporated ADDP as part of their pre-
funding QC process have seen a significant drop in repurchase claims based on
collateral. Also, those AMCs who incorporate ADDP for the banks or lenders
are making their services more valuable by reducing the probability of a change
in an AMC vendor.
The ADDP adds so much more creditability to the collateral valuation that I
could see brokers getting back in the appraisal ordering process if the broker had
the ADDP incorporated into their QC plan and was providing the collateral data
to the lender with the appraisal submission.
LQI is about compliance, and Fannie Mae is looking for effective QC policies
and procedures. ADDP seeks to reduce loan defects and helps in loan approval
efficiency. It can be applied down to the broker and appraiser levels as well. If you
have not implemented ADDP as part of your QC plan, you are assuming risk in
delayed closings and potential loan repurchases based on collateral.
By Tommy A. Duncan, CMT
Sponsored by
Tommy A. Duncan, CMT is executive vice president of Quality Mortgage Serv-
ices 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 Qual-
ity Mortgage Services LLC on the Web at www.qualitymortgageservices.com.
continued on page 24
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A Message From NAMB/WEST
2010 Conference Committee Chair
Donald J. Frommeyer, CRMS
Redefining innovation ... one step at a time!
I, along with Co-Chair John Stevens, have been serving as
chairmen of the NAMB/WEST Committee for about eight
months now, and I can tell you that this will be the best con-
ference that we have ever hosted in Las Vegas. It has always
been a great place to visit, but now this is the time you can
come and learn about what is going on in the current state of
the mortgage world. We have kept the cost of registration at a
reasonable $200 for the entire event and the rooms at the
MGM Grand, our host hotel, at $105 per night. These rooms can be reserved
from Friday-Tuesday, Dec. 3-7.
Of all years, this will be the year that you need to come to NAMB/WEST. With
everything on the verge of changing the way we have been doing business in the
mortgage industry, you need to be on hand in Vegas to ask the questions and get
all the answers you need to know.
It all starts Saturday, Dec. 4, with speakers from Genworth and the American
Association of Asset Protection. Then, at 9:15 a.m. in the Main Reception Room, we
will present Dave Duncan from Fannie Mae who will discuss the state of the econ-
omy and what Fannie Mae is doing in these economic times. Following this, we will
feature a speaker from the U.S. Department of Housing & Urban Development
(HUD) who will be discussing the state of the Federal Housing Administration (FHA),
a session that I feel will be a very informative and important one for all mortgage
professionals.
At noon, lunch will be served and
our featured speaker, California Rep.
Gary Miller, will fill us in on the latest
rumblings from Capitol Hill. We will
also have video features from guests
that have been invited to make
comments throughout the day.
All registered attendees will be
able to spend Saturday evening at the
NAMB/WEST 2010 Opening Reception from 7:00 p.m.-9:00 p.m. We will have
music and food and drink, and prize drawings for all attendees to participate in
to win tickets to KA by Cirque Soleil and other prizes.
Sunday will be dedicated to the Government Affairs Panel. From 8:00 a.m.-
11:00 a.m., NAMB will put their best minds together and meet with you to cover
all of the newsworthy items that are currently making the headlines. Mike
Anderson, NAMB’s Government Affairs Committee Chair, will lead this panel dis-
cussion that will cover a range of topics, including loan officer compensation, new
regulations and legislation, licensing, and other pertinent industry topics, and
then, the panel will turn the floor over to the audience to field their questions.
We have allotted three hours for this session, plenty of time to answer all the
questions you may have.
At 1:00 p.m., we invite you to come join the exhibitors that have gathered in
the Exhibit Hall for an eye-opening adventure of seeing new lenders and vendors
that have come into the market and companies that are here for your business.
The exhibit hall portion of the program will last until 6:00 p.m., at which time,
you are invited to attend a networking reception until 8:00 p.m. with exhibitors,
loan officers, owners, and NAMB’s board of directors for an opportunity to sit,
relax and unwind from this great conference.
I strongly urge you to make your reservations now by visiting www.nambwest.org
and registering for the event. If you complete your registration today, you will be
entered into the weekly drawings for a gift basket compliments of the states rep-
resenting the NAMB/WEST Committee.
See you in Vegas!
Donald J. Frommeyer, CRMS, 2010 NAMB/WEST Committee Chair
and Vice President
National Association of Mortgage Brokers
Will Wholesalers Get Tougher to
Keep Brokers Alive?
By Deb Killian, CRMS, NAMB Board Member
What insanity! How can wholesalers help the broker channel sur-
vive the tsunami of regulations and ever-changing compliance?
A shift in perspective is what we need.
As a SAFE Act course instructor, I have a unique opportunity
to speak with my friends and peers who are out there trying to
figure out what the broker business model will ultimately look
like. To be sure, it will continue to evolve and we won’t really know until Elizabeth
Warren and her ultimate successor at the Consumer Financial Protection Bureau
(CFPB), the Federal Reserve, Congress, Fannie Mae and Freddie Mac, and every
other entity that has their two cents to add, is finished discussing, conducting
hearings, writing and creating rules related to mortgage origination, in particular,
the mortgage broker community. That’s why we need representation in
Washington, D.C.
The regulatory environment we are in is unprecedented. I have been a mort-
gage originator since 1994 and have owned my own company since 1998. There
have been more changes in the last two years than the previous 10 years. It’s hard
to keep up with. Just when you think you have a system down, along come more
changes. The Federal Housing Administration (FHA), Fannie Mae and Freddie Mac
define the base. With fear of buybacks, lenders then take the base and create
something totally different. Why you may ask … because it’s the Golden Rule.
They have the gold, and our clients want it, so they get to make the rules. Fair
enough. We need to be thankful for the lenders who have hung in there with the
wholesale channels to provide brokers with product.
The one complaint I hear consistently in all of my classes (I teach the 20-hour
SAFE course and a Connecticut Mortgage Law test prep course) is how come the
brokers are taking the brunt of what everyone knows was created by the big banks
and Wall Street? My answer: We didn’t have enough numbers to fight anything.
“Why ?” they ask, haven’t the Realtors been called on the carpet? My answer: The
National Association of Realtors (NAR).
Real estate agents need access to products. Their product is the multiple list-
ing services (MLS) that provide information for buyers and sellers. In many states,
access to the MLS is gained by membership through a local real estate board. If
you don’t belong to the board or the MLS, you cannot gain access to the services
needed to conduct your business. Do you know how many members NAR has? As
of Aug. 31, 2010 NAR had 1,089,839 members.
1
Over one million members!
For more information on the National Association of Mortgage Brokers, visit www.namb.org.
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Imagine a world where wholesalers required anyone selling them loans, to be
a member of a professional organization in order to have access to their products,
and encouraged and supported mortgage loan originator (MLO) education. Ever
notice how many nationally-recognized
designations are available for Realtors?
What would wholesalers gain? A bet-
ter educated and more accountable bro-
ker base. Imagine a world where an edu-
cational advisory committee was com-
prised of wholesalers who were continu-
ally providing input on current issues
and what education was needed with one constant goal: Quality originations.
If the biggest problem lenders face today is repurchases, maybe it’s time to con-
sider prevention instead of punishment. The quality of loans is still not where it
needs to be. Originators submit poorly structured loans, loans that are non-com-
pliant, or worse, loans that are fraudulent. The solution is easy … the implemen-
tation is challenging at best, but not insurmountable.
According to FraudBlogger.com,
2
fraud is up 55 percent from the first quarter
of 2010 to the second quarter of 2010 … an interesting fact if true, now that banks
are originating the lion’s share of the business.
“The government’s push to bring mortgage fraudsters to justice is certainly wel-
come, but the cases brought to date represent only the tip of the iceberg in terms
of how much fraud was actually committed during the real estate boom,” said
Ann Fulmer, vice president business relations at Interthinx. “It’s sobering to know
that only a small minority of cases are ever prosecuted, and it ought to serve as a
reminder that the industry must protect itself by focusing on prevention.”
Prevention starts with awareness. Codes of ethics, professional mindsets, edu-
cation and ongoing learning, is what it takes to originate quality loans. I may be
going out on a limb here, but maybe individuals who want to fly under the radar,
not participate in industry efforts and only take the bare minimum to get by may
be the ones that wholesalers have the trouble with. Can investing time and money
to belong to an association be indicative of a propensity toward compliance and
ethical behavior?
Joining state and national associations in and of itself is only a start and does
not guarantee the existence of ethical behavior. However, it’s a good place to start.
To encourage participation, wholesalers could strongly suggest that they want bro-
kers who demonstrate professionalism. The more brokers, the more the associa-
tions can protect the broker channel. While we have taken the brunt of it all over
the last year or two, as long as we are still here, we should try new strategies and
make a concerted effort to change our thinking to match what is happening in our
industry.
For mortgage brokers who are viewed as scapegoats, wouldn’t it have been great
if everyone had been a member of the National Association of Mortgage Brokers
(NAMB)? Wouldn’t it have been great if we were all members of a strong trade asso-
ciation that could have had more resources to protect the brokers and originators
who are now fighting the fight of their lives? Would it have been a wise thing to
support an association like NAMB that had hundreds of members fighting for the
benefit of non-members? Oh, and the cost … simply one processing fee every year!
We are under attack because originators making hundreds of thousands of dollars
per year, wouldn’t part with just $350. Who do we have to blame, really?
Deb Killian, CRMS of Charter Oak Lending Group, LLC is a member of the National
Association of Mortgage Brokers board of directors. She may be reached by phone at
(203) 778-9999, ext. 103 or e-mail debkillian@snet.net.
Footnotes
1-National Association of Realtors, Aug. 31, 2010, Monthly Membership Report.
2-Web site: www.fraudblogger.com/PressRelease082310.asp.
“If the biggest problem lenders
face today is repurchases, maybe
it’s time to consider prevention
instead of punishment.”
Become a NationalMortgageProfessional.com Blogger!
It's free and easy. Just head on over to NMPMag.com, register and
follow the link in the upper right hand side of the page to
become a blogger on our site today!
Got an opinion? Want to share your
thoughts on the industry?
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Major East Texas Mortgage Fraud Scheme: Out of Florida
203(k) Rehab Loan Program: Foreclosures Present Challenges, Opportunity
NMLS and State Testing for Mortgage Professionals
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Paul Donohue, Founder
Abacus Mortgage Training and Education
Carolina’s NAMB state affil-
iate, NCAMP, Paul served
NCAMP as statewide associ-
ation president in 1997 and
was named the winner of
the 1996 NCAMP Broker of
the Year Award.
He began his career as a
custom home builder, craft-
ing unique architecture in
Blacksburg, Va. He entered
the mortgage industry in
1987 and founded MoneyNet
Mortgage Planning Services
in North Carolina in 1989.
Paul has personally originat-
ed more than 4,000 loan
applications.
Teaching from a lifetime of accom-
plishment and personal experience, Paul
believes his purpose is to give the real
estate finance industry the tools, skills
and vision it needs to thrive in an ever-
changing marketplace. Paul’s personal
code of integrity and personal philoso-
phy of reciprocity are woven throughout
his teachings and storytelling.
Paul grew up in Buffalo, N.Y. and as a
young adventurer, spent three years trav-
eling the United States before settling in
Southwest Virginia. Married since 1978,
he and his wife Deonna have raised two
sons, Austin and Francis. They are cur-
rently building and living on the horse
farm of their dreams in Summerfield,
just north of Greensboro, N.C.
Paul is a member of the Nationwide
Mortgage Licensing System (NMLS)
Education Provider Working Groups, is the
author of more than a half-dozen courses
approved for state mandatory education
and a regularly featured columnist in
industry magazines and publications.
How did you first get
involved in the mortgage
industry?
I started my career in 1976, as a home
builder in Blacksburg, Va. Virginia Tech
has a terrific architecture school and we
were building fine energy-efficient pas-
sive solar homes. It was very cutting-
edge architecture for the times. I loved
custom home building, especially the
interaction with the families I served. It
was extremely rewarding; however,
after 10 years of pickup trucks and nail
aprons, I was ready to make a change.
My wife and I had two small children,
and I wanted something where I could
create a better family life … and, I
wanted to buy a tie! To me, with my
blue-collar background, a white collar
job represented a life change.
I answered an ad in the Roanoke
Times that a mortgage broker was look-
ing for an originator for the Roanoke,
Va. area. When I discovered I could
make a great living, control my own
time and serve homeowners, I was in. I
knew nothing about mortgages or
finances, but I loved home sales and
was willing to work hard to learn the
business. That was early in 1987, back
at the beginnings of the mortgage bro-
ker industry. My company’s registration
number was seven. Within six months,
the owner made me the general man-
ager and I stayed with him through the
end of 1988. In 1989 I started
MoneyNet, Mortgage Planning Services,
a mortgage brokerage shop that I ran
until the beginning of 2007.
What was the secret to
your personal production
success back then?
Two key concepts propelled my produc-
tion over a 20-year origination career
that allowed me to produce in excess of
4,000 loan applications.
First was a singular focus on my cus-
tomers. I discovered early on that my
customers borrowed money for their
own reasons not mine. I learned that
every single person I met had a finan-
cial need and that need was always
changing. When I fully embraced this
truth, it caused me to focus entirely on
my borrower’s needs.
I was simply selling into my cus-
tomer’s changing financial needs and
timing was crucial. If they were not
“mortgage ready” when I first met
them, and if I treated them well and
stayed in front of them with consistent
follow-ups, I could provide them with a
loan when they were ready. This was
the foundation of my practice, and we
went on to build a tremendous repeat
and referral business as a result.
Secondly, I quickly grew frustrated
with prospecting where I spent 90 per-
cent of my time getting in front of a bor-
rower and only 10 percent of my time
actually selling. To correct this, I devel-
oped a team selling concept where
entry level employees were trained to
prospect, pre-screen applicants and
coordinate in-home appointments for
me and my senior loan originators. This
created a training ground for new loan
originators and allowed the more expe-
rienced originators to spend their time
in front of families originating. The
result was a “high volume, high margin”
loan production team and we effective-
ly served a lot of families.
Would you say that you
utilize a particular man-
agement style to inspire
and motivate your
employees?
I was a working manager and produced
Each month, National Mortgage
Professional Magazine will focus on one
of the industry’s 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 Paul Donohue, founder of Abacus
Mortgage Training and Education.
Over the years, Paul has been very
active with industry trade associations,
including national involvement with the
National Association of Mortgage
Brokers, and locally in his home state of
North Carolina with the North Carolina
Association of Mortgage Professionals.
He has served NAMB in a number of vol-
unteer roles, including time spent as a
member of the NAMB Ethics Task Force,
North Carolina’s representative to the
NAMB Delegate Council, and was a cer-
tified instructor with the NAMB
Educational Foundation. In 1997, Paul
was honored with the NAMB Teamwork
in Education Award and in 1998, was
named NAMB Regional Broker of the
Year. Serving his home state of North
“The mortgage business is one of
those wonderful opportunities in
which you can make a great living
while providing a service that is
meaningful.”
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loans personally until 2007, when I
transitioned my career. It’s a principle
of leadership that dictates, “You cannot
teach what you don’t know and you
cannot lead where you won’t go.” One
of my great mentors, Bill Brooks,
taught me this. The leader sets the
pace, communicates clearly the expec-
tations and then demonstrates the val-
ues of the organization through his or
her actions.
The sales manager is the most
important job in a sales organization,
yet I find it’s the least understood posi-
tion and gets the least amount of train-
ing and attention. Sales management
consists of coaching, teaching and rein-
forcing expectations.
Ultimately, you get the results that
you measure and hold people account-
able for. This cannot be done from
behind a desk. Effective sales manage-
ment happens in real-time, on the pro-
duction floor and in the field. You must
be committed to your originator’s suc-
cess, which means direct involvement.
It demonstrates that you are serious,
that you care about individuals and I
find people respond well to this.
When did you see a need
for educational require-
ments in the mortgage
industry?
The independent mortgage broker and
mortgage banker channel exploded on
to the market throughout the mid- to
late-1980s. By the early 1990s, there
was a trend of abuses and deceptive
trade practices that had spread widely
across the retail marketplace. Much of
these practices were by short-term
thinkers who entered the industry with
the intention to take as much as possi-
ble out of each transaction. Back then,
consumers were much less financially
sophisticated and they were ripe for
the unethical practices of the few.
I also recognized that many origina-
tors did not fully understand their
methods were destructive and that
education and training could be a solu-
tion. There are givers and takers in this
world, and I find most people want to
do the right thing if they know why and
how to do it.
In the mid 1990s, I got involved with
the National Association of Mortgage
Brokers Education Foundation and
began teaching the fundamentals of
origination with a focus on borrower-
centric principles. Knowledge is not
retractable. Once a person learns some-
thing, it cannot be unlearned.
Education represents growth
and progress.
Through the late 1990s, I
was teaching and speaking
across the industry. As the
laws changed, individual
licensing and education created an
opportunity I gravitated towards.
In 2000, I started my education com-
pany that has evolved into Abacus
Mortgage Training and Education. With
the SAFE Act and the development of
the Nationwide Mortgage Licensing
System (NMLS), I was privileged to serve
on two working groups developing the
education protocols for mortgage loan
originator licensure. As an NMLS educa-
tion provider, we are teaching nation-
wide and providing test preparation
tools for the industry. It has been
extraordinarily satisfying to play a part
in educating our industry.
As a former mortgage
broker and past president
of the North Carolina
Association of Mortgage
Professionals, how do you
feel about the current
role of the mortgage bro-
ker in the marketplace?
This is a very complex issue in which
mortgage brokers have been marked as
the scapegoat and have been out-
manipulated politically by influential
power brokers with very deep pockets.
With that said, I still think the mortgage
broker can reemerge as a significant
player in the primary market. With
proper systemic safeguards, mortgage
brokers still represent the least cost
and most effective way to produce loan
contracts.
Several factors, including regula-
tions, perceived capital risk and
investor appetite for mortgage-backed
securities, also happens to Fannie and
Freddie and how we respond as an
industry to our new realities, are just a
few issues that will dictate the future
role of mortgage brokers. Depending
on the direction we go politically as a
nation, it is very likely the mortgage
broker can recapture much of the mar-
ket share it has lost. I do not subscribe
to the thinking that it is over for the
mortgage broker.
The relationship between the mort-
gage broker and its sponsoring
lenders will no doubt be the critical
link. To secure a seat at the table,
mortgage brokers will need to demon-
strate an ability to produce invest-
ment-grade product and have sys-
temic quality control processes in
place. The safety and soundness prin-
ciples that were once the domain of
depository institutions are being
pushed down into the non-depository
channel. And, the accountabilities go
all the way down to the originator
that sits across the table from the bor-
rower. Although the mortgage broker
industry has suffered deeply, it can
ultimately rise again as a better incar-
nation of its former self.
Do you feel that exemption
from full SAFE Act require-
ments by depository banks
will soon end?
Before Dodd-Frank I would have said
no. With its passage down the road, I
do see it as possible. One of the objec-
tives of the Dodd-Frank Act is the “lev-
eling of the playing field” between
banks and non-bank entities. With that,
I think we have a chance of seeing the
hypocrisy of unlicensed activity by
mortgage loan originators (MLOs) work-
ing for banks coming to an end. The
banks will fight hard to keep this
exemption. If it does come to licensure
for registered MLOs, it will be several
years down the road.
How can mortgage loan
originators create distinc-
tion in this marketplace?
The professional MLO brings two things
of value to every loan transaction. First,
the value they deliver with their prod-
uct solution and the impact it has on
the families they serve. Secondly, the
value of who they have become as a
person and a professional. We must
never forget, people do business with
people. And, more than anything else,
people want to do business with people
they like and trust, and with someone
who takes the time to understand what
they want.
It’s a tight credit market and con-
sumers have shifted their approach to
taking on debt. My advice to originators
is to become experts in their field.
Become intensely knowledgeable in
areas of debt, credit, equity manage-
ment and the financial markets.
Expertise provides comfort to con-
sumers and that is value people will
pay a premium for. To differentiate,
drive up your expertise. In business
today, your income will be proportion-
al to your expertise.
It’s also a highly skeptical time
where people do not know who or
what to believe. The integrity and
good name of an originator has actual
value today. This is a very positive
trend. With the advent of things such
as viral community chat, an endorse-
ment by happy customers is the
lifeblood of an originator’s business.
The MLO should focus on every aspect
of the customer experience, from
application through funding and fol-
low through. Give your customers an
exceptional experience and the word
about your value distinction will
spread like wildfire. A highly-trusted
mortgage expert exerts influence and
is intrinsically distinct.
Can you tell us about
some required reading
that has been helpful in
your career path?
The list is too numerous to itemize. I
think you are either learning or you
are dying. It’s that simple. The key is to
have a reading or listening habit. The
great thing is, the better you become,
the better your rewards. I like audio
books and use my windshield time for
learning. With that said, here are a few
classics that are must-reads:
Philosophy: Atlas Shrugged by Ayn
Rand; sales and business develop-
ment: You Are Working Too Hard to
Make the Sale by Bill Brooks and What
Clients Love: A Field Guide to Growing
Your Business by Harry Beckwith; per-
sonal development: How to Win
Friends and Influence People by Dale
Carnegie and Think and Grow Rich by
Napoleon Hill.
The mortgage business is one of
those wonderful opportunities in which
you can make a great living while pro-
viding a service that is meaningful. This
is the new era of the professional mort-
gage originator. I believe five and 10
years from now, we will look back and
see that we have built a better industry.
It will take each of us committed to
that end. It’s a pursuit worthy of our
best work. Our nation’s future depends
on it.
“There are givers and takers in
this world, and I find most people
want to do the right thing if they
know why and how to do it.”
“Give your customers an exceptional experience and the word about
your value distinction will spread like wildfire. A highly-trusted mort-
gage expert exerts influence and is intrinsically distinct.”
“Effective sales management
happens in real-time, on the pro-
duction floor and in the field.
You must be committed to your
originator’s success, which means
direct involvement.”
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Let’s do something different. How about
we tune out all of the compliance
headaches and negative news headlines for
a minute and focus on just three numbers.
These three numbers are important. These
three numbers are important because they
outline the borders of your
playing field as a mortgage
originator.
It’s football season
right? You cannot get a
touchdown by running out
of bounds. It just doesn’t
work. A football player
needs to know the bound-
aries of the gridiron. The
same is true for the mort-
gage industry. A mortgage
originator needs to know
the boundaries of the
mortgage field. The prob-
lem is that most people in
the mortgage industry play
within the wrong bound-
aries. They limit themselves
by not understanding how
big the field really is and
where they need to focus
their time and energy.
That’s why these numbers
are important.
I didn’t make these num-
bers up. They are what they
are. You need to know these numbers if you
want to score more touchdowns in this
industry and enhance your mortgage super-
stardom. After all, what’s the use of playing
if you cannot win? And you cannot win with-
out knowing the real boundaries.
Boundary #1: $6.96 trillion
You’ve heard the sob story … heck you
could probably even recite
it better than anyone else.
The majority of Americans
have negative equity and
hardly anyone can qualify
for financing … right?
Wrong. According to the
latest stats by the Federal
Reserve, Americans still
have a whopping $6.96
trillion of home equity
remaining even after the
Great Housing Crash of
2007-2010. That represents
a very large population of
Americans who can qualify
for financing. Let’s use the
80/20 rule here. According
to the U.S. Census Bureau,
there are just more than
100 million households in
the U.S. If 20 percent of
them control 80 percent of
the equity, there are
approximately 20 million
households that have
more than enough equity
in their homes to qualify for financing.
In fact, according to the Fed, there are
approximately 20 million American house-
holds who have a net worth greater than
$350,000. This is a perfect example of the
80/20 rule in action. Your mission, should
you choose to accept it, is to find these peo-
ple. Where?
Let’s think this through. If I have at
least $350,000 of cash and home equity,
where would I hang out? Do you think
you’d find me click-shopping through
the Facebook pictures of all the good-
looking loan originators in my market?
Maybe; but probably not. Would you
find me scavenging Twitter for the latest
tweets of all the loan originators in my
market? Maybe; but probably not.
How about finding me when I’m sit-
ting down with my CPA or financial advi-
sor figuring out what to do with all my
money and home equity? Now we’re
talking! Not to knock social media (I use
it, like it and I recommend it), but I real-
ly do think that spending your time with
CPAs and financial advisors can provide
much more targeted access to this $6.96
trillion pool of opportunity. After all, they
not only have access to these clients, but
they also have their trust and loyalty.
Boundary #2: $1.56 trillion
Mortgage volume is down and many peo-
ple have left the industry. Competition is
fierce and regulators are squeezing profit
margins. Sound like a good time to go all
in? Heck yeah! The Mortgage Bankers
Association (MBA) estimates that there will
be $1.56 trillion of loan volume originated
in 2010. This is roughly half the annual vol-
ume that we saw in the boom days of
2003-2006. However, the Nationwide
Mortgage Licensing System (NMLS) esti-
mates that approximately 200,000 total
originators will be licensed and registered
by the end of 2010. This is also roughly half
the number of originators that were selling
mortgages in the boom days of 2003-2006.
Although loan volume is cut in half, the
number of people you are competing with
has also been cut in half. In other words, if
it was possible to have a record year in
2003-2006, it is equally possible to have a
record year in 2010. Yes, compliance is a
challenge, and yes, negative equity is a
challenge. Dude, that’s why loan volume
and your competition have been cut in half
… deal with it, because the opportunity to
ethically make a lot of money in the mort-
gage industry is still alive and well. If you
aren’t closing these loans, somebody else
must be having a record year!
By the way, don’t even try giving me
that lame excuse that the Fed is reducing
compensation levels … Okay, so you
can’t make four points per loan to your
pocket. But were you making four points
per loan in your pocket in 2003-2006?
Boundary #3:
Four million units
Home sales have plummeted to record
lows! Let’s all go out and shoot ourselves!
Wait a minute. Before you pull the trigger,
check this out. I’ll agree with you that
home sales have declined dramatically, if
you agree with me that eight million
referrals are still up for grabs. There will
be an estimated four million home sales
in 2010, according to the latest (and wide-
ly mourned) statistics from the National
Association of Realtors (NAR). That means
that there are eight million buyers and
sellers in today’s market. Using the 80/20
rule on the roughly one million Realtors
that are out there, the top 20 percent of
Realtors should be closing an average of
32 transaction sides in 2010.
This means that one top-producing
Realtor is worth at least 32 potential refer-
rals to you even in one of the worst pur-
chase years on record. How would you
like to get 32 referrals from one top-pro-
ducing Realtor? How about 128 referrals
from four top-producing Realtors? Again,
if you aren’t closing this business, some-
one else must be having a record year.
That’s exactly where CMPS comes in.
We are launching the free CMPS Webinar
series to help you focus your time and
energy on these three numbers that real-
ly matter. Why should someone else have
a record year when you deserve the busi-
ness? Know your numbers. Know your
boundaries. Tune out the noise.
Gibran Nicholas is the founder and chair-
man of the CMPS Institute
(CMPSInstitute.org—NMLS Provider ID#
1400384). The CMPS Institute administers
the Certified Mortgage Planning Specialist
(CMPS) designation and has enrolled more
than 5,500 members since 2005. Through
CMPS, Gibran empowers mortgage profes-
sionals with confidence, unique knowl-
edge, and dynamic marketing resources to
simplify compliance, increase their com-
petitive advantage, and generate more
business. Visit Gibran’s blog and Web site
at http://gibrannicholas.com.
Visit author Gibran Nicholas’s
blog at http://gibranni-
cholas.com where he shares
his insights on economics, real
estate and financial issues, including the
current mortgage and credit crises.
BY GIBRAN NICHOLAS
The Three Numbers That
Really Matter
“Although loan vol-
ume is cut in half, the
number of people you
are competing with
has also been cut in
half. In other words, if
it was possible to have
a record year in 2003-
2006, it is equally pos-
sible to have a record
year in 2010.”
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www.windvestcorp.com
lending standards, which are actually
the ones we had 20 years ago, seem to
be set in place for a long time. These
standards are necessary for investors to
regain their confidence with regard to
purchasing mortgage-backed securities
(MBS). The government cannot support
the secondary markets forever—or can
it? We need a healthy secondary mar-
ket for the long-term viability of the
mortgage industry.
Now let’s talk about the factors
affecting the long-term.
O Industry viability: If you are wondering
whether this industry will be viable in
the future, here is one thing I can assure
you: People will be buying homes for
decades in the future, and more likely
for centuries. And they will need to bor-
row money. I cannot tell you the shape
or format of the industry, but I can tell
you we will have a mortgage industry.
O The population will grow: Many ana-
lysts love to point out that the home-
ownership rate is shrinking and will
probably continue to shrink. I don’t
doubt these numbers, nor do I believe
that this won’t hurt the industry in the
long-run. However, if you look at the
long-term demographics, we have a lot
to look forward to. And many of those
“turned into renters” will want to rent
condos and houses instead of apart-
ments. As a matter of fact, some will be
renting the houses they lost in foreclo-
sure. This will turn out to be a great
opportunity for investors because we
are not building enough homes or
apartments to meet this demand in the
long run.
O The deficits: Yes, eventually we will have
to deal with the deficits. The stronger the
economic rebound, the less this situation
will hurt. However, in the long run, if we
have a stronger economy and we are
dealing with massive government debt,
we will likely see higher rates in the
future. But I emphasize again, the high-
er rates are not likely until the economy
improves. And an improving economy
will mean more purchases because
more will be employed. This will defi-
nitely require a balancing act by the
Federal Reserve Board.
O Unqualified borrowers: When the hous-
ing market rebounds, we will still be left
with consumers with low credit scores,
high debt ratios and tighter lending stan-
dards. We don’t expect the sub-prime
boom to resurrect itself in the future.
While these are not all the factors
affecting the short and the long term,
these are very significant factors that will
impact our future. What I am suggesting to
the average loan officer is to take a long-
term view. This is always the case when I
suggest that loan officers focus on pur-
chases rather than solely refinances. It is
also the case when I suggest that they have
a system in place to help borrowers get
qualified in the future, even if it does not
mean a deal next week. Yes, the mortgage
industry will be here in the future. But the
real question is … will you be a part of this
industry? The opportunity is there for the
taking but you will have to have a long-
term view, as well as a short-term view?
Dave Hershman is a leading author for the
mortgage industry with eight books and
several hundred articles to his credit. He is
also head of OriginationPro Mortgage
School and a top industry speaker. Dave’s
Certified Mortgage Advisor Program can
be found at www.webinars.origination-
pro.com. If you would like to stay ahead of
what is happening in the markets, visit
ratelink.originationpro.com for a free trial
or e-mail success@hershmangroup.com.
I receive a lot of questions regarding the
short-term direction of the markets, as
well as the long-term viability of the
industry. By now, you should recognize
that I am not much for predictions.
There are too many uncontrollable fac-
tors that can intervene. However, there
are some factors that have at least some
degree of certainty attached to them.
Therefore, this month I will not focus on
the markets but will take a broader view.
For all of those who have written
regarding why the purchase market has
become so “slow” this summer, let’s take
a look at the factors we are facing …
O Seasonal: It is not unusual for pur-
chases to fall in July and August. In
most areas of the country, the strong
sales season is in the spring and there
is a secondary rise in the fall after
Labor Day as well. August and
December are usually the slowest pur-
chase months of the year. December
can be a strong closing month, with
builders trying to get houses finished
and on the books for the year, at least
when builders are building.
O The tax credit: We all knew that the
end of the tax credit would coincide
with a drop in purchases. I am not
sure why so many seemed to be sur-
prised at the severity of the decrease.
Not only was the incentive removed,
but we “borrowed” from future pur-
chases. And don’t forget that the tax
credit ended and the summer pause
came along shortly afterwards, a dou-
ble whammy.
O The slow economy: The economy
was not roaring in the first quarter,
but it was a lot stronger than it was
just two years ago. All along, we have
said this would be a recovery of
“stops and starts.” Well, this summer
we had a “stop.” The question is: “Did
the economy slow down because of
the end of the tax credit or did the
real estate market slow down
because of the economy?” I don’t
really think it matters whether it was
the chicken or the egg, because you
cannot have one without the other.
We proved that when the collapse of
the U.S. real estate market fueled a
worldwide recession.
O Very low rates: That is an understate-
ment. We had record low rates that
should be encouraging sales. I am sure
some sales were encouraged by these
rates, but obviously not enough to off-
set the first three factors. Many origi-
nators have been living this summer
off of refinances and are keeping their
fingers crossed that these rates will last
until the end of the year. On the other
hand, continued extraordinarily low
rates could be considered bad news
for the economy and purchases.
O Unqualified clients: We should have
the largest refi boom in history right
now. We don’t because so many clients
cannot qualify because of lack of equi-
ty, low credit scores and high back
ratios (or low incomes). The govern-
ment (Federal Housing Administration)
is adding an “underwater refi program,
but 97.75 percent loan-to-value (LTV)
requirement and mandatory principal
reduction will keep many banks away
from this option. Of course, tighter
lending standards will also keep the
volume in the purchase market down.
We really cannot say that this is a “sea-
sonal” phenomenon or will swing back
with the economy starts growing. New
The Short-Term and Long-Term
“Yes, the mortgage industry will
be here in the future. But the real
question is … will you be a part of
this industry?”
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By Jonathan Foxx
“Society is founded not on the ideals but on the nature of man
and the constitution of man rewrites the constitutions of states.
But what is the constitution of man?”
1
—Will and Ariel Durant
In the first two parts of this three-part series,
2
we have explored
the basic structure of the new financial reform law, known as
the Dodd-Frank Act (Act), as it affects residential mortgage loan originations.
3
We
have already given consideration to the many mortgage loan regulatory provisions
that the Act covers
4
and especially to the Mortgage Reform and Predatory Lending
Act, a primary component of this landmark financial legislation.
5
Now, we will turn our attention to the very core of the Act itself vis-à-vis the
mortgage industry and consumer financial protection: the Bureau of Consumer
Financial Protection (known also as the Consumer Financial Protection Bureau or
CFPB, and hereinafter as the “Bureau”).
6
But first, a thought experiment
7
A vast, entangled array of very small and sleek wires, super strong magnets, and very wide
and long cables extend out omnidirectionally—all of which lines and circuits are laid
throughout a network of interlocking, electrically generated devices that are held in place
in their respective positions on a shaky iron scaffold by fraying, single-knotted ropes. The
devices are needed to power vital and critical services to a community. But, due to wear
and tear on their bindings, some devices are about to break free, threatening to pull down
with them the entire array of wires, magnets, cables, and other devices. Any device can
plummet at any time. Before it is too late, all the lines must be disentangled, traced to each
of the devices, and rerouted to a new and more stable grid; plus, the devices themselves
must be transferred, one by one, to the new grid without damaging them, and then recon-
nected to their lines. But the collapse can take place at any time. A “crisis” looms!
So, how are you going to accomplish this heroic task quickly and effectively?
Now let’s consider this analogue: The energy source is Constitutional authority; the
grid is the financial regulatory framework; wires and cables are the ways and means that
implementing regulations affect one another; magnets are the legal foundations (i.e.,
case law precedents or stare decisis), statutes (federal and state), Constitutional laws or
rights) on which all subject enumerated laws (see below) rest; devices are the existing
regulations; and ropes are the various governmental agencies that are charged with
enforcement of and monitoring compliance with specific implementing regulations.
By the end of this article, I hope you will have decided how best to solve the
above-described and admittedly convoluted “crisis.” This article and the preced-
ing articles in this series outline how Congress decided!
Please keep in mind that this series on the Dodd-Frank Act is meant to provide an
overview. However, the legislation itself is extremely detailed and extensive. Therefore, for
guidance and risk management support, I strongly recommend that you consult a risk
management firm, residential mortgage compliance professional, or regulatory counsel to
develop policies and procedures to implement the Act’s requirements.
One Bureau, many bureaucrats
“Nothing is more destructive of respect for the government and the law of the land
than passing laws which cannot be enforced.”
8
—Albert Einstein
There are numerous existing consumer protection laws that will be included in the trans-
fer to the Bureau by July 21, 2011, the Designated Transfer Date,
9
thereby giving it exclu-
sive rulemaking and examination authority.
10
These “enumerated laws” include:
11
O Alternative Mortgage Transaction Parity Act (AMTPA)
12
O Community Reinvestment Act (CRA)
13
O Consumer Leasing Act (CLA)
)14
O Electronic Funds Transfer Act (except the Durbin interchange amendment)
(EFTA)
15
O Equal Credit Opportunity Act (ECOA)
16
O Fair Credit Billing Act (FCBA)
17
O Fair Credit Reporting Act (except with respect to sections 615(e), 624 and 628)
(FCRA)
18
O Fair Debt Collection Practices Act (FDCPA)
19
O Federal Deposit Insurance Act, subsections 43(c) through 43(f)(12) (FDIA)
20
O Gramm-Leach-Bliley Act, sections 502 through 509 (GLBA)
21
O Home Mortgage Disclosure Act (HMDA)
22
O Home Ownership and Equity Protection Act (HOEPA)
23
O Real Estate Settlement Procedures Act (RESPA)
24
O SAFE Mortgage Licensing Act (S.A.F.E. Act)
25
O Truth-in-Lending Act (TILA)
26
O Truth-in-Savings Act (TISA)
27
O Omnibus Appropriations Act–Section 626 (OAA)
28
O Interstate Land Sales Full Disclosure Act (ILSFDA)
29
As I have discussed elsewhere, the Bureau would be assigned primary authority
to enforce the aforementioned laws, but other federal regulators, including the
U.S. Department of Housing & Urban Development (HUD), the banking agencies,
and the Federal Trade Commission (FTC), would retain overlapping, secondary
enforcement authority over certain requirements. State attorneys general would be
empowered to enforce federal laws under the Bureau (subject to any existing lim-
itations in the laws to be transferred to the Bureau’s authority).
30
And state con-
sumer financial protection laws would not be preempted, except to the extent that
they are inconsistent with federal law (although such state laws could be stricter
than the federal laws, in which case they would not be preempted by federal law).
31
The Bureau is established pursuant to Title X of the Act and is placed function-
ally within the purview of the U.S. Department of Treasury. It is housed within the
Federal Reserve (Fed), but the Fed has no direct, operational authority over the
Bureau.
32
Its purpose is to regulate consumer financial products or services under
the federal consumer financial laws.
33
These financial products and services
include, but are not limited to, credit extension; credit counseling; loan servicing;
Credit Reporting Agencies, their agents and affiliates; real property leases; real
estate settlement services; real estate appraisals; depository accounts; financial
advisory services; exchange of funds and transmittal of funds; consumer custodi-
al fund services; so-call “stored value cards;” check cashing; debt management,
settlement, and collection services; payment processing services; and, a catch-all
“other products and services” as the Bureau so defines.
Breaking this down, the Bureau will have purview over virtually all financial
products and services that are offered or provided to consumers for personal,
family, or household purposes.
The Bureau has authority over the above-stated enumerated laws through rule-
making, orders, guidance, interpretations, policy statements, examinations, and
enforcement actions. It will be responding to the changing financial landscape by con-
tinual rulemaking, as well as providing guidance and rules in accordance with time-
frames required by the Act. Implementation functions include enforcement of exist-
ing laws and the Bureau’s prescribed rules through civil monetary penalties,
34
as well
as in response to “covered persons” and service providers to prevent unfair, deceptive
and abusive practices in connection with a consumer financial product or service.
To take just one example, regarding disclosures, the Bureau’s rulemaking will
ensure that the features of any consumer financial product or service are fully,
accurately, and effectively disclosed to consumers in a manner that the Bureau
determines will permit consumers to understand the costs, benefits, and risks asso-
ciated with the product or service. Or, with respect to forms, in tandem with the
Bureau’s new disclosure rules, it may provide model forms, which, although
23
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optional, would provide a “safe harbor.” Yet another example would be the Act’s
requirement to restructure the TILA and RESPA Disclosures (i.e., TIL Statement, GFE,
and HUD-1 Settlement Statement) by combining them. So, not later than one year
after the Designated Transfer Date, the Bureau must propose a new model disclo-
sure that combines the initial and final TILA Statement and the GFE and HUD-1
Settlement Statement into a single disclosure for mortgage loan transactions.
A Penalty Fund
35
will be established for payments to the victims of activities for which
civil penalties have been imposed. The Bureau will have the authority to impose regis-
tration requirements on persons subject to its jurisdiction, other than insured depository
institutions and insured credit unions and their related affiliates. The Bureau is further
permitted to prescribe rules and take enforcement actions. In general, then, the Bureau’s
enforcement authority includes the right to impose penalties and restitution, bring a civil
action in its own name in order to impose a civil penalty or seek equitable relief. And, as
a specific power delegated by the Act itself, the Bureau can provide protection for whistle-
blowers and employees who report violations and cooperate with authorities.
Excluded from the Bureau’s purview are insurance products or services, entities reg-
ulated by stated insurance regulators, and electronic pass-through services; employee
benefit and compensation plans; small merchants, retailers or other sellers offering
purchase money credit where the debt is not assigned; real estate brokers; services
offering identity theft information; certain retailers of manufactured housing or mod-
ular homes; attorneys; persons and entities regulated by a state securities commission;
certain charitable contribution functions; accountants and tax preparers; persons reg-
ulated by the Farm Credit Administration; activities related to the solicitation or mak-
ing of voluntary contributions to a tax-exempt organization; and, persons and entities
required to be registered with the Securities and Exchange Commission, Commodity
Futures Trading Commission (CFTC), and the Bureau itself. Automobile dealers who
assign their credit contracts to unaffiliated third parties are also excluded.
36
The Bureau
does not have the authority to establish usury limits, unless explicitly authorized by law.
The Bureau has a five-year term director (Director), who is appointed by the
President, and requires Senate confirmation. A new bureaucracy will be established in
order for the Bureau to fulfill its mission. There will be various units and offices: a
research unit to monitor the consumer financial products and services market, and a
unit to collect and track complaints; three new offices to be established within one year
of the Designated Transfer Date, an Office of Fair Lending and Equal Opportunity, an
Office of Financial Education, an Office of Service Members Affairs; and, an Office of
Financial Protection for Older Americans, which must be established within 180 days
after the Designated Transfer Date. Furthermore, there will be a Private Education Loan
Ombudsman to process complaints from borrowers of private education loans.
Periodically, the Director reports to Congress and provides documentation in
support of the Bureau’s work. The Director forms and appoints members to a
Consumer Advisory Board (Board), which consists of six members recommended
by regional Federal Reserve Bank Presidents. The Board advises and consults with
the Bureau regarding consumer financial laws, provides information on emerging
practices in the consumer financial products or services industry, and reviews
regional trends, concerns, and other relevant information.
It should be noted that the Act establishes the Financial Stability Oversight Council
(Council), charged with identifying systemic risks to the financial stability of the United States,
which is ostensibly meant to monitor conditions leading to “too big to fail” and emerging
threats to the U.S. financial system. This Council is composed of 10 voting members and five
non-voting members, and one of the 10 voting members is the Director of the Bureau.
37
The Council may set aside a final regulation prescribed by the Bureau, or any
provision thereof, if the Council decides that the regulation will put the safety and
soundness of the U.S. banking system or the stability of the U.S. financial system
at risk. The Chairperson of the Council also may stay the effectuating of a regula-
tion in order to permit further consideration of a petition to the Council upon the
request of any member agency.
38
Until such time as the Council decides to vacate
its stay, the subject regulation or provision would be unenforceable.
In addition to the Bureau’s responsibility to build its own staff and administrative
operations, it will collaborate with the federal banking agencies and HUD to choose
employees to be transferred from their agencies to the Bureau. All such employee
transfers are to be fully effectuated not later than 90 days after the Designated
Transfer Date. The Bureau is expected to cost approximately $500 million to run, an
amount not altogether high when compared with the cost to run many other feder-
al agencies – although the cost will no doubt increase over the years.
Bureau and the banks
“If you owe the bank $100, that’s your problem. If you owe the bank $100 million,
that’s the bank’s problem.”
—John Paul Getty
The Bureau has exclusive authority to require reports of insured depository institutions
and conduct examinations, including authority over their affiliates. The Bureau’s
authority extends to credit unions and their affiliates, as well. Threshold size is $10 bil-
lion in total assets; below $10 billion in assets, bank oversight will remain with their
principal supervisory agencies—their prudential regulators. In such instances for
banks with total assets below $10 billion, the prudential regulator will retain exclusive
enforcement authority with respect to federal consumer financial laws. The Office of
the Comptroller of the Currency (OCC) will continue to regulate small thrifts. Obviously,
the Bureau’s mission is to monitor and enforce consumer financial laws; therefore, its
authorities will be exercised in this particular area of oversight.
In any event, the Bureau must coordinate examinations with prudential regulators
and state bank supervisors. Although the threshold is $10 billion in total assets, the
Director may still require reports from insured depository institutions and credit unions
that have total assets of less than $10 billion. The Bureau is not required to participate
in examinations performed by the prudential regulator for such institutions, but it may
do so. If the Bureau finds that any institution has materially violated a federal consumer
financial law, it notifies the prudential regulator and recommends appropriate action.
Under the Act, a state law is not inconsistent with the provisions of Title X if
such law offers greater consumer protection.
39
Therefore, the Bureau may deter-
mine that a state law is inconsistent with Title X on its own motion or in response
to a petition by any interested person. Procedurally, the Bureau must initiate a
rulemaking whenever a majority of the states enact a resolution to establish or
modify consumer protection regulation promulgated by the Bureau. With respect
to visitorial powers, the provisions of Title X do not affect the application of a reg-
ulation, order, guidance or interpretation of the OCC or Office of Thrift Supervision
(OTS) regarding the applicability of state law to a preexisting contract.
But the Act does provide a preemption standard pursuant to which a state con-
sumer financial law is preempted if it either (1) has a discriminatory effect on
national banks in that it “prevents or significantly interferes with the exercise by the
national bank of its powers,” or, (2) is preempted by a provision of federal law.
40
Determining the preemption standard—permitting preemption of state con-
sumer financial protection law – requires the following de minimus analysis: (1) If
the preemption’s application would have a discriminatory effect on national
banks, compared to banks chartered by a state; (2) If the preemption determina-
tion, made by the OCC or a court on a case-by-case basis, is in accordance with the
legal standard in Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance
Commissioner, et al., which set a standard for preempting state regulation in the
insurance industry;
41
or (3) If it is preempted by another federal law.
Determining that a state law prevents or significantly interferes with a nation-
al bank’s powers may be made by a court or by the OCC on a case by case basis.
42
The preemption standards also apply to state laws affecting federal savings banks
as well. Contrary to the U.S. Supreme Court’s decision in Watters v. Wachovia
Bank,
43
federal preemption will not apply to subsidiaries and affiliates of national
banks that are not themselves national banks.
Bureau and the non-banks
“Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.”
44
—Polonius, William Shakespeare’s “Hamlet”
The Bureau has supervisory authority over several types of non-depository institu-
tions. In coordination with the FTC,
45
the Bureau will determine the scope of its
purview over non-depository institutions, with an initial rule to be issued within
one year after the Designated Transfer Date.
To identify such non-depository institutions and other entities, a specific classi-
fication is established, called “covered persons,” which is defined, as follows:
A. A person (entity) that engages in offering or providing a consumer financial
product or service; and,
B. An affiliate of a person (entity) described in A, if the affiliate acts as a service
provider to such person (entity).
Covered institutions are those persons or entities that:
1. Offer or provide origination, brokerage, or servicing for residential mortgage
loans. In effect, all businesses that are involved in mortgage loan originations.
2. Offer or provide other consumer financial products or services for which the
Bureau has yet to promulgate a rule.
3. Engage or have engaged in conduct that, in the view of the Bureau, poses risk
with regard to the offering or provision of consumer financial products or services,
which include non-bank lenders, debt collectors, and consumer reporting agencies.
4. Offer or provide private education loans.
5. Offer or provide payday loans to consumers.
continued on page 24
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news flash continued from page 15
processes in place to facilitate borrow-
er disclosure of changes in financial cir-
cumstances throughout the origination
process. It also provides an expanded
debt-to-income (DTI) ratio tolerance
that will lead to fewer loans having to
be re-underwritten.
Lenders will only be required to re-
underwrite a loan after the initial
underwriting decision has been made if
the borrower discloses or the lender dis-
covers changes that cause the debt-to-
income (DTI) ratio to exceed 45 percent
or to increase by three percentage
points or more.
Fannie Mae exists to expand afford-
able housing and bring global capital to
local communities in order to serve the
U.S. housing market. Fannie Mae has a
federal charter and operates in
America’s secondary mortgage market
to enhance the liquidity of the mort-
gage market by providing funds to
mortgage bankers and other lenders so
that they may lend to home buyers. Our
job is to help those who house America.
For more information, visit www.fan-
niemae.com.
NAR survey:
Homeownership and
community stability
linked
Homeowners are
more active in their
communities, ben-
efit from improved
education opportunities, and report
higher levels of self-esteem and happi-
ness when compared to renters,
according to leading research. A new
report from the National Association of
Realtors (NAR), “Social Benefits of
Homeownership and Stable Housing,”
explores the impact of stable housing
and the positive social outcomes result-
ing from homeownership.
“Homeownership is in investment in
your future—home is where we make
memories, build our lives and feel
comfortable and secure,” said Vicki Cox
Golder, owner of Vicki L. Cox Real
Estate in Tucson, Ariz. “Owning a home
has long-standing government support
in this country because homeowner-
ship benefits individuals and families,
strengthens our communities and is
integral to our nation’s economy.”
NAR’s study identifies research from
government, industry and academia
that identified the relationship
between homeownership and stable
communities. Homeowners move far
less frequently than renters, and there-
fore are embedded into the same
neighborhood and community for
longer. This allows for social cohesion,
ultimately resulting in social benefits
and stronger communities.
“Realtors care as much about keep-
ing families in their homes as they do
about helping them find the home of
their dreams,” said Golder. “Social ben-
efits do not arise solely from ownership,
but also from greater housing stability
and social ties associated with less fre-
quent moves among homeowners.”
Several research studies cited in the
NAR report have found that homeown-
ership has a significant impact on edu-
cational achievement. For instance, the
decision by teenage students to stay in
school is higher for those raised by par-
ents who are homeowners compared to
those whose parents are renters. Access
to economic and educational opportu-
nities are also more prevalent in neigh-
borhoods with high rates of homeown-
ership. Furthermore, studies have
shown that changing schools frequent-
ly due to moving impacts negatively a
child’s educational outcome.
Civic participation is another social
benefit resulting from homeownership
and stable housing. Homeowners are
proven to be more politically active and
are more likely to vote in local elections
compared to renters. In addition,
homeowners have a higher member-
ship in voluntary organizations.
Studies have shown that homeown-
ers are more likely to believe that they
can do things as well as anyone else,
and they self-report higher ratings on
their physical health. “The research
shows that homeowners report higher
self-esteem and happiness than
renters, resulting in better overall
health, both physically and psychologi-
cally,” said Golder.
When it comes to property, home-
owners have more invested both finan-
cially and emotionally. Property crimes
affect homeowners directly, but non-
violent property crimes can impact the
property values of the entire neighbor-
hood. Therefore, homeowners are
more motivated to deter crime by
forming and implementing voluntary
crime prevention programs. In addi-
tion, it is easier for homeowners to rec-
ognize perpetrators in stable neighbor-
hoods because of extensive social ties.
Unstable neighborhoods often display
social disorganization which can lead
to higher levels of crime.
Along with protecting their home
and neighborhood from crime, home-
owners spend more time and money
maintaining their home than renters.
Neighbors also influence other home-
owners to improve their property,
resulting in a better overall quality of
the community.
“Homeownership certainly con-
tributes to positive social outcomes, but
those outcomes are truly a result of sta-
ble housing communities,” said Golder.
“With strong social ties and a cohesive
community, homeowners can enjoy not
only the long-term financial benefit of
owning a home, but also a more satis-
fying life—which is what’s really at the
heart of the American Dream.”
For more information, visit www.real-
tor.org.
The Bureau requires reports and has examination authority over covered insti-
tutions. The scope of such authority extends to (1) assessing compliance with con-
sumer financial protection laws, (2) obtaining information about the activities and
compliance systems or procedures, and (3) detecting and assessing risk to con-
sumers and markets of consumer financial products and services.
This also means that the Bureau will promulgate, through its rulemaking
authority, recordkeeping and record retention requirements in concertu with
state and federal regulators.
Indeed, the Bureau can exercise its authority even if other provisions of law grant
some enforcement, rulemaking, or examination authority to another agency.
Director of the Bureau
“If a sufficient number of management layers are superimposed on top of each
other, it can be assured that disaster is not left to chance.”
46
—Norman Augustine
Creating any new governmental agency is a Herculean, and perhaps also a hero-
ic, undertaking! To create a new agency that has consumer financial protection as
its primary mission requires appointing a Director with considerable managerial,
legal, political, and financial knowledge, all of which ideally would be expressed
through a balanced temperament, a focused and incisive mind, a fierce consumer
advocacy, and sophisticated communication skills.
Consider the ostensible tasks that a Director of the Bureau must accomplish,
and it becomes eminently clear that few individuals in or out of government
could meet such high standards.
Here is a chart of the units that the Director must establish:
47
continued from page 23
continued on page 34
Supervisory Units
& Functions
Compliance Requirement
Research
• Research
• Analyze
• Report
A. Developments in consumer financial product markets, alterna-
tive markets with high growth rates, and areas of risk to consumers.
B. Access to fair and affordable credit for traditionally underserved
communities.
C. Consumer awareness, understanding, and use of disclosures and
communications regarding consumer financial products or services.
D. Consumer awareness and understanding of costs, risks, benefits
of consumer financial products or services.
E. Consumer behavior—including mortgage loans—with respect to
consumer financial products or services.
F. Experiences of traditionally underserved consumers, including
un-banked and under-banked consumers.
Community affairs
• Provide Information
• Guidance
• Technical Assistance
Support to consumers regarding consumer financial products or
services offered and provided to traditionally underserved con-
sumers and communities.
Collecting and
tracking complaints
A. Toll-Free Number, Web site, centralized Database to monitor
and respond to consumer complaints, in coordination with the
FTC and other federal agencies.
B. Route complaint calls to states.
C. Data sharing requirements with prudential regulators, FTC,
federal and state agencies.
Office of Fair
Lending and
Equal Opportunity
A. Ensure fair, equitable and non-discriminatory access to credit
for individuals and communities.
B. Coordinate fair lending efforts with federal and state agencies.
C. Work with private industry, fair lending, civil rights, consumer
and community advocates.
D. Provide annual reports to Congress.
Office of Financial
Education
Develop and implement initiatives to educate and empower
consumers to make better informed decisions.
Office of Member
Affairs
Educate and empower service members and their families to
make better informed decisions regarding consumer financial
products.
Office of Financial
Protection For Older
Americans
Activities designed to facilitate financial literacy of individuals
who have attained the age of 62 years or more on protection
unfair, deceptive, and abusive practices, and information about
current and future financial choices.
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THE
MORTGAGE
PROFESSIONAL
TRUSTED
By Greg Schroeder
Okay, so we all agree that being a licensed, bonded and insured
broker is not only a smart business decision, but it is also the right
thing to do, right? Assuming unwavering agreement from my
many loyal readers, this month, I will explain how brokers can
achieve maximum value from the adoption of these hallmarks of
a true Trusted Mortgage Professional.
The licensing part of the equation is easy, mainly because it’s now required.
While the advantages of being licensed (i.e. being allowed to lend) may seem pretty
obvious and finite, there are ways to use this fact to a broker’s advantage. Many
borrowers are unaccustomed to seeing mortgage professionals advertise themselves
as being licensed so why not update your marketing materials to include this fact?
A sizable banner on your Web site and in your marketing literature, as well as a
few well-worded updates on the social media outlet of your choice (Twitter, Face-
book, LinkedIn, etc.) announcing this fact, could go a long way in regards to cus-
tomer acquisition and would be time and money well-spent.
The second piece of this equation is a little trickier. People often assume that
“bonded” and “insured” are one and the same, but actually, these are two different, yet
complimentary, concepts. To be “bonded” means to have financial protection in place
to cover claims made against your company for wrongdoing on the part of an employee.
The most common type of bond coverage is a fidelity bond, which covers a business
in the event of dishonest acts by an employee. However, this type of bond hasn’t been
available to brokers until just recently. A newly available fidelity bond just for brokers
protects against acts of mortgage fraud or deceit on behalf of an employee intended to
enhance that employee’s personal financial gain or to cause harm to the employer, in-
cluding acts by third-parties such attorneys or closing agents retained by the broker.
To provide brokers with maximum protection, the fidelity bond should cover the fol-
lowing: Forged checks and documents; fraudulent mortgages, including fraudulent
procurement (theft) of a mortgage investor’s money or collateral; and computer crime.
Other features that would be beneficial for brokers include retroactive coverage,
automatic coverage for newly-established offices and a definition of “insured” that
covers both past and present employees from the top of the organization down.
What a fidelity bond doesn’t cover is negligence, which is where professional lia-
bility or professional indemnity insurance comes into play. This type of coverage pro-
tects a business from errors, omissions and other type of mistakes, hence the policy’s
more common moniker “E&O.” The legal definition of negligence is very broad, which
is not good news for businesses like mortgage companies that must execute with per-
fection every time. Most E&O policies are written for a specific business, so be sure to
use an agent that has experience in creating these types of policies for mortgage com-
panies to ensure that all of the bases are covered. However, a robust E&O policy should
cover the following: Failure to obtain or maintain required property insurance in-
cluding flood coverage; improper Flood Zone Determination; failure to secure
FHA/VA/PMI guarantees; failure to obtain or maintain life or disability insurance on
the mortgagor; or failure to pay real estate taxes or special assessments.
A true Trusted Mortgage Professional needs to be motivated by more than just the
bottom line if they expect to succeed in today’s wholesale environment. A commit-
ment to quality, integrity and fidelity can no longer be lip service, but must now be
the foundation upon which brokers must build their business. One small crack in
that foundation and the whole structure could come tumbling down. Are you ready?
Greg Schroeder is president of Comergence Compliance Monitoring. To learn
more about how the Comergence Compliance Trusted Mortgage Professional pro-
gram can help, call (714) 495-4720.
Bonded and Insured: A Foundation for Rebuilding Trust
Insured broker originators secure wholesale lender confidence and
borrower preference
U.S. Census Bureau finds
monthly housing costs
reach $1,000 for
homeowners
Photo credit: John Foxx
The nation’s home-
owners paid a median
of $1,000 in monthly
housing costs in 2009, compared with
$808 for renters, according to data
released today by the U.S. Census
Bureau and the U.S. Department of
Housing & Urban Development (HUD).
However, renters usually paid a higher
percentage of their household income
on these costs than did owners (31 per-
cent compared with 20 percent). These
new figures come from the 2009
American Housing Survey, the defini-
tive source of information on the qual-
ity of housing in the United States.
Statistics are provided for apartments,
single-family homes, manufactured
housing, new construction and vacant
housing units.
Issued jointly bi-annually by the
Census Bureau and HUD, this survey pro-
vides detailed information on the char-
acteristics of the nation’s housing stock.
A wide range of specific topics is
covered, such as the presence of air
conditioning, crowding, housing costs,
special living services offered to older
residents, safety equipment present,
type of heating fuel used, satisfaction
with the neighborhood, cost of utilities
and size of the home. The survey also
covers the demographic characteristics
of the housing units’ occupants.
“So many of these measures are
really unique to this survey,” said
Tamara Cole, chief of the Census
Bureau’s American Housing Survey
Branch. “Together they provide a com-
prehensive view of the quality of the
nation’s housing stock. This survey is
also a longitudinal one, meaning it fol-
lows the same unit over time. For
example, you can track the remodeling
done to a specific unit from one survey
to the next.”
The 2009 survey indicates that respon-
dents are generally quite content with
where they live: Approximately 70 per-
cent rate their homes an 8, 9, or 10 on a
scale of 1 to 10 with 28 percent giving
them the “best” rating of 10. Residents of
new construction tend to rate their
homes even more highly: 84 percent gave
them between an 8 and 10, and 45 per-
cent gave a perfect 10 rating. Likewise,
more than two-thirds of residents (68 per-
cent) rated their neighborhood highly
with 25 percent giving it a “best” rating.
People living in newly built homes rate
their neighborhoods especially highly: 75
percent (rated highly) and 35 percent
(rated best), respectively.
Other highlights for the nearly 112
million occupied housing units:
O The median year housing units
were built was in 1974, with owner-
occupied units being slightly newer
(median of 1975 compared with
1971 for renter-occupied units).
O The median purchase price of
homes was $107,500; for a newly
constructed home, it was $240,000.
O Thirty-two percent of owner-occu-
pied units were owned free and
clear, 66 percent had a regular
and/or home equity mortgage and
two percent had only a line-of-
credit.
O The most important consideration
for recent movers in choosing their
homes was financial (28 percent),
followed by room layout/design (15
percent) and size of home (10 per-
cent). Furthermore, the most com-
mon reasons recent movers had for
choosing their neighborhoods were
convenience to job (20 percent),
convenience to friends or relatives
(14 percent), look/design of neigh-
borhood (10 percent) and the house
itself (10 percent).
O About two-thirds (64 percent) of the
units used a warm-air furnace for
heating; 12 percent used an electric
heat pump; and 11 percent used a
steam or hot water system. The lat-
ter is increasingly falling out of use
as only two percent of new units use
this system.
O About half of homes (48 percent)
had a separate dining room and
three in 10 (30 percent) reported two
or more living rooms or recreation
rooms. About one-third (35 percent)
had a usable fireplace.
O About two-thirds of housing units
(65 percent) had central air condi-
tioning and another 21 percent had
window units; for new units, the
percentage with central air condi-
tioning was even higher (89 percent).
O About nine in 10 units (93 percent)
reported the presence of a smoke
detector. Additionally, 36 percent
reported having a working carbon
monoxide detector, 45 percent pur-
chased or recharged a fire extin-
guisher in the last two years and 5
percent had a sprinkler system.
O Most homes had three or more bed-
rooms (64 percent), with the per-
centage even higher in new homes
(80 percent). Additionally, about half
of homes (51 percent) had two or
more bathrooms, with the percent-
age even higher (89 percent) in new
homes.
O Ten percent of communities had
secured entrances, with the likeli-
hood somewhat higher (15 percent)
in new communities.
For more information, visit www.cen-
sus.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 pre-
ferred. The deadline for submissions is the
1st of the month prior to the target issue.
Marketing during a downturn isn’t
the only challenge we face. Today, a
great deal of people are focused on the
back end of the mortgage transaction.
With defaults at historic levels, mort-
gage fraud out of control and constant
government pressure to help home-
owners in distress, mortgage loan ser-
vicers have their work cut out for them.
But soon, very soon if the federal gov-
ernment’s academic advisors are cor-
rect and we have exited the recession,
the focus will return to the point of
sale. It will be here where the future of
the mortgage industry is being written,
for only by closing new
loans will companies
remain in business and
succeed as we move into
the recovery.
We are already seeing
some excellent signs.
Some pockets of second-
ary market investment
are starting to get active
and we’ve already seen at
least one mini-refi boom
this year. Those who
believe that this new busi-
ness is only the result of
government bailout funds
are missing the point. The
government can spark
interest on the part of
prospective borrowers,
but only lenders can close
the deals. And only lenders who have a
good understanding of what it means to
market to the new generation of mort-
gage borrowers will be around.
Most discussions of marketing are
complicated by confusion about how it
relates to sales. While sales are the results
of good marketing, they are not at all
similar disciplines. While sales is what
ultimately makes the company money
and keeps the machine working, market-
ing tells us who to sell to, why they want
our product and what salespeople must
say to get them to close. The company-
centric (or supply side) “Four P’s of
Marketing:” (Product, Place, Price and
Promotion) now need to be accompa-
nied, if not replaced with, the customer-
focused “Four C’s of Marketing:”
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Taking Control of Your Marketing
Two runners approach a hill. One run-
ner walks up the hill and the other,
runs up the hill. Which is a better strat-
egy for a long distance race?
Well, I’m not a runner, so I really don’t
know which is a better strategy, however,
when we look at this from a marketing
perspective, the answer becomes a lot
more clear. Let’s look at it again.
Two businesses hit a downturn in the
market. One business seizes all market-
ing activities. The other, decides to
invest more into marketing. Which is a
better strategy for long-term business
success?
The answer to that
question comes down to
understanding the value
of the incremental gain
earned while running
versus walking up a hill.
In running, you expend
energy to gain distance.
In marketing, you spend
money to gain customers.
The big difference is that
the energy spent running
harder does not translate
into more energy for the
race. In fact, you’ll have
less energy to finish the
race hard. In business,
however, the money
spent on marketing trans-
lates into more cus-
tomers now, which
means more cash to invest in more
marketing to get even more customers.
An unfortunate common practice for
companies at the onset of a poor econ-
omy is to begin cutting operating costs.
Even more unfortunate is the fact that
marketing budgets are often the prime
targets of those cuts. It has been proven
time and time again that it’s not a good
idea to reduce marketing efforts during
a recession. This short-term approach
saves money, but leaves your brand in
a less competitive position whenever
the economy recovers. And over the
years, research has confirmed that the
best strategy in terms of long-term
return on investment (ROI) is to
increase marketing efforts during an
economic slowdown.
Customer value (product), Cost to the cus-
tomer (price), Convenience for the buyer
(Place) and Communication (Promotion).
Beyond that, marketing is the
machine that keeps future borrowers
on the line until they are in the “buy
zone” and ready to sign an application.
While loan officers know they must
maintain these databases and stay con-
nected to these prospects, it can be very
difficult to do so on a regular basis.
Without that kind of marketing sup-
port, sales become much more diffi-
cult, referrals are harder to get and cus-
tomer loyalty goes out the window.
So what do we do?
Gary Kellar, Dave Jenks and Jay Papasan
wrote a game-changing book entitled
The Millionaire Real Estate Agent. Their
research into what they call “mind-
share” illustrated that the 92 percent of
sellers will list their home with either
the first or second agent they meet with
and 82 percent of buyers will sign a con-
tract with either the first or second
agent they meet with. That means that
you’d better be number one or number
two or you’re not even in the game!
We see the same lack of loyalty from
customers in the mortgage industry
today. While the industry has worked
hard to increase customer satisfaction,
and the numbers are promising, it is
not translating into customer loyalty.
We’re still seeing almost every borrower
go to a different lender for their next
loan. I believe this is because no one in
our industry is taking control of the
marketing process.
Who owns the marketing
process?
I strongly believe that marketing should
be owned and managed by the compa-
ny so that originators can focus their
time, energy and money on selling and
building relationships. Sounds great, but
there is one big problem. For a mortgage
company to “own” marketing, they have
to pay for it and where will they find that
money? For too many years, mortgage
companies competed for the industry’s
top talent through the promise of high
commission splits. Over time, as those
splits continued to rise, there was less
and less money available to spend on
supporting, training and developing the
originator. In the end, the originator was
left with not only the task of selling, but
they also now had to spend their own
money to implement marketing sys-
tems. We all know that dollars spent on
an individual basis go a lot less further
than collective dollars. One-hundred
originators individually spending $250
per month on marketing with no cohe-
sive message generates a pretty weak
impression on the market. Now, if you
pool the $250, you can now spend
$25,000 per month into a cohesive mes-
sage and effort. Much more powerful!
In the past, mortgage lenders went
down one of two paths when it came to
marketing. Either they had a process
that they subjected every loan officer to
as a matter of course, or they left all of
that to the front line originators, letting
the best rise like cream to the top.
As you might imagine, those loan
officers that did the best job of mar-
keting to their prospects on a regular
basis, closed the most loans and
earned the most commissions. The top
producing loan originators do a few
important things consistently. After
years of training and consulting with
some of the nation’ top originators, I
can tell you that when it comes to
database building, mining and main-
taining, these guys are experts and
they spend a lot of money to do it.
They have teams of people whose sole
job is to execute marketing best prac-
tices similar to Kellar Williams’ 8 x 8
(eight touches in eight weeks) and 33
Touch (33 touches per year) programs.
The ROI on campaigns of that nature
have been proven and easily justify the
expense of a full-time person. Sadly,
the amount of work and expense to
properly execute those campaigns on a
regular basis prohibits the majority of
originators from being able to enjoy
the benefits of such activities.
e-mail marketing to the
rescue … NOT!
I’m not saying that I don’t like e-mail
marketing because I do. What I am say-
ing is that the days of uploading your e-
mail marketing list to an online service
that kicks out an e-mail a few times a
month are over. In the beginning, it
was a very powerful too, but the influx
of automated spam messages and the
continued abuse of people’s personal
information has forced e-mail spam fil-
ters to tighten up. I personally know of
several owners of e-mail marketing sys-
By Rene F. Rodriguez
“Today, it takes a
combination of
touches from different
channels (or media)
to keep prospective
borrowers engaged.”
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tems who are constantly testing to see
if they receive the e-mail they send out,
and some of the marketing messages
don’t even clear their own spam filters.
Multi-channel marketing
Even when the e-mail does get through
to us, we’ve all seen so many e-mail
marketing messages that they don’t
even register on us before we’ve clicked
the delete button. It’s like the check
engine light in our car, if nothing bad
happens right away by ignoring it, we
eventually learn not to take it very seri-
ously. After a few weeks, we don’t even
see it anymore. It’s not news to any of us
that there’s very little power in solely
using e-mail as your communication
and marketing tool.
Today, it takes a combination of
touches from different channels (or
media) to keep prospective borrowers
engaged. Borrowers are alerted to mes-
sages in one medium, say e-mail, but will
respond and engage with companies
that approach them through multiple
avenues, such as e-mail combined with
social networking sites, YouTube videos
and a personal phone call. The problem,
of course, is that loan officers don’t the
have time, expertise and money to do
this type of marketing, much less gener-
ate the content it takes to provide the
messages for those media. Some out-
source it but most, cross their fingers and
do nothing in hopes that maybe the sta-
tistics won’t apply to them.
Marketing responsibility
falls to the lender
In the end, it’s up to the mortgage
lender to provide the marketing that
will provide a steady stream of sales
leads to the loan officers. In fact, it
makes good business sense to do so.
But here again, we run into the chal-
lenge of recruiting the nation’s best
loan originators and paying the high
commissions required to get them to
come aboard, there is little money left
for marketing purposes.
Soon, many lenders are going to be
forced to re-think and re-structure how
they compensate originators, which
will inevitably lead them re-think how
they are going to retain top talent.
Herein lies the opportunity. Lenders
that are able to find ways to offer ancil-
lary value that originators are able to
monetize are going to be the big win-
ners. Most likely, the originator’s com-
pensation will be perceived as going
down, but if done correctly, lenders will
be able to successfully reduce the cost
of business to the originator by taking
on such expenses as marketing. The
positive result will be more business
generated at a lower cost to the origi-
nator. While there isn’t a magic formu-
la as of yet, I can guarantee you that we
are going to see strategies like this pop
up all over the place.
Hidden opportunity
As everyone rushed to make the move
to e-mail marketing, traditional print-
ers were somewhat left behind in the
dust. The printing industry has been
under heavy pressure coming from
online adverting and falling prices for
traditional mass media. While advertis-
ing online may not always be cheaper
than doing so in print, it comes without
the cost of printing or paper. All of this
is taking business away from printers.
Consequently, printing companies are
hungry for business. They have stream-
lined their operations and have added
technologies that allow them to do some
great things for marketers. At
MortgageDashboard, we chose to fully
integrate Cross Media’s (www.CrossMedia-
LLC.com) LeadStar marketing engine into
our new loan origination software (LOS)
and customer relationship manage-
ment (CRM) system. They are a perfect
example of what is possible when you
combine the expertise of a traditional
printer and the power of variable data
printing to execute marketing best
practices. With their technology, they
can offer their clients individually-
printed marketing pieces printed
directly from a database at an afford-
able price. The ability to automate cer-
tain marketing and communications
that were personalized and delivered
through multiple channels based on
strategically placed triggers throughout
the loan process was a dream come
true for me. The more customized a
direct mail marketing piece is, the
more effective it will be.
One of the advantages to the com-
pany for handling this type of market-
ing on behalf of its mortgage origina-
tors is that should an originator leave
the company, a simple change to the
database, perhaps the addition of a
new originator’s name and photo, and
prospects may not even notice the
change if the company’s other brand-
ing remains the same.
It falls on the shoulders of the com-
pany to seek out these marketing
opportunities and make sure that
prospects are getting attention regular-
ly. This will require firms to either bol-
ster the staff in their marketing depart-
ments to handle the content genera-
tion, media buying and database main-
tenance responsibilities; outsource it to
a firm that can handle it for them; or
invest in a technology to help them
streamline and execute their marketing
plan. Those firms that keep the work
in-house must be prepared to play a
numbers game.
Database math
When Gary Keller looked into the habits
of the most successful real estate
agents in their industry, they learned
that marketing was less about the par-
ticular sales messages that the salesper-
son used and more about the different
ways the prospect was touched and
how often.
Their research indicated that the
nation’s best agents had two databases,
one that was comprised of past cus-
tomers and people they knew (their
“met” list), and the other consisted of a
targeted group of prospects, typically a
purchased list in a specific area code or
neighborhood (their “not met” list). The
agent would systematically farm both
lists. It turned out that, if the agent sent
a postcard to every person in the “not
met” database once each month for 12
months, Kellar Williams calls this
approach the 12 Direct program, they
would earn one new transaction for
every 50 contacts they mailed to. In
other words, they got a two percent
response rate. When it came to market-
ing to their “met” database, Kellar’s
book recommended a two-step
approach. Step one would be to touch
every new prospect eight times in eight
weeks, then follow up with a total of 33
touches throughout the year. Those
touches consisted of e-mails, postcards,
drop-offs, gifts, etc. That strategy yield-
ed two deals for every 12 people they
marketed to (or a 17 percent response
rate). The value of this research is real-
ized when you utilize these metrics to
not only accurately determine what
your marketing activities should be to
reach your desired income level, but
also, you could calculate the cost of not
marketing to your clients.
These metrics are consistent with
the mortgage industry. The Mortgage
Bankers Association (MBA) reported
that 8.7 percent of your closed clients
will refinance each year and the U.S.
Census Bureau stated that 6.8 percent
of the nation’s population will pur-
chase a home each year. Combine
those numbers and the end result is
that 15.5 percent of your database will
be in need of a new loan each year. For
example, if an originator has a data-
base size of 500 people, that means
that 77.5 loans will happen, but the
question is, “Will they be yours?”
According to the research and stats we
stated previously on the subject of
mindshare, if you are number one or
number two, the chances of those loans
coming to fruition is pretty good. It’s
not like I need to twist the knife any
further, but if the average fees on a
loan are $3,000, then that means there
is in excess of $232,000 of opportunity
in a 500-person database. Even if we
are half-right with these numbers, it
still translates into a huge opportunity
for those can properly execute this
plan. That’s what we call database
math.
Other results that the nation’s top
agents were enjoying came clear after
the research, but they all said basically
the same thing. Once the metrics were
worked out and the agent knew how
many touches were required to pro-
duce a sale, the marketing function was
reduced to a numbers game, and the
most successful agents keep doing the
work.
Now, the federal government is
working harder to make it possible for
home loan borrowers to shop around
for the right lender. While that has tra-
ditionally been harder to do here, the
government is not likely to stop moving
the industry in that direction. That
means that mortgage loan officers will
soon face a similar challenge and will
need to remain in the forefront of the
prospect’s mind.
This will prove increasingly difficult
for mortgage lenders who are dealing
with legal and investor compliance,
technology, mortgage fraud and a host
of other issues critical to their business.
Those who are able to deal with these
pressures without letting their market-
ing suffer will succeed.
Many say that we are living in the
“Information Age,” but I no longer
think that’s true. I believe we are now
living in the “Implementation Age.”
You can do a quick Google search and
receive any information you want, but
that data alone benefits you little. It’s
what you do with that information that
matters. The very same is true of mar-
keting. Many know that it’s the number
and quality of prospects that leads to
future business. Few have the where-
withal to implement a practical mar-
keting program that works. I hope this
information will help shift focus away
from the upfront cost of marketing to
the real question of what is it costing
you NOT to market to them.
Rene F. Rodriguez is a corporate business
strategist, acclaimed speaker and train-
er, and chief executive officer of
MortgageDashboard. He may be reached
by phone at (612) 310-4010, e-mail
rene@mortgagedashboard.com or visit
www.mortgagedashboard.com.
“Most discussions of marketing are
complicated by confusion about how
it relates to sales. While sales are the
results of good marketing, they are
not at all similar disciplines.”
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If you walked up to most anyone in our
industry or any industry for that matter
and asked them, “What is the differ-
ence between ‘sales’ and ‘marketing?’”
you would be surprised at how many
different answers you would receive.
For many, the words “sales” and “mar-
keting” are mistakenly
used interchangeably.
These terms are not inter-
changeable, and it is
important that we estab-
lish a solid definition for
these two words and have
a thorough understand-
ing as to their differences.
“Sales” is an act or
effort of persuading or
influencing someone to
enter into a relationship
with you and/or your
company for the purpose
of exchanging (transact-
ing) something of value
for products and services
being offered by you
and/or your company. At
its core, selling or sales is
transactional in nature.
“Marketing” on the other hand, is
your effort to communicate informa-
tion about yourself, your company
and/or your products and services to
those with whom you would like to
transact business. At its core, market-
ing is all about communicating a mes-
sage.
While sales and marketing are
uniquely different, they share one
common goal and objective … and
that is to make money! If your market-
ing efforts are only costing you money
and not making you money, you are
not alone. By in large, the mortgage
industry is not known for its marketing
prowess. To many in the mortgage
industry, marketing is a mystery. But in
reality, the subject of marketing comes
to all of us naturally and
at a young age. Think
back to our single days
when that “special some-
one” caught our atten-
tion. One way or another
we found a way to “mar-
ket” ourselves to those
that caught our atten-
tion. Clearly, some excel
at marketing more than
others, which is why I
hope to make a differ-
ence with this article.
Bigger companies
have a chief marketing
officer (CMO) occupying
the “C-Suite” along with
all the other C-Level
executives (see last
month’s article for an
explanation of the “C-
Suite” and C-Level executives). But,
the vast majority of companies in our
industry don’t, and it is painfully
obvious. That is why I advise you to
have the attitude that you are per-
sonally responsible for your own
marketing. Even if your company has
a marketing department with a good
marketing strategy, you should never
rely on anyone else’s marketing
efforts to achieve your goals and
objectives. If you do, you are putting
your fate in the hands of another and
that compromises your potential for
success. Those who want to achieve
extraordinary success have to take
ownership and personal accountabil-
ity for their own marketing.
I was recently talking to a very
successful originator and asked him,
“What has been the key to his suc-
cess?” And I should point out that
he worked for a company that had
an excellent marketing plan. His
answer was refreshing and high-
lighted what I am talking about. He
said, “While I am grateful for all
that my company does in the area of
marketing to generate leads for me,
I have learned that if I am be suc-
cessful at all times and in all market
conditions, I cannot fall prey to
becoming dependent upon someone
else’s efforts to do something as
important as marketing.”
He went on to say, “All it takes is
one cut in the market budget and I
could be in trouble. I believe it is my
responsibility to do all that I can in
conjunction with what my company
does to market myself, my company
and our products and services.”
Obviously the best of all scenarios is
if your company has an effective mar-
keting plan. Whether you work for a
Wells Fargo, Bank of America or a one-
person shop, to be successful, you must
have your own marketing plan/strategy
and you must work the plan consistent-
ly. The best part is that a good market-
ing plan doesn’t have to cost a fortune
and you don’t have to be a creative
genius.
The key is developing a marketing
strategy that fits your business plan. It
will serve as a solid foundation for your
target market. You can develop a strong
marketing plan by taking the following
steps:
1. Determine that
you are your primary
product
I would suggest that when it comes
to the mortgage business, you are
your primary product that needs to
be marketed. The color of money is
the same at any mortgage company.
The 30-year fixed-rate mortgage loan
is the same across the industry, but
who is offering that 30-year fixed-
rate loan product varies by the same
number as those offering the prod-
uct. People make the difference in
this industry. It is truly a relation-
ship-driven business. So, you would
do well to identify what makes you
unique. The greatest differentiator is
you! Identify those strengths that are
unique to you and publish them loud
and clear.
“Those who want to
achieve extraordi-
nary success have to
take ownership and
personal accountabil-
ity for their own
marketing.”
A View From the C-Suite
By David Lykken
Marketing vs. Sales:
Understanding the Difference
2. Determine your target
market
You might think that everyone and
anyone might be potential prospect.
That approach lacks focus and will
eventually fail. Once you determine
who you are, I would suggest you iden-
tify with whom you enjoy working
with. By doing so, you are well on your
way to identifying your target market
upon which you would do well to focus
all of your efforts. When I was a loan
officer 30-plus years ago, I chose the
purchase market. It became my target
market, and I did very well at it. What
amazes me today is the number of loan
originators that don’t like or respect
Realtors, yet they have chosen to focus
all their efforts on the purchase mar-
ket. Folks, if you do not enjoy working
with Realtors, you should forget focus-
ing on the purchase market. You’d do
better to consider a consumer-direct
marketing strategy. There is another
old saying that goes something like
this, “Find a career doing something
you love to do and you’ll never work a
day in your life.”
3. Your competition
There are two primary ways to view
your competition. They are either
“friend” or “foe.” One perspective is by
nature negative and usually based on
insecurity. The other is positive and
based upon a confidence/secure out-
look. There is nothing better than a
healthy relationship between two com-
petitors to make each other stronger
which will, in turn, typically help them
to do a better job serving their com-
mon markets. We have several clients
that are competitors in the same com-
munity where one company referred
us to the other … again, one of their
competitors. I have respect for these
types of companies and individuals. I
have come to recognize a common
denominator amongst the most suc-
cessful companies and individuals …
they commonly have good relations
with their toughest competitors. Given
the fact that we have so many external
threats aimed at our industry, doesn’t
it make sense to get to know and col-
laborate with others in our industry
and within our own markets? If you
haven’t already, get to know your com-
petition. It will be good for both of you.
4. Identifying your niche
As I mentioned above, my target mar-
ket for years was the purchase market.
But within that market, I developed a
real niche with the first-time homebuy-
er market. A number of my competi-
tors, most of whom were friends,
focused their efforts on the refinance
market. When rates dropped, they
It’s funny to think back to the early years
of grade school when I’d spend the entire
recess chasing girls. When that bell rang,
they were running and I was following. It
seemed like a good idea at the time and
just what we did as young boys. After
doing this for some time, we quickly real-
ized that we had no idea what to do
when we actually caught a
few of the slower girls
other than giggle, run and
jump in the bushes.
I find this analogy similar
with how many handle their
marketing in our industry.
We spend all of this time,
money and effort to produce
more prospects, but unfor-
tunately, many of us do not
have the systems or skills in
place to convert a prospect
to a client. New and innova-
tive marketing ideas are
important, but preparation
for the response and conver-
sion is much more impor-
tant. Don’t go golfing with-
out a putter.
You don’t become an expert overnight.
It takes years to develop the education and
expertise in our industry to speak accu-
rately and intelligently when communicat-
ing with a prospect. Your confidence and
abilities as a service provider will clearly
show, either on the phone or in person.
The hard truth is that some people simply
will never convert as much as others. Some
things just come naturally and are difficult
to train in those who don’t have the “gift.”
The solution would be to determine your
strengths and build upon them, while sur-
rounding yourself with a team that can
support your weaknesses.
One major problem our industry has
faced (which hopefully is getting better) is
turning a respected professional into a
general commodity for quick comparison
without the thought of commitment. I pri-
marily blame excessive, and sometimes
unethical, online and media marketing in
conjunction with limited education, back-
ground and accountability requirements
to loan originators and others selling real
estate. I’m glad to say this is changing and
finally improving other than some bad
legislation affecting the consumer which I
will not get into in this piece. Market share
opportunities are excellent.
So the marketing is working … great!
How do we convert these prospects?
O Be confident. Confidence is one of
the most important factors in busi-
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world, a hamburger and fries from
McDonald’s looks the same, tastes the
same and is served in the same manner
every single time. Another example is
Starbucks Coffee. Any successful busi-
ness must provide consistently excel-
lent service over and over and over
again.
8. Stay focused
In an industry where an inordinate
number of us struggle with ADD and
ADHD, nothing can challenge a solid
marketing strategy more than a lack of
focus. The key to staying focused is
having a well-thought out plan and
making a firm commitment to that
plan. I cannot tell you the number of
times that I was challenged in my com-
mitment to stay focused on my mar-
keting plan of pursuing the purchase
money market when the refinance
craze was going so strong. But it paid
off! Another example of staying
focused on a marketing plan were
those executives who made the unpop-
ular, but wise, decision to avoid doing
sub-prime products and kept them-
selves and/or companies focused on
the core Fannie Mae, Freddie Mac and
U.S. Department of Housing & Urban
Development (HUD) products. Many
that yielded to the temptation of veer-
ing away from their market focus and
started offering sub-prime lending lost
not only their focus, but in many cases,
they lost their companies as well. The
key to maintaining your focus is found
in making an informed and quality
decision and then following through
… staying focused on your commit-
ment to your marketing plan.
As always, I welcome your feedback
on this or any other article I have writ-
ten or anything else you would like me
to write about.
David Lykken is president of mortgage
strategies and managing partner with
Mortgage Banking Solutions. He has
more than 35 years of industry experi-
ence and has garnered a national repu-
tation, and has become a frequent guest
on FOX Business News with Neil Cavuto,
Stuart Varney, Liz Claman and Dave
Asman with additional guest appear-
ances 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@mortgage-
bankingsolutions.com.
To listen to author David
Lykken’s 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.
went crazy and made a lot of money. I
did well during those times, but cer-
tainly not as well as my half-crazed refi-
nance buddies. When rates rose, how-
ever, I was the one to be envied. You
would do well to identify your niche.
5. Creating awareness
It is essential that your target market
knows you exist. In today’s world, espe-
cially with so many social media tools,
there are numerous ways you can cre-
ate awareness without having to go
with expensive advertising campaigns.
I would recommend you go back and
read the article I wrote in the June edi-
tion of National Mortgage Professional
Magazine about social media, “Show
Me The Money.” As I pointed out in that
article, I primarily use LinkedIn and, to
a lesser degree, Plaxo to connect with
my market. Facebook is a great option,
but I use it primarily for my personal
connections. I have also launched a
radio program called “Lykken on
Lending” that is heard by thousands
each week (if you are interested, go to
www.LykkenOnLending.com to learn
more). Additionally, I write articles like
this one in National Mortgage
Professional Magazine, as well as speak
at conferences and conventions every
chance I get. Trust me, it works! You
can do the same. The key is finding out
what comes naturally to you and to
start there.
In some cases, it may be that you
have to develop a skill such as writing.
When I started writing, it did not come
naturally to me. Nonetheless, I recog-
nize its value and press forward to
develop my writing skills. The point is
that you are in control and you may
have to step out of your comfort zone
to create a greater awareness.
6. Creating credibility
I am sure that there are several ways
that you can create credibility within
the markets you served, but none is
more effective then positive testimoni-
als from past customers. The “must-
read” book, Raving Fans, written by
Ken Blanchard and Sheldon Bowles
speaks to the importance of having sat-
isfied customers willing to tell others
about the positive experience they had
doing business with you. If you make
having “raving customer” as the num-
ber one objective of your marketing
plan, you are well on the road to suc-
cess in marketing.
7. The power of
consistency
Question: “Why has the fast food fran-
chise of McDonald’s been so success-
ful?” Answer: “They are consistent!” It
doesn’t matter where you go in the
What Are You Marketing For?
ness. Believe in yourself and your
product, but never be arrogant.
O Be credible. Gain education, build
credentials and testimonials. Make
sure when someone researches you
and/or your company, they are
impressed and not concerned.
O Be different. Don’t walk
and talk like everyone
else. Be yourself and be
unique.
O Have a specific follow-
up system. Have a step-
by-step lead follow-up
system and checklist in
place to ensure immedi-
ate and organized con-
tact from every angle.
O Listen. The more you
listen, the better you
understand a situation
or goal and the more
you will convert.
O Listen to yourself. Record a message
and listen to it. Hear what others hear in
your introduction or follow-up. Critique
yourself and make adjustments.
O Have access to great products. In this
market, you cannot afford to not be
competitive on price or program
choices. Don’t make things harder on
yourself when there is no reason to.
O Be professionally persistent. The
majority of conversion comes from
the fifth contact. Put status on your
lead as quickly as possible.
O Educate. Educate your clients on
what they don’t know which is
important. This goes a long way with
building rapport and expert status.
O Put your client before yourself. When
you do this, you get business. When
you don’t, you lose business. Focus
on the long-term and be a good per-
son or please do the rest of us a favor
and do something else for a living.
O Return phone calls and e-mails. Simply
put, return phone calls and e-mails!
O Answer your phone. Again, simply
put, answer your #@!* phone!
By Andy W. Harris, CRMS
“No one likes a cheesy
salesman, especially
one who pressures
their client.”
continued on page 30
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Odds of a child becoming a professional athlete: 1 in 16,000
Odds of a child being diagnosed with autism: 1 in 110
To learn more of the signs of autism, visit autismspeaks.org
No words by
16 months.
No babbling by
12 months.
Some signs to look for:
No big smiles or other joyful
expressions by 6 months.
© 2010 Autism Speaks Inc. “Autism Speaks” and“It’s Time To Listen” & design are trademarks owned by Autism Speaks Inc. All rights reserved.
O Track your conversion and place quick-
ly. If something is not working, correct it.
Make sure to deny or approve loans
quickly. Good news fast, bad news faster.
O Lose the salesman and become the
expert. No one likes a cheesy salesman,
especially one who pressures their client.
You’re dealing with one of the largest
and most important financial decisions
a person will make … act like it!
O Be current. Web, video, social, search
engine optimization (SEO), etc.—
make yourself accessible. You must
be on board here to adapt with
today’s consumer.
O Be positive and stay positive. Are you
having a bad day? Get over it. Your
prospect doesn’t care, but can tell
from your tone. Don’t surround your-
self with negative people. Remain
focused and appreciate your bless-
ings. Never allow fear to make deci-
sions or control emotions.
O Be consistent with successes and
correct failures. If something works,
maintain it. If something does not,
change it. Always market no matter
how busy you think you are to avoid
peaks and valleys.
O Always think referral. The more refer-
rals you get, the more passive mar-
keting is happening through others.
It’s free and much easier to convert.
Use new ideas and strategies to gain
market share. Manage time (yourself)
wisely everyday. Watch your return on
investment (ROI) both financially and
from time spent on each marketing
campaign.
Just remember … when creating a
marketing plan, don’t forget the most
important piece of the puzzle which
is to build the skills that convert a
prospect into a client. It’s not selling,
it’s educating through persistent
communication.
Andy W. Harris, CRMS is president and owner
of Lake Oswego, Ore.-based Vantage Mortgage
Group Inc. and 2010-2011 president of the
Oregon Association of Mortgage Professionals.
He may be reached by phone at (877) 496-
0431 or e-mail aharris@vantagemortgage-
group.com or visit AndyHarrisMortgage.com.
The Truth About Direct Mail
As a mortgage professional, you may
wonder “Is direct mail dead?” It’s a
common conversation going on
amongst mortgage marketing experts
today. Actually, the debate rages in
every industry, but you deserve to know
the truth about direct mail and how it
personally affects your business.
So here it is: Is sending
postcards, letters and snail
mail a dying strategy?
The simple answer is no.
Direct mail isn’t taking
its last breath any time
soon, but it is evolving.
Business marketing strate-
gies are different than four
or five years ago. Now, it’s
common and necessary to
integrate a marketing cam-
paign with your Web site,
social media pages and e-
mail marketing.
The bottom line … direct
mail still yields results, is
effective for mortgage pro-
fessionals today and is still
one of the only mediums
that can specifically target
your ideal clients.
So what does this
mean for you as a mort-
gage professional?
Only when you allow
direct mail to work with e-mail market-
ing, your Web site and online mediums
like Pay-Per-Click (PPC) will you maxi-
mize the return on investment (ROI) for
your marketing dollars. With marketing
today, there isn’t a solo action that will
bring a stampede of clients through your
door or make the phone ring. When you
plan to market, you must think with an
integrated approach. You’ll see a big dif-
ference in your responses.
Let me explain. Your job as a mar-
keter is to isolate identities of individu-
als likely to need what you have to
offer. Once those identities are isolated,
it is your job to warm them up over the
course of time until they reach for your
services. You don’t know where these
identities are exactly in the sales
process. They could be ice cold, luke-
warm or ready to close.
I’ll break it down further for you.
You buy a list, you mail to it. Those
recipients even highly interested proba-
bly will not call. They might go to your
Web site. On your site, you must have a
way to capture their identity so you can
now send them a campaign. That cam-
paign consists of e-mails, letters, con-
necting with them on social media sites
and staying in front of them until they
are ready to buy.
For all of the skeptics who continue
to argue against the effectiveness of
print advertising, specifi-
cally direct mail in today’s
world, here is some hard
evidence that clears up a
few common myths.
Myth #1:
“Nobody reads
junk mail
anymore”
This is one of the most mis-
guided beliefs out there right
now. According to the 2010
DMA Statistical Fact Book, 79
percent of households read
or skim direct mail pieces.
Also, an International
Communications Research
study found people were
31 percent less likely to
ditch unopened mail than
delete unopened emails,
and 45 percent said they
found direct mail less
intrusive than e-mail.
You are not limited to
the traditional “letter and envelope”
method of direct mail. More and more
mortgage brokers are turning to direct
mail postcards to reach their clients.
Postcards are eye-catching, easy to read
and, best of all, don’t have to be
opened.
The biggest strength in postcards lies
in their ability to generate responses. If
you can get your prospect to call (either
right away or after visiting your Web
site), you have a much higher chance of
closing the loan.
Myth #2 “You can’t track
the effectiveness of
direct mail”
Whether you are sending letters or
postcards, there is just no way to tell
exactly how many people read your ad.
This is true, but what is it you really
want to track? How many pieces get
opened, or how many responses you
receive?
It really doesn’t matter how many peo-
ple read them if nobody calls. However,
By Joy Gendusa
Still effective for the mortgage industry
or a dying strategy?
“A well-written letter
will draw the reader
in and present your
case in a conversa-
tional, to-the-point
style. Be sure it is
absolutely clear why
they should read your
letter, or it won’t pass
the skim test.”
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to say. They may not give you a lot of
time to capture their interest, but they
are giving you the chance—and that’s
a big advantage!
A well-written letter will draw the
reader in and present your case in a con-
versational, to-the-point style. Be sure it
is absolutely clear why they should read
your letter, or it won’t pass the skim test.
Postcards have an even better chance.
State “why they should use your services”
simply and quickly, provide a few impor-
tant benefits on the back, and include a
compelling offer and emphasize your con-
tact info with a strong call to action. This
method has been working for mortgage
brokers and other industries alike. Take a
look at what’s in your mailbox—how
many times have you called a business
because you received an ad in the mail?
An emotional connection
In a marketing e-mail, people aren’t look-
ing for emotion. They want the facts, and
they want them quickly. That is, if they
bother reading it in the first place.
With a direct mail piece, you have the
opportunity to make an emotional con-
nection with your prospect. You can
inspire excitement, fear, curiosity, etc. You
must capture attention and mail to a list
of people interested in your services, but
your chances of being remembered by the
prospect increase every time you make an
emotional connection with them.
I have a mortgage client who used
one of our sample designs for his post-
card. The headline reads, “Wait any
longer and you may MISS THE BOAT!”
On the card is a picture of a group sail-
ing on a small sailboat over beautiful
clear blue water. Then it reads,
“Refinance While Rates Are Still Low!”
The emotion evoked by this post-
card would never translate in an e-
mail, because it just isn’t the appropri-
ate venue. My mortgage customer had
a 2,500 percent ROI from that piece,
and the emotion it conveyed to the
reader had a lot to do with it.
Greater visibility
Especially after the housing crisis, many
mortgage brokers cut back on advertising.
This isn’t a smart move, but it’s what hap-
pened, and you can use it to your benefit.
While others drag their feet, you have the
opportunity to saturate your local market
with targeted direct mail postcards. Stand
out from the competition and capture the
market share simply because your com-
petitors stopped marketing!
Consider the example of Bed Bath &
Beyond and Linens ‘n Things. When the
recession hit, one cut back on their
marketing and the other ramped up
their direct mail campaign driving
home their well-known 20 percent off
coupon. Today, one company is going
strong while the other closed all of its
physical locations. Can you guess which
one kept marketing?
Right! Bed Bath & Beyond weathered
the storm because they kept mailing!
They got great visibility because their
competitor bailed out of the market.
The best way to reach
seniors
Do you offer reverse mortgages? If you
do, direct mail is essential for you!
The evidence showing older generations
prefer receiving offers through the mail is
overwhelming. Whether it is inherent dis-
trust of the Internet or force of habit, it
doesn’t matter, it just works. A well-crafted
letter or well-designed postcard will go a
long way to increase the number of reverse
mortgage loans you close.
Now that you know
direct mail is very alive
… what do you do with
this information?
Use it to boost the results of your market-
ing plan! If you have relied solely on
direct mail in the past, branch out into e-
mail marketing. Get a professional Web
site, track your campaigns with custom
landing pages, market online with Pay-
Per-Click—integrate your marketing!
If you have never tried direct mail or
have believed the “dying” myth, get
back in the water! Know the benefits
you get with direct mail and apply
them to your advantage. Use direct
mail to drive traffic to your Web site
and collect e-mail addresses, then fol-
low up with more e-mails! It’s a proven
formula that does work for mortgage
professionals, even in today’s market.
Remember, direct mail isn’t dying,
it’s evolving. Evolve with it, integrate
your marketing and dominate your
competition.
Joy Gendusa is chief executive officer and
founder of PostcardMania. She began
PostcardMania in 1998 with nothing but
a phone and a computer and zero invest-
ment capital. By 2008, revenues reached
nearly $19 million and the company
now employs more than 150 people,
prints four million and mails two million
postcards each week representing more
than 40,000 customers in over 350
industries. For more information, call
(800) 628-1804, ext. 342 or visit
www.postcardmania.com.
tracking is important and direct mail offers
a variety of ways to measure effectiveness.
One tactic available is placing a cus-
tomized landing page on each postcard or
letter. You can tell exactly how many peo-
ple visit the site, collect new lead contact
info and track the effectiveness of your
mailings.
You can also set up a separate 1-800
number for your mailings, or print a pro-
motional code on the piece to track which
offers are pulling a response. In reality,
direct mail is one of the easiest mediums to
track!
Myth #3 “Direct mail is more
expensive than e-mail”
This myth is true. E-mail is an extremely
affordable way to advertise, and postage
rates seem to always be on the rise.
However, there is more to the story.
Direct mail is far more effective than e-
mail marketing. Unsolicited e-mails have an
unimpressive open rate and if your e-mail is
opened, very few are read by the recipient,
especially if they have no connection with
you. An open rate indicates nothing about
how many people actually read the con-
tents. And another thing to consider is how
you feel when you get an unsolicited e-mail
from a strange business you’ve never heard
of. Think for a moment. Do you like it? Do
you have a good impression of that compa-
ny or bad? If you become the “spammer,”
how will 99 percent of the recipients feel
about your company?
With that said, the best option is to
integrate both e-mail and direct mail.
The main problem with e-mail mar-
keting is the scarcity of high quality
lists. To save money, use direct mail to
drive traffic to a custom landing page,
collect e-mail addresses on that page
and send follow-up e-mails to those
addresses. Your open (and read) rates
will be off the charts and you’ll save the
money on follow-up mail pieces!
These myths are busted
Clearly, due to developments in the
direct mail industry, these concerns
don’t hold water. Direct mail is still
effective and will be around for a long
time to come. But is it still an effective
venue for mortgage professionals? With
changing technology and a volatile
marketplace, should direct mail be a
part of your marketing plan?
Yes, it absolutely should. But
remember, it has to be part of an inte-
grated approach.
Let’s look at some of the benefits
you get with a direct mail campaign.
An attentive audience
As mentioned earlier, 79 percent of
people read or skim their mail. This
means a prospect is intentionally set-
ting aside time to hear what you have
www.CBspecialty.com
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reported in 2009 decreased by 42 per-
cent from 2008, and the number of
community development loans origi-
nated decreased 29 percent, from
22,287 in 2008 to 15,882 in 2009.
Institutions need to not only make
note of these national trends, but
also focus on community trends that
directly impact their own businesses.
Much is revealed by analyzing rele-
vant HMDA/CRA data, and doing so
can enable institutions to better
strategize their marketing and sales
approach.
Using 2009 HMDA/CRA
data for strategic
marketing
Evaluating HMDA/CRA data can help
institutions make significant and highly
strategic changes to their marketing
efforts. An institution can evaluate its
lending activity alone to look for weak
areas, such as identifying communities
with little lending activity. Any weak
areas may need a different marketing
strategy or different loan products to
generate activity.
Since HMDA/CRA data is public
information, it provides a detailed
view of what other lenders are doing in
specific markets. Institutions can com-
pare their lending patterns to any
number of other institutions to see
how others are doing in any given area.
By comparing one’s own lending activ-
ity to a competitor’s activity, institu-
tions will have better information to
guide strategic changes where neces-
sary, offer new loan products, increase
marketing efforts in more competitive
areas, reduce marketing efforts in less
competitive areas, etc. This should lead
to more focused marketing and cross-
selling.
Analyzing peer data
There were more than 19 million appli-
cations in the 2009 HMDA data. While
this information is public and readily
available at no cost, analyzing the data
can be costly and time-consuming for
lenders in need of evaluating hundreds
of institutions.
There can be a significant amount
of information to consider, and lend-
ing institutions need a viable solution
to evaluate this data effectively and
efficiently for marketing purposes.
Using a Web-based tool built on mod-
ern, .NET technology, institutions can
more easily gauge how they compare
and rank with their peers.
Ideally, a system should enable an
institution to perform evaluations by
selecting a specific geographic area.
Once you determine your criteria, you
can filter the Loan Application
Register (LAR) data, a register that lists
all loan applications taken by a sav-
ings association, select institutions
you consider to be your peers based
on criteria such as volume or geo-
graphic vicinity, and then run analysis
reports. Once the information is ana-
lyzed, different types of reports can be
generated, such as table reports, top
peer reports, ranking reports, market
share reports, pricing reports or spa-
tial assessment reports.
HMDA/CRA data provides some of
the best, most cost-effective market
research available. Institutions that
take advantage of this information
are better positioned to improve
their marketing efforts and move
themselves into a more competitive
position.
John A. Woloshen is executive vice presi-
dent and chief operating officer of RATA
Associates, a provider of HMDA/CRA
data compliance software and services
for financial institutions. For more infor-
mation, call (407) 831-7282 or visit
http://hmdacomply.com.
Turning a Headache on its Head
Transforming the HMDA/CRA process into a
winning marketing strategy
Each year, lenders are required to ded-
icate valuable time and resources to
compiling and submitting Home
Mortgage Disclosure Act (HMDA) and
Community Reinvestment Act (CRA)
data. While typically viewed as a bur-
densome process necessary for main-
taining regulatory com-
pliance, there is a signifi-
cant benefit to be derived
if done properly—one
that can positively impact
your marketing strategy.
Once institutions sub-
mit HMDA/CRA data at the
beginning of each year,
the Federal Financial
Institutions Examination
Council (FFIEC) then releas-
es that data to the public.
This presents useful infor-
mation that lenders can
use to effectively compare
their marketing efforts to
those of their competitors
and determine where
opportunities for improve-
ment lie.
2009 HMDA/CRA
data indicate
significant market
changes
On Sept. 20, HMDA data from mortgage
lending transactions was released.
HMDA data was collected from 8,124
U.S. financial institutions including
banks, savings associations, credit
unions and mortgage companies, cov-
ering 2009 lending activity, such as
applications, originations, purchases
of loans, denials and other actions,
such as incomplete or withdrawn
applications.
According to the FFIEC, the total
number of originated loans of all types
increased by nearly 1.8
million, up 25 percent
from 2008. This is largely
due to a 67 percent
increase in refinancings.
Additionally, FHA loans
were up 37 percent in
2009 and VA loans were
up by 6.7 percent.
CRA data was released
in August for small busi-
ness, small farm and
community development
lending reported by cer-
tain commercial banks
and savings institutions.
A total of 941 lenders
reported data about orig-
inations and purchases of
small business and small
farm loans, a two percent
decrease from the 965
lenders reporting data in
2008. And of the 941
institutions reporting 2009 data in
2010, more than 40 percent were not
“large” institutions under the applica-
ble regulation and, therefore, reported
either voluntarily or because they
elected to be evaluated as “large.”
CRA lending, however, is down. The
total number of small business loans
By John A. Woloshen
“Much is revealed by
analyzing relevant
HMDA/CRA data,
and doing so can
enable institutions to
better strategize their
marketing and sales
approach.”
Lead Provider
Roundup
Bankrate.com
561-630-1257
www.bankrate.com/cpcprogram/
CEO: Thomas R. Evans
Type of leads: Cost Per Click, Internet leads,
performance based
Bankrate.com is the leading aggregator of rates and
other information on more than 300 financial prod-
ucts, including mortgages, credit cards, new and
used auto loans, money market accounts and CDs,
checking and ATM fees, home equity loans and
online banking fees. Bankrate's CPC program pro-
vides a performance-based, cost effective method
for reaching Bankrate's qualified, in market con-
sumers. Advertisers enjoy greater control and flexi-
bility over their marketing dollars, which means
better campaign performance and higher ROIs.
EnVision Direct
800-922-9860
CEO: Christian DeWorken
Type of leads: Our clients stay ahead in this
changing market with our great service and all-
inclusive pricing.
EnVision Direct is a full-service printing and direct
mail company. From start to finish, we build quali-
ty into every stage of the process to ensure your
print and mail campaigns sail efficiently through
our state-of-the-art facility. Our services include spe-
cialty list acquisition, data management, mailing
services, graphic design. offset, web and digital
printing. Whatever your project may be, we will
strive to help you meet your goals!
A short list of companies offering
leads for mortgage professional
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but to change their lending practices.
Providing a good consumer experience
means a lot more than just being nice, it
means being transparent about every
aspect of the lending process. Lenders
must be open and honest in their commu-
nication from start to finish, including the
lead generation process. Landing pages
must accurately explain the lending
process. Being the first to contact a con-
sumer means more than just selling a
mortgage; a consumer’s financial goals
must also be taken into account.
There are far fewer loan programs
these days from which to choose, which
makes comparison shopping less effective.
To win consumers’ business, lenders must
provide more value, such as supplying
accurate quotes quickly by phone or by e-
mail. Many pricing engines make it easy to
offer consumers automatic quotes within
minutes of completing a contact form, but
sending the same rate and program to
everyone is a recipe for disaster. Lenders
should only work with pricing engines that
update rate sheets frequently and have
highly accurate quoting technology.
New Real Estate Settlement Procedures
Act (RESPA) rules require loan officers to be
appropriately licensed, thus mortgage com-
panies can expect big penalties if their loan
officers discuss mortgage options in states in
which they aren’t licensed. But routing leads
to the right loan officer goes beyond just
state licensing. The most effective mortgage
companies are implementing skills-based
lead routing to align consumers with loan
officers that have similar interests, back-
grounds and experiences.
The sales process for both refinance
and new purchase loans takes longer than
it used to. Lenders should be prepared to
work with customers for greater lengths of
time to win their business, which necessi-
tates setting follow-up reminders, priori-
tizing call-backs and leveraging automatic
e-mails. The days of one-call-closes are
long gone, and mortgage professionals
who embrace lead nurturing will benefit
greatly. Lead nurturing is about consis-
tent, relevant communications to con-
sumers. The key is relevance. Sending an
e-mail simply asking if a consumer is
ready to refinance is not a relevant piece
of communication.
Lenders should take care to create a
string of drip e-mails that have useful con-
tent for consumers. Success relies on how
much information about the consumer
was learned during the discovery calls early
on in the process. With good intelligence
about who the consumer is and what they
are seeking, lenders can customize content
that will be relevant and useful.
Implementing a customer-centric
approach requires a combination of effort,
discipline and automation. Lenders who
want to be successful should consider
upgrading their lead management process or
investing in software to optimize customer
acquisition. Mortgage professionals can learn
from their failures, as well as their successes.
In fact, many of the best practices learned
from the lending boom, such as speed to
contact and consistent follow-up, still apply.
Lenders must combine those tactics with a
consumer-focused attitude to win in the new
mortgage landscape.
In the end, Bill didn’t refinance his
home. Sue had done a great job under-
standing Bill’s financial situation and
had recommended he wait and focus on
maximizing his credit. Of course, Sue
will be staying in constant contact with
Bill because she knows that eventually
he will refinance and that being a valu-
able resource for Bill now can pay divi-
dends later. That’s a customer-centric
lending experience. What’s yours like?
Jeff Solomon is founder and senior vice
president of product and marketing for
Leads360. He is responsible for defining
and implementing the strategic product
roadmap of the company, as well as
overseeing the company’s lead genera-
tion and branding efforts. For more
information, visit www.leads360.com.
How the Consumer
Experience is Driving Change in
the Mortgage Industry
Bill gets a mortgage and a lot more than he
bargained for
It’s 9:00 a.m. on a Monday morning.
Bill Bailey arrives at work, pours a cup
of coffee and sits down at his desk.
Before starting his day, Bill decides to
go online and search for
a mortgage.
Over the weekend, Bill
and his wife spent several
hours working through
their finances trying to fig-
ure out how they were
going to pay for their son to
go to college in the fall.
They had come to the con-
clusion that they might
have enough equity in their
home to refinance or take
out a home equity line of
credit, but the idea of talk-
ing to another mortgage
broker produced a sinking
feeling in Bill’s stomach. He
remembered the night-
mare his family went
through last time they got a
mortgage—they had near-
ly lost their house due to a scrupulous
mortgage broker who got them into an
unscrupulous program. Reluctantly, Bill
suggested to his wife that he would go
online to see what kind of rates were
available.
Being more than a bit apprehensive,
Bill clicked on the first search result and
completed a short online application for
a mortgage refinance. Within minutes of
completing the form, Bill was bombard-
ed with calls from mortgage brokers.
“Hello Bill, this is Sue
from American National
Mortgage, I received your
inquiry online, do you have
a moment to discuss your
financial goals?” Discussing
his financial goals wasn’t
exactly what Bill was
expecting, but neither was
the rest of the process he
went through with Sue to
refinance his house.
Adopting a
consumer-
centric approach
Enter the new consumer-
centric approach to mort-
gage lending, a practice that
many lenders are now
adopting. The idea isn’t new
as some financial institu-
tions have always approached the lending
process this way, but now, a greater number
of lenders are recognizing that consumers
have become more informed than ever
before about their personal finances and
aren’t about to be deceived again. Add to
the equation, government-stipulated reg-
ulations, and lenders have little choice
By Jeff Solomon
“With good intelli-
gence about who the
consumer is and what
they are seeking,
lenders can customize
content that will be
relevant and useful.”
MortgageLoan.com
(877)-390-4750
CEO: Paul Knag
Type of Leads: Internet Leads, Inbound Calls,
Branded Leads
Established in 1995, MortgageLoan.com is the first
Internet site to feature live mortgage interest rates
on the Internet for consumers. More than half a mil-
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combination of interest rate information, financial
news, consumer education materials, and personal
finance tools.
Premier Advantage Marketing
888-799-3959
www.thinkPAM.com
Vice President: Tom Emmerson
Type of leads: Targeted mailings, creative design,
direct response campaigns
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results. We handle all types of targeted direct mail mar-
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you to create your next lead generation campaign.
Split Test Media, LLC
www.Refinance-Mortgage-
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CEO: Michael Andrew
Type of Leads: Refinance Leads Only.
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“GIVE a man a fish, feed him for a day. Teach a man
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All units are required to be established within specific timeframes, include var-
ious coordinating and administrative mandates, provide for reporting require-
ments to Congress, and must function through interacting participations within
and across all Bureau units and, where applicable, certain federal and state agen-
cies and regulators. In addition to the foregoing, the Director must also establish
the Consumer Advisory Board and appoint its members.
48
By the time of the trans-
fer of authorities to the Bureau on the Designated Transfer Date, as well as its
receiving other authorities pursuant to the Act, the Bureau must, among other
things, conduct research relating to consumer financial products and services,
develop its nationwide consumer complaint response center, plan and take steps
to implement the risk-based supervision of non-depository entities, and prepare for
the opening of outreach offices.
49
On Friday, Sept. 17, 2010, President Barack Obama appointed an Assistant to
the President and Special Advisor to the Secretary of the Treasury on the Consumer
Financial Protection Bureau. The President’s appointment is charged with the
responsibility of developing the Bureau. Such an appointment did not require
Senate confirmation, because the Act specifically states that the Treasury Secretary
is “authorized to perform the functions of the Bureau” and may provide “admin-
istrative services necessary to support the Bureau before the designated transfer
date” of the many regulatory authorities to it.
50
Therefore, the Treasury Secretary
has purview over the Bureau, and also has the authority to appoint somebody to
run the Bureau until a Director is chosen and confirmed by the Senate. Timothy
Geithner, the Treasury Secretary, acting on and in agreement with President
Obama’s wishes, supported this special appointment.
Given the Senate’s gridlock and political posturing that have unduly accompa-
nied many of this Administration’s nominations,
51
it is no wonder that President
Obama chose to appoint an Assistant and Special Advisor to develop the Bureau,
rather than subject yet another of his nominees to extensive delays in confirma-
tion. And surely there would be long and torturous delays! As the president said
recently when Senate delays in confirming his nominees constrained him to name
15 recess appointments, “I simply cannot allow partisan politics to stand in the
way of the basic functioning of government.”
52
The appointed individual will serve
until a permanent Director is nominated and confirmed to the five-year position.
Elizabeth Warren, the person President Obama has appointed to develop the
Bureau, is the very person who devised the idea of a consumer financial protec-
tion agency and then advocated in the halls of Congress, in speeches, lectures, and
interviews throughout the United States, for its creation.
53
In some ways, Mrs.
Warren has become the face of consumer financial protection advocacy at a time
when consumer confidence is at a low mark.
54
President Obama expects the
Bureau to be a “watchdog for the American consumer, charged with enforcing the
toughest financial protections in history.”
55
As the President stated unequivocally,
Mrs. Warren “will help oversee all aspects of the Bureau’s creation, from staff
recruitment, to designing policy initiatives, to future decisions about the agency.”
56
Her credentials indicate that she would be an exacting, methodical, insightful, and
highly competent shepherd of the Bureau’s mandates. She has published numerous
scholarly articles, and, after teaching at other law schools, she has been teaching con-
tract law, bankruptcy law, and commercial law at Harvard Law School. Warren’s legal
expertise and experience have led to her being unofficially considered a nominee to
serve as a Supreme Court Justice, for the position previously held by Justice John Paul
Stevens (and now held by Justice Elena Kagan). She has served as the Chief Adviser to
the National Bankruptcy Review Commission, and was appointed by Chief Justice
Rehnquist as the first academic member of the Federal Judicial Education Committee.
Importantly, her understanding of the financial industry is broad based and
hands-on. Warren has served as a member of the Commission on Economic
Inclusion established by the FDIC. She has been the Chairperson of the
Congressional Oversight Panel, charged with investigating the Troubled Asset
Relief Program (otherwise known as TARP), in which role she has consistently
fought for more accountability and transparency in the financial system.
Mrs. Warren is a mature woman of 61 years of age, somebody who is not an ivory
tower scholar, having grown up in Oklahoma, attended non-Ivy League colleges, and
received a JD from Rutgers University. Her popular books, entitled The Two-Income
Trap: Why Middle-Class Mothers and Fathers Are Going Broke,
57
and All Your Worth:
The Ultimate Lifetime Money Plan,
58
reflect a commitment to proper financial plan-
ning, transparency, and responsibility. Her broad abilities are reflected in the fact that
she has been elected to the American Academy of Arts and Sciences. She has con-
ducted empirical studies for the National Science Foundation and the Ford
Foundation. A fierce advocate for preserving middle class financial opportunities
through proper consumer financial protection, Warren is a former vice president of
the American Law Institute and she is also a former Sunday School teacher.
continued from page 24
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need a financial partner and business
support. With this new warehouse line of
credit, our customers can significantly
impact their profitability and increase
their agility in the marketplace.”
Meaux noted that he is seeing an
increase in the number of brokers in the
market who are becoming bankers by
obtaining warehouse lines of credit. As
this development continues, NexBank will
be able to expand and broaden its range
of clients—adding small and medium-
sized local mortgage bankers and mort-
gage brokers—who seek the professionals
in NexBank’s mortgage division because
they recognize the bank’s ability to deliv-
er a financial package that supports long-
term growth.
“The small to mid-sized banker and large
mortgage broker are comfortable doing
business with NexBank,” said Meaux.
“Essentially, it is really about relationship—
it is about doing business with a partner you
can depend on and who you know has the
means to financially support the growth of
your business—and who is not going to sur-
prise you by pulling out of the market, put-
ting both you and your customers at risk.”
For more information, visit
www.nexbank.com.
Fidelity National
Financial acquires
Commerce Velocity
Fidelity National Financial Inc. (FNF), a
35
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American Foundations
MortgageBanc announces
merger with Inlanta
Mortgage
Inlanta Mortgage has
announced that American
Foundations MortgageBanc’s
retail offices and operations are merging
with Inlanta through a strategic agreement.
American Foundations MortgageBanc was
previously a wholly-owned subsidiary of
Generations Bancorp Inc. Terms of the
transaction were not disclosed.
“We’re excited that American
Foundations MortgageBanc will be adding
to the strength and quality that Inlanta has
demonstrated over our 17 years in this
business,” said John Knowlton, president
and founder of Inlanta Mortgage. “As a con-
servative Midwest lender, American
Foundations is a group of quality mortgage
lending professionals and their core values
are similar to ours and make this a perfect
fit. This merger strengthens our presence in
Illinois and Wisconsin.”
American Foundations MortgageBanc
has retail branches in Illinois and Wisconsin
that will change their name to Inlanta
Mortgage. The merger will strengthen
Inlanta Mortgage’s leadership team.
Nicholas J. DelTorto, president of American
Foundations MortgageBanc Inc. will join
Inlanta Mortgage as executive vice presi-
dent. He has more than 28 years of industry
experience. In addition, John L. Watry will
become chief financial officer of Inlanta
Mortgage; he was chief operating officer at
American Foundations MortgageBanc.
“We’re pleased to be merging with
Inlanta Mortgage and what the new com-
bined company can offer its employees
and customers,” said DelTorto. “Inlanta is
a top-notch organization that is highly
regarded in the industry and market-
place. We look forward to continuing to
provide our customers with more prod-
ucts and great service.”
For more information, visit www.inlanta-
partners.com.
Wholesale lender
NexBank launches broker
to banker platform
Recognizing the
significant role that
smaller, independent originators play in
generating mortgage loans, NexBank, has
announced the launch of a new warehouse
lending program designed to give small and
mid-sized banks, as well as large mortgage
brokers, the capacity and flexibility to grow
and compete for business. NexBank has
committed $100 million in capital to their
new warehouse lines to date.
“Not only does this new warehouse
lending product allow mortgage bankers
and brokers to expand their business
capacity with access to capital and control,”
said Jed Meaux, vice president and head of
NexBank’s mortgage division, “it also gives
consumers more options to choose from—
and in the market today, this kind of flexi-
bility is a winning strategy.”
NexBank will be offering multiple tiers
to their program, from $100,000 required
in net worth to $1 million depending on
the size of the warehouse line.
“But with the introduction of this new
line of credit, NexBank has realized an
overwhelming positive response from our
current clients as well as new customers
to participate in this lending program,”
said Meaux. “Small mortgage bankers
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“Atare Agbamu is one of only a handful of people in the reverse mortgage arena
who possesses a commanding understanding of the reverse mortgage industry.
As an originator, he has hands-on experience educating seniors and their advi-
sors. As author of the “Forward on Reverse”column 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 Atare’s 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.
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decades of experience skillfully woven into this book. If you plan to succeed in this industry, this
book is the place to start.”
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of NRMLA’s Board of Directors
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professionals.”
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“The stories [Chapter 15: Profiles in Satisfaction] are the best vehicle to increase understanding and
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—Therese Cain, Executive Director, Minneapolis/St. Paul Chapter of Little Brothers—Friends
of the Elderly
“This book should be required reading for all new loan consultants originating reverse mortgages
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Think Reverse!
Table of Contents
Part I:
The new pillar of retirement security
Part II:
Marketing reverse mortgages: It’s 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
On the same day that President Obama appointed Warren to develop the
Bureau, she wrote:
“The new consumer bureau is based on a pretty simple idea: people ought to be able
to read their credit card and mortgage contracts and know the deal. They shouldn’t
learn about an unfair rule or practice only when it bites them—way too late for
them to do anything about it. The new law creates a chance to put a tough cop on
the beat and provide real accountability and oversight of the consumer credit mar-
ket. The time for hiding tricks and traps in the fine print is over. This new bureau is
based on the simple idea that if the playing field is level and families can see what’s
going on, they will have better tools to make better choices.”
59
In response to these sentiments, some critics believe that the consumer needs
to evince greater responsibility.
60
This view precisely misses the point: providing
consumer financial protection upholds the rule of law by actually making sure
that the consumer fully understands the terms of financial products and services
in the context of a transparent, two-way financial transaction!
If the need for financial reform has taught us anything at all, it is that a finan-
cial system can collapse when market participants are not properly informed of
risks, when information about financial risk is not appropriately vetted into the
market, where regulatory compliance created to assure an orderly market is not
enforced or does not even exist, and if financial products and services are not
monitored for defects that may cause systemic failure.
The consumer has never really had a seat at the financial industry’s round-
table—until now!
Jonathan Foxx, former chief compliance officer for two of the country’s 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
1—Durant, Will and Ariel, from “Character and History,” in The Lessons of History,
p. 32, Simon and Shuster, 1968.
2—I would like to take this opportunity to thank the Publisher, Editor-in-Chief,
and Staff of National Mortgage Professional Magazine (NMP) for permitting me the
print space needed to explore the Dodd-Frank Act’s impact on the mortgage
industry. This three-part series of articles comprised almost 17,000 words and
required significant careful planning. In providing this unique forum and jour-
nalistic support to the mortgage originator community, NMP’s monthly magazine
continues to demonstrate its serious, timely, and unwavering commitment to the
needs of the mortgage industry.
3—HR 4173: Dodd-Frank Wall Street Reform and Consumer Protection Act, 111th
Congress (2009-2010): “A bill to promote the financial stability of the United States
by improving accountability and transparency in the financial system, to end “too
big to fail”, to protect the American taxpayer by ending bailouts, to protect con-
sumers from abusive financial services practices, and for other purposes.”
Sponsored by Rep. Barney Frank (D-MA) and Sen. Christopher Dodd (D-CT).
4—Foxx, Jonathan, “Landmark Financial Legislation: New Rules for Mortgage
Originators—Part I: Reformation and Regulations,” National Mortgage
Professional Magazine, August 2010, Volume 2, Issue 8, pp 28-42.
5—Foxx, Jonathan, “A New Era of Mortgage Reform—Part II: Legislation—
Reactive or Proactive,” National Mortgage Professional Magazine, September 2010,
Volume 2, Issue 9, pp 22-28.
6—I have written extensively about the Bureau. Also see: Foxx, Jonathan, “The
Birth of an Agency,” in National Mortgage Professional Magazine, September 2009,
Volume 1, Issue 5, pp 24-27. This article provides a chart that outlines the
Bureau’s structure and authorities; and, Foxx, Jonathan, “The CFPA Controversy:
Asking the Tough Questions,” in National Mortgage Professional Magazine, October
2009, Volume 1, Issue 6, pp 22-25.
7—Known in German as “Gedankenexperiment,” and made famous by Albert
Einstein (“riding on a light beam at the speed of light”), Erwin Schrödinger
(“Schrödinger’s Cat”), and James Clerk Maxwell (“Maxwell’s Demon”), a Thought
Experiment is a thinking exercise which extrapolates a theory or hypothesis into
and facilitates the imagining of the potential consequences—especially when
actual experimentation may not often be practicable or possible.
8—Einstein, Albert, “My First Impression of the U.S.A.”, 1921, an essay published
by Einstein after his first trip to the USA in June 1921.
continued from page 34
continued on page 38
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NEW PROGRAM
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SAVE THE DATE!
Mortgage Brokers and Loan Originators
Attend the 2010 NAMB/WEST Conference
December 4-6, 2010 at the MGM Grand Las Vegas.
Visit www.NAMBWEST.comfor updates.
NAMB/WEST
9—Designated Transfer Date is July 21, 2011, see Designated Transfer Date,
Bureau of Consumer Financial Protection, Federal Register, Vol. 75, No. 181
(09/20/10).
10—The Designated Transfer Date must be between Jan. 17, 2011 and July 21,
2011, unless the Treasury Secretary determines that the orderly implementation of
Title X is not feasible within 12 months; but, in no case may the Designated
Transfer Date be later than January 21, 2012.
11—In addition to the “enumerated laws” many other laws are amended to pro-
vide for the Bureau’s interaction, such as the Expedited Funds Availability Act,
Federal Financial Institutions Examination Council Act of 1978, Right of Financial
Privacy Act, Telemarketing and Consumer Fraud and Abuse Prevention Act.
12—12 U.S.C. §§ 3801 et seq.
13—12 U.S.C. §§ 2901 et seq. Not included as an “Enumerated Consumer Law” in
HR 3126, but enforcement authority over this Act is transferred to the CFPA. HR
3126 § 184(b)(2).
14—15 U.S.C. §§ 1667 et seq. Not specifically referenced in HR 3126’s definition of
“Enumerated Consumer Law,” but enforcement authority over this Act is trans-
ferred to the CFPA. H.R. 3126 § 184(b)(2).
15—15 U.S.C. §§ 1693 et seq.
16—15 U.S.C. §§ 1691 et seq.
17—15 U.S.C. §§ 1666-1666j. Not specifically referenced in HR 3126’s definition of
“Enumerated Consumer Law;” but enforcement authority over this Act is trans-
ferred to the CFPA. H.R. 3126 § 184(b)(2).
18—15 U.S.C. §§ 1681 et seq.; and, 15 U.S.C. §§ 1681m(e), 1681s-3, 1681w.
19—15 U.S.C. §§ 1692 et seq.
20—12 U.S.C. § 1831t(c)-(f).
21—15 U.S.C. §§ 6802-6809.
22—12 U.S.C. §§ 2801 et seq.
23—15 U.S.C. § 1639.
24—12 U.S.C. §§ 2601-2610.
25—12 U.S.C. §§ 5101-5116.
26—15 U.S.C. §§ 1601 et seq.
continued from page 36
27—12 U.S.C. §§ 4301 et seq.
28—Public Law 111-8, 2009.
29—15 U.S.C. § 1701.
30—For a detailed discussion on the enumerated laws transferred to the Bureau,
see Foxx, Jonathan, “The CFPA Controversy: Asking the Tough Questions,” in
National Mortgage Professional Magazine, October 2009, Volume 1, Issue 6, pp. 22-
25.
31—In this article, I will not be discussing the Act’s new regime for national bank
federal preemption in the area of state consumer financial laws, or, for that mat-
ter, the new framework for determining the states’ enforcement powers against
financial services companies. With respect to the former, the Act resets the pre-
emption framework for national banks to pre-2004 compliance guidelines—prior
to when preemption regulations were promulgated by the Office of the
Comptroller of the Currency (OCC). The Act provides now that the federal savings
banks will have the same preemption rules that apply to national banks. July 21,
2011 will mark the commencement of national banks and federal savings banks
being required to comply with more limited preemption of state laws in accor-
dance with the 1996 Supreme Court holding in Barnett Bank v. Nelson. In the
Barnett Bank decision, the Supreme Court set a standard for delineating preemp-
tion for national banks: a state law that “prevents or significantly interferes” with
a national bank’s exercise of its powers is preempted. See Dodd-Frank Wall Street
Reform and Consumer Protection Act, Pub. L. No. 111?203, 124 Stat. 1376 (2010),
and Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25 (1996), 517 U.S. at
32.
32—The Act states that no rule or order of the Bureau shall be subject to approval
or review by the Federal Reserve.
33—Op. cit. 3: the subsequent outline of the Bureau of Consumer Financial
Protection is based on Title X–Subtitle A, Bureau of Consumer Financial
Protection, and various Sections (1001-1100H). Title X commences almost three-
quarters of the way through the 2319 page Dodd-Frank Act. For sake of brevity
and reading facility, I will not provide a corresponding citation for each and every
analytical part of the outline provided in this article.
34—Op.cit. 3: Relief Available, Title X, Subtitle E, § 1055(c)(2)(A-C). Civil monetary
penalties are in three tiers. First Tier: from $5,000 per day for minor violations of
federal consumer financial laws. Second Tier: $25,000 per day for “reckless” vio-
lations. Third Tier: $1 million per day for “knowing” violations.
35—Consumer Financial Penalty Fund.
continued on page 40
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EXECUTIVE OFFICES:
108 Corporate Park Drive, Suite 301
White Plains, NY 10604
CALL:
Louis Tesoriero at (888) 329-GHMC
ltesoriero@ghmc.com
www.joinguaranteed.com
WHO WOULD YOU TRUST WITH YOUR LIFE?
BRANCH PROGRAM FOR PROFESSIONALS
IT'S ALL WE DO.
You've decided to look
at Branching Opportunities!
With all the NEW PLAYERS entering the market, it's not an easy decision.
Tere are several options, but are they EXPERIENCED AT BRANCHING?
Licensed in AL, AK, CA, CT, DE, FL, GA, IL, IN, LA, ME, MD, MA, MI, MO, NH, NJ, NM, NY, NC, OH, PA, SC, TN, TX, VA, WV and growing
heard on the street continued from page 35
provider of title insurance, mortgage serv-
ices, specialty insurance and information
services, has announced the acquisition of
Commerce Velocity. Commerce Velocity
provides technology solutions to mort-
gage lenders, loan servicing organizations
and investment banks that enable users
to mitigate risk and optimize outcomes
for their mortgage loan portfolios.
The firm offers three Web-based, SaaS
products: Spectrum, Optimizer and
AssetX. Spectrum provides a versatile end-
to-end loan origination platform, which
can provide a true commitment-to-lend
at the point of sale, apply risk models and
workflow rules to repair problem loan
files, and verify that each loan complies
with regulatory and investor guidelines
throughout the loan life cycle. Optimizer
is a market leader helping Servicers to
maximize cash flows from delinquencies
and enforce workout consistency
throughout the default management
process. It enables servicers to deploy
their preferred loss mitigation strategies.
AssetX facilitates acquisition and manage-
ment of performing and non-performing
loan pools by providing the ability to con-
solidate and evaluate various data sources
and provides traders with valuable insight
into each transaction.
Fidelity announced that the Commerce
Velocity technology will be strategically
aligned with ServiceLink, the national
lender platform for FNF and a leading
provider of origination and default relat-
ed solutions for the mortgage industry.
The strategic integration creates a com-
plete workflow management solution
from loan origination through loss miti-
gation, default and asset disposition.
Mortgage lenders and servicers have
long relied on an extensive suite of mort-
gage-related solutions from ServiceLink,
including valuation, title, closing, sub-
servicing, loss mitigation, and asset man-
agement and disposition. The addition
of Commerce Velocity’s platform will
now extend ServiceLink’s solutions to
incorporate technology to process origi-
nation loan transactions as well as man-
age the loans in the default stages.
“We are excited to add Commerce
Velocity’s capabilities to our family of com-
panies,” said Chairman William P. Foley II.
“Commerce Velocity provides a strong
complement to FNF’s National Lender
Platform, ServiceLink. This acquisition will
bring a comprehensive technology plat-
form that can effectively support the
lender’s process while incorporating the
premier origination and default solutions
for which FNF and ServiceLink are known.”
For more information, visit
www.cvelocity.com or www.fnf.com.
Informative Research
partners with LPS on
AVM products
Informative Research has
announced the avail-
ability of Automated
Valuation Models (AVMs)
through an extended relationship with
Lender Processing Services (LPS). A cas-
cade of up to four AVMs ensures the high-
est hit rate possible by sequencing
through four AVM products, returning the
first to meet the quality benchmark. The
standard AVM products in the cascade are
ValueSure, SiteX, CVM and CASA. Each
delivers estimated property value, com-
parable sales, location map, and confi-
dence score in an easy-to-read report.
“In today’s sensitive lending environ-
ment, having an accurate property value
estimate is critical not only to the qualifi-
cation process, but also in underwriting
and quality control,” said Brad Kelso,
executive vice president, marketing for
Informative Research. “Lenders are look-
ing for better, more robust valuation tools
and through our partnership with LPS
Informative Research can now deliver the
highest quality AVMs available.”
For more information, visit www.infor-
mativeresearch.com or www.lpsvcs.com.
LPS forms network of
default-related service
providers
Lender Processing
Services Inc. (LPS), a
provider of integrated
technology and servic-
es to the mortgage
and real estate industries, has announced
the formation of the LPS Strategic
Partnership Group. The Strategic
Partnership Group will establish a network
of default-related service providers,
including attorneys, title companies, fore-
closure trustees, publication and posting
providers and service of process compa-
nies dedicated to lowering costs and creat-
ing efficiencies for consumers, mortgage
servicers and investors.
LPS currently provides default-related
administrative support services and tech-
nology solutions to mortgage servicers,
law firms and trustee operations. LPS has
recently announced a Request for
Proposal (RFP) focused on the attorneys
and trustees that provide default legal
services. The RFP solicits bids and input
from attorneys and trustees to determine
the lowest cost and highest service level
at which default-related services can be
provided in various regions of the coun-
continued on page 41
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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,
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• 24 to 48 hour turn times on conditions and
underwriting
• Fund loans in two weeks
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-
praisers
• In-house licensing department to handle all
State Licensing and Compliance
• The security and stability of a big lender
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KEY #3
Maximize Branch PROFITABILITY and
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36—The House and Senate reconciliation conference promulgated this exclusion
and authorizes the Federal Trade Commission to prescribe new rules under
Section 5 of the FTC Act to address unfair or deceptive practices by auto dealers.
37—The ten voting members of the Council are: the Treasury Secretary (who is also
the chair of the Council), the FRB Chairperson, the Comptroller of the Currency, the
Bureau’s Director, the SEC Chairperson, the FDIC Chairperson, the CFTC
Chairperson, the FHFA Director, the NCUA Chairperson, and an independent mem-
ber having insurance expertise (appointed by the President, confirmed by Senate).
The five non-voting members of the Council are: the Office of Financial Research
(OFR) Director, the Federal Insurance Office (FIO) Director, a state insurance com-
missioner, a state banking supervisor, and a state securities commissioner. The FIO
is also a new entity, under the Treasury’s purview, created under the Act.
38—Procedurally, upon petition of a member agency of the Council, and only by
a two-thirds vote of the Council, a Bureau regulation may be set aside.
39—Op.cit. 29.
40—Op.cit. 3: State Law Preemption Standards for National Banks and
Subsidiaries Clarified, Title X, Subtitle D §1044 (b)(1)(B).
41—Barnett Bank of Marion County, N.A. v. Nelson, Florida Insurance
Commissioner, et al., 517 U.S. 25 (1996).
42—Op.cit. 3: Periodic Review of Preemption Determinations, Title X, Subtitle D
§1044 (d)(1-2). The Comptroller must publish a list of the OCC’s preemption deter-
minations in effect.
43—Watters v. Wachovia Bank, N.A., 550 U.S. 1 (2007).
44—Hamlet Act 1, Scene 3, 75–77.
45—The Bureau and the FTC must negotiate an agreement for coordinating on enforce-
ment actions and limits the ability of each agency to initiate a civil action for a violation
of federal when the other agency has already filed suit based on the same matter.
46—Augustine, Norman R., Augustine’s Laws, 1986, 1997, American Institute of
Aeronautics and Astronautics Inc., Reston, Va.
47—Op.cit. 3: Administration, § 1013.
48—Op.cit. 3: Consumer Advisory Board, § 1014.
49—Op.cit. 9.
50—Op.cit. 3: Subtitle F-“Transfer of Functions and Personnel; Transitional
Provisions,” Sections 1066 (a) and (b), inter alia.
51—Presidential appointments require the Senate’s Advice and Consent (U.S.
Constitution, Article II, Section 2, and Clause 2). A simple majority (i.e., 51 percent)
of those voting in the Senate is required for confirmation, once the nomination
reaches the Senate for a vote. However, pursuant to agreed-to convention, presi-
dential nominations requiring Senate confirmation must have 60 votes (i.e.,
“supermajority”) to break a filibuster, in order for those confirmations to be
approved. Many high level nominations made by President Obama have faced a
filibuster or a Senator has put them on “hold.”
52—USA Today, Obama announces 15 recess appointments, scolds GOP,
03/28/10. Recess appointments powers are granted to the President in the U. S.
Constitution, Article II, Section 2, and Clause 3.
53—Warren’s advocacy for a consumer financial protection agency began pub-
licly on March 10, 2009, when she joined Sens. Dick Durbin (D-IL) and Chuck
Schumer (D-NY), and Reps. Bill Delahunt (D-MA) and Brad Miller (D-NC) to
announce a bill to create what was then being called the Financial Product Safety
Commission. In time, its other appellation was Consumer Financial Protection
Agency. The Dodd-Frank Act created the Bureau of Consumer Financial
Protection.
54—The Conference Board announced on 09/28/10 that the Consumer
Confidence Index (CCI) for September 2010 stands at 48.5 (1985=100), down from
53.2 in August.
55—President Barack Obama’s speech in the Rose Garden, Sept. 17, 2010.
56—Idem.
57—Warren, Elizabeth and Amelia Warren Tyagi, The Two-Income Trap: Why
Middle-Class Mothers and Fathers Are Going Broke, Basic Books/Perseus, NY, 2003.
Elizabeth Warren’s daughter is Amelia Warren Tyagi.
58—Warren, Elizabeth and Amelia Warren Tyagi, All Your Worth: The Ultimate
Lifetime Money Plan, Free Press, NY, 2005.
59—Warren, Elizabeth, Fighting to Protect Consumers, The White House Blog,
Sept. 17, 2010.
60—As but one objection to the Bureau: “The vast majority of those who held the
billions of dollars in mortgages now foreclosed on knew exactly what they were
doing. And one of the dirty little secrets of the financial crisis is that one home-
owner after another signed mortgage-loan documents that were filled with inac-
curate information about his or her net worth, assets, salaries and ability to make
monthly mortgage payments.” Cohan, William D., “The Elizabeth Warren Fallacy,
Opinionator, The New York Times, 09/30/10.
continued from page 38
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GSF Wholesale -
The Safe Place for
your business!
“Protect your loans with GSF”
Contact the Client Relations Manager today at
1-877-494-4448
or service@gsfsales.com
Originating and closing loans these days can be very challenging. Lengthy
turn times, inexperienced underwriters, and high costs can contribute to
fewer closed loans.
GSF Wholesale is the safe and secure place for all of your business.
Our experienced staff is dedicated to ensuring your loans are protected.
With seasoned underwriters, efficient quality control department and
competitive pricing, GSF Wholesale is focused on you and your business
every day to meet the challenges of the new lending environment.
GSFSal es. com
try. The attorneys selected as a result of
this process will be among the first mem-
bers of the Strategic Partnership Group.
“We realized that by reducing the num-
ber of attorney partnerships to those who
can provide the lowest cost and highest
service level and can meet the demands of
the regions they are supporting, we will
create a more efficient process, which will
help borrowers and investors save money,”
said Clay Cornett, president of LPS Default
Servicing Solutions. “Last year, legal ven-
dors billed nearly $2 billion in default fees.
Even a 10 percent reduction would be sig-
nificant. Such reductions would make it
less costly for defaulted borrowers to rein-
state or pay off loans in default.”
For more information, visit www.lpsvcs.com.
Mortgage Professionals
to Watch
O Citizen Financial Group has named
Cheryl Nolda president of the compa-
ny’s home lending solutions division.
O Robert Beni Jr. has joined
Meridian Capital Group LLC as vice
president of the company’s com-
mercial originations group.
O Community Trust Bank has
announced the addition of Ian M.
Wright as senior vice president,
director of warehouse lending to
launch the bank’s mortgage ware-
house lending program.
O Georgeann Beville has joined Ellie
Mae as director of customer care.
O John Walsh has been appointed act-
ing Comptroller of the Currency for
the Office of the Comptroller of
the Currency (OCC).
O Tricia Bailey has joined Paramount
Residential Mortgage Group (PRMG)
as the company’s new corporate
operations manager.
O TMS Funding, the wholesale resi-
dential platform of Total Mortgage
Services LLC, has announced the
addition of Robin Buttner and
Stephen Jaser as wholesale account
executives.
O Southwest Securities FSB, the com-
mercial banking subsidiary of SWS
Group Inc., has named Peter
Brown senior vice president, direc-
tor of special assets.
O Subha V. Barry has been named
chief diversity officer for Freddie
Mac.
O First American Financial Corporation
has announced the appointments of
Max O. Valdes as chief financial officer
and Mark E. Seaton as senior vice
president of finance.
O PHH Mortgage Corporation has
named William J. Steinmetz senior
vice president, fulfillment operations.
O Provident Bank Mortgage has
announced the appointment of
Steve Atwood to the position of
retail production manager.
O Prommis Solutions has named Phil
Johnsen senior vice president of
sales and marketing.
O Rick Borges II, MAI, SRA has been
elected vice president of the
Appraisal Institute.
O Scott H. Kramer has been named
director of commercial default serv-
icing for Clayton Holdings LLC.
O New Vista Asset Management has
named Ivan Choi as the company’s
national default sales executive.
O Berkadia Commercial Mortgage
LLC has announced the addition of
Hugh F. Frater as the company’s
new chief executive officer.
O RiskSpan Inc. has announced the
hiring of Allen H. Jones as manag-
ing director of the company’s feder-
al services consulting practice.
O Kelli Himebaugh has been named
to the newly created position of vice
president of client development for
Mortgage Builder.
O Loan Value Group has named Louis
J. Petriello chief financial officer
and general counsel.
O Joe McCloskey has joined Dimont
& Associates.
O American Capital Agency Management
LLC has appointed Christopher Kuehl
senior vice president of mortgage
investments.
Your turn
National Mortgage Professional Magazine
invites its readers to submit any infor-
mation, events, passages, promotions,
personal or professional occurrences
that seem appropriate and/or other per-
tinent data to the attention of:
Heard on the
Street/Mortgage
Professionals to Watch
column
Phone #: (516) 409-5555
E-mail:
newsroom@nmpmediacorp.com
Note: Submissions sent via e-mail are
preferred. The deadline for submissions
is the 1st of the month prior to the tar-
get issue.
heard on the street continued from page 39
Robert Beni Jr.
Cheryl Nolda
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www.calyxsoftware.com
Credit Plus suite of
products conforms to
new Freddie Mac
requirements
Credit Plus Inc. has announced that it is
offering a suite of products to help lenders
comply with the more stringent selling
requirements that Freddie Mac
announced in its Aug. 16 Bulletin 2010-19.
“Making the mortgage process easier
for lenders is our focus at Credit Plus.
New requirements and rules are con-
stantly being introduced, which is why
we are so vigilant about developing tools
that keep lenders compliant. Our suite of
products assists lenders with pre-closing
and post-closing initiatives,” said Greg
Holmes, national director of sales and
marketing for Credit Plus.
A key provision of the updates
announced in Freddie Mac’s Bulletin 2010-
19, which apply to mortgages with settle-
ment dates on or after Dec. 1, 2010, revis-
es requirements for inquiries on a borrow-
er’s credit report. Lenders now will be
required to look into the borrower’s credit
report inquiries made in the previous 120
days, rather than the 90 days previously
required. If the borrower was granted addi-
tional credit, the lender will be required to
obtain verification of the debt, and include
the debt in qualifying the borrower. This
revised requirement will apply to all loans,
not only manually underwritten loans.
Credit Plus is offering a number of
tools to assist lenders with quality con-
trol. These services may be purchased
alone or bundled together:
O Mortgage professionals can easily com-
pare a credit report pulled at closing to
the report pulled at origination with a
COMPARE report. Delivered in 10 sec., it
includes a quick reference summary
section, general information compari-
son, credit score comparison, credit
score factor comparison, trade line com-
parison, public record comparison,
inquiries comparison and information
sources comparison.
O New account information is easily
pinpointed with a manual inquiry
verification process.
O Soft code inquiries are a valuable
resource to quickly check if addi-
tional inquiries have been conduct-
ed without adversely affecting their
credit scores. This could potentially
show signs of new debt.
For more information, visit www.credit-
plus.com.
OpenClose releases GFE
accuracy product
OpenClose Mortgage Software, develop-
ers of Web-based, loan origination soft-
ware (LOS), has released the enhanced
editing version that improves the accu-
racy of information flow in the new
Good Faith Estimate (GFE). The GFE lock-
down “significantly improves” accuracy
of loan documents allowing for those
lenders to gain better control of 2010.
Regulatory change called for a
redesigned GFE this year to—in part—
provide borrowers with more detailed
closing cost information in order to
make better informed decisions. But
mistakes, or erroneously changed fees,
can create inaccurate applications and
non compliant loans. For example, a
loan officer might try to waive a charge
that the lender stipulates as mandatory.
OpenClose created the GFE lock-
down to provide lenders with even
greater control by adding the ability to
lock down fields in the fee mainte-
nance and closing cost scenarios mod-
ules. By checking the “Lock on GFE”
checkbox, a loan administrator can
freeze the dollar value for that fee and
then it cannot be changed on the Good
Faith Estimate by any originator or
processor.
“The redesigned GFE 2010 provides
many more details for prospective
homebuyers,” said Jason Regalbuto,
president of OpenClose, “but with
those details comes more chance for
error. Our new GFE lockdown feature
provides an extra level of control and
therefore, peace of mind.”
For more information, visit www.open-
close.com.
CoreLogic announces
solution to defend
against short sale fraud
CoreLogic has intro-
duced the Short Sale
Monitoring Solution,
which the company
describes as the indus-
try’s first short sale fraud prevention and
pricing solution. The new service allows
lenders to receive alerts on “risky” pend-
ing and closed short sales to minimize
unnecessary losses related to fraud and
property underpricing, which CoreLogic
estimates at $41,500 per transaction.
Short Sale Monitoring Solution pro-
vides real-time access to lenders’ con-
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REMEMBER THE
“GOOD OLD DAYS”?
…When you could speak directly with
easy-to-reach underwriters who issued
fast approvals with common sense
underwriting? Well so do we.
Go Back in Time.
At Terrace Mortgage Company, we believe in
providing friendly, fast service with a personal
touch, and we’ve done just that for 22 years. We
pride ourselves on our easy-to-reach, seasoned
underwriters who use common sense and offer
unparalleled support by phone or email every
step of the way. And we understand you need to
close quickly. So we send a link with the closing
package directly to the closing company right
after you get a clear-to-close.
Terrace Mortgage Company
Celebrating 22 years of wholesale lending
www.terracemortgage.com
Sandy Garcia, National Sales Director
(866) 934-4631, ext 301
NMLS#7101
current transactions on short sale prop-
erties through the CoreLogic Mortgage
Fraud Consortium, a repository of
application and transaction data that
represents 65 percent of annual loan
applications.
To prevent short sale fraud pre-clos-
ing, the CoreLogic solution matches
details against other pending loan
applications in the consortium data-
base and public records for the same
property. When a matching record is
found, an alert goes instantly to the
lender, recommending a decision to
delay pending further investigation.
For short sales that have already
closed, the Short Sale Monitoring
Solution continues to watch the proper-
ty for a period specified by the lender,
CoreLogic explains. Any subsequent
loan closed on the property generates
an alert to the original short sale lender
and the resale lender, if different.
Additionally, the new short sale
solution watches for and evaluates
short sale re-sales for 90 days,
enabling lenders to refine pricing
methods on an ongoing basis. Another
option available is a retrospective
short sale analysis that allows lenders
to detect fraud, assess pricing-method
accuracy and pinpoint problematic
geographies.
For more information, visit www.corel-
ogic.com.
Enhancements
announced to Ellie Mae’s
Encompass360 product
Ellie Mae, the
enterprise mort-
gage origination
technology provider for mortgage
bankers, mortgage brokers, community
banks, credit unions and other mort-
gage lenders, has released enhance-
ments to its Encompass360 Mortgage
Management Solution. More than a
dozen added or upgraded features
comprise this release—many of which
were based on suggestions from exist-
ing Encompass360 users.
The enhancements are components
of three primary areas: Regulatory com-
pliance, electronic document manage-
ment and disclosure, and authorized
multi-party access. Each enhancement
was designed to address the requests of
existing Encompass360 customers.
“We are continually investing in our
technology, and meeting our customer
requests is a big part of that,” said
Jonathan Corr, chief strategy officer for
Ellie Mae. “In this update, we made
some significant improvements around
electronic document and disclosure
management, multi-party access, and
regulatory compliance. Compliance is
rightfully a big focus among originators
right now.”
Some of the key new enhancements
include:
O More configurable RESPA/TIL alerts
that allow users to customize alerts
based on company policies.
O More refined disclosure workflow
that filters disclosures based on
entity type and disclosure timing
according to channel-specific con-
figuration.
O The ability for the interviewer to e-
sign mortgage applications prior to
sending to borrowers for e-signing.
O Intelligent document recognition
that not only recognizes, but also
categorizes and files all commonly
used forms and documents, and
can easily “learn” virtually any new
document.
O Productivity functions that allow
users to print any document from
any software program directly to the
loan file’s specific e-folder.
O Coordination and monitoring of
multi-party access that not only
reveals any individual that opens a
file, but also logs the specific actions
taken on each file by each individual.
O Deeper reporting capabilities that
offer expanded audit trails and added
fields to allow for more detailed and
customized categorization.
For more information, visit
www.elliemae.com.
PropertyMinder launches
Comparable Market
Analysis tool for agents
PropertyMinder has
announced the launch
of the first generation
of its Comparable
Market Analysis (CMA) tool for listing
agents. A CMA provides insight for a
home seller to determine an appropriate
list price for their home. The
PropertyMinder CMA searches the MLS to
pickup comparables, creates charts and
is entirely Web-based within the
AccelerAgent Web sites. According to the
company, there are many options within
the CMA section of the Web site. Agents
can create unlimited CMAs, send, print
and have their visitor access it via a
secure log-in area.
Visitors on the Web site can even
submit a Home Evaluation Request
(CMA) on the agent’s website. Agents
can modify the CMA report pages
including the Cover Sheet, Table of
Contents, About Me, Marketing Plan,
Closing Comments and more. As men-
tioned earlier, the CMA is completely
Web-based which means no download-
ing of software and the agent can just
login to the admin toolkit.
For more information, visit www.proper-
tyminder.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 target
issue.
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Appraisal Management
Company
We are a premier National Appraisal Company since 1970.
We have a complete product line for your entire organization.
We guarantee HVCC and FHA regulatory compliance.
Let our experience work for you. The way valuations should be.
Coester Appraisal Group
7650 Standish Place, Suite 107 • Rockville, MD 20855
www.coesterappraisals.com
(888) 485-1999 Ext. 2
Branch Manager
Branch Recruitment
Continuing Education
Contact Management/CRM
Branch Manager
Freedom Mortgage Corporation, The BEST Branch Solution, Period.
Freedom Mortgage Corporation
www.fmbranch.com
info@fmbranch.com
800.220.9498
iServe offers a complete product mix - aggressively priced, with
hassle-free service & turntimes. Branching & Loan Offcer
opportunities available nationwide. For a change, focus on
production, quick closes & a good night's sleep!
iServe Residential Lending
www.iservelending.com
afriedman@iservelending.com
415-298-2500
Be in business for yourself, but not by yourself. Join GSF Mortgage's
Professional Branch Network. Enjoy freedom and stability and reap
the rewards. Signing bonus for Branch Managers, retain 100% of
your commissions. Absolutely NO files fees, NO splits
GSF Mortgage
15430 W Capitol Dr. Brookfield, WI 53005
1-877-494-4448
www.gsfprobranch.com
Find out what Guaranteed can do for you.
Branch Program for Professionals. It's what we do.
Guaranteed Home Mortgage Company, Inc.
108 Corporate Park Drive, Ste 301
White Plains, NY 10604
888-329-GHMC • www.joinguaranteed.com
Established in 1993 and headquartered in Waukesha, Wisconsin,
Inlanta Mortgage is a multi-state mortgage banking company com-
mitted to delivering superior service to our branch clients.
For more information, call 262-513-9853 or visit www.inlanta.com.
Inlanta Mortgage
W229 N1433 Westwood Drive, Suite 103
Waukesha, WI 53186
www.inlanta.com • 262-513-9853
United Northern Mortgage Bankers......888-600-8808
Limited room available for established Team Leaders and
Licensed Mortgage Originators. Become part of an established
30-year Mortgage Banker with a proven track record and success.
RealEstateBestJobs.com....................201-489-0256
Currently working with various bankers & federally chartered banks.
Seeking established, new branches & Loan Officers Nationally. We
are a top recruiting firm handling all types of mtg positions.
WorkCenter CRM ....................................877.498.6888
A CRM & contact management solution designed for mortgage
professionals. Automated campaigns & LOS synchronization make
WorkCenter an intuitive timesaver for staying in touch with clients.
Church Financing
• Church Purchase & Construction • $100,000 to $2,500,00
• Church Refnance & Cash Out • Churches all 50 states
• 75% of Appraised Value • 20 Yr. Fixed Rate
CONCORD CHURCH FINANCE
NATIONWIDE FINANCING FOR CHURCHES
ONLINE Pre-qualify@ConcordAcceptanceCorp.com
800-926-0399 • Fax: 858-756-8108
Brokers United ........................................877-710-0948
Consulting & Branch opportunities. Exclusive opportunities with a
top Federally Chartered Bank, Mortgage Banker and/or Mortgage
Banker/Broker Platform. Email Jeff Flees at jeff@brokersunited.net.
Closing Gifts
Increase your Loans,Get the Edge & Generate More Referrals!
Offer your clients a 5 Day 4 Night Cruise certificate for Two to Mexico,
the Bahamas or the Western Caribbean (up to a $1798.00 value) only
when they close a loan with you. Only $159.00 per certificate!!
Cruise4Two-Loan Incentives
1-866-541-8077
www.Cruise4Two.com
Compliance Consultants
The first full-service, mortgage risk management firm
in the country, specializing exclusively in mortgage compliance.
Pioneers in outsourcing solutions for mortgage compliance.
Our Compliance Team Will:
Leverage your existing employees.
Improve your productivity.
Collaborate on projects.
Make the most of your current technology.
Bring innovation to your company.
Be a strong cultural fit.
Free you to focus on your core competencies.
Give you access to world-class expertise.
Lower your total operational costs.
LENDERS COMPLIANCE GROUP
167 West Hudson Street - Suite 200
Long Beach | NY | 11561 | (516) 442-3456
www.LendersComplianceGroup.com
Time is running out...are you ready?
Pass the S.A.F.E. Act Test, meet your 20 hours of Pre-licensure,
and complete the 8 hours of Continuing Education you need
• The Ultimate Test Prep Kit and Test Prep Boot Camps – Cover
everything to pass the S.A.F.E. Act Test — on your frst try.
• 20-hour Pre-licensure - Packed with everything to successfully
complete your pre-licensure requirements.
• Continuing Education - Exciting, NMLS approved courses that
meet your Continuing Education needs and build your business.
MSS Learning Center
(800) 963-1900
www.MortgageSuccessSource.com
Email: info@MortgageSuccessSource.com
Bookmark this!
Access these
listings online at
nmpmag.com/directory_list
NMLS approved 20 hour Prelicensing Education
NMLS approved Continuing Education
Live Classroom Instruction, Web Delivery and Private Events
The SAFE-Smart ExamCram, Powerfully Innovative Test Prep
Abacus Mortgage Training and Education
PO Box 780
Summerfield, NC 27358
888-341-7767 • www.GetYourEd.com
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Education
"North Lake College - Specialized Education In Mortgage Banking.
Earn An Associates Degree in Mortgage Banking From the First Fully
Accredited Mortgage Banking Degree Program in the U.S. For
Information About Our 30 Year Program email:kbaker1@dcccd.edu.
North Lake College
5001 North MacArthur Blvd, Room T-231-C
Irving, TX 75038
(972) 273-3467 • http://www.northlakecollege.edu/
Direct Mail
Specializing in Official Snap Packs for Greater Open Rates
Envelope Mailers, Business Reply, Postcards and Much More
Targeted Mortgage Lists with Many Selects
Complete Design, Printing and Mailing Services
Your Complete Mortgage Marketing Solution.
Call Us Today!
(800) 922-9860
www.envisiondirect.net/catalog/mortgage.htm
Document Preparation
ProClose provides compliant closing documents and software for
Residential Mortgage Lending. Created with closers in mind,
we help make a lender’s staff more efficient and supported.
Mortgage Banking Systems - ProClose
1360 Beverly Rd. Ste 200, McLean, VA 22101
800-783-2283 · sales@proclose.com
www.ProClose.com
Errors and Omissions
Insurance
Doc Management
DocVelocity is an end-to-end paperless solution designed to sim-
plify the loan origination experience. Imagine having all your doc-
uments in the loan process as electronic files, all online, from pre-
approval to closing. DocVelocity provides: Fast and easy loan
delivery to any lender … Automatic doc sorting, naming and filing
… Real-time online document sharing for anyone you choose …
Friendly and intuitive user interface … No start-up fees, and free
training and support. DocVelocity addresses important compli-
ance issues while giving your office the competitive advantage of
being paperless. It streamlines all aspects of the mortgage
process and most important, it does so in one easy-to-use and
inexpensive package. Its newest version, DocVelocity 2.5, adds
over 50 new features and enhancements to make the best paper-
less office even better. DocVelocity is the flagship product of
Paperless Office Solutions, Inc., a wholly owned subsidiary of
Flagstar Bancorp. Visit www.docvelocity.com to find out more.
DocVelocity
www.docvelocity.com
(877) 362-8356
sales@docvelocity.com
Events
“The Expo for Real Estate Professionals"
For ongoing Networking Events throughout the year please visit
www.nycnetworkgroup.com.
NYC Real Estate Expo LLC
Anthony Kazazis - Director
apkazazis@optonline.net • www.nycrealestateexpo.com
646.210.2545 • 914.763.8008
Hard Money/Private Lending
ACC Mortgage, Inc.
932 Hungerford Drive #6 • Rockville, MD 20850
240-314-0399 • 240-314-0336 fax
WeApproveLoans.com
We are doing traditional subprime lending, fix & flip lending and
hard money lending.
Income Verification Services
Advanced Data
(800) 537 - 0458
www.advanceddata.com
verifications@advanceddata.com
Advanced Data is a leading national provider of data services,
streamlining income and employment verification with proprietary
software. Clients can submit 4506-T directly through Encompass360.
Also ask about our AVM and flood services!
CB Malaga Insurance Services LLC......877-245-5887
Insurance broker providing errors & omissions (E&O)
insurance to mortgage brokers and bankers. All loan types.
Available in 22 states. www.CBspecialty.com
Windvest Corporation ............................877-285-0777
Specializing in rehab loans for property investors in So. CA.
Up to 60% ARV, 12.99% fixed rate, 3.5-5 points, 1 yr. term.
Fast & professional service since '94! Visit windvestcorp.com!
Jumbo
Sign up with the
Premier Jumbo Lender
www.ingloans.com
877.464.0555, option 2
Move your Jumbos to a better neighborhood. ING Mortgage is
your home for Portfolio loans up to $3,000,000. We offer aggressive
pricing and simple guidelines in all 50 states.
Big Loans. Low Rates. Great Value.
Leads
Our network attract over one million visitors per month. Our paid
lead program as well as our free lender directory will help you con-
nect with targeted new consumer traffc from with high-intent con-
sumers searching online for the right mortgage lender.
MortgageLoan.com
SM
www.mortgageloan.com • 877-390-4750
MortgageLoan.com is the largest online directory
for mortgage professionals and a favorite of
consumers shopping for mortgage loans.
Reach affluent and creditworthy consumers who are in-market and
ready to transact. Bankrate is a consumer direct Web site, NOT a
lead aggregator. Qualified leads for every sized budget, and pay
only for performance. No set up fees! No contracts! No risk!
• Reach self directed, highly qualified consumers that are actively
searching for mortgage loans
• Geo-targeting – reach the right consumers in the right markets
• Our proprietary Advertiser Portal gives you complete control
over your campaigns, budgets, and performance reports.
• YOU determine your daily/weekly/monthly budget
• Pay only for consumers who click on your listing
• NO cancellation fees
Try us risk-free! Call 561-630-1257
or visit www.bankrate.com/cpcprogram/ for more details.
Internet’s Leading Consumer Mortgage Marketplace
Attracting over 7 million unique
consumers every month
www.Bankrate.com • 561-630-1257
AAA Refi Leads.....AAA Refi Leads.....AAA Refi Leads
Learn how I went from failure to success by mailing cheap refi
letters from home, closed 71 loans & made $248,954.62 last yr.
I’ll show you exactly how I did it. Go to: www.Refi-Leads.NET
Does Advertising in the
Resource Registry Work?
It just did!
Call 888-409-9770 ext. 4
to Register your company.
Platinum Credit Services, Inc.................631-299-2084
Tax return vertification (4506 tax transcript done in less than
24 hours in most cases). Call Lorenzo Pugliano, President
and CEO at 631-299-2084.
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Title
Wholesale/Residential
Intracoastal Abstract Co. Inc. ................516-358-0505
Privately owned & operated full service title insurance agency
in NY, NJ and FL, with affiliates throughout the US & Canada.
Escrow Agent in Florida. www.intracoastalabstract.com.
Flagstar Wholesale Lending, a division of Flagstar Bank, is one of
the nation’s largest wholesale and correspondent mortgage
lenders, providing the technology, products, service and support
that independent mortgage brokers, correspondents, and bankers
need in today’s mortgage arena. In the ever-changing environ-
ment of mortgage banking, Flagstar takes pride in accommodat-
ing the specific needs of each customer. At Flagstar, we under-
stand that you need every available advantage to stay ahead of
the competition. This is why we provide multiple technology
options to meet your needs to register, lock, underwrite, close,
fund and deliver your loans. Our wholesale website
(wholesale.flagstar.com) and the loan processing tool Loantrac
provides our customers with the functionality that make it easier
and faster to close loans, saving you time and money! Visit whole-
sale.flagstar.com to learn more.
Flagstar Wholesale Lending
www.wholesale.flagstar.com
(866) 945-9872
WLSC@flagstar.com
Retail Branch
Are you a broker/owner or current branch manager looking to
expand your business into Mortgage Banking with FHA capabilities?
Then our PARTNER BRANCH ADVANTAGE© program is perfect
for you. We are offering you all the benefts of partnering with an
established lender while still enjoying your independence.
Mortgage Concepts is a nationwide FHA Direct Lender with a 16
year long reputation of excellence.
YOUR SUCCESS IS OUR SUCCESS!
For more information contact THOMAS R. SIRICO, Vic President
of Business Development at (917) 923-1472 or email at
tsirico@mortgageconcepts.com.
We look forward to sharing our services with you!
(800) LOANS-15
www.mortgageconcepts.com
We offer competitive pricing and fast turn-times for FHA, VA,
Conventional, and USDA programs without having a retail pres-
ence in the industry. We are a wholesale lender with 22 years of
experience and believe in exceptional service.
Terrace Mortgage
4010 W. Boyscout Blvd., Suite 550
Tampa, FL 33607
866-934-4631 • www.terracemortgage.com
Regulatory/Compliance
Comergence Compliance Monitoring is the mortgage industry’s only
Complete broker desk management software and outsource solution
for TPO management and monitoring. We can supplement lenders in-
house management and monitoring resources departments.
Comergence Compliance Monitoring, LLC
630 The City Drive South, Suite 205 • Orange, CA 92868
Office: 714-740-9000
www.ComergenceCompliance.com
Secondary Marketing Consulting
Call 888-409-9770 ext 4.
to register your company.
Broker to Banker Services.com ..........(951) 746-3075
We complete your applications for approval
Save the time and hassle
contact: brokertobankerservices.com
Lykken on Lending is a weekly 60-minute show hosted by mortgage
veteran of 37 yrs, David Lykken, along with special guest Alice Alvey &
Joe Farr as well as featured special guests. Each week we provide our
listeners with up-to-the-minute information of what is happening in
mortgage and housing industry.
Sign-on weekly at
nmpmag.com/lykkenonlending
Loan Incentives
Increase your Loans,Get the Edge & Generate More Referrals!
Offer your clients a 5 Day 4 Night Cruise certificate for Two to Mexico,
the Bahamas or the Western Caribbean (up to a $1798.00 value) only
when they close a loan with you. Only $159.00 per certificate!!
Cruise4Two-Loan Incentives
1-866-541-8077
www.Cruise4Two.com
Loan Origination Systems
Calyx Software, the #1 provider of mortgage solutions is dedicated
to offering reliable and affordable software that streamlines, inte-
grates and optimizes the loan process. Find out how PointCentral
can streamline your business and create compliant processes today.
Calyx Software
800-362-2599
sales@calyxsoftware.com
www.calyxsoftware.com
End-to-end LOS system for multi-channel lending.
PreQual thru Interim Servicing. Includes all back-office functionality;
Underwriting,Secondary Marketing,Post Closing and much more
SaaS, ASP and Client Server delivery options.
Mortgage Builder Software
24370 Northwestern Highway, Suite 200
Southfield, MI 48075
800-460-5040 • www.mortgagebuilder.com
Loan Management Systems
Xetus ....................................................877-GO-XETUS
XetusOne is a powerful, easy-to-use loan management system
that streamlines loan processing. Our affordable SaaS applications
are lenders #1 choice for origination, subordination & modification.
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SAVE THE DATE!
Join the
2010 NAMB/WEST Conference
December 4-6, 2010 at the
MGM Grand Las Vegas!
Visit www.NAMBWEST.com
for 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
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OCTOBER 2010
Friday, October 22
Evolution: The Oregon Association of
Mortgage Professionals Mortgage
Industry Convention & Trade Show
1849 SW Salmon Street
Portland, Ore.
For more information, call (503) 670-
8586 or visit www.oamponline.com.
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
Thursday, November 4
Utah Association of Mortgage Brokers
2010 Annual Expo
Noah’s • 322 West 11000 South
South Jordan, Utah
For more information, call
(801) 787-6611 or visit www.uamb.org.
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.
Tuesday, November 9
Tennessee Association of Mortgage
Professionals 2010 Mortgage Industry
Showcase
The Best Western Cedar Bluff Inn
420 North Peters Road
Knoxville, Tenn.
For more information, call (615) 302-
0001 or visit www.tnamb.org.
Tuesday, November 16
Missouri Association of Mortgage
Professionals 17th Annual Convention
St. Charles Convention Center
1 Convention Center Plaza
St. Charles, Mo.
For more information, call (314) 909-
9747 or visit www.mamb.net.
Wednesday-Friday,
November 17-19
Mortgage Bankers Association
Accounting, Tax & Finance
Management Conference 2010
The Roosevelt New Orleans
123 Barrone Street
New Orleans, La.
For more information,
call (800) 793-6222 or visit
www.mortgagebankers.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.
FEBRUARY 2011
Sunday-Wednesday,
February 6-9
Mortgage Bankers Association’s
Commercial Real Estate
Finance/Multifamily Housing
Convention & Expo 2011
Manchester Grand Hyatt San Diego
One Market Place
San Diego, Calif.
For more information, call
(800) 793-6222 or visit www.mortgage-
bankers.org.
Tuesday-Friday, February 22-25
Mortgage Bankers Association
National Mortgage Servicing
Conference & Expo
Gaylord Texan Hotel & Convention
Center
1501 Gaylord Trail
Grapevine, Texas
For more information,
call (800) 793-6222 or visit
www.mortgagebankers.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 ....................................13 & 35
ACC Mortgage .................................................. www.weapproveloans.com ....................................37
American Toner & Ink ...................................... mortgagecompanyspecialist@amertoner.com ..........5
BankFinancial .................................................. www.bankfinancial.com ......................................42
Calyx Software ................................................ www.calyxsoftware.com ......................................42
CB Malaga Insurance Services LLC ...................... www.cbspecialty.com ..........................................31
Comergence Compliance Monitoring, LLC .......... www.comergencetrustedmember.com ..........11 & 25
Envision Direct ................................................ www.envisiondirect.net/catalog/mortgage.htm ......20
Flagstar Wholesale Lending .............................. www.wholesale.flagstar.com ....................Back Cover
Freedom Mortgage .......................................... www.fmbranch.com ......................Inside Back Cover
Frost Mortgage Lending Group .......................... www.frostmortgage.com/nmp ................................6
GSF Mortgage Corporation ................................ www.gsfprobranch.com ................Inside Front Cover
GSF Funding .................................................... www.gsfsales.com ................................................41
Guaranteed Home Mortgage.............................. www.joinguaranteed.com ....................................39
iServe Residential Lending, LLC ........................ www.iservecompanies.com ..................................40
MortgageProShop.com...................................... www.mortgageproshop.com ..................................36
Mortgage Concepts .......................................... www.mortgageconcepts.com ..................................9
Mortgage Investors Corporation ........................ hr@mortgageinvestors.com ..................................10
NAMB/WEST .................................................... www.nambwest.com ....................................38 & 47
NAPMW .......................................................... www.napmw.org ..................................................17
PB Financial Group Corp. .................................. pbfinancialgrp.com ..............................................34
ProClose.......................................................... www.proclose.com ..............................................34
Protelus Corporation ........................................ www.protelus.com ................................................4
Quality Mortgage Services ................................ www.qcmortgage.com ..................................15 & 28
REMN (Real Estate Mortgage Network)................ www.remnwholesale.com ......................................7
Ridgewood Savings Bank .................................. www.ridgewoodbank.com ......................................8
Terrace Mortgage Company .............................. www.terracemortgage.com ..................................43
United Northern Mortgage Bankers Ltd. ............ www.unitednorthern.jobs ............................ 12 & 34
Windvest Corporation ...................................... www.windvestcorp.com ........................................21
Xetus Mortgage Corporation.............................. www.xetus.com ..................................................48
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