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Mortgage PROFESSIONALT E N N E S S E E

M A G A Z I N E

Your source for the latest on originations, settlement, and servicing

OFFICERSPhone # E-mail

Hiram “Chip” Langley, CRMS President (615) 712-3527 [email protected] C. Sweeney, CRMS President-Elect (931) 707-1500 [email protected] Hendrix Vice President (615) 778-1119 [email protected] V. Ham, CRMS, GMA Secretary (615) 370-8888 [email protected] T. Laws Treasurer (615) 335-2284 [email protected] Christein Immediate Past President (423) 899-6898 [email protected] Short, CMC, CRMS, GMA Executive Director (615) 302-0001 [email protected]

BOARD OF DIRECTORSCraig Cline (901) 758-0007 [email protected] Hoover (615) 833-0456 [email protected] Miller (864) 748-5831 [email protected] Shine (865) 567-2100 [email protected] Thomas (931) 455-0500 [email protected] Andy Voyles, CRMS Parliamentarian (Past President) (615) 584-1057 [email protected]

COMMITTEE CHAIRSTina Christein Association Partners Committee (423) 899-6898 [email protected] V. Ham, CRMS, GMA Certification Committee (615) 370-8888 [email protected] C. Sweeney, CRMS Convention Committee (931) 707-1500 [email protected] “Chip” Langley, CRMS Education Committee (615) 712-3527 [email protected] Ellenburg Ethics Committee (901) 867-1177 [email protected] Voyles, CRMS Government Affairs Committee (615) 584-1057 [email protected] Buckman Marketing Committee (615) 496-5626 [email protected] Coile Membership Committee (615) 872-8484 [email protected] Hendrix Programming Committee (800) 295-1020 [email protected] Laws TNAMB-PAC (615) 335-2284 [email protected]

Tennessee Association of Mortgage ProfessionalsP.O. Box 111 � Spring Hill, TN 37174

Phone: (615) 302-0001 � Fax: (615) 296-4090TNAMP Web site: www.tnamp.com

E-mail: [email protected]

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Thursday, June 24, 2010Friday, June 25, 2010

AAMB welcomes NAMB to beautiful Phoenix! Come see the new NAMB President and the new NAMB Board installation, while

participating in some great networking opportunities. State delegates can also participate in the NAMB Delegate Council Meeting.

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Delinquencies in Tennessee Fall in Latest National Delinquency Survey

The delinquency rate for mortgage loans on residential properties inTennessee was 9.89 percent at the end of the first quarter of 2010, adecrease of 142 basis points, according to the Mortgage BankersAssociation. The delinquency rate excludes loans in the process of foreclo-sure. The percentage of loans in Tennessee on which foreclosure was start-ed during the quarter rose 6 basis points to 1 percent, while the percent-age of loans in the foreclosure process at the end of the quarter rose 7 basispoints to 2.41 percent.

Mortgage delinquency rates normally fall between the fourth and firstquarter of the year due to a variety of seasonal factors, particularly heatingbills and Christmas holiday spending. Many borrowers are behind on theirmortgage payments at the end of December, but are current by the end ofMarch.

The delinquency rate for prime adjustable rate mortgage loansdecreased 66 basis points to 11.92 percent and the rate for prime fixed-ratemortgage loans decreased 77 basis points to 5.45 percent. The delinquencyrate for the sub-prime ARM loans decreased 234 basis points to 35.24 per-cent, while the rate for sub-prime fixed-rate loans decreased 314 basispoints to 25.15 percent.

The delinquency rates for FHA and VA loans were 12.83 percent and 7.7percent, respectively—down 282 basis points for FHA loans and down 137basis points for VA loans. The foreclosure starts rate for prime ARM loans inTennessee increased 8 basis points to 1.25 percent, while the rate for primefixed-rate loans increased five basis points to 0.55 percent. The foreclosurestarts rate for sub-prime ARM loans decreased 39 basis points to 3.95 per-

cent, while the rate for sub-prime fixed-rate loans decreased 23 basis pointsto 2.22 percent.

The percentage of prime ARM loans in foreclosure decreased two basispoints to 4.16 percent and increased eight basis points to 1.37 percent forprime fixed-rate loans. The rate for sub-prime ARM loans decreased 39 basispoints to 12.09 percent, while the rate for sub-prime fixed-rate loansdecreased 29 basis points to 5.08 percent. The percentage of FHA loans inforeclosure increased 30 basis points to 2.56 percent. The percentage of VAloans in foreclosure increased 12 basis points to 1.82 percent.

Among the 50 states and the District of Columbia, Tennessee ranked 11thin delinquencies and 18th in foreclosures started. Nevada ranked first indelinquencies with a rate of 14.03 percent and first in foreclosure starts witha rate of 3.23 percent. Tennessee has 30 percent non-prime borrowers (FHAand sub-prime) versus a national average of 22 percent.

On a national level, the delinquency rate for mortgage loans on one-to-four-unit residential properties was 9.38 percent on a non-seasonally adjustedbasis, down 106 basis points from 10.44 percent in the fourth quarter of 2009.The seasonally adjusted delinquency rate on residential properties was 10.06percent in the first quarter, up 59 basis points from last quarter’s seasonallyadjusted rate. The non-seasonally adjusted percentage of loans in which fore-closure was started during the quarter increased three basis points to 1.23 per-cent, while the non-seasonally adjusted percentage of loans in the foreclosureprocess at the end of the quarter rose five basis points to 4.63 percent.

For more information, visit www.mortgagebankers.org.

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� Thursday-Friday, June 3-4Hotel Preston (Briley Pkwy South of I-40)733 Briley Parkway • NashvilleCheck-in: 7:45 a.m. Thursday, June 3Class: 8:00 a.m.-7:00 p.m. Thursday & Friday$340 per student/current TNAMP members only rate: $250Cost includes complete student manual, NAMB certified live classroom instructorand all NMLS/CSBS Reporting Fees.

� Thursday-Friday, June 10-11Hampton Inn & Suites962 S. Shady Grove Road • MemphisCheck-in: 7:45 a.m. Thursday, June 10Class: 8:00 a.m.-7:00 p.m. Thursday & Friday$340 per student/current TNAMP members only rate: $250Cost includes complete student manual, NAMB certified live classroom instructorand all NMLS/CSBS Reporting Fees.

� Thursday-Friday, June 17-18Best Western of Knoxville 420 North Peters Road • Knoxville, Tenn.Check-in: 7:45 a.m. Thursday, June 17Class: 8:00 a.m.-7:00 p.m. Thursday & Friday$340 per student/current TNAMP members only rate: $250Cost includes complete student manual, NAMB certified live classroom instructorand all NMLS/CSBS Reporting Fees.

� Thursday-Friday, July 1-2Hotel Preston (Briley Pkwy South of I-40)733 Briley Parkway • NashvilleCheck-in: 7:45 a.m. Thursday, July 1Class: 8:00 a.m.-7:00 p.m. Thursday & Friday$340 per student/current TNAMP members only rate: $250Cost includes complete student manual, NAMB certified live classroom instructorand all NMLS/CSBS Reporting Fees.

� Tuesday-Wednesday, July 6-7Hampton Inn & Suites962 S. Shady Grove Road • MemphisCheck-in: 7:45 a.m. Tuesday, July 6Class: 8:00 a.m.-7:00 p.m. Tuesday & Wednesday$340 per student/current TNAMP members only rate: $250Cost includes complete student manual, NAMB certified live classroom instructorand all NMLS/CSBS Reporting Fees.

� Thursday-Friday, July 22-23Best Western of Knoxville420 North Peters Road • Knoxville, Tenn.Check-in: 7:45 a.m. Thursday, July 22Class: 8:00 a.m.-7:00 p.m. Thursday & Friday$340 per student/current TNAMP members only rate: $250Cost includes complete student manual, NAMB certified live classroom instructorand all NMLS/CSBS Reporting Fees.

Required Pre-Licensing Education in Memphis, Nashville & Knoxville

For more information, call (615) 302-0001, e-mail [email protected] or visit www.tnamb.org.

Lowest Prices Ever in 2010! Two-Day Classes!

Just Added: Tennessee Law Class & Practice Exam … a $50 Value … FREE!

NMLS reported that in February 2010:� 32 percent of all who attempted the national exam failed! � 27 percent of those attempting their state exams have failed!

If you do not pass the NMLS test there is a 30-day mandatory waiting period beforeyou may retake the test. If you do not pass on the fourth attempt you must waitsix months before you will be allowed to retake the test.Remember, all Tennessee mortgage brokers and loan originators must have com-pleted their 20 hours of pre-licensing education and have passed the national andTennessee exams by July 30, 2010 or they will be unable to originate mortgages.

20-Hour SAFE Comprehensive CourseNMLS Course Approval ID#: 1350This 20-Hour Mortgage Loan Originator SAFE Comprehensive Course uses theMortgage Lending Principles and Practices, third edition textbook, which wasdesigned to meet the core criteria established by the SAFE Act for national mort-gage loan originators, including three hours on federal lending legislation-includ-ing recent changes to the Truth-in-Lending Act (TILA) and the Real EstateSettlement Procedures Act (RESPA) as a result of the Mortgage Disclosure

Improvement Act (MDIA)-three hours on the critical topic of fair lending andethics, and two hours on nontraditional lending products. In addition, the textpresents elective topics selected to give students the information they need to suc-cessfully enter the mortgage lending field. This course provides a primer on theprimary and secondary mortgage markets, as well as a review of the economic,legal, and valuation aspects of the real estate market. This course also detailstypes of loan products and finance instruments-including conventional, govern-ment, and nontraditional financing tools-available today. Students will also learnthe fundamentals of the residential mortgage lending process-from pre-qualifyingpotential borrowers, to understanding appraisals, to closing a loan.This SAFE Comprehensive Course will fulfill the 20-hour pre-licensure educationrequirement. Once this course is completed your PE hours will be uploaded to theNMLS system within seven days, be sure that your correct NMLS ID number is list-ed so that your hours can properly be submitted. The class fee includes the $30CSBS/NMLS Recording Fee.

Class schedule

*Federally regulated bank and credit union employees are currently exempt from licensing, education and testing requirements but they must still register in the NMLS.

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For information on all TNAMP events, call (615) 302-0001 or visit www.tnamb.org.

TNAMP

JUNE 2010Wednesday, June 2

Three-Hour Tennessee Law ReviewHotel Preston (Briley Pkwy South of I-40)

733 Briley ParkwayNashville

2:00 p.m.-5:00 p.m.

Thursday-Friday, June 3-420-Hour SAFE Comprehensive Course

Hotel Preston (Briley Pkwy South of I-40)733 Briley Parkway • Nashville

Check-in 7:45 a.m. Thursday, June 3Class 8:00 a.m.-7:00 p.m.

Thursday & Friday

Wednesday, June 9Three-Hour Tennessee Law Review

Hampton Inn & Suites962 S. Shady Grove Road

Memphis2:00 p.m.-5:00 p.m.


Hampton Inn & Suites962 S. Shady Grove Road • MemphisCheck-in 7:45 a.m. Thursday, June 10

Class 8:00 a.m.-7:00 p.m. Thursday & Friday


Best Western of Knoxville 420 North Peters Road • Knoxville, Tenn.

2:00 p.m.-5:00 p.m.


Best Western of Knoxville 420 North Peters Road • Knoxville, Tenn.Check-in 7:45 a.m. Thursday, June 17



Hotel Preston (Briley Pkwy South of I-40)733 Briley Parkway • Nashville

2:00 p.m.-5:00 p.m.

JULY 2010Thursday-Friday, July 1-2

20-Hour SAFE Comprehensive CourseHotel Preston (Briley Pkwy South of I-40)

733 Briley Parkway • NashvilleCheck-in 7:45 a.m. Thursday, July 1


Tuesday-Wednesday, July 6-720-Hour SAFE Comprehensive Course

Hampton Inn & Suites962 S. Shady Grove Road • MemphisCheck-in 7:45 a.m. Tuesday, July 6

Class 8:00 a.m.-7:00 p.m. Tuesday & Wednesday

Thursday, July 8Three-Hour Tennessee Law Review

Hampton Inn & Suites962 S. Shady Grove Road • Memphis

2:00 p.m.-5:00 p.m.

Wednesday, July 21Three-Hour Tennessee Law Review

Best Western of Knoxville420 North Peters Road

Knoxville, Tenn.2:00 p.m.-5:00 p.m.

Thursday-Friday, July 22-2320-Hour SAFE Comprehensive Course

Best Western of Knoxville420 North Peters Road

Knoxville, Tenn.Check-in 7:45 a.m. Thursday, July 22


The Tennessee Association of Mortgage Professionals’ Industry Partners are cru-cial to the continued operation of TNAMP. Their contributions help fund andsupport everything from education programs, luncheons, luncheon speakers,golf tournaments and special projects to the annual convention and trade show.As members of TNAMP, we should support those companies that support us.

For more information on the TNAMP IndustryPartners program, contact TNAMP ExecutiveDirector by phone at (615) 302-0001, [email protected] or visit www.tnamp.com.

TNAMP’s Industry Partner Program

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NMP EXPLORERPA

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SAFE Smart … Testing, Education and Licensing: The Testin the Bar By Paul Donohue, CRMS

Five Steps to Get the Media Exposure You Deserve By Josephine Nicholas

The NAMB Perspective

NMP Mortgage Professional of the Month: KelleyBerkheiser, Branch Development Manager, GuaranteedHome Mortgage Company

Value Nation: Is There a Better Way to Select Appraisers?By Charlie W. Elliott Jr., MAI, SRA

HOPE NOW Takes Foreclosure Solutions on the Road By Eric C. Peck

FHA Insider: New FHA Rule … All Brokers Now HaveAccess to FHA Loans By Jeff Mifsud

The Secondary Market Overview: Rub-a-Dub-Dub … TheFed Pulls the Plug By Dave Hershman

Regulatory Compliance Outlook: May 2010—MortgageLoan Officers Lose Administrative Exemption By Jonathan Foxx

Trend Spotter: Real Estate Investors … The $141 BillionMarket By Gibran Nicholas

Mortgage Originators be Warned: Credit Repair CouldEnd Your Mortgage Career! By Terry W. Clemans

Ask Tommy: Your QC Expert By Tommy A. Duncan, CMT

Forward on Reverse: Spring Sale in Reverse Country By Atare E. Agbamu, CRMS

Brokers … Don’t Jump Ship! By Paul A. Lucido

A View From the C-Suite: Branch Development … Four“C” Tips From the “C” Suite By David Lykken

Branch Development: Steer Clear of Risks and Focus onthe Finish Line By Joe Ramis

Mortgage Branching in a Changing IndustryBy Mark Buskuhl

Establishing the Branch Relationship By Shawn Sirko & Tina Jablonski

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May 2010Volume 2 • Number 5

1220 Wantagh Avenue • Wantagh, NY 11793-2202Phone: (516) 409-5555 / (888) 409-9770

Fax: (516) 409-4600Web site: www.nationalmortgageprofessional.com

Mortgage PROFESSIONALN 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

STAFFEric C. Peck

Editor-in-Chief(516) 409-5555, ext. 312

[email protected]

Andrew T. BermanExecutive Vice President(516) 409-5555, ext. 333

[email protected]

Domenica TrafficandaArt Director

[email protected]

Karen KrizmanSenior National Account Executive

(516) 409-5555, ext. [email protected]

Jon BlakeAdvertising Coordinator(516) 409-5555, ext. 301

[email protected]

Jennifer MoellerBilling Coordinator

(516) 409-5555, ext. [email protected]

ADVERTISINGTo 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 [email protected].

ARTICLE SUBMISSIONS/PRESS RELEASESTo submit any material, including articles and press releases, pleasecontact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or [email protected]. The deadline for submissions is the first ofthe month prior to the target issue.

SUBSCRIPTIONSTo receive subscription information, please call (516) 409-5555, ext.301; e-mail [email protected] or visit www.nationalmort-gageprofessional.com. Any subscription changes may be made to theattention of “Circulation” via fax to (516) 409-4600.

Statements, articles and opinions in National Mortgage Professional Magazineare the responsibility of the authors alone and do not imply the opinion orendorsement of NMP Media Corp., or the officers or members of NationalAssociation of Mortgage Brokers and its State Affiliates (NAMB), NationalAssociation of Professional Mortgage Women (NAPMW), National CreditReporting Association (NCRA) and/or other state mortgage trade associations.

Participation in NAMB, NAPMW, NCRA, and/or other state mortgagetrade associations events, activities and/or publications is available ona non-discriminatory basis and does not reflect the endorsement of theproduct 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 complianceaspects of advertisers, products or services and/or the editorial contentcontained in NMP Media Corp. publications. National Mortgage ProfessionalMagazine 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 Magazineis published monthly by NMP Media Corp.

Copyright © 2010 NMP Media Corp.

NATI

ONAL

MORTGAGE PROFESSIONAL

MAGAZINE

NMPNMP

A Message From NMP Media Corp. Executive Vice President Andrew T. Berman

Making the change?So many mortgage brokers over the last two years have been facing some serious deci-sions, such as closing up shop and joining a larger entity (i.e. branch manager position).In this issue, we focus on Branch Development. The section begins with a piece fromPaul A. Lucido of PRMG call “Brokers … Don’t Jump Ship!“ Paul makes a great case forriding out the storm in what many still feel is a great business model. In this section,David Lykken’s “A View From the C-Suite” shares some tips on how to find the rightbranch partner when looking to make a change. Later in the section, Joe Ramis ofInlanta Mortgage shares his tips on what to demand from your partner when looking to

make the change. There are a few more pieces in the section that will help you better inform yourselfbefore making the change. The section wraps up with a “Who’s Hiring” directory which includes some ofthe top branch opportunities currently out there.

Inspiration for success in 2010 andbeyond from Mortgage RevolutionOn May 6-7, there was an event happening in SanFrancisco that was truly a game-changer for many …Mortgage Revolution. This Mastermind Event was the cre-ation of Mark Green, Mark Madsen and Brian Larrabee. InSan Francisco, there was help from local hosts like ThinkBig, Work Small and folks like Ginger Bell who helped puttogether the amazing speaker lineup, and David Childerswho handled the logistics of the event.

Mortgage Revolution is an event for the mortgageoriginator by the mortgage originator. The speakers,many of whom are top originators in their respectivemarkets, are free-flowing with their ideas. As Carl Whitefrom MortgageMarketingAnimals.com put it: “The shar-ing of the ideas. The mastermind concept. There is nomine and yours. Everyone is sharing their best ideas. Aswe share ideas together, I’ll benefit from yours and youwill benefit from mine.”

In Carl White and Chris Brown’s session, they sharedideas to help create Facebook pages that “attract referringreal estate agents like flies to a picnic.” The session hadattendees including Tim Swierczek of Creative Mortgage Partners in Minnesota and Matt Miller from FirstPriority Financial in Sacramento walk out of the session ready to start implementing Carl White’s Facebookninja tactics immediately. Even video master Roberto Monaco, learned about perfecting his Facebookpage.

“I learned that I am not being effective with my Facebook page,” said Monaco. “I have lots of friendsand family view my page, but my Facebook page is not targeted. I have thousands of people in my socialnetwork, but they are not clients and potential clients. I am attracting people, but not the people whoneed help with my services. It’s about the numbers with the right people.”

Monaco delivered a powerful session with Jeff Paro on video marketing. Roberto gave simple steps onhow to make a video right there in the session! He actually had the room full of attendees walking out ofthe room screaming, “I am a video making machine!“ (spoken in Roberto’s Brazilian accent). BetweenRoberto and Jeff’s session, and Frank Garay and Brian Stevens from Think Big Work Small, it’s no wonderguys like Ted Gross from Milestone Mortgage walked away saying, “I need to get video savvy!”

There were countless other power presentations at Mortgage Revolution, too many to list here, andthere will be a video of the full conference available shortly. In fact, the founders of Mortgage Revolution,agreed to offer the most powerful presentation of the event (quite possibly the most powerful ever at amortgage industry event), Todd Duncan’s opening session. Todd is responsible for training some of theindustry most successful mortgage originators, yet faced some failure and personal setbacks. He took thesehard lessons and presented a session that left guys like Hans Bruhner of First Priority Financial from SamoaCounty, Calif. saying, “Todd Duncan talking about transparency, accountability and memories was huge.Life changing!” You can view Todd’s presentation at www.MRev.org.

As Sponsorship Chairman of Mortgage Revolution, I was truly fortunate to have been able to take partin this event and get a first-hand perspective of seeing the inspiration happen live in person! As TorryBurdick from Mortgage Success Source put it, “This has been the most amazing two days of the industrygetting together, getting ready and poised to take back the world. Everyone has been very giving by shar-ing what is working for them. There were a lot of great speakers and sessions … not a lot of platitudes,but really a lot of back-to-basics sessions and presentations on what works successfully and how these suc-cesses can work for you.”

Sincerely,

Andrew T. Berman, Executive Vice PresidentNMP Media Corp.

Todd Duncan, one of the speakers of the MortgageRevolution event in San Francisco, delivers hisinspirational message to a packed house

National Credit Reporting Association Inc.125 East Lake Street, Suite 200 � Bloomingdale, IL 60108

Phone #: (630) 539-1525 � Fax #: (630) 539-1526Web site: www.ncrainc.org

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The National Association of Mortgage Brokers

7900 Westpark Drive, Suite T-309 � McLean, VA 22102Phone: (703) 342-5900 � Fax: (703) 342-5905

Web site: www.namb.org

President—Jim Pair, CMCMortgage Associates Corpus Christi6262 Weber Road, Suite 208Corpus Christi, TX 78413(361) [email protected]

President-Elect—William Howe, CMC, CRMSHowe Mortgage Corporation9414 E. San Salvador Drive, #236Scottsdale, AZ 85258(602) [email protected]

Vice President—Michael D’Alonzo, CMCCreative Mortgage Group1126 Horsham Road, Suite DMaple Glen, PA 19002(215) [email protected]

Secretary—Ginny Ferguson, CMCHeritage Valley Mortgage Inc.5700 Stoneridge Mall Road, Suite 150Pleasanton, CA 94588(925) [email protected]

Treasurer—Don Frommeyer, CRMSAmtrust Mortgage Funding Inc.200 Medical Drive, Suite DCarmel, IN 46032(317) [email protected]

Joe CamarenaThe Mortgage Source10120 Southwest Nimbus Avenue, Suite C-7Portland, OR 97223(503) 443-1060 � [email protected]

John Councilman, CMC, CRMSAMC Mortgage Corporation2613 Fallston Road � Fallston, MD 21047(410) 557-6400 � [email protected]

Olga KucerakCrown Lending8700 Crown Hill Boulevard, Suite 804 � San Antonio, TX 78209(210) 828-3384 � [email protected]

Walt ScottExcalibur Financial Inc.175 Strafford Avenue, Suite 1 � Wayne, PA 19087(215) 669-3273 � [email protected]

Don StarksD.C. Starks Mortgage Associates Inc.141 South Main Street � Bourbonnais, IL 60914(815) 935-0710 � [email protected]

Marty Flynn—President(925) 831-3520, ext. [email protected]

Tom Conwell—Vice President(248) [email protected]

Daphne Large—Treasurer(901) [email protected]

William Bower—Director(800) [email protected]

Mike Brown—Director(800) [email protected]

Susan Cataldo—Director(404) 303-8656, ext. [email protected]

Nancy Fedich—Director(908) 813-8555, ext. [email protected]

Sanford (Sandy) Lubin—Director(805) [email protected]

Judy Ryan—Director(800) 929-3400, ext. [email protected]

Tom Swider—Director(856) 787-9005, ext. [email protected]

Donald J. Unger—Director(303) 670-7993, ext. [email protected]

NCRA StaffTerry Clemans—Executive Director(630) [email protected]

Jan Gerber—OfficeManager/Membership Services(630) [email protected]

PresidentLiz Roberts-Fajardo, GML(702) [email protected]

President-ElectGary Tumbiolo, CMI(919) [email protected]

Senior Vice PresidentSharon Patrick, MML, CMI(386) [email protected]

Vice President/Northwestern RegionJill M. Kinsman(206) [email protected]

Vice President/Western RegionTim Courtney(760) [email protected]

Vice President/Central RegionCandace Smith, CMI(512) [email protected]

Vice President/Greater NortheastRegionColleen-Therese McKeever, CMI(646) [email protected]

Vice President/Southeastern RegionJessica Edmonston(919) [email protected]

SecretaryLaurie Abisher, GML, CMI(661) [email protected]

TreasurerKay Talley, MML(919) [email protected]

ParliamentarianHulene Bridgman-Works(972) [email protected]

NAMB Board of Directors

National Association of ProfessionalMortgage Women

P.O. Box 140218 � Irving, TX 75014-0218Phone: (800) 827-3034 � Fax: (469) 524-5121

Web site: www.napmw.org

Officers

Directors 2010 Board of Directors

National Board of Directors

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NAMB applauds threehousing bills approved bythe House Committee onFinancial Services

The NationalAssociation ofMortgage Brokers

(NAMB) has applauded the House Committeeon Financial Services for passing three billspositively affecting the mortgage indus-try, clearing the bills for considerationby the full U.S. House ofRepresentatives. The bills would,among other things, provide additionalfunding for the U.S. Department ofAgriculture (USDA) Rural HousingService Loan Guarantee Program(Section 502 Loans); would extend theNational Flood Insurance Program; andwould provide necessary FederalHousing Administration (FHA) reform tocontinue offering borrowers affordablemortgage options.

“These bills have cleared a legislativehurdle today, and NAMB commendsmembers of the House Committee onFinancial Services for taking a step for-ward in addressing the nation’s afford-able housing needs,” said NAMBPresident Jim Pair, CMC.

NAMB recently sent a letter toCongress urging them to not allow theUSDA Loan Guarantee Program toexhaust its fiscal year federal funding,which was projected to run out withindays. HR 5017, the Rural HousingPreservation and Stabilization Act of2010, sponsored by Rep. Paul Kanjorksi(D-PA), would provide additional budg-et authority for USDA to continue toguarantee rural loans, as well as makethe Loan Guarantee Program self-fund-ed going forward. HR 5017 has beenapproved on the House floor under sus-pension of the rules.

NAMB, along with a coalition ofindustry representatives, sent a letter tothe House Committee on FinancialServices in support of FHA reformincluded in HR 5072, the FHA ReformAct of 2010, sponsored by Reps.Maxine Waters (D-CA), Barney Frank(D-MA), Al Green (D-TX), Shelley MooreCapito (R-WV).

NAMB also advocated for an exten-sion to the National Flood InsuranceProgram and other provisions designedto strengthen the program included inHR 5114, the Flood Insurance Reform

Priorities Act of 2010, sponsored byRep. Maxine Waters (D-CA). HR 5114 willbe considered on the House floor short-ly, a definitive date has not yet beenchosen.

“NAMB looks forward to continuingits work with members of Congress asthe bills move forward, in what is sureto be a victory for consumers,” saidPair.For more information, visit www.namb.org.

FHA to issue regulationsto increase net worthrequirements ofapproved lenders

The Federal HousingAdministration (FHA)has announced newregulations to fur-ther reduce and bet-

ter manage counterparty risks to itsinsurance funds as it continues to playa critical role in the nation’s housingmarket. FHA will issue regulations toincrease the net worth requirementsof FHA-approved lenders, strengthenlender approval criteria, and makelenders liable for the oversight ofmortgage brokers.

“These changes support qualitymortgage lenders while excludingorganizations that are ill-equipped tohandle the risk associated with marketvariations,” said FHA CommissionerDavid H. Stevens. “That is particularlyimportant now when a robust, compet-itive mortgage finance market is a cru-cial element in rebuilding the Americaneconomy. Lenders bear the overall riskof FHA-endorsed loans, therefore itmakes sense for them to approve theircounterparties and have sufficient cap-ital to operate.”

The final rule permits FHA to moreeffectively focus its resources onlenders that pose the greatest potentialthreat to its insurance funds and toensure that lenders possess theresources appropriate for the financialservices they deliver. FHA solicited pub-lic comments on this new regulationand considered those comments in thedevelopment of the final rule.

On Sept. 18, 2009 FHA CommissionerStevens announced a set of credit poli-cy changes that enhanced FHA’s risk

SAFE Education’s Best Kept SecretImagine a class that offers the convenience of online access, yet gives youthe powerful experience of a live event. Think about a class without the costof travel or disconnect from the office, yet puts you right into the class livewith the instructor in real-time.

The revolution in mortgage education that is taking the industry by sur-prise is Online, Live Equivalent With Live Instructor. Often an overlooked op-tion, this Nationwide Mortgage Licensing System (NMLS)-approved “classroomequivalent” format delivers the convenience of online and the powerful im-pact of a live classroom event.

Online, Live EquivalentBecause of the obtuse descriptive name “Live Equivalent,” many people aremissing the distinct advantages of this best kept secret in education. This ver-satile format is an “online” delivery of an actual live class event. Online, LiveEquivalent education can be streamed anywhere across the nation to yourcomputer or to a group in the conference room at your office. This interac-tive format may include full audio and video streaming of the instructorteaching the material in real-time.

When considering an Online, Live Equivalent course, be sure your provideroffers all the course text, the live PowerPoint presentation, exercises, quizzesand the ability to interact directly with the instructor. One advantage to “liveequivalent” is that your questions are answered and you hear the responsesto other students live while you are absorbing the material. Your retention isenhanced by participating in a live class over a concentrated two- or three-day period and because you are not reading or working alone.

Know Your OptionsWhen choosing your pre-licensing (PE) course, keep in mind not every edu-cation format is appropriate for you. Each person’s learning style is different.Only you know how you learn and retain information. If you prefer online ed-ucation to live classroom, keep in mind self-paced online is approved for con-tinuing education, but not for PE. The only other approved online format forPE is instructor-led online.

Instructor-led online education is similar to a correspondence course witha defined start and end period; normally spread out over 10 days or twoweeks. The instructor leads the students through the course by assigning read-ing material, exercises and quizzes that the student must complete on theirown. The advantage of this format is that the student can fit the courseworkin on their own free time. The disadvantages are the student must do all thereading on their own and the additional time it takes to complete all the ex-ercises and assignments. Do you remember homework?

SAFE-Smart TipYour education choice will be critical to your success on the test, so choosewisely. If you prefer online education, the advantages of Online, Live Equiv-alent are significant. It delivers the powerful impact of a live class, the ac-cessibility of online, you get the class done in 20 concentrated hours andthere is no homework.

My SAFE-Smart Tip is to check out this best kept secret of SAFE education.

Paul Donohue, CRMS is a 23-year industry professional and founder of AbacusMortgage Training and Education. Paul served on two NMLS working groups, es-tablishing the new national education protocols. Go to AbacusMortgageTrain-ing.com to find out more about your obligations for testing, education andlicensure, or call (888) 341-7767.

continued on page 7

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• Rapid Rescore (NO DOC)• Score Increasing Tools• Monthly Credit Score Monitoring

(SCORE WATCH)• Instant Credit Reports• Same Day Credit Supplements

Learn more about our services by calling,Lorenzo Pugliano, President and CEO at 631-299-2084.www.platinumcreditservices.com

Here’s what our customers are saying:

“My loan officers have been closing more loansby running credit reports through PCS’s creditscoring services”

in the media whom you want toaddress, and drill down on the messageyou will be sending them.

Ask yourself questions like:

� Which media outlets are best posi-tioned to get the word out about youand your knowledge?

� What are the currentheadline stories inyour market, and howcan you contribute anew voice to thosesubjects?

� What angles are thesemedia outlets notaddressing that youhave the scoop on?

Once you’ve answeredthese questions, you havewhat you need to startcreating the message;now you can start writingyour messages down inthe form of press releases.

When you tell the localmedia how a national cri-sis is affecting the localmarket (true stories fromyour clients or referral

partners), this gives you the star qualityand authentic perspective that othersmay not have.

I suggest telling your messagethrough a press release format, becauseit’s something the media outlets areused to seeing; however, you can writea talking points outline, which will alsoserve a good purpose when you getready to approach the media.

In writing a press release, you wantto make sure you stick to facts and yourexpert opinion on how these factsaffect your target market. Make sureyour release is written in story format,spiced throughout with quotes by youas the expert. Many outlets will copyand paste your quotes directly intotheir print/online media or re-quoteyou on the radio/TV. You will want tomake sure the title of your release isnot too long, because they won’t openit with a lengthy title. Sprinkle directlinks to your site, graphs, charts, etc.,within the release; this serves two pur-poses—it points the media back to you,and it validates your release. Make sureyou do not sell or market yourselfthroughout the release or you will get“blacklisted.” These releases are strictlya way to get your information to themedia—the fact that you are the expertquoted, “sells” you to the media andaudience.

What many of us don’t always realizeis that, though the media may seemlike they are unapproachable, in mostcases, they are desperate for new infor-

How many times have you watched thenews, listened to the radio or read thepaper and thought, “I could have beenthe ‘mortgage expert’ they inter-viewed.” If your answer is “manytimes,” this article is for you. As a pub-lic relations agent with clients scatteredthroughout different industries acrossthe country, I would liketo pass on five PR tipsthat will help you posi-tion yourself as themedia’s local expert.Now, more than ever, ourindustry needs positivemedia exposure, so readon and get ready to bethe media’s newest star!

Step #1: FindyourselfThe first step in gettingthe media exposure youdeserve is to understandyour own value and whythe media needs you.There are several thingsyou may be an expert in,including:

1. Unique financial con-cept(s) you implement in your mort-gage practice2. A segment of your local market thatyou focus on:

a. Investment propertiesb. High-end homesc. Foreclosures

3. Unique referral partners

The list is endless; each of us operatesour business differently, and we all havesomething at which we are so good wecould do it in our sleep. Take some time toreally find out what that niche is for you.

Once you find out your forte, andwhere you are most confident in yourmortgage practice, go one step furtherand make sure you thoroughly under-stand your subject matter and becomea student of the market and studyhuman behavior. Examine what othersare doing and talking about in themedia, see what angles they are pre-senting on the subject matters you aremost qualified in. Be a student of yourclients and referral partners—find outwhat the market is lacking that themedia is not providing. Use resourcesavailable to you to refine your expert-ise, and get grounded—be the best inthose areas that you can possibly be.

Now that you’ve solidified your cor-ner of the market, you are ready to goout and educate the media.

Step #2: Create your tar-get audience and messageIt’s time to create the group of people

Five Steps to Get the MediaExposure You Deserve

“There’s somethingelse you’ll want tokeep in mind—the

media doesn’t alwayscredit you with its

newfound knowledgethat you’ve so gra-ciously provided.”

By Josephine Nicholas

mation, facts and story ideas. You willbe invaluable to them if you providethem with quality content.

Step #3: Send the infor-mation to the mediaYou are now ready to send your infor-mation out to the media. There are pro-grams available that have the directcontact information to local and nation-al media outlets. You can plug intothose sources, or you can gather all thedirect contact information for your tar-get media outlets and send it to themone by one. You can also connect with aPR agent to do this for you. Many PRagents charge unnecessarily largemonthly fees, so make sure you findone who is charging a fair price for theservice they are offering.

Step #4: Respond well tothe mediaMake sure that you and your teammembers prepare a system to handlethe media response. Sometimes, youwill get an immediate flurry of activityfrom the media; other times, they saveyour release and information and con-tact you at a future date; and still othertimes, they reprint your quotes, or talkabout you on the radio and TV withouttelling you first.

Remember, you are helping themedia sound smarter—they value thatand respect you for helping them carryout their job well. Additionally, you arecontributing to the greater good of soci-ety by easing clients’ and the public’sfears—so, keep in mind that, althoughyou won’t always know the entirety ofthe impact you’re having, be assuredyour message is reaching its audience.

There’s something else you’ll want tokeep in mind—the media doesn’talways credit you with its newfoundknowledge that you’ve so graciouslyprovided. Yet, whether you are or aren’tgetting the credit for the informationquoted, keep the big picture in mind—you are affecting more people than youcould possibly imagine by passing thisknowledge on to the media, and youwill get rewarded.

When the media outlets answer,respect their time and questions—remember they are generally workingon very tight deadlines. In your phone

interview or e-mail reply back, stick toyour expert opinion on how the newsand the facts in your press release affectthe media’s target market. If you don’thave the correct information readilyavailable, do not make the mistake ofmisquoting an answer to their ques-tion; tell them you will get back tothem with that particular answer. Then,promptly use the resources available toyou to gather that information andsend it to them that same day. They willbe more impressed with your solutionto take more time and effort to find forthem the correct answers, than withyou making a fool out of them by sup-plying them with misinformation. Thisis also an opportunity for you to showthat you run a high quality mortgagefirm, by having access to resources oth-ers may not have available to them.

Remember, once you earn themedia’s trust as a reliable source, theywill call on you time and again.

Step #5: RepeatMedia outreach is not a one-nightstand; you want to repeat these stepsover and over in your business practiceto get the most effect out of yourmedia campaign. As with everything inlife, consistency matters, so stayfocused and don’t get discouraged.

Once you’ve earned a good reputa-tion with the media contacts, mediaprofessionals will forward your releasesto colleagues, save your releases, andput you on their lists so that when theyneed a certain question answered,they’ll reach out to you, the expert.

Josephine Nicholas runs her own publicrelations agency, icheadlines.com. Shespecializes in helping map out individu-alized media campaigns, and offers acomprehensive array of services to han-dle the diverse PR needs of her clients.Josephine’s clients have also appeared inother national and local media outlets,including, but not limited to, MSNBC,Fox Business News, CNN, NPR; in TheWall Street Journal, Reuters, The NewYork Times, The Washington Post,Financial Advisor Magazine, FinancialPlanner Magazine, CPA Magazine, andvarious entertainment and lifestyle out-lets. She may be reached by e-mail [email protected].

The Ever Growing Voice of NAMBin Our Nation’s CapitolA Message From NAMB President Jim Pair, CMC

There seems to be some concern with a small number our membersregarding what is happening in Washington, D.C. and what theNational Association of Mortgage Brokers is doing to ensure ourindustry is being protected.

Let me assure you that legislative protection is the highest priori-ty of your association. Our staff and our lobby team are constantly

monitoring Capitol Hill and the agencies to learn the hot issues of the day. Therapport we have on the Hill and with the agencies is the best we have ever expe-rienced in the history of our association.

Let’s look back and see where we were and where we are now. For manyyears, we played a very small role in Washington, D.C. It was difficult to findanyone who would meet with us to hear our position on issues that directlyaffect our industry.

Through the strong leadership of previous boards and a constant messagethat benefitted not only our industry, but protected the consumer, we nowhave a seat at the table. We are invited to present our position at various leg-islative committee hearings. We are able to meet with the various regulatoryagencies as proposed rules are being formulated. We are respected as a voiceof our industry.

Some of our positions have taken years to be implemented either by Congressor the regulatory agencies. Let’s look at two good examples of how long theprocess can take.

The first example is the passing of the Secure and Fair Enforcement forMortgage Licensing Act (SAFE Act), which created the National Registry and thelicensing of loan originators. Another example is the Federal HousingAdministration (FHA) now allowing all mortgage brokers to originate FHA loanswithout having to go through the cost of an audited statement. These issues wereadvocated by NAMB for years before they became a reality.

The strong relationship that NAMB has developed with Congress over the pastfew years gives us the opportunity to be a part of legislative process from the verybeginning. We now have the opportunity to hear what is being considered andlend our voice on how this would impact our industry and the consumers. Twoexamples of NAMB being invited to be a part of the process in the early stages waswhen Congress was considering a net worth requirement of $1 million for mort-gage brokers and the banning of yield spread premiums (YSPs) as part of new bill.Working directly with staff and the legislators themselves in the very beginning,we were able to have both dropped. These two issues would have put the mort-gage broker out of business.

It seems that there is something happening, almost on a daily basis, inWashington, D.C. It is very important that you, as a member of NAMB, are keptinformed of those issues that affect our industry and the way we do business.NAMB communicates these messages by e-mails to its membership. We uselegislative alerts, weekly “News From NAMB” bulletins and “Calls to Action”when your help is needed on a particular issue. Hopefully, if you are an NAMBmember, you are receiving all these types of correspondence from us. If not,please check your computer to see if it is blocking e-mails from NAMB. If it isnot, please contact Paul Nierman of NAMB’s Membership Department [email protected] to verify your current e-mail address in the NAMBdatabase. This will allow us to make any corrections to ensure you receivethese important e-mails in the future.

NAMB’s Web site, www.namb.org, is a good way to keep yourself updated on6

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legislative matters and other important information about what is happeningwith your association. You will be able to review the accomplishments of yourassociation by clicking on the document, “What Has NAMB Done in 2009.” Thisdocument will give you a breakdown of the month-by-month happenings of theassociation in 2009.

The reasons for the success of our national association in Washington, D.C.over the past years is due to the dedicated staff at NAMB, the many volunteersand members who have served on the Government Affairs Committee andhave given so much of their time and talent to the legislative issues, and anexceptional team of lobbyists. Without these ingredients, NAMB would nothave been able to accomplish our objective of protecting our industry and theconsumers we serve.

Jim Pair, CMC is with Mortgage Associates Corpus Christi and is president of theNational Association of Mortgage Brokers. He may be reached by e-mail at [email protected].

Certification? Certainly!The “Buzz” Around Certification

A Message From NAMB Certifications CommitteeChair Pava J. Leyrer, CMC, CRMS

My article this month is really geared toward those individuals whohave already taken the voluntary steps of validating the knowledge,skills and abilities they possess beyond the regular scope of their jobs.We have the attitude that our professions are worth the extra effortto become certified and proudly display those certifications.

We realize the growing statistics that consumers are looking forthose individuals who set themselves apart and are able to demonstrate their will-ingness to excel. It has been increasingly difficult for mortgage brokers and loanoriginators to show that the media accounts of the minority in our industry areno different than bad actors in other industries.

Being certified and showing your commitment to honesty and lendingintegrity are key ways to promote our passion and ability to provide for fam-ilies in our communities. Those of us still surviving and fighting for the rightsof our customers show these very aspects every time we help someone inneed.

The National Association of Mortgage Brokers is proud of every person who hastaken the time and effort to reach the goals of certification they earned througheducation, experience and hard work. This is nothing new to those of us who arediligent in what we have done for homeowners and will continue to do. Share thebenefits you have received from certification with someone today. Let them knowthat this is a great way to promote and take pride in a profession that is extreme-ly important and represents our united dream … the American dream of home-ownership.

Those who are not certified may already have the education and criteria to meetthe requirements. Check out the “Certification” section of NAMB’s Web site,http://www.namb.org/namb/Certification_Home.asp?SnID=1414598388, apply todayto broaden your horizons and become certified.

Pava J. Leyrer, CMC, CRMS, is president and owner of Heritage National MortgageCorporation in Grandville, Mich., and Certifications Committee chair for theNational Association of Mortgage Brokers. She may be reached by phone at (616)534-4993 or e-mail [email protected].

For more information on the National Association of Mortgage Brokers, visit www.namb.org.

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• Tax Return Verification (4506 tax transcript donein less than 24 hours in most cases)

• Flood Certification Report• Automated Valuation Model (AVM) Reports• Verification of Employment (VOE)



“By using PCS’s VOE service, I was able to move thecost onto the HUD1 and virtually get the VOE’s done atno cost to my company”

“PCS’s high level of customer service ensures that myloans close on TIME!”

Consensus of opinion?Although Charlie W. Elliott Jr.’s article [National Mortgage Professional Magazine,April 2010 issue, page 4] was well written and easy to understand, his ‘article’ ormore accurately, editorial, “The Mortgage Meltdown and Appraiser Selection,”was long on hyperbole and short on facts. He never mentioned whose opinionwas being referred to, but used ‘consensus of opinion’ as the basis to support amodel that benefits his appraisal business makes a very weak argument.

Everyone faces moral and ethical decisions, why do appraisers need spe-cial consideration to keep them honest?

It would have been much more enlightening to read why appraisersaren’t strong enough to resist unethical and illegal acts.

Then these reasons could be addressed through background checks, ethicstraining, etc. This would be much more efficient, and ultimately, benefit theindustry and more importantly, the consumer. On the surface, the currentappraisal process sounds logical, but in practice it’s a mess and is hurting theconsumer in countless ways, which I’m sure you are already aware.

Should we also create intermediaries between loan officers and con-sumers to avoid undue influence? How about between lobbyists and legis-lators? Did you know we can eliminate car accidents by banning automo-biles? Yes, stricter rules do come at a price, whether you’re an advocate ornot depends on who is paying, and who is collecting.—Brian D. Tata, President, Advanced Mortgage Corporation, Warwick, R.I.

Certainly, I respect Mr. Tata’s opinion and his right to it. It is not my natureto argue over such issues; however, given his interest in facts, I will respondwith some facts to ponder.

� Due to bad loans, Fannie Mae and Freddie Mac have both been taken over bythe federal government and are costing the taxpayers billions of dollars. (fact)

� Since 2007, we have had 230 banks failures, due to toxic mortgages,with Federal Deposit Insurance Corporation (FDIC) losses of $60 billion,and there is much more to come. (fact)

� By the end of 2011, we will have experienced, in four years, 10-plus mil-lion home foreclosures. (likely fact)

Our country cannot afford another mortgage meltdown. Backgroundchecks and ethics training will not solve the problem. The taxpayers, bankstockholders and homeowners deserve better.—Charlie W. Elliott Jr., MAI, SRA, President, Elliott & CompanyAppraisers, Greensboro, N.C.

approved by FHA, will be author-ized to continue to originate FHA-insured loans through the end ofthe calendar year without sponsor-ship of an FHA-approved lender.Commencing Jan. 1, 2011, howev-er, the origination authority willend.

For more information, visit www.hud.gov.

FHA withdraws approvalof two lenders

The Federal HousingAdministration (FHA)has announced that itis permanently with-drawing its approvalof Atlanta-based RSA

Financial Inc. and 1st AllianceMortgage LLC of Houston, Texas. Theactions announced prevent theselenders from originating and under-writing new FHA-insured mortgages orfrom participating in the FHA single-family insurance program. The U.S.Department of Housing & UrbanDevelopment’s (HUD) MortgageeReview Board (MRB) also voted toimpose a $15,000 civil penalty againstRSA and seek $267,900 from 1stAlliance.

HUD’s MRB cited RSA for misleadingHUD that it was properly licensed bythe Georgia Department of Bankingand Finance at the time the companysubmitted an application to FHA forlender approval. In addition, the MRBalleges that RSA submitted false and/ormisleading information regarding thecriminal conviction and sanction histo-ry of its owner and executive, RamseySuphi Agan. HUD claims 1st Allianceengaged in prohibited branch arrange-ments, provided false certifications,failed to implement a quality controlplan, and a number of other violationsof HUD/FHA standards.

“If lenders want to do business withthe FHA, it’s critical that they providecomplete and truthful information sothat we can properly determine whowe’re dealing with,” said FHACommissioner David H. Stevens. “If anylender can’t operate within FHA’s guide-lines, they can’t do business with us.”

The permanent withdrawal of RSAFinancial’s FHA approval is based uponviolations set forth in a Notice ofViolation dated Dec. 4, 2009. RSA’sapplication to FHA contained falseand/or materially misleading informa-tion in connection with RSA’s failure toobtain proper licensing in the State ofGeorgia and in connection with Agan’shistory of criminal convictions andadministrative sanctions. Specifically,RSA represented that company officials“are neither currently, nor have everbeen, debarred, sanctioned, fined, con-victed, denied approval, or refused alicense by any state, federal, or local

management function, including thehiring of a Chief Risk Officer for thefirst time in the agency’s 75-year histo-ry. In addition, Stevens announced hisintent to propose new regulations tofurther strengthen FHA’s risk manage-ment. The final rule, to be published inthe next few days, makes good on thatpromise and will:� Strengthen the capacity of FHA-

approved lenders: Since 1993, FHAhas required approved lenders tohave a net worth of at least$250,000. To ensure that FHAlenders are sufficiently capitalizedto meet potential need, effectiveimmediately, all new lender appli-cants for FHA programs must nowpossess a minimum net worth of $1million.

� Provide sufficient time for currentFHA lenders to increase net worth.

Effective one year following theenactment of this rule:� Current FHA approved lenders, with

the exception of small businesses,must possess a minimum net worthof $1 million;

� Current FHA-approved small busi-ness lenders must possess a mini-mum net worth of $500,000.

Effective three years following theenactment of this provision:� Approved lenders and applicants to

FHA single-family programs musthave a net worth of $1 million plusone percent of total loan volume inexcess of $25 million.

� Approved lenders and applicants toFHA multifamily programs musthave a minimum net worth of $1million.

� Multifamily lenders that alsoengage in mortgage servicingmust have an additional one per-cent of total volume in excess of$25 million.

� Multifamily lenders that do notperform mortgage servicing musthave an additional 0.5 percent oftotal loan volume in excess of $25million.

� Streamline lender approval: FHA-approved lenders currently assumeliability for all the loans they origi-nate and/or underwrite. Whilemortgage brokers will continue tobe able to originate FHA-insuredloans through their relationshipswith approved lenders, they willno longer receive independentFHA eligibility approval. Thesechanges align FHA with FannieMae and Freddie Mac and havepotential to increase the numberof mortgage brokers eligible tooriginate FHA-insured loans whileproviding for more effective over-sight of brokers by FHA-approvedlenders. Mortgage brokers or otherthird-party originators, already

news flash continued from page 4

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“Our data shows that mortgage ser-vicers are continuing a strong effort onproprietary and HAMP modifications inthe first two months of 2010,” saidFaith Schwartz, executive director ofHOPE NOW. “Additionally, we areencouraged by the decreases in seriousdelinquencies and foreclosures. Withalmost four million loans currently indefault, we realize that our work is notyet done. Since 2007, the industry hascompleted more than 6.7 million work-out solutions, including almost 2.7 mil-lion loan modifications. Mortgage ser-vicers and housing counselors haveworked extremely hard through aggres-sive borrower outreach and HOPE NOWremains determined to keep as manyfamilies as possible in their homes.”

HOPE NOW continues its efforts toreach troubled homeowners via face-to-face workshops held across the countryand the Homeowner’s HOPE Hotline at(888) 995-HOPE. Additionally, HOPENOW recently introduced its Web portal,Hope LoanPort, which allows non-profithousing counselors working with home-owners to securely upload completedHAMP modification applications directlyto participating servicers.For more information, visitwww.HopeNow.com.

MBA report: Nearly 1.2million households lostduring the recession

Approximately 1.2million householdswere lost from 2005-2008, despite thepopulation increase

of 3.4 million in the study area, asAmericans experienced one of the deepestrecessions in decades, according to a studyreleased by the Mortgage BankersAssociation (MBA). This decline in house-holds is likely what contributed significant-ly to the excess supply of apartments andsingle family homes on the market.

The study, “What Happens toHousehold Formation in a Recession,”which was conducted by Professor GaryPainter of University of SouthernCalifornia (USC) and sponsored by theResearch Institute for Housing America(RIHA), analyzes the impact of economicand housing conditions on householdformation and how the recent recessionhas affected Americans’ propensity toform new households, mobility trends,and changes in the rate of overcrowding.

“With such a significant drop in house-holds nationwide, it is clear the mostrecent recession impacted individuals’decisions to move out on their own andcaused many Americans to join alreadyformed households,” said Painter, associ-ate professor in the School of Policy,Planning and Development at USC. “Dueto data limitations, my analysis had tofocus on household formation as of 2008.Clearly, given the depth of the downturn

government agency.” Agan has beensuspended and debarred by HUD on atleast two occasions and has two felonyconvictions.

In 1982, Agan pleaded guilty to twocounts of knowingly submitting falsestatements for the purposes of influ-encing the actions of a federallyinsured bank. He was sentenced to twoyears in prison (suspended), two yearsof probation, and fined $10,000. Theseactions led to the permanent with-drawal of his former FHA-approvedcompany, Adana Mortgage Bankers,and a five-year debarment of Agan. In1988, Agan was convicted of multiplecounts of bribery by a Georgia Court,causing HUD to debar Agan indefinite-ly. RSA has 30 days to challenge thewithdrawal action before an adminis-trative law judge.

The permanent withdrawal of 1stAlliance’s FHA approval is based onviolations set forth in a Notice ofViolation dated Oct. 21, 2009. TheMRB alleges that 1st Alliance usedindependent contractors to originate708 loans from branch offices thatwere not true branches of the compa-ny and then falsely certified thesecontractors were full-time employeesof the company. The MRB also con-tends 1st Alliance failed to adopt andmaintain a required quality controlplan; failed to report employee com-pensation on IRS Form W-2; chargedconsumers unallowable, excessive orduplicative loan processing and origi-nation fees; and failed to properlyensure that fees “paid outside of clos-ing” were listed on borrowers HUD-1Settlement Statements.For more information, visit www.hud.gov.

HOPE NOW reports ser-vicers finished 148,000loan mods in February

HOPE NOW, the pri-vate sector allianceof mortgage ser-vicers, investors,mortgage insurers

and non-profit counselors has announcedthat its February 2010 data estimates95,586 homeowners received propri-etary loan modifications for the month.Combined with the United StatesTreasury’s recently released HomeAffordable Modification Program (HAMP)data that showed 52,905 HAMP modifi-cations for February, a total of 148,000loan modifications were provided tohomeowners in February. Approximately78 percent of the proprietary loan modi-fications completed in February includedreduction of principal and interest.

The data also showed that foreclo-sure starts and sales dropped 17 per-cent for the month, along with a fourpercent decrease in the number of 60-plus day delinquencies. The total num-ber of loan workout plans provided tohomeowners (including repaymentplans) in February was 279,831.


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• We make FHA and HVCC compliance easywith our tools built around your business

• We work with YOUR appraisers• Online automated appraisal ordering



“PCS appraisal management services allowedme to create a virtual firewall between the loanofficers and the appraisers, yet still maintain a high level of quality, fast, and accurate appraisals”

Each month, National MortgageProfessional Magazine will focus on oneof the industry’s top players in our“Mortgage Professional of the Month”feature. Our readers are encouraged tocontact us by e-mail at [email protected] for consideration inbeing featured in a future “MortgageProfessional of the Month” column.

This month, we had a chance tochat with one of our advertisers, KelleyBerkheiser, Branch DevelopmentManager of White Plains, N.Y.-basedGuaranteed Home Mortgage Company.Kelley oversees the hiring, licensing,transitioning and marketing ofGuaranteed Home Mortgage’s offices in27 states nationwide. With more thanseven years of experience in marketingand promotional activities, including astint with Kraft Foods where she won asales leadership award, Kelley alsoassists Guaranteed with branch train-ing, mortgage company research andlead distribution.

Founded in 1992, Guaranteed HomeMortgage Company, a licensed mortgageinvestment and banking firm, is comprisedof more than 300 mortgage professionals.The firm, previously named in the Inc. 500

Kelley Berkheiser, Branch Development ManagerGuaranteed Home Mortgage Company

list of the fastest growing companies in theUnited States, provides residential mortgagefinancing to a wide variety of consumersand real estate professionals.

How does Guaranteed HomeMortgage Company managethe appraisal ordering process?Guaranteed is full compliant with theHome Valuation Code of Conduct(HVCC). We apply the rules to bothagency and government loans. Our firmhas a list of approved appraisal man-agement companies (AMCs) and werestrict providers to this bi-monthlyupdated list. The management compa-ny makes payment arrangements withthe borrowers, and loan officers areprohibited from dealing with theappraiser directly.

Does Guaranteed HomeMortgage allow branches toact as a broker?Guaranteed does permit its branches tobroker reverse mortgages and 203k. Wekeep all Federal Housing Administration(FHA) and conforming business in-house. In days past, we were morereceptive to brokering conforming andFHA loans, but because of the recentheinous reps and warranties, it made nosense to jeopardize the company. Also,we are very protective of our FHA per-formance. Brokering FHA is a recipe fordisaster as an investor might do an inad-visable loan, but our company dealswith its performance.

We understand that GuaranteedHome Mortgage offers lots offree marketing services to itsbranches. Do you feel that yourexperience learning the market-ing tricks in the highly competi-tive consumer goods gives yourbranches an upper hand intheir local market?Our strength is that our branches’sales efforts remain autonomous. We

recognized long-ago that differentmethods work in different demo-graphics and geographies. Guaranteed

Home Mortgage regularly providesstrategic and monetary supportaround a broad spectrum of availablemarketing conduits. Because we won’toverlap our locations, our branches donot have to competeterritorially, and we areable to implement suc-cessful marketing pro-grams across the com-pany. Simply put, westrive to produce moreloans from existing loca-tions, not more loca-tions. It is better for ouremployees and for thecompany.

“… we are very protective of ourFHA performance. Brokering FHA

is a recipe for disaster as aninvestor might do an inadvisableloan, but our company deals with

its performance.”

“Our strength is that our branches’ sales efforts remain

autonomous.”

As the company’s top branchliaison, what are the biggestproblems branches facewhen trying to get businessfrom local real estateagents? Many of the larger money center bankshave set-up shop within real estate bro-kerage operations. These types of inte-grated relationships create an initialbarrier of resistance for outside mort-gage firms. However, the upside is thatour firm has the ability to offer manymore options and much quicker turn-around. When word gets around a bro-kerage shop that deals are getting donewith Guaranteed, we usually have nofurther obstacles.

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agement companies (AMC) has more than15 years of experience appraising residen-tial properties, according to a new surveyconducted by the Title/Appraisal VendorManagement Association (TAVMA). In addi-tion, the survey showed that the vastmajority of appraisers used by TAVMAmembers are “certified” appraisers, a desig-nation that requires more experience andan additional level of testing above thestate-licensed level.

According to the survey of TAVMAmembers, 87 percent of appraisersused by TAVMA members are certifiedappraisers. According to the FederalFinancial Institutions ExaminationCouncil (FFIEC) registry, 83 percent ofappraisers have a certified registration.The certified designation is a higherlevel of appraisal licensing than statelicensing. Although each state has itsown rules, many require additionalexperience and testing-levels to reachthe certified level. States also demandthat appraisers successfully completecontinuing education classes each yearto maintain their licenses.

“Our members, the nation’s largestappraisal management companies,monitor their roster of appraisers toensure that they are properly certifiedand experienced for a specific assign-ment,” explained Jeff Schurman, exec-utive director of TAVMA. “We surveyedour members to answer the allegationsthat brokers and realtors have beenmaking in the media, regarding theexperience levels of AMC appraisers.Our member survey clearly shows thatnot only are AMC appraisers experi-enced, the vast majority hold the high-er, certified-level, appraisal credential.”

AMCs currently provide approximate-ly two-thirds of all residential appraisalsused in the mortgage industry, andTAVMA’s 45 AMC members togetheraccount for more than 80 percent of thisvolume. Although some AMCs employ in-house appraisers, most assign orders tolocal independent appraisers.

“TAVMA members continuallyreview their roster of appraisers tomake sure that all certifications andlicenses are up to date,” saidSchurman. “This is just one elementthat AMCs look at before assigning anappraiser. They also look for anappraiser who has experience withinan appropriate geographic area, usual-ly not more than a 13-mile radius, andwith the property type in question.”For more information, visit www.tavma.org.

Wells Fargo signs HAMPsecond lien modificationprogram agreement withTreasury Department

Wells Fargo has announcedthat it has signed the sec-ond lien modification com-ponent of the ObamaAdministration’s Home

Affordable Modification Program (HAMP).

in 2009, and the ongoing weakness inthe job market through the beginning ofthis year, this study gives no reason toexpect that household formation haspicked up at all.”

The study includes analysis of datafrom the past 40 years, a period cover-ing six recessions, to examine the his-torical impact of recessions and associ-ated elevated unemployment rates onthe formation of new households.

Key findings from the study include:

� In a recession, the likelihood that ayoung adult will form an independ-ent household falls by up to four per-centage points depending on the ageof the person and severity of thechanges in unemployment rates. Inthis particularly severe recession, thisprediction has been borne out withdata through 2008 revealing a reduc-tion of nearly 1.2 million householdsnationwide despite the continuedincrease in population and likelyeven more households lost in 2009.

� Though the national homeownershiprate has fallen from a peak above 69percent to just over 67 percent, thisdecline may be understating themagnitude of the change when wetake into account the simultaneousdrop in renter household formation.In fact, the rental market saw a steep-er decline in new households formedthan the homeownership market. Asa result of this drop, the denominatorin the homeownership rate calcula-tion has been reduced, mitigating thedecline in homeownership.

� This recession has also caused a dra-matic increase, almost five-fold, inthe rates of overcrowding (definedas having more than one person perroom in the household), indicatingthat many families are doubling upin response to the downturn.

� Overall, there was a greater impacton the creation of new householdsamong native born Americans overnew immigrant households. The datashow native born Americans experi-enced a larger decline in householdformation and a larger increase inovercrowding rates than immigrants.

� Children whose parents have higherincomes are more likely to remain athome, with this effect largest for youthsmoving into the rental market. However,children whose parents have higherfinancial wealth are more likely to formtheir own new rental households.

For more information, visitwww.housingamerica.org/index.htm orwww.mortgagebankers.org.

TAVMA report finds theaverage AMC has 15-plusyears of experience

On average, anappraiser work-ing with majorappraisal man-


Is There a Better Way to Select Appraisers?

Yes, we as taxpayers did lose hundredsof billions of dollars recently due to themortgage crisis. This is the second timethat this has happened during mycareer as a mortgage professional.

The first time it occurred was in the1980s, when it was called the Savings &Loan (S&L) Crisis. Back then, the govern-ment stepped in and bailed out the S&Lsalong with some banks.Many people blamed theappraisers for the debacle,because they were not statelicensed. The S&L bailoutresulted in a national cam-paign to require statelicensing of all real estateappraisers. Before thattime, appraisals had beenperformed by designatedappraisers, who haddemonstrated their profi-ciency through belongingto appraisal trade groups,such as the AppraisalInstitute and the AmericanSociety of Appraisers. Now,it seems that state licensingof appraisers is not enough.Many are blaming apprais-ers yet again for the hugelosses experienced by thebanks. This time around,there are practically noS&Ls left. Will we everlearn?

In an attempt to stemfurther losses, Fannie Mae, Freddie Macand the Federal Housing Administration(FHA) have taken steps to promoteappraiser independence by not allowingmortgage brokers to select appraisers orto place appraisal orders. This hascaused an outcry from many quarters inthe industry, including mortgage bro-kers, Realtors and appraisers. They areblaming appraisal management compa-nies (AMCs) because they are now han-dling appraisal orders, which once wereordered by mortgage brokers. Thosecomplaining say that AMCs are apprais-

ing properties too low, using unquali-fied appraisers, sending appraisers toofar to perform appraisals and not pay-ing appraisers all of the fees collectedby the bank when the loan applicationwas taken.

If this sounds like sour grapes, itprobably is, at least some of it. Very fewof us in the mortgage loan industry are

making the money wewere two or three yearsago. People are trying toposition themselves tomake up for the shortfall.Realtors need to closedeals, mortgage brokersneed to make loans andappraisers need to performappraisals. The industry isin an economic meltdown,property values have plum-meted, loan parametersare tighter, many peopledo not have jobs, andthose with jobs, in somecases, are afraid that theywill lose them.

This all boils down tovery select few qualifiedborrowers with tons ofpeople applying who donot make the cut. What itcomes down to is thatmany are blaming theappraiser-selection sys-tem for the lack of busi-ness. Does this equate to

rigging the system to make loans close?Is this not just what we are trying to getaway from? Appraisers must be inde-pendent in order for them to providehonest and accurate appraisals.

Given the above statements, shouldwe go back to the policies of the pastthat got us into this mess, just to pro-vide jobs to those who now do nothave as much income because of themortgage crisis? I should think not,and as a taxpayer, I hope not. It is a


“Those complainingsay that AMCs are

appraising propertiestoo low, using unquali-fied appraisers, send-ing appraisers too farto perform appraisals

and not payingappraisers all of thefees collected by thebank when the loan

application was taken.”

By Charlie W. Elliott Jr., MAI, SRA

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Platinum Credit Services, Inc. (PCS)is more than just credit, with a fullscope of services for mortgagelenders. At PCS, we pride ourselveson providing the highest level of re-spect and deserving gratitude toour clients.

At PCS you will receive, knowledge-able, courteous service from our staffof skilled credit professionals. Ourcombined management experienceis greater than 30 years of expertisein the mortgage servicing industry. Inaddition, PCS offers competitive pric-ing and believes in providing theclient personal attention, in all as-pects of service.

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The program will be offered to quali-fied Wells Fargo and Wachovia secondlien mortgage customers who havecompleted their HAMP modificationson their first mortgage.

“The Second-Lien ModificationProgram offers struggling homeownerswith yet another valuable option forreducing payments so they can remainin their homes,” said Kevin Moss, execu-tive vice president of Wells Fargo’sHome Equity Group. “This program is animportant component of joint industryand government efforts to bring furtherstability to the housing market.”

Wells Fargo has already implement-ed a variety of its own programs toassist its home equity customers. Sincelast year, the company’s Home EquityGroup has participated in Wells Fargo-sponsored home preservation events inAtlanta, Baltimore, Chicago, Phoenixand St. Paul to provide thousands ofcustomers the opportunity to talk face-to-face about their payment challenges.Three more events will be held in thefirst half of this year in Los Angeles,Oakland and Miami.

Over the past two years, Wells Fargohas proactively reached out to its cus-tomers through telephone calls, mailand other means to discuss potentialassistance options. In addition, thecompany added more than 2,000 teammembers to its staff to focus on helpingits customers who may be struggling tomake their home equity payments.

As a result of all of these efforts, as of

the end of February 2010, Wells Fargoprovided assistance to more than180,000 second lien mortgage customersthrough various programs, includingloan modifications and subordinations,and more than a half million first mort-gage customers with first lien modifica-tions. This included 139,065 active trialand completed first-lien HAMP modifica-tions. Given the HAMP focus on afford-ability and documentation, Wells Fargoexpects loans modified under the newsecond-lien program to have a similarquality and performance to those madeunder its own internal programs.

“With so many families challengedby current economic conditions, WellsFargo remains committed to providinghelp to customers who qualify forHAMP and those who don’t,” Moss said.“This new program will help expediteour efforts and likely increase the num-ber of borrowers we can assist throughloan modifications, which will benefitour customers, our communities andour shareholders.”

Borrowers with second lien mort-gages who qualify for a first-lien HAMPshould contact their first-mortgageproviders to determine if they are eligi-ble for the new federal program.Servicers participating in the programare required to contact all first-lienHAMP customers with second-lienmortgages to make them aware of thenew payment relief option.For more information, visit www.wells-fargo.com.

MBA study on mortgagebankers finds productionprofits held steady in Q4 ‘09

Independent mort-gage bankers andtheir subsidiariesmade an averageprofit of $890 on

each loan they originated in the fourthquarter of 2009, down from $902 perloan in the third quarter of 2009, but upfrom $296 in the fourth quarter of 2008,according to the Mortgage BankersAssociation (MBA).

“Production profits remained favor-able in the fourth quarter because ofstrong servicing rights valuations andsecondary marketing gains,” said MarinaWalsh, MBA’s associate vice president ofindustry analysis. “However, provisionexpense for repurchase demands mayweaken profitability in upcoming quar-ters. We saw the expense provision dou-ble to over six basis points from thefourth quarter of 2008.”

Among the principal findings ofMBA’s Quarterly Mortgage BankersPerformance Report are:

� Seventy-six percent of the firms in thestudy posted pre-tax net financial profitsin the fourth quarter 2009, compared to82 percent in the third quarter 2009.

� The average production volume foreach firm was $216.5 million in thefourth quarter 2009, compared to$189.6 million in the third quarter2009.

� The share of refinancings to totaloriginations for this sample was rel-atively constant at 45 percent in thefourth quarter 2009, compared to 44percent in the third quarter 2009.

� The average pull-through (the num-ber of closings divided by the num-ber of loan applications) was rela-tively constant at 73 percent in thefourth quarter 2009 from 72 percentin the third quarter 2009.

� The “net cost to originate” rose to$2,345 per loan in the fourth quar-ter 2009, from $1,950 per loan inthe third quarter 2009. The “net costto originate” includes all productionoperating expenses and commis-sions minus all fee income, butexcludes secondary marketing gains,capitalized servicing, servicingreleased premiums and warehouseinterest spread.

� Production operating expenses—commissions, compensation, occu-pancy and equipment, and otherproduction expenses and corporateallocations—rose to $4,402 per loanin the fourth quarter 2009 com-pared to $4,376 per loan in the thirdquarter 2009.

� Net warehousing income, which rep-resents the net interest spreadbetween the mortgage rate on aloan and the interest paid on awarehouse line of credit, was almostconstant at 6.26 basis points in the


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Most of the stories are similar … youraverage American family with two work-ing parents and two to three children,living in a modest home are beginningto feel the crush of economic hardshipfirsthand through thethreat of losing theirhome. The ripple effectof high unemploymentrates in struggling to sur-vive as a homeowner inthe 21st century haswreaked havoc on thenation, thrusting foreclo-sure and bankruptcyrates into record highterritories.

Foreclosure interven-tion by financial institu-tions and governmentalmediation through pro-grams such as the HomeAffordable ModificationProgram (HAMP), hasbeen a bumpy road for many. Someattribute it to the big banks, often stub-born in nature in providing a home-owner with foreclosure relief as theydeal with the training and implementa-tion of their loan modification pro-grams, as other chalk the issues up tobureaucratic red tape that is bindingthe government’s efforts to step in andhelp the struggling U.S. homeowner. Nomatter where the finger is pointed, theproblem remains … scores ofAmericans each day are slowly sinkingunder the weight of wage loss andmounting expenses with the inevitabil-ity of eventually losing their home.

That is where the HOPE NOW Allianceis trying to make a difference. HOPENOW is an alliance between counselors,mortgage servicers, investors and othermortgage market participants with thecollective goal of maximizing outreachefforts to homeowners in distress tohelp them stay in their homes. HOPENOW’s nearly 70 member companiesrecognize that by working together tostamp out the foreclosure crisis, they

will be a more effective force than byworking solo.

HOPE NOW, along with co-sponsorsthe Making Home Affordable Programand NeighborWorks America, have

organized a number of “Help forHomeowners Community Events” ontheir road show that bring the banksand servicers together, face-to-face,with homeowners looking for solutionsto their problems. The common com-plaint from a customer seeking a modi-fication is the chain of voicemails anddepartments they have to deal with andthe mountain of paperwork required inorder to get the modification processstarted.

“Locations for these outreach eventsare determined by the amount ofHAMP activity in a particular region,and then, an easily accessible and cen-tralized location is selected to housethe event,” said Brad Dwin, director ofcommunications for the HOPE NOWAlliance.

“Face-to-face contact and personalinteraction is important in a situation asdelicate as this,” said one homeowner ata recent New York Help forHomeowners event. “We really gotnowhere dealing with our bank by thephone, at least we can come here today

and deal with a live person and not justleave an endless number of voicemails.”

Since 2008, HOPE NOW has hosted60-plus homeownership outreachevents, assisting approximately 59,000

families in the process.When an event is on thehorizon, HOPE NOW noti-fies area lenders andbanks. In turn, the banksand lenders send outmailings to their cus-tomers to notify them ofthe opportunity to meetone-on-one with a trainedhousing counselor at theHelp for HomeownersCommunity Event. If acustomer’s lending insti-tution happens to not beon hand for the event,consumers are paired upwith non-profit housingcounselors who assist the

homeowner through their situation.Homeowners are given a checklist ofpaperwork to bring in order to see ifthey qualify for HAMP or other alterna-tives from their lender.

“The personal contact a con-sumer has with a housing coun-selor is a plus,” said AlvinaMcHale, director of communica-tions and marketing for the U.S.Department of the Treasury.“These events are a win-win situ-ation for all involved as the bor-rower can discuss their situationdirectly with their financial insti-tution.”

At day one of a Help forHomeowners Community Event, heldin late April on Long Island, N.Y. inUniondale at the Nassau VeteransMemorial Coliseum, 646 cases wereheard in a four-hour span by thelenders on hand. The doors for theevent opened at 1:00 p.m., withmany lining up as early as 6:00 a.m. in orderto meet with their lender. On hand for thisparticular New York event were: American

Home Mortgage Servicing Inc., Aurora LoanServicing, Bank of America/Countrywide,Carrington, Chase/Washington Mutual, Citi,GMAC/Homecomings, Home Loan Servicing(HLS), HSBC, Litton Loan Servicing, Ocwen, OneWest Bank/IndyMac, PNC Mortgage/NationalCity, Saxon, Select Portfolio Servicing and WellsFargo/Wachovia who sent along approvedcounselors to reach out to their customers.

“There are a lot of borrowers out therewho are confused about the whole processand need our help,” said Jamie Holland,compliance manager with Ocwen.

Not all homeowners are guaranteeda home-saving conclusion, and that toowas the case at the New York event. Forevery success story, whether it be qual-ifying for a loan modification or obtain-ing a temporary forbearance, therewere stories with unhappy endings as itwas either too late to save a consumer’shome and the realization of a shortsale, deed-in-lieu or foreclosure startedto become a reality.

A man by the name of Bob was onesuch success story. He came to the eventseeking a reduction in his monthlymortgage payments which stood in the$2,400 range. The loss of his wife’s job

due to a layoff made the family’s finan-cials an issue and Bob was no longerable to keep up with payments. He visit-

Alvina McHale, director of communicationsand marketing for the U.S. Department ofthe Treasury, with Jamie Holland, compli-ance manager with Ocwen, at the New YorkHelp for Homeowners Community Event

By Eric C. Peck

Lenders set up shop at Nassau Coliseum to meet one-on-one withhomeowners

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much bigger and more important issuethan just providing industry memberswith jobs.

There is plenty of room to discuss theshortcomings of appraisals and appraisers.That being said, I do not believe that thereare many appraisers out there intent uponkilling an otherwise healthy loan packagewith a bad appraisal. The problems we cur-rently face are too few qualified borrowersand declining home values. This cannot becorrected with appraisal legislation, rulechanging or loosening up of the standards.Such action would only make things worsein the long run.

This begs the question: Is there a bet-ter way to select appraisers? I suggestthat there very well may be. Whatever itis, it should not include the lender mak-ing the loan, selecting the appraiser,ordering the appraisal and paying theappraiser. When the lender is really notlending his or her own money, there isjust too much temptation for the undueinfluence of appraisers.

It is my suggestion that a bank, fund-ing a loan, give the customer at least twooptions for the selection of a manage-ment company to acquire an appraisalfor their property. At least one of thesemust come from an independent man-agement company. Each would include

all-inclusive prices, which would be thedollar amount charged by the companyproviding the appraisal service, includingthe management of the process. Therewould be no other appraisal fees chargedto the customer. Banks, opting to engagein the process of offering their clientsappraisals, would be required to set upmanagement companies and register inall states, as well as at the federal level, ifand when required of other AMCs. Saidanother way … bank-owned AMCs wouldbe required to follow the same rules as allother management companies.

Would this be perfect? Probably not,but I believe that it would foster compe-tition, while giving the borrower at leasta bit of say-so in the appraisal process.It would go a long way toward providingtransparency and would help to removequestions as to the ethics of the bank inthe transaction. Banks would undoubt-edly benefit from the increased cus-tomer satisfaction and could focusmore on what they do best, make loans.

Charlie W. Elliott Jr., MAI, SRA, is presidentof Elliott & Company Appraisers, a nation-al real estate appraisal company. He canbe reached at (800) 854-5889, e-mail [email protected] or visit his company’sWeb site, www.appraisalsanywhere.com.

value nation continued from page 10

ed the event and met with his lenderand walked away with a trial modifica-tion and a reduction of $700 a monthoff each mortgage payment, thus set-ting his mind at ease and saving hishome became a reality.

“This is a dog and pony show,” saidone attorney on hand for the event.“The banks are putting on a really goodshow here by showing up and givingthe impression they are doing the rightthing. I feel they can do so muchmore.”

Brian and Laura, a middle-class LongIsland couple, came to the event seek-ing to meet a counselor in person afterdealing unsuccessfully over the phonefor months trying to obtain a loan mod-ification. Brian’s job cut back on hisovertime hours, thus impacting theirability to meet their monthly mortgagecommitment. The couple showed uptwo hours in advance of the doors

opening, taking the day off from workand hiring a babysitter. Their end result,the same as on the phone, dead endsand no resolution.

“No one seems to know what is goingon or have a clue about our situation,”said Brian. “I thought it would be good tocome on down, meet with a human andnot play phone tag. I wanted immediateresults, but got what seems to have beena wasted day. In the end, we weredeemed ineligible for a modification andwere left with a great deal of questionsabout the future of our home.”

No matter the end result, HOPE NOW,its alliance partners—Making HomeAffordable Program and NeighborWorksAmerica—and their lender supporters areputting forth a strong concerted effort tosave America’s homeowners. Their overallgoal is to keep the American dream ofhomeownership alive and well, even inthis current economic downturn.

The check-in desk at the April Help for Homeowners Community Event atNassau Veterans Memorial Coliseum in Uniondale, N.Y.

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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 eachloan, while maintaining a competitive advantage over the street

• Proven leading-edge technology (built on Encompass 360technology)

• 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 andLicensed Mortgage Originators. Become part of an

established 30-year Mortgage Banker witha 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 [email protected].

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 #MC5070North 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

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1. Go to www.ruralhomeloan.com2. Pick a low fixed rate for your borrower3. Enjoy an easy closing, and then relax!

“Innovative Rural Financing since 1993”Lending in TX, NM, and OK

Mortgages: Get the Facts BeforeCashing in on Your Home’s Equity,” anew business alert to help housingcounselors spot and report potentiallydeceptive claims, and presentations toreverse mortgage industry groups.

FTC staff specifically supports theFFIEC’s efforts to advise lenders of theimportance of not making deceptiveclaims for reverse mortgages and toprovide them with concrete guidanceas to the circumstances under whichclaims may be deceptive in violationof Section 5 of the FTC Act. The com-ments also encourage reverse mort-gage lenders and brokers under theFTC’s jurisdiction to review and con-sider the proposed guidance’s adviceand examples relating to deceptiveclaims. The comments further notethe value of testing disclosures andother measures in certain circum-stances to confirm that they are clearand useful and do not create unin-tended consequences.For more information, visit www.ftc.gov.

HUD brings onMichaelson, Connor & Boul as mortgageecompliance manager

The U.S. Departmentof Housing & UrbanDevelopment (HUD)has announced the

agency has contracted Michaelson,Connor & Boul Inc. (MCB) of HuntingtonBeach, Calif. to serve as its mortgageecompliance manager. MCB will beresponsible for ensuring that FederalHousing Administration (FHA)-approvedlenders and loan servicers convey fore-closed properties to the FHA in accept-able condition.

MCB will establish a central officefor lender compliance oversight inOklahoma City, Okla., which is project-ed to create 75-100 new professionaljobs. HUD’s National Servicing Center(NSC) in Oklahoma City will be respon-sible for the direct oversight of thenew compliance manager contract.

“This new contract is part of FHA’scontinuing effort to reduce risk,increase return, and improve efficiencyin the resale of its inventory of fore-closed property,” said HUD DeputyAssistant Secretary Vicki Bott. “It is crit-ically important that FHA recaptures asmuch of our claims through the even-tual sale of these properties and thiscompliance management firm will helpus do that.”

The contract is awarded under FHA’sManagement and Marketing (M&M) IIIdisposition structure. Under M&M III,the process of conveying foreclosedproperties to FHA has been centralizedand streamlined in order to simplifythe process for FHA’s lenders and ser-vicers, as well as to improve communi-

fourth quarter 2009, compared to6.67 basis points in the third quar-ter 2009.

MBA’s Quarterly Mortgage BankersPerformance Report offers a variety ofperformance measures on the mort-gage banking industry and is intendedas a financial and operational bench-mark for independent mortgage com-panies, bank subsidiaries and othernon-depository institutions. Seventy-two percent of the 285 companies thatreported production data for thisreport were independent companies.For more information, visit www.mort-gagebankers.org.

FTC files comments with FFIEC on reversemortgage guidance

The Federal TradeCommission (FTC)has filed commentswith the FederalFinancial InstitutionsExamination Council(FFIEC) supporting a

measure designed to protect consumersfrom deceptive claims and to help themmake better-informed decisions aboutwhether to obtain a reverse mortgage. Areverse mortgage is a home-secured loanthat becomes due when the home-owner moves, sells the home, dies orfails to meet loan terms such as payingproperty tax or homeowners insur-ance. Although reverse mortgageshave assisted many elderly consumersin drawing on the equity in theirhomes, some consumers may not fullyunderstand these complex products ormay be deceived by advertising claimsmade about them.

In December 2009, the FFIEC issuedproposed guidance for its members onhow to deal with reverse mortgages.FFIEC members include the federalbanking agencies—Office of theComptroller of the Currency (OCC),Board of Governors of the FederalReserve System, Federal DepositInsurance Corporation (FDIC), Office ofThrift Supervision (OTS), NationalCredit Union Administration (NCUA)and the State Liaison Committee,which includes representatives fromthe Conference of State BankSupervisors (CSBS), American Council ofState Savings Supervisors (ACSSS), andNational Association of State CreditUnion Supervisors (NASCUS).

The comments, prepared by thestaff of the FTC’s Bureaus of ConsumerProtection and Economics and itsOffice of Policy Planning, describe FTCwork in this area, including forming afederal-state working group tostrengthen law enforcement effortsagainst illegal practices. The commentsalso note FTC consumer and businesseducation efforts, such as including arevised consumer brochure, “Reverse



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New FHA Rule: All Brokers NowHave Access to FHA Loans

On Sept. 18, 2009, David H. Stevens,Commissioner of the Federal HousingAdministration (FHA), made anannouncement in a press release. Thisannouncement was that a proposedrule (published in the Federal Register)would not require mortgage brokers toget FHA approval in order to haveaccess to FHA programs. This rule, infact, became final on April 20, 2010,when the rule was published in theFederal Register.

This provides a wonderful opportu-nity for brokers who were previouslyunable to meet net worth requirementsallowing FHA approval. However, theother side of this rule is that brokerswill need to be sponsored by an FHA-approved lender and they must meetthe FHA lender’s requirements for beingsponsored.

Now the big question is: How diffi-cult will the FHA lenders make it for thebrokers? Likely, by the printing of thisarticle, many lenders will have alreadyestablished their broker guidelines fordoing FHA loans. In reality, why is doinga loan that will be sold to Ginnie Maeany different than a Fannie Mae orFreddie Mac loan? It shouldn’t take alot of effort on the part of FHA lendersto create internal policies that establishsome guidelines allowing brokers to doFHA loans with them. FHA lendersalready have very strict reporting andadministrative requirements in placefor the FHA-approved brokers they cur-rently sponsor. Thus, FHA feels the tran-sition will not present a big challenge toexisting FHA lenders.

What about currently approved FHAbrokers? The rule states that currentlyapproved FHA lenders will do businessas usual through the rest of 2010, andstarting on Jan. 1, 2011, mortgage bro-kers will no longer be required to sub-mit audited financials to maintain theiraccess to FHA loans. Many brokers areecstatic about this change and are excit-ed about the fact they won’t have tospend thousands of dollars on theaudits. I spoke with HUD directly on thequestion of whether or not currentlyapproved FHA brokers will have to sub-mit audited financials in 2010, and wastold that if you are a broker that is in

good standing with FHA, you will not berequired to submit audited financial,but will have to re-certify through FHAConnection and pay the fee.

This leads to another question: Whatif an FHA-approved broker wants to getapproved now as an FHA lender? Theanswer is that they will have to meet acertain net worth requirement, or NWR.For 2010 and 2011, smaller companies(as defined by the Small BusinessAdministration [SBA]) will need

$500,000 in net worth, and larger com-panies will need a minimum of $1 mil-lion in net worth. In all cases, 20 per-cent of the net worth must be in theform of liquid assets. In 2013 andbeyond, all companies applying for FHAapproval will be required to have aminimum net worth of $1 million, 20percent of which must be liquid assets.

Given this new NWR, many compa-nies will be faced with a tough decision.The companies that are currently FHA-approved will have to decide if theywant to meet and maintain the NWR,and the companies that want to getFHA approval will have to decide if theyalso want to come up with the cashmeet the new NWR. Because FHA issuch an important loan product to havetoday and many loan officers need it tosurvive, we have seen a national trendof consolidation of smaller brokeroffices into larger companies just toenable access to FHA. It could be thatthis rule will reverse that trend. If so,we may see an increase in smaller bro-ker offices, especially as housing salesimprove.

If you are a broker who has hired alot of talented originators and/or bro-kers over the past several years, youneed to look seriously at why the tal-

“Be prepared to give these talentedoriginators a good reason to stay

or be prepared for attrition,because when the market gets hot,talented people are always looking

for ways to improve their lot.”


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Government support of housingrecovery is not ending. The ObamaAdministration recently announced anew initiative to refinance and modifyunderwater mortgages with incentivesto investors to pare down principal. Theprogram includes mortgage paymentaid for those who are unemployed. Also,grants were announced to five morestates hit hardest by the crisis.

Here is an interesting note. TheCongressional Budget Office recentlyannounced that the TARP program,which was supposed to cost the govern-ment $700 billion, is now estimated tocost only 16 percent of that total, or$109 billion. How times have changed.We now think of $100 billion as a bar-gain!

What is the point of all this? With thejobs picture turning positive, the mar-kets are turning back to normal. Thismeans that the government has to facil-itate this process. Do not think by anymeans that we are out of the woods justyet. There are a ton of foreclosures tocome, and if a recovery means higherrates and oil prices, it will be an evenslower recovery than expected. The Fedhas indicated that they are prepared tokeep rates low because of these facts,and if the recovery continues, expectmore speculation regarding when andhow the Fed will increase rates. In themeantime, the Fed has also toldCongress that they are ready to step inand reintroduce measures when and ifnecessary.

Now we come back to the ques-tion, how do all of these factorsaffect originations? For one, the ratevolatility we warned about hasbecome a reality. That means thatoriginators must keep on top of themarkets at all times. Even when youare in loan application as you are fill-ing out the rate on the Good FaithEstimate (GFE).

Second, rising rates are not everpleasant. However, if these risingrates are due to a recovery in whichpeople start finding jobs, it will be apositive tradeoff. That is why the pos-itive employment report for Marchwas so important. We have anothereight million jobs to go before werecover the jobs lost during the reces-sion. That is a long road to travel. Along-term recovery only happenswhen people are employed and canafford to keep their homes in the longrun. We will accept higher rates thatare still historically low if people aregoing back to work.

Dave Hershman is a leading author for themortgage industry with eight books and sev-eral hundred articles to his credit. He is alsohead of OriginationPro Mortgage Schooland a top industry speaker. Dave’s CertifiedMortgage Advisor Program can be found atwww.webinars.originationpro.com. If youwould like to stay ahead of what is happen-ing in the markets, visit ratelink.origination-pro.com for a free trial or [email protected].

Okay, that is a bad rhyme. But the truthis, we might as well be rubbing the bot-tle with the genie to see what is comingnext. We have talked about this formonths. The Federal Reserve Board hasfinally reached the date in which theyare no longer purchasing Mortgage-Backed Securities (MBS). The devasta-tion of the secondary market for homeloans was one of the major effects ofthe financial meltdown which occurredover a year ago. The Fed took manydefinitive actions to keep rates downwhile the government took many otheractions to right the financial ship. Hereare some of these actions:

� The Fed lowering benchmark short-term rates to close to zero.

� The Fed purchasing hundreds of bil-lions of dollars in Treasury securi-ties.

� The Fed purchasing hundreds of bil-lions of dollar in MBS.

� The Fed providing significant liquid-ity to the system.

� Congress passing two versions of theHomebuyer Tax Credit.

� Congress increasing high-end loanlimits on conforming and govern-ment loans.

� Congress bailing out the banks withan influx of Troubled Asset ReliefProgram (TARP) funding.

� Not to mention several tax rebates,foreclosure prevention programs,unemployment aid, bailing out thecar companies and more.

Now, the Fed is ready to see if theprivate markets will pick up the slackand allow home loans to be originatedand sold on the open markets at a pricethat will not halt the economic recov-ery, particularly in the real estate sec-tor. Is this a non-event at this point?Note that rates had already increasedmoderately in the weeks before theFed’s deadline of March 31. There havebeen many explanations for thisincrease, including tepid response togovernment bond auctions. However, itis entirely possible that the tepidresponse was due to anticipation of thisimportant date.

Now, speculation moves to anotherlevel as it appears we will ponder as towhether rates will continue to rise andwhether the Fed will start selling someof the hundreds of billions of dollars inbonds they currently own. Here is aquote from a recent article from TheNew York Times:

No one expects the Fed to unload itsholdings anytime soon, which would bereckless given the housing market’sfragility and the country’s high unem-ployment. But since the Fed now ownsabout 25 percent of the outstandingstock of bonds, any talk about actuallyselling should be a cause for greater con-cern than the Fed simply ending furtherpurchases.

What will happen? No one actuallyknows. Rub-a-dub-dub.

This is not the only program which isending. The tax credit is schedule toend at the end of April. Many hadexpected an automatic extension. As amatter of fact, homebuyers seem to beacting like this extension was a given.From CNN/Money:

There is little sentiment for continuingthis program, especially because manyconsider the latest iteration’s results tobe disappointing. Even the Senate’sbiggest proponent of the homebuyer taxcredit, Johnny Isakson (R-GA) is ready tolet it end. “He has no plans to introducelegislation to extend the credit,” saidIsakson’s spokeswoman. “Part of thebenefit of the tax credit was the urgencyits sun-setting generated.” Thus at thetime of printing the tax credit is up inthe air.

Rub-a-Dub-Dub: The Fed Pulls the Plug

“The Congressional Budget Officerecently announced that the TARPprogram, which was supposed to

cost the government $700 billion, isnow estimated to cost only 16 per-cent of that total, or $109 billion.How times have changed. We now

think of $100 billion as a bargain!”

©2010 Inlanta Mortgage

Approved to do business in Wisconsin, Illinois, Indiana, Iowa, Florida, Michigan, Minnesota, Missouri, North Dakota...and growing.Minnesota License – Inlanta Mortgage, Inc. #MO 20373610 “Not an offer to enter into an interest rate lock-in agreement under Minnesota law.”Illinois – Inlanta Mortgage – An Illinois Residential Mortgage Licensee #MB.0006190 Inlanta Mortgage is regulated by the State of Illinois Department of Financial and Professional Regulation, Division of Banking located at 122 S. Michigan Ave., Suite 1900, Chicago, IL 60603. Phone #312-793-1409.

Dear Mortgage Bankers,

If you’re motivated to take your mortgage company to new heights, consider joining Inlanta Mortgage through a strategic partnership or acquisition. Established in 1993, we provide stable financial backing, a wide variety of products, an experienced team, and outstanding support services – marketing, compliance, processing, human resources, training, technology, accounting, legal, in-house funding, and underwriting.

As an Inlanta partner, you’ll function as a true mortgage banker – without concerns about warehouse facilities. If you’d like to grow with us, I’d like to talk to you. Please call me at 262-513-9853 or email [email protected].

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JEAN BADCIONG Chief Operating Officer

Grow with us

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collar exemptions. The following table provides a brief synopsis, with salaryrequirements, of those revisions:4

In an Administrator’s Interpretation (Interpretation),1 issued March 24, 2010, theU. S. Department of Labor (DOL) determined that employees who perform the typ-ical duties of a mortgage loan officer have a primary duty of making sales for theiremployers and, therefore, do not qualify as bona fide administrative employeesexempt under the Fair Labor Standards Act (Act).2

Accordingly, mortgage loan officers are subject to minimum wage and over-time requirements.

Administrator’s InterpretationThe Interpretation applies to employees who:

� Spend the majority of their time working inside their employer’s place of busi-ness, including employees who work in offices located in their homes, ratherthan mortgage loan officers who are customarily and regularly engaged awayfrom their employer’s place of business; and

� Do not spend the majority of their time engaging in “cold-calling,” contactingpotential customers who have not in some manner expressed an interest inobtaining information about a mortgage loan.

By issuing this Interpretation, the DOL has now rejected its own Sept. 8, 2006Wage and Hour Opinion Letter FLSA 2006-31, asserting that its previous positionprovided an “inappropriately narrow definition of sales” as including only cus-tomer-specific persuasive sales activity (i.e., the time that a mortgage loan officerspends directly engaged in selling mortgage loan products to customers).3

Exempt versus non-exemptThe Act identifies two types of employees: non-exempt employees and exemptemployees:

� Non-exempt employees are employees who, based on the duties per-formed and the manner of compensation, are required to account for timeworked and sick leave, vacation, and other leave on an hourly and fraction-al hourly basis. The Act requires that these employees be paid overtime atthe premium (time-and-one-half) for actual time worked in excess of 40hours per week.

� Exempt employees are employees who, based on the duties performedand the manner of compensation, are exempt from the Act’s minimumwage and overtime provisions. Exempt employees are paid an establishedmonthly or annual salary and are expected to fulfill the duties of theirpositions regardless of the hours worked. They do not receive premiumovertime, straight overtime or compensatory time for working more than40 hours in a work week.

To be considered “exempt” from the Act’s requirements, employees mustmeet two tests: the Salary Basis Test and the Duties Test. The Act has a num-ber of white collar exemptions from overtime and minimum wage. Changesmade to the Act in August 2004 modified these tests, compelling an examina-tion of how to classify and pay mortgage loan officers. Eligibility for theseexemptions is based on the primary duties of their job functions and theirweekly salary.

Table of certain white collar exemptionsThe August 2004 revisions to the Act elucidated the requirements for certain white

Mortgage Loan Officers LoseAdministrative Exemption

Executive employees

Pre-August ‘04 rule Beginning August ‘04

Minimum compensation

Dutiesrequired

$250 qualified weekly salary

• Primary duty consists ofmanagement of enterpriseor recognized departmentor subdivision thereof; and

• Customarily and regular-ly directs work of two ormore other employees.

$455 qualified weekly salary



$250 qualified weekly salary $455 qualified weekly salary



None Same

• Same

• Same

• Authority to hire/fire otheremployees (or suggestionsabout hiring/firing/promo-tion/other status changesgiven particular weight).

Dutiesrequired

• Primary duty consists ofperforming office or non-manual work directly relat-ed to management poli-cies or general businessoperations of the employ-er or the employer’s cus-tomers; and

• Includes work requiringexercising discretion andindependent judgment.

• Same

• Primary duty includes theexercise of discretion andindependent judgmentwith respect to matters ofsignificance.

Dutiesrequired

• Employed for the purposeof, and customarily andregularly engaged awayfrom the employer’s placeof business in, makingsales; or in obtaining ordersor contracts for services orfor the use of facilities; and

• Devotes no more than 20percent of hours workedby nonexempt employeesto activities not incidentalto and in conjunctionwith employee’s own out-side sales or solicitations.

• Primary duty of makingsales, or obtaining ordersor contracts for services oruse of facilities; and

• Customarily and regularlyengaged away from theemployer’s place of busi-ness.



No such exemption $100,000/year (including min-imum weekly salary of $455)

Dutiesrequired

• No such exemption • Non-manual or office work• Customarily and regularly per-

forms one or more exemptduties or responsibilities of anexecutive, administrative orprofessional employee.

Administrative employees

Outside sales employees

Highly compensated employees

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Contact one of our Regional Managers in your areaTX, OK, LA: David Walden 1-214-878-6300 • [email protected] & East Coast: Ken Michael 1-931-222-8023 • [email protected], OR, WA, NV: Allen Friedman 1-415-298-2500 • [email protected], CO, ID, WY, MT: Tony Moore 1-801-824-7243 • [email protected]

KEY #1Offer your borrowers full product line,BEAT THE STREET PRICING anddedicated service support • FHA, Conventional, Jumbo, Super Jumbo,

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KEY #2Have 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-

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KEY #3Maximize Branch PROFITABILITY andBranch Manager COMPENSATION • Generous commission split• Branch manager’s are able to control their

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• W-2 Employee with group health, dental,vision and disability benefits

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• Support for all accounting, human resources,payroll, licensing and operations

Exemption testUnder the Interpretation, to fall within the meaning of an “employee employed ina bona fide administrative capacity” (therefore, exempt) an employee’s job dutiesand compensation must meet all of the following tests:

1. The employee must be compensated on a salary or fee basis as defined in theregulations at a rate not less than $455 per week;2. The employee’s primary duty must be the performance of office or non-manu-al work directly related to the management or general business operations of theemployer or the employer’s customers; and3. The employee’s primary duty must include the exercise of discretion and inde-pendent judgment with respect to matters of significance.

The DOL, contending that the second test (listed above) does not apply to mort-gage loan officers, argues that the typical, primary duty of the mortgage loan offi-cer is sales, not office or non-manual work directly related to the management orgeneral business operations of their employer or their employer’s customers.

Mortgage loan officer is a salespersonAlthough mortgage loan officers compile and analyze potential customers’ finan-cial data, they do so because doing so is necessary to evaluate the customers’ qual-ifications for a loan (in order to consummate a sale); that is, the DOL’s position isthat mortgage loan officers are not analyzing the customers’ information to pro-vide advice to the customer, which the customer could take and use elsewhere,but performing “screening” for the benefit of the employer, rather than servicingfor the benefit of the customer.

In determining whether an employee’s primary duty is making sales, the DOL’sview is that work performed incidental to sales should also be considered sales work.

An employee who performs the typical duties of a mortgage loan officer, asdefined by the Department, does not qualify for exempt status as bona fideadministrative employees. In short, the Interpretation’s position is that a mort-gage loan officer’s primary duty is sales and not the management or general busi-ness operation of the employer.

Salary arrangementsIn structuring salary arrangements to meet the $455/week, the issue of commis-sions and draws must be considered.5 The general rule is that an exempt employ-ee may be paid solely on a commission basis if the payments for each work weekare sufficient to meet the salary basis requirement for that work week. A draw may

not reduce an employee’s earning to below the salary basis requirement for hoursworked. Additionally, commissions may not be used for weeks other than whenearned as a means of making up amounts in a different week where commissionearnings are insufficient to meet the statutory amount.

The Act permits an agreement between an employer and employee which pro-vides that the employee will receive the statutory amount for all hours workedalong with any additional amount by which commissions may exceed the statuto-ry amount required. It appears that a monthly commission period may be utilized;however, the computation and recording of hours must be on a work week basis.

Submit your questions …Do you have a regulatory compliance issue that you’d like to see addressed in theRegulatory Compliance Outlook Column? If so, e-mail your issue or concern toJonathan Foxx at [email protected].

Jonathan Foxx, former chief compliance officer for two of the country’s top publicly-traded residential mortgage loan originators, is the president and managing directorof Lenders Compliance Group, a mortgage risk management firm devoted to provid-ing regulatory compliance advice and counsel to the mortgage industry. He may becontacted at (516) 442-3456 or by e-mail at [email protected].

Footnotes1—Administrator’s Interpretation 2010-1, Department of Labor. (This is the firstAdministrator’s Interpretation ever issued by the DOL.)

2—See: 29 U.S.C. § 213(a)(1).

3—The withdrawn opinion letter is Opinion Letter FLSA 2006-31. (Also withdrawnwas a previously supporting interpretation Opinion Letter: FLSA 2001 WL 1558764.)

4—The analysis of this article pertains to federal law. State law and licensingrequirements must also be considered in determining how to classify employees.In addition, the Federal Reserve Board is considering a proposal to eliminate com-pensation based on the “terms” of the loan.

5—A mortgage loan officer who cannot satisfy the administrative exemption maystill satisfy the highly compensated employee exemption by “customarily and reg-ularly” performing at least one of the exempt responsibilities associated with thethree exemption criteria for that category.

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we’re committedto brokers!

IN:Call Bijan Farassat at 917-731-4870or email [email protected]

IN:

Call Lisa Constant at 516-640-8375or email [email protected]

Member FDIC A Member of the New York Association of Mortgage Brokers

Markets may be volatile, but there’s one thing you can always count on, the total commitment of our Mortgage Team. Loyalty, continuity of service and our dedication to protecting the integrity of our relationships are just a few of the things that set us apart.

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has opened an investigation intoMaking Home Affordable, the federalforeclosure prevention program. As partof the Committee’s investigation, NCRCreleased a survey of homeowner experi-ences in the loan modification process,conducted by over 29 housing counsel-ing organizations affiliated with theorganization.

“We’ve surveyed housing counselorsfrom the front lines of the foreclosurecrisis, and they tell us that the battle isbeing lost.” said John Taylor, presidentand chief executive officer of the NCRC.“While this administration has beenmore proactive than the last, MakingHome Affordable is simply failing tomake enough of a difference relative tothe size of the problem. It’s not for lackof good ideas, including more aggres-sive principal reductions that this crisishas been allowed to continue mostlyunabated. The end result, if we don’tget ahead of this problem now, is theongoing loss of wealth from America’scommunities.”

NCRC’s HAMP Mortgage ModificationSurvey provides alarming insight into theexperience of homeowners goingthrough the federal Home AffordableModification Program (HAMP). The sur-vey was administered to distressedhomeowners seeking assistance fromNCRC’s Housing Counseling Network. The

survey documents performance and pro-grammatic issues, issues of fairness andequity, and pragmatic recommendationsto improve upon the HAMP program.

Among survey respondents, somekey trends include:

� Loan servicers foreclose on delin-quent black or African-Americanborrowers more quickly than Whiteor Hispanic borrowers. Additionally,White HAMP eligible borrowers arealmost 50 percent more likely toreceive a modification than African-American or Latino borrowers.

� The majority of loan modificationsinvolve an interest rate reduction,while principal reductions werescarce.

� Homeowners with foreclosure pend-ing were less likely to receive a mod-ification than those current on theirpayments. Half of the delinquentsurvey respondents did not receive amodification, compared to 25 per-cent of those borrowers who werecurrent on their mortgage.

For more information, visit www.ncrc.org.

OCC and OTS releaseMortgage Metrics Reportfor Q4 of 2009

Performance onhome mortgagesserviced by thelargest nationalbanks and feder-

ally regulated thrifts declined for theseventh consecutive quarter in the

fourth quarter of 2009, though homeforeclosures slowed and new homeretention actions continued strong,according to a report released by theOffice of the Comptroller of theCurrency (OCC) and the Office of ThriftSupervision (OTS).

The OCC and OTS Mortgage MetricsReport for the Fourth Quarter 2009showed the overall percentage of cur-rent and performing mortgages fell to86.4 percent at the end of 2009, drivenby an increase in mortgages that were90 or more days past due. Prime mort-gages, which make up two-thirds of themortgages in the portfolio, continuedto have the greatest increases in delin-quency.

Overall, servicers implemented morethan 594,000 new home retentionactions during the quarter, including259,410 new trial plans initiated underthe “Home Affordable ModificationProgram” (HAMP) and 21,316 existingtrial plans converted to permanentHAMP modifications. The actions alsoincluded 102,102 loan modifications,94,667 trial plans, and 116,600 pay-ment plans for borrowers who did notqualify for HAMP.

Although the number of new homeretention actions was more than twicethe number of new modifications dur-ing the same quarter a year ago, itdropped 12.4 percent from the thirdquarter. Servicers reported that thefourth quarter decline followed a surge

cation and the dissemination of pro-gram guidance and requirements.

As the largest seller of real estate inthe country, HUD has been outsourcingthe disposition of its foreclosed FHAinventory under the M&M contractingprocess since 1999. After conductingextensive research into market-basedbest practices, HUD has developed itsnew M&M III disposition structure tostreamline its operations, capitalize onthe expertise of potential vendors andprovide flexibility in a changing envi-ronment.

Under M&M III, lenders and loanservicers seeking to convey foreclosedproperties to FHA will find a more effi-cient and less complex process thanunder previous M&M contracts.Michaelson, Connor & Boul, Inc willserve as the sole entity responsible formortgagee compliance.For more information, visitwww.hud.gov or www.mcbreo.com.

NCRC study finds troublingtrends with loan mods

The National Community ReinvestmentCoalition (NCRC) recently testifiedbefore the House Oversight andGovernment Reform Committee, which



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fha insider continued from page 16

ent would want to stay with you. Beprepared to give these talented origi-nators a good reason to stay or be pre-pared for attrition, because when themarket gets hot, talented people arealways looking for ways to improvetheir lot. Now, when the market isn’tbooming, is the time to start thinkingabout these things.

Some brokers are scared that theywill not be able to get sponsored bytheir lenders to do FHA loans. It paysto keep this in mind … as I explainedat the NAMB/WEST conference lastDecember in Las Vegas, we are in anera of what I call “Relationship lend-ing.” This means that good lendingpractices rely on and are built ongood relationships. So, the brokersthat have created good relationshipsand have delivered quality loans totheir wholesale lenders will be theones who will be sponsored by theirlenders to do FHA loans. The brokersthat have not created good relation-ships and have only shopped their

lenders based on how much they canprofit may find it difficult to get spon-sored by an FHA-approved lender. Ifyou are a broker not yet sponsored byan FHA lender and you need access toFHA programs, I strongly encourageyou to make some phone calls to yourlenders and find out their guidelinesfor sponsoring you to do FHA loans.Don’t sit and wait …

Go FHA!

Jeff Mifsud founded Southfield, Mich.-based Mortgage Seminars LLC in 2004,has been an FHA originator for 13 years,is a contributor to LoanToolbox.com andis a former FHA underwriter. Jeff may bereached at (877) 342-9100 or [email protected].

Visit author Jeff Mifsud’sWeb site at http://msemi-nars.com for tips and infor-

mation on FHA loans anddetails from some of the nation’s topFHA specialists.

iServe Servicing certifiedto participate in HAMP

iServe Servicing Inc.,a residential ser-vicer of performing,sub-performing ,non-performing and

bank-owned assets, has announced ithas received certification for immedi-ate participation in the U.S.Department of the Treasury’s HomeAffordable Modification Program(HAMP). HAMP, a key component ofthe Obama Administration’s MakingHome Affordable Program, was estab-lished to help financially strugglinghomeowners avoid foreclosure bymodifying residential loans to a levelthat is affordable and sustainable forborrowers over the long term.

“Beginning in 2007, the manage-ment of iServe Servicing understoodthe undeniable need to work withhomeowners to essentially re-under-write loans and make every effort tohelp stabilize their position and pro-

mote long-term viability,” said iServeChief Executive Officer Richard Cimino.“We have always understood that con-tinued homeownership, wheneverpossible, is an obvious benefit to thehomeowner, but is also a tremendousadvantage for the underlying mort-gage investor because a successfullymodified and performing loan pres-ents significantly more value than aforeclosure. With a team of highlytrained loss mitigators that work a lowcaseload and use cutting edge technol-ogy solutions, we believe we have theright model that can help homeown-ers maintain their dignity, supporthome values in communities and letlenders focus on financing futurehomeowners.”

iServe Servicing has significant lossmitigation experience in servicingnon-performing, delinquent and sub-performing residential loans with anaverage of 60-plus days delinquency.


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institutions, FHA/Ginnie Mae, REITS,mortgage REITS, investment funds,and other investors;

� HFF LP for conduits;� MetLife for life insurance companies;� PNC Real Estate for Fannie Mae;� CBRE Capital Markets Inc. for Freddie

Mac;� TIAA-CREF for pension funds;� Glacier Real Estate Group for credit

companies; and� Deutsche Bank Commercial Real

Estate for specialty finance.

By dollar volume, the top five origi-nators for third parties in 2009 wereDeutsche Bank Commercial Real Estate,Wells Fargo Bank, PNC Real Estate, CBRECapital Markets Inc. and HFF LP.

The MBA study presents a comprehen-sive set of listings of commercial/multi-family mortgage originators and the dif-ferent roles they play. The MBA report,“Commercial Real Estate/MultifamilyFinance Firms—Annual OriginationVolumes,” presents origination volumes inmore than 140 categories, including byrole, by investor group, by property type,by financing structure type, and by thelocation of the originating office.For more information, visit www.mort-gagebankers.org.

Your turnNational Mortgage Professional Magazineinvites you to submit any informationon regulatory changes, legislativeupdates, human interest stories or anyother newsworthy items pertaining tothe mortgage industry to the atten-tion of:

NMP News Flash columnPhone #: (516) 409-5555

E-mail:[email protected]

Note: Submissions sent via e-mail arepreferred. The deadline for submissionsis the 1st of the month prior to the targetissue.

in new home retention actions in thesecond and third quarters of 2009 afterthe introduction of HAMP.

More than 82 percent of all modifi-cations implemented during the quar-ter reduced principal and interest pay-ments, and all HAMP modificationsreduced monthly payments. Most ofHAMP modifications decreased bor-rowers’ monthly payments by 20 per-cent or more.

Recent vintages of modificationsthat emphasized sustainability throughlower monthly payments performedbetter at three and six months aftermodification than older vintages.However, re-default rates remainedhigh overall, with more than half of allmodifications falling 60 or more dayspast due by nine months after modifi-cation.

Newly initiated foreclosures fell bymore than 15 percent in the fourthquarter and foreclosures in processwere stable, as mortgages remaineddelinquent for longer periods beforeentering the foreclosure process andthe servicers evaluated more borrow-ers for loss mitigation and foreclosureprevention programs. However, ser-vicers report that they expect new fore-closure actions to increase in upcomingquarters as alternatives to preventforeclosure are exhausted and a largernumber of seriously delinquent mort-gages slip into foreclosure.

Current second liens that standbehind delinquent or modified firstliens have an elevated risk of defaultand loss. The OCC and OTS haveinstructed banks and thrifts that holdsuch second liens, which are a minori-ty of all second liens, to hold appropri-ate loan loss reserves to reflect the ele-vated risk.For more information, visit www.occ.govand www.ots.gov.

MBA finds Wells Fargo as top U.S.commercial/multifamilyoriginator in 2009

Wells Fargo Bankwas the top com-merc ia l /mult i -family originatorin 2009, accord-

ing to a set of listings released by theMortgage Bankers Association (MBA).Other originators in the top 10 includePNC Real Estate, Deutsche BankCommercial Real Estate, CBRE CapitalMarkets Inc., HFF LP, PrudentialMortgage Capital Company, MeridianCapital Group, MetLife, NorthmarqCapital LLC and Capmark FinancialGroup Inc.

Eight different companies toppedthe 11 lists reporting originations byinvestor groups:

� Wells Fargo Bank as the top origina-tor for commercial banks/savings


How do you deliver unique value?Consider this loan comparison prepared for an investor who wants to purchase a$200,000 property with 25 percent down:

Most investors think that a 15-year mortgage carries less risk than a 30-yearmortgage, and a 30-year mortgage carries less risk than an interest onlyadjustable-rate mortgage (ARM). However, one of the biggest risks with incomeproperty is that the property goes vacant. In that case, if the investor fails to maketheir mortgage payment, the property will go into foreclosure and the investor willlose all their principal investment.

As you can see from the illustration, the seven-year interest-only option in col-umn number three will result in more safety of principal. This is because it carriesa much lower monthly obligation and allows the investor to maintain their pay-ments and/or set aside more capital reserves in case the property goes vacant. A10-year interest-only option could even be used as a variation to this strategy if theinvestor’s time horizon for the property is greater than five to seven years.

The interest-only option also results in greater monthly income and a higherrate of return than either the 30-year option or the 15-year option. In other words,if you were trained and equipped to calculate and compare IRR for your investorclients, you could show investors and their CPAs, financial advisors, and Realtors

Rate of return

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Investors currently account for 19 percent of all home sales according to theNational Association of Realtors (NAR). This means that real estate investors arepurchasing one out of every five residential homes being sold today. In fact, it isestimated that a whopping $141 billion of non-owner-occupied investment prop-erty loans will be funded in 2010. What if you could capture more business fromthis lucrative segment of the market?

Finding qualified real estateinvestorsThe first step to working with qualified investors is tofind them! I’m not talking about a “wanna-beinvestor” with a 520 credit score who wants to buy aforeclosed property with no money down. I’m not talk-ing about a “speculator” who wants to flip propertiesby buying today and selling tomorrow. No; I’m talkingabout an “investor” who is defined by the financialdictionary as being:

“A person who purchases income-producing assets. Aninvestor as opposed to a speculator usually considerssafety of principal to be of primary importance. Inaddition, investors frequently purchase assets with theexpectation of holding them for a longer period oftime than speculators.”

So, where do you find true, qualified investorswho frequently purchase or would like to fre-quently purchase income-producing real estaterental properties? When you go fishing, it helps tofish in a lake or stream where there are a lot offish. The same idea applies to “fishing for quali-

fied investors.” This is as simple as establishing referral relationships withCPAs, attorneys, financial advisors and Realtors who specialize in workingwith real estate investors. After all, who uses a CPA? Business owners and/orpeople who pay a lot of taxes; and remember, you don’t pay taxes unless youare making money. Who uses a financial advisor? People who need advice orhelp in managing their money; and remember, you don’t need financialadvice or money management services unless you actually have money toinvest.

You get the picture.

Adding unique value and capturing the businessIn order to capture your share of the $141 billion of annual loan volume fromqualified real estate investors you need to find out what is important to them andtheir financial advisors. Then, you need to find a way to deliver this value in waythat is more unique and effective than your competition.

What is important?When we go back to our definition of “investor,” we discover that investorsare looking for income and consider “safety of principal to be of primaryimportance.” Put simply, in order to capture the business, you will need toshow investors how working with you and implementing your strategies willresult in:

� More safety of their principal� More income and a higher rate of return on their investment

BY GIBRAN NICHOLAS

Real Estate Investors: The $141 Billion Market

“In order to captureyour share of the

$141 billion of annu-al loan volume fromqualified real estate

investors you need tofind out what is

important to themand their financial

advisors.”


Cash flows

30-year fixed 15-year fixed 7-year interest-only ARM

Value of property $200,000 $200,000 $200,000

1st mortgage balance $150,000 $150,000 $150,000

Interest rate 5.250% 4.625% 4.750%

Monthly payment $828.31 $1,157.10 $593.75

Term Amortized Amortized Interest-only

Points 2.000% 2.000% 2.000%

First mortgage closing costs $2,400 $2,400 $2,400

Total points & costs $5,400 $5,400 $5,400

Monthly taxes & expenses $525 $525 $525

Gross monthly rent $1,500 $1,500 $1,500

Monthly cash flow $146.69 -$182.10 $381.25

Cash needed to close $55,400 $55,400 $55,400

30-year fixed 15-year fixed 7-year interest-only ARM

Current value of property $200,000 $200,000 $200,000

Current mortgage balance $150,000 $150,000 $150,000

Equity invested plus costs (PV) $55,400 $55,400 $55,400

Rate of appreciation 3.000% 3.000% 3.000%

Value of property in seven years $245,975 $245,975 $245,975

Mortgage balance in

seven years $132,580 $92,700 $150,000

Equity in seven years (FV) $113,395 $153,275 $95,975

Monthly cash flow (PMT) $146.69 -$182.10 $381.25

Annual internal rate of return (IRR) over seven years 12.58% 12.17% 14.38%

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housing market has now begun toshow signs of stabilizing, we see anopportunity to apply Sterling’s capital,experience and market knowledge tofill this financing need and generatesolid returns on our investment in thewarehouse business. In keeping withour traditional disciplined and pru-dent approach, our focus will be onfinancing only the most qualified,experienced and successful mortgagebanking firms.”For more information, visit www.ster-lingbancorp.com.

Byte Software partnerswith AppraiserLoft forintegration in BytePro

Byte Software, a provider of mortgagesoftware solutions for banks, creditunions, mortgage bankers and mort-gage brokers has partnered withAppraiserLoft to provide compliantand warranted valuation products toByte Software customers. The inte-grated solution allows Byte Softwarecustomers to quickly and seamlesslyorder AppraiserLoft services directlyfrom within Byte Software’s ByteProloan origination software (LOS). ByteSoftware specializes in providing soft-

ware products to streamline andautomate the processes used bymortgage originators, processors andclosers.

AppraiserLoft, a nationwide appraisalmanagement company (AMC) operatingin all 50 states, offers residential valua-tion services targeting the mortgagelending and servicing industries.AppraiserLoft provides immediateaccess to residential real estate apprais-al services through an in-house devel-oped appraisal platform. AppraiserLoft’sproprietary platform and processesallows for client collaboration to helpprovide customized solutions. This col-laboration and customization adds


In order to ensure that homeownershave consistent and direct contactwith an experienced servicing special-ist, each iServe Servicing loss mitiga-tion specialist manages less than 200cases at any one time.

“We are proud to participate in theHAMP program and apply our uniqueapproach to loan servicing and loss mit-igation for institutions and privateinvestors that are looking to work with-in the HAMP guidelines and also forlarger servicers that are looking for aspecialized partner to help them withcomponent servicing mandates,” saidCimino.For more information, visit www.iserve-companies.com.

Sterling Bancorpannounces launch ofSterling WarehouseLending Group

Sterling Bancorp, a financial holdingcompany based in New York City andthe parent company of SterlingNational Bank, has announced thelaunch of a new mortgage warehouselending business to serve the financingneeds of the residential mortgagebanking industry as the U.S. housingmarket recovers. Known as SterlingWarehouse Lending Group, the newdivision will provide funding to highlyqualified mortgage banking firms fromthe time of closing until the mortgagesare sold.

“Our new warehouse lending opera-tion is an excellent example of ourstrategies to deploy the capital fromour recent common stock offering togrow our core business,” noted SterlingBancorp’s Chairman and ChiefExecutive Officer Louis J. Cappelli.“Warehouse lending is a natural exten-sion of our business, drawing uponSterling’s demonstrated strengths inboth asset-based financing and mort-gage banking.”

Sterling Warehouse Lending Groupwill focus on serving established mort-gage banking firms and will concen-trate primarily on warehouse facilitiessecured by Fannie Mae, Freddie Macand Federal Housing Administration(FHA) residential loans.

The company is building a teamof experienced warehouse lendingprofessionals to work with its exist-ing personnel in maximizing theopportunities for this business. GaryTimmerman, with more than 20years of executive experience inbank warehouse lending, has joinedas senior vice president and manag-ing director of Sterling WarehouseLending Group.

“Warehouse lending has historicallybeen a successful product for a num-ber of banks,” said Cappelli. “As the

heard on the street continued from page 22

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You don’t need to be a credit expert tostart your own Credit Repair businessFortunately, with HTDI Financial’s Credit Services Or-

ganization (CSO) program, you will be able to handle

ALL aspects of your business except having to do the

actual repairs; we do that for you! We will train you on

how to handle these customers and you will have the

support you need every step of the way. We will make

you look like a Fortune 500 company even if you work

from home! YOU control how much money you make.

In fact, through our CRM, we give you the tools and

resources to harvest leads, manage prospects and mon-

itor their progress.

You don’t have to spend tens of thousands ofdollars for start-up costs for your own CreditRepair CompanyOnce you are set up in our system, you will get access

to software and tools that HTDI has spent over $1 mil-

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spend an arm and a leg to start building your own

credit repair business. Here is a quote from a mortgage

company located in upstate New York who spent

months of research before choosing HTDI:

“Until last year, I owned a large mortgage com-

pany in upstate NY with over 125 employees. We

got hit hard during the mortgage industry crash

and had to close our doors. I was stuck in a posi-

tion with thousands of leads and customers that

couldn’t get qualified for anything. I decided to

start looking for a way to capitalize on my left

over resources and help people in the process. I

called many other credit repair companies and

was very unimpressed. One west coast based

company was charging $15,000 and had nothing

but negatives written about them on the Internet.

Then I found HTDI. They helped me to get

started at the beginning of this year and it has

been great. I have not only made great money

helping people to repair their credit, but I have re-

financed 8 of them and helped 6 buy houses that

would have never qualified with the new guide-

lines. The software is very user friendly and all of

my clients, affiliates and Brokers have increased

business because of it.”

Get those impossible to close dealsCLOSED!As the number of loan programs are shrinking, the bar

on credit scores keep rising. This program will allow

your borrowers to become “Mortgage Ready” as soon

as 45 days. As one of our CSO stated:

“I have many loan officers that are now able to

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they couldn’t close before due to bad credit! It

means more loans and more revenue for my loan

officers. Even better than that, it is very reward-

ing to be able to help a client regain their credit

and be able to get the loan they need.”

Get started in a business that is boomingand shows no signs of slowingThe credit industry, as a whole, is one of the most pow-

erful and profitable industries in existence. With

loans, insurance and even employment taken into con-

sideration individuals’ credit picture, the credit indus-

try is getting bigger every day.

Inside the credit industry, Credit Services is helping by

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moving unverifiable and inaccurate negative items

from their credit reports. As a CSO, you can benefit in

being in a profitable industry and helping clients with

their futures.

“I’ve been in the mortgage business over 22 years.

A year ago, as the mortgage crisis worsened, I

began trying to find a way to help clients who

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From Day One you can be sure your “back of-

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Although I got into it as a part timer, I now realize

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We average one of the highest fix/deletion rates in the indus-try for the first 45 days of service. Shown below, in real-time,is the average percentage of fix/deletes per round.

If you are going to get involved in CreditRepair, be VERY CAREFULFirst you have “Fair Credit Reporting Act” (FCRA). The

FCRA holds credit bureaus and creditors to their report-

ing methods and has guidelines they must comply with.

There are numerous techniques that are used along with

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You can’t forget “Credit Repair Organizations Act.”

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Lastly, you have applicable State Laws. Depending on

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software returning the full appraisalmeeting all FHA regulations and HVCCguidelines.”For more information, visit www.byte-software.com or www.appraiserloft.com.

IMS expands REO assetmanagement offering withREO Leasing Solutions

Integrated MortgageSolutions (IMS) andREO Leasing Solutions

LLC have joined forces to address the lossmitigation and real estate-owned (REO)

challenges in today’s housing market.“Ever-changing legislation necessi-

tates uniting with a proven organiza-tion that has deep experience in theboth the mortgage market as well asproperty management in the residen-tial market,” said Cheryl Lang, presi-dent and chief executive officer of IMS.“REO Leasing Solutions brings a sea-soned management team and a nation-al perspective to this emerging market.In working with REO Leasing Solutions,IMS is equipped to offer additional lossmitigation and REO options to our cus-tomer base. The additional expertisethat REO Leasing Solutions deliverenables IMS to work within landlord-tenant law—leases, tenant qualifica-tion, payment by credit card, tenant

turnover, make ready, and habitabilityand maintenance requirements.”

IMS adds the deep experience ofREO Leasing Solutions in residentialmarket property management to itsdistressed portfolio managementservices. IMS provides an array ofasset management solutions on athird-party basis to mortgage ser-vicers, expediting the loss mitigationprocess.

“We are strategically building ourcompany in order to provide organiza-tions like IMS with end-to-end specialtysolutions in the distressed market andon a scale they demand,” said C. AlanPaylor, president of REO LeasingSolutions LLC. “IMS is able to give theirinvestors immediate options, even attheir initial due diligence of a distressedportfolio. REO Leasing Solutions canmodel a rent/lease option and providecash flow analysis and ROI on a portfo-lio or a single loan.”For more information, visit www.imsto-day.net or www.reo2lease.com.

Intelenet partners withSigniaDocs for real-timeeModification solution

Intelenet GlobalServices, a providerof business processoutsourcing (BPO)

support services for the mortgage bankingindustry, announced that it has part-nered with SigniaDocs Inc., aneMortgage solutions provider, to offeran eModification solution for lendersand servicers. This online, real-timeapproach compresses the loan modifi-cation process to identify and collectthe required documents into a “Modsin Minutes” solution.

“The HAMP modification programhas only reached a small fraction of thedistressed borrowers it was intendedfor,” says Robert Guatelli, vice presidentof sales for banking and financial servic-es at Intelenet Global Services. “It is stillfar short of the Obama Administration’sgoal of helping millions of homeownersthat are in danger of losing theirhomes.”

Intelenet Global Services worksclosely with distressed borrowers as aseamless extension of the lender’s orservicer’s staff, from initial contact toidentifying and recommending viableworkout options, as well as comple-tion and execution of agreements anddocuments.

“Using SigniaDocs’ eModification,borrowers can execute the documenta-tion immediately and securely online,”Guatelli said. “Immediacy is the key,and our loan workout specialists canwalk them through the click-to-signprocess on the phone. Within minutesthe mod can be completed.”

Tim Anderson, president of SigniaDocs,notes that Intelenet’s expertise in out-sourced support services and processautomation technology combineswith SignaDocs’ secure eSigningcapability and eModification docu-

value to the clients’ process since itallows them to structure the system tomeet their business needs.

In addition, AppraiserLoft is in fullcompliance with Federal HousingAdministration (FHA) regulations andHome Valuation Code of Conduct (HVCC)guidelines, providing peace of mind tothe mortgage professionals in today’schallenging regulatory market. MasadBaba, chief compliance officer ofAppraiserLoft said, “This integration inBytePro enables our customers to orderappraisals easily and directly within the



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What were the hot topics at the Mortgage Bankers Association’s recentFraud Issues Conference?First, I would like to say that the Mortgage Bankers Association (MBA) and its com-mittees that did such a great job in hosting this conference. They featured a greatnumber of panelists and speakers who are quite knowledgeable in the field of tech-nology and fraud issues regarding the mortgage industry. One particular session thatreally grabbed my attention was a discussion regarding Home Affordable Modifica-tion Program (HAMP) loan modifications and short sales. I could not believe thenumber of problems that plague the federally-mandated HAMP.

There are 300,000 loans currently in their trial period that are expected to go intodefault. The reasons appear to be income related. The borrower, when applying forthe loan modification, is working with the loan specialist and when asked about in-come, the findings appear the income is temporary or part-time, the borrower hasnot started yet, immediate loss of income for reason beyond the borrower’s control,or the income just insufficient to make the payments even with a full-time or severalpart-time jobs. Also, there appears to be a question regarding getting the appropri-ate paperwork to complete the loan modification from the borrower. There are twoideas surrounding this dilemma:

The borrower is not sophisticated enough to know what to do or understand what to do.The borrower is afraid they will get caught for misrepresentation/fraud once the first

loan’s income is discovered to be incorrect so the completed paperwork is not sent in dueto fear. When the audience was asked which option they felt was the probable reason,option two was recognized by a majority for the reason. Simply put, if the borrower isnot sophisticated enough to send in the supporting documents, how did they receive theloan in the first place. Some enemies of brokers may say the loan officer broker did it ormade them do it. We know that is not true. It does make sense that the borrower mis-stated or misrepresented their income on the first loan. We know that there are manyhonest borrowers who truly disclose their income and not every mortgage loan is fraud-ulent. We understand many borrowers and brokers made good loans out there and un-fortunate things happened to many innocent borrowers. However, this was a fraudconference and the focus was on those loans containing fraud.

Lenders are faced with a moral dilemma … if the first loan had fraud for housingwith overstated income, should the loan modification be made? The servicers aremaking them. However, what are the statutory limits for reporting a loan officer to au-thorities for allowing fraud for housing? There is not one yet. However, there are ser-vicers mad as hornets with loan officers and they may unite and submit informationto SAR and other organizations that are monitoring mortgage fraud.

Servicers are finding the borrower overstated their income when they receivedtheir first loan and understating their income to receive the loan modification. Thismust be the few hundred thousand who actually received their loan modification. Ef-fective in June, all loan modification will require full documentation and the bor-rower will be required to sign a general authorization for a vendor or third-party toverify income rather than sending documents to the servicer.

Mortgage fraud is expanded in the servicer’s world and it has taken them by sur-prise. After all this time, they are just now learning how to deal with it. We hope thebest for those who are stressed and being stretched, and hope to see America to getthrough these difficult days.

By Tommy A. Duncan, CMT

Sponsored by

Tommy A. Duncan, CMT is executive vice president of Quality Mort-gage Services LLC. For answers to your QC and FHA questions, pleasecontact Tommy at (615) 591-2528 or e-mail [email protected] may also visit Quality Mortgage Services LLC on the Web atwww.qualitymortgageservices.com.

unrecognized, is the Credit RepairOrganizations Act (CROA). This is theprimary governing law for creditrepair companies and it strictly pro-hibits many practices that are unfortu-nately still in use by many creditrepair companies today. For a creditrepair company to be compliant withthe most basic of CROA regulations,they must start with a clear contractspelling out exactly what they will do

for the consumer, informthem of their rights andnot charge the consumerany fees until all termsof the contract havebeen completed.

Many of these compa-nies have policies thatbarely meet the require-ments of the law, andwould likely fail a CROAlegal challenge by a con-sumer or governmentenforcement agency. Evena couple of the nationalcredit repositories andFair Isaac and Company(FICO) got surprised byCROA litigation chal-lenges regarding the sale

of their credit reports, scores and cred-it correction/improvement programson the Web for violating the pre-pay-ment portion of CROA. If you are inter-ested in further detail, log on tohttp://www.ftc.gov/ro/chro/credit.shtmfor a complete copy of the CROA.

The sale of credit reportsThe second issue, and the issue withthe greatest potential impact on yourability to continue your mortgageorigination business, is related to thethree national credit repositories andtheir policies prohibiting the sale ofcredit reports to companies in thebusiness of credit repair. Any accuratederogatory data on a consumer’scredit report cannot be removedthrough legal methods until thestatute of limitations expires (sevenyears for everything other than bank-ruptcy, which is 10 years). Companiesthat make claims other than that

In early 2008, with the industry enter-ing a meltdown that made most night-mares serene, a troubling trendemerged. It was the feature of coverstory of the issue of Broker Magazinethat discussed various methods of cred-it restoration and improvement. Withthe mortgage marketplace drasticallychanging over the past year, it was easyto understand the increased awarenessin the maximization of a consumer’scredit score in an attemptto salvage every loan, andmake some extra incometo boot. Other articleshave since been writtenin several mortgage pub-lications featuring theseprograms. With today’sincreased underwritingscrutiny, providing deci-sions that hang on thesmallest of credit scoremargins. The desire to beinvolved in making creditimprovement happen isobvious, but at what cost?

There is no shortageof firms looking to part-ner with mortgage orig-inators offering variousmethods of correcting, improving or“repairing” credit, and profits fromthe process there are two veryimportant missing aspects of “creditrepair”—aspects that mortgage orig-inators must carefully consider whenworking with their clients and creditrepair companies. While the firmspromoting these programs willaddress one of the problems, theymiss one very important one …mortgage originators must bewarned: Being involved with credit“repair” may bring major conse-quences, including the loss of yourability to originate loans!

In terms of legalityThe first issue with credit repairinvolves its legality. Does the programspecifically comply with federal law?In addition to the Fair CreditReporting Act (FCRA), there are veryspecific and strict laws about creditrepair. One of the most importantlaws, and one of the most frequently

Mortgage Originators beWarned: Credit Repair Could End Your Mortgage Career!

By Terry W. Clemans

“The desire to beinvolved in makingcredit improvementhappen is obvious,but at what cost?”


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relationships with approximately 1,000independent real estate agents nation-wide to the National Quick Sale plat-form, working with both buyers andsellers to effect successful short saletransactions. As a national mortgagebanking firm, Hollander Financial willalso be offering financing options, pro-viding additional continuity and speedto the process.

“Short sales can be complex,” saidMark Hollander, president of HollanderFinancial. “National Quick Sale hasfound a way to simplify and acceleratethem immensely, and it is our role tobring that message to the marketplace.Real estate professionals see the enor-mous potential offered by short sales,and National Quick Sale makes thoseopportunities realistic with their tech-nology platform. We are using socialmedia, our Web site and other means tomake certain all parties know that shortsales no longer have to be an ordeal.Thanks to National Quick Sale, they are aviable, commissionable business oppor-tunity for Realtors and a sound exit strat-egy for borrowers in trouble.”

“Short sales let the market do most ofthe work in the recovery process,” saidRich Rollins, founder and chief executiveofficer of National Quick Sale. “Instead offoreclosures and vacant houses, motivat-ed buyers can benefit from realistic offersand lenders can reduce losses substantial-ly. This partnership with HollanderFinancial means thousands more peoplecan sell their homes and avoid the painand misery of the foreclosure process. By

ments to make the “Mod in Minutes”possible.

“Nearly every servicer I’ve spokenwith has said that their number onechallenge is getting documents com-pleted and executed in a timely man-ner,” said Anderson. “With the size ofthe task at hand, it seems logical to methat strained lenders and servicerswould outsource these functions toquickly scale and address the problem,rather than throwing people and paperat the process. From a true cost andefficiency perspective, our partnershipwith Intelenet Global Services providesa best of both worlds approach.”For more information, visitwww.IntelenetGlobal.com orwww.SigniaDocs.com.

National Quick Sale andHollander join forces toexpedite short sales

National Quick Sale, aprovider of short saleautomation technolo-gy, has announced an

agreement with real estate and mortgageservices provider Hollander FinancialHolding Inc. of Claremont, Calif., to pro-mote the use of its short sale platform’scapabilities through Hollander’s networkof real estate professionals nationwide.National Quick Sale’s Web-based tech-nology enables all parties in a short saleopportunity to monitor workflow andcomplete documentation requirementsin a condensed time frame.

Hollander Financial will bring its


• Highest Paid Commissions In The Industry

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trend spotter continued from page 24

how working with you and implement-ing your strategies will result in:

� More safety of their principal� More income and a higher rate of

return on their investment

As an investor, wouldn’t you muchrather deal with a loan originator who istrained and qualified to help you preservesafety of your principal while enhancingyour income and rate of return? As a CPA,financial advisor or Realtor, wouldn’t youfeel more comfortable referring yourclients to a loan originator who can makeyou look good by “wowing” your clients,and helping them make smart real estateinvestment choices? Remember, Realtorsmake more money the more transactionsthey close. If you can help their investorclients make more money with less risk,the investors will buy more properties, andthe Realtors will make more money.

CMPS certification equips you withunique knowledge, training, tools andresources to help you and your clients cal-

culate and compare IRR, and implementthe seven keys of profitable real estateinvestment. It’s time for you to captureyour share of this $141 billion market!

Gibran Nicholas is the founder andchairman of the CMPS Institute, whichadministers the Certified MortgagePlanning Specialist (CMPS) designation.The CMPS Institute has enrolled morethan 5,500 members since its foundingin 2005. Gibran is also the chairman ofPublished Daily, a customizable onlinemagazine, newsletter and marketingservice that helps professionals trans-form their clients and prospects into areferral-generating sales force. He maybe reached at (888) 608-9800, ext. 101 ore-mail [email protected].

Visit author Gibran Nicholas’sblog at http://gibranni-cholas.com where he shares

his insights on economics, realestate and financial issues, including thecurrent mortgage and credit crises.

fair lending violations continued from page 27

should have their practices carefullyreviewed for both FCRA and CROAcompliance.

Since any firm that is found to be inthe business of credit repair no longerqualifies to purchase credit reports, ifyou are discovered and listed on a “donot sell” list of the repositories forbeing involved in credit repair, what isgoing to happen to your mortgage orig-inations? This also affects any companythat shares office space with a creditrepair company. In other words, start-ing a new “company” to shelter theconnection with your mortgage brokerbusiness will not work if you are shar-ing physical office space with the othercompany. This is one of the itemsreviewed during the mandatory siteinspections prior to receiving clearancefor the purchase of credit reports.Mortgage originators now are nowbeing cut off on a regular basis for vio-lating this policy.

In a down market, it is only naturalto seek new ways to expand your con-sumer base and look for new revenuestreams. When doing so, careful evalua-tion should be given to the potentialconsequences to both your consumerand your mortgage origination busi-ness if credit repair is something being

considered. Make sure that any compa-ny you are considering referring to yourconsumers meets all of the federalguidelines for legally offering creditrepair.

The FTC brochure at this link,http://www.ftc.gov/bcp/conline/pubs/credit/repair.shtm, will help you todetermine if the company you areplanning to refer is worthy of consid-eration by your consumer. And, ofcourse, if you are considering gettinginto this business, remember thatbeing involved in a credit repair com-pany impacts your ability to accesscredit report information. Make sure toinclude the loss of access to creditreports for your mortgage operationsfrom any considerations on getting intothis business line and if the potentialloss of your company is worth the ben-efits of these programs.

Terry W. Clemans is the executive direc-tor of the National Credit ReportingAssociation Inc. (NCRA). He may bereached at (630) 539-1525 or e-mail [email protected].

Visit the National CreditReporting Association Inc.(NCRA) on the Web at

www.ncrainc.org.

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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.

bringing more real estate professionalsinto the network served by National QuickSale’s short sale platform, HollanderFinancial enables thousands of agents tobecome engaged, earn commissions andhelp the housing market get moving. Weare very pleased to be working with themto achieve this important goal.”For more information, visitwww.NationalQuickSale.com orwww.HollanderFinancial.com.

Mortgage Professionalsto Watch� Elliott & Company Appraisers has

promoted Carlyle Holt to the posi-tion of vice president.

� Danielle Drewisch has been nameddirector of client relations for Equi-Trax Asset Solutions LP.

� Prommis Solutions has promotedJennifer Dorris to president, GeorgeDunaway as chief financial officer,and Dick Volentine as its new cor-porate counsel.

� HOPE LoanPort has named LarryGilmore as chief executive officer andhas named the following to the boardof directors: William A. Longbrake,John H. Dalton, John A. Courson,Faith A. Schwartz, Kenneth D. Wadeand Camillo T. Melchiorre.

� Fairway Independent MortgageCorporation has appointed PaulWalnick president of mortgage opera-tions and Dan Cutaia president of cap-ital markets and risk management.

� Saxon Mortgage Services Inc. hasnamed John P. Kim as head of busi-ness development.

� Brian D. Frame, CMB, AMP hasbeen appointed to the position ofdirector, strategic segment managerfor Radian Guaranty Inc., the mort-

gage insurance subsidiary of RadianGroup Inc.

� Level 1 Loans, a wholly-owned sub-sidiary of The Sextant Group, hasannounced the hiring of TomHealey III as product manager.

� The First American Corporation hasnamed Anand K. Nallathambi as itsnew chief executive officer andBuddy Piszel as chief financial officerof its Information Solutions Group.

� David Hall has announced thelaunch of Hall Financial, based inBirmingham, Mich.

� UnitedTech Lender Services Inc. hasannounced the appointment of BradleyCoburn as vice president of valuations.

� Anthony Self has joined GoHoming.comas head of business marketing.

Your turnNational Mortgage Professional Magazineinvites its readers to submit any infor-mation, events, passages, promotions,personal or professional occurrencesthat seem appropriate and/or other per-tinent data to the attention of:

Heard on theStreet/Mortgage

Professionals to Watchcolumn

Phone #: (516) 409-5555E-mail:

[email protected]

Note: Submissions sent via e-mail are pre-ferred. The deadline for submissions is the1st of the month prior to the target issue.

Carlyle Holt

Danielle Drewisch

Jennifer Dorris

George Dunaway

Dick Volentine

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AbacusMortgage Training and Education

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So you can return to originating loans.

Credit Plus announcesdirect connectivity toFHA TOTAL Scorecard

Credit Plus Inc. has announced that itscustomers can obtain direct access to theFederal Housing Administration (FHA)TOTAL (Technology Open to ApprovedLenders) Scorecard through its innovativetechnology. “We’re excited to be one ofthe first credit reporting agencies to offerthis direct access,” said Greg Holmes,national director of sales and marketingfor Credit Plus. “This connection allowsour customers to save money and submitdirectly to FHA TOTAL Scorecard.”

The U.S. Department of Housing &Urban Development (HUD) developedthe FHA TOTAL Scorecard to evaluate thecredit risk of FHA loan applications thatare submitted through an automatedunderwriting system. A mortgage profes-sional simply uploads the 1003 loan datainto the FHA TOTAL Scorecard and theapplication is approved or denied. A real-time response is provided through theautomated technology.For more information, visit www.credit-plus.com.

NYLX adds live MBS pricingand analysis in its pricedecisioning platform

NYLX, a providerof automatedmortgage dataapplications and

solutions, has announced a partnershipwith MBSQuoteline to incorporate stream-ing real-time Mortgage-Backed Securities(MBS) and Treasury prices, market newsand analysis, and an economic events cal-endar into its LoanDecisions product eligi-bility and pricing platform. Users will beprovided a dashboard of summary MBSmarket data, and access to the rich informa-tion services provided by MBSQuoteline.These services include real-time MBS pric-ing, intra-day MBS price monitoring toanticipate pricing risk or opportunity,charting of mortgage rates to view volatili-ty and developing trends, and conciseanalysis of the day’s economic eventsaffecting mortgage rates.

“MBSQuoteline market informationand services will help NYLXLoanDecisions users get the same real-time streaming data professional tradersuse, enabling them to stay in touch withthe market information they need,” said

Howard Conyack, chief executive officerof NYLX. “They’ll be able to make betterlock/float decisions because they’ll haveaccess to real-time MBS data and willknow about upcoming economic eventsthat could move market rates.”

MBSQuoteline market information andservices will help NYLX LoanDecisionsusers get the same real-time streamingdata professional traders use, enablingthem to stay in touch with the marketinformation they need.

“It is a natural fit for MBSQuotelineto provide its services through the NYLXmarket leading platform for producteligibility and pricing,” stated ScottSanderson, president of MBSQuoteline.“We supply the essential market infor-mation—what you need to know, whenyou need to know it—necessary foreffective decision making for origina-tors when assisting borrowers duringthe loan origination process, and forsecondary marketing departmentsmanaging pipelines.”For more information, visit www.nylx.comor www.mbsquoteline.com.

New Interthinx productdetects occupancy issuesrelated to fraud

Interthinx has enhanced its flagshipFraudGUARD product with new vari-ances to help detect occupancy issuesrelated to mortgage fraud. The changescome in response to a disturbing trendthe company uncovered in its quarterlyfraud risk reports. Occupancy fraudshowed a slight quarter-over-quarterincrease in the third-quarter 2009report, which alerted the Interthinxproduct team to study issues includingoccupancy fraud, buy and bailschemes, straw buyers, risks associatedwith delinquency/default, and risksassociated with increased home value.

The introduction of the new vari-ances, designed to help protect mortgagelenders from fraud and improve loanquality, is made possible by the uniqueFraudGUARD comparison of the borrow-er’s current residence to the subjectproperty. Interthinx is a leading providerof proven risk mitigation, mortgagefraud prevention, and regulatory compli-ance tools for the mortgage industry.

“We look very closely at the findingsin the mortgage fraud risk reports,”said Connie Wilson, executive vice pres-

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� Presidents First is a multi-state, full-service home mortgageBanker dedicated to offering quality mortgage solutions with anunwavering commitment to service. Having years of experience inthe mortgage industry, we understand what’s important.Presidents First is dedicated to providing our customers withintelligent, innovative mortgage products at aggressive rates andunparalleled service levels. Utilizing hands-on common senseunderwriting, expeditious closing strategies and personalizedaccount servicing, Presidents First is focused on helping ourcustomers to grow their business. Offering affordable lendingsolutions for borrowers that deserve quality loan programs andstability - it’s clear to see why Presidents First is America’s LeadingWholesale Lender.™

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ident of Interthinx. “In the third quar-ter report for 2009, the OccupancyFraud Risk Index, which is closely corre-lated to schemes involving speculativeinvestments, declined 30 percent froma year ago. However, a very slightincrease over the last quarter—the firstsince fourth-quarter 2006—suggestedthat occupancy risk may be poised for arebound. We decided to respond swiftlyto this analysis with the new ability tocompare subject properties to the cur-rent residences of borrowers withinFraudGUARD. As it stands now, resultsfrom our fourth-quarter 2009 MortgageFraud Risk Report reveal a 16 percentrise in the Occupancy Fraud Risk Index.The magnitude of the quarter-on-quar-ter increase suggests that occupancyfraud risk may become a serious issueas continuing price declines and get-rich-quick schemes lure investors backinto the market. FraudGUARD is readyto support lenders facing occupancyrisk issues.”

Using a borrower’s current address,FraudGUARD produces a data comparisonthat identifies renters that buy non owner-occupied properties and borrowers claim-ing owner occupancy on a subject proper-ty of lesser value than a currently ownedproperty; both scenarios present a certainlevel of risk. The new variances will alsohelp identify potential risks associatedwith increase in value of housing and thepotential problems associated with theability to qualify for the increased value.The new variances analyze all borrowersand are available to all FraudGUARD cus-tomers.For more information, visitwww.interthinx.com.

Wolters Kluwer launchesnew RESPA audit tool

Wolters Kluwer Financial Services hasannounced the launch of its new RESPAPost-Implementation Audit Service.Through the service, the company’s com-pliance and risk management profession-als can help banks and credit unions effec-tively and efficiently comply with recentchanges to the Real Estate SettlementProcedures Act (RESPA). Since the RESPArevisions took effect on Jan. 1, financialinstitutions have identified several com-mon challenges in complying with them.These include meeting the new fee toler-ance and Good Faith Estimate (GFE) re-dis-closure requirements, and the responsibil-ity to make sure third parties they do busi-ness with, such as mortgage brokers andsettlement agents, are also in compliance.

Wolters Kluwer Financial Services’RESPA Post-Implementation Audit Servicehelps institutions rapidly put the necessarypolicies, procedures and documentationin place to overcome the most commonand complex challenges. The company’sattorneys, compliance analysts and regula-tory consultants use decades of experienceand expertise to perform an efficient andthorough review of institutions’ RESPAcompliance programs.

The review includes an examination ofan institution’s lending, compliance, ven-dor management, and staff training proce-dures. It also includes a loan file reviewthat looks at GFEs and HUD-1 and HUD-1Aforms for accuracy and adherence to allRESPA requirements. Wolters KluwerFinancial Services’ compliance and riskmanagement experts then offer a compre-hensive diagnosis of each institution’sRESPA compliance program, highlightingany areas of potential concern. And theysuggest practical ways in which policies,procedures and documentation can beenhanced from compliance and opera-tional standpoints.

“The effective compliance date forRESPA passed several months ago, but

financial institutions are still tackling relat-ed obstacles,” said Jason Marx, vice presi-dent and general manager, mortgage, forWolters Kluwer Financial Services. “Now isa perfect time to evaluate their complianceprograms and ensure they are meeting therequirements through the easiest, mostcost-effective routes possible.”For more information, visit www.wolter-skluwer.com.

Pro Teck announcesAppraisal Order Portal forthe wholesale/retail market

Pro Teck Valuations Services, a real

estate valuation and risk solutionsprovider, has announced the expansionof its services by offering a configurableAppraisal Order Portal for wholesale andretail mortgage origination.

The platform, already in use by topnational mortgage wholesalers, isdesigned to meet the national appraisalneeds of the market; including regulato-ry, investor and Home Valuation Code ofConduct (HVCC) requirements. With astreamlined interface, multiple paymentoptions, robust status reporting capabili-ties and the quality demanded today, ProTeck’s solution does away with the needfor a third party ordering platform and


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Copyright © 2010 Emigrant Mortgage Company, Incorporated (Emigrant). All rights reserved. Emigrant is a subsidiary of Emigrant Bank, Member FDIC and is an Equal Opportunity Lender. All product names, company names and logotypes are servicemarks or trademarks of Emigrant in the United States and other countries. The information, products and services contained in this advertisement are believed to be correct but may include inaccuracies, typographical errors and/or omissions. Emigrant does not guarantee the accuracy of the data contained herein. This information is intended for mortgage and/or real estate professional use only and should not be distributed or presented to consumers or any other third parties. This is not an offer or guarantee to extend consumer credit. Program guidelines, terms and/or conditions are subject to change by Emigrant without notice. All loans are subject to submission of a complete application, underwriting review and credit and property approval by Emigrant. Not all products and/or programs are available in all states and/or localities and/or for all loan amounts. Certain products / program are offered through third parties. Other restrictions and limitations may apply. New York Licensed Residential Mortgage Lender: Exempt. Emigrant is registered or licensed with the Banking Departments or Divisions in CT, DE, FL, MA, NH, NJ, NY and PA.

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truly simplifies the appraisal manage-ment process.For more information, visit www.protk.com.

MCS launches Broker360to reduce market time ofREOs

M o r t g a g eContractingServices (MCS),

a nationwide property preservation andinspection services provider to thefinancial services industry, has launchedBroker360, a Web-based portal thatallows real estate-owned (REO) brokersto access the status of preservationwork completed by MCS. With inboundand outbound communication capabil-ities, the portal enables brokers to sub-mit information and bid requests inaddition to receiving electronic notifi-cations regarding the properties theymanage.

Broker360 works in union with MCS’existing Web-based client platform,MCS360, but is designed specifically toenhance the communication betweenthe servicers, field service providersand real estate agents managing thesales process of REO properties.MCS360 was developed in response tothe industry’s need for software thatallows for two-way communication aswell as real-time delivery of work orderresults. While MCS360 is a client-basedWeb-portal, Broker360 essentially per-forms the same functions for individ-ual real estate brokers, thereby provid-ing them with up to the minute infor-mation about their properties andaffording them a direct line of commu-nication with their asset preservationcoordinator.

This advancement in the speed inwhich information is sent and receivedallows asset managers to make moretimely decisions with regards to preser-vation initiatives, which ultimatelyenhances short- and long-term mainte-nance as well as enables them to movethe sale of these properties at a fasterrate. Chad Mosley, vice president ofoperations for Mortgage ContractingServices, said, “It is important that wecontinue to promote cohesion and fur-ther develop our working partnershipwith brokers. With more and moreproperties adding to an already swollenREO inventory each day, it is vital thatwe do all we can to assist real estateagents in the selling process.”

After logging into the system, brokersassigned to manage properties by MCS’mortgage servicing clients can viewinformation about their propertiesincluding inspection results, work orderdetails and photos of completed work. Ifthey elect to do so, brokers can “watch”selected properties, allowing them toreceive e-mail notifications when MCScompletes work at one of the designatedproperties. The e-mails are automatical-ly generated through Broker360 once a

work order or inspection has been ful-filled and validated by MCS.

“Broker360 will not only increasecommunication between MCS and realestate brokers, but it will also make thatcommunication more efficient, allowingus to perform our work faster, hopefullyreducing the time properties are on themarket and the cost our clients have tospend to maintain them,” said Mosley.“In giving brokers the ability to viewwork upon completion and opening anadditional avenue to communicate withour shared clients, we can help themtrim down sale cycles as well as portfoliovolumes.”For more information, visit www.mcs360.com.

Bank of America intro-duces earned principalforgiveness program tohelp curb foreclosures

Bank of Americaannounced that itwill look first atprincipal forgive-

ness, ahead of an interest rate reduc-tion, when modifying certain sub-prime,pay-option and prime two-year hybridmortgages qualifying for its NationalHomeownership Retention Program(NHRP). Several enhancements are beingmade to the program, including theintroduction of an earned principal for-giveness approach to modifying mort-gages that are severely underwater. Theprogram changes are designed toencourage greater customer participa-tion in the company’s aggressive home-ownership retention programs, includingour continued strong commitment to thefederal government’s Home AffordableModification Program (HAMP).

The Commonwealth of Massachusettsworked with Bank of America to developthese additional homeownership reten-tion strategies that help ensure sustain-able solutions and is the most recentstate to join the NHRP. There are now 44states and the District of Columbia par-ticipating in the NHRP mortgage modifi-cation program and related foreclosurerelief payment and relocation assistanceprograms.

Bank of America developed andlaunched the NHRP in 2008, in cooper-ation with state attorneys general, toprovide assistance to Countrywide bor-rowers who financed their home withcertain sub-prime and pay-optionadjustable-rate mortgages (ARMs). Bankof America removed these from theCountrywide product line upon acquir-ing Countrywide in July 2008. Thesenew components of the agreementapply to certain NHRP-eligible loansthat also meet the basic qualificationsfor the government’s Home AffordableModification Program.

“The centerpiece of these enhance-ments is a program of earned princi-pal forgiveness that addresses severelyunderwater mortgages with some of

new to market continued from page 31

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the highest rates of delinquency—specifically sub-prime loans, pay-option ARMs and prime two-yearhybrid ARMs that are 60 days or moredelinquent with a principal balance of120 percent or more,” said BarbaraDesoer, president of Bank of AmericaHome Loans. “At the same time,earned principal forgiveness helpshomeowners, it also recognizes andaddresses the interests of mortgageinvestors by ensuring that forgivenessis tied to the homeowner’s perform-ance, reducing the probability of afuture default under the modifiedterms, and adjusting the total amountto be forgiven in light of any gains inproperty values that might occur in aneconomic recovery.”

Bank of America expects to be oper-ationally ready to implement the newprincipal reduction components ofNHRP in May. The bank will identifymortgages that may be eligible forthese solutions and proactively contactthose customers to ascertain theirinterest in a modification and torequest documents necessary to deter-mine actual eligibility.

With implementation of theseenhancements, Bank of America willmake principal reduction the initialconsideration toward reaching theHAMP’s target for an affordable pay-ment equal to 31 percent of house-hold income when modifying qualify-ing sub-prime, pay-option ARM andprime two-year hybrid ARM loans thatare also eligible for NHRP. An interestrate reduction and other steps wouldthen be considered, if additional sav-ings are necessary to reach the target-ed payment.

Bank of America estimates that itwill be able to offer these enhancedprincipal reduction solutions to about45,000 customers who qualify for aHAMP modification, for an estimated$3 billion in total reduced principaloffered under this NHRP enhancement.For more information, visit www.banko-famerica.com.

Fairway IndependentMortgage launches virtualdata storage solution

F a i r w a yIndependentM o r t g a g e

Corporation, one of the country’slargest mortgage bankers, announcedthat it has deployed a new virtual datastorage solution geared toward savingthe company hundreds of thousands ofdollars in costs over the coming years,while providing unlimited storage capac-ity. The deployment was a key goal forthe company in 2010, which recently sur-passed the $3 billion mark in loan vol-ume, as it moves its growing mortgageoperations toward a more electronic andenvironmentally-sustainable future.

Fairway’s new virtual data storagesolution employs the use of a storagearea network (SAN) which allows datato be consolidated at a remote datacenter where it is accessed and man-aged virtually over the Internet. For

Fairway employees, the SAN appears asif it’s an on-site server, one in whichthe data can be called up instantly, atany time. The new system replaces thecompany’s network of nearly 30 physi-cal on-site servers, which is similar tohow most mid-sized mortgage lendersstore their data.

The solution is provided by DellEqualLogic and managed by softwareprovided by VMWare. Since rolloutwas recently completed, Fairway’sSAN has resulted in a 50 percent sav-ings across the organization in hard-ware, maintenance and administra-tion costs. The company now has anunlimited ability to add additionalstorage space without the need fornew hardware, as well as better data

security, as its mortgage data is nowhosted in a remote, secure locationand consistently backed up.

“Given our explosive growth overthe past several years, our growingdata load, and the upcoming rollout ofour new origination platform, we real-ized it was an ideal time for us to makethis switch,” said Randy Allen, vicepresident of enterprise infrastructurefor Fairway Independent Mortgage. “Inthe past five years alone, the amountof data we produce and store hadgrown by 400 percent. While manyorganizations our size have not yetembraced virtual storage solutions, webelieve it will become more and morecritical as paperless platforms andelectronic documentation become

industry standards. Fortunately, we’llbe ready.”For more information, visitwww.FairwayIndependentMC.com.

AIMSdashboard releaseslatest version of itsappraisal software

AIMSdashboard has released the lat-est version of its Web-based AppraisalIndependence Management System(AIMS), featuring several compliance-focused additions. AIMS 4.4 will pro-mote lender compliance with theappraisal independence requirements


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Ginnie Mae saw it coming. The expertspredicted it. And it has finally arrived,with a vengeance.

The entry costs reduction food-fightamong home equity conversion mort-gage (HECM) reverse mortgage lendersis on. Among the major players, MetLifeBank lobbed the first salvo on March26, by discarding origination and serv-icing fees on its fixed-rate HECMs.

Others have since jumped in withtheir version. Wells Fargo spread it to itsadjustable-rate HECMs. Bank ofAmerica stretched it to front-end mort-gage insurance premiums (MIP), offer-ing to pay 100 percent of the borrower’sMIP and erasing servicing fees. Othercost-reduction ideas are coming. Onelender can easily match another’s offer-ing. None has a cost-reduction compet-itive advantage. The HECM consumer isthe winner. Call it spring sale in reversecountry!

Jacking up volume is a driver ofthese lenders’ largesse. Volume is down22 percent for the first half of fiscal2010 from the same period a year ago.Volume projection for the remainder ofthe fiscal year is dismal. High secondarymarket premiums for fixed-rate HECMsis a second driver. A third is lenders’guilt for making a bundle on the back-end.

What do these happenings mean forborrowers and the industry? For bor-rowers, it means more cash at a time ofthe Federal Housing Administration’s(FHA’s) cash-advance cutbacks and pre-mium increases. If the trend continues,it could help change the perception ofreverse mortgages as expensive loans.If it doesn’t, we are back where westarted.

For the industry, it is a mixed bless-ing. It is a great public relations oppor-tunity. Government is taking away cashfrom seniors. Presumed predators aregiving it back. Forget the $100,000plus industry “repositioning” PR cam-

paign. Scream about the cost reduc-tion revolution in reverse mortgages.Speak of the difference it is making forseniors, saving their homes from fore-closure. Sing about the extra cash inseniors’ pockets in these tough times.So, what could go wrong?

� Suitability: Lenders must ensurethat loan officers or brokers do notneed the fixed-rate HECM more thanseniors. With eye-popping premiumsfloating around for fully-fundedfixed-rate HECMs, the risk exists thatsome may push fixed-rates on sen-iors who do not need them. If theseseniors end up losing their lumpsum in some post-reverse transac-tion situations, the industry gets theblame, canceling any PR gains.

� Complexity: The flood of cost-reduc-tion and pricing options is creatinganother layer of complexity in reversemortgages. While professionals mayfind these “new” options good andeasy, consumers may find them badand confusing. Industry should focuson simplifying these options:

• Tell consumers that zero originationand servicing fees mean slightlyhigher rates.

• Tell them that high front-end costsequals slightly lower rates.

• Tell them what investors are payingfor their loans on the secondarymarket and how it affects their long-term loan costs.

• And tell them that ultimately, theyare paying for the zeros.

� Disclosure: The conventionalizationof reverse mortgage entry costs havebegun. As lenders wrap costs andyields into rates similar to forwardlenders, they need to disclose every-thing, beyond the letter of the law.

� Zero-fee conditioning: The industryhas started training borrowers andthe public to think origination andservicing fees are alien to reversemortgage lending. When premiumpricing disappears and it finds itsnon-variable operating costs are still

present, reinstating these necessaryfees after conditioning seniors, regu-lators, and the public to forget themwill do lasting damage to industryveracity. It will keep feeding the PRbeasts and “repositioning” the indus-try. It is short-term thinking.

Atare E. Agbamu, CRMS is author ofThink Reverse! and more than 130 arti-cles on reverse mortgages. Since 2002, hewrites the nationally distributed column,Forward on Reverse. Through his advisory,

ThinkReverse LLC, Agbamu advises finan-cial professionals, institutions, and regu-lators across the country. In a 2007national report on reverse mortgages,AARP cited Agbamu’s work. He can bereached by phone at (612) 203-9434 ande-mail at [email protected].

Visit author Atare E.Agbamu’s blog at thinkre-verse.com for his thoughts

and insights on the reversemortgage marketplace.

Spring Sale in Reverse Country

“The entry costs reduction food-fight among home equity conver-sion mortgage (HECM) reverse

mortgage lenders is on.”

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. Eachweek we provide our listeners with up-to-the-minute information

of what is happening in mortgage and housing industry.

Sign-on weekly atnmpmag.com/lykkenonlending

Twitter.com/ntlmortgagepro

facebook.com/mortgageprofessional

LinkedIn.com (search NationalMortgage Professional Magazine)

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Advanced Credit Training helping you:

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consumers not repeat past mistakes.• Discover how you can expand your business beyond your state's

boundaries.• Understand how to develop ongoing commission structures that

motivate and create incentives for your sales team.• Learn how to penetrate the biggest banks to get hundreds of leads.

After this conference you will:

• Walk away with the immediate knowledge and tools to buildyour own compliant and profitable credit repair business.

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Who is this conference for? Mortgage company owners, branch managers and loan officers looking

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of the Uniform Standards of ProfessionalAppraisal Practice (USPAP), FederalHousing Administration (FHA) MortgageeLetter 09-28, Federal FinancialInstitutions Examination Council (FFIEC)and the Home Valuation Code of Conduct(HVCC). AIMS 4.4 further automates sever-al elements of appraisal operations,smoothing lender-appraiser interactionduring appraisal production.

“Lenders are seeking more oversightin the appraisal process, which mayappear to conflict with appraisal inde-pendence requirements” said ChrisWilliams, president and chief technolo-gy officer for AIMSdashboard. “AIMS 4.4strikes a balance between the require-ment of appraisal independence andlender process oversight. The twoseemingly opposed qualities can beachieved through the use of software,eliminating dependence on third partyappraisal management companies.”

AIMS 4.4 delivers several new ele-ments designed to restore efficienciesto the entire process, including:� An automatic engagement letter

from the lender, which allowsappraisers to accept or reject thelender’s assignment within theframework of the system.

� Automatically-generated question-naire addressing USPAP competencyaffirmation and ethics rule disclosurefor each appraisal assignment, allow-ing the lender to actively manage theprocess where an appraiser’s responsemerits further consideration.

� Introduction of Appraiser Administrators,providing increased efficiency throughthe performance of administrative func-tions (appraisal status updates, docu-ment download/upload), especiallywhile appraisers are busy performing“field inspections.”According to Williams, the new fea-

tures amount to real-time statusupdates for the lender and originator,as well as faster delivery of any apprais-al-related notifications necessary forthe Real Estate Settlement ProceduresAct (RESPA) compliance.

“More than ever, mortgage origina-tors are looking for ways to regain effi-ciency in the valuation process withoutsacrificing accuracy,” said Williams.“AIMS has always focused on maintain-ing conformity with the variety ofappraisal independence standards.AIMS 4.4 will make that process evenfaster and smoother without sacrificingbusiness controls.”For more information, visitwww.AIMSdashboard.com.

LPS Asset Managementrolls out short sale product

Lender ProcessingServices Inc. (LPS),a provider of inte-grated technology

and services to the mortgage and realestate industries, has announced thelaunch of its professional short sale

service. Offered through LPS AssetManagement Solutions, LPS’ short salesolution helps servicers respond morequickly to short-sale offers and closemore transactions. In the current envi-ronment, servicers must be prepared toefficiently leverage alternatives likeshort sales. They must also be able tomanage an increase in short salerequests from borrowers and processthe increased volume, while minimiz-ing risk exposure and keeping operat-ing complexity to a minimum.

“As the need for short sale manage-ment continues to increase, servicers

must have an exceptionally efficientprocess in place for accuracy, timelinessand high-performance results,” saidChad Neel, president of LPS AssetManagement Solutions, LPS FieldServices and LPS Auction Solutions.“With our extensive industry and shortsale experience and resources, we areideally poised to help servicers stream-line the short sale process, enablingthem to keep costs down and workwith defaulted homeowners moreeffectively.”

LPS Asset Management Solutionshas an established network of assetmanagers who manage, market andsell distressed and bank-owned prop-erties, so servicers don’t have to exper-iment with alternatives or create

alliances that may not offer the samebenefits. LPS Asset ManagementSolutions’ ability to quickly draw uponrelated LPS resources, including prop-erty preservation and code enforce-ment services, title and closing servic-es, analytics, valuations, MLS data andmarket trending data, offers servicersa powerful, comprehensive solutionfor its short sale needs.

With the expertise and ability toassist servicers at any stage of the shortsale process, LPS works directly with itsclients to review title; assess andresolve junior liens; review propertyvalues against short sale offers; evalu-ate the equity position for each transac-



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Brokers … Don’t Jump Ship!

“Loan brokers are one of the least expen-sive ways to bring a loan to market,” saidDavid H. Stevens, commissioner of theFederal Housing Administration (FHA)during his presentation to the NationalAssociation of Mortgage Brokers 2010Legislative & Regulatory Conference inWashington, D.C.

Brokers, in their purest form, are anextension of the lenders they representand a borrower’s best friend. Withoutsacrificing professionalism or ethics,professional mortgage brokers find thevery best lending programs at the bestrates, fees and terms. They, in fact, dothe shopping for the consumer and thisis why we believe that not only will bro-kers remain a viable source of loanoriginations for the industry, but willdominate once again in the future.Bottom line, consumer demand willdictate it.

Many brokers are finding themselvesdrifting about in a sea of uncertainty,wondering if they will still be in busi-ness due to the rising notion thatwholesale business is sure to become athing of the past. This self-serving mythis often perpetuated by industry lead-ers who are using this current climateto gain market share. Their lack ofbelief in those who made them whatthey are is shameful and we will notabandon our business partners whenthey need our support the most. What’salarming is that many of those compa-nies, who are pushing brokers tobecome net branches, are in factwholesalers themselves.

“Have we have lost sightof the spirit of the whole-sale model?”Paul Rozo, president and chief execu-tive officer of Paramount ResidentialMortgage Group (PRMG) said, “I findthis quite ironic to say the least!Many wholesalers are speaking fromboth sides of their mouth. Some ofthem are literally cannibalizing theirown brokers by corralling them intotheir wholesale channels by playingoff the broker’s fear-based notions,and ultimately leaving them no

choice but to become part of theirown self-serving net branch platformwith the intent of hedging their oddsagainst a broker/wholesale collapse.This is not in the best interest of thebroker, the consumers or even that ofthe industry, especially at a timewhen we need to support our brokersthe most.

Rozo continued, “I began my careeras a broker, and have been disappoint-ed over the last seven years by the lackof enforcement of the standards that Iadhered to when I entered this profes-sion. Have we have lost sight of whatthe entire spirit of the wholesalemodel is to begin with? It’s time the‘professional’ broker reclaims theirrole within their communities, and asa wholesaler, we intend to help themdo just this.”

“It’s time the ‘professional’broker reclaims their rolein their communities …”Paul Rozo’s passion for the broker isshared throughout his company teammembers and is the cornerstone oftheir foundation as an organization.It is part of their culture to serve andtheir belief in the broker and isshared by other prominent industryleaders as well. “I have spoken withsome very high level capital partnerson Wall Street and investors in thesecondary market, as well as execu-tives at other large institutions whoagree that staying true to a businessmodel, which is ‘broker centric,’allows wholesalers the ability tomaintain loyalty and gain new brokerpartners that few will be able to emu-late.” Said Rozo. As wholesalers, weneed to believe in our brokers andcontinue to support them. It is alsoimportant that we continue to pro-vide educational resources whichremain second to none.

Commitment towards educationand consumer outreach is para-mount. As an example, PRMG demon-strates this in their funding of theNon-Profit HELP (HomeownershipEducation Learning Program) and

their ongoing efforts to reach out tothe public with such partners as theCalifornia Department of Real Estate(DRE), local community colleges, HUD,the Internal Revenue Service (IRS),district attorneys and local govern-ments who all believe that consumeroutreach and education is vital tomoving our economy forward.

Choose to remain a broker!So what about the net branch model?While net branches havecertainly helped thesmall broker expand theirpossibilities, this usuallycomes with a great price!This includes, surrender-ing their broker’s license,loss of commissions, andloss of freedom to chooseand work with multiplelenders in selecting thebest loan programs andrates for their clients.Essentially, the broker isvirtually giving up theiridentity, culture and busi-ness autonomy to accepta rather so-called con-trolled and structuredenvironment.

We’ve all heard it … I can’t get anything donearound here!”In today’s market cli-mate, net branching ismodeled to play on the fears of mort-gage brokers to get them thinkingthat this is their only choice of sur-vival outside of becoming an employ-ee of a mega conglomerate nationalbank. And let’s face it, most of usknow that big banks “bank” on theirname and reputation and are gener-ally not attentive to the needs oftheir loan officers who are trying toget that all important loan throughthe system. We’ve all heard it: “I can’tget anything done around here!”Nobody cares, nobody listens. Thebank’s attitude is, “It’s our way or thehighway.”

When the market was controlledby real estate-owned (REO) inventorybanks could intimidate Realtors intorequiring that all offers had to comefrom a direct lender. Now that short

sales are dominating and Realtorsare able to choose the very best pro-fessional lenders available, oftenthey will turn to their local brokerwho has been part of their team foryears.

With net branching, the brokerloses the ability to broker a loan out-side of the company inhibiting themfrom offering the best combination ofprice and service to their customers.In many cases, if a non-Federal

Housing Administration(FHA) loan is allowed tobe brokered outside, thenet branching companywill charge a significantfee, thus cutting into thebroker’s profitability.Brick and motor officeshave a significant costand the originator paysfor these costs. Brokerswho are accustomed tobeing the customeroften report being treat-ed with contempt fromtheir new “employers”when they demandexcellence from thosearound them.

So, as a broker,you have to askyourself … “Is itreally worth jumping ship?”We say, “No!” There are,in fact, wholesalers out

there that will continue to standbehind mortgage brokers, whole-salers who believe that wholesalebusiness will remain strong for yearsto come. That belief in maintaininglong-term relationships by providingcontinued education and support tomortgage brokers, along with thebest possible loan programs, serviceand technology in order to ensurethey can succeed in today’s mortgageenvironment.

Keep your identity; choose to remaina mortgage broker!

Paul A. Lucido is national marketingdirector for Paramount ResidentialMortgage Group (PRMG) in Corona,Calif. He may be reached by phone at(951) 547-6311, ext. 358 or [email protected].

By Paul A. Lucido

“Many brokers arefinding themselvesdrifting about in asea of uncertainty,wondering if they

will still be in busi-ness due to the rising

notion that whole-sale business is sureto become a thing of

the past.”

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National Account ExecutiveSales PositionNational Title Company seeking an experienced sales person tosell loan origination and default products to lenders and loan ser-vicers on a nationwide basis.The successful applicant must be willing to travel, have 5 years ofsales experience, and an understanding of title and closing serv-

ices. Company is nationally recognized as apremier provider of title and closing serviceswith an outstanding reputation. Competitivesalary, commission schedule and benefits.

Please fax or e-mail resumeAttn: Blanche Harrison714-822-3222 • [email protected]

Production is down and regulation isup. In response, companies hope toincrease production via branch devel-opment and brokers are looking for asafe harbor from all of the new regula-tions. But how do you find the right fit?Read on and I will share four tips thatwill help your chances of getting itright the first time.

Whenever I write my column, I try andthink of some clever eye-catching titlethat will draw the reader. One such titlewas based on the well-known lyrics of anold song “Looking for love in all the wrongplaces!” It seemed appropriate when con-sidering how some are going about theprocess of branch development.

There are two obvious componentsin any “branch development” plan …the branch (the production folks) andthe company (the funding folks)!Regardless of which side of the equa-tion you are on, both have one com-mon goal: Getting into the right rela-tionships and avoiding the wrong rela-tionships. If you are a company pursu-ing a branch development strategy,you would do well to follow the princi-ple set forth by James Collins in hisbook, Good to Great, which is “Get theright people on your ‘bus,’ and get theright people off your ‘bus.’” The sameprinciple works for a production grouplooking for “the right” company tojoin. You want to make sure you are“getting on the right ‘bus’ and avoidingthe wrong ‘bus’… simple as that. Butthat can be a bit trickier for both thanit would appear. If you doubt that, con-sider America’s high divorce rate. Itwould suggest that ‘just maybe’ we getenamored with all the wrong thingswhen considering a long-term relation-ship. Why do you think we would begood at selecting the right businesspartnerships when we struggle asmuch as we do to find the right mate?

We are a consulting firm that hasextensive experience consulting tocompanies that have, or desire to have,a branch development plan as well asto production groups looking for theright home. Here is some free advice… three tips to be exact … that Iwould suggest you consider beforeentering into a branch relationship.

Tip #1: Consider gettingcounselThe harsh “hindsight reality” that will hityou in the face if you make a mistake isthis, “You don’t know what you don’tknow!” We all have blind spots. Don’t be

blindsided by your own blind spots! Hereare some places to go for advice:

� Friends and family: I don’t knowabout you, but some of my closestand most valued friends are thosewho tell me what I need to hear andnot necessarily what I want to hear!This can be the result of being indenial or just having “blind spots.”Getting to an objective view pointfrom those you trust is important. Ihave found this advice to be some ofthe best advice I have received …and best of all, it is the cheapestadvice we can get for free!

� An experienced consultant: Unlikefriends and family, this advice comesat a cost. Yet, it can be some of thebest money you every spent and saveyou hundreds of thousands of dollarsin hard cost and even more in lostrevenue opportunities as the result oftime spent. We can always make backthe money, but we can never regainthe time lost which may prove morefatal than the loss of money.We don’t always have the time or

money for a mulligan … a “do over” ifyou will. So, to help you “get it right”the first time and avoid those painful“whoops … why didn’t I see this?” kindof mistake, seek the advice of others!

Tip #2: Consider the cultureThere are three key ingredients, the “4-Ps,” that you should carefully examinebefore getting into a branch relation-ship … and these, like everything else Isuggest, apply to both sides of theequation … the company with thebranch expansion plans and the pro-duction team looking for a good home.

� Products: This may come as a shockto you, but we are amazed by thenumber of times this most basic andobvious of considerations is beingoverlooked. The reason for this isthat some wrongly assume thateveryone in business today has thesame basic product offerings. Whilethis is generally true, don’t make themistake of assuming something asbasic as this, or as the saying goes, itwill make an “ass out of you andme.” For companies consideringbringing on a production group,make sure to get a report of theirlast 12 months’ fundings, itemizedby product type. Production groups… don’t assume the company you

A View From the C-SuiteBy David Lykken

Branch Development: Four “C” Tips From the “C” Suite

are considering joining offers theproducts you sell.

� Pricing: Most originators don’t missthis one, but more companies thanwe can count don’ttake the time to findout how price sensitivethe production groupyou are consideringhiring is. The best wayto find out is to againget, if at all possible,funding reports of notonly the products, butalso the rates the pro-duction group fundedthe loans at and com-pare those prices towhere you were at.

� Personalities: Whetherit’s business or person-al, everyone is on theirbest behavior in thecourtship phase of anyrelationship. As soonas it has been deter-mined by both partiesthat there is potentialfor a relationship, thenthe courtship phasehits high gear and ourblind spots grow.

� Pressure: As the old say-ing goes, “Haste makeswaste.” Too many dealsare done too quickly because there’s afalse sense that “We’ve got to get thisdone ‘yesterday’ so that we don’t losethis opportunity.” When rushed,things “below the surface” or blindspots, don’t have time to become evi-dent and obvious. There are dealsdone in haste that blow up that other-wise didn’t need to blow up.

The first two may seem like no-brainers,but you would be amazed at how manyfolks overlook the obvious, especially if thecourtship phase gets “hot and heated” andwe rush into a relationship prematurely.

How many couples after a few months oryears of marriage realize they may havebeen more “in lust” than “in love?” I wouldsuggest that “lust” because it has a “greed

factor” to it is way moreblinding that “love” ever is.And if we look back at mostfailed relationships, whetherpersonal or professional,hindsight reveals a selfish-ness (a “what’s in it for me”perspective more than a“what in this for us” perspec-tive) and lust (“I want thisrelationship for me or mycompany”) as the motivationbehind why we did some-thing.

Tip #3: Considercapital constraintsThis is probably the mostoverlooked important fac-tor a production groupshould take into considera-tion. If ever there was anarea where the saying, “Youdon’t know what you don’tknow,” is truer, it is here.Capital is king if you are ahigher producing group. Ifyou are a production groupthat has the ability to funda good amount of produc-tion each month, you really

need to dig into the funding capacity ofwhomever you are seriously consideringgoing to work for. There is nothing worsethan finding yourself in a company thatmaxes out their funding ability.

Tip #4: Consider characterIf there has been anything we have learnedfrom this last business cycle it is that “char-acter matters!” Even if you get good coun-sel that covers the business aspects of thedeal, and if you like the culture of the com-pany, and even if you verify that they have

“There are two obvi-ous components in any‘branch development’

plan … the branch(the production folks)and the company (the

funding folks)!Regardless of whichside of the equation

you are on, both haveone common goal:

Getting into the rightrelationships and

avoiding the wrongrelationships.”


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feedback. To leave me feedback, pleasee-mail [email protected]. Also, I would encourageyou to tune into my weekly radio pro-gram, “Lykken on Lending,” eachMonday at 10:00 a.m. Pacific, 11:00a.m. Mountain, Noon Central or 1:00p.m. Eastern. To listen, log on towww.blogtalkradio.com/search/lykken-on-lending.

David Lykken is president, mortgagestrategies and managing partner withMortgage Banking Solutions. David hasmore than 35 years of industry experi-ence and has garnered a national repu-tation. David has become a frequentguest on FOX Business News with NeilCavuto, Stuart Varney, Liz Claman andDave Asman with additional guestappearances on the CBS Evening News,Bloomberg TV and radio. He may bereached by phone at (512) 977-9900, ext.101 or e-mail [email protected].

To listen to author DavidLykken’s online radio show,log on to www.blogtalkra-

dio.com and type in “Lykkenon Lending” in the “Search” box on theright-hand side of the page.

plenty of capital, you would do well tomake sure they have the kind of characterand values that align with yours. Failingthis important assessment can lead to frus-tration in the relationship and even to fail-ure. What is most interesting about assess-ing character is that it can be the most dif-ficult thing to do. Why? In a word, it is “pos-ing.” Posing is something that we all havea tendency to do to some degree when weare getting to know someone for the firsttime. Basically, posing is when someonetries to project something about them-selves or their company. This is relativelycommon when people are considering get-ting into a relationship. Where thisbecomes a negative is if the intent is anattempt to mislead or even deceive some-one about themselves, which drives homethe point that assessing character takeseffort and a plan. This, in itself, could con-stitute a whole article if I were to outlineways and tips for making a characterassessment, but for the sake of time, I wantto simply make sure that you consider andevaluate this critical assessment and makesure there is adequate alignment so as tonot impede, inhibit or cause the relation-ship to fail down the road.

After reading this article, I welcomehearing from you and receiving your

To keep from spinning your wheels, youhave to go out and develop your businessThat means becoming an expert in themortgage industry, learning the rulesand regulations, being a true resourceto your clients, and helping to steerthem in the right direction. Those arekeys for winning.

Know where the bumps areJust as Indy drivers familiarize them-selves with the tracks at Watkins Glen,St. Petersburg or Long Beach, mortgageprofessionals must know the ins andouts of regulations and regulatorychanges. While “knowledge is strength”may sound cliché, it’s true: The moreyou know, the more you’re seen as a“go-to” person. A couple of recent regu-lations illustrate this.

One is the Home Valuation Code ofConduct (HVCC). As you are aware, HVCCestablishes standards for solicitation, selec-tion, compensation, conflicts of interestand appraiser independence. Since takingeffect on May 1, 2009, it has had a dramat-ic impact on conventional, single-familymortgages sold to Fannie Mae or FreddieMac. Under HVCC, real estate professionalsand mortgage brokers are prohibited fromselecting appraisers. Lenders may use “inhouse” staff appraisers to conductappraisals, but the loan production staff isprohibited from selecting, retaining, rec-ommending or influencing the selection ofan appraiser; and conducting any substan-tive conversation with an appraiser orappraisal management company regardingthe appraisal assignment.

For consumers, the appraisal processhas remained largely intact. However,they may find the process takes longerand may be more costly than in thepast. For appraisers and mortgagefirms, it’s a different story. Someappraisers now earn less money andmany mortgage firms have had tochange the way they interact withappraisers or risk not being in compli-ance with HVCC rules.

Another regulatory change that hasraised yellow caution flags among loanoriginators and independent brokers isone involving Good Faith Estimates (GFEs).Lenders are required by the federal RealEstate Settlement Procedures Act (RESPA)to provide you with a GFE of the fees dueat closing. The GFE is supposed to be pro-vided to the potential buyer within threedays of applying for a loan. Smart shop-pers obtain GFEs from two or morelenders, compare their costs and askquestions about any large discrepancies.

According to a February article in TheWashington Post, “if the quotes aremade on a GFE, they’ve got to be accu-rate because, under new federal rulesthat took effect Jan. 1, any significantexcesses must come out of the lender’swallet at settlement.” Clearly, knowing

those rules and what they mean to youas a lender can be a matter of survivalin today’s complex and highly competi-tive mortgage industry.

Consider expanding yourpit crewThe HVCC and GFEs are only two of thenew regulations that have caused confu-sion among many mortgage profession-als. That’s why it is important to keepyour finger on the pulse of the industryand stay on top of rule changes. It’s alsowhy you may want to consider enteringinto a branch partnership. After all, thebest drivers not only have a vision forwhere they’re going, they also have aqualified crew to back them up and keepthem running at full speed.

In this difficult and changing environ-ment, a branch partnership can provideyou with many of the benefits enjoyed bymortgage bankers—without having toinvest the time and money necessary todevelop and manage a full-service oper-ation. Such benefits include lower over-head, administrative support, licensingin additional states, the ability to writeother types of loans, and more. But,branch partnerships aren’t for everyone.So, as you look at potential business part-ners with an eye toward choosing thebest pit crew possible, be sure to ask thefollowing questions:

Do they have a banking division?A partnership with a mortgage bankerwill give you more options; you’ll havethe choice of closing loans within yourown company or brokering them outside.

How much administrative support willyou receive? Many of your everyday functions shouldbe taken over by your branch partner,including payroll, marketing, informa-tion technology, human resources, pro-cessing and compliance. This will enableyou to focus on originating loans. Toomany branch partners, however, canresult in less-than-effective service, so it’simportant to find out how many branchoffices your prospective partner has.

Are there compliance experts on staff?The right partner will have the proce-dures in place to provide backgroundchecks, brand and loan officer licens-ing, file reviews, and loan audits, aswell as ensure that your promotionalmaterials are compliant. Such proce-dures also ensure the compliance ofyour other branch partners—an impor-tant benefit since their actions canreflect on you.

What products and services do they offer?Your partner should enable you to pro-vide a variety of options, such as FederalHousing Administration (FHA), U.S.

Branch development is a bit like Indy Carracing—lots of fun and fullof twists, turns and chal-lenges. Like Danica Patrick,Michael Andretti or Al UnserJr., successfully navigatingthe competitive course andbuilding a viable network ofbranches requires strongplanning, laser-like preci-sion and nerves of steel.

The best branch develop-ers, those who consistentlyadd new talent, look atrecruitment much the wayChip Ganassi Racing or TeamPenske view their opera-tions—as team effortsrequiring strong knowledgeof the myriad rules and reg-ulations that impact ourbusiness, the latest technol-ogy, and of course, the abili-ty to communicate regularlyand meaningfully.

Tips to rev up your businessSo, what should mortgage professionals

do to build their business and grow theirnetworks? Here are somesuggestions based on mypersonal experience andthat of my firm, InlantaMortgage, which has 25branch offices nation-wide and is always look-ing for more:

Run the courseWeather, track conditionsand the like can con-tribute to a driver’s suc-cess or spinout. Similarly,knowing the mortgagelandscape is essential ifyou want to grow yournetwork. The environ-ment has changed overthe last several months.My company has beentelling clients there arestill tax credits availablefor homebuyers, the ratesare still historically low.

Bottom line … this is a great time to getout and buy!

Branch Development: Steer Clear ofRisks and Focus on the Finish Line

By Joe Ramis

“In this difficult andchanging environment,a branch partnershipcan provide you withmany of the benefitsenjoyed by mortgage

bankers—without hav-ing to invest the time

and money necessary todevelop and manage afull-service operation.”

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What is their ideal branch set-up and isthis a good match for you?The reality of a branch partnership is thatyou are choosing your own boss and co-workers. So it’s imperative that you meetwith recruiters in person and visit the cor-porate office. Discuss both your futureplans and theirs to make sure you’re head-ed in the same direction. Take a look at themost productive offices in your prospec-tive partner’s organization and compare itto how you operate. If you work different-ly than they do, discuss those differencesbeforehand to ensure you won’t have con-flicts later. Finally, put the details in writingso that everyone involved moves forwardon the same page.

Keep your foot on thepedal, eyes on the roadWhether you’re developing a branch net-work or looking to become a branchpartner, the process, at times, can be aschallenging as driving 500 miles atIndianapolis. There are no shortcuts tosuccess. But with vision, focus, driveand, like any good Indy driver, the abili-ty to anticipate changes and changegears when necessary, you’ll find your-self in the position for the checkered flagand that much anticipated victory lap.

Joe Ramis is branch recruitment direc-tor for Inlanta Mortgage, a Waukesha,Wis.-based mortgage banker and bro-ker since 1993. He may be reached byphone at (262) 513-9853 or [email protected].

Department of Veteran’s Affairs (VA),U.S. Department of Agriculture andRural Development; and 203k loans;reverse mortgages; and more. In addi-tion, a good partner will also providetraining so you can quickly get up tospeed on products that are new to you.

How long have they been in businessand what is their reputation?Once you enter into a partnership, yourpartner’s reputation reflects on you.That’s why it is crucial to find out howyour prospective partner is viewed bothlocally and within the industry. It’s alsoimportant to find out whether theyever been suspended or fined by theU.S. Department of Housing & UrbanDevelopment (HUD). Generally, thelonger a company has been in busi-ness, the more stable it is. It also willhave a longer track record, which willhelp your decision-making process.

Do they offer multistate licensing?A business partner that is licensed inmultiple states can enable you toexpand your business and close loanson out-of-state prospects instead ofturning them away.

Are they committed to technology?The demand for information just contin-ues to grow. It is important to have a part-ner that embraces technology so you areable to price loans quickly and accurately,register and lock loans online, and moni-tor the pipeline regardless of time of day.

Development (HUD) permits a non-tra-ditional branch office to be, “located ina non-commercial space, but it musthave adequate office space and mustcomply with the local government userequirements” (HUD Handbook 4060.1,Chapter 2-11.C.1.). While HUD may per-mit a home-based branch office, sever-al states require a com-mercial location.

Have you everread a correspon-dent or brokeragreement?All of the liability is placedon the company whoenters into the agreement,not the loan officer whooriginates the loan. Theseagreements have becomemuch stricter in recentyears, with some evenattempting to pass all ofthe liability onto the origi-nating lender. The repre-sentation and warrantyclauses often require guar-antees beyond loan offi-cers or the originatinglender’s control. The costfor indemnity or loanrepurchase can add up tovery sizeable amounts quickly. Couplethis with loans that must be sold, scratchand dent for pennies on the dollar,because they failed to meet a particularguideline or because a borrower’s cir-cumstances change after funding, andyou have a financial exposure that somecould not handle.

Staffing the branchAn often overlooked component of asuccessful mortgage branch company isthe commitment and passion of thecorporate staff, which is critical to assistthe branches. The dynamics between

the corporate staff and loan officers isuniquely personal. Excellent customerservice requires specialized profession-als with a broad understanding of themortgage business. Branches dependon this vital link to the corporate officein order to succeed. When the branchessucceed, the company succeeds. The

staffing and infrastruc-ture requirements for abranch company areextensive. There areplenty of loan originationsoftware systems andback-office software sys-tems to handle under-writing, secondary, clos-ing, funding and othertasks, but systems thatmanage employees,licenses and the uniquecompensation model inthe branching world, areextremely limited.

Everyone lacksexperience atone time in theirlife or anotherRight now, many of thecompanies offering brancharrangements are just get-ting their feet wet with the

business model. Sure, they may haveplenty of experience in mortgage lending,perhaps as a wholesale lender, but whole-sale lending is nothing like a retail mort-gage branch company. An independentmortgage banker or broker who is lookingto expand may have experience with ahandful of loan officers at their location,but what happens when some of the con-trol is lost to an offsite office? Federalbanking agency-regulated institutionsoffer the benefit of skipping theNationwide Mortgage Licensing System

Mortgage retail branch opportunitiesare sprouting up like mushrooms afterheavy rains. Everyone, from independ-ent mortgage brokers to federally-char-tered banks to wholesale lenders,wants to get in on the action. Thesetypes of arrangements are oftenreferred to by different names, branchpartnerships or affiliate branches,being two of the more popular terms. Afew companies are still referring tothemselves as a “net branch,” now con-sidered a dirty word thanks to somepoorly-operated companies that havegiven the term a negative meaning.Perhaps there are so many terms cur-rently in use because no new universalterm has yet to be coined.

A mortgage branch company is notan easy business to manage or operate.To some, opening a branch sounds like

a quick way to get rich … hire someloan officers, make a few hundred dol-lars off each loan or a flat fee permonth and retire in a couple of years. Ifonly it were so easy. There are going tobe some tough lessons learned in thenot-too-distant future.

Regulations aboundBoth federal and state regulators havemade, and are likely to continue mak-ing, drastic changes to the industry.These changes are not going to makeyour job any easier. Staying abreast ofthese changes is a monumental taskand requires a heavy emphasis on com-pliance; something a good branch com-pany should always do for you. To makematters even more challenging, statelaws often contradict federal laws. TheU.S. Department of Housing & Urban

Mortgage Branching in a Changing Industry

By Mark Buskuhl

“To some, opening abranch sounds like aquick way to get rich

… hire some loanofficers, make a fewhundred dollars off

each loan or a flat feeper month and retire

in a couple of years. Ifonly it were so easy.”


Qualified Candidates with a proven track record will get:• Guaranteed Salary• Full Benefits Package• Bonus based on profitability of branch office.• Assistance with recruiting and training team.

Call Dane Basham today 888-544-0034

Gateway Mortgage Group is seeking more leaders to run a retail branch office.

“If I was in the market to become a branch manager or work as a loan officer, Dane would be on the shortlist of friends I would contact. His positive attitude is infectious. You cannot have a conversation with Daneand NOT be motivated.” November 28, 2006

Andrew Berman, Executive Vice President, The Mortgage Presswas a consultant or contractor to Dane at Gateway Mortgage Group LLC

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(NMLS) test and required education, butthey bring about stricter oversight fromtheir own set of regulators and will mimicmore of a traditional employer/employeerelationship, which can be contradictoryto the loan originator entrepreneurialspirit. The federal banking agency-regu-lated institutions are also attracting thosewho can not pass the NMLS-requiredbackground check or test, potentiallydrawing a crowd that may be questioned.

Do your researchWhen looking at mortgage branch com-panies, there is a lot of research thatneeds to be done. Loan officers are beingbombarded with opportunities to join abranch company. Solicitations are com-ing from wholesale account executivesthat are being required to, not only estab-lish and maintain relationships withmortgage brokers and loans officers, butto now actually recruit and manage themas employees. E-mail blasts and Web sitesclaim misleading information about pro-duction, capabilities and costs. The deci-sion to join a branch company should bea well thought out business decision; itshould not be an emotional decision orone that was a result of a great salespitch. Take the time to do your home-work now and you will be rewarded later.

Evaluate experienceWhen interviewing branch companies, askthem how long they have operatedbranch offices and how many offices theycurrently have. Experience counts, unlessyou want to be a guinea pig. This informa-tion can be validated through HUD’sSingle-Family Neighborhood Watch EarlyWarning System (NW). If you do not haveaccess to this information, ask the branchcompany to provide a printout for you.Not only will NW list all of the company’sactive branch locations and the date eachwas authorized, the system is the only reli-able and accurate source for productiondata and loan performance. Like borrow-ers, branch companies often speak higherof themselves than what the numbersmay show. NW reports the most recent 24-month’s production data for all FederalHousing Administration (FHA)-insuredloans, as well as the compare ratio, whichtracks defaults to that of the national aver-age or other specified geographic areas.There are two reasons why this is veryimportant: the first is to validate a compa-ny’s production. If they claim to be theworld’s largest branch company or thatthey pay out over a million dollars a day incommissions, yet the data only reports1,200 FHA loans in the past 24 months,you know something may be a little fishy.Secondly, and most importantly, is thecompare ratio. A compare ratio of 100 per-cent means the company’s loans defaultat the exact same rate as the national aver-

You may be in the process of making oneof the biggest decisions of your profession-al life—determining whether or not toestablish a branch affiliate relationship.During the last several years, more firmshave considered such an option. Some areinterested in developing Federal HousingAdministration (FHA) busi-ness without having to paythe fees and provide audit-ed financials. Others cite adesire to have the corre-spondent ability, in-houseunderwriting, the opportu-nity to work with a largercompany that can leveragerelationships and obtainbetter pricing, reducedaccounting/payroll andhuman resources responsi-bilities, and access to multi-ple states without theexpense of the requiredlicenses.

Your success in findingthe ideal branch affiliatepartner will largely dependon the thoroughness ofyour research. The follow-ing are guidelines to helpyou select one whosemodel best suits your salesteam and customer base.

Key considerationsThe first step is to determine the mostimportant factors involved in a branchaffiliate relationship. For example, theywill include:

� Company size/growth: Size can makea difference. Some companies have200 branches and others have 12. Youmay find the one with fewer branchesis more selective than the larger oper-ation. The 12-branch company maygive you more direct attention andtake a greater interest in your successthan the one with 200 branches.There probably will be a more family-type culture and attitude as well. Youalso want to know if the branch affili-ate prospects are growing and on theincline or downsizing, which is a typi-cal sign of decline. Another criticalindicator is total annual production,as you want to be associated with atop performing organization.

� FHA lending process: If you’re inter-ested in FHA business (and youshould be), this is critical. Do theyunderwrite FHA in-house? That may

be a plus considering lender turntimes. However, if the corporate officeis Full Eagle and underwrites the file,you have no option if it’s declined.Whereas, some companies may nothave a Full Eagle, but utilize lendersas authorized agents to underwrite

on their behalf. This pro-vides an opportunity torevive an FHA loan withanother lender if youstrongly disagree with theinitial underwriting deci-sion and have the abilityto change it.

� Compensation plans:This is at the top of the listfor many firms. Some com-pensation plans are per file-based flat fee, while othersare tied to basis points, andsome build in an extra mar-gin, which can impact yourcompetitive position in themarket. You‘ll find thosethat will cover expenses andoverhead; however, thecommission split will belower. That’s fine if you’renot a risk-taker and want tomake a good income byworking the minimum 40-hour week. If you are trulyentrepreneurial and seek ahigher income, you’ll need

to assume greater risk and responsibil-ity, and make a more substantial per-sonal investment in overhead andrelated expenses. In doing so, you willdefinitely be entitled to higher splits.In addition, investigate whether youare strictly limited to using in-houseunderwriting services and a corporate-ly published rate sheet, which proba-bly contains built-in margins that canimpact your competitive position.

� Broker/correspondent options: Thereare distinct advantages to being eithera broker or correspondent. It’s alwaysgood to have options, so don’t limityourself to one business channel. Ifwarehouse lines become an issue, youwant the ability to broker. If the whole-sale/broker channel continues to suf-fer, you will want strong correspondentrelationships and sufficient liquidityon those warehouse lines.

� Management style: Management stylesvary greatly and can have a major influ-ence on your working relationships. Youmay chafe under a very structured sys-

Establishing the Branch RelationshipBy Shawn Sirko and Tina Jablonski

Shawn Sirko

Tina Jablonski

age. At 200 percent, the defaults doublenational average and the game is aboutover; the days are numbered before HUDrevokes approval.

Ask for the corporatecontact list now, not afteryou have been hiredLook for a company that is staffed accord-ingly for its size and also look at job titles.The corporate office should not onlyinclude common back office positions suchas, underwriters and closers, but shouldalso include IT, compliance, payroll andsupport staff who are dedicated to support-ing the branch offices with anything andeverything, not just underwriting or closingcoordinators in disguise as support.

Banker or broker?The choice should not be made now, buton each and every loan. No company canbe everything to every borrower on everyloan. We all want the very best pricing,instant service, and every program avail-able, but the reality is no company can orhas ever offered this. Is there a wholesalelender you have worked with that can dothis? No. Look for a company that offers agood balance among pricing, productsand service, but keep your options opento broker loans too. “First right of refusal”is not a policy put in place for your bene-fit. A branch company that allows you tochoose on each and every loan, whetheryou want to bank it in-house or broker itto their expansive lender list, is forced tocompete for your business. Loan officerswant to close loans quickly, close all ofthe loans they come across, and get paidwell for their work. Keeping your optionsopen to both bank and broker your loansis the key to maximizing your success.

The right branch company will allowyou to originate more loans and putmore money in your pocket. By off-load-ing all of the back office functions andassociated costs and liability, your timeis freed up to work on the tasks that gen-erate income for you—originating andclosing loans and/or managing a team ofloan officers. In order for this to work toyour benefit, all of the other elementsmust be in place. You must align your-self with a branch company that has theexperience in operating branch offices, acompany that has been around and willbe here in the future, so your paychecksare good and on time.

Mark Buskuhl is chief operating officerof Texas-based Southwest Funding LP,one of the longest operating and mostsuccessful mortgage branch providers.He may be reached by phone at (877)-878-8989, e-mail [email protected] or visit www.branchsouth-west.com.

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Visit UnitedNorthern.Jobs, email [email protected] or call (888) 600-8808 ext 1.

United Northern is Seeking Highly

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ogy, training and back-up. Leads likelyare an integral part of your marketingmix, so confirm the company has atrack record of providing and effective-ly using leads. Is there an ongoing mar-keting/advertising campaign to helppromote the organization as well as thebranches?

� Fee structure: You need to knowabout all fees, including accounting,payroll, technology, managementand other. How often does the cor-porate entity charge these?

Review process In addition to information on the aboveareas that you obtain from phone con-versations, Web sites, brochures andother sources, the following are a feweffective ways to ensure you’re gettingboth objective and subjective insights:

� A simple Internet search will reveal ifthere has been positive and negativepublicity about the company. Are thereany employee or customer complaints?

� You’ll get some useful information bymystery shopping. We constantly mys-tery shop our competition for retailand branch development because itgenerates valuable data about howother companies operate. See how thebranch affiliate organizations respondto a series of questions.

� Ask to contact employees at other com-pany branches to get the real “story.”Query them for their honest assessmentof the organization. You can always“read between the lines.” Also, considerhow long the branches have operatedand the length of employment forbranch managers and top originators.

� Of course, you must visit your potentialemployer before making a decision.You want to get a feel for the energy inan office and how the people interact.This will also give you a better under-standing of the company culture. Makesure to meet the upper managementteam and others involved in affiliaterelations. When interviewing with apotential branch affiliate network,don’t exaggerate about your productionand abilities. You don’t want the com-pany to have unrealistic expectations,but rather, have an accurate view ofyour potential so that you can establisha solid foundation. Also, you will wantto review a copy of the contract to con-firm your responsibilities, the compa-ny’s guarantees and other essentials.

� Don’t forget that throughout your duediligence process, the companies youtalk to will be researching you. They

tem and welcome a more entrepre-neurial approach that offers freer rein.Some people need more structure to besuccessful, while others thrive when leftalone, as long as they maintain high vol-ume. It’s also wise to know about themanagement and operations team. Forexample, if the principal leaders havenot originated loans themselves, theywon’t be familiar with what you’re deal-ing with on a daily basis. Everyone inour company, Gold Star MortgageFinancial Group, including the chiefexecutive officer, has a strong origina-tion background. The company was cre-ated by salespeople for salespeople. Youshould also confirm how accessible topmanagement is. Our chief executiveofficer encourages an open door policy.

� Margins: If you operate on thin mar-gins and are more of a high volumediscount mortgage operation, youneed to be aware of pricing whensearching for a branch affiliate rela-tionship. You may not be comfort-able with a company that builds inadditional margin or charges 0.25-0.375 per file. FHA yield spread pre-miums (YSPs) obviously provide moreroom to pay such a fee to the house,but that could be unappealing if youare a 75 percent conventional refi-nance-based organization.

� State licensed: If your plans includeoperating in other states, then you’llbe concerned about where potentialbranch affiliate partners are licensed.You will need to be licensed in thosestates and know the type of resourcesavailable to help your staff getlicensed there. For example, we arewilling to get licensed in a state if it’sa good fit and the right prospectivecompany to joins us.

� Diversification: Forward-thinking firmsare interested in diversifying their busi-ness beyond the residential mortgagebase. Do you want to originate reversemortgage loans or commercial loans,sell life or health insurance, annuities orcredit repair services? Adding theseproduct offerings to a core business cansignificantly expand your revenuestreams, as well as bolster your loanclosing capability. Offering additionalproducts and services can enhance yourlong-term client relationships.

� Support services: You want to be cer-tain the company provides excellentsupport. Is there a compliance depart-ment? There should be a thorough ori-entation to learn systems, meet man-agement and sales staff, and schedulefollow-up sessions. Their service menushould also include advanced technol-

will call their industry partners, whole-sale reps, title companies, and others.They will Google search you. Make sureif you are doing social networking forbusiness or personal reasons—usingLinkedIn, MySpace or Facebook—thatyou are representing yourself well.

Certainly, there are other actions you cantake to help select the best possible branchaffiliate organization. Your priority should

be to do research the candidates, ask thetough questions, be satisfied with theanswers and then do everything possible tomake the relationship succeed long-term.

Shawn Sirko and Tina Jablonski are vicepresidents of business development atAnn Arbor, Mich.-based Gold StarMortgage Financial Group. They may bereached by e-mail at [email protected] or call (800) 201-LOAN.

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Who’s Hiring Report for Mortgage ProfessionalsBranch Opportunities

Branch Opportunities



Loan Officer Programs

Loan Officer Programs

Guaranteed Home Mortgage Company, Inc.108 Corporate Park Drive, Ste 301White Plains, NY 10604 www.joinguaranteed.com

Teamwork. Stability. Success. 18 year old National mortgage lender looking for existing branches tojoin Guaranteed. Our diverse investor list, FHA/VA/Conv direct lend-ing capabilities, and rapid processing ensure a profitable environ-ment. In addition, we have an award winning and innovative manage-ment team and unparalleled client and employee satisfaction.

Get access to hot leads and predicative dialing.

Take your business to the next level with inhouse underwriting(48 hour Turntime). Monthly minimum volume is required. Health, Dental, 401k available.

CEO:David A. Wind

Key Contact:Louis Tesoriero108 Corporate Park DriveSte 301White Plains, NY [email protected]

ACC Mortgage, Inc. WeApproveLoans.com

We are searching for smart, experienced and self motivated loan offi-cers who want to keep 100% of the origination income onHard/Private Money loans. Must have NMLS approval. Some leadsprovided. We have the money, can you find the loans?

Locations: MD, DC, VA, DE, FL.

President/CEO:Robert M. Senko

Contact:Robert M. Senko932 Hungerford Drive #6Rockville, MD 20850240-314-0399 ext [email protected]

Orange Coast Title Company640 N. Tustin AvenueSanta Ana, CA 92705 www.octitle.com

National Title Company seeking an experienced sales person to sellloan origination and default products to lenders and loan servicerson a nationwide basis. The successful applicant must be willing totravel, have 5 years of sales experience, and an understanding of titleand closing services. Company is nationally recognized as a premierprovider of title and closing services with an outstanding reputation.Competitive salary, commission schedule and benefits.

Locations: Nationwide

Key Contact:Blanche HarrisonFax: [email protected]

iServe Residential Lending, LLC13520 Evening Creek Drive North, Suite 400San Diego, CA 92128.www.iservelending.com/brokersignup.php

CEO: Gary Willis

Key Contact:Tom MaykowskiDirector of Operations(877) 308-4117 ext. 335

Inlanta MortgageW229 N1433 Westwood Drive, Suite 105Waukesha, WI 53186 www.inlantapartners.com

With Inlanta Mortgage, you’ll close loans faster and more frequently,while enjoying comprehensive support. Our efficient and accurateservices make it easy for you to do what you do best – originate.From FHA loans to in-house funding and underwriting, as a mort-gage banker, we have the versatility and expertise you need.

Locations: We are currently seeking qualified candidates in: Florida,Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, NorthDakota, and Wisconsin!

CEO:Jean Badciong

Key Contact:Joe Ramis – Branch Recruitment DirectorW229 N1433 Westwood DriveSuite 105Waukesha, WI [email protected]

Branch Opportunities Services

Shore Financial Services Inc.770 S. AdamsBirmingham, MI 48003 www.shoremortgage.com

Shore Financial Services is a Direct Endorsed Lender founded over25 years ago. We’re offering Loan Officers and Branches an oppor-tunity to make 100% commission (YSP Not required to be dis-closed!) and opportunity to grow in up to 40 States. We offer a LowFlat Monthly Fee, National Licensing Support, Full ServiceMarketing Team, your own Underwriting Team U/W in 48 hours orLESS, Virtual Origination Software, Mortgage Returns, FlexiblePayroll, BCBS & 401k. Shore Financial Services, Inc., NMLS #3038.

Locations: AL, AZ, AR, CA, CO, CT, DE, FL, GA, IA, ID, IL, IN, KS,KY, LA, MA, MD, ME, MI, MO, MS, NE, NH, NM, ND, NC, OH, OK,OR, RI, SC, TN, TX, UT, VA, WA, WI, WY.

Key Contact:Kristina Leszczynski 770 S. AdamsBirmingham, MI 48003 [email protected](866) 903-8953 ext. 5505

CreditAbility Credit RestorationHiawatha, IAwww.creditability.org

CreditAbility Credit Restoration is expanding to California! We needmotivated and successful Account Executives. CreditAbility's AEsreceive generous commission structures which can easily result in aSIX figure income. With some of the lowest fees and fastest turn-around times your pipelines will grow exponentially. As one of theonly companies that charges NO UPFRONT FEES, we make it easyfor our AEs to set themselves apart from the competition. Don't missthis opportunity, call today!

Location: CA

CEO:Andrew Yamilkoski

Key Contact:Sam Parker2205 Blairs Ferry CrossingSte BHiawatha, IA 52213Work: 319-373-2822Cell: 319-560-5999

Mortgage Concepts4170 Veterans Memorial Highway, Suite 201Bohemia, NY 11716 www.MortgageConcepts.com

Mortgage Concepts is hiring experienced Loan Officers and BranchManagers. We are a multi-state licensed FHA DIRECT LENDER withbranches throughout the country. The Branch Manager is responsible for the daily operations of theirbranch, including but not limited to establishment and recruitment.Proactively meets established loan quality and production goals.Exceptional service is required through knowledge of programs, poli-cies, procedures and professional ethics.

Locations: AL, CA, CT, FL, GA, HI, MA, MD, MS, NC, NJ, NY, OK, PA,SC, TN, VA, VT,

CEO:Steven A. Milner

Key Contact:Len RamirezVice [email protected]

As a Conventional and FHA Full Eagle lender iSRL can assist you inbuilding your business within a much larger business that providing youwith the needed stability which is so often missing today. With the SeniorManagement’s commitment combined with many long-standing andloyal relationships that have been built and nurtured over many yearsiSRL and our Branch Partners are in a position to take advantage of themany lending opportunities that are evolving today.Locations: TX, OK, LA: David Walden 1-214-878-6300. Southeast & East Coast: Ken Michael 1-931-222-8023CA, OR, WA, NV: Allen Friedman 1-415-298-2500UT, CO, ID, WY, MT: Tony Moore 1-801-824-7243

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$49.95

Plus Postage

& Handling

“Atare Agbamu is one of only a handful of people in the reverse mortgage arena

who possesses a commanding understanding of the reverse mortgage industry.

As an originator, he has hands-on experience educating seniors and their advi-

sors. As author of the “Forward on Reverse” column in The 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.

“Present and future reverse mortgage professionals and senior advisors will profit from

decades of experience skillfully woven into this book. If you plan to succeed in this industry, this

book is the place to start.”

—Sarah F. Hulbert, President, Senior Financial Corporation and former four-term Co-Chairof NRMLA’s Board of Directors

“When I first began reviewing the contents of this book, I became quite jealous ... Atare Agbamu

has set down an impressive amount of information ... And he delivers it in an easy-to-read,

simple-to-understand style that will make this book essential reading for all reverse mortgage

professionals.”

—from the Foreword by Jim Mahoney, Co-Founder and Former Chairman, Financial FreedomSenior Funding Corporation, and former four-term Co-Chair of NRMLA’s Board of Directors

“The stories [Chapter 15: Profiles in Satisfaction] are the best vehicle to increase understanding and

acceptance of reverse mortgages among us laypeople. They are very compelling ...”

—Therese Cain, Executive Director, Minneapolis/St. Paul Chapter of Little Brothers—Friendsof the Elderly

“This book should be required reading for all new loan consultants originating reverse mortgages

and is recommended for experienced ones as well. This book provides excellent insight and infor-

mation on preparing ahead to provide the service our seniors deserve, to ensure a smooth loan

process and shorten the time to closing. Most of the problems caused in the processing and clos-

ing of reverse mortgages come from inadequate preparation.”

—Deanne Opstad, AVP, Senior Underwriter, Generation Mortgage Company

Think Reverse!Table of Contents

Part I:

The new pillar of retirement security

Part II:

Marketing reverse mortgages: 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

tion; perform occupancy checks; andprovide property preservation services,if necessary.

Additionally, LPS can coordinateshort sale offer reviews to provide guid-ance on whether the offers are in linewith local market values and appropri-ate for the servicer’s objectives. Finally,LPS can either manage the entire clos-ing process for short sale offers that areaccepted, or support servicers withproperty auction and deed-in-lieu serv-ices to expand the choices available tohelp clients and their borrowers con-clude their transactions.For more information, visit www.lp-am.com.

Your turnNational Mortgage Professional Magazineinvites you to submit any informationpromoting new “niche” loan programs,new products or any other announce-ment related to the introduction of anew program, to the attention of:

New to Market columnPhone #: (516) 409-5555

E-mail:[email protected]

Note: Submissions sent via e-mail are pre-ferred. The deadline for submissions is the1st of the month prior to the target issue.


Services

New Line Mortgage5241 S. State StreetSalt Lake City, UT 84107www.NewLineAdvantage.com

New Line Mortgage, wholesale lender for 27 years, is seeking moti-vated Account Executives with a proven track record to join our suc-cessful team! Our reputation as a prominent mortgage banking firmis built on years of experience and rock solid financial strength. TopFHA/VA lender with expanded product menu, aggressive commis-sions, pricing and excellent technology will help you and your bro-kers close more loans! Benefits.

Locations: AZ, CA, CO, ID, MT, NM, NV, OR, TX, UT, WA

CEO:Scott Leishman

Key Contact:Shauna ReimannVice PresidentWholesale Production [email protected] x 147

Quality Mortgage Services, LLC1111 Lakeview DriveFranklin, TN 37067http://www.qcmortgage.com

Quality Control Auditors-Hiring immediatelyOur steady growth affords the opportunity to bring on-board quali-fied Quality Assurance Auditors with experiences in Underwriting,mortgage operations and quality control. We look for qualified personnel whose knowledge base takes thembeyond a check list method need to apply because we prefer auditorswho know how to analyze in depth and detect fraud. We accept remoteapplicants and telecommuters. For consideration on please reply to thisposting and submit your resume: [email protected].

Locations: Nationwide

CEO:Thomas Duncan

Key Contact:Michael S. RichardsonQuality Mortgage Services, LLC1111 Lakeview DriveFranklin, TN [email protected]

Wholesale Channels

Real Estate Mortgage Network Wholesalewww.remnwholesale.com

Wholesale Account Executives – Experienced in FHA, VA andConforming loan products. A great opportunity for great AccountExecutives.

Locations: Positions available in CT, SC, NC, LA, TX, AZ, CO, CA,OR, IL, OH and other areas.

CEO:Peter Norden

Key Contact:Joe Amoroso499 Thornall StreetEdison, NJ [email protected]

Wholesale Channels

Who’s Hiring Report for Mortgage Professionals

JUNE 2010Thursday-Friday, June 3-4

Hawaii Association of Mortgage Brokers2010 Annual Conference

“2010 & Beyond: Don’t Toy With Us …We’re Licensed & Educated!”The Sheraton Waikiki Hotel

2255 Kalakaua AvenueHonolulu, Hawaii

For more information, call (808) 479-8960 or

visit www.hambonline.com.

Monday-Wednesday, June 14-16CRE Finance Council

2010 Annual ConventionThe Waldorf-Astoria

301 Park Avenue (50th Street)New York, N.Y.

For more information, call (212) 509-1844 or visit www.cmsaglobal.org.

Thursday-Friday, June 24-25National Association of MortgageBrokers 2010 Mid-Year Meeting

Phoenix Airport Marriott1101 North 44th Street

Phoenix, Ariz.For more information, call

(703) 342-5900 or visit www.namb.org.

JULY 2010Wednesday-Saturday, July 7-10Florida Association of Mortgage

Professionals 50th Anniversary AnnualConvention & Trade Show“From FAMB to FAMP …

50 Golden Years”Rosen Shingle Creek

9939 Universal BoulevardOrlando

For more information, call (850) 942-6411 or visit www.famb.org.

Wednesday, July 14“Let’s Make a Deal” Tri-State Wholesale

Lending FairTrump Taj Mahal Casino Resort

1000 BoardwalkAtlantic City, N.J.

For more information, call (973) 379-7447 or visit www.mbanj.com.

AUGUST 2010Wednesday-Friday, August 18-20California Association of MortgageBrokers 2010 Annual Convention &

Grand ExpositionHyatt Regency Long Beach

200 South Pine AvenueLong Beach Convention Center

300 East Ocean BoulevardLong Beach, Calif.

For more information, call (916) 448-8236 or visit

www.cambweb.org.

SEPTEMBER 2010Thursday, September 16

Iowa Association of Mortgage Brokers2010 Annual Convention

White Oak Vineyards15065 Northeast White Oak Drive

Cambridge, IowaFor more information, call

(515) 210-4675 or visitwww.iowamortgagebrokers.org.

Monday-Wednesday, September 20-22

Second Annual Northeast Conference of Mortgage Brokers

Trump Taj Mahal Casino Resort1000 BoardwalkAtlantic City, N.J.


www.mbanj.com.

Monday-Tuesday, September 21-22Illinois Association of Mortgage

Professionals 21st Annual Fall Conference

Location to be determinedFor more information, call (630) 916-

7720 or visit www.iamp.biz.

OCTOBER 2010Thursday-Friday, October 14-15Kentucky Association of Mortgage

Professionals 2010 Annual ConventionLocation to be determined

For more information, call (270) 929-2836 or visit www.kyamp.net.

Tuesday-Wednesday, October 19-20Utah Association of Mortgage Brokers

2010 Annual ExpoLocation to be determinedFor more information, call

(801) 787-6611 or visit www.uamb.org.

Sunday-Wednesday, October 24-27Mortgage Bankers Association 97th

Annual Convention & ExpoAtlanta Georgia Congress Center285 Andrew Young International

Boulevard NW • AtlantaFor more information, call

(800) 793-6222 or visit www.mortgagebankers.org.

NOVEMBER 2010Monday-Wednesday, November 8-10

Mortgage Bankers of Pennsylvania Conference

Wyndham-Conference Center95 Presidential Circle

Gettysburg, Pa.For more information, call (973) 379-

7447 or visit www.mba-pa.org.

APRIL 2011Sunday-Wednesday, April 3-6

2011 National Association of MortgageBrokers 2011 Legislative &

Regulatory ConferenceHyatt Regency Washington

on Capitol Hill400 New Jersey Avenue NW

Washington, D.C.For more information, call (703) 342-

5900 or visit www.namb.org.

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MAY 2010Sunday-Wednesday, May 23-26

Mortgage Bankers AssociationCommercial/Multifamily Servicing and

Technology Conference 2010Sheraton New York Hotel & Towers811 7th Avenue • New York, N.Y.

For more information, call (202) 557-2790 or visit www.mortgagebankers.org.

Sunday-Wednesday, May 23-26Mortgage Bankers Association National Secondary Market

Conference & Expo 2010Hilton New York

1335 Avenue of the AmericasNew York, N.Y.


www.mortgagebankers.org.

To submit your entry for inclusion in the National Mortgage ProfessionalCalendar of Events, please e-mail the details of your event, along with

contact information, to [email protected].

COMPANY WEB SITE PAGE

Abacus Mortgage Training and Education .......... www.acethesafe.com ..............................TN5, 4 & 30

ACC Mortgage .................................................. www.weapproveloans.com ....................................32

Calyx Software ................................................ www.calyxsoftware.com ........................................16

Comergence Compliance Monitoring, LLC .......... www.comergencetrustedmember.com ....................23

Credit Mastery Event ........................................ www.creditmasteryevent.com ..............................35

Emigrant Mortgage Company ............................ www.emigrantmortgage.com ................................32

Entitle Direct Group.......................................... www.entitledirect.com ..................Inside Front Cover

FindMortgageJobs.com .................................... www.findmortgagejobs.com ................................TN1

First Source Capital Mortgage, Inc. .................... www.fscmortgage.com ..........................................15

Flagstar Wholesale Lending .............................. www.paperless.flagstar.com ......................Back Cover

Franklin First Financial .................................... www.4abranch.com ..............................................28

Freedom Mortgage .......................................... www.fmbranch.com ......................Inside Back Cover

Frost Mortgage Banking Group .......................... frostmortgage.com/nmp ........................................21

Gateway Mortgage Group, LLC .......................... www.gatewayloan.com ........................................39

Guaranteed Home Mortgage.............................. www.joinguaranteed.com ....................................25

HTDI Financial ................................................ www.startacreditrepaircompany.com ....................26

Inlanta Mortgage.............................................. www.inlanta.com ................................................17

iServe Residential Lending, LLC ........................ www.iservecompanies.com ..................................19

Mortgage Concepts .......................................... www.mortgageconceptsonline.com ........................16

MortgageProShop.com...................................... www.mortgageproshop.com ........................TN1 & 43

NAMB.............................................................. www.namb.org......................................TN2, 22 & 32

NAPMW .......................................................... www.napmw.org ....................................................8

Orange Coast Title Company.............................. www.octitle.com ..................................................37

Platinum Credit Services, Inc............................. www.platinumcreditservices.com ............5, 7, 9 & 11

Presidents First Mortgage Bankers .................... www.presidentsfirst.com ......................................31

Quality Mortgage Services ................................ www.qcmortgage.com ..................................27 & 41

REMN (Real Estate Mortgage Network)................ www.remnwholesale.com ....................................29

Ridgewood Savings Bank .................................. www.ridgewoodbank.com ....................................20

Shore Financial Services, Inc. ..............................................................................................TN3 & 33

Titan Lists........................................................ www.titanlists.com ..............................................13

United Northern Mortgage Bankers Ltd. ............ www.unitednorthern.jobs ............................ 14 & 41

Xetus Mortgage Corporation.............................. www.xetus.com ....................................................13

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