Idaho Mortgage Professional Magazine - April 2012

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Idaho Association of Mortgage ProfessionalsP.O. Box 7981 � Boise, ID 83707

Phone #: (208) 321-9309 � Fax #: (208) 321-4819E-mail: [email protected]

Web Site: http://www.idahomortgageprofessionals.org

Mortgage PROFESSIONALI D A H O

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

• Daily updated mortgage industry news

• Industry blogs• Write your own blog

• Find loan programs• Discover local and

national events• Get access to video

IAMP OFFICERS & DIRECTORSPhone # E-mail

Tyler Porter President (208) 389-4709 [email protected]

Alison Gillespie Treasurer/Secretary (208) 378-1013 [email protected]

Steve Cox National Director (208) 514-3978 [email protected]

Chuck Anderson Northern Director/

National Director (208) 449-1789 [email protected]

JJ Astorquia Director (208) 389-4709 [email protected]

Tom Birch Director (208) 343-4065, ext. 111 [email protected]

Bryan Booth Director (208) 409-1731 [email protected]

Travis Dyson Director (208) 608-0059 [email protected]

Michelle Guth Director (208) 853-7878 [email protected]

Chad Harding Director (208) 406-1176 [email protected]

Mark Rodeghiero Director (208) 939-2228 [email protected]

Kathy Smith Director/NAMB WEST Delegate (208) 230-5284 [email protected]

Scott Stingley Director (208) 387-7414 [email protected]

Shanna Wroten-Tucker Director (208) 388-0500 [email protected]

Headlines and breaking news from NationalMortgageProfessional.com.

Headlines and blogs from around the web.

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A Special Look at “Leadership”The New Age of Leadership By Daniel Milstein........................36Vision, Integrity, Inspiration: The Foundations of Strong Leadership By John M. Robbins, CMB ......................37What Leadership is NOT By David Lykken ..............................38Leadership: Igniting Extraordinary Results ThroughPassion, Purpose and Love By Hayes Barnard........................39Five Keys to Effective Sales Leadership in a Post-Dodd-Frank World By Erik Janeczko ............................40Are You a Manager or a Leader? By Dave Hershman ............41

FeaturesGrow Your Business This Spring By Mary Beth Doyle ..............4HUD Now Requires Many Credit Report Disputes Resolved By Terry W. Clemans ..................................................4We Walk You Home: Purpose, Production and the Power of the Consumer Conduit By Rick Roque......................8The NAMB Perspective ......................................................12NMP Mortgage Professional of the Month: Danny Nicolo, President & CEO of Meadowbrook Financial Mortgage Bankers ..............................................22HARP 2.0: Direct Marketing Outlook By Raymond Bartreau ....24Survival of the Mortgage Broker By Al Crisanty ..........................26The Elite Performer: Laser Focus By Andy W. Harris, CRMS ....26The End of the Refinance Era By John Walsh ........................28Regulatory Compliance Review: The CFPB’s Treatment of Confidentiality and Privilege By Jonathan Foxx ..................30The Calm Before the Storm By Laurie Spira............................32USA Cares Mortgage Heroes: Douglas C. Rice of Fidelity First Home Mortgage By Beverly Frase ......................33Becoming and Involved Leader By George L. Duarte, MBA, CMC......34New Developments in the Foreclosure Crisis By Patrick M. Roberts Esq. ..........................................................35Finding and Attracting Good Customers is All AboutPreparation..........................................................................46Top Five Things to Improve Your Existing Business By Leif Boyd ............................................................................50

ColumnsHeard on the Street ..............................................................6NMP News Flash: April 2012 ..............................................16New to Market ....................................................................32NMP Mortgage Professional Resource Registry ..............52NMP Calendar of Events ....................................................56

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America’s Choice Home Loans .......................... www.achlonline.com ............................................29

Best Rate Referrals, LLC .................................... www.harpmortgageleads.com ................................5

Calyx Software ................................................ www.calyxsoftware.com ......................................20

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Elliott and Company Appraisers, Inc................... www.appraisalsanywhere.com ..............................20

Equity Loans LLC .............................................. www.equityloans.com ..........................................15

First Guaranty Mortgage Corp. .......................... www.fgmc.com ....................................................21

Freedom Mortgage .......................................... www.fmbranch.com ......................Inside Back Cover

Frost Mortgage Lending Group .......................... www.frostmortgage.com/nmp ..............................18

Hometown Lenders .......................................... www.whotookmybacon.com ................................45

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Land Home Financial Services .......................... [email protected] ....................................40

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Meadowbrook Financial Mortgage Bankers Corp. .... www.mortgagesalesjob.com ..................................27

Menlo Park Funding ........................................ www.menloparkfunding.com ................................35

Mortgage Brokers Network Corp, Inc. ................ www.mortgagebrokersnetwork.com ......................16

NAPMW .......................................................... www.napmw.org ..................................................6

PB Financial Group Corp. .................................. www.pbfinancialgrp.com ......................................10

Polaris Home Funding Corp. (Branches) .............. www.polarishfc.com/TimeForAChange ....................9

Polaris Home Funding Corp. (Wholesale) ............ www.polarishfc.com ............................................31

REMN (Real Estate Mortgage Network)................ www.remnwholesale.com ......................................7

Ridgewood Savings Bank .................................. www.ridgewoodbank.com ....................................42

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Streetlinks LLC ................................................ [email protected] ..................Inside Front Cover

TagQuest ........................................................ www.tagquest.com ..............................................17

National Mortgage Professional Magazine

TABLE OF CONTENTSNA

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ORTGAGE PROFESSIONAL

MAGAZINE

NMPNMPApril 2012 Volume 4, Number 4 Company Web Site Page

From The Publisher’s DeskApril 2012Volume 4 • Number 4

1220 Wantagh Avenue • Wantagh, NY 11793-2202Phone: (516) 409-5555 • Fax: (516) 409-4600

Web site: NationalMortgageProfessional.comSTAFF

Eric C. PeckEditor-in-Chief

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

Joel M. BermanPublisher


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

[email protected]

Joey ArendtArt Director

[email protected]

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

[email protected]

Beverly KoondelNational Account Executive


Tara CookBilling Coordinator


ADVERTISINGTo receive any information regarding advertising rates, deadlines andrequirements, please contact National Account Executive Beverly Koondelat (516) 409-5555, ext. 316 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 content con-tained 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.

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A Message From NMP Media Corp. Publisher Joel M. Berman

Leadership: A concept that goes beyond being just amanagerIn this month’s issue of National Mortgage Professional Magazine, we will focus on thosein the mortgage industry who have the vision to lead. A leader is defined best by W.Clement Stone in his discussion about “The Secret” where he wrote:

“Everyone who achieves success in a great venture, solves each problem as they came intoit. They helped themselves. And they were helped through powers known and unknown to them at the timethey set out on their voyage. They keep going regardless of the obstacles they met.”

Mr. Stone, who passed away in 2002 at the age of 100, emphasized using a ‘’positive mental attitude’‘ orPMA to make money, both for himself and for the millions of people who became his disciples through theself-help books and magazines he wrote, edited and published.

A line is clearly drawn between a “manager” and a “leader.” A manager maintains the organization andruns the day-to-day repetitive functions with little passion to grow. On the other hand, a leader not onlymanages, but inspires the organization to grow and passionately seeks ways in which to inspire the teamto both succeed and exceed their goals. The effective leader embraces the concept of PMA and starts offeach day refreshed with a daily plan of action.

Our featured editorial contributors for this month fit well into Mr. Stone’s vision of leaders. Despite thedifficulties of our economy and the mortgage industry, each and every one of these authors looked for“that secret” to take adversity and turn it into success. As we look towards the future, each of us shouldlook to build on the attributes of a leader. Managing loses its appeal in short time, while being a leaderalways gives you a chance to experiment and be creative and keeps you constantly replenished.

Kicking things off this in our special leadership section is a piece by Daniel Milstein of Gold StarFinancial, “The New Age of Leadership,” on page 36, where Daniel discusses the traits of what makes up agreat leader in today’s mortgage marketplace. On page 37, John M. Robbins, CMB of Bexil AmericanMortgage and former president of the Mortgage Bankers Association (MBA), discusses the building blocksof what it takes to be a leader. David Lykken of Mortgage Banking Solutions, on page 38, takes a differentapproach and details some misconceptions about the role of a leader. On page 39, Hayes Barnard ofParamount Equity explains what he feels are the keys to leadership in his article, “Leadership: IgnitingExtraordinary Results Through Passion, Purpose and Love.” On page 40, Erik Janeczko of MaximumAcceleration lists the five keys to being a successful leader in today’s mortgage market as measures such asthe Dodd-Frank Act further regulate the industry. Wrapping up this section on page 41 is Dave Hershman’sarticle detailing the differences between the role of a “manager” and the role of a “leader.”

NMP’s Mortgage Professional of the Month … the butcher turnedmortgage bankerThis month on page 22, we profile Danny Nicolo, president and chief executive officer of MeadowbrookFinancial Mortgage Bankers. Danny’s story is one of hard work and dedication, as his career path and entryinto the mortgage arena is quite a unique story as he got his start managing and working in his family’sItalian market. From there, Danny garnered the tools needed to grow his own mortgage brokerage busi-ness through referrals and word-of-mouth, eventually making the successful transition to becoming amortgage banker.

The voice of a few leading an industry of thousandsIn addition to Danny Nicolo and our section on leadership, this month, we recap the very successfulNational Association of Mortgage Brokers (NAMB) 2012 Legislative & Regulatory Conference held last monthin Washington, D.C. The voice of the mortgage professional was heard loud and clear on Capitol Hill, as theindustry’s premier mortgage broker trade association met with their elected officials to convey the mes-sage of the mortgage community. Read all about it in this month’s installment of “The NAMB Perspective”beginning on page 12. Also on the topic of having the industry’s voice heard, George L. Duarte, MBA, CMCties in the concepts of political advocacy and taking a leadership role in his article on page 34. Georgeauthored a bill, The Homeowners Retention Act of 2012, sharing his years of industry-related knowledgeand addressing loans not covered by HARP 2.0—ARMs that are owned by other than Fannie Mae or FreddieMac that are jumbos, monthly adjustable mortgages, Alt-A and sub-prime loans. George’s bill is underreview by the lobbying team of the California Association of Realtors (CAR) and may be sponsored by CAR.George took the lead and realized that he can make a difference for an entire industry, as his single con-cept may have a positive impact on an entire industry should his bill come to light.

I thank you again for taking the time to pick up this copy of National Mortgage Professional Magazine,either in print form or electronically, and hopefully, you come away from reading this issue with a multi-tude of ideas that can be positively implemented into your day-to-day business plans.

Sincerely,

Joel M. Berman, PublisherNMP Media Corp.National Mortgage Professional Magazine

is published monthly by NMP Media Corp.Copyright © 2012 NMP Media Corp.

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The Association of Mortgage Professionals

2701 West 15th Street, Suite 536 � Plano, TX 75075Phone #: (703) 342-5900 � Fax #: (530) 484-2906

Web site: www.namb.org

President—Donald J. Frommeyer, CRMSAmtrust Mortgage Funding Inc.200 Medical Drive, Suite DCarmel, IN 46032(317) 575-4355 � [email protected]

Vice President—Donald Fader, CRMSSMC Home FinanceP.O. Box 1376Kinston, NC 28503-1376(252) 523-5800 � [email protected]

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

Secretary—Olga Kucerak, CRMSCrown Lending222 East Houston, Suite 1600San Antonio, TX 78205(210) 828-3384 � [email protected]

Past President—Jim Pair, CMCMortgage Associates Corpus Christi6262 Weber Road, Suite 208Corpus Christi, TX 78413(361) 853-9987 � [email protected]

Rocke Andrews, CMC, CRMSLending Arizona LLC1996 North KolbTucson, AZ 85715(520) 886-7283 � [email protected]

Fred Arnold, CMCAmerican Family Funding24961 The Old Road, Suite 101Stevenson Ranch, CA 91381(661) 284-1150 � [email protected]

Kay A. Cleland, CMC, CRMSKC Mortgage LLC200 South Wilcox Street #224Castle Rock, CO 80104(720) 810-4917 � [email protected]

Andy W. Harris, CRMSVantage Mortgage Group1596 SW Boones Ferry Road, Ste. 100Lake Oswego, OR 97035(503) 496-0431 � [email protected]

Deb Killian, CRMSGMAC246 Federal Road, Unit C-24Brookfield, CT 06804(203) 778-9999, ext. 103 � [email protected]

Linda McCoyMortgage Team 1 Inc.6336 Picadilly Square DriveMobile, AL 36609(251) 610-0494 � [email protected]

John StevensBank of England d/b/a ENG Lending11650 South State Street, Ste. 350Draper, UT 84120(801) 427-7111 � [email protected]

Donald J. UngerPresident(303) 670-7993, ext. [email protected]

Daphne LargeVice President & Treasurer(901) [email protected]

Tom ConwellEx-Officio & Legislative Chair(800) 445-4922, ext. [email protected]

Nancy FedichDirector–Conference Chair(908) 813-8555, ext. [email protected]

Judy RyanDirector-Strategic AllianceChair(800) 929-3400, ext. [email protected]

Susan CataldoDirector–Education & Compliance Chair(404) 303-8656, ext. [email protected]

William BowerDirector–Tenant ScreeningChair(800) [email protected]

Mike BrownDirector–Technology Chair(800) 925-6691, ext. [email protected]

Maureen DevineDirector–Education & Compliance Co-Chair(413) [email protected]

Renee EricksonDirector–New Membership & Elections Chair(800) 311-1585, ext. [email protected]

Terry ClemansExecutive Director(630) [email protected]

Jan GerberOffice Manager/MembershipServices(630) [email protected]

PresidentLaurie Abshier, GML, CME, CMI(661) [email protected]

President-ElectCandace Smith, CME(512) [email protected]

Senior Vice PresidentJill Kinsman(206) [email protected]

Vice President-Northwestern RegionNita Cook, GML, CME, CMI(360) [email protected]

Vice President-Western RegionLyman King III, CME, CMI(916) [email protected]

Vice President-Central RegionLisa Puckett, CME(405) [email protected]

Vice President-Eastern RegionChristine Pollard(607) [email protected]

SecretaryKatheryn M. Farrell(509) [email protected]

TreasurerJeanne Evans, CME(918) [email protected]

ParliamentarianHulene Bridgman-Works(800) [email protected]

NAMB 2011-2012 Board of Directors

National Association of ProfessionalMortgage Women

P.O. Box 451718 � Garland, TX 75042Phone #: (800) 827-3034 � Fax #: (469) 524-5121

Web site: www.napmw.org

OFFICERS

DIRECTORS

2012 Board of Directors & Staff

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

National Board of Directors 2011-2012

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Grow YourBusiness This Springby Mary Beth Doyle, Founder

B.C. Forbes once said, ‘It is only the farmer who faithfully plants seeds in the Spring, who reaps a harvest in the Autumn.’ The same principle applies to growing your business. By planting the seeds for success in April, you can reap exceptional rewards in the weeks and months to come. The key is high-impact marketing. It’s extremely important to stay in touch with customers & prospects – and also to build business through partner relations. To maximize success, you need a robust, intelligent marketing platform that makes the process as effective & efficient as possible.

LoyaltyExpress is the #1 choice of top-producing loan officers & executives across the nation. We offer comprehensive marketing solutions that continuously capture new, repeat, and referral business:

high-impact communications that can engage & motivate your book of business to take action. Intelligent data mining quickly identifies and promotes new opportunities.

through a wide range of cross-media formats and channels. By combining high-quality direct mail, e-mail, and on-demand marketing pieces, you can significantly improve your response rate.

the mouse, you can send targeted marketing campaigns that achieve exceptional results. Contact our industry-leading client services team for continuous support and information.

Simply put, LoyaltyExpress is the best. We know it, and you will too. Take a few minutes to learn more about us. We’re here to make a difference.

LoyaltyExpress is the leading mortgage marketing company in the nation. For more information:

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HUD Now Requires ManyCredit Report Disputes

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on consumer rights?

By Terry W. Clemans

Effective April 1, 2012, Federal Housing Administration(FHA) loan credit reports must be free of most creditaccount disputes. One of the requirements of FHAMortgagee Letter 2012-03 is that buyers must resolve anyoutstanding credit disputes of more than $1,000 on theircredit report if that dispute is less than two years old.

Consequently, paying down balances on disputed accounts and collectionsto drop the balance below $1,000 is not an acceptable resolution ofaccounts. Cases of identity theft (like disputes outstanding more than twoyears), will be exempt from the new rule.

For all other credit disputes, borrowers will either have to pay theremaining balance on the account, or enter into a payment plan and makeat least three payments. Payment plans will need to be documented andsubmitted to the FHA.

Fannie Mae and Freddie Mac have had even tighter dispute resolutionrequirements for several years. These policies came about due to the pos-itive impact to credit scores when a consumer enters a dispute on aderogatory account. Most credit scoring models remove disputed accountsfrom the credit score calculation, perhaps creating an artificially high scoreand exposing the lender to added risk. FHA stated they also found a corre-lation between credit disputes and mortgage defaults in their loan per-formance evaluations.

With the statistical evidence on questionably higher scores and histori-cal loan performance to support these policies, FHA joining the ranks ofFannie Mae and Freddie Mac seems logical. Do these policies, however,change the power balance in consumer business transactions? There arelegitimate occurrences when a consumer needs to be able to dispute a billwhen they did not pay for a product or service. If the product or servicedoes not perform as advertised, and the merchant refuses to stand behindit, the final recourse available to the consumer is to dispute the account ifit shows up on their credit report.

These policies remove that final shot at redemption, and perhapsinfringe upon consumer rights. The Fair Credit Reporting Act (FCRA)guarantees the consumer the right to dispute erroneous information onany account in their credit files. Once a consumer challenges that infor-mation, a notation to this effect must be made on the file, which trig-gers most credit-scoring systems to not factor the disputed account intothe computation of the consumer’s score. By demanding that all dis-putes be resolved, merchants have been given additional leverage whendealing with consumers to make sure payment has been received. Whilethis is not an issue for most merchants, some may take advantage of thenew leverage.

When Fannie Mae and Freddie Mac created these policies years ago,Evan Hendricks, author of the book, Credit Scores and Credit Reports andpublisher of Privacy Times, wrote about Fannie Mae’s policy, calling it,“Extremely unfair to honest consumers who are simply doing what theyshould—challenging misinformation.”

Unfortunately, too many credit repair firms use this tactic to rip off con-sumers, and the lenders who have made bad loans from data skewed byconsumers disputing everything negative on the credit report. And ofcourse, as all too often occurs—a tool to help consumers with legitimateproblems gets lost.

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

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First Guaranty MortgagePartners With NAREB onHomeowner’s AssuranceProgram

First GuarantyMortgage Corp-oration (FGMC)

will participate in the Homeowner’sAssurance Program (HAP), a non-profitpartnership created by the NationalAssociation of Real Estate Brokers (NAREB)to address the impact of the mortgage cri-sis in a number of urban communitiesnationwide. The effort will revolve aroundthe investment in and resale of real estate-owned (REO) properties and non-perform-ing loans in targeted communities. HAPparticipants will collaborate to acquire,manage, market, and dispose of non-per-forming loans and REO properties, prima-rily in 25 urban MSAs and first ring com-munities across the country. HAP will pro-vide asset oversight and governance aswell as political and social capital manage-ment. They will also spearhead efforts instrategic direction, community mobiliza-tion, and industry partnerships. The initia-tive will be fulfilled through the “Boots onthe Ground” project, which will put NAREBRealtists in direct contact with distressedhomeowners and first time homebuyerswho have been locked out of the homebuying process, to advance the loss mitiga-tion effort.

FGMC will be the preferred lender onall new mortgages originated throughthe program for homebuyers referredby NAREB. It will also provide financingoptions, such as 203k renovation lend-ing, to facilitate REO sales.

“HAP is a promising and practicalapproach to a national nightmare,”said James Cromartie, FGMC AVP ofnational business development. “Weare offering a 360 degree solutiondesigned to create sustainable home-ownership. HAP will address social andeconomic barriers to homeownershipand help rebuild communities, mitigat-ing the deep costs of the crisis, whilerestoring dignity and empathy to ahuge number of borrowers.”

Lenders ComplianceGroup Partners With The Bernard Law Group

Lenders ComplianceGroup Inc. (LCG), anationwide risk

management firm, and The BernardLaw Group have announced a strategic

alliance to offer mortgage risk manage-ment guidance to the mortgage indus-try. The two firms will build on existingtools, processes, risk assessments, andresources to provide a “best practices”approach to residential mortgage com-pliance. Both firms offer regulatoryguidance to members of the real estateand banking industries.

LCG provides a suite of services for allareas of mortgage banking, such asloan audit analytics, mortgage compli-ance guidance, loan origination chan-nel and product development, mort-gage quality control (QC), legal reviewsand remedies, government-sponsoredenterprise (GSE) applications, due dili-gence reviews, and banking, ConsumerFinancial Protection Bureau (CFPB) andFinCEN exam readiness.

Wendy Bernard Esq., named partnerof The Bernard Law Group, has accept-ed the position of director of legal andregulatory compliance at LCG, and willwork with the firm’s clients on their res-idential mortgage compliance needs.

“Wendy Bernard has distinguishedherself as an accomplished complianceprofessional and regulatory counsel,”said Jonathan Foxx, president and man-aging director of LCG. “Her deepinvolvement in nearly all aspects of themortgage industry has given her a spe-cial perspective on its complianceneeds. Wendy brings a unique blend ofmortgage banking and mortgage bro-kerage experience. By becoming adirector of Lenders Compliance Group,she joins our other directors and sub-ject matter experts in support of a ‘bestpractices’ approach for our clients.”

Bernard has unique qualifications asa compliance attorney, as she hasworked in the trenches of the mortgageand banking industry for more than 10years. Her diverse experience and rangeof industry responsibilities includecommercial lending specialist, loanclosing specialist, vice president of QCand post-closing compliance relating tothe secondary market transactions andsecuritization. She has served not onlyas in-house counsel for several regionalmortgage bankers and mortgage bro-kers, but also as a VP of compliance andsecondary markets.

“It is clear that Lenders ComplianceGroup provides a wealth of informationand unprecedented access to mortgagerisk management support within themortgage banking and mortgage bro-

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on Jan. 1, 2012. All month-end, quarter-end and year-end processing for loansserviced using the MSP loan servicingplatform was completed at the LPSJacksonville Data Center early on NewYear’s Day. LPS client groups servicemore mortgages by dollar volume withthe MSP service than any other system.During this project, LPS processed andprovided support for 62 clients on morethan 34 million loans while maintain-ing standard system access to its loanservicing platform.

“A well-executed, on-time year-endprocess is vitally important to our clients,given the rigorous internal and externalreporting that is required of them,” saidDan Scheuble, chief operating officer forLPS. “Throughout 2011, we were also very

aggressive in designing and implement-ing new functionality to our core MSPservicing technology to help our clientsaddress complex regulatory changes andto be more productive.”

Mortgage servicers are required toreport account information to mortgagorson an annual basis to meet IRS and otheragency regulations. Year-end processingfor LPS compiles the necessary loan infor-mation; generates exception and balanc-ing reports; and creates the annual state-ments for the loans in each mortgage serv-icing client’s portfolio. Each year, thisprocess is completed through a wide-rang-ing corporate project that involvesemployees from multiple departments.

continued on page 10

kerage industries,” said Bernard. “In myview, this strategic alliance between TheBernard Law Group and LendersCompliance Group ensures that ourrespective clients are well-versed andrepresented, with respect to all regulato-ry compliance issues affecting their busi-nesses. I am excited to bring together ourresources and provide ‘best practices’compliance solutions to strengthen ourclients and the industry.”

The Bernard Law Group advisesclients concerning regulatory compli-ance, establishing comprehensiveframework and execution plans forexpansion, recruiting, mergers andacquisitions, licensing, state andFederal law, and the vast array ofadministrative regulations that impactconsumer lending operations. In addi-tion to Bernard’s law practice, she is aboard member and organization coun-sel for the Connecticut Association ofMortgage Brokers (CTAMB); she teachesnational and state mandatory continu-ing legal education as required for pro-fessional mortgage loan originatorsunder the SAFE Act; and, she is anadjunct professor of law at PostUniversity in Waterbury, Conn. Bernardhas received a Bronze Star Medal forperformance of duty in a combat zoneand is a 17 year veteran of the UnitedStates Army Reserve Judge AdvocateGenerals Corp.

REMN Opens NewCalifornia Office inPleasanton

Real EstateM o r t g a g eN e t w o r kInc. (REMN)

has announced the opening of itsnewest retail location in Pleasanton,Calif. Jackie James will be joining REMNin Pleasanton as the office’s first branchmanager. An experienced mortgage pro-fessional, James was raised in nearbyFremont, Calif. and has nearly 30 years ofexperience in the lending industry. Shehas won multiple industry awards, is amember of both the Women’s Council ofRealtors and the Bay East Association ofRealtors. Active in the community, Jameswas recently a member of the board ofdirectors for the Valley Humane Societyand currently volunteers with other localorganizations.

James will be joined by two otherindustry veterans, Carlyse Ford andDuane Lendahl. Both accomplishedloan originators, Ford and Lendahlbring more than 50 years of combinedlending industry experience to REMN’sfirst office in the San Francisco area.

“Pleasanton is a vibrant communityand not too long ago, was named one ofthe best places to live by CNNMoney.com,”said REMN Regional Vice President CathyStroud. “Simply put, it’s a great place tolive. Regardless of if someone is buying anew home in the area, looking to refi-nance or interested in a 203(k) style loanto turn a fixer-upper into their Pleasantondream home, the all-stars we have in thisoffice are here to help.”

REMN currently employs more than

600 throughout offices in California,Colorado, Connecticut, Delaware,Florida, Georgia, Maryland, Missouri,New Jersey, New York, North Carolina,Pennsylvania, South CarolinaTennessee and Vermont. In 2011 alone,REMN closed more than $2.3 billion inhome loans, solidifying its position asone of the largest independent non-bank lenders in the U.S.

LPS Processes 34 Million-Plus Loans for 62 MSPClients at Year-End

Lender ProcessingServices Inc. (LPS) hasannounced that it has

successfully completed year-end pro-cessing for its mortgage servicing clients

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By Rick Roque

I’ve never closed aloan, but I get hun-dreds of loans closed.I don’t focus on indi-vidual units as I iden-tify, attain and over-

see a process that closes hundreds ofunits on a monthly basis. Do I knock onthe doors of real estate agents? No. DoI cold-call consumers? No. In fact, thefirst generation of mortgage origina-tion—let’s call this “Sales 1.0,” waspoint to point—rather, a Realtor-basedrelationship that was built on a local,trusted business arrangement builtover time. This, I believe, is a dyingbreed or at least not a scalable andsecure model for the future.

I’m not suggesting that there are notarrangements that work where individ-ual loan officers work closely with indi-vidual real estate agents to produce aconsistent flow of business. But thisisn’t the future of mortgage lending.

The foundation for this is sociologi-cal, something that has happened overthe last 10 years in how people relate,communicate and perceive one anoth-er … an evolution so to speak. Point topoint relationships lack social value;there is no social dimension. One-to-many relationships are what drive busi-nesses today. This article is not aboutsocial media, but it is about your statedpurpose as a mortgage company andyour ability to grow your productionand capitalize on “mortgage conduits”to benefit from this evolution. Allowme to explain.

The ability to structure your businessto reach, monitor, communicate andsell your mortgage products to a targetgroup (one to many) people is the keyto future growth and success. It is not,however, as simple as broadcastingyour message, that was Sales 2.0 andthrived with the dawn of the Internet,static Web pages and blogs. This wasone-to-many communication, but itlacked a dynamic connection with thereaders, there was no ability to meas-ure the experience of the consumer,and lastly, there was no captured audi-ence of people that you can retain, sus-tain and service over a period of time.That captured audience is the power ofthe consumer conduit and this is Sales3.0 for mortgage lenders.

There are three characteristics ofSales 3.0: Passion, Production and thePower of the consumer conduit. These

are all interrelated in that in order togrow your production, the passionbehind your operation must be used toattract prospects from within your con-sumer conduits.

A major obstacle to adoption of Sales3.0 is that mortgage companies stilldon’t know who they are and what theydo. It’s not as simple as saying theyclose and fund mortgages. Mortgagecompanies change lives, empower peo-ple, open new doors (literally and figu-ratively) and serve borrowers through-out the mortgage process. Some callthis the “We Walk You Home” philoso-phy whereby a mortgage lender walksthem through a vision and process thatculminates in the emotional reality forconsumers that they can enjoy the com-forts of owning their own home.

The key to success and retention ofclient relationships is in tapping intothis basic human need through thecomforts associated with homeowner-ship. It is the downsizing family whosells a “home” through a short sale andseeks to find a smaller, more affordablehome; it is a relocating family whoneeds to get settled into a new home sokids can get registered for school; it isthe first-time homebuyer moving intotheir first home after renting and livinga fairly transient lifestyle—in all ofthese cases, the process and emotionalcomfort associated with purchasing,moving and settling into a new home isimmeasurably powerful.

Your ability to provide the processand vision to a borrower, letting themknow what to expect, how the mortgageprocess can be accomplished and whatmay be needed as they work toward theday they move in, is proportionate toyour success. Your company needs that“We Walk You Home” philosophy, and itmust be built into your company’s corevision and mission statement.

So, does having this passion for help-ing people attain homeownership auto-matically give you the production youneed? No. What it does do is give yousomething to sell. But to sell to whom?To achieve maximum success, you’ll sellthis to conduits of consumers.

What is remarkable about humanbeings, especially Americans, is that weare phenomenally social. We live ingroups that form our identity. We arebound together by associations that tiepeople together because of their occu-pation, personal interests and eventheir race or ethnicity. This is the prem-ise behind social networks, Facebook

Friends and Google Plus Circles; we nolonger live in “networks” but we live inmulti-dimensional “mesh-works” thatreflect a three-dimensional componentto our relationships, not just the nodal,“point-to-point” type relationships thatthe Internet was originally based upon.

These tools have allowed us to createconnection like never before. It is fareasier today to discover the commoninterests and values we share with otherpeople. These overlapping relationshipsand powerful associations are the basisfor new consumer conduits that canbecome powerful sources of productiononce you connect your company’s stat-ed mission or purpose to the similar val-ues held by the members of a particularconsumer conduit. Allow me to illus-trate this further.

My grandfather was superintendent ofschools in Chicopee, Mass. He was herald-ed as one of the top superintendents inMassachusetts, having been a pioneer indistance education, labor relations, homeschooling, racial integration and financialmanagement of schools. Having served for20 years (1945-1965) and built most of theschools that are still in operation, his pres-ence is felt everywhere in the communityof Chicopee, Mass. Even having passedaway nearly 18 years ago and retired fromthe job nearly 50 years, “the great John L.Fitzpatrick” is still mentioned often in thehalls of the schools and referenced inmeetings in the central office of the super-intendent.

What does this have to do with mort-gages and consumer conduits? If youare asking this question, you are stuckin Mortgage Sales 2.0 and you need toread on.

The legacy of John L. Fitzpatrick—hispassion for public schools, commitment topublic school teachers and his ability torelate to all constituencies, especially par-ents’ committees and teachers unions, areall connected to my passion, why I am inthe business and how I can serve theseaforementioned consumer conduits.

I am finishing my doctorate in edu-cation finance at American Inter-national College (AIC) and my ability tospeak, work and support public educa-tion is part of my family heritage andcentral to my personal passion. As aresult, I want to support public schoolteachers; I want to work with schoolunions; I want to support parents and Iwant to work closely with administra-tors, but as a mortgage professionalwho understands their profession andtheir needs.

The ability for a mortgage firm toestablish joint ventures with publicschools, unions and districts is real andit represents a substantive opportunityto grow your business in a purposefulway that builds loyalty. For me, andmany like me, this grows organicallyout of who I am, both individually andin terms of the company I am building.

I’ve built relationships similar to thisbetween mortgage firms and other con-sumer conduits, public education is justone of them. Before you start makingphone calls to your school superintend-ent, you should realize that it doesn’tstart there; it starts with your passionand purpose as a company.

Each firm must state its purposeclearly and break down its mission intospecific organizational outcomes inorder to sustain a consistent consumerexperience across all marketing andsales efforts. It is important to developa new class of mortgage leadershipfrom within your firm to articulate thiswith passion. Without this, any out-reach will be hollow and of limitedvalue. Your firm will be frustrated bythe bureaucracy and the conduit—aschool district in this case—willbecome suspicious of your intentions.

Consumer groups don’t speak our lan-guage and they don’t trust us. Our repu-tation and brand as a profession hasbeen wounded by the negative publicityin the media, much of it well-deserveddue to the extent to which many peoplewho worked in the industry took advan-tage of the system to drive production.We walk you home is an answer to that.So, what will define you is not what youare, but what you believe, and it is thissense of purpose that will drive your suc-cess with consumer conduits, and yourproduction overall.

Rick Roque is senior vice president ofgrowth and strategy for PrimeSourceMortgage, the wholly-owned lending sub-sidiary of PSM Holdings Inc. He may bereached by phone at (408) 914-5895 or e-mail [email protected].

“Your ability to provide theprocess and vision to a borrower,letting them know what to expect,how the mortgage process can beaccomplished and what may beneeded as they work toward the

day they move in, is proportionateto your success.”

We Walk You HomeWe Walk You HomePurpose, production and the power

of the consumer conduit

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heard on the street continued from page 7

Ranieri Real EstatePartners and WL RossAcquire Deutsche BankBerkshire Mortgage

Ranieri RealEstate Part-

ners LP (RREP), a real estate financialservices company, and private equityfunds affiliated with WL Ross &Company LLC, has announced the com-pletion of the acquisition of DeutscheBank Berkshire Mortgage (DBBM), for-merly a subsidiary of Deutsche Bank.Effective immediately, the company hasbeen renamed Berkeley Point Capital(Berkeley Point). Jeffrey C. Day, whoserved as chief executive officer ofDBBM and is an 11-year veteran withthe company, and will serve as CEO ofBerkeley Point. Berkeley Point origi-nates multifamily loans for Fannie Mae,Freddie Mac and the Federal HousingAdministration (FHA). It is the secondlargest originator of Fannie Mae loansand services a $29 billion multi-familyloan portfolio. Founded in 1988,Berkeley Point has 175 employees andoperates out of three primary offices:Bethesda, Md.; Boston and Irvine,Calif.; and has additional offices inDallas, Los Angeles, Nashville andSeattle.

“A high-quality acquisition of thisscale within the multi-family sector isunique and rare. The new BerkeleyPoint provides us with an excellent in-place team, that we know well and iscapable of much more,” said JonVaccaro, head of real estate at RanieriPartners and founder of Ranieri RealEstate Partners. “With the benefit of thestrong WL Ross and Ranieri partnership,we believe Berkeley Point is poised forgrowth.”

James B. Lockhart III, vice chairmanof WL Ross and former director of theFederal Housing Finance Agency (FHFA),said, “Berkeley Point did over $3 billionin multi-family originations last year.We look forward to working with Jeffand his strong team to help them growin this critical part of our nation’s hous-ing market.”

One Reverse MortgageAdds to Its Ranks andExpands Operations

One Reverse Mort-gage LLC (ORM)has announced

it has expanded and nearly doubled itsheadquarters to accommodate thecompany’s continued growth. ORM willoccupy one floor and 14,000-plus sq. ft.in its new office, located at 9920 PacificHeights Boulevard, Suite 350 in SanDiego, Calif. One Reverse Mortgage wasfounded in 2001, operates in 48 statesacross the U.S. and is a Quicken Loanscompany.

“One Reverse Mortgage is the fastest-growing reverse mortgage company inthe nation,” said Gregg Smith, president

and COO of One Reverse Mortgage.“This success demands additional teammembers. We had 20 licensed bankersin 2007 and now have more than 130with immediate plans to hire more. Ouroperations team has also grown from16 team members in 2007 to more than50 today. We expect to hire 20-30 addi-tional team members this year.”

ORM’s new space was designed andbuilt to encourage creativity, communi-cation, collaboration and motivation.One Reverse Mortgage’s culture isreflected in the bright colors, openspaces, low interior walls, and fundesign combined with the latest state-of-the-art technology.

“This new space accommodates ourgrowth, which although aggressive, hasbeen accomplished by maintaining ourfocus on high-quality client service,”said Richard Mandell, chief executiveofficer of One Reverse Mortgage. “Ourlicensed bankers are knowledgeableabout reverse mortgages and are expe-rienced working with seniors, which hasallowed us to grow so rapidly.”

GSF Mortgage Expands Into ThreeAdditional States

GSF Mortgage hasannounced that ithas opened threenew branches inIndianapolis; Austin,

Texas; and McLean, Va.“These branch openings reinforce

GSF Mortgage’s commitment to provid-ing exemplary customer service andexpertise in helping individuals achievehomeownership,” GSF Mortgage ChiefOperating Officer Chad Jampedro said.

Jampedro added that he is pleasedto have four seasoned professionalsmanage each of the new locations:Ronald Gardner and Nicole Lissade forthe Indianapolis branch; Paula Brownfor the Austin branch; and Judy Hinesfor the McLean branch.

“We are thrilled to have them repre-sent GSF Mortgage’s philosophy inbuilding lasting relationships,”Jampedro said.

ClosingCorp PartnersWith RamQuest on Title and SettlementServices Initiative

ClosingCorp hasannounced a part-nership with Ram-

Quest to enable automated orderingcapabilities for title and settlementservices through the SmartGFECalculator and RamQuest’s ClosingMarket. RamQuest, based in Plano,Texas, provides business solutions fortitle and settlement agents. Throughthe relationship, customers ofClosingCorp’s SmartGFE Calculator and


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Wow! What a greatNAMB Legislative &Regulatory Conferencewe just held. The dis-appointing thing wasthat we only had 100people show up, butboy, did they get

their money’s worth.The morning panel discussion fea-

turing the Mortgage BankersAssociation (MBA), National Associationof Realtors (NAR) and NationalAssociation of Home Builders (NAHB),along with NAMB Government AffairsChairman John P. Hudson as the mod-erator, could have gone on for twomore hours. All of our panelists weregreat. The luncheon was a great sessionas well, as we hosted Bart Shapiro fromthe Consumer Financial ProtectionBureau (CFPB) as our guest speaker,and Allison Brown, also from the CFPB,as our afternoon speaker on loan origi-nator (LO) examinations.

I think the entire Government AffairsCommittee did a fantastic job of put-ting together a very good group to helpus understand some of the differentthings that we, as mortgage profession-als, have been forced to cope with inthese times.

I had the pleasure to attend meet-ings at the U.S. Department of VeteransAffairs (VA) and at the Federal HousingAdministration (FHA). I was captivatedto find that we are very much lookedupon as people who are able to givegood, solid information that both ofthese agencies are interested in receiv-ing. John Hudson will talk more aboutthe Legislative Conference in his articleto the right. He will provide a solidanalysis of the event and dissect theendeavors of the trials and tribulationsgoing through Congress today.

We continue to work very hard inWashington, D.C. to get our messageacross. I have to admit that I was veryhappy to see that in almost all of myconversations with my congressmenand senators, and with most of you,that these guys are really starting to getit. They seem to have their hand onwhat is going on and what we are talk-ing about. That is a direct reflection onall of you getting out there and talkingto your legislators and giving them the

information required. Our grassrootsefforts are again starting to work, butwe have to keep it up and continue. Donot let up!

By the time you see this article, youwill know that we offered a Webinar toNAMB members only with the directorof the CFPB, Richard Cordray. We havebeen working for nearly a month to getthe date and time, and we finally wereable to get an open time for him to bewith us for an hour. I hope all of youwere able to take advantage of this out-standing opportunity to listen to whathe had to say and to participate withsome of your questions. We plan ondoing these Webinars each month withsomeone or on a topic that is current orhas something that they can bring to usof importance in our everyday life as amortgage professional.

We are now beginning to acceptnominations for the NAMB board ofdirectors. If you personally know ofsomeone that we should look at to beon the board, please visit NAMB.org andcomplete the paperwork to nominatethem for a position. The most impor-tant part of this process is that theboard needs people who are willing towork to get things completed. Most ofthe meetings are conducted via con-ference call, but there are three in-person meetings each year that youwill need to attend. It also helps if youhave a designation of the CertifiedMortgage Consultant (CMC) or CertifiedResidential Mortgage Specialist (CRMS).This is because only two members cansit on the board as a director withoutthese designations, which limits who iseligible.

I would also like to know if you areinterested in being a chair or co-chair ofone of our committees, please contactme at [email protected] and let meknow. I am putting together a list of allof those who are interested, so that Ican begin putting together the commit-tees for next year. Please, don’t be shy.We want volunteers and if you just wantto be on a committee, let me know andI can work that out also.

At the Legislative Conference, I pro-moted Andy W. Harris from Oregon tofill one of the open spots on the board.Andy is from Vantage Mortgage Groupand has been an active supporter of the

association for a number of years. Hehas also been extremely active in hisnative state of Oregon, serving in manycapacities, his latest as president of theOregon Association of MortgageProfessionals (OAMP). I have also pro-moted John Stevens from Utah to com-plete the open board positions, as hecame on board April 4. John has alsobeen a past president of his state asso-ciation, and for the past three years, hasbeen chair and co-chair of NAMB/WEST.John will again chair the NAMB/WESTConference this year. All of their contactinformation can be seen on the NAMBWeb site, NAMB.org.

In concluding this month’s column, Ibelieve I should comment on the state-ment that I have on all of my e-mailsconcerning membership. Now I knowthat every article that is written by meor by someone else always brings outthe membership question, “Why don’tyou belong?” But in discussions withpeople, I began to think of somethingthat had meaning. I came up with“MEMBERSHIP … BE YOUR PART OF IT!”I must admit that it is a little corny, butit is such a true statement. We cannot

be a successful association without youand your part of membership. I reallydon’t understand why people feel that$120 for a Platinum Membership or $50for a Silver Membership is looked at asan astronomically high amount. I cur-rently pay $320 per year to be anumpire. That is my dues, my member-ship into the umpires association, andevery umpire does this because it isimportant enough to be a member andwe are required to belong to an associ-ation because that makes us betterumpires. So, maybe all of you that arenot members should break down andjoin. What have you got to lose? NOTH-ING! In fact, you probably will be bet-ter-informed, better-trained and a littlemore knowledgeable about your pro-fession. After all, it’s YOUR PART OF ITwe are missing!

Sincerely,

Donald J. Frommeyer, CRMS,PresidentNAMB—The Association of MortgageProfessionals

The President’s Corner: April 2012

Mortgage Brokers’Presence Felt in D.C.

By John P. Hudson

Last month, mortgageprofessionals fromacross the country con-vened in Washington,D.C. to participate inthe 2012 NAMB Legis-lative & Regulatory

Conference. Not only did these industryvolunteers learn the latest news on issuesaffecting their business, they passionatelyadvocated on behalf of all mortgage pro-fessionals, small business and the preser-vation of consumer choice on Capitol Hill.

RecapOn March 19, NAMB professionals got tohear first-hand from the Consumer

Financial Protection Bureau (CFPB) onhow our new regulator works, whatauthority it has, and perhaps moreimportantly, what they will be lookingfor during the mortgage originatorexamination process. Additionally,NAMB members participated in aroundtable discussion with representa-tive from the National Association ofRealtors (NAR), National Association ofHome Builders (NAHB) and MortgageBankers Association (MBA) to discuss avariety of issues such as loan originator(LO) compensation, the QualifiedResidential Mortgage (QRM), QualifiedMortgage (QM), appraisals, the overalleconomy, fair lending laws and muchmore. The takeaway from this round-table was rather amazing … all of the

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respective trade associations are on thesame page. One finds it difficult toremember the last time that Realtors,brokers, builders and mortgagebankers agreed so closely on so manyissues. This is a perfect example of whyparticipation in your trade associationis so important … because the impactof poorly-written legislation and regu-lation threatens to further weaken theoverall economy by restricting con-sumer access to credit and consumerchoice and harming small business.

On March 20, mortgage professionalstook Capitol Hill by storm to lobby onsome of the more pressing issues whichneeded to be brought to the attention ofour legislators. The primary focus ofLobby Day was to regain flexibility withinthe realm of LO compensation via Rep.Gary Miller’s HR 4163 and Rep. BarneyFrank’s HR 4076. Both of these bills offerthe ability to bring back competition tothe market and allow mortgage profes-sionals to help the consumer. In addi-tion, NAMB members proudly lobbiedfor the protection of non-bank confiden-tial information with reference to CFPBaudits; stopping the use of government-sponsored enterprise (GSE) credit riskguarantee fees as “pay fors;” the MedicalDebt Responsibility Act which would helpconsumer FICO scores; and making legis-lators aware of the dangers of the CFPB’srule for “Qualified Mortgages.”

The fight continuesOur Lobby Day talking points representonly just some of the issues currentlyfaced by thousands of mortgage profes-sionals and millions of consumers.Mortgage professionals MUST be ready,willing and able to get involved in thelegislative and regulatory process alongwith NAMB to ensure that our industryand consumers are protected from theunintended consequences of ill-advisedregulation and legislation. So what areyou going to do about it?

The bottom lineNAMB’s advocacy has been effectiveover the years because our membersget involved. NAMB members are lead-ers within the mortgage businessbecause of their experience and expert-ise. They are widely regarded as leaderswithin their communities because theyrecognize the importance of gettinginvolved and making a difference. Inorder for NAMB to continue to be an

effective advocate for mortgage brokersand mortgage professionals, you mustparticipate in the political process.

Your involvement ensures that legis-lators and regulators hear a perspectivethat they care most about—a con-stituent who can communicate theimpact of potential legislation on themarketplace, homebuyers and the gen-eral public. We must continue to lookout for the interests of the customers weserve and for the general good of theAmerican people.

We continue to face enormouschange. You need to know the issues,learn about what’s on the horizon andwhat you can do to protect your interestthrough political action. If you are amember of NAMB, thank you for yoursupport. If you are a future member ofNAMB, we looking forward to workingwith you to protect and promote yourprofession.

For more information, please visitNAMB.org or e-mail us at [email protected].

Special thanks to Provident Fundingfor sponsoring the NAMB 2012Legislative & Regulatory Conference.Provident Funding has once againdemonstrated their commitment andloyalty to mortgage brokers and allmortgage professionals in the housingindustry.

John P. Hudson is 2012 Government AffairsCommittee Chair for NAMB. He may bereached by phone at (817) 247-4766 or e-mail [email protected].

Mike Anderson from the Louisiana Mortgage Lenders Association(LMLA) and NAMB President Don Frommeyer proudly display their flagthat was flown over the U.S. Capitol

Bart Shapiro, SeniorAdvisor for the Office ofCommunity Banks andCredit Unions for theConsumer FinancialProtection Bureau (CFPB),addresses luncheonattendees

NAMB GovernmentAffairs Committee ChairJohn P. Hudsonintroduces panelistsfrom NAR, NAHB andthe MBA

Rep. Gary Miller (R-CA)with members of the

NAMB board during the2012 Legislative &

Regulatory Conference

NAMB President Don Frommeyer and NAMB Government AffairsChair John P. Hudson preparing to walk the halls of Congress

during Lobby Day

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Scenes From the 2012 NAMB Legislative & Regulatory ConferenceMarch 18-20 at the Capitol Skyline Hotel in Washington, D.C.

Sponsored by

Housing Panel Discussion panelists Ken Markinson of theMortgage Bankers Association (MBA), Steve Linville of theNational Association of Home Builders (NAHB) and KenTrepeta of the National Association of Realtors (NAR) fieldquestions from the audience

Roy DeLoach of DC Strategies Groupprovides attendees with tips onlobbying on Capitol Hill

Herman Churchwell of2012 NAMB Legislative &

Regulatory Conferencesponsor ProvidentFunding welcomes

attendees to D.C. for the2012 Legislative &

Regulatory Conference

NAMB Directors FredArnold and KayCleland discussblogging and reachingout via social media

NAMB Government Affairs Chair John P. Hudson (right) with membersof his Texas delegation prepare to lobby on Capitol Hill

California Association ofMortgage Professionals(CAMP) President-ElectFred Kreger with Rep.

Gary Miller (R-CA)

Faith Schwartz, executivedirector of HOPE NOW,discusses refinanceprograms

Rep. Raul Labrador (R-ID) (center), meetswith NAMB President Don Frommeyer

(left) and Chuck Anderson from the IdahoAssociation of Mortgage Professionals

NAMB President Don Frommeyermeets Rep. Todd Rokita (R-IN) inthe streets of D.C.

Allison Brown, ProgramManager, Mortgage

Supervision, Office of Non-Bank Supervision for the

Consumer FinancialProtection Bureau (CFPB),discusses LO examinations

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APRIL 2012

BofA Launches Own toRent Pilot Program

Bank of America has begun to offer alimited number of mortgage customerswho are facing foreclosure an opportu-nity to remain in their homes, but tran-sition to tenant status, through a pilotprogram dubbed “Mortgage to Lease.”To maintain test controls, the Mortgageto Lease pilot will be conducted strictlyon a solicitation basis; there will not beany opportunity for customers to volun-teer or apply for consideration. Fewerthan 1,000 customers will be invited toparticipate in the first phase of thepilot. Initial outreach has begun to pre-selected customers in test markets inArizona, Nevada and New York, threestates hit the hardest in the housingdownturn.

“When homeowners are struggling tomake payments, owe more on theirmortgage than their home is worth andface certain foreclosure, one of theirgreatest anxieties is the transitionprocess they face in moving from theirhome,” said Ron Sturzenegger, legacyasset servicing executive for Bank ofAmerica. “This pilot will help determinewhether conversion from homeowner-ship to rental is something our cus-tomers, the community and investorswill support. This program may havethe potential to further round out thebroad set of solutions we offer our cus-tomers in need of assistance.”

The pilot population will include cus-tomers who meet all of the followingrequirements:� Have loans owned by Bank of

America.� Are delinquent for more than 60

days.� Have exhausted modification solu-

tions or have not responded to alter-natives to foreclosure, includingshort sale and deed-in-lieu.

� Have high loan balances in relationto their current property value.

� Face considerable risk of ultimateforeclosure.

� Have no junior liens.� Are still occupying the home.� Have adequate income to make an

affordable rent payment.Pilot participants will transfer title to

their properties to the bank and havetheir outstanding mortgage debt forgiv-en. In exchange, they may lease theirhome for up to three years at or below

the current market rental rate. Therental payment will be less than theexisting mortgage payment, and thecustomer will be relieved from certainother homeowner financial obligations,including property taxes and hazardinsurance.

Initially, Bank of America willretain ownership of the properties,working with property managementcompanies to oversee the rental prop-erties. Properties in the pilot programwill be transitioned to investor owner-ship. If the Mortgage to Lease programproves viable, it may lead to a broad-er program, potentially involvingselected real estate investors whowould purchase properties that meettheir predetermined specificationsand keep the previous homeowners inplace as tenants.

“Our priority is designing a solutionthat helps our customer,” saidSturzenegger. “If this evolves from apilot into a more broadly based pro-gram, we also see potential benefitsfrom helping to stabilize housing pricesin the surrounding community and cur-tail neighborhood blight by keeping aportion of distressed properties off themarket.”

FHFA Announces GSEExec Salary Cuts and New ConservatorshipScorecard

Federal Housing FinanceAgency (FHFA) ActingDirector Edward J. DeMarcohas also announced detailson the new 2012 execu-

tive compensation programs at FannieMae and Freddie Mac. The 2012 payprogram reduces top executive pay bynearly 75 percent since conservator-ship, eliminates bonuses, and estab-lishes a target for new CEO pay at$500,000. In setting this new compen-sation framework, FHFA concludedthat further material reductions oruncertainty around compensationwould heighten safety and soundnessconcerns.

“I believe the new compensationprogram strikes the balance betweenprudent executive pay including theelimination of bonuses, with the needto safeguard quality staffing in orderto protect the taxpayers’ investmentand achieve the objectives in theConservatorship Scorecard,” said

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• Multiple National Lenders• 580 FICO FHA• Local Underwriting• VA-USDA-203k-Reverse• Onsite Migration Assistance

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DeMarco. “A sudden and sharp change inpay from these levels would certainly riska substantial exodus of talent, the bestleaving first in many instances. A signifi-cant increase in safety and soundness risksand in costly operational failures would, inmy opinion, be highly likely.”

The FHFA has also released a 2012Conservatorship Scorecard, which pro-vides the implementation roadmap forthe new FHFA Strategic Plan announcedin February 2012. The scorecard includesspecific objectives and timetables forthe government-sponsored enterprises(GSEs)—Fannie Mae and Freddie Mac—insupport of the Strategic Plan.

The 2012 compensation program,disclosed in the GSE’s SEC filings, wasestablished by the FHFA in consultationwith the boards of directors for bothEnterprises and the U.S. Department ofthe Treasury, as required by the SeniorPreferred Stock Purchase Agreementsestablished at the time of conservator-ship in September 2008.

FHA Takes Measures to Increase Its Capital Reserves

As part of ongoing effortsto encourage the return ofprivate capital in the resi-dential mortgage market

and strengthen the Federal HousingAdministration’s (FHA) MutualMortgage Insurance Fund, Acting FHACommissioner Carol Galante hasannounced a new premium structurefor FHA-insured single family mort-gage loans. FHA will increase itsannual mortgage insurance premium(MIP) by 0.10 percent for loans under$625,500 and by 0.35 percent forloans above that amount. Upfrontpremiums (UFMIP) will also increaseby 0.75 percent. These premiumchanges will impact new loansinsured by the FHA beginning in Apriland June of 2012.

“After careful analysis of the mar-ket and the health of the MMI fund,we have determined that it is appro-priate to increase mortgage insurancepremiums in order to help protect ourcapital reserves and to continueencouraging the return of private cap-ital to the housing market,” saidGalante. “These modest increases areone of several measures we are takingtowards meeting the Congressionallymandated two percent reserve thresh-old, while allowing FHA to remain avaluable option for low- to moderate-income borrowers.”

The Temporary Payroll Tax CutContinuation Act of 2011 requires

FHA to increase the annual MIP it col-lects by 0.10 percent. This change iseffective for case numbers assignedon or after April 1, 2012. FHA is alsoexercising its statutory authority toadd an additional 0.25 percent tomortgages exceeding $625,500. Thischange is effective for case numbersassigned on or after June 1, 2012.

The UFMIP will be increased fromone percent to 1.75 percent of thebase loan amount. This increaseapplies regardless of the amortiza-tion term or loan-to-value (LTV) ratio.FHA will continue to permit financingof this charge into the mortgage. Thischange is effective for case numbersassigned on or after April 1, 2012.

FHA estimates that the increase tothe upfront premium will cost newborrowers an average of approxi-mately $5 more per month. Thesemarginal increases are affordable fornearly all homebuyers who wouldqualify for a new mortgage loan.Borrowers already in an FHA-insuredmortgage, Home Equity ConversionMortgage (HECM), and special loanprograms outlined in FHA’s forth-coming Mortgagee Letter will not beimpacted by the pricing changes.

Taken together, these premiumchanges will enable FHA to increaserevenues at a time that is critical tothe ongoing stability of its MutualMortgage Insurance (MMI) Fund, con-tributing more than $1 billion to theFund, based on current volume pro-jections through Fiscal Year 2013.

Mortgage Industry Vet Barry Habib Submits HousingInitiative Proposal

As the mortgage industryand the federal govern-ment struggle to findways to stem foreclo-sures, Barry Habib, vicepresident and chief mar-ket strategist forResidential Finance

Corporation (RFC), has submitted hisproposal to prevent foreclosures andstrategic defaults. The proposed planalso enables homeowners to quicklyrebuild equity in their homes with amonthly housing expense lower thanrenting. Under the proposedHomeowners Equity and LiquidityPathway (HELP) for Housing plan,homeowners build equity in theirhomes after just two years without agovernment bailout while contributingup to $450 billion in economic stimulusto the U.S. economy over five years.

Key elements of the HomeownersEquity and Liquidity Pathway (HELP) forHousing plan include:� Eligible for borrowers who are cur-

rent but trapped in their mortgageby not being able to refinance theirmortgage or sell their home.

� Existing mortgage would be dividedinto two parts: a first mortgage—representing 80 percent of the cur-rent value of the home—on a 20-year fixed payment, which takes

advantage of the historically lowmarket rates, and a second mort-gage on the remaining balance, tobe securitized and held on theFederal Reserve balance sheet,much like QE1, QE2 and OperationTwist.

� Borrower is not be obligated tomake monthly payments on the sec-ond mortgage; however, interestaccrues and is payable upon the saleof the home.

� Significantly lower monthly mort-gage payments—resulting in a lessexpensive alternative to renting asimilar home.

� Borrower rebuilds equity within twoyears.

� Borrower cannot sell the home forthree years after entering the pro-gram.

� Zero to minimal contribution fromthe federal government.While there are many loan pro-

grams and ideas that address theforeclosure problem, this proposalactually addresses borrowers’ cur-rent situation and underlying issuescontributing to strategic defaults. Forinstance, with some programs, evenif the borrower does refinance, he orshe will end up paying more thanthey would for rent and still not beable to gain equity in their home. Bybuilding equity, HELP for Housingallows borrowers to see a light at theend of a tunnel of being upside downor loan trapped. The program showsthem how they can create wealth intheir home again by giving them“skin in the game” or a reason tocontinue to pay their mortgage aswell as room to rebound financially.

“This program would enable anaverage homeowner to save about$590 a month on their mortgagepayment, which they would likelyspend—creating enormous econom-ic stimulus—save, or use to paydown their mortgage,” Habib said.“The bottom line is that homeown-ers will have a mortgage paymentthey can afford and once againbuild equity in their home whilealso having significant extra cashper month. This is not a bailout;there is no moral hazard; and thegovernment benefits from signifi-cant economic stimulus withouthaving to pay for it.”

Homeowners would be requiredto pay back all of the loan(s) uponthe sale of their home, which theywould not be able to sell for threeyears, as a condition of the proposedprogram.

The proposal has been submittedfor consideration to the MortgageBankers Association (MBA), NationalAssociation of Realtors (NAR), theConsumer Financial ProtectionBureau (CFPB), the House FinancialServices Committee (HFSC), the U.S.Department of Housing & UrbanDevelopment (HUD) and severalcongressmen.

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For a free demo, contact Erik Wind, at (800) 262-3783, ext. 701 or visit

shortsalespeedway.com/freedemo

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Many real estate agents shy away from short sales because of the complexityinvolved in doing it themselves. When they refer the work to an attorney or thirdparty negotiator, they risk losing a great chunk of their commission.

ShortSaleSpeedway™ automates the short sale process, by creating all ofthe documents a real estate agent needs to create the superior short saleproposal exactly how banks want to see them.

How Can ShortSaleSpeedway™ Help YOU Trap Real Estate Agents?

Your company can have your very own, private labeled version ofShortSaleSpeedway™ that you offer at no cost to your real estate agents.They will now have the tools provided by your company to be a true short salesspecialist. Now they can negotiate short sales with ease and not have to giveaway their commission to someone else. You’re providing them with a tool thatputs more money in their pocket.

What Do We Provide You?When you have your own ShortSaleSpeedway™, we provide you with the

following:Your own customized private labeled ShortSaleSpeedway™ siteAccess to reporting on all borrowers being put into the systemTraining for you, your real estate agents and a dedicated support teamMarketing materials to promote your ShortSaleSpeedway™ to real estateagentsIn many cases, the setup for the private labeled site costs you nothing!


RamQuest’s Closing Market will be ableto provide online title and settlementrate quotes to their lender clients andgive them the ability to instantly placeorders online.

“Today, efficient residential realestate transactions require timely deliv-ery of up-to-date closing cost informa-tion,” said Bob Hart, vice president ofsales for ClosingCorp. “By partneringwith RamQuest, we can provideSmartGFE Calculator and ClosingMarket customers with the most accu-rate closing cost data available, as wellas the ability to seamlessly and imme-diately receive title and settlementservice orders online.”

The SmartGFE Calculator is a pricingand compliance tool that is posted on atitle company’s Web site and used bymortgage lenders to instantly generatetitle and settlement rates, as well asaccurate recording fee and transfer taxcosts.

“Closing Market allows our clients tooperate in a purely digital environmentfor unmatched efficiency,” said BrooksYeager, director of Internet services forRamQuest. “Our goals perfectly alignwith ClosingCorp’s commitment toimproving the residential real estatetransaction process, and our servicesand technology in collaboration willprove invaluable to the productivityand business objectives of our collec-tive client base.”

The Duncan Group andAllRegs Partner onTraining Programs

AllRegs and TheDuncan Group (TDG)have announced a

joint relationship to offer sales training tothe mortgage industry. Together, thetwo companies will build on existingcontent, courses and resources to pro-vide mortgage loan origination staffwith the tools they need to increaseloan production and improve processefficiencies. Based on mortgage salesindustry expert Todd Duncan’s provensales strategies, the Mortgage MasteryClub is a comprehensive set of onlinetraining resources that provides sub-scribers with necessary tools to suc-ceed in business.

“Increasing production starts withthe loan origination staff, and we areexcited to offer this comprehensiveset of sales training resources to thefront lines of the mortgage industry,”said Dan Thoms, executive vice presi-dent of AllRegs. “Todd Duncan’sworld-renowned industry specificsales strategies will change the wayloan originators approach their busi-ness, unlocking their potential andleading them on the path to success.”

Available in three subscription lev-els and price points, loan officers willbe able to create a solid repeatablebusiness plan that will sustain

through up and down markets. TheMortgage Mastery Club resources willhelp loan originators dramaticallyimprove their loan production, timeefficiency and customer service.Todd’s two New York Times best-sell-ers, High Trust Selling and Time Trapsare the backbone of this excitingoffering In addition to audio and text-based content, key resources includemotivational videos, sales strategies,objection management, how-to docu-ments, and much more.

“In over 20 years of equipping loanofficers and their leaders to succeed,there has never been a time wherestrategy, tactics and passion mattermore than right now,” said CEO andfounder of The Duncan Group, ToddDuncan. “Working with AllRegs, thegold standard for mortgage industryinformation and leading CE trainingprovider, creates a powerful one-twopunch for lenders, banks and theirsales staff to have easy access to allthe tools to help close more loans inless time with less stress. In recentsurveys, 61 percent of loan officersreport that these methodologies helpthem close between one to six moreunits a month.”

LenderLive SettlementServices Expands TitleServices Offerings WithAcquisition of MoKan

LenderL iveSet t lement

Services, a wholly-owned subsidiaryof LenderLive Network Inc., hasannounced the acquisition of MoKanTitle Services LLC. MoKan, withoffices in Missouri and Kansas, offersbasic and specialized title insurancecoverage and services for residentialand commercial lenders on newloans, refinances of existing loans,foreclosure-related actions and clos-ings for real estate-owned (REO)transactions. MoKan was previouslyaffiliated with Martin, Leigh, Laws &Fritzlen PC, a law firm based inKansas City, Mo., and they will con-tinue working together as strategicpartners.

LenderLive Settlement Services hasprovided title and settlement prod-ucts and services since 2006 in all 50states, and it is now directly licensedin 36 states. The company has exten-sive, proven experience in assign-ments, substitution of trustee andloan modifications. The LenderLivedivision began offering title-relatedservices for loan modifications in2009, and with the acquisition ofMoKan, has further expanded itscapabilities to be an end-to-end titleservices provider in the defaultspace. The acquisition is also a strongstrategic fit with LenderLive’s recent


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e-mail: [email protected]: www.calyxsoftware.com

— the industry’s leading marketing company.

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launch of its specialty servicing busi-ness in June 2011.

LenderLive plans to retain all ofthe current staff and continue tooperate from the current MoKanlocations. Amy Wilson has beennamed vice president of defaultoperations for LenderLive SettlementServices. In addition, Berry F. Laws IIIwill remain as of counsel for the firmand will join LenderLive SettlementServices in the capacity of director ofstrategic initiatives.

“We understand that the needs ofservicers are changing drastically asthe market resets and increasing regu-latory compliance is required,” saidRick Seehausen, president and chiefexecutive officer of LenderLive. “Theaddition of MoKan gives us a solidopportunity to grow our offerings, addmore default-related experience toour team and become the go-to com-pany for all title and settlement servic-es in this and every market cycle.”

Gateway Mortgage GroupOpens NewCorrespondent Division

Gateway Mort-gage Grouphas announced

the launch of a correspondent lendingdivision to purchase closed mortgageloans from banks, credit unions andindependent mortgage bankers.Gateway brought on Scott Henley, MollyReed Davis and Linda Garloch to spear-head the new unit. Gateway’s new divi-sion was created to acquire conformingFHA, VA and USDA loans from approvedcorrespondents and retain servicingrights on the loans. Some of the nation’slargest banks have begun to retreatfrom the correspondent lending chan-nel in response to the implementationof Basel III requirements or as a strate-gic de-emphasis on the current mort-gage market. By selling loans toGateway, depository institutions areensured that their primary relation-ships with the borrower, includingdeposits, personal loans and creditcards, will not be in jeopardy sinceGateway is not a competitor for thoseproducts.

“Gateway is entering the correspon-dent lending space at a time whensome major banks have scaled back orexited the channel altogether, whichleaves originators with fewer optionsin the secondary market,” said Henley,vice president of national productionfor Gateway Mortgage Group. “Thelimited resources have led to frustra-tions and delays in getting loans soldto investors. Gateway alleviates thisissue by acting as an additional loansale outlet to financial institutions andmortgage bankers.”

Gateway hired Henley as VP ofnational production, Davis as chiefcredit and compliance officer, and

Garloch as correspondent operationsmanager to oversee the new division.Henley, Davis and Garloch have morethan 50 years of combined industryexperience with expertise in corre-spondent and retail lending. The newcorrespondent lending team has helda variety of senior level positions atcompanies such as Bank of America,MetLife, Citi Mortgage, CornerstoneMortgage, Freddie Mac andCountrywide Financial.

“Our new correspondent divisionnot only enables Gateway to grow itsservicing portfolio, but also diversifythe geographic areas in which it serv-ices loans. We are confident in ournew correspondent lending team andsure that Scott, Molly and Linda willbring us success in this new market,”said Kevin Stitt, president of GatewayMortgage Group.

Homebuilder KB HomeSigns ExclusivityAgreement WithNationstar Mortgage

KB Home hasannounced thatit has enteredinto an agree-

ment with Nationstar Mortgage, underwhich Nationstar will become KBHome’s preferred mortgage lender.Under the agreement, Nationstar willoffer a wide array of financing optionsand mortgage loan products to thecompany’s homebuyers at all KBHome communities nationwide.

“We look forward to working withNationstar and its group of profession-als who are dedicated to providingexceptional customer service to ourhomebuyers,” said Jeffrey Mezger,president and chief executive officerof KB Home. “Nationstar is a nationallender that is capable of serving KBHome’s homebuyers as we continue tohelp them fulfill the American dreamof homeownership.”

Nationstar Mortgage, headquar-tered in Lewisville, Texas, is one of thenation’s leading mortgage servicesproviders, and a lender offering FHA,VA, USDA, conventional conformingand nonconforming products directlyto consumers. It is currently one of thelargest non-bank mortgage servicersin the country with a portfolio ofapproximately $107 billion and645,000 customers.

KB Home builds quality homes in32 markets across the United Stateswith a focus on providing choice andvalue to its customers. The agree-ment with Nationstar is intended tooffer KB Home customers a seamlesshome buying experience, from pur-chase and mortgage application topicking up the keys to their newhome.


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Dear Mortgage Broker/Correspondent Lender/Retail Loan Officer

I’m pleased to introduce to you First Guaranty Mortgage Corporation. Some of you may

already know us. Whether you’re hearing our name for the first time, or have been with us for

years, I think you’ll be pleased by the steps we’re taking to help you help your customers.

You may have already noticed that your interactions with us on each transaction are faster,

smoother and more efficient. We’ve refined our process with new technology and a better

workflow, ensuring fewer people need to touch your file before the closing or purchase.

We want you to have time to do what you do best: work with your customer, rather than

processing loans and troubleshooting.

We are also working hard to provide options for our partners. Today’s market requires

maximum flexibility. We’re offering solutions regardless of the space you occupy in today’s

marketplace. Whether you are a mortgage broker seeking a common sense FHA and VA lender

with niche offerings; a flow seller looking to fill the voids with products like 203K or VA

manuals; a banker looking for a mini bulk / bulk buyer with competitive pricing and the fastest

purchase times in the industry to help create cash flow or warehouse line relief; or a retail loan

officer looking for a unique home that will allow you endless opportunities, FGMC offers real

options. We are delivering these every day for clients across the country.

One thing that won’t be changing is our focus. Our core philosophy continues to be the

foundation of what we do. We still believe strongly that borrowers deserve to be evaluated by

experienced, manual underwriting and common sense, rather than a simple DU and FICO

score. We wonder whatever happened to common sense when it comes to mortgage lending. We

exist to put good people into good homes. You deserve that, as do your customers. Your clients

are borrowers, not numbers.

We invite you to learn more about our product lines and services at www.FGMCwholesale.com

(wholesale); www.FGMCcorrespondent.com (correspondent); www.FGMCb2b.com (capital

markets); and www.FGMC.com (retail) so that we can show you exactly how we can help your

business grow. We are always open to your feedback on ways we can improve. The market may

be changing, but that can mean opportunity for you and your customers. We’d like the chance

to prove it to you.

Best regards,

Andrew Peters

Chief Executive Officer

First Guaranty Mortgage Corporation

Andrew Peters

www.fgmc.com (800) 296-2275

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Each month, National MortgageProfessional Magazine will focuson one of the industry’s top players

in our “Mortgage Professional of theMonth” feature. Our readers are encour-aged to contact us by e-mail at [email protected] to be consid-ered for a future “Mortgage Professional ofthe Month” feature article.

This month, we had a chance to chatwith Danny Nicolo, president and chiefexecutive officer of MeadowbrookFinancial Mortgage Bankers. A 1986graduate of Xaverian, a private collegepreparatory high school in Brooklyn,N.Y. and worked for his family’s cateringbusiness, A&S Italian Marketplace.Danny pursued architectural engineer-ing after high school with two years ofundergraduate work at the PrattInstitute. He became more involved withthe family’s catering business, and from1989-1997, opened up several A&SItalian Marketplace locations for hisfamily in the Tri-State New York areaand Long Island. He also began investinghis savings in the real estate market.

His desire for a greater challenge anda chance to improve his quality of life,Danny was eventually led to the field ofreal estate and the housing finance

industry. Working as a loan originator in2001, Danny was able to build relation-ships with his clients similar to the rela-tionships he built with his family-ownedItalian markets. In 2004, he applied forhis New York State Mortgage BrokersLicense and in 2008, applied for his NewYork State Mortgage Bankers License.

Danny is currently president andchief executive officer of New York-based Meadowbrook FinancialMortgage Bankers, a full-service mort-gage bank offering an array of prod-ucts, from purchase, to refinance, toconstruction lending. Danny is knownas the man who has made the transi-tion from “Butcher to Broker to Banker”in the mortgage industry.

How does one go from owning andoperating a chain of successful Italiangourmet markets, A&S ItalianMarketplace and being the entrustedbutcher in the community, to owninga mortgage bank?Although the food industry is a greatbusiness, you would have to spendevery day of the week in the stores tobecome successful. After many yearsand countless days in the stores, watch-ing customers loading up their coolers

in the summer and spending time withtheir family added to my drive in chang-ing careers. I decided to challengemyself and seek other opportunities toearn a better quality of life for me andmy family.

First, I started investing all of my sav-ings into real estate. When goingthrough the whole process of buyingproperties and meeting with origina-tors, we would discuss mortgages and itbecame very intriguing to me. I startedunderstanding the origination end ofthe process. I started spending manyhours with clients from the store whowere in the mortgage industry and tookcourses. My wife also started pursuing acareer as a title closer at the time. It wasthe ideal career path for her becauseshe was doing something she wanted,and introduced the both of us to theworld of real estate, and buying andselling properties.

I applied from my own broker’slicense and began working out of mybasement, processing and closing mort-gages on my own and became very suc-cessful. I attribute much of my successto my experiences as a butcher whereyou establish and develop relationshipswith your clients and they learn to trust

you due to your service and quality rec-ommendations. If I could build up asuccessful Italian butcher shop, then Icould use those same fundamentals instarting up my mortgage business.

How did you turn those referrals intobusiness and maintain your mortgagebusiness?I began building my base of referrals bytelling people that I was starting a part-time mortgage business, and if theyneeded anyone for their mortgageneeds, I was available. I used to work 70to 80 hours a week at A&S, and neversaw my family. I wanted to make achange to see my kids grow up and seemy family more often. Many of my firstclients were from my Italian market-place, and I built upon that throughreferrals. My first six to eight monthsbeginning in the mortgage businesspart-time back in 2001, my clientelewas strictly customers from my Italianmarket. From there, through referralsand word-of-mouth, my mortgage busi-ness grew, and in 2004, I decided toobtain my New York State MortgageBroker’s License.

Taking the relationships I built frommy store with my customers made it a

Danny Nicolo, President & CEOMeadowbrook Financial Mortgage Bankers

From Butcher to Broker to Banker

“Our values are crystal clear atMeadowbrook Financial

Mortgage Bankers—our communication, leadership,

excellence, attitude andrespect—if an LO believes inthose values and works really

hard, they are going to be verysuccessful with us.”

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good fit for me to change careers becausethey trusted me … it was a transfer oftrust. There were other businesses up theblock from A&S Italian Marketplace thatwould also give me their real estate andmortgage business. I would bring achange of clothes with me to A&S, andafter working, I would make appoint-ments to meet with them later in the dayabout mortgages, and then change againand go back to work at A&S. I did that forabout six or seven months, and was onlyable to meet them nearby because Iwould always have to go back to the store.It was a hard push with a lot of sleeplessnights, but it was to improve my quality oflife with my family. Before this change ofcareers, I was never able to take vacationwith my family—I had off one week ayear—and it was never around holidays.

When I first got my Broker’s License, Iwas afraid to leave A&S because it was“secure,” something I had done myentire life. With the urging of my father,he suggested I take six months off fromthe Italian market, and that I work onbecoming a broker to see if I could culti-vate and build my business to have a bet-ter life for my family. Within my firstmonth, I had 10 or so deals I was work-ing on—originating, processing andmeeting investors in my basement. As Istarted getting busier, an old friend ofmine heard that I was an approved mort-gage broker and asked if I wanted tobecome partners, so we opened up amortgage business.

In 2005 when the economy began totake a turn for the worse, I decided toapply for my New York State MortgageBankers License. I realized it was a goodtime in the industry to make the transitionfrom broker to banker, and changingcareers was to improve my quality of life.

I believe that trust is the most impor-tant aspect of business, especially whenyou’re dealing with someone’s finances.If a person can trust you, you have themfor life. With all of my customers, I alwayshave to meet them face to face. Theyneed to know that I’m not just a tele-marketer, I meet them face to face andget to know them personally. They beginto trust me so much that they ask me tohelp them with other aspects of their life.I would meet with them three or fourtimes before I even got the mortgage, butwhat was important to me was how Ibuilt and established their trust.

What do you find more fulfilling, beinga butcher or a mortgage banker?Being a mortgage banker is definitelymore fulfilling. With my mortgage busi-ness, I wake up in the morning, put on asuit and tie and meet with clients, I feel

born again. My family fully supports me.So many people come and go in thisindustry, and I really have to believe inmyself and what I can bring to my clients.It’s not just a case where I go into theback of the store and cut someone asteak … you really have to put in a hugeeffort to make sure that your clients arequalified the right way in order to get theapplication approved. I use the same fun-damentals in my mortgage business as Idid when working in the pork store.

What moves are you most proud of thathave allowed you to maintain yourgrowth during the mortgage industryconsolidation? What do you think theindustry has done in order to properlysurvive over these past few years as reg-ulations and underwriting standardshave become more strict?At first, we started as a strictly referral-type business. Then, by aligning myselfbringing in others with other platforms ofthe business, we were able to grow.Licensing in the mortgage industry hashelped us find, create and hire bettersales prospects. Also, hiring a very conser-vative underwriting team has created aworkflow complete with several compli-ance checks and balances in each depart-ment to make sure that we are maintain-ing the highest level of loan quality.

In terms of our operations atMeadowbrook Financial MortgageBankers, we have a full-time trainer com-ing on board. Education and training arethe keys to making it in the mortgagebusiness, as regulations and underwritingstandards have tightened. All of ouremployees must take a five-day course.This business is ever-changing, as oursalespeople are constantly training onnew products and our investors are sub-jected to new regulations. In the end,open lines of communication are key.

Looking at your career, are there anymilestones and accomplishments thatyou are really proud of?I am very proud of the growth ofMeadowbrook Financial MortgageBankers, both here in New York and ourexpansion into nine states. I am alsoproud of our investor involvement. Just ayear ago, we had no tier investors, it tookus a year or so to get approval with topinvestors.

At Meadowbrook Financial, we havealso gone completely paperless, from buy-ing leads to shipping loans to the second-ary market, it’s all done from center tocenter. I am proud of the expansion of ourpaperless system. I believe that will be amilestone that I can look back on in thefuture and say, “Thank God we did that!”

Are there any regrets you have aboutthe industry or any decisions you wouldhave made differently?I regret not getting involved in the mort-gage industry much sooner. I knew we’dhave to start small and take baby steps. Ifeel we took all the necessary steps to getus where we are now. Of course I wouldhave liked for the growth process ofMeadowbrook Financial MortgageBankers to have gone faster, but we tookthings slow, aligned ourselves with theright partners and did things the rightway, and I am very satisfied with wherewe are today.

What do you feel separates a successfulloan originator with a mediocre loanoriginator? A successful loan originator is one whomust have a strong knowledge of theindustry, not someone who is just apaper-pusher or someone who is con-sumed by making money. Marketing andnetworking are two factors that separatea top LO from an average LO. Our valuesare crystal clear at MeadowbrookFinancial Mortgage Bankers—our com-munication, leadership, excellence, atti-tude and respect—if an LO believes inthose values and works really hard, theyare going to be very successful with us.

How would you describe your man-agement style, and do you feel anyone person or book influenced yourmanagement style?I am very laid-back and trusting. I get outof the way so that successful LOs can be

successful, but I am here to offer my sup-port to them whenever they need it. Myfather’s work ethic is what I’ve modeledmyself after. My whole life has consisted ofwork. When I was 11-years-old on Dec. 23,I was working around the clock. My fatherwould tell me not to tell other peoplebecause it was wrong, but at the end of theday, it was all about work. I learned valuesand wanted to thrive and succeed. I’m notthat big into reading … I’m big on “doing!”

How involved are you in your familylife?On weekends now, I’m able to take myson to basketball games. We can go onquick vacations now as well. I was neverable to really spend time with themuntil now. In running A&S ItalianMarketplace, I just couldn’t leave to dothings like that. Now, I have the flexi-bility to do work outside of my office.Up until I was 35-years-old, I had neverbeen to a vacation spot like Montauk,N.Y. … I’d be behind the counter atA&S all night and then go homebecause I had to be in early the follow-ing day. Now, I’m at a point where I feelthat we are still growing the company,but I have a life too with my family.

What do you see in the future of themortgage industry, and what aresome of the big opportunities thatare on the horizon?I feel a combination of call centers andthe purchase business will come back

“I believe that trust is the most important aspect of business,especially when you’re dealing with someone’s finances.

If a person can trust you, you have them for life.”


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SPONSORED EDITORIAL

By Raymond Bartreau

Once you have exhausted all of your past clients, contacts and referralpartners with the new Home Affordable Refinance Program (HARP) prod-uct, what’s next? You will want to start thinking about other forms ofgenerating new business in the marketplace with this program. There aremore than 27 million Fannie Mae and Freddie Mac loan holders nation-wide who have no idea about HARP 2.0. The goal here is to find youraudience within this large group and get yourself in front of them, or bet-ter yet, get them to come to you. The best way to do this is direct mar-keting, which consists of a few different options and avenues: Radio, TV,cold calling, direct mail and the Internet.

As we all know in the mortgage industry, lenders have guidelines onpretty much every loan product on the market. If you are going to usedirect marketing in the mortgage industry, the first thing you want to dois find the amount of homeowners that fit within your lending capabili-ties, in this case, we are talking about HARP 2.0. Some recent count stud-ies were ran with three of the industry’s leading database compiler/man-agers of mortgage and here is what we came up with:

� There are more than 27.5 million Fannie Mae and Freddie Mac loansin America right now.

� There are currently more than 11 million Fannie Mae and Freddie Machomeowners that are upside down on their mortgage (more than 100percent LTV).

� Two states have more than 1.8 million, four states have more than475,000, and another 31 states have 45,000-plus homeowners whocan be helped.

� Of those 11 million, nearly 60 percent of these homeowners are cur-rent right now on their mortgage.

� The other 40 percent-plus could get current and potentially be helpedbefore the end of 2013 if they are educated soon and make the effortsfor the next six to 12 months.

Depending on your specific lender requirements for this program, youwould take these massive databases, and filter them down based uponthe criteria you are looking to lend to. FICO, LTV, loan amount, origina-tion date, late(s), no bankruptcies, and many more filters are availablewhen you are looking to create your perfect audience.

After extreme HARP 2.0 overlay filtering, we end up with a total of 2.3million marketable (outbound with addresses) homeowners who mayqualify for HARP 2.0. Of those, more than 215,000 homeowners are avail-able to be called after we do a Do-Not-Call (DNC) scrub on the database.Since most of these folks have not seen a mortgage offer over the last twoto four years, you should see a pretty good response on any direct mail


again. We look at B to B … all retail,hiring virtual LOs, branch expansion,etc. Right now, a lot of the accountexecutives did their year-end and havecaptured back the business, but we areon the list to be the in-house mortgagecompany for large groups of organiza-tions, whether they’re union or publiccompanies, we’re expanding into allareas of origination.

We are predominately expanding inthe New York Metro area, but we arebecoming licensed in some areas of theSouth as well. In addition, we are alsobeginning to align ourselves with com-panies working with real estate-owned(REO) properties.

We are also increasing our presencein the social media space through aheavy involvement with LinkedIn,Facebook and Google … MeadowbrookFinancial is expanding in all areas.

If a branch comes to work withMeadowbrook Financial MortgageBankers, what type of support do youoffer these branches? We are a business in a briefcase! Literally,there is a briefcase where they can origi-nate from any computer, laptop and log-in 24 hours a day, seven days a week andpull credit reports, price a loan, runDesktop Underwriter, submit a file tounderwriting, or ask for help with ques-tions or concerns with a file guideline.Users can press a button and upload doc-uments for review, they can downloaddocs to a real estate agent, track the sub-mission of their loans … we provide theability to accurately track the entireprocess at the touch of a button.

All of this information is availablevia the Internet. Everyone needs to becomputer savvy. We do have some peo-ple who are just frightened by IT. Infact, I have one person who calls me

every time a rate drops and wants me toprice the loan. I have to pull over in mycar to tell her the current rates. We alsohave programs that allow LOs to remainLOs and not have to be so IT-savvy. Weaccommodate all types of LOs.

Do you feel that there a particular busi-ness that works best in this environ-ment … what kind of branches workbest for Meadowbrook Financial?We don’t cater to a call center that doeslead generation or not cater to a callcenter that just does referrals … wetreat them all the same. We have thetechnology in place for a consumer tolog into our system and check the statusof a loan. We don’t treat the branch anydifferent than the consumer … they areall treated the same. We don’t cater toany sources of a loan … we ultimatelycater to the client. LOs in sales fuel ourfire, as a good LO who has a bad experi-ence with us is like losing a client.Happy LOs bring in more clients.

Where do you see yourself and thedirection of Meadowbrook Financialover the course of the next five years?Currently, we are looking to expand rightaway, with corporate branches up anddown the East Coast. Right now, we have atotal of four call centers. In three years, weplan on having 35 corporate branches,and by five years from now, have 50 cor-porate branches under the MeadowbrookFinancial Mortgage Bankers banner. Weare expanding rapidly and are looking forthe right people with a proven work histo-ry and prior success.

We treat all of our corporate branch-es the same, offering them the sametools, we help them recruit, we helpthem with management and expansionas well. If they are doing business, weare here to help them.

nmp mortgage professional continued from page 23

“A successful loan originator is one who must have a strongknowledge of the industry, not someone who is just a paper-

pusher or someone who is consumed by making money.”

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� Prioritize purchase u/w times by contingency or closing dates� Provide touch points throughout the process to ensure on time closings� Encourage direct access to all underwriters, internal processors, closers & your

Account Executive� Order your appraisal online without submitting the credit package – no delay� Offer diverse line:

Att CBCC Nationall Bankk we:

�Conventional loans up to 97% LTV�Agency High Balance�FHA loans down to 640

�VA loans down to 640 (100% LTV/105% CLTV)

�USDA loans

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Alaser is defined as a unit thatemits light through a process ofoptical amplification. Could you

imagine thinking of your brainthrough your eyes as being “opticallyamplified” during any given task? Wealways talk about time and self-man-agement, but we never talk abouthow focused we are during these taskswe work so hard to find time for. Howproductive could we be if we learnedhow to “laser in” on our scheduleeach and every day to accomplisheverything quickly and efficiently?

I have found this to be one of themost challenging things for most of us,primarily in the technological world welive in. Occasionally when we commitall our time to one task we feel shouldbe doing something else also. Thethought that we’re not being produc-tive in another area crosses the mindand at times can be challenging tomanage. While multi-tasking is impor-tant for some things, I’ve found that itcan also prohibit productivity if notused appropriately to complete eachtask before moving onto the next.

While we can try to create systems inour somewhat repetitive mortgageindustry, we also know there are way toomany distractions in this technologicalworld we live in. With all of the e-mails,voicemails, Internet, social media, textmessages, etc., we find it hard at times tobe proactive rather than reactive. Thismight be a greater problem for those ofus in the X and Y Generations who feelthe need to adapt and evolve in this rap-idly changing work force. It’s hard tokeep up with all of the changes andadvancements in business communica-tion and operations, but it’s imperativeto comply to stay ahead.

So what are some things we can doto operate with this technology whilemaking sure we remain focused andrefrain from being distracted?

Complete easy tasks firstWarm up your brain in the morning

Laser Focus“While multi-tasking is importantfor some things, I’ve found that itcan also prohibit productivity if

not used appropriately to complete each task before

moving onto the next.”

By Al Crisanty

We have heard many reasons over the last couple ofyears of why the mortgage broker would not and shouldnot survive. Yet today, it is quite apparent that thenaysayers missed one key factor that will not only en-sure the mortgage broker’s current survival, but a factorthat will also allow the mortgage broker to survive in the

future: They are resilient … the quintessential entrepreneurs whoseshoulders this industry was built upon.

Most brokers are small business owners who work closely with real estateagents, builders and developers in order to remain connected to and activein their local community. They are in tune with local economic and marketactivity. Brokers also recognize that the key to their success is measured inmeeting and exceeding their customers’ expectations through a clear un-derstanding of their customers’ financial situations and goals.

Although many, including the President himself, have seemingly leviedthe majority of the blame for our industry’s challenges on the broker, it ispretty clear to most that this is an unreasonable accusation. As is the case inmost situations of this magnitude, there is rarely one person or entity thatshould sustain the brunt of the responsibility and continuing to point fingersproves unproductive and irrelevant.

Instead, we need to focus our efforts on rebuilding trust and credibilitywithin our industry for the future. Although new regulations imposed on theindustry initially created fear and confusion for the mortgage broker com-munity, these regulations also helped to “separate the wheat from the chaff”as they say. In other words, the brokers who are still standing and thrivingtoday have worked diligently to adapt to the new regulatory environment bymaking necessary changes to their business model and educating their teamand customers.

Today’s new breed of broker clearly understands the relationship betweenhappy and satisfied customers and repeat and referral customers, which arethe cornerstone of their business model. They are also aware that, althoughmortgage originations are down from a few years ago, there are currentlyfewer competitors and the opportunity to capture incremental market shareand “wallet” share is very good. Because of this, brokers are extremely se-lective about and loyal to the lenders they choose to partner with.

With the focus on building a sustainable business model through repeatand referral business, it is imperative for brokers to find a lender that canprovide all of the tools necessary to help them succeed. The successful mort-gage brokers I have met identify these attributes as the key criteria and char-acteristics of an ideal lender partner: A competitive selection of loanprograms with minimal overlays, a technology and operational platformthat is customer-centric (clear, consistent communication and service thatexceeds expectations) and empowers the broker, and competitive pricing.

Today’s broker is looking for a lender partner who they can trust and whocan provide them with the tools and support needed to help them take careof their customers and ultimately succeed. Through their perseverance, hardwork and desire to succeed, these brokers are survivors and can truly be rec-ognized as the best of breed today. Most importantly, these brokers reflectthe future of our industry.

Al Crisanty is vice president of national wholesale production for 360Mortgage Group and is responsible for overseeing territory sales managersas the company seeks to expand operations to all 50 states. Al hasaccumulated more than 25 years of management and leadership experiencein the mortgage industry, holding positions in secondary marketing, retail,wholesale and correspondent lending. Formerly the national wholesaledirector for Caliber Funding, Al was responsible for the development andexpansion of Caliber’s wholesale production channel. Additionally, Al servedas executive vice president of national production for American HomeMortgage, successfully transitioning the 500-member production team fromCapital Commerce Mortgage Company after its closure. Al may be reachedby phone at (916) 761-1624 or e-mail [email protected].

SPONSORED EDITORIAL

MortgageBroker

survivalof the

and quickly move through your to-dolist by checking off the shorter and lesstime-consuming tasks.

Be cautious about multi-taskingIf you are dealing with any task ofimportance, focus on the task 100 per-cent until complete. If you start theprocess and continue to get distractedand come back to it time and timeagain, you’ll find the day is over and thetask is not complete. You’ve failed inyour multi-tasking efforts.

Clear your mind and take a breakIf you need time to yourself, get out ofthe office. Taking a break throughoutthe day will help you be more produc-tive and focused during your time spentat the office.

Concentrate and don’t procrastinateIf a task is important or if it will affectsomething that is important later on,don’t put it off and just get it done.

Get plenty of sleep each night and eat wellGetting plenty of sleep and feeling rest-ed is vital for concentration. Eating wellis equally or even more important tosustain insulin and energy levelsthroughout the day. Don’t feel draggeddown, feel uplifted!

Avoid the Internet unlessusing exclusively for workWe can all get caught in the Internet


27


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Mortgage Professionals to Watch� PHH Mortgage has named Smriti

Laxman Popenoe as interim president.

� Jeffrey R. McGuiness has beennamed chief executive officer ofLenders One Mortgage Cooperative.

� Platinum Data Solutions has namedPhil Huff as its new chief executiveofficer.

� Appraisal Logistics has namedDennis H. Ashcroft vice president,sales and marketing.

� Joe Mowery has been named presidentof LenderLive Settlement Services.

� Gregory Chi has joined MortgageGuaranty Insurance Corporation(MGIC) as senior vice president andchief information officer.

� Loan Value Group LLC (LVG) hasannounced the addition of KellyJohnson and Kim Schubert as direc-tors of sales.

� Molly Reed Davis has been namedchief credit and compliance officerfor Gateway Mortgage Group.

� Cobalt Mortgage has announced theaddition of Matt Eckard, sales man-ager of The Eckard Team.

� WFG National Title InsuranceCompany has added RobertOpdycke as an agency sales rep inthe Southeast region.

� Nathan C. Brown has been namedchief legal officer and senior compli-ance manager of MountainSeedAppraisal Management.

� GSF Mortgage has announced that RichObermeier has joined the company asbranch manager/loan originator, andthat Mark Rossetto has joined the com-pany as a loan specialist.

� Holt Crowder and Brian Smith havejoined LendingQB as sales reps to thefirm’s business development team.

� Lisa Marra has been named Marylandarea renovation sales manager for RealEstate Mortgage Network Inc. (REMN),and REMN has also added MattDeCesaro as branch manager for thefirm’s Duluth, Ga. location.

� Atlantic & Pacific Real Estate hasannounced the addition of WendyForsythe as executive vice presi-dent/head of global operations.

Your turnNational Mortgage Professional Magazineinvites its readers to submit any informa-tion, events, passages, promotions, person-al or professional occurrences that seemappropriate and/or other pertinent data tothe 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.

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By John Walsh

Are you prepared forthe end of the refi-nance era? If not,then I suggest you getyour business ready,because a change in

the fundamental make-up of our indus-try is not far away. Recent reports andcomments from the Federal Reserveand economists with major U.S. banksdescribe a housing sector that has fun-damentally changed from historicalnorms, and one that will not return tothose norms during our lifetimes.However, we will almost certainly seemortgage rates rise to their historicalnorms.

The recent period following thehousing bubble has seen mortgagerates significantly below historical lev-els. Once rates rise, they are not likelyto revisit these levels—short of anoth-er monumental crisis. We need to letconsumers know that now may be thelast chance many in the U.S. will haveto refinance for cash-flow improve-ment or to move to less risky mortgageproducts.

During the aftermath of the housingbubble, the Federal Reserve has provid-ed substantial liquidity to the U.S. econ-omy that has helped to artificially driveand keep mortgage interest rates low.In so doing, the Federal Reserve has“lubricated” the troubled housing sec-tor. The Fed’s “Zero Interest Rate Policy”has helped keep the mortgage industryafloat over the past few years. What willthe mortgage industry look like whenthe liquidity ends and rates rise beyondthe level of most current in-force mort-gages? Simply put, it will be a muchsmaller industry that is overwhelminglyfocused on purchase financing.

What evidence supportsthis conclusion?First, in early February, FederalReserve Chairman Ben Bernanke sub-mitted a Fed study on the state of thehousing sector to Congress. In it hestated, “… restoring the health of thehousing market is a necessary part of abroader strategy for economic recov-ery.” But he added that there weremany “frictions” in the market thatwere preventing that recovery, includ-ing ongoing foreclosures and the result-ing overhang of housing supply.

Moreover, a paper by economists atJP Morgan Chase, Bank of America, andthe Universities of Chicago andWisconsin released in late Februaryargues that the Fed should be very cau-tious about policy responses to thosefrictions. They write, “A mistake wouldbe to adopt policies that seek to artifi-cially boost house prices and residentialinvestment going forward.” The authorsbelieve that the housing bubble repre-sented a “dramatic overinvestment”(based on historical norms) in housing

and that it will take decades for themarket to return to normal. Their pro-posed prescription—as painful as itmight be—is to allow for the housingsector to revert to historical norms. Thiswould include higher loan-to-value(LTV) ratios and higher average interestrates. Clearly, they would argue againstany further quantitative easing fromthe Fed.

This same paper makes anotherpoint that is the focus of this article,namely that the current low interestrate environment, brought aboutthrough a zero percent Fed Funds ratefor the past three years and $2.3 trillionin asset purchases, have enabledalmost everyone capable of benefittingto benefit. Commenting on this aspectof the paper, president of the St. LouisFederal Reserve Bank, James Bullard,said, “Those that can respond to thelower yields have done so already andthose that cannot will not be influencedby further policy actions because theyare backed up against sharply bindingcollateral constraints.”

The implication for the mortgageindustry is quite simple … even furtherquantitative easing including the pur-chase by the Fed of additional mort-gage-backed securities (MBS) is not like-ly to significantly increase refinancingactivity.

So … where does thatleave us as an industry?The fact is that we could be one newsstory away from significantly higherinterest rates. Rates have been held lowby Fed action for sure, but also by ayear’s worth of bad news that may bequickly improving. The ongoing weak-ness of the U.S. economy and job mar-ket is reversing course, the negativeafter-effects of the Japanese Tsunami(at least on the global economy) is wan-ing and the impending default ofGreece and the collapse of theEuropean banking sector are delayed atworst, avoided at best.

Currently, concerns over the priceof gas on the U.S. economy due to ten-sions in the Middle East, along withthe Federal Reserve’s purchase pro-gram for mortgage-backed securities,known as “Operation Twist,” are help-ing to keep mortgage rates near all-time lows. But these beneficial gover-nors on mortgage rates could declinein significance, or be eliminated alto-gether, very soon. Operation Twist, forexample, is scheduled to end by themiddle of 2012. The fact is that the eraof refinancing is coming to an endsooner rather than later.

The End of the Refinance Era“We need to let consumers knowthat now may be the last chance

many in the U.S. will have to refinance for cash-flow

improvement or to move to lessrisky mortgage products.”

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Black Hole. The “I’ll just check my mes-sages on Facebook really quick” quicklyturns into “Why am I looking at a pic-ture of an ape wearing pajamas thatScott liked” an hour later.

Think beyond time and self-manage-ment. Build your attention span, don’trestrict it. How productive you are willsimply rely on how focused you are. Wespend way too much time in the officeso we might as well make sure we’refocused enough to justify it. Be a laser.

Tip of the month …If you don’t have it already, get Jing(Jing.com). It’s a free program that

allows you to highlight anything onyour computer screen and send it toyour clients or business partners. It’sexcellent for sharing market updates,information on rate sheets, simplesnap-shots, anything you can see onyour computer screen. Best of all, it’sfree!

Andy W. Harris, CRMS is president andowner of Lake Oswego, Ore.-basedVantage Mortgage Group Inc. and 2010-2011 president of the Oregon Associationof Mortgage Professionals. He may bereached by phone at (877) 496-0431 or e-mail [email protected] visit AndyHarrisMortgage.com.

the elite performer continued from page 26

harp 2.0 continued from page 24

or outbound call campaign. We are cur-rently seeing more than 2.5 percentresponses with marketing campaigns tocurrent Fannie Mae and Freddie Mac loanholders. Once this new plan launches infull force and major news outlets beginreporting on the program, the excitementshould drive direct mail responses up wellover the three percent mark.

The above-stated numbers provideus with a couple important things toconsider. First, there will be at least 11million homeowners (that you canhelp) that may be searching online forHARP rates at any given time from nowuntil the end of 2013. It is your job tocapture that search, either by your own

page or through a company that canhelp you capture those leads. Second,the above numbers also let us knowhow many people you can market tothrough direct mail campaigns, as wellas cold calling campaigns.

If you set up your direct marketingprograms correctly with the right part-ners, HARP will be bigger than youcould have imagined!

Raymond Bartreau is chief executive offi-cer of BestRate Referrals, and founderand chief executive officer of www.harp-mortgageleads.com. He may be reachedby phone at (800) 811-1402 or [email protected].

What should mortgageprofessionals do?I have three suggestions:� Be a Town Crier: If it’s truly last call for

refinances, then we owe it to our for-mer customers and communities to letthem know this fact. In particular,those who have adjustable-rate mort-gages (ARMs) should consider a refi-nance into a fixed loan to avoid inter-est rate risk in the future. Moreover,those with 30-year loans should con-sider refinances, at these lower rates,into shorter duration loans. Thedepressed forecast for housing valuesfor years to come increases the finan-cial advantages of paying off a mort-gage more quickly.

� Re-engineer your sales process: Wecannot expect that the same way wehave done business in the past isgoing to work in the future. Marketingfor purchase business is distinctivelydifferent from marketing for refi-nance business. The sales cycle isgoing to be longer and more is goingto be expected of the mortgage pro-fessional in the future. We have to be

prepared to help our customers ana-lyze the pros and cons of homeowner-ship—which are no longer the sameas they have been.

� Listen to and engage with your cus-tomers: As every service professionalknows, the ability to listen to andrespond appropriately to your cus-tomers is what separates the great fromthe “not so great.” In the future of thesmaller mortgage industry, the “not sogreat” will quickly be out of the busi-ness. Mortgage professionals are prob-lem solvers and dream facilitators. Thatcan only happen when we listen care-fully to the folks with which we areprivileged to have a chance to work.

The end of the refinance era is uponus. Are you prepared?

John Walsh is president of Milford, Conn.-based Total Mortgage Services. John found-ed Total Mortgage Services in 1997 with acustomer-centric approach and a mission ofresponsible lending. He may be reached bye-mail at [email protected] orvisit TotalMortgage.com.

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By Jonathan Foxx

On March 12, 2012, theConsumer FinancialProtection Bureau(CFPB) announced pro-posed amendments tothe confidential treat-

ment of information obtained from per-sons in connection with its exercise ofauthorities under federal consumer finan-cial law. The proposed amendments willadd a new section to the rules which pro-vide that the submission by any person ofany information to the CFPB in the courseof its supervisory or regulatory processeswill not waive or otherwise affect any priv-ilege such person may claim with respectto such information under federal or statelaw as to any other person or entity.

Additionally, the CFPB is proposingto adopt a provision which providesthat privileged information given bythe CFPB to another federal or stateagency does not waive any applicableprivilege, whether the privilege belongsto the CFPB or any other person.

The Dodd-Frank Act did not explicit-ly address whether the submission ofprivileged information to the CFPB inthe course of the its supervisory or reg-ulatory processes will affect any privi-lege a supervised entity may claim withrespect to such information, eventhough Congress did provide that “allthe powers and duties” of the pruden-tial regulators relating to their trans-ferred consumer financial protectionfunctions would be granted to theCFPB, and this grant of authorityencompasses the ability to receive priv-ileged information from supervisedentities without effecting a waiver.

In this article, I will offer a briefunderstanding of this complex issueand provide an Action Plan.

HistoryThe CFPB first announced in October of2010 that it would be gathering informa-tion from banks and nonbanks in itsefforts to examine and supervise financialservice products. Many financial institu-tions at the time expressed considerableconcern that divulging privileged docu-ments to the CFPB would be deemed awaiver by the courts, thereby permittingcompetitors and consumer groups toaccess the privileged documents.

The CFPB’s first official release in2012, Bulletin 12-01, addressed thetreatment and scope of confidentialityprotections accorded information col-lected from supervised institutionsthrough the CFPB’s supervisory process.

Then, as indicated above, on March12, 2012, the CFPB proposed the newrule, the purpose of which, amongother things, is to codify protections forprivileged information submitted byfinancial institutions that are regulatedby the CFPB.

CFPB Bulletin 12-01The CFPB asserts that “Congress intend-ed the Bureau’s examination authorityto be equivalent to that of the pruden-tial regulators,” with respect to thestatutory provision that grants pruden-tial regulators the authority to receiveprivileged information from theirsupervised entities without there beinga waiver of privilege.

The CFPB reached this conclusion byclaiming that in inheriting the pruden-tial regulators’ examination authoritywith respect to compliance with federalconsumer financial laws for supervisedinstitutions, it was concomitantly grant-ed “all powers and duties” vested in theprudential regulators related to exami-nation authority.

And one of the powers is the abilityand authority to receive privilegedinformation without affecting a waiver.However, it should be noted here thatthe statutes cited by the CFPB in sup-port of its claim apply to federal bank-ing agencies, not the CFPB. Thus, itseems that the CFPB is not entirely in aposition to use, mutatis mutandis, thesame statutory privilege protection pro-vided for in Dodd-Frank.

Bulletin 12-01 addressed two specificparts of the CFPB’s policy on confiden-tial information.

� It states that institutions providingprivileged information to the CFPBpursuant to a supervisory requestwill not waive any privilege thatattaches to such information.

� It indicates that the CFPB will treatinformation obtained through thesupervisory process as confidentialand privileged, and, importantly, itprovides that the CFPB will only dis-close such information to prudential

and state regulators, when neces-sary and/or appropriate, and to lawenforcement agencies, only wherejustified, as determined by theCFPB.

Bulletin 12-01 seeks to resolve anintrinsic issue regarding the CFPB’slack of a statutory examination privi-lege such as that provided to the fed-eral banking agencies. Although theBulletin provides possible legal sup-port for why similar privilege appliesto supervisory information providedto the CFPB, the outline itself doesrecognize the absence of the samestatutory protection that the federalbanking agencies had been com-pelled to pursue in the FinancialServices Regulatory Relief Act of 2006(FSRRA), specifically Section 607.

Section 607 of FSRRA was impor-tant to the federal banking agenciesbecause several courts had dimin-ished the existing common law exam-ination privilege. Broadly speaking,this section was adopted in order tohave statutory protection that couldnot be challenged.

In my view, the legislative historyinvolved in drafting Section 607 ofthe FSRRA suggests that supervisedinstitutions which disclose privi-leged information to the CFPBshould be mindful of the issues andpotential risks in doing so, given theCFPB’s assertion that it has the sameauthority and legal protections inplace as the federal banking agen-cies to receive privileged informa-tion without effecting a waiver ofthe privilege.

Proposed ruleA core feature of the proposed rule isthe following provision:

The submission by any person of anyinformation to the CFPB for any purposein the course of any supervisory or regu-latory process of the CFPB shall not beconstrued as waiving, destroying, or oth-erwise affecting any privilege such per-son may claim with respect to suchinformation under federal or state lawas to any person or entity other than theCFPB.

On July 28, 2011, the CFPB issued a

rule providing that the “provision bythe CFPB of any confidential informa-tion pursuant to [12 CFR part 1070,Subpart D] does not constitute a waiv-er, or otherwise affect, any privilegeany agency or person may claim withrespect to such information underfederal law.”

In other words, the proposal wouldensure that the CFPB’s transfer of privi-leged information to another federal orstate regulatory agency will not waiveany privilege that protects the confi-dentiality of the information.

The CFPB claims that the proposedrule is substantially identical to thestatutory provisions that apply to thesubmission of privileged informationto prudential regulators, state bankand credit union supervisors, and for-eign banking authorities.

According to the CFPB, the rulewould be comparable to the federallaw that protects the confidentialityof information that is provided toother regulatory agencies. Additionallanguage precludes claims that therule implicitly waives any privileges ifinformation is provided under othercircumstances.

The Dodd-Frank Act does actuallyprovide that the CFPB assumed all ofthe powers and duties covering con-sumer financial protection that previ-ously were held by the other agencies,and it also causes the CFPB to adoptrules to protect the confidentiality ofinformation it receives.

Subpart D (referenced above)makes clear that the CFPB is author-ized to disclose, in “appropriate cir-cumstances, confidential informationto another Federal or State agency.”The operative words in this languageare “appropriate circumstances.”

It seems that the CFPB is endeavor-ing to provide assurances that provid-ing privileged information will notbreach confidentiality.

ConfidentialityThe rule provides that informationobtained during the supervisoryprocess will be treated as confidentialand privileged, consistent with thepolicies of other prudential regula-tors. Furthermore, the CFPB will treatsuch information as exempt from dis-closure under the Freedom of

RegulatoryCompliance Review

The CFPB’s Treatment of Confidentiality and Privilege

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Information Act (FOIA), and will notroutinely share such information withgovernment agencies not engaged insupervision.

But, the CFPB will share a super-vised institution’s confidential super-visory information with other pruden-tial and federal regulators and stateregulators that share supervisoryjurisdiction over the institution withthe CFPB. When confidential supervi-sory information is shared withanother federal or state agency, theCFPB asserts that such informationremains the property of the CFPB andmay not be further disclosed orshared by the recipient without theCFPB’s permission.

It is important to take note of thefact that the CFPB may share confi-dential supervisory information withlaw enforcement agencies, such asState Attorneys General. That is, theCFPB will share confidential informa-tion in these situations “except whererequired by law,” and/or “only in verylimited circumstances and uponreview of all the relevant facts andconsiderations.”

The decision to share confidentialsupervisory information with stateand federal law enforcement agenciesdepends on the significance of thelaw enforcement interest at stake.The CFPB may take the position thatthe furtherance of a significant lawenforcement interest will not alwaysbe sufficient. Presumably, the CFPBmay actually decline to share confi-dential supervisory information withlaw enforcement based on other con-siderations (i.e., such as “the integrityof the supervisory process,” and theimportance of preserving the confi-dentiality of such information).

ConsiderationsAlthough existing case law favors theview outlined by the CFPB in Bulletin12-01, and the proposed rule pro-vides certain substantive grounds toadopt the protections that will con-tinue to attach to confidential andprivileged information shared withthe CFPB, it is unsettled at this timewhether a court could find that asupervised institution waived a privi-lege by sharing such informationwith the CFPB.

Further, the lack of the samestatutory protections afforded to thefederal banking agencies infersuncertainty, particularly for non-bank financial firms providing infor-mation to the CFPB.

Therefore, the most importantconsideration for supervised institu-tions and nonbank financial firms isto determine how the proposed rulewill apply to their existing opera-tions and take steps to implementpolicies and procedures for docu-ment review policies and proceduresto minimize risks.

Action planThe following list is not meant to becomprehensive; however, it suggests

certain actions that a financial institu-tion, bank or nonbank, should imple-ment in preparation for a CFPB exami-nation, with respect to protecting theconfidentiality and privilege of its docu-ments and information.

� Conduct a self-assessment of opera-tional, compliance, legal and otherrisks that may arise from sharingconfidential supervisory informationwith the CFPB, including, but notlimited to, the effects on the compa-ny for sharing such information.

� Identify sources of supervisory infor-mation, policies and procedures,with respect to controls imposed onthe sharing of such information.

� Enumerate the logistical steps thatshould be exercised prior to provid-ing confidential supervisory infor-mation to the CFPB.

� Retain risk management consult-ants and legal advisors to deter-mine corrective actions needed toremediate potential weaknesses inthe information sharing and com-pliance program.

� Determine the supervisory informa-tion held by related entities, such asaffiliates and third-party serviceproviders, to assess risks that may beposed by sharing such informationwith the CFPB, and remediate anyweaknesses.

� When the CFPB requests confidentialand privileged information, endeav-or to limit the form and scope ofsuch requests.

� State any claim to privileged infor-mation in a response to the CFPB;for instance, by designating inemboldened type all privileged doc-uments as such on the documentsthemselves that are conveyed to theCFPB.

� Consult with experienced counselbefore disclosing any document orinformation to the CFPB that mightbe considered subject to confiden-tiality and privilege.

The CFPB has already begun exam-inations. It is incumbent on responsi-ble management of a supervisedfinancial institution to put in placethe appropriate means to preserve thetreatment of confidential and privi-leged information.

Jonathan Foxx, former chief complianceofficer for two of the country’s top pub-licly-traded residential mortgage loanoriginators, is the president and manag-ing director of Lenders ComplianceGroup, a mortgage risk managementfirm devoted to providing regulatorycompliance advice and counsel to themortgage industry. He may be contactedat (516) 442-3456 or by e-mail [email protected].

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360 Mortgage GroupAdds Closing DocFunctionality to ItsBroker Network

360 MortgageG r o u p h a sannounced therelease of Bro-ker Docs, a

closing document clearing functionalitynow available online to all 360 MortgageGroup brokers. This new feature to 360Mortgage Group’s suite of proprietary onlineorigination tools is expected to shorten clos-ing time by at least 50 percent. Developedby 360 Mortgage Group Chief OperatingOfficer Andrew WeissMalik, Broker Docsautomatically and instantaneously deliversclosing instructions to a closing agent when-ever a broker submits a documentationorder request and a “Clear to Close” hasbeen issued within the file. This allows clos-ing agents to work on a file prior having a360 Mortgage Group closer review it, there-by reducing the time required to close a file.

“Instead of having to wait on our staff toprocess a doc order request and deliverclosing instructions to the closing agent,now the originator stays in control of thedelivery of closing instructions,” WeissMaliksaid. “As far as we can tell, no other whole-sale lender is offering this kind of tool to itsbrokers.”

The development of Broker Docs is thelatest in a series of proprietary tools 360Mortgage Group has developed to empowerits brokers to complete as much of the orig-ination process as possible. Previousadvancements include the development ofFHA Connection, which allows 360 brokers topull case numbers directly from FHA’s portal,and an online chat tool that instantly con-nects brokers to a 360 account executive.

“360 Mortgage Group does not hire any-one it can’t explicitly trust to deliver zero-defect, salable loans,” WeissMalik said. “Wehave built our technology platform with aneye towards putting as much control aspossible in the hands of our brokers, andour miniscule default rate demonstratesthat trust has not been misplaced.”

United WholesaleMortgage Unveils HARP2.0 Unlimited LTV/CLTVImplementation With DU

United WholesaleMortgage (UWM) hasannounced that it hassuccessfully imple-

mented Fannie Mae’s HARP 2.0 pro-gram requirements with UnlimitedLTV/CLTV. UWM was one of the firstlenders to implement the govern-ment’s adjustments to HARP 2.0 whenit went into effect Dec. 1, 2011, andnow they have effectively implement-ed the expansion of HARP 2.0 intotheir Easiest Application System Ever(EASE) broker portal.

“With the heavy volume of HARP 2.0submissions that we are receiving,UWM has not faltered in providingsuperior customer service, communica-tion and consistency,” said Mat Ishbia,president at UWM. “Our swift imple-mentation of HARP 2.0 is proof thatUWM’s exceptional staff can meet andexceed broker expectations in all areasof operations and with every productoffering. At UWM, we want to make it aseasy as possible to do business with us;investing in resources to quickly imple-ment HARP 2.0 for our brokers was atopthe priority list. This high level of serv-ice and speed to market holds true toour companywide mantra of ‘LendingMade Easy.’”

In addition to HARP 2.0, UWMrecently rolled out The Big & Easy, atrue jumbo loan up to $2.5 million, aswell as the ability to help their brokersbecome bankers by issuing a correspon-dent line. To round out their spectrumof product offerings, USDA will be avail-able in April 2012.

Rates in Motion Gets Web Makeover

Rates in Motion, a freedaily video blog thatserves as an educationalresource for consumersshopping for mort-

gages, announced that it has renovatedits Web site.

“The improvements align with Ratesin Motion’s philosophy to be consumer-friendly,” said Rates in Motion owner,host and mortgage expert, Mike Cox.“The Web site presents sometimes tech-nical information in a more easy-to-understand format. Getting a mortgagecan be very complicated and some-times very frustrating so we wanted toimprove upon the experience.”

Cox said the enhancements aredesigned to make it more convenientfor consumers to: Subscribe to the dailyblog easier; subscribe to comments on

The Calm Before the Storm

By Laurie Spira

The Dodd-Frank Wall Street Reform and ConsumerProtection Act (the Act) was signed into law on July 21,2010. More than 800 pages long, the Act requires a rule-making process that could take as long as five years and

could result in as many as 250 rules from 20 different regulatory agen-cies. Mortgage lending professionals are especially interested in theprogress being made on implementing the requirements of Title IX,which addresses credit risk retention for asset-backed securities; TitleX, which establishes the Consumer Financial Protection Bureau (CFPB);and Title XIV, the Mortgage Reform and Anti-Predatory Lending Act.

Although some of the Dodd-Frank Act requirements have beenimplemented in the almost two years since the Act was signed, themost significant impact is likely to be felt in the next 18 months. By July21, 2012, the CFPB is required to propose rules and model disclosuresthat combine the disclosures required under the Truth-in-Lending Act(TILA) and Sections IV and V of the Real Estate Settlement ProceduresAct (RESPA) into a single, integrated disclosure.

Consumers and the industry (including the members of DocMagic’sCompliance Department) have been actively involved in reviewing pro-totype disclosures through the CFPB’s “Know Before You Owe” project,which put draft disclosures online to obtain public input. The CFPB hasalso conducted consumer testing and is currently engaged in a SmallBusiness Regulatory Enforcement Fairness Act (SBREFA) panel process,which will examine the impact of the proposed disclosure changes onsmall businesses. The prototype disclosures and the SBREFA documentssuggest that the proposed rule and model disclosures will be a signifi-cant departure from the current TILA and RESPA disclosures.

In addition to the requirement to combine the current TILA and RESPAdisclosures, Title XIV of the Act amends TILA and RESPA to require newdisclosures that must be provided in the Loan Estimate or Settlement dis-closures. Title XIV also adds other new disclosure requirements that aren’tspecifically included in the Loan Estimate or Settlement Disclosures. TitleXIV provides that these regulations or amendments to the consumer lawmust be final by Jan. 21, 2013, with an effective date not later than Jan.21, 2014. Although the CFPB has stated a belief that final regulationsimplementing these Title XIV disclosures simultaneously with the finalTILA-RESPA rule would improve the overall effectiveness of the disclo-sures, it may not be possible to issue a final TILA-RESPA rule by Jan. 21,2013. Accordingly, the CFPB is considering a proposal to use its authorityto exempt lenders from the Title XIV disclosure requirements temporari-ly until the TILA-RESPA disclosure rule takes effect. Until the TILA-RESPArule is proposed, though, the industry cannot know exactly what to beprepared for, and what the effective date is likely to be.

Until final regulations are implemented, during this calm before thestorm, those persons in operations, compliance and risk managementcan prepare for what might be, based on what we all know today. Forexample, the business of planning systems and policy updates maybegin now. In addition, for those with proprietary systems, new datapoints that may need to be collected to complete the TILA-RESPA dis-closures based on previously published prototypes could be identified.

Whatever preparations you can start today will better protect youfrom the storm of regulations that lie ahead.

Laurie Spira is chief compliance officer with Torrance, Calif.-basedDocMagic Inc. She may be reached by phone at (800) 649-1362, ext. 6446or e-mail [email protected].

Sponsored Editorial

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By Beverly Frase

With 30 years of experience in real estate management and 20years of doing mortgages full-time, Douglas C. Rice of Fi-delity First Home Mortgage understands his business inside

and out. He strives to ensure that his customers understand the entiremortgage transaction too.

“I want them to feel comfortable every step of the way,” said Rice. “From the timeof first contact, at the point of application, and before and after closing.”

With a good bit of his business comingfrom referrals, his strategy is working.

“Whether it’s helping our military per-sonnel purchase a home or refinance, I al-ways enjoy finding the best program to suittheir financial needs,” Douglas said. “In thelast 48 months, we have seen tremendousturmoil and uncertainty in the entire U.S.financial system, especially the mortgageindustry. At Fidelity First Home Mortgage,I can offer my customer all the possible pro-grams in the entire mortgage industry, andget them the lowest wholesale rate from our35 different investors.”

Like all Mortgage Heroes who work withthis special military niche market, Douglasloves to remember those times when hemade a big difference in the lives of his mil-itary clients.

“I helped a military family refinance theirVA home loan and consolidate their bills atthe same time,” he recalls, “saving them$1200 a month! The savings allowed the wife to remain a ‘stay at home mom.’ Thatwas very important for them since they had two young children.”

The refinance was a life-changing event for that family. Multiply by the number ofloans Douglas Rice has done for his military borrowers, roughly 2,000, and you havea good idea of how important it is to provide skilled services for our military heroes.

Douglas helps his military clients become financially savvy.“There is so much misinformation out there,” Rice said, “about what it takes to ei-

ther refinance a VA loan, or to purchase a home with a VA loan. Most people thinktheir credit has to be perfect, and that is just NOT the case! It is very important to getthe facts, and to make the best plan for that military servicemember and the family.I do free consultations and pull free ‘mortgage’ credit reports. Most consumers get freecredit reports which are not the same scores used by VA lenders!”

Doug helps servicemembers come up with the best strategy for their homeowner-ship. If it turns out they aren’t yet in a good position to purchase, he works with themto be ready at some point in the future.

“As most veterans know,” he says, “you cannot win the war without a sound battle plan!”

Be a Mortgage Hero! This recognition is free to Certified Military Housing Spe-cialists. Take the FREE Certified Military Housing Specialist course offered on-line by USA Cares and tell us how you are “Helping those who defend our homes,preserve their own.” Please contact Program Manager Beverly Frase at [email protected] to join our national team and be our next MortgageHero. We want to recognize you!

USA CaresMortgage Heroes

Douglass C.. Rice,, Seniorr Loann OfficerFidelityy Firstt Homee Mortgage,, Annapoliss Md.

Fidelity FirstDouglas C. Rice

Senior Loan OfficerOffice: 410-266-2544, ext. 24

Toll-Free: 866-266-2544, ext. 24Cell: 410-991-4532Fax: 206-202-9032


“Our military servicemen andwomen have sacrificed ‘big time’ to

serve our country. Helping themwith their VA loan or other

financing is just one very, very smallway I can repay them for their

service of protecting me, my familyand loved ones, fellow citizens, andcountry. May God bless our troops,and keep them out of harm’s way!”

—Douglas C. RiceFidelity First Home Mortgage,

Annapolis, Md.

a specific blog article; track replies tocomments; browse through episodeswith a new search functionality usingkeywords such as “FHA” or “VA” toinstantly find videos relating to the cho-sen subject; navigate the site to findwhat they are looking for; utilize moresocial sharing features to share videosmore easily on their favorite social plat-form; arrive at RatesInMotion.com andfind the video of the day instantly onthe homepage without having to clickanywhere else; and view Rates inMotion’s approved lenders and otherbusiness partners.

“At the end of the day, it is our maingoal to help individuals get the bestdeal on their mortgage and educatethem along the way,” Cox said. “Ourimproved Web site supports our goalswith helping them consume helpfulinformation faster.”

LPS Extends ItsStreamlined SettlementProgram SupportingHARP 2.0

Lender ProcessingServices Inc. (LPS)has announced thatits LSI Title Division

is extending its Streamlined Settlementsolution to help lenders meet the HomeAffordable Refinance Program (HARP)2.0 agency program guidelines.

“Since 2009, LSI has been the leadingprovider of technology that enableslenders to quickly and efficiently closeHARP loans utilizing LSI’s proprietaryAQUASM title production platform,” saidRon Frazier, president of LPS’ LSI TitleDivision. “The combination of LSI’s settle-ment workflow and proven Web-basedclosing platform, ClosingStream, hasenabled LSI to close a majority of all HARPloans processed in 2010 and 2011.”

LPS has been at the forefront of provid-ing technology that helps lenders and ser-vicers implement HARP requirements,with functionality that enhances perform-ance, including three to five day subordi-nation turn-times and improved closingrates, while also reducing settlement andprocessing costs.

“We are proud that our StreamlinedSettlement technology was used to helpso many borrowers refinance in theHARP program,” said Al Verkuylen, titleexecutive of LPS’ LSI Title Division.“With an expanded focus on HARP 2.0,we expect to continue supporting ourcustomers through our best-in-classtechnology and services, which leadsdirectly to improved opportunities forhomeowners.”

Additionally, LPS’ core servicingtechnology, MSP, can identify whichloans are eligible for HARP 2.0, presentthe loan-to-value (LTV) ratio to the ser-vicer, show if a property is owner-occu-pied and provide origination data.

Coester Appraisal GroupLaunches Cloud-BasedAppraisal Tool

Coester AppraisalGroup has launched

Cloud Control, its revolutionary new

appraisal management technology.Cloud Control is the only appraisal man-agement software built on the award-wining platform of Salesforce.com, whichForbes magazine designated as the mostinnovative company in the world in July2011. Cloud Control enables lenders tocustomize their appraisal processes farbeyond the levels offered by otherappraisal management technologies.Cloud Control offers virtually limitlesscustomization—users can create busi-ness rules to automate virtually any func-tion, from protecting standards throughfirewalls and safeguards, to business-unique sales and marketing activities thathelp companies generate new business inaddition to enhancing compliance andefficiency.

Coester is providing Cloud Controlcompletely free of charge to alllenders—Coester customers and non-customers alike—without obligation touse any additional Coester valuationservice, whatsoever. Cloud Control is acloud-based, end-to-end appraisal man-agement technology that efficientlymanages the entire appraisal cycle. Inaddition to automating functions andtasks ranging from relaying the initialrequest to the lender’s desired apprais-al panel to filing and storing the com-pleted report, the system automaticallyextracts and converts data into UCDP-compliant formats and submits apprais-al data through the Uniform CollateralData Portal (UCDP). Cloud Control pro-vides the property value as estimated byan automated valuation model (AVM),provides reviewers’ notes for everyappraisal report, and verifies that theappraiser and property adhere to indus-try requirements by cross-checkingresources like ASC.gov, FHA Connectionand FEMA.

“As an AMC, we had tried most of theappraisal management software on themarket and we couldn’t find one withanywhere near the customizability weneed, so we built Cloud Control,” saidBrian Coester, CEO of Coester AppraisalGroup. “Other technologies claim cus-tomizability but only offer minimal con-figurability. Cloud Control can be con-figured to do virtually anything youwant—all the way down to the actualuser level.”

Cloud Control utilizes theSalesforce.com platform and providesvirtually the same power and flexibilityoffered by Salesforce.com’s customerrelationship management (CRM) soft-ware, Sales Cloud, a technology specifi-cally designed to make it faster and eas-ier for companies to connect with andservice their customers, and to do so ina way that promotes high service levelsand increased sales. With Cloud Control,users can fully automate the appraisalstatus notification and escalationprocesses at the user level, whichmeans that users can automaticallyreceive key information on customersand vendors, based on any trigger—such as a phone call—in real time. Thesystem can also be set up to send cus-

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Becoming an Involved LeaderContribute your time, experience and creativity

towards influencing solutionsBy George L. Duarte,MBA, CMC

“Be an industryleader; represent con-sumers’ right to theAmerican Dream, andsmall business by

being involved and contributing yourideas to your local and state legislators.”

Defending your industry and theconsumer’s right to choose serviceproviders means that you have to

remain engaged in the advocacy and leg-islative/regulatory process, no matterwhat forces or trends are operatingagainst you. Those of us in the mortgageloan originator (MLO) business, especiallyas independent brokers, have seen thetidal wave of blame, recriminations andthe resultant flood of knee-jerk reactionlegislation and new regulations over-whelm the market. Starting with theHome Valuation Code of Conduct (HVCC),one regulation after another, layered onwithout considering the individual orcumulative effects, are causing the realestate market to fail to recover; causingfurther confusion among consumers, andcreating unlimited liability for MLOs andlenders. When people get confused, theydo nothing. We’ve all seen the statistics ofhow many potential first-time homebuy-ers are sitting on the sidelines, failing totake advantage of this historical junctureof the lowest rates ever, and depressedproperty values. Their fear of the securityof their jobs in this economy is com-pounded by confusion of the mortgageprocess and extensive paperwork; withno clear assurance on the future value ofowning a home.

For the first time ever, there are forcesinside and outside of government ques-tioning America’s historic commitmentto homeownership as the integral foun-dation of “The American Dream.” Theysay that there is nothing wrong being alife-long renter, and there are many peo-ple who just shouldn’t own homes.“They” fail to say that when you’re arenter, you’re paying the landlord’smortgage; and that homeownership isthe historically proven method for the 99percent to build equity and savings overtheir lifetime. It is also not mentionedthat individual homeownership has beencritical to the economic advancement ofAfrican-Americans, Hispanics and otherminorities in this country. Thankfully,this battle is still being waged, and “they”have not yet managed to prevail, anddeprive Americans of their right to theAmerican Dream.

This is where we in the mortgageorigination industry should choose tostay high profile and be more engaged

than ever. We are warriors defendingthe American Dream, and the rights ofsmall businesses to survive as a viableconsumer choice distribution channelagainst the marketplace and regulatoryadvantages of those entities that are“too big to fail.” We are out there in thestreets every day, working and helpingreal people solve their problems andachieve their goals; no one knows theeffects of the current economy andpoorly-thought-out regulations haveupon consumers and the real estatemarket better than us.

It is easy to become discouraged andfeel helpless against the flood of recrimi-nations and resultant regulations that hasoccurred over the past four years, but thisis exactly what our adversaries want tohave happen, so that we give up the fightand quietly go away. However, it is impor-tant to understand that the wheel hasagain turned, and that things have gottenso bad in the real estate market in most ofthe country without any apparent hopefor improvement, that legislators arebecoming much more receptive to ideasfrom industry veterans; recognizing thatwe are in the trenches every day, and thatwe know what works and what doesn’t.Therefore, it is more important than everto be engaged at every level of govern-ment, from city council to county supervi-sor to State Assembly and Senate to mem-bers of Congress. Remember, a famousman once said that all real estate, likepolitics, is local. It is impossible to under-estimate the potential possibilities ofestablishing relationships with your locallegislators, especially in these times ofhyper communication. The marketplaceand legislators are thirsty for positiveinput and good ideas. Be an industryleader, stay in the game, make sure yourvoice is heard as an industry expert whoknows how it works; and be sure to con-tribute to the discussions of how toimprove the real estate market.

To this end, I have written a billdesigned to address all the loans thatHARP 2.0 does not—adjustable-ratemortgages (ARMs) that are owned by otherthan Fannie Mae and Freddie Mac thatare jumbos, monthly adjustables, Alt-Aand sub-prime loans. In California, themajority of loans in the state are notowned by Fannie and Freddie, and mostCalifornians are not helped by HARP 2.0.The bill is called the “Homeowners Reliefand Home Retention Act of 2012” andappears below for your review andthoughts.

I have been around the legislative andbill-making arena for many years andharbor no illusions about the chances thisbill has, or what the end product wouldlook like. I also have no emotional invest-ment in this bill, knowing it will be bent,

spindled and slammed, and I will take nopersonal offense at that process.Obviously, I think the bill has a lot of mer-its to benefit both consumers and thebanking industry (it doesn’t require prin-cipal balance reduction or cramdowns);doesn’t require any government money;and lowers the homeowners’ paymentssubstantially for a five-year period,pumping much needed liquidity intohomeowners’ hands. This bill is designedto stimulate serious discussion aboutdoing something different to address thehousing crisis, the situation is not improv-ing by conventional thinking. To dothings the same way and expect differentresults is the definition of insanity.

I have had discussions with severalmembers of the California State Senateand Assembly about this bill, and theyare very receptive to having it movethrough the bill creation and sponsor-ship process. Right now, this bill hasbeen submitted to the CaliforniaAssociation of Realtors (CAR) StateLegislative Committee and on to theirlobbying team for review, discussionand proposed sponsorship by CAR. Weremain very optimistic about itschances, having gotten very good feed-back on the idea.

Here is the bill in its current andoriginal form as of April 2, 2012:

HomeownersMortgage Reliefand HomeRetention Act of2012Summary-SituationReportThe economy continues to be stalled,unemployment remains stubbornlyhigh and the real estate market has sta-bilized in some areas, but continues todeteriorate in others. Many homeown-ers are still distressed, causing moreproperties to go on the market at everlower prices, to the point where morethan half of homes for sale in any givenarea are short sales and foreclosures,with “regular” listings in the minority.Those who don’t have to sell, don’t, pre-ferring to wait it out. Even those home-owners who are willing to hold on andwait it out in rapidly declining areas arelosing hope, and considering walkingfrom their properties.

So far, federal efforts to stem thehousing crisis have done little if anygood, to the frustration of homeownersand Congress alike, look at the Hope 4Homeowners Program—announcedwith great fanfare in 2008, but with nonet effect at all. President BarackObama’s latest efforts, a re-working of

his Administration’s Home AffordableRefinance Programs (HARP), HARP 2.0,will apply to only a minority ofCalifornians whose loans are owned byFannie Mae and Freddie Mac, it hasbeen expanded to remove the loan-to-value (LTV) limits. It is estimated thatnearly 60 percent of all the mortgageloans in California do not qualify underHARP 2.0, limiting the benefits andimpact in the state. This estimated 60percent consists of option ARMs, sub-prime loans (which are ARMs), andjumbo loans, most of which are eitheroption ARMs or intermediate ARMs.

The American economy will continueto flounder until the housing market isstabilized and consumer confidencereturns. Two things need to occur:

� Stop the decline in property valuesby establishing stability in mortgagepayments and returning a measureof affordability to existing homeown-ers, encouraging and enabling themto stay in their homes.

� Establish credit liquidity into themarket to enable and encourage first-time homebuyers to purchase theexcess inventory of homes fromhomebuilders, foreclosures and shortsales. Homes are more affordablethan any time in the past 15 years,with the home affordability rate inCalifornia now at over the 60 percentmark, up from only 16 percent justfive years ago. There is a pent updemand in young families looking toestablish their households and fami-lies, whose twin problems are avail-ability of downpayment and closingcost funds, and much tighter qualify-ing guidelines. The only low down-payment program available now fornon-veterans is the FHA program;along with the Cal HFA program thatis periodically available, but unreli-able due to the state’s fiscal crisis.FHA has recently increased its down-payment requirement, and raised themortgage insurance premium (MIP)fee as well, which it will be doingagain twice more in 2012. The FHAprogram has actually historicallybeen of limited utility in California,with too low loan limits, which islarge part of what caused the rise ofsub-prime loans in the first place. Thecurrent management of FHA is veryconcerned for the safety and viabilityof the program, because its usage hasincreased more than 120 percent inthe last year. The underwritingrequirements have gotten more con-servative, with requirements for high-er credit scores as an example.


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By Patrick M. RobertsEsq.

The real estate mar-ket’s foreclosure crisiscontinues to evolveand, as it does, sodoes the law govern-ing wrongful foreclo-

sure and related lender defenses. One theory that homeowners have

used to set aside foreclosures in thepast, was that an improper assign-ment or transfer of the mortgage orDeed of Trust by the lenders renderedit invalid. Historically, whenever amortgage or Deed of Trust was trans-ferred or assigned, the transactionwas recorded in the Real PropertyRecords. However, in recent years,lenders have transferred Deeds ofTrust or mortgages (or certain frac-tional shares of the same) so frequent-ly that lenders no longer record eachparticular assignment. To assist withthe epidemic of mortgage recorda-tion, lenders began utilizing theMortgage Electronic RegistrationSystems (MERS), a nationwide registrysystem which held various Deeds ofTrust in its name. When an interestwas transferred, the Deed of Truststayed in the name of MERS, and atransfer was simply made in the inter-nal records.

An argument raised by homeown-ers in foreclosure litigation followingthe adoption of MERS was that MERSitself was illegal, and foreclosuresunder Deeds of Trust held by MERSwere improper and could be set aside.Specifically, borrowers would allegethat MERS was not the “true” benefici-ary under the Deed of Trust, neverhad ownership of the promissorynote, nor held an assignable interestin the note or Deed of Trust. As such,any assignment of the note by MERS toany other institution was invalid.

The law is clear that any irregulari-ty in a foreclosure is construed againstthe homeowner, who has the burdenof proof when contending that a par-ticular foreclosure sale is invalidbecause a lender lacked authority toconduct it. Lenders previously arguedthat showing MERS to be merely anominee was insufficient to demon-strate that it lacked authority to makea valid assignment on a note onbehalf of the original lender. Prior to2012, there was very little Californiaauthority on this particular issue.However, three recent California Courtof Appeals decisions have affirmative-ly rejected attacks on MERS in favor oflenders: Ferguson v. Avelo MortgageLLC, Gomes v. Countrywide HomeLoans, and Fontenot v. Wells Fargo.These decisions can be cited for theproposition that California homeown-

New Developmentsin the Foreclosure Crisis

ers are unlikely to prevail on the argu-ments that MERS is not valid or thatthe foreclosing lender has to prove thevalidity of its assignment.

As the cases demonstrate, a lender’stypical defense to a wrongful foreclo-sure lawsuit is to argue that, under theprevailing law (specifically Civil CodeSection 2924), a homeowner must showthat there was an irregularity in thetrustee sale—an often insurmountableburden for plaintiff homeowners, as thesale is presumed to be valid pursuant tostatute, but this is not a closed issue.

Just last December, the CaliforniaCourt of Appeal in Lona v. Citibank NAdetermined that when a bank fails toconsider the income and credit of ahomeowner before issuing a loan, thatloan agreement may be uncon-scionable. In Lona, a lender enticed ahomeowner to refinance his home for$1,500,000, saddling the homeownerwith monthly payments four timesgreater than his income. After hedefaulted on payments and the housewas sold at a foreclosure sale, thehomeowner filed an action for “preda-tory lending” (i.e., lending sums ofmoney which cannot possibly be repaidby a borrower based on their income)against the lender, the loan servicer andothers, seeking to set aside the sale.Despite the homeowner’s failure to ten-der amounts due on his loan—usually arequirement to set aside the sale—andeven though no statutory exceptions tothis “tender requirement” applied, thecourt ultimately decided that, pursuantto Civil Code Section 1670.5, the home-owner would be allowed to proceed totrial on the issue of unconscionabilitybased on the argument that the loanwas both unconscionable and illegalbecause they were made to the home-owner without reasonable considera-tion of his ability to repay the loangiven his income at the time, and fur-ther, the interest rate far exceeded whatwas reasonable given his credit rating atthe time of the application.

Lona raises an interesting issue forhomeowners, who, instead of claimingone of the four historical exceptions tothe tender requirement, may now beable to argue unconscionability to cir-cumvent their obligation to tenderamounts due to their lender in order toset aside a foreclosure sale. The courtmade note of the four historical excep-tions to the tender requirement, statingthat a tender will not be required if theborrower’s action attacks the validity ofthe underlying debt; when the personseeking to set aside the sale has a coun-terclaim or set off against the benefici-ary; where it would be inequitable toimpose such a condition on the partychallenging the sale; and when thetrustor is not required to rely on equityto attack the deed because the trustee’s

deed is void on its face.The specific holding of Lona was that

the lenders failed to timely oppose thehomeowner’s argument that the tenderrequirement did not apply due to hisobjection to the validity of the debt,based on unconscionability. While thecase is limited in its application and isby no means resolved, this is an inter-esting issue which will bear observationin the future to determine if othercourts refine the unconscionability

argument relating to predatory lending.If so, borrowers may have anotherweapon in the arsenal for opposinglender foreclosure actions.

Patrick M. Roberts Esq. of Gray DuffyLLP is an experienced litigator and triallawyer in matters including businessdisputes and construction relatedclaims and defects. He may be reachedby phone at (818) 907-4000 or [email protected].

“The law is clear that any irregularity in a foreclosure is construedagainst the homeowner, who has the burden of proof when

contending that a particular foreclosure sale is invalid because a lender lacked authority to conduct it.”

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The New Age of LeadershipBy Daniel Milstein

As the mortgage lending industry contin-ues to stabilize and regain its stature as awell-respected profession, leadership is anespecially timely topic

During the last few years, we have wit-nessed a serious exodus of mortgageindustry leaders, as their firms imploded orotherwise suffered, or key executives haveswitched careers. Many watchdog criticsand industry insiders have stressed that alack of capable leadership was a majorcontributing factor to the mortgage lend-ing industry’s “meltdown.” While thatclaim may be an oversimplification, it doesunderscore the importance that all busi-nesses—especially those being carefullymonitored by government agencies andthe public—should place on developingquality leaders.

Our industry’s crisis certainly has madecompanies reevaluate the qualities of lead-ers and how we prepare them for themajor challenges as well as their everydayresponsibilities.

Primary traitsWhen evaluating the essential attributesfor successful leaders, I consider “visionary”to be at the top of the list. Leaders must beable to look ahead and not only plan andexecute long-term goals, but ideally, howthey can help enhance their company’sprominent and influential position. Thisrequires frequently stepping out of theday-to-day operational mode to look fiveand 10 years into the future to anticipatethe industry’s likely direction and how theorganization can make a difference atmany levels. Leaders have to be forecastersand creative thinkers.

Other key leadership characteristicsinclude:

� Knowledge: Obviously, leaders musthave a thorough understanding of allfacets of the mortgage (or other indus-try), along with a familiarity of the gen-eral business environment. Being anexpert is critical to instilling confidenceamong your staff.

� Adaptable: As we have seen, true lead-ers are able to adapt to the inevitablechanges of their industry and the mar-ketplace. Mortgage companies thathave survived and thrived throughout

the lending industry crisis have modi-fied their operational policies and sys-tems to address new regulations andother developments. We have all hadto rethink our prior ways of doing busi-ness and make the transition to a rede-fined mortgage industry. It has becomeeven more important for leaders toanticipate the primary changes so thatthey are usually in a proactive ratherthan reactive state.

� Work ethic: Most leaders—whetherthey are department heads or compa-ny chief executive officers—work hardto get to their position. It typicallyrequires a special commitment toachieve a leadership role, whichinvolves extra hours for training, jug-gling new responsibilities and chartinga new course for their ongoingadvancement. Most leaders do not fol-low the 9 to 5 schedule. I stronglybelieve in leading by example; it isessential that your staff sees that youare willing to work as hard as they do.I personally make it a point to arriveearly, work through lunch and to stayin my office past “closing time.”

� Interpersonal relations: Many other-wise capable leaders lack one funda-mental trait—the ability to developgood working relationships with otheremployees. You must be recognized asthe one in charge, but also show thatyou are able to work well with others.Establishing an open door policy thatencourages people throughout ourcompany to call or visit my officewhenever they have a question, sug-gestion or problem has helped furtherstrengthen rapport with employees.

� Teamwork: Growing a company is ateam sport. A leader is one of the team-mates, albeit a principal player. Even ifyou believe you know the answers tomost situations, you must work withothers to arrive at a consensus. Beingpart of the team also means that salesmanagers, executives and other lead-ers should at least occasionally workside-by-side with other employees. Forexample, managers who haven’t closeda loan in years should spend time orig-

inating with their loanofficers.

� Integrity: More thanever, leaders have tobelieve in and adhere toa strict code of ethicalstandards. Companyemployees must knowthat the people runningthe company arescrupulously honest inhow they deal with cus-tomers, vendors andothers.

While age can be a factorin determining if someoneis ready to be an effectiveleader, it is not a primaryconsideration. There are“older” business veteranswho aren’t suited to be asupervisor or company executive and thereare much younger people who are readyfor a top position. I know that a few com-petitors questioned whether I was ready toopen Gold Star Mortgage 12 years agowhen I was 25. But I have concentrated onrefining my own leadership skills, assem-bling an exceptional group of other man-agers, and working with them to create ahighly successful company. I believe thedoubters have become believers.

Attracting leadersThere is no one way to identify and attractleaders. Some people definitely haveinnate leadership qualities that are readyto be developed. These “born leaders” mayneed a little prodding for their best traits toflourish.

As human resources directors and chiefoperating officers know, attracting the bestleader candidates requires a combinationof financial incentives and other benefits.For example, along with providing com-petitive compensation packages, we knowthat some mortgage professionals areinterested in joining Gold Star because ofour reputation as one of the “Top Places toWork.” We’ve been fortunate to have expe-rienced minimum turnover.

In addition to hiring experienced mort-gage professionals from outside the com-pany, we like to hire younger people whohave ambitions to grow beyond their initialposition. We put them through our exten-sive training program that involves work-ing closely with mentors and other staff.Some thrive on the challenging six-monthprogram, while others quickly indicate that

they are not able to “makethe grade.”

We also watch forpotential leaders by payingclose attention to produc-tivity reports, meeting pre-sentations and other signsthat someone possessesleadership qualities. Weencourage people to takeadvantage of all appropri-ate training and education-al opportunities so thatthey are comfortable andready to assume a leader-ship role.

RetentionAll companies invest a cer-tain amount of money andtime in developing theirleaders, so they must doeverything reasonable to

retain them. Managers and top executiveseventually become visible to others in theirmarketplace, including competitors whomay court them to leave their currentcompanies.

We not only strive to offer the appropri-ate compensation structure and productionincentive campaigns that include sales tripsand other rewards, but also take other stepsto show that we want leaders to stay. Thisincludes providing them with a clear under-standing of their potential advancement, apositive work environment and recognitionof their contributions to our success. Inaddition, I meet frequently with top man-agers and others to make sure we aren’tmissing any signs of dissatisfaction thatmight make them want to leave.

Hiring, cultivating and rewarding lead-ers is not an exact science. Books andcourses provide great insights on master-ing the leadership “formula,” but individ-ual companies are ultimately successfulbecause they carefully match their currentand future needs with the most qualifiedpeople at any given time. Then they con-tinue to fine-tune their leadership pro-gram until it is even better. Attracting andsatisfying potential leaders to your compa-ny isn’t easy, but it is one of the aspects ofmy job I most enjoy.

Daniel Milstein is founder and CEO ofAnn Arbor, Mich.-based Gold StarMortgage Financial and the author ofthe award-winning The ABC of Sales,Lessons From a Superstar. He may bereached by phone at (734) 971-9900 or e-mail [email protected].

“Our industry’s crisiscertainly has made

companies reevaluatethe qualities of leaders

and how we preparethem for the major

challenges as well astheir everyday

responsibilities.”

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Vision, Integrity, Inspiration:The Foundations of Strong Leadership

By John M. Robbins, CMB

There has been so much written aboutleadership. It‘s the subject of books,articles and academic papers all defin-ing what makes a great leader. After allof the discussion, there is one point wecan all agree on: Being a leader is noteasy in today’s business environmentand certainly has become much morechallenging for those at the top of mort-gage banking companies. As the indus-try begins to regroup and rethink how itwill operate in the future, strong lead-ership is essential in shaping the behav-iors and decisions of those within anindividual organization or those whowill shape an industry.

That is why today‘s leaders in themortgage banking industry will be bestserved if they never again abandon thegreat responsibilities placed on them asproviders of “The American Dream!“Leadership is not doing what everyoneelse is doing better than they do it; it isabout doing what you know to be right,thereby creating trust and respect. Adedication to ethical principles, integri-ty and customer well-being will alwaysbe the best course for your business orour industry. It is ironic that some lookto recreate the very products and lackof customer focus that led our industryinto the most difficult economy sincethe Great Depression.

Hard lessons are all soon forgotten.These same people continue to ignoreregulations on compensation and con-trolled business arrangements, pavingthe way for a stronger regulatory enforce-ment. They are the worst examples ofindustry leaders, and as always, they casta bad light on all those who abide by ourindustry‘s regulations. Leadership withinan industry or a company is based on thesame principles. Clearly, it is an absenceof these principles that will ultimatelylead to the same fate—as it always has inthe past—failure.

Unlike some experts, I do not believea person must be born with naturalleadership skills nor are they all mas-tered by participating in a collegecourse or MBA program. Rather, theyare developed over time, not dissimilar to

a great wine that matures over the years,increasing in fullness and complexity. Alarge contributor to becoming a greatleader is the accumulated knowledgeand experience that one gains through avariety of market cycles which ultimatelyforms the basis for educated decision-making. It has been said that the moreyou know, the more you realize what youdo not know. It is that accumulation ofexperience that helps someone become abetter, stronger leader. In looking backover the years, a person must learn fromtheir mistakes, realizing that everythingis a learning process. True leaders acceptresponsibility for their decisions andlearn from their successes or failures, andthen move on to the next challenge.

I believe a key principle of leader-ship is creating an understandable andrealistic vision of what can be achievedand then motivating your team toaccomplish the task or plan. I alsobelieve, as a person grows in theircareer, understanding what caused oth-ers to succeed or fail becomes a funda-mental element in shaping your capa-bilities. The goal is to develop perhapsthe most important and yet rarest ofleadership capabilities—the one thatguides a company to success, avoidinglethal pitfalls along the way. Whileexperience and vision developed overtime are key elements of leadership, soare individual skills and traits. You onlyneed to look at those you have consid-ered mentors and those who haveinspired you to achieve things youthought impossible! The words,“dependability,“ “trust,“ “respect,““vision“ and “fairness,“ all come tomind. Do not confuse fairness with apassive nature. In many cases, a highly-respected leader is both regimentedand driven. In fact, it is their dedicationthat inspires others to follow, as long asthey feel they are part of a team andtreated with dignity and respect.

As previously mentioned, a leaderboth perspires and inspires. Yet, whileThomas Edison said that “genius was onepercent inspiration and 99 percent per-spiration,” leadership today typically

involves quite a bit moreinspiration in terms ofmotivating today‘s educat-ed workforce. The perspi-ration often comes in howthis inspiration is achieved.What creates inspirationand loyalty? Two funda-mental prerequisites aretrust and integrity. Simplystated, talented peopletypically do not remain forextended periods of timewith executives they can-not trust.

I also believe loyaltyand dedication are by-products of the environ-ment we create. In success-ful organizations whereemployees are valued,they perform significantlybetter and are an inspira-tion to other employeesbecause they are encour-aged to be top performers and strive forexcellence. It is a leader‘s responsibility toprovide the tools and guidance neces-sary, enabling everyone in the organiza-tion to raise the bar on company excel-lence and individual performance. This isespecially true in today‘s lending envi-ronment, which places a large premiumon creating absolutely perfect loans.

Lastly, a great leader must be an hon-est communicator, one of many areaswhere integrity is essential. An organiza-tion‘s talent should be able to trust thattheir leader will share information,whether it is good news or bad news. Itcan be said that people can stand goodnews and bad news, but what they can-not stand is no news. Corporate goalsneed to be communicated throughout alllevels of the company. It is importantthat everyone has a basic knowledge ofthe overall plan and how they contributeto the accomplishment of those goals.Celebrate the wins but, more important-ly, stand up and share the bad newswhen necessary. It has been my experi-ence that employees who are kept well-informed pull together during difficultcycles and often become the differencewhen weathering a storm. Honest com-munication is a must and absolutelyessential to the creation of trust.Credibility trumps all.

Leadership is the ability to facetough challenges, make the hard deci-sions, and not compromise on integritythat ultimately sets real leaders apart.

Being handed a title doesnot make someone aleader. This has becomeeven more critical due tothe failure of leadership inthe mortgage bankingbusiness in the firstdecade of the new millen-nium. Bad decisions weremade at every link in thebusiness chain whereleaders compromised thebest interests of customersto further profit goals.Underwriting standards,which had stood for yearsas a testament to a disci-plined and rationaleapproach to mortgagelending, were cast aside.

Now, as the mortgagebanking industry regainsits footing, it is time to seewho can lead and reestab-lish customer trust and

confidence. In looking for leadershipmaterial, it is important to select thosewho understand that the industry‘s well-being is critical to our individual success.They need to have the intelligence, visionand inspiration to influence their peers,the willingness and stamina to make thedifficult decisions, and an unwaveringdedication to always put our customers‘interests first. A person can be a boss, butit is entirely different to be a leader who isrespected. That comes from havingintegrity, building trust, communicating aclear vision and inspiring those aroundyou through your actions. Mortgage bank-ing companies need true leaders at thehelm once again. Only then will our indus-try help consumers make the AmericanDream of homeownership a reality.

John M. Robbins, CMB is former chair-man of the Mortgage BankersAssociation (MBA) and is currently CEOand president of Bexil AmericanMortgage, a company he founded in late2011. Its wholesale business unit,American Mortgage Network, is dedicat-ed to serving the broker community.Robbins is a 40-year veteran of the mort-gage banking industry. He foundedAmerican Residential Mortgage, whichwas sold to Chase Manhattan Bank in1994, and American Mortgage Network,which was sold to Wachovia Bank in2005. He may be reached by phone at(877) 255-2266 or e-mail [email protected].

“Being handed a title does not makesomeone a leader.

This has become evenmore critical due to the failure of

leadership in themortgage bankingbusiness in the firstdecade of the new

millennium.”

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What Leadership is NOTBy David Lykken

Never has there been a time when we asAmericans have been more confused aboutwhat makes for good leadership. Why isthis? For years, we seemed to intuitively rec-ognize good leadership when we saw it …so what has changed? Why the confusion? Iused to think that it might be the result ofa leadership deficit in our nation. However,more recently, I suspect the problem to becentered on the great ideological dividewithin our nation. There are “leaders” whobelieve that big government is a solution.Others, like me, believe less governmentinvolvement is the solution.

As we ponder the question about lead-ership, I believe the bigger question is:“What is the right direction for our country… more government or less government?”Once that issue is decided, then I believethere will be less confusion when dis-cussing the topic of leadership. The leaderof the “bigger government” ideology isgoing to have a completely different stylethan a leader who believes in “smallergovernment.” For all practical purposes,we are a two-party political system. TheDemocratic Party seems more intent onmore government involvement in everyaspect of our lives and industry, where asthe Republican Party seems to subscribe toless government involvement. As we pre-pare to go to the polls this comingNovember to decide the ideological direc-tion for our country, the questionbecomes: “Who now is the best leader?”One thing seems certain as we face anuncertain world with serious financialproblems … we must recognize whatmakes a great leader.

As many of you know who have read mycolumn each month throughout 2011, Ihave been writing extensively on the topicof leadership. In this article, I want to takea different approach. I am going to writeabout what leadership is NOT.

But before I do, here is a brief summa-ry of the 7-Cs (Characteristics) found in agreat leader that I wrote about last year.They were as follows:

1. Character, which I described as thatwhich make up who we really are—our inner person or what makes upour “core.” It’s what drives our everydecision, and in many ways, defineswho we are—good or bad. It is the

“cornerstone” in the foundation ofevery leader.

2. Conviction is what you have that guidesyour every move and causes you to notlose your direction. It is that inner com-pass that keeps leaders on course withwhat they believe is the right directionin spite of opposing opinions.

3. Confidence is the hallmark of astrong leader, and works hand-in-hand with conviction and character.A leader must have an unwaveringconfidence in their convictions.Character clearly establishes “trueNorth” on a leader’s compass.

4. Charisma is embodied in most greatleaders. They exude genuine selflessmagnetic warmth and have anamazing ability to relate to others.

5. Clarity of purpose and direction is thenext essential component of every greatleader. This is particularly critical andimportant when confusion surroundsthe various options.

6. Communication of all the above is socritical. I used the example ofRonald Regan as someone who wasvery effective at communicating to abroad and diverse audience. Evenhis greatest critics admired his abili-ty to effectively communicate.

7. Compassion while leading, especially indifficult circumstances, is a powerfulcomponent of any great leader.

And several readers wrote me suggest-ing more “Cs,” all of which were great. Ifyou’re interested in reading any of thosearticles, I would encourage you to visitNationalMortgageProfessional.com andsearch “David Lykken” for my archivedarticles.

So if the above 7-Cs describe what agood leader is, what are some of thethings that a leader is NOT? Here aresome that come to mind immediately.As you read this list, please write downyour ideas of what a leader is and isnot. Then e-mail your list to me and Iwill include them and your name in

future articles.So let’s start with the

following list of what aleader is NOT”

1. Leadership is NOTabout a positionThe position or role thatsomeone has does not, inand of itself, make a personof leader. I know that mayseem like an “oh duh” obvi-ous kind of statement, butyou’d be surprised howmany people considersomeone a leader justbecause they hold a title or aposition of leadership. Let’sget this foundational corner-stone in place … leader isnot WHAT you are in terms of position … aleader is WHO you are internally.

Some of you reading this article mayknow exactly what I’m talking about. Youmay be working for someone or haveworked for someone who has/had aposition of leadership, but has miserablyfailed to lead you and/or the rest of theorganization.

Another example is that most wouldagree that President Obama arguablyholds the number one leadership positionin the world. How many would argue thathe has failed as a leader especially when itcomes to leading our country out of theeconomic challenges facing our country?

When evaluating a leader, consider this… it is rarely the good times that define agood leader. It is typically the difficulttimes that determine whether or not aleader is good or bad. How many industry“leaders” do you know who have held theposition of the chairman of the board,chief executive officer, president, chieffinancial officer, chief operating officer orgeneral manager who has failed in theirposition and role as a “leader.” In terms oftitles, they may be in the role of a leader,but functionally, they are not. While “theclothes make the man,” a position does notmake a leader.

2. Leadership is NOT an ego tripThe comedian Billy Crystal, when speak-ing to a group of business executives,said, “Gentlemen, start your egos.”While I have never met a good leaderthat does not have a healthy ego, I alsonever met an effective leader who had anoversized ego. When someone’s ego getsout of hand and they go on a power trip, itcan be extremely demoralizing and eventu-

ally destructive to an organ-ization. An out-of-controlego is like a cancer thatmust be cut out of anorganization if it is to sur-vive. Fear is the commondenominator amongst ego-centric “leaders.” While fearcan be an effective motiva-tor, it doesn’t result in ahealthy organization, espe-cially if the fear is generatedfrom within an organiza-tion’s leadership. I particu-larly like Diana Black’squote, “Big egos are bigshields for lots of emptyspace.” The very definitionof “egocentric” drives homethe point, “Thinking only of

one’s self, without regard for the feelings ordesires of others; self-centered.” True lead-ers are self-less not self-centered.

3. Leadership is NOT a popularitycontestTrue leadership, especially in difficulttimes, rarely results in someone beingpopular with the majority. Yet more andmore “leaders” in our country desire to“lead” by consensus than conviction? Howmany political “leaders” do you know thatformulate their “leadership” positionsbased on polling data? While a case couldbe made that an elected official voting onan important issue should attempt to gaininsights via polling data as to their elec-torate’s preferences, consensus-buildingwithin a company is not how good leader-ship works. Far too many company leadersmanage their business by consensus ratherthan conviction. There is nothing wrongwith getting consensus per se, but in theend, a good leader must lead by their ownconvictions. A good leader is a consensusbuilder … NOT a consensus follower.

4. Leadership is NOT a “birthright”Leadership should be viewed as a privilegeearned by successfully overcoming difficultcircumstances and not the right of some-one just putting in time. It’s sad when youhear someone say, “I deserved that pro-motion to leadership because I’ve beenhere longer than that person.” Whensomeone’s ascension to a position of lead-ership becomes more about seniority thanqualifications, then an organization isdoomed to mediocrity, and eventually,failure. Just because someone has occu-pied space in an organization longer thansomeone else is no reason to promote

“One thing seems certain as we face anuncertain world with

serious financial problems … we mustrecognize what makes

a great leader

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Leadership: Igniting Extraordinary ResultsThrough Passion, Purpose and Love

By Hayes Barnard

to a leadership role. If someone wants aleadership position as a result of tenure,my advice is that they go to work for thefederal government. They will be in goodcompany. All we have to do is consider theU.S. Postal Service to discover where“birthright leadership” gets an organiza-tion—bloated and bankrupt.

As I close out this month’s article, I leaveyou with one of my favorite Peter Druckerquotes: “Management is doing things right.Leadership is doing the right things.”

I’ll be back next month with more onthis important topic. Remember to e-mail me at [email protected]

with your thoughts on what leadershipIS and is NOT.

David Lykken is president of mortgagestrategies and managing partner withMortgage Banking Solutions. He has morethan 35 years of industry experience andhas garnered a national reputation, and hasbecome a frequent guest on FOX BusinessNews with Neil Cavuto, Stuart Varney, LizClaman and Dave Asman with additionalguest appearances on the CBS EveningNews, Bloomberg TV and radio. He may bereached by phone at (512) 977-9900, ext. 10,or e-mail [email protected] or [email protected].

vulnerable, while bringingstrength to instill drive andhunger within their team.This is the type of personwho adds tremendousvalue to creating and lead-ing a purposeful culture.

I’ve been asked, “Areleaders born or are theytaught?” The answer is, theyevolve through seeing moreand feeling more. At somepoint in our lives, most of usbegin to have compassionfor others. We begin to thinkmore in-depth about ourlegacy and it stops beingabout us and more aboutmaking an impact on thelives of others.

When I was 28-years-old, someone askedme what is my legacy going to be? In think-ing about it, I wondered how I made mywork matter to really make a positive differ-ence. How do I focus my efforts to live a ful-filled purpose-driven life as a leader? I haveseen people in their 60s and 70s and theystill don’t get it. You become a real leaderwhen you are more focused on others—when you’re willing to make their needsyour needs. This breakthrough typicallyhappens depending on your own maturity,wisdom and level of awareness. When aperson’s efforts are focused on doing goodand contributing to the greater good of oth-ers, you have the foundation of a leader.

The keys to successful leadership� Design strategies and recipes for success:

Create rituals and a culture of inspiringfun, as well as company achievements.Focus on replicating things that work. Toscale a company forward, you have tofind the strategies that allow successfulpeople to be successful.

� Be transparent and genuine: Shareaccurate perspectives of the companyand its future. For a team to make edu-cated decisions they have to be awareof what’s going on.

� Find your personal best and designincentives for others to find their bestselves: It takes competition off thetable and allows employees to design apath to their own personal best goals.

� Borrow best practices from other suc-cessful companies: Engage in site visitsand learn what other organizations do

to maintain success inbusiness and in culture. Itallows you to get outsideyour own four walls andsee what others aredoing. You can then bor-row those best practicesand it gives leadership adifferent lens to viewtheir world.

Leaders must holdstrongly to the things theydo uniquely well and out-source or empower othersto lead the other tasks. Justlike a kite, you let the stringout and bring it back in attimes. If performed correct-

ly, the result is you get lift. There is an art inwhen to let go and knowing when to reel itback in and have conversations to make surethe team continues to fly straight. The bal-ance is empowering a leadership team togain autonomy so they can make key deci-sions to grow the business while knowingwhen to reel everyone in to ensure thatthe vision and direction are aligned.There are moments when you realizethere are too many initiatives going onand it becomes highly distracting. Inthe theory of “you can do anything, butnot everything” or “often those who tryto do too much achieve too little,” youmust learn to guide a team to accom-plish specific goals and remain alignedto effectively achieve successful results.

A successful leader has a mindset thatsets the stage for others to follow. Yourenergy is their energy. Your passion istheir passion. If you have no energy orpassion, then the organization has noenergy or passion. My constant goal is toinspire people to do what they love to do,to help them find meaning or a purposethat motivates them to succeed in life.Effective leaders enable others to discov-er themselves and what they contribute… both to their own lives and the lives ofothers. I am inspired by the energy andenthusiasm that our team brings to thecommunities in which we serve. Nowmore than ever, our leadership team val-ues the importance of giving back andthe power of connecting the hearts ofothers to change people’s lives in a posi-tive way.

Hayes Barnard is president of Sacramento,Calif.-based Paramount Equity. He may bereached by phone at (877) 290-9991 or visitParamountEquity.com.

“You become a realleader when you are

more focused on others—when you’rewilling to make their

needs your needs.”

Through growth, adversity and achieve-ment, entrepreneurs wear many hats. Tosuccessfully scale a company, businessleaders need to make the transition from“entrepreneur” to “professional,” and froman entrepreneurial company to a profes-sional company. Often, a singular leaderleads in a singular fashion and it’s all aboutone person’s goals. As a leader of a grow-ing group of talented individuals, I havediscovered the value of thinking and lead-ing more globally. There’s a saying:“Human beings hallucinate when notcommunicated to.” As a company grows, aleader needs to, early and often, addressany undertones or rumblings that takeplace culturally within an organization.Our leadership team developed a weeklycompany-wide, interactive video confer-ence to connect the hearts of our team. Wetalk about what’s working, share informa-tion and ideas, and address challenges togain genuine perspective and rapport. It’sa time to ask transparent questions and itallows the organization to be authentic.This provides the whole group access toleaders and creates trust. It reminds everyone of our company’s purpose and theprinciples that enable our customers toenjoy doing business with us.

The world and corporate America wantus to treat employees like numbers, to fitthem in a box and define rigid lines. Leadersare faced with balancing people with prof-its and social value with economic value. Mymentality is to dig deep with my leadership

team and the employees. What drives them?What is their big “why?” Why do they cometo work? Why do they do what they do? Ourleaders are taught to go “three deep” by ask-ing the questions that delve through the lay-ers of what motivates them by asking eachperson individually “Why?” Why they dowhat they do? This allows for deep emo-tional connections and creates loyalty. Wewant to hire leaders who are willing to cre-ate meaningful work with their team. Welook for those that are willing to go threedeep and discover in their own teams whatreally drives their people.

Good leaders understand how to bal-ance passion with pragmatic, professionaland well-thought-out business fundamen-tals. But to become an outstanding leaderin our organization, we are searching forsomeone fulfilled by contribution. Mostleaders have learned the value of leadingwith integrity and hard work. Along withthose valuable principles, we look for lead-ers that are driven by love and growth.Those two driving forces have the purpose-ful depth to really touch the hearts of ourteam and ignite true passion.

As an example, sales leaders can be self-ish with a “What have you done for melately?” mentality. We want leaders on ourteam to come from a mindset that includesteaching, coaching, inspiration and love.They know how to show others how to besuccessful, find purpose and gratitude inhelping propel others forward. They havediscovered the art of being humble and

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Five Keys to Effective Sales Leadershipin a Post-Dodd-Frank World

By Erik Janeczko

The Dodd-Frank Act and the FederalReserve Board’s loan originator (LO) com-pensation rule, which came into effect a lit-tle over one year ago, created some seriouschallenges for leadership in the mortgageindustry. The biggest concern we see indus-try leaders wrestle with now is about “shav-ing” or “saving” … that is, are you shavingprice to save deals or are you saving profitat the expense of losing deals? And, how doyou make it all work? How do you makeenough revenue per loan to make a dealworth doing on $100,000 loan, withoutpricing yourself “out of the market” on thelarger $300,000 or $400,000 loans? Can youactually “have your cake and eat it too?”

In today’s environment, sales leader-ship, organization and volume planninghave become critical keys to success. Inour work as a coaching company specificto the mortgage industry, our team dealswith a wide variety of loan officers indiverse markets across the nation. We’veseen many different pricing modelsemerge, and many mortgage companiesare finding it more important than ever toredefine their value proposition in aneffort to separate their businesses fromthe competition.

Here are five key strategies to help youbuild a profitable business in our currentmarket, despite the limitations and chal-lenges we face.

Step 1: Determine yourmonthly volume goals The first key is knowing where to start.The most effective sales leaders in thispost-Dodd-Frank Act era have helpedtheir LOs understand where their busi-ness is coming from, and how manyloans must close each month to reachtheir income goals.

First, define your typical market andestablish pricing based on a “per loan”revenue target that is expressed as a per-centage of loan amount that equals indollars the kind of revenue and commis-sion you want to generate per loan. Then,determine each LO’s monthly productiongoal, based on how much money each LOwants to make. Have each LO work outhow many loans need to close eachmonth to reach his or her individualincome goal.

Next, factor in the conversion ratios todetermine how many leads they mustgenerate to ensure they hit that goal. Ifyour LOs don’t already know what theirconversion ratios are, take a closer look atthe previous year’s production numbers.Determine how many applications weretaken and compare that to how manyloans actually closed, this gives you a goodballpark figure to start with. But, to dialthis in better for the future, start trackingthese numbers to determine what the real

conversion ratio is for eachteam member.

So, our first step is tobegin with the end in mind.Help your team determinewhat they really want toachieve personally, andthen work backwards todecide what level of activityit will take to reach thatvision.

Helping your team knowwhat your lead generationtargets are on a weeklybasis, is the first critical stepto success in the currentenvironment. Keep anopen line of communica-tion with your team anddiscuss the numbers, thepricing, and how to overcome challengesin your specific market. This will keep yourteam focused on proactive business devel-opment, rather than reactively “doingbusiness by accident.”

Step 2: Define your “perfect” borrowerTo win in today’s market, your LOs mustexude confidence and trust in everytransaction. Your pricing model shouldfit both your company culture and thetype of borrowers you choose to workwith. But you should also challengeyour team to think seriously about howthey can be more valuable to their cus-tomers and offer a level of service thatgoes well beyond the promises of greatprice and “world class” service offeredby everyone else (whether they can real-ly provide it or not).

For example, if you choose to workwith high-end clientele, your LOs mustbecome experts at strategies to differ-entiate themselves at a higher level.They need to be able to efficiently offera more in-depth consideration of thelong term financial impact of the mort-gage choices they make in real longterm dollars.

And, since the LO compensation rulesmandate that we cannot lower our priceon any one specific deal, we need systems,tools and strategies to ensure that we canbe confident in charging a higher profit—even on the larger deals—if we are goingto be able to also make the smaller dealsworth doing.

Knowing your market and being real-istic about the type of business yourteam wants to attract will also enableyour team to focus their energy and

efforts on the production,and not the difficulties.

This focus and consis-tent attention to produc-tion activity is a critical ele-ment in establishing aneffective sales process.

Step 3: Defineyour value proposition In the post-Dodd-Frankworld, it has becomemore critical than everfor sales teams and lead-ers to focus on differenti-ation strategies and valuepropositions, and how tomake sure those valuepropositions are under-

stood by the consumer consistently.The team that truly understands thecompany’s value proposition will clear-ly and consistently articulate this valueto the consumer.

Mortgage advisors who reinforce thecompany’s value proposition—whilethey are in the process of helping theclient set up their loan structure—arewinning hands down.

Sales teams that spend a significantamount of time and energy drilling,practicing and learning the art of com-municating a stronger value proposi-tion are able to focus on the long-termbenefits of the choices that a borrowermakes when setting up the mortgage.By focusing on the client’s long-termfinancial growth and overall net worthdown the road, and then dollarizingthat value difference to the consumerwill offset the few dollars or cents amonth in interest rate or upfront clos-ing costs offered by a slightly lowerpriced competitor.

Though you may occasionally losethe extremely high maintenance, hard-core rate shopper, in the long run, yourLOs will see a significant increase intheir conversion ratio and correspon-ding income.

Step 4: Focus on growthNo single LO can win a market. It takes awhole team working together under acommon brand identity to build a solidreputation. Working together, over anextended period of time, on what makesyour company uniquely more valuable tothe customer will make your company thedominant force in your marketplace.

“Certainly, personalitytraits and skills arerequired to be an

effective leader, but, inlife, there are very few‘natural born’ leaders

in existence.”

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To get your entire team dialed in andreally working as a team, you mustencourage collaboration. Schedule meet-ings on a regular basis to brainstormideas, discuss the company’s brandingstrategy, and leverage the unique tal-ents and strengths of your team. Thisconsideration includes advertising,attending trade shows, an Internet pres-ence, social media activity, e-mail cam-paigns, direct mail, and traditional per-son-to-person marketing and referralpartner development.

For example, if you have an LO witha strong marketing background and apassion for direct mail marketing,encourage that LO to use those skills tobenefit the entire team. On the oppo-site end of the spectrum, if a differentLO has the natural charisma and pas-sion for meeting new people, encour-age that LO to attend as many net-working events and trade shows aspossible, to attract new clients and atthe same time connect the entire teamand company to the community in avery visible way.

As a team, discuss how to establishreferral networks, what’s working andwhat are the best practices in your mar-ketplace. Explore what opportunitiesyou have as a team to reach a wideraudience and leverage existing relation-ships into to multiple opportunities.

A well-oiled, well-orchestrated salesteam that sees the benefit of ideasharing profits tenfold what one indi-vidual can create. But, it is critical tosteer the team away from internalcompetition and backstabbing thatcan very quickly kill morale.

It’s important for the sales managerto be fair in these open forums. It’s nat-ural to have one or two LOs who standout from the rest. Help the ambitious,goal-oriented members of your teamto direct that energy in a positive waytowards helping the weaker membersof the team. Help them understandthat the greater goal is to strengthenthe team’s presence in your market bysharing their insight and wisdom. Thereputation and the strength of theteam as a whole is how market shareis captured.

Step 5: Establish effective accountabilityand performance managementA big part of accountability and per-formance management is tracking.

The law of the Hawthorne Effect tellsus that what gets measured gets done.Compare it to tracking your diet andyour sugar intake. If a doctor gives adiabetic an effective tool to tracksugar levels and eating habits, the dis-ease may be managed. But, when thepatient forgets to keep track of dietaryintake, the sugar levels can spiral outof control fairly quickly and with direconsequences.

The same goes for performancetracking. But, much more than thetraditional “call report,” an effectiveperformance tracking tool should helpyour loan originators sustain the vol-ume of activity necessary to ensurethey hit their desired closing numbers.Your tracking tool should also helpeach LO recognize what efforts aresuccessfully working and which onesaren’t, and track the source of thelead and the specific obstacles facedin trying to capture that lead.

It should make clear which leadsources are providing a 20 percentconversion rate versus an 80 percentconversion rate. This enables the LO toadjust time and energy spent on vari-ous work efforts, and adjust strategiesto reach significantly higher volumelevels in dramatically less time byfocusing on high pay-off activities.

So, can a leader be made, or are theleaders of the world simply uniqueindividuals who come with the right setof personality and experience?Certainly, personality traits and skillsare required to be an effective leader,but, in life, there are very few “naturalborn” leaders in existence. They arealmost always created through the cru-cible of effective training, practice andexperiential learning. If you are a salesleader, a sales manager, or the ownerof a company, I encourage you toimplement these five keys to effectiveleadership in your business.

Erik Janeczko is the head coach and chiefbusiness development strategist forMaximum Acceleration, a coaching systemdesigned to help loan originators build theirbusinesses by implementing proven corestrategies. National Mortgage ProfessionalMagazine readers can download Erik’s freegoal planning and performance trackingtools at www.maccelcoach.com/plantools.He may be reached by phone at (573) 298-4237, ext. 101 or e-mail [email protected].

Are You a Manager or a Leader?By Dave Hershman

We have thousands of man-agers in this industry, butonly a small percentage thatare actually great examplesof leaders. I applaudNational Mortgage Profes-sional Magazine’s focus onthe topic of leadership thismonth because if we aregoing to thrive as an indus-try in the future, we certain-ly need more effective lead-ers. Of course, it is incum-bent upon us to define thedifference between a “man-ager” and a “leader” so thatour managers might recog-nize where they needimprovement. The follow-ing represent my keys to great leadershipfrom my book, The Complete MortgageManagement Kit.

Having long-term visionEveryone in this industry has vision.However, because managers are typicallyproducers, recruiters and coaches, theyoften do not have time to look beyond whatis in front of them day-to-day. Therefore, wecan say that they don’t have great long-termvision. Great leaders can see the big picture.Every action we take can affect that big pic-ture, but we don’t necessarily see the con-nection because of our myopic view. Forexample, do you know a loan officer thatneeds to be coached in a particular area, butyou do not have enough time to focus onthat particular issue? When the issue arises,you tell yourself that you need to talk tothem. But when the issue quiets down, youlet it ride because you have so many otherpressing concerns. What kind of long-termdamage is being done? Could you perhapscause another loan officer who is botheredby the problem to resign? What are the long-term consequences of inaction?

Is a great exampleA great leader is a great example for theiremployees. Actually, we typically select ourmanagers as examples in one respect. Thetop producers become managers.Branches are typically more profitable witha top producing manager. Unfortunately,we also assume that a top producing man-ager will be able to show others how to

produce. This is not neces-sarily the case. In addition,the production of a manag-er is often not of the high-est quality. Again, the lackof time can exacerbate thissituation. However, if themanager does not do agreat job of bringing in highquality loans and takingcare of business from acomplete loan applicationto settlement, then they arenot the great example theyneed to be. Even the waythat a manager handlesstress is an important partof being a good example.When the fires hit, does the

manage react to stress by fanning the fire,or by leading others to safety?

Following upHow many times have you told your loanofficers that they must follow up to bothconvert leads and get loans closed? Well,following up is just as important for lead-ers. Again, because of time constraints,managers are hard-pressed to follow-upon every detail that is important. But if youdon’t return phone calls and e-mail on atimely basis, how do you expect your loanofficers to do the same? Again, you set theexample in this regard.

Communication skillsGreat leadership is displayed through greatcommunication skills. This includes notonly follow-up skills, but what I will call“proactive communication.” While follow-ing up requires that we respond to prob-lems quickly, proactive communicationmeans that we prevent problems fromhappening. Perhaps it is an extra commu-nication to an underwriter on a file or get-ting the word out about a programchange. An example of communicationskills are not limited to just calls. Leadersshould have above average public speak-ing and writing skills. If you cannot get infront of a group of loan officers and inspirethem, how do you expect your loan officerto get in front of a group of real estateagents?

“Yes, we often have to teach and inspire asleaders, but if we don’t

listen, we will neverfind out what our

employees really need.”


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RetentionGreat managers hire producers andgreat leaders retain those producers. Doyou work harder at recruiting than youdo in supporting your employees? Doyou even know where they need help?This is again where following up andcommunication skills are essential. It issometimes not easy to determine whereour employees need help, however,spending the time and effort to find outis very important.

ListeningGreat leaders are great listeners. Yes, weoften have to teach and inspire as lead-ers, but if we don’t listen, we will neverfind out what our employees really

need. Even in interviews, we should beasking questions and listening, ratherthan talking. Of course, in order to teachour salespeople to be better at convert-ing prospects, we need to be able toteach them advanced questioning andlistening skills. Selling and leading arenot all that different in this regard. Greatsalespeople are also great leaders.

HonestyA leader’s integrity can never be inquestion. Again, this brings us back tothe point regarding being an example.If we are not “THE” example in thisregard, how can we not expect thesame from our loan officers and opera-tional staff? Many walk a fine line in

are you a manager or a leader? continued from page 41

this industry, but leaders must standvery clear of this line.

ConsistencyLeaders must be consistent in their direc-tion. Are you someone who schedules astaff meeting when there is a catastropheor sends out an “effective immediately” e-mail? Or, do you schedule meetings on aregular basis to prevent these issues fromarising? Can your employees count on yourreaction day-to-day, or do they fear whichpersonality will show up day-to-day?

DelegateDelegation by leaders is important withregard to your own time management,but also you can deliver more skills toyour employees in order for them togrow. This is a key to retention and the“I do everything myself” mentality onlyretards the progress of those you serve.

A positive messageA great leader carries a positive mes-sage. Again, we want to be the exam-ple in this regard. If you don’t carry apositive message, why should othersaround you do the same? This posi-tive message should include thankingyour employees and clients often.Even the way you carry your messageis important. When you are “criticiz-ing or pointing out a mistake,” itshould be done in private. When youare lavishing praise, this should beaccomplished in public.

Dave Hershman is a top author in the mort-gage industry with seven books published, aswell as hundreds of articles. Dave has deliv-ered hundreds of keynote speeches, seminarsand schools for the industry as well. He maybe reached by e-mail at [email protected] or visit OriginationPro.com.

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new to market continued from page 33


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tom e-mail messages to specifiedgroups. For example, certain propertyowners can be contacted with market-ing messages when specific triggers areactivated, like each time rates reach acertain threshold.

Credit Plus Launches NewMobile Credit App forMortgage Professionals

Credit Plus Inc.has announced

the launch of a new mobile app, CreditPlus nEXT Generation Credit (nGC),allowing mortgage professionals toaccess a wide range of consumer creditdata on iPhones and other mobiledevices.

The Credit Plus nEXT GenerationCredit (nGC) App provides: Consumercredit data, including actual creditscores; credit usage, including accounttype, balance, payment and past dueamounts; adverse summary, includingnumber of collections and charge-offs,number of accounts that are 30-60-90days late and other information; andfront-end and back end debt-to-income(DTI) ratios, as long as the user hasentered gross annual income.

“We developed this app with ourcustomers in mind,” said Mike Hall,vice president of operations for CreditPlus. “Our goal is to enable mortgageprofessionals to securely access theinformation they need even whenthey’re not in the office.”

CoreLogic AnnouncesHARP 2.0 Refi DataServices

CoreLogic has announceda new service designed tohelp originators identifypotential Home Afford-

able Refinance Program 2.0 (HARP 2.0)refinance prospects. The HARP 2.0 pro-gram was introduced in late 2011 toassist qualified underwater homeown-ers in refinancing their mortgages.CoreLogic leverages a proprietary data-base, patented valuation technologies,comprehensive lien information andnew patent-pending analytics to identi-fy more than 2.3 million borrowerswith a ‘strong likelihood’ of potentialeligibility for refinancing through theHARP 2.0 program.

“The new HARP 2.0 guidelines providea great opportunity for homeownerswith negative equity who were previous-ly unable to take advantage of historical-ly low interest rates and refinance theirexisting mortgages,” said AnandNallathambi, president and chief execu-tive officer of CoreLogic. “It may not beclear to homeowners how HARP 2.0 eli-gibility requirements apply in their cir-cumstance. CoreLogic is uniquely posi-tioned to help mortgage originatorsidentify qualified homeowners who arehighly likely to be eligible for the HARPprogram. This will allow the originators

to focus their educational and salesefforts on homeowners who will likely bemotivated to refinance.”

Using a specific list of eligibility crite-ria, database filters and derivation tech-niques are used to identify potentialHARP 2.0 eligible loans. The loan-to-value (LTV) ratio information is calculat-ed using industry-leading CoreLogicautomated valuation models (AVMs). Inaddition, to ensure the most up-to-dateinformation is available, CoreLogic re-evaluates its HARP 2.0 eligibility data-base with refreshed data monthly, pro-viding originators access to updatedand/or new leads in either singleprospect or batch forms.

“By utilizing CoreLogic proprietarydatabases and analytics teams, we canprovide a targeted and customized listof very high probability HARP 2.0 refi-nance-eligible candidates,” said DiannaSerio, chief data officer for CoreLogic.“Our ability to provide specific home-owner data, highly accurate loan-to-value estimates, identification oflenders, current owner occupancy sta-tus, and liens associated with a proper-ty can be especially helpful to origina-tors looking to build or defend theircurrent portfolio.”

CampusMBA AnnouncesNew CE Requirement forCMB Designation

CampusMBA hasannounced a newContinuing Education(CE) requirement forall Commercial, Resi-

dential and Master Certified MortgageBanker (CMB) designates. Beginning June 1,2012, all CMB designates will now berequired to complete ongoing CE tomaintain their respective designation.

“Since 1973, the CMB designation hasbeen the symbol of respect, credibility,expertise and achievement within thereal estate finance industry,” saidJeffrey Schummer, VP of education forthe Mortgage Bankers Association(MBA). “Now, more than ever, with theindustry in a period of rapid change, itis essential that industry leaders contin-ue to advance their knowledge andbuild on this standard in order to setthe bar for excellence in our industry.”

Each CMB will be required to com-plete 30 hours of continuing educationover an ongoing two-year period. CEcredits will be available throughCampus MBA online courses, at selectedsessions during MBA conferences, andthrough special CMB events.

In order to be eligible for the CMBdesignation, candidates must eitherwork for an MBA member company orbe a member of a recognized state MBA.Every candidate for an Executive CMB isrequired to have a minimum of 10 yearsof experience in real estate finance andhold a senior management position atan MBA member company.

CMB candidates must acquire 150points earned through a combination ofprofessional experience, secondary edu-cation, continuing education throughMBA-sponsored events and CampusMBAcourses, as well as participation in MBAat the local, state and/or national level.After accumulating the required pointsand passing a comprehensive writtenexam, candidates must demonstrateindustry knowledge by passing an oralexam conducted by a panel of CMBs.

ClosingCorp LaunchesNew Mortgage Calculator

ClosingCorp hasannounced theintroduction of

its SmartClosing Mortgage Calculator,which allows homebuyers to shop formortgages and estimate closing costsfor any residence in the country. SanDiego-based Z57 Inc., a real estateInternet solutions provider, will imple-ment the tool to enable its real estateagent clients to make shopping formortgages and accurate closing costsavailable to homebuyers. These serviceswill help consumers make informeddecisions regarding home purchases.

The SmartClosing Mortgage Calculatorprovides instant mortgage rate shopping,annual percentage rates (APRs), monthlymortgage payments, closing costs andcash-to-close estimates in a single tool.Real estate agents and mortgage lenderscan also use the calculator to identify andcapture valuable lead information forindividuals proactively seeking homebuy-ing information.

Z57 Inc. will integrate the SmartClosingMortgage Calculator with its Internet mar-keting products as a valuable source ofcontent for home shoppers. By offeringclosing cost estimates at key stages of theproperty research process, a consumer canmake an informed decision regarding aproperty. The tool also will be used toidentify potential home buyers for Z57’sreal estate agent clients.

“While other calculators only providemonthly mortgage payments, ClosingCorp’sSmartClosing Mortgage Calculator providesaccurate closing cost data that consumersneed to gauge the real costs associated withbuying a home,” said Ryan Whitlock, chiefexecutive officer of Z57. “It takes local regu-lations and customs into account whileusing real, up-to-date rates to ensure themost accurate data delivery. By partneringwith ClosingCorp, Z57 is able to provide yetanother value-added service for our realestate agent clients to provide to their homebuying clients.”

The SmartClosing Mortgage Calculatoruses actual costs from ClosingCorp’s propri-etary, real estate service provider database,making it unique in the marketplace. It alsogenerates property-specific recording feeand transfer tax costs, and calculates pre-paid costs and reserves.

DataQuick Adds ValueNetUSPAP-Compliant DesktopAppraisal to Suite of Tools

DataQuick has part-nered with ValueNetto offer its customers

access to ValueNet’s Uniform Standardsof Professional Appraisal Practice(USPAP)-compliant Desktop Appraisals.The ValueNet suite presents mortgageprofessionals with a more accurate andcost-effective solution, in comparisonto similar products, to fulfill theirappraisal needs and provides multiplebenefits.

“Market knowledge of local appraiserspaired with property-level data and neigh-borhood trending information are the keysto accurate appraisals,” said ValueNetChief Executive Officer Scott Waxman. “Weare excited to integrate our ValueNet prod-uct offering into DataQuick’s Collateral val-uation offering.”

ValueNet appraisals include exten-sive property research, input from localdata sources and the actual valuationof the property, while offering severalvariations of reports to be usedthroughout the lending operation.

“ValueNet has established a reputa-tion for quality, service and reliability indelivering accurate desktop appraisals,”said John Walsh, president of DataQuick.“Their proven performance and compre-hensive product set is a great comple-ment to DataQuick’s collateral valuationand appraisal solutions.”

Mortgage ReturnsAnnounces EnhancedDatabase Managementand Marketing Solution

Mortgage Returnshas announcedan upgrade to its

system to include additional functional-ity enabling lenders to more effectivelycommunicate with referral partnersand easily track and identify referralsources. With more than 300 marketingmessages that are compliant with fed-eral regulations, Mortgage Returns’ newenhancements streamline marketing,so originators can more easily assignautomated and relevant marketingcampaigns to customers, prospects andreferral partners.

“According to RE/MAX, Januaryhome-buying sales were up 3.4 percentfrom a year ago,” said Jim Blatt, chiefexecutive officer of Mortgage Returns.“To make the most of the spring home-buying season, banks and mortgagecompanies will need to strengthen rela-tionships with referral partners. Thenumber of referrals a company receivesin a year is often the differencebetween meeting revenue goals andfalling short of them. Referral partnersneed consistent communication and acommitment that lenders are manag-ing these important relationships.Mortgage Returns’ new features enablemortgage originators to more effective-ly manage referred clients.”

New features enable lenders to bet-ter classify, organize and search cus-tomer data that is typically buried inloan origination systems. In addition,originators can consistently matchreferrals to customers and prospects, aswell as give regular updates to referral

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becoming an involved leader continued from page 34

The search for a solution that willactually have an immediate and sub-stantial impact is complicated by sever-al factors. The first is that there is a ris-ing tide of resentment by those home-owners who are impacted by theirproperty values decreasing, yet are ableto make their payments, and who feelthat it is essentially unfair that peoplewho purchased a home they couldn’tafford are getting bailed out and“rewarded” for their imprudent behav-ior, at the “prudent” buyers and gener-al taxpayer’s expense. The second ishow to accomplish this assistance with-out the U.S. Department of the Treasuryexpending additional hundreds of bil-lions of dollars. The third is how to dothis in a way that doesn’t causeirreparable damage to the future homefinance marketplace by creating theprecedent of forced principal balancereduction, which would place futuremortgage investors in a position ofuncertainty that their principal invest-ment may be at risk. If this occurred, itwould have the unfortunate effect ofcausing a huge rise in the cost of homeloans to the consumer in the future, asinvestors would build in the higher per-ceived risk into the loan pricing.

So, a solution is necessary thataccomplishes the following:

1. Addresses the needs of those home-owners that current and previousattempts have missed.

2. Doesn’t force a principal balancereduction on lenders/investors.

3. Reduces monthly payments to anaffordable level.

4. Eliminates the excess risk levels incurrent and future ARMs.

5. Re-establishes consumer confidenceand price and value stability, keep-ing people in their homes.

6. Creating confidence in first-time andother homebuyers to get them offthe fence and into the market toreduce home inventory.

7. Provides stability in the home mar-ketplace, protecting the remainingequity or value of homeowners,allowing them to stay in their homesuntil the market eventually returnsto normal, as it always does. Thereal estate market, like the stockmarket, is cyclical but inexorablyrises over the course of time.

Preface to the solutionThe solution lies in the details and designof the ARM … how it works and theimpact on the monthly payment. TheARM loan consists of two parts, the indexand the (profit) margin. The index is thatpart of the loan that adjusts, and can beconsidered the cost of the lenders funds.The margin is what the lender adds to theindex, and is the profit that is made on theloan. The margin is always a fixed figure.When the index and margin are addedtogether, this is the actual interest rate of

the loan. This is called “fully indexed rate,”“note rate” or “real rate of interest,” thedefinition depending on the lender, butthe result is the same. All ARMs start witha subsidized rate lower than the fullyindexed rate (“start rate,” “initial rate” or“teaser rate”) for a certain period of time,and over the course of time, all ARMsreach their full-indexed rate. Although theinitial low start of the loan doesn’t pay thefull amount due (the fully-indexed rate),the eventual rise of the rate to fully-indexed status ensures that the lender willeventually receive payment for both prin-cipal and interest, with the full loanamount and interest paid over the courseof 30, or sometimes 40 years. ARMs havebeen in existence for approximately 30years, with option ARM loans pioneered byWorld Savings, funded out of, and held intheir own “portfolio,” who was bought outby Wachovia Bank, who in turn, wasrecently taken over by Wells Fargo, hencethe origin of the “toxic loan portfolio.”

There are several popular indexes thatlenders have used, depending upon if theloan has a negative amortization feature(option ARM), is a sub-prime loan, or anintermediate ARM (fixed P & I paymentfor a certain period). Generally, optionARMs have COFI, COSI, CODI or MTA astheir indexes; sub-prime loans usuallyhave LIBOR, and intermediate ARMs (bothconforming and jumbo) have either six-month or one-year CMT or MTA (for cur-rent numerical values, see appendix). Tothese indexes, the lenders add their (prof-it) margins. Over the course of the last 15years, the margins have been creeping up,unnoticed by consumers or regulators,with the option ARMs and especially thesub-prime loans having the highest mar-gins. Option ARMs have margins as high as3.5 percent, and sub-prime loans as highas five percent to six percent. This is thereason they were so popular to lendersand their investors—the high profit mar-gins on each loan made them very lucra-tive. When these loans with high marginsbecome fully-indexed, the rates are high,and payment shock results with a muchhigher payment than the initial start rate,which is the source of the trouble thatconsumers find themselves in.

The proposed solutionThe key to immediately lowering therates and payments of people who haveARMs, and preventing future excesses,lies in addressing the margins on ARMswith several proposals.

Section 1I. ARM MANDATORY MARGIN

REDUCTION PERIODImmediately reduce all ARM margins to0.25 percent (quarter of a point) foreveryone in California who has anyARM, for a five- or seven-year period,starting from the next monthly adjust-ment for those who have option ARMs,


new to market continued from page 43

partners on the status of mutualprospects. This is what the referral part-ner really wants to see. This uniqueapproach to database managementenables Mortgage Returns to providebetter results for more than 6,000 origi-nators nationwide.

“Stronger relationships with cus-tomers, prospects and referral partnersmean more closed loans,” said Blatt.“Beyond the improvements to databasemanagement, we have also improvedthe communication process. For exam-ple, we have automated the process forproviding referral partners with weeklyrate sheets. This, combined with otherefforts, will strengthen relationshipswith referral partners and positions theoriginator as a market and financialservices expert.”

New Mortech PortalOpens LO to BorrowerDirect Communication

Mortech Inc. hasreleased a newtechnology allow-

ing loan officers the ability to exchangereal-time mortgage application datadirectly with their borrowers. The secureconsumer-facing portal, called Connect, isavailable completely free to users ofMortech’s MarksmanLMP platform.

“Transparency and open communi-cation are the keys to rebuilding trustwith today’s homebuyer. And that’sexactly what the new Connect technolo-gy provides,” said Don Kracl, presidentof Mortech. “At the same time, origina-tors are under pressure to expend fewerresources on every loan they close. TheConnect platform makes that easy byopening up a communication linedirectly with the borrower and allowingthem to provide more of the requiredinformation on their own.”

Connect is powered by TheMorty.com,also owned by Mortech and is seamlesslyintegrated into Mortech’s MarksmanLMPplatform. Each originator portal is auto-matically branded for individual compa-nies. MarksmanLMP is the industry’s firstLending Management Platform for manag-ing the complex processes that take placebefore the prospect completes the loanapplication. It includes tools for simplify-ing, automating and organizing the entiremortgage lending process, from leadacquisition to assessment and marketingto processing.

Cogent Road LaunchesNew Mortgage-SpecificCRM Tool

Cogent Road hasintroduced Gravity,a mortgage-specific

CRM/lead management system thathelps loan officers obtain a loan com-mitment in a single call. Gravity is acloud-based CRM/lead managementsystem that fully integrates with credit,1003, FHA Scorecard, a pricing engine

(PriceMyLoan), loan comparison toolsand anti-steering disclosure, allowingloan originators to take a completeapplication, select and price a loan,accurately discuss financial benefitsand qualify borrowers in one call.Gravity’s toolset ensures that loan offi-cers can be confident presentingprospects with an accurate pre-qualifi-cation; ultimately resulting in signifi-cant time efficiencies and the potentialof improved closing ratios.

“Gravity is the result of over a decadeof experience creating mortgage specif-ic software applications,” said WilliamDiPaolo, Cogent Road’s chief executiveofficer. “The outcome is a CRM/LMS thathelps loan officers close faster, manageopen opportunities easily and capturenew leads from more sources.”

After using customized InterviewWizards to capture a prospect’s basicapplication data, the loan originatorprovides a real-time comparison of thefinancial benefits of up to three differ-ent loan choices. Interactive charts helpthe applicant visualize the savingsgained over specific time periods, ascompared to their current loan. Theprospect receives a full-color summaryof the loan program options, along withthe loan officer’s photo and contactinformation. When necessary, loan offi-cers can also create multiple 1003s withup to five different borrowers on a sin-gle application.

“Our experience working with third-party systems helped us integrate FHAScorecard and the Price My Loans pric-ing engine seamlessly into Gravity,”DiPaolo said. “Loan officers can easilyretrieve accurate FHA eligibility andloan pricing options while on a singlecall with the applicant. The goal is tohelp them gain commitment and lockup the lead as soon as possible.”

Titan Lenders to BeginOffering Loan Processingand UnderwritingServices

T i tan Lender sCorporation has

announced that it is now providingmortgage processing and underwritingservices, and has also announced thehiring of underwriting expert and mort-gage industry veteran Jan Conner tomanage its new service offering.

“Titan’s 360 degree view of the loanorigination lifecycle has given us a deepinsight into how minor processing andunderwriting glitches can add an enor-mous level of risk to lenders that other-wise have high origination standards,”said Titan president Mary Kladde. “Byadding processing and underwriting toour flagship fulfillment services, we helpmortgage lenders close the post-applica-tion origination loop, ensuring dataintegrity and quality through purchasing.”

Conner brings more than 20 years’mortgage industry experience to her

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new role at Titan. Previously, Connerhas been involved in processing andunderwriting departments for regionaloffices of some of the largest lendersand financial institutions in the U.S.She also has extensive experience man-aging underwriting and operations withsmall- to mid-sized lenders, giving her abroad perspective on achieving qualityand superior customer service at anyvolume level.

“Outsourcing underwriting elimi-nates a potential source of human errorand risk for mortgage lenders—espe-cially those that are growth orientedand risk averse,” Conner said. “My goalin leading Titan’s processing andunderwriting service is to provide top-shelf customer service with the highestpossible quality to ensure the salabilityof our clients’ loans.”

New Short SaleTechnology Launched by Wingspan

Wingspan Portfolio Advisors andWingspan Real Estate Network (WREN)have announced the creation ofWingspan Commander, a full-featuredshort sale technology and service plat-form for real estate professionals.Powered by Elk Software’s transactionmanagement technology, Short SaleCommander, this new initiativeempowers real estate agents, brokersand franchises with fast, professional,full-service short sale facilitation, nego-tiation and closing services nationwide.

Wingspan’s WREN affiliate has beenoffering short sale facilitation to thereal estate community since commenc-ing operations in 2011. The addition ofthe Wingspan Commander technologyprovides new levels of transparency,communication and ease of use forbusy real estate professionals, savingthem tremendous time and effort whileincreasing short sale success.

As part of the new collaborationwith Short Sale Commander,Wingspan will also offer access to theWingspan Certified Short Sale, a pre-contract review service that identifiespotential obstacles earlier in theprocess than in ordinary short saletransactions. With its Certified ShortSale and loan servicing expertise,Wingspan is able to accelerate theshort sale process up to 50 percentfaster than industry averages, benefit-ing all parties to the transactions.

“As an industry, agents and home-owners often wait for weeks andmonths only to find out that a shortsale file has been declined by a ser-vicer based on an issue that couldhave been identified and remediedearlier in the transaction,” says ChrisPlummer, Wingspan Portfolio Advisorsvice president and managing directorof WREN. “Wingspan’s experience withservicers, investors and mortgageinsurance companies allows us toidentify these issues and assist thehomeowner and agent in resolvingthem before an offer is submitted.”

Quandis and CSC Partner onShort Sale Tracking System

Computer ScienceCorporation (CSC)

has announced that it has teamed withQuandis to offer CSC’s EarlyResolution clientsand prospects a new short sale tracking andfulfillment portal to accelerate processingcycles. This benefits consumers who wish tosell their homes instead of foreclosing andreduces losses for mortgage investors.EarlyResolution is CSC’s lending defaultmanagement system, which, together withthe complementary functionality fromQuandis, will enhance coordination acrossthe entire mortgage loss mitigation lifecycle, including short sales, helping mort-gage servicers to improve communicationsand provide a single point of contact (SPOC)for borrowers.

Under the agreement, CSC and Quandiswill build and maintain a Web-based dataexchange interface to facilitate short saleoffers between servicers, agents, borrowersand investors in one platform. Through theSoftware as a Service (SaaS) offering, userscan coordinate time-sensitive informationand provide a single audit trail from initialborrower contact through short sale plancompletion. The interface will improveoperating efficiencies and reduce shortsale case cycle times, increasing the proba-bility of short sale approval.

“Short sales are becoming more prevalentas the mortgage delinquency pipeline movesfrom retention toward litigation,” said ScottStoddard, chief executive officer of Quandis.“Approximately 30 percent of short salerequests conclude with the sale of the home,and we are looking to significantly increasethis percentage through our collaborationwith CSC, thereby reducing the likelihood offoreclosure for borrowers in default.”

“This joint effort offers servicers asophisticated and flexible short sale pro-cessing and tracking system that willimprove loss mitigation decision-makingand short sale results,” said John Dickson,president of CSC’s Banking and CreditServices Division. “EarlyResolution clientsgain a highly secure, integrated tool toimprove the short sale fulfillment ratio andenhance multi-party communication.”

EarlyResolution is a leading consumerlending default management solutionoffered in a SaaS environment. In use by thetop three U.S. mortgage servicers,EarlyResolution assists in finding effectivesolutions when borrowers are in default,improves collections and loss mitigationoperating efficiency, and helps servicers reactquickly to regulatory and other changes.

Your turnNational Mortgage Professional Magazineinvites you to submit any information pro-moting new “niche” loan programs, newproducts or any other announcementrelated to the introduction of a new pro-gram, to the attention of:

New to Market columnPhone #: (516) 409-5555


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

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Finding and AttractingGood Customers is All

About PreparationGrowing your business is essential, and finding those perfect prospects can be extremely dif-ficult. The benefits of having a reliable marketing campaign are having the ability to grow atyour own rate, and plan for the future no matter where the mortgage industry takes you.Thefollowing three factors MUST be considered before setting out to accomplish this task.

1. You have to be willing to pay for good customers

To find out how much you have to pay, do the math: Total dollars spent with your companyminus cost of goods sold. Then, subtract your desired profit margin. What you have left is areasonable amount you could spend to acquire a new customer. The average acquisitioncost per customer in the mortgage industry is between $600 and $1,200. If you’ve never doneany marketing before, you might want to budget for the higher end of that.You can take thatacquisition cost and multiply it by the amount of new customers you want per month to de-termine your monthly budget. Don’t worry if this number seems astronomically high.You willwant to ramp up to that over a period of time.

2. Take a look at your sales approach

Do you hard sell people your product, or do you wait for them to ask how they buy it? If youare salesperson, you’ll be able to keep your acquisition costs low. If not, you are going to needto come to terms with spending more money to get someone else to do it for you. Maybe it’sthe marketing piece, or maybe you’ll have to hire salespeople. It is always more cost-effec-tive to do the work yourself, but anyone can have an effective marketing campaign regard-less of their own sales ability. Knowing how you best sell will allow you to find the right typeof marketing campaign for your own needs.

3. Dissect your close ratio

Some people know this number like they know their own birthday. Others will have to cal-culate it. To do so, take the number of loans you closed over the last 90 days and divide thatnumber by the total number of “leads” (or interested prospects). That will give you a rea-sonable close ratio. One should find themselves anywhere from 5 percent to 15 percent onaverage. Don’t think that you’re going to close any leads at 80 percent just because you canclose referrals at that rate. This is marketing, not networking.

Key factors that contribute to the overall success of your campaign:� Planned growth: How many new customers you want to add every month;� Acquisition cost: How much you can afford to spend per customer;� Approach: The best type of marketing to work with your abilities and your budget;� ROI: The expected return on your investment (ROI).

Now that you know where you stand, you can begin asking around about what market-ing programs fit within your acquisition cost and your sales style. Talk to your colleaguesabout the marketing campaigns they’ve done that have worked. Direct mail, mortgage leads,live transfers, data lists, etc. … these types of campaigns are all tried and true, and will fitinto most any marketing strategy. Don’t try to take this on yourself. You are a mortgage pro-fessional, not a marketing expert. So, let the pros guide you through the process: call a mar-keting firm, NOT A LEADS COMPANY. A marketing firm. There’s a BIG difference.

You’ll want to talk with people who understand your business.There are a handful of thesecompanies that will actually take the time to explain what works, what doesn’t and why.You’ll be able to rule out certain types of marketing and advertising because they either don’tmatch your sales style, or they don’t match your budget. Better to know upfront than afteryou’ve spent your hard earned money.

Once you find the right program, test it a few times on a small level. Don’t blow your wholemarketing budget on the first trial. Test, test and re-test. Once you prove that it is profitable,THEN spend every dollar you can spare on it. In fact, you might want to consider getting an-other credit card because you’re going to earn a lot more money than you’ll pay in interest!

Medford, Ore.-based TagQuest is a full-service marketing firm created specifically for theever-changing business world. TagQuest assists companies with their direct marketing, ad-vertising and branding needs, and knows what it takes to generate quality customers and,most importantly, how to retain those customers for years to come. TagQuest brings forth aunique opportunity to utilize our experience and expertise in varying consumer sales andmarketing environments. For more information, call (888) 717-8980 or visit Tagquest.com.

Sponsored Editorial


Treasury’s MBSInvestment Nets $25 Billion PositiveReturn for Taxpayers

The U.S. Department of the Treasuryhas announced the completion of theorderly wind down of its agency-guar-anteed mortgage-backed securities(MBS) portfolio, which it acquired aspart of its response to the financial cri-sis. Overall, Treasury’s MBS portfoliogenerated a positive return of $25 bil-lion for taxpayers. The Treasury invest-ed $225 billion in MBS during 2008 and2009 through authority provided to itby Congress under the Housing andEconomic Recovery Act of 2008 (HERA).These MBS purchases helped preserveaccess to mortgage credit during a peri-od of unprecedented market stress.Overall, taxpayers received total cashreturns of $250 billion from this MBSportfolio through sales, principal, andinterest—$25 billion more than theirinitial investment.

“The successful sale of these securi-ties marks another important milestonein the wind down of the government’semergency financial crisis responseefforts,” said Assistant Secretary forFinancial Markets Mary Miller. “Thisprogram helped support the housingmarket during a critical moment for ournation’s economy and delivered a sub-stantial profit for taxpayers.”

In March 2011, in light of improvedmarket conditions, Treasury announcedthat it would begin the orderly winddown of its MBS portfolio through thegradual sale of those securities overtime. Those sales were part of Treasury’scontinued efforts to exit the emergencyfinancial crisis response programs thatwere put in place in 2008 and 2009.

Foreclosure InventorySurpasses the 1.4 MillionMark in January

CoreLogic hasreleased itsNational Fore-closure Reportfor the monthof January ,

which provides monthly data on com-pleted foreclosures, foreclosure inven-tory and 90-plus delinquency rates.There were 69,000 completed foreclo-sures in January 2012, compared to80,000 in January 2011, and 65,000 inDecember 2011. The number of com-pleted foreclosures for the previous 12months was 860,128. From the start of

the financial crisis in September 2008,there have been approximately 3.3 mil-lion completed foreclosures.

“We are encouraged by the notice-able progress we are seeing over thelast several months in the mortgageindustry,” said Anand Nallathambi,chief executive officer of CoreLogic.“During the last several years theindustry has faced enormous chal-lenges working through difficult andcomplex issues. We are hopeful thatthese recent improvements are earlysignals of revitalization in the mort-gage market.”

Approximately 1.4 million homes, or3.3 percent of all homes with a mort-gage, were in the foreclosure inventoryas of January 2012 compared to 1.5million, or 3.6 percent, in January 2011and 1.4 million, or 3.4 percent, inDecember 2011. Nationally, the num-ber of loans in the foreclosure invento-ry decreased by 145,000, or 9.5 percentin January 2012 compared to January2011. The foreclosure inventory is thestock of homes in the foreclosureprocess. A property moves into theforeclosure inventory when the mort-gage servicer places the property intothe foreclosure process after seriousdelinquency is reached and remainsthere until the foreclosure is complet-ed. The foreclosure inventory is meas-ured only against homes with an out-standing mortgage, rather than againstall homes. Nationwide, roughly onethird of homeowners own their homesoutright.

The share of borrowers nationallythat were more than 90 days late ontheir mortgage payment, includinghomes in foreclosure and real estate-owned (REO), fell to 7.2 percent inJanuary 2012 from 7.8 percent inJanuary 2011, but remained unchangedfrom December 2011.

The inventory of REO assets held byservicers nationwide grew faster inJanuary than the pace of REO sales, asmeasured by the distressed clearingratio. The distressed clearing ratio iscalculated by dividing the number ofREO sales by the number of completedforeclosures; the higher the ratio, thefaster the pace of REO sales relative tothe pace of completed foreclosures. Thedistressed clearing ratio for January2012 was 0.69, down from 0.80 inDecember 2011.

“The pace of completed foreclo-sures is gradually increasing again, butthe clearing ratio is falling as REO saleshave slowed in the winter months.Judicial foreclosure states1 are contin-uing to process foreclosures moreslowly than non-judicial foreclosurestates,” said Mark Fleming, chief econ-omist with CoreLogic. “Non-judicialforeclosure states completed almosttwice as many foreclosures per 1000active loans as judicial foreclosurestates in January.”

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GSEs Complete 1.1Million Permanent Loan Mods

The govern-ment - spon-sored enter-prises (GSEs),Fannie Maeand Freddie

Mac, completed more than 2.1 millionforeclosure prevention actions sincethe start of conservatorship including1.1 million permanent loan modifica-tions. These actions, designed to helpborrowers stay in their homes, aredetailed in the Federal Housing FinanceAgency’s Q4 2011 ForeclosurePrevention and Refinance Report. Thereport also shows that after ninemonths, fewer than 20 percent of theGSE loans modified in the four quartersended March 31, 2011, had missed twoor more payments, an improvementover prior years.

With this report, FHFA releases newstate data sets and launches an interac-tive Fannie Mae and Freddie Mac StateBorrower Assistance Map, showing thenumber of loans owned or guaranteedby Fannie Mae and Freddie Mac, delin-quencies, foreclosure prevention activi-ties, real estate-owned (REO) properties,and refinances in each state. In addi-tion, the report now includes a graphicshowing Delinquent Loans by State andProfiles of Key States, with detailedinformation about states with thebiggest five-year decline in house pricesand the highest number and rate ofseriously delinquent loans.

Other findings in the Q4 2011Foreclosure Prevention and RefinanceReport:� The GSE’s cumulative Home

Affordable Refinance Program(HARP) refinancings increased 10percent in the fourth quarter of2011.

� Half of all borrowers who receivedloan modifications in Q4 of 2011had their monthly paymentsreduced by over 30 percent, andone-third included principal for-bearance.

� Serious delinquency rates for FannieMae and Freddie Mac loans remainbelow industry levels and continueto decline.

� Florida had the highest number ofserious delinquencies at the end ofthe fourth quarter.

� California had the largest number ofcompleted foreclosure preventionactions since the beginning of con-servatorship in 2008.

AmericaHomeKey Cited by HUD for FHA Violations

The Mortgagee Re-view Board (MRB)for the U.S. Depart-ment of Housing &Urban Development

(HUD) has announced that it is immedi-ately and permanently withdrawingapproval for AmericaHomeKey Inc.(AHK) to originate and underwrite new

mortgages insured by the FederalHousing Administration (FHA). In addi-tion, the MRB is imposing $268,000 inpenalties against the Dallas-based mort-gage lender for repeated and seriousviolations of FHA requirements.

“When we begin to see a pattern offailure to apply our standards, we willact to protect FHA’s financial health aswell as consumers,” said Acting FHACommissioner Carol Galante. “Weexpect lenders to meet our require-ments, not just to protect the safety ofour insurance fund but to make certainthey don’t set up borrowers to fail byputting them into mortgages they ulti-mately can’t sustain.”

Among more than a dozen violationsof FHA standards, the MRB found AHK:� Failed to adequately document the

source and/or adequacy of borrow-ers’ funds used for closing;

� Failed to correctly calculate or ade-quately document borrowers’income;

� Failed to verify the stability of bor-rowers’ income;

� Failed to ensure borrowers were eli-gible for an FHA-insured mortgageloan;

� Failed to ensure the property meteligibility requirements;

� Failed to comply with HUD’s proper-ty flipping requirements, including acase involving a property purchasedfor $14,100 that was resold approxi-mately three months later for$125,000; and;

� Charged borrowers unallowablefees.Ginnie Mae also terminated AHK as

an approved issuer, though AHK wasnot an active participant in the GinnieMae program having never issuedGinnie Mae securities in the past.

SEC Charges ThreeThornburg MortgageExecs With AccountingFraud

The Securities& ExchangeCommission

(SEC) has charged the senior-most exec-utives at Thornburg Mortgage Inc. withhiding the company’s deterioratingfinancial condition at the onset of thefinancial crisis. The plan backfired andThornburg lost 90 percent of its value injust two weeks. The SEC charges thatThornburg Mortgage Chief ExecutiveOfficer Larry Goldstone, Chief FinancialOfficer Clarence Simmons, and ChiefAccounting Officer Jane Starrettschemed to fraudulently overstate thecompany’s income by more than $400million and falsely record a profit ratherthan an actual loss for the fourth quar-ter in its 2007 annual report. In actuali-ty, Thornburg was facing a severe liq-uidity crisis and was unable to make on-time payments for substantial margincalls it received from its lenders in theweeks leading up to the filing of itsannual report on Feb. 28, 2008. On May1, 2009, TMST Inc., formerly known asThornburg Mortgage Inc. and its sub-sidiaries, filed for Chapter 11 bankrupt-

cy protection in U.S. Bankruptcy Courtfor the District of Maryland.

According to the SEC’s complaintfiled in federal court in New Mexico,even though Thornburg was violatinglending agreements by failing to makeon-time payments, the executives wereunwilling to disclose the severity oftheir liquidity crisis to investors andThornburg’s auditor. For example, in aFeb. 25 e-mail from Starrett toGoldstone and Simmons, she said, “Wehave purposefully not told [our auditor]about the margins calls.” Goldstone,Simmons, and Starrett scrambled to sat-isfy all outstanding margin calls andthen timed the filing of the annualreport to occur just hours later in orderto precede additional margin calls andavoid full disclosure. As Goldstone hadearlier stated to Simmons and Starrettin an e-mail, “We don’t want to discloseour current circumstance until it isresolved.” The intention was “to keepthe current situation quiet while wedeal with it.”

The SEC alleges that the plan byGoldstone, Simmons, and Starrett tonever disclose the delayed margin callpayments fell through when they wereunable to raise cash quickly enough tomeet more margin calls received soonafter filing the annual report. WhenThornburg began to default on this newround of margin calls, it was forced todisclose its problems in 8-K filings withthe SEC. By the time the company filedan amended annual report on March11, its stock price had collapsed bymore than 90 percent. Thornburg neverfully recovered and filed for bankruptcyin May of 2009.

“The truest test of corporate execu-tives’ commitment to full and accurateshareholder disclosure comes not dur-ing times of soaring profits and double-digit growth, but when companies areunder financial stress and shareholdershave the greatest need for accurateinformation,” said Robert Khuzami,director of the SEC’s Division ofEnforcement. “These Thornburg execu-tives flunked that test by issuing a seriesof misleading statements and half-truths to conceal Thornburg’s rapidlydeteriorating situation.”

The SEC has now filed financial crisis-related enforcement actions against 98individuals and entities, including morethan 50 chief executive officers, chieffinancial officers, and other senior cor-porate officers.

According to the SEC’s complaintagainst the Thornburg executives, thecompany was based in Santa Fe, N.M.,and considered the nation’s second-largest independent mortgage compa-ny after Countrywide. In addition to itslending business that focused onjumbo and super-jumbo loans, andadjustable-rate mortgages (ARMs),Thornburg purchased and held ARMsecurities and also securitized ARMloans. In order to finance its mortgagebusiness and investment-related activi-ties, Thornburg needed constant accessto financing, which included moneyborrowed from various lenders pur-

suant to reverse repurchase (repo)agreements. The repo agreementsrequired Thornburg to maintain adegree of liquidity and subjected thecompany to margin calls if the valueof its ARM securities serving as collat-eral for its loans fell below designatedthresholds. Thornburg was generallyrequired to pay cash to reduce itsloan amount or pledge additional col-lateral to the lender either the sameday or the day following a margincall.

In the weeks leading up toThornburg’s annual report filing, thecompany received more than $300 mil-lion in margin calls that severelydrained its liquidity. Thornburg waslate in meeting the margin calls from atleast three lenders and received a reser-vation of rights letter from one con-firming that Thornburg was in violationof its lending agreement and could bedeclared in default at any time.Unwilling to disclose these events andthe extent of the liquidity crisis,Thornburg executives improperly deter-mined that more than $400 million inmarket value losses related to its ARMsecurities were temporary and there-fore did not need to be recognized inthe company’s income statement.

The SEC alleges that Goldstone,Simmons, and Starrett engaged in ascheme to deceive Thornburg’s auditorand investors into believing thatThornburg had successfully met allmargin calls. Keeping the extent of itsmargin call crisis quiet and relying onthe cooperation and forbearance of itslenders, Thornburg was able to makethe final payment on its margin callsapproximately 12 hours before filing itsannual report. Knowing that itsreprieve from outstanding margin callswas only temporary and additionalmargin calls were likely in light of Feb.27 news that a large European hedgefund holding substantial mortgage-backed securities like Thornburg’s ARMsecurities was about to collapse,Thornburg filed its annual report at4:00 a.m. local time on Feb. 28. Theexecutives’ urgency to file the annualreport before the negative impact ofthe hedge fund’s collapse was evidentin an e-mail that Simmons sent toStarrett saying that he gave Thornburg’sSEC reporting manager “a 6:00 a.m.Thursday deadline to file the K. I do notwant there to be any issues based onThursday activity.”

According to the SEC’s complaint,Thornburg’s financial condition and liq-uidity immediately continued to deteri-orate after filing its annual report. By6:00 a.m., Thornburg began to receiveadditional margin calls that exceededits available liquidity by 7:30 a.m.Nevertheless, even as Thornburg’s stockprice dropped in the hours and daysfollowing the annual report filing,Goldstone and Simmons continued topublicly project the same false financialcondition they had presented in theannual report, and they encouraged


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becoming an involved leader continued from page 44

or in the case of people with intermedi-ate ARMs (fixed for a certain period), forfive years forward commencing uponthe expiry date of the initial fixed peri-od, whenever that may be, with thelender having no recourse to make upthe lost margin income in either case.This would have the immediate impactof reducing interest rates by as much as6.5 percent for sub-prime loans; 4.25percent for option ARMs; and 3.5 per-cent for intermediate ARMs.

II. ESTABLISH THE ARM MARGINHOMEOWNER CHOICE PROGRAM

Upon expiry of the five- or seven-yearMargin Reduction Period, the home-owner would receive a statement fromtheir loan servicer, with the followinginformation and menu of choices:� Current margin, current index rate

and loan balance� Three choices of margin rate:

Continuing the 0.25 percent marginfor another year; having a margin ofone percent for one-year; or havingthe reduced full margin rate of 2.25percent for one-year. If the con-sumer chooses either of the tworeduced margins, the reduction ofincome to the loan servicer from thereduced margin income would beadded to the loan balance payoff atthe end of the loan. The choicesallowed the consumer would givethem the flexibility to keep theirpayment lower if still necessary afterthe initial three-year MarginReduction Period.

III.PERMANENT REDUCTION OF MARGIN AND IMPOSITION OF AMAXIMUM MARGIN CAP

Impose a maximum margin of 2.25 per-cent on all new ARMs, and currentlyexisting ARMs.

Results and effects of this solution1. Upon passage of this Act, everyone

who has an ARM loan would havetheir payment immediately reducedin half or more, not only because ofreduction of margins, but also par-ticularly because current indexesare very low due to the economiccrisis. This would include homeown-ers not included in PresidentObama’s current plan, and thoseconsumers not in trouble who mayhave been resentful of other effortsat mortgage relief—lower paymentbenefits for everyone, owner-occu-pied, second home, investment,conforming and jumbo.

2. Doesn’t force a principal balancereduction on loan servicers andinvestors, but removes their exces-sive profit margins fairly and perma-nently, while conversely eliminatingthe “toxic” aspect of the loan portfo-lios. This would be accomplished

because of the newly restored abilityof consumers to make their pay-ments in a timely manner, loandelinquency ratios should decreasedramatically, thereby restoring theintegrity of the loan portfolio heldfor servicing and improving the bal-ance sheet of the institution holdingthe portfolio.

3. Offers a solution directly to thehomeowner, creating perceived andreal consumer empowerment, help-ing to offset the resentment createdby the endless multi-billion dollarbailout of the banks and big corpo-rations. It definitively helps “the lit-tle guy” by immediately loweringtheir payment, giving them the

power to manage their loan more totheir benefit and control, and re-establish neighborhood stability.

4. Neighborhood stability would berestored because homeownerswould be able to afford their pay-ments at least for the next five toseven years, providing the elusivefoundation that the economy needsto recover from the current reces-sion. Homeowners would stay intheir homes, greatly reducing thenumber of distressed properties onthe market, and halting the down-ward spiral on property values. Thiswould have a greatly beneficialimpact on neighbors, and localmunicipalities, whose tax bases areeroding with property tax revenuesdeclining. It would also provide theconfidence necessary to encouragefirst-time homebuyers and other“fence sitters” to get out and buy

available properties, with the resultof reducing current inventories, andfurther firming up property values.

5. The money saved every month byhomeowners could be used by themto reduce their onerous credit carddebt and other consumer debt,helping to avert the next loomingcredit crisis. Also, the monthly sav-ings could be used to revive con-sumer spending on pent up demandfor new cars, and other items, help-ing the economy to recover morequickly, since consumer spendingaccounts for 70 percent of theAmerican economy.

George L. Duarte, MBA, CMC, CRB, CG-REP ispresident/broker/REALTOR with California-based Elite Real Estate Properties/HorizonFinancial Associates. He may be reached byphone at (510) 377-9059 or [email protected].

APPENDIX

TABLE 1Popular ARM Indexes, their October 2011 values; fully-indexed rates and payments with full margins for a $300,000 loan amount.Index 10/11 Values Usual Margins Fully-Indexed P & I Payment

Rate for a $300,000 Loan One-Year CMT 0.12 2.75 2.87% $1,243.88Three-Year CMT 0.41 2.75 3.16% $1,290.85Five-Year CMT 0.99 2.75 3.74% $1,387.6512-MonthMTA 2.02 2.75 4.77% $1,568.56

Option ARM IndexesIndex 10/11 Values Usual Margins Fully-Indexed P & I Payment

Rate for a $300,000 Loan COFI 1.27 3.5 4.77% $1,568.56CODI 0.2758 3.5 3.78% $1,394.46

Sub-Prime ARM IndexesIndex 10/11 Values Usual Margins Fully-Indexed P & I Payment

Rate for a $300,000 Loan

Six-Month LIBOR 0.400 5.5 5.90% $1,779.41

One-Year LIBOR 0.72 5.5 6.22% $1,841.30

TABLE 2The same indexes with the proposed reduced margins fully-indexed rate, and resulting lower P & I payments.Index Values Reduced New Lower New P & I Monthly

Margins Interest Rate SavingsOne-Year CMT 0.12 0.25 0.37% $880.57 $363.31Three-Year CMT 0.41 0.25 0.66% $918.78 $372.07Five-Year CMT 0.99 0.25 1.24% $998.35 $389.3012-Month MTA 2.02 0.25 2.27% $1,149.80 $418.76

Option ARM IndexesIndex Values Reduced New Lower New P & I Monthly

Margins Interest Rate SavingsCOFI 1.276 0.25 1.53% $1,039.68 $528.88CODI 0.276 0.25 0.526% $900.99 $493.47

Sub-Prime Loan IndexesIndex Values Reduced New Lower New P & I Monthly

Margins Interest Rate SavingsSix-Month LIBOR 0.400 0.25 0.65% $917.45 $861.96One-Year LIBOR 0.720 0.25 0.97% $960.79 $880.51

These tables clearly indicate the very substantial benefit to the homeowner in monthly payment reductions resulting fromreducing the profit margins on ARMs.

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the company’s investor relations groupto do the same. Privately, reflecting onthe company’s stock price drop,Simmons commented in an e-mail toGoldstone soon after the annual reportwas filed, “I guess the recent develop-ment section did not go over well. Ifthey only knew.”

The SEC’s complaint chargesGoldstone, Simmons, and Starrett withviolations of the anti-fraud, deceit ofauditors, reporting, record keeping,and internal controls provisions of thefederal securities laws. The complaintseeks officer and director bars, dis-gorgement, and financial penalties.

HUD Charges Bank ofAmerica WithDiscrimination AgainstDisabled Homebuyers

The U.S. Departmentof Housing & UrbanDevelopment (HUD)has charged Bank ofAmerica with discrim-inating against home-

buyers with disabilities. HUD claimsthat Bank of America imposed unneces-sary and burdensome requirements onborrowers who relied on disabilityincome to qualify for their home loansand required some disabled borrowersto provide physician statements toqualify for home mortgage loans. TheFair Housing Act makes it illegal to dis-criminate in the terms and conditionsof a loan to an individual based on adisability, including imposing differentapplication or qualification criteria,and makes it illegal to inquire aboutthe nature or severity of a disabilityexcept in limited circumstances notapplicable here.

“Holding homebuyers with disabili-ties to a higher standard just becausethey rely on disability payments as asource of income is against the law,”said John Trasviña, HUD AssistantSecretary for Fair Housing and EqualOpportunity. “Mortgage companiesmay verify income and have eligibilitystandards but they may not single outhomebuyers with disabilities to delayor deny financing when they are other-wise eligible.”

HUD’s charge is based on a“Secretary-initiated investigation,” andthe investigation of complaints filed bytwo individual borrowers in Michiganand one borrower in Wisconsin whoclaimed that Bank of America requiredthem to provide personal medicalinformation and documentationregarding their disability and proof ofcontinuance of their Social Securitypayment in order to qualify for a homemortgage loan. The charge is also beingissued as part of the work being con-ducted by the Federal Financial FraudEnforcement Task Force’s non-discrimi-nation working group.

According to HUD’s charge, Bank of

America allegedly asked some borrow-ers for proof of their disabilities andsought evidence of the continuation oftheir Social Security income beforeapproving loans, after first denyingthem. The matter will now be handledby the Department of Justice (DOJ).

75,000 Loan ModsReported Completed in January

HOPE NOW hasreleased its Jan-uary 2012 loanmodi f i ca t iondata , wh ich

shows that an estimated 74,000 home-owners received permanent, affordableloan modifications from mortgage ser-vicers in the first month of 2012. Thereported data for January shows thatmortgage servicers completed approxi-mately 56,000 proprietary loan modifi-cations for homeowners and 17,992Home Affordable Modification Program(HAMP) modifications (as reported byU.S. Department of the Treasury).Proprietary loan modifications contin-ued to show characteristics of sustain-ability, which the majority having lowerprincipal and interest monthly pay-ments as well as fixed interest rates offive years or more. This trend has beenconsistent with data from previousmonths.

The January data also showed thatforeclosure sales slightly outpaced loanmodifications for the first time sinceOctober of 2009. For the month ofJanuary, there were approximately79,000 completed foreclosure sales.Delinquencies of 60 days or more con-tinued to remain flat at about 2.77 mil-lion, or approximately six percent of allloans.

“HOPE NOW and its members havecharged full speed into 2012 in theongoing collaborative efforts to assistat-risk homeowners,” said FaithSchwartz, executive director of HOPENOW. “Loan modifications continue at asteady pace and proprietary mods con-tinue to show real signs of sustainabili-ty and affordability for homeowners.This is important to note, as these char-acteristics are vital to housing marketrecovery.”

Highlights of the January 2012 dataincludes:� Total permanent loan modifications

were approximately 74,000� Approximately 56,000 were propri-

etary� 17,992 were completed under HAMP� Completed foreclosure sales were

approximately 79,000.� Loan modifications with reduced

principal and interest paymentsaccounted for approximately 67 per-cent (38,000) of all proprietary mod-ifications.

� Fixed-rate modifications (initialfixed period of five years or more)

accounted for 89 percent (50,000) ofall proprietary modifications.

� 60-plus days delinquencies forJanuary 2012 were 2.77 million.

Study Finds the AverageAge of Reverse MortgageBorrower on the Decline

A new study from theMetLife Mature MarketInstitute shows theage of those seeking aHome Equity Conver-

sion Mortgages (HECM) has plummetedin the four years since the collapse ofthe housing market in the U.S. Thestudy also finds that reverse mortgageshave evolved into a way for many olderBaby Boomers to help manage urgentfinancial needs. Boomers, age 62–64,currently represent one-in-five prospec-tive borrowers of the product, whichwas once associated with a much olderage group.

“Changing Attitudes, ChangingMotives: The MetLife Study of HowAging Homeowners Use ReverseMortgages,” produced in conjunctionwith the National Council on Aging(NCOA), reports that the average age ofthose who have gone through reversemortgage counseling has declined andis now 71.5 years of age. The U.S.Department of Housing & UrbanDevelopment (HUD) reports a similardecline in the average age of borrowersto age 73. Forty-six percent of home-owners considering a reverse mortgageare under age 70. The percentage of 62-to 64-year-olds who are prospectiveborrowers has increased 15 percentagepoints since 1999, despite the fact thatyounger applicants have had loweravailable loan limits.

Data for the study was collected byHUD-approved counselors as part ofmandatory counseling for all reversemortgage applicants. BetweenSeptember and November 2010, coun-selors completed 21,240 of these coun-seling sessions. Approximately 67 per-cent of recent counseling clients alsohave a conventional mortgage that willneed to be repaid if they decide to takeout a reverse mortgage, the studyfound. About 27 percent of the respon-dents reported having both housingand non-housing debt. Borrowers withsizable existing debt may rapidlydeplete home equity.

“Consumer attitudes about reversemortgages are changing because therecession has eroded confidence aboutretirement security and Americans willrely more and more on these measures,”said Sandra Timmermann Ed.D., directorof the MetLife Mature Market Institute.“As reverse mortgages do not haveincome requirements and since otherforms of credit have become less accessi-ble, these loans will become more attrac-tive, though it is worth noting that theDepartment of Housing and UrbanDevelopment stated recently that lendersmay conduct financial assessments ofapplicants to ensure that they have theability to meet their loan obligations.”

Barbara Stucki, Ph.D., vice president

for home equity initiatives for NCOA,added that going forward there is agood chance home equity will evolvefrom being an emergency measure toone that is part of a strategic retire-ment plan.

“While the economic downturn maybe a major reason borrowers havebegun to use this financial option fordebt management, in the future it islikely that tapping home equity will beviewed as part of the entire retirementplanning process,” said Dr. Stucki. “It islikely the reverse mortgage option willbe considered alongside some of themore traditional methods of saving andinvestment.”

FHA Cuts Could SaveBorrowers $3,000Annually

Acting Federal HousingAdministration (FHA)Commissioner CarolGalante has announcedsignificant price cuts to

the FHA’s Streamline RefinanceProgram that could benefit millions ofborrowers whose mortgages are cur-rently insured by FHA. Beginning June11, 2012, FHA will lower its UpfrontMortgage Insurance Premium (UFMIP)to just 0.01 percent and reduce itsannual premium to 0.55 percent forcertain FHA borrowers.

To qualify, borrowers must be cur-rent on their existing FHA-insured mort-gages which were endorsed on orbefore May 31, 2009. Late last month,FHA also announced it will increase itsupfront premiums on most other loansby 75 basis points to 1.75 percent. Inaddition, FHA will raise annual premi-ums 10 basis points and 35 basis pointson mortgages higher than $625,500.

“This is one way that FHA can makea real difference to help homeownerswho are doing the right thing, payingtheir bills on time and want to takeadvantage of today’s low interest rates,”said Galante. “By significantly reducingcosts for these borrowers, we can makecertain they cut their monthly mort-gage burden which will benefit thehousing market and the broader econ-omy in the process.”

Currently, 3.4 million householdswith loans endorsed on or before May31, 2009, pay more than a five percentannual interest rate on their FHA-insured mortgages. By refinancingthrough this streamlined process, it’sestimated that the average qualifiedFHA-insured borrower will save approx-imately $3,000 a year or $250 permonth. FHA’s new discounted pricesassume no greater risk to its MutualMortgage Insurance (MMI) Fund andwill allow many of these borrowers torefinance into a lower cost FHA-insuredmortgage without requiring additionalunderwriting. FHA-insured homeown-ers should contact their existing lenderto determine their eligibility.

The Obama Administration recentlyannounced a broad package of actions


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By Leif Boyd

In the February 2012issue of NationalMortgage ProfessionalMagazine, I wrote anarticle titled “The TopFive Things to Know

to Start Your Career as an LO” (seepage 27). Now, I want to providesome tips on how to improve an exist-ing loan origination (LO) business.The five strategies listed below areones that some of my colleagues andI have used to build our businesses.

1. Create a business planIn the beginning of a career, manyLOs are diligent about making a plan,developing goals, creating timelinesfor success and creating strategies toachieve specific objectives. However,as LOs get busy, they often just keepdoing the same thing day after day,year after year.

Taking the opportunity to create abusiness plan each year is a hugeopportunity for LOs. It may seem liketaking a day or even a week off to cre-ate such a plan is too time-consum-ing, but the end result is worth it. LOs

are often stuck working in their busi-nesses and not on their businesses;however, taking the time to refocusand build a new business plan cankeep a business from growing stag-nant and declining.

Creating a plan means taking thetime to step back, assess success,identify failures and develop goals topave the way to a successful future.

� Assess success: Take a look backover the last year and see whatworked. Was it meeting withclients? Utilizing new technolo-gies? Hiring help? Constantly com-municating with clients through-out the loan process? Asking forreferrals? Once these successes areidentified drill down into each oneof them. Which clients were morelikely to give the best referrals?What technologies helped the mostand why? What steps during theloan process were the most impor-tant to be in contact with yourclients and why?

� Identify failures: Everyone makesmistakes. The important thing isthat we learn from those mistakes.Did a certain marketing piece not

meet expectations? Did a processfail repeatedly? Were there con-stant delays in loan processing?Was paperwork not collected fromclients that needed to be? Werenew LOs and staff not properlytrained in their essential job func-tions? Once these failures are iden-tified, ask if they have been cor-rected and if new processes havebeen put in place to limit similarfailures in the future.

� Develop goals: Having goals isessential to growing an LO busi-ness. Goals can be about employ-ee retention, developing newbusiness leads, contacting pastclients for future referrals, closinga certain dollar amount of loansfor the year and so on. Dream bigabout both personal and businessgoals.

� Create a path: Goals are great, andcreating a path to reach thosegoals will turn lofty ideas into real-ity. If a goal is to contact pastclients for future referrals, thenidentify how many clients will becontacted each week. If a goal isemployee retention, what strate-gies will be used? It could be con-

tinuous training, developingincentive programs or team build-ing activities and lunches.

2. Continuous learningIf it was easy to be an LO there wouldbe more of them. Having a successfulcareer as an LO requires dedica-tion—it is not a 40-hour per weekcareer. Professional athletes play thesame sport, but still train and prac-tice regularly. Doctors may performthe same surgery countless times,but they still practice and learn newways of doing things that make thesurgery more successful, limit med-ical errors and reduce patient recov-

Top Five Thingsto Improve

Your Existing Business

“LOs are often stuck working in their businesses and not

on their businesses; however, taking the time to refocus andbuild a new business plan can keep a business from growing

stagnant and declining.”

Top Five Thingsto Improve

Your Existing Business

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and legislative proposals to helpresponsible homeowners save thou-sands of dollars through refinancing.This includes the changes announcedtoday that will benefit current FHA bor-rowers—particularly those whose loanvalue may exceed the current value oftheir home. By lowering monthly mort-gage costs for home-owners, FHA hopesto help more borrowers stay in theirhomes, thereby decreasing the poten-tial for future default and reducinglosses to the Mutual MortgageInsurance (MMI) Fund.

Loan WorkoutWrongdoing Remains Top Choice AmongFraudsters

The Financial CrimesEnforcement Net-work (FINCen) hasreleased its ThirdQuarter 2011 Up-

date of mortgage loan fraud suspiciousactivity reports (MLF SARs) that showsfinancial institutions filed 19,934 MLFSARs in the third quarter of 2011 upfrom 16,567 filed in the same quarterof 2010. The report also found that5,728 MLF SARs filed in the third quar-ter, 29 percent of the total, reportedactivity that occurred between October2009 and September 2011.

Some of the types of suspicious activ-ity reported included:� Some form of loan workout or debt

elimination attempt;� Questionable refinance or loan

modification attempts by borrowersor others targeting distressed home-owners; and

� Social Security number discrepan-cies submitted in the original loanapplication and the workoutrequest.“As housing markets look to recover,

criminals persist in their efforts to preyon struggling homeowners, while finan-cial institutions continue to uncoverapparent fraud as they work through

their portfolios of earlier mortgagesnow in default,” said FinCEN DirectorJames H. Freis Jr. “FinCEN will continueto monitor these reports and workclosely with law enforcement to helpthem track illicit actors.”

Nearly 62 percent of MLF SAR filingsreported in Q3 of 2011 involved suspi-cious activities that started four or moreyears ago. These filings, driving the con-tinued rise in the MLF SAR numbers,stem largely from mortgage repurchasedemands and special filings generatedby several depository institutions relat-ed to mortgages originated in theheight of the housing boom. Thismajority of filings involving past activitycompares with just 24 percent of MLFSARs reported in the third quarter of2010 where the activity started four ormore years ago.

FinCEN also released per capita rank-ings of MLF SARs subjects by state andby county. The top five counties rankedper capita and by SAR subject in thethird quarter were Santa Clara County,Calif.; Honolulu County, Hawaii; OrangeCounty, Calif.; San Bernardino County,Calif.; and Palm Beach County, Fla. Thetop five states ranked by per capita andby SAR subject were: Hawaii, California,Nevada, Florida and Delaware.

Your turnNational Mortgage ProfessionalMagazine invites you to submit anyinformation on regulatory changes, leg-islative updates, human interest storiesor any other newsworthy items pertain-ing to the mortgage industry to theattention of:

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

E-mail:[email protected]

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

Become a NationalMortgageProfessional.com Blogger! It's free and easy. Just head on over to NMPMag.com, register and

follow the link in the upper right hand side of the page to become a blogger on our site today!

Got an opinion? Want to share yourthoughts on the industry?

Undercove

r Boss: Le

ssons Lea

rned

Major EastTexas Mortgage F

raud Scheme: Out of Florida

203(k) Rehab Loan Program: Foreclosures Present Challenges, OpportunityNMLS and State Testing for Mortgage Professionals

ery time. As an LO, it is our responsi-bility to constantly better ourselvesand our business. We do this by read-ing articles in trade publications,attending training seminars, makingsure we know about the impacts ofnew regulations and knowing how tobest utilize new technologies.

If new technology or processes areidentified, it is important to deter-mine if they would be effective for aspecific office or individual LO. Takethe time to learn about the technolo-gy, see how it is being used and thentry it out, giving it a fair and honestreview. Adapting to new technologiesand new processes that work are whatkeeps LOs and their businesses grow-ing and successful. Not making thenecessary adaptations will put someLOs far behind their competitors andjeopardize who potential clientschoose to do business with.

3. Look backThis goes beyond looking back at suc-cesses from the past year as discussedin the “Business Plan” section. This isan opportunity to look at historicalsuccesses from an entire career as anLO. When speaking with new LOs, Ialways emphasize the importance ofreferrals and putting the customerbefore the commission. Over time, Isuspect that some LOs get so busythat they forget the original corner-stones of their success. When theyfirst started, perhaps they called fivepast clients a week to check in. Didthat practice stop? It is probably use-ful to make time in a busy scheduleto make these calls again. Did a newLO set aside a certain percentage ofincome for marketing? It may be timeto reevaluate a marketing budgetand stick to it. Direct mail, print ads,e-mail campaigns, social media andsocial networking, and digital ads allmay offer opportunities to reach outto potential customers. What othersimple strategies were used in anearly career to build a business? Goback and review those.

4. Evaluate witha business coachAll of the above strategies have beenabout an LO looking back at theirown business and finding ways toimprove it. Although this works verywell, sometimes it is necessary tobring in an outside set of eyes toaccurately assess the situation. Abusiness coach can look at a loanoriginators business independentlyand help discover what is really hap-pening within the organization. Thissecond set of eyes can createaccountability, not just to the busi-ness coach, but to themselves.

During the evaluation with a busi-ness coach a “SWOT analysis” mayalso be performed. This analysis willpoint out the LO’s and/or the busi-ness’s Strengths, Weaknesses,Opportunities and Threats. Taking anhonest look into each of the itemsmentioned by the business coach will

help the LO and/or the business suc-ceed and achieve each of its desiredgoals.

5. NetworkingNetworking is one of the most impor-tant parts of being a successful LO.The more people an LO interacts withregularly, the better the chance thatthey will receive referrals.Networking can be done in both for-mal and informal ways. Networking isnot a scary process, it is literally get-ting to know new people and beinginterested in what they are doingfirst. Once you ask what they do, theyare almost guaranteed to ask youwhat you do, giving you the opportu-nity to say what you do in 30 sec. toone min. Once LOs know how to net-work, the best ones figure out how towork networking into their everydaylives, while also attending eventsdesigned for networking.

Informal networking can be doneat sporting events or among friends.If a child plays soccer or is in gymnas-tics, do the other parents know whatyou do? Do you know what they do? Ifyou are on a softball team, do yourteammates know what you do? If youare at a graduation party or a back-yard barbeque, did you make a pointto meet five to 10 new people? Thenthere are events designed for net-working, ranging from chamber mix-ers to Tweetups, to grand openinggalas and community fundraisers. LOscan have a goal of how many newpeople they will meet at each event,how many events they will attendeach month and can make a plan ofhow they will follow up with eachnew contact. Building these relation-ships will help create future clientsand have a high likelihood of bring-ing in more referrals.

Utilizing these five strategies canhelp many LOs add new life to theirbusiness and careers. As with anything we do in life, we will only getbetter by learning more, looking backand developing plans to achievefuture goals. We do this whether weknow it or not, in every area of ourlife. One individual might have a goalof losing weight, so they watch whatthey eat and start meeting with a per-sonal trainer regularly. Parents mighthave a goal of giving their child mul-tiple opportunities to succeed, sothey plan what schools a child shouldattend and what extracurricular activ-ities they should be exposed to. Justas individuals and parents do this,LOs can do it with their careers.

Leif Boyd is senior vice president of pro-duction for American Pacific Mortgage.Since joining American PacificMortgage, Leif has taken an active rolein overseeing all aspects of mortgageorigination, including the oversight ofthe production department and 114-plus branches. He may be reached byphone at (916) 960-1325 or [email protected].

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Appraisal Management Company

Appraisal Management Company

Branch Manager

StreetLinks Lender Solutions provides an innovative andcomprehensive suite of valuation and service solutions used bylenders, servicers and appraisers nationwide to improve everydaybusiness operations.

StreetLinks industry-leading products include LenderPlus™ full-service appraisal management, LenderX™ lender-executedappraisal management software and SCORe™ appraisalreviews and a series of valuation analysis tools for services.Our commitment to quality and service, embodied by ourpartnership approach to clients and appraisers, continues toset us apart as the nation’s premier lending solutions partner.For more information, visit www.streetlinks.com.

StreetLinks Lender Solutions(800) 778-4920

[email protected]

We help you Meet & Exceed UMDP enforced by the GSE’sWe Improve your evaluation of collateral with “REALviewTM” Appraisals submitted in a MISMO/XML or PDF format.We’ve raised the bar for Appraisal Management Services!

HVCC Appraisal OrderingNational Appraisal Management Center

www.HVCCAppraisalOrdering.com Please call 866-396-6260

Accounting and Audit

A full service CPA firm specializing in the needs of the mortgageindustry. Providing monthly bookkeeping services,FHA andfinancial statement audits , corporate tax preparation and con-tract CFO services. Contact us today to learn more.

Compliance Consultants

• Mortgage Branch Employment Opportunities

• We work with some of the top mortgage branch companies inthe industry!

• With hundreds of branch employment opportunities out there,making a choice on who to sign up with is not an easy task! Weare here to help!

• Hiring Licensed Mortgage Originators for branch managementand loan origination.

• Bank and Broker status to choose from, multi-State lending andmore...

Visit our site or call us today to speak to one of our representatives.

Mortgage Brokers Network Corp, Inc.1-888-589-7048

The Mortgage Industry’s Matchmakerhttp://mortgagebrokersnetwork

Mark Wilson Certified Public Accountants9455 Ridgehaven Ct, Suite 101 • San Diego, CA 92123

619-649-0712www.markwilsoncpa.com

CENTERED ON YOUR NEEDS - FOCUSED ON YOUR SUCCESS

NO File Fee or Monthly Fees

• Get a BPS payback from our volume incentive that your loanofficers can’t see

• You have the ability to control your loan officers pricing• Create, Customize and Optimize your branch’s compensation

plan• Recruiting Support – Our network of recruiters place producers

in your branch!• Full Eagle Lender and we’re currently looking for high-quality

Producers in TX, GA, AL, TN, FL, MS, and SC

Hometown Lenders(888) 606-8066

[email protected]

Branch Manager

Continuing Education

The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance.

Pioneers in outsourcing solutions for mortgage compliance.

Our Compliance Team Will:

Leverage your existing employees.Improve your productivity.Collaborate on projects.Make the most of your current technology.Bring innovation to your company.Be a strong cultural fit.Free you to focus on your core competencies.Give you access to world-class expertise.Lower your total operational costs.

LENDERS COMPLIANCE GROUP167 West Hudson Street - Suite 200

Long Beach | NY | 11561 | (516) 442-3456www.LendersComplianceGroup.com

Contact Management/CRM

LoyaltyExpress, the leading mortgage marketing company in thenation, delivers high-impact marketing that substantially increasesproduction levels. Direct mail, e-mail, and intelligent alerts arecombined to deliver unprecedented results. Learn more today.

LoyaltyExpress877.938.1175

[email protected]

NMLS approved 20 hour Prelicensing EducationNMLS approved Continuing EducationLive Classroom Instruction, Web Delivery and Private EventsThe SAFE-Smart ExamCram, Powerfully Innovative Test Prep

Abacus Mortgage Training and EducationPO Box 780

Summerfield, NC 27358888-341-7767 • www.GetYourEd.com

United Northern Mortgage Bankers......888-600-8808Limited room available for established Team Leaders andLicensed Mortgage Originators. Become part of an established30-year Mortgage Banker with a proven track record and success.

Accounting and Audit

Freedom Mortgage Corporation, The BEST Branch Solution, Period.

Freedom Mortgage [email protected]

800.220.9498

Finally - the freedom to originate!America's Choice gives you the tools you need so you can Originate,Close and Get Paid!

We work as hard as you to be America’s Choice for consumersneeding a home loan, and we work just as hard to be America’sChoice for top branch managers, loan originators and mortgageprofessionals.

Call Jonathan Fowler, Director of National Production at 713-821-9750to learn how you can have a better, more rewarding career.

America’s Choice Home Loanswww.achlonline.com

713-821-9750

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Direct Mail

Document Preparation

Document Preparation (SaaS)

Mortgage Loan Closing Document Preparation & Compliance ServicesFulfillment Services Including Pre-Funding Review & Post-ClosingInterfaces with Leading Loan Origination Software SystemsForeclosure – Loss Mitigation Services

Robertson | Anschutz800-343-7160

[email protected]/info.html

Mortgage Loan Closing Document Preparation & Compliance SoftwareLoan Documents and Compliance – Web-based/SaaS – Easy to UseIntuitive – Secure and Reliable – Integrates with Leading LOSFree Setup and Support – Extensive Compliance Audits

Docs on Demand800-343-7160

[email protected]

Doc Management

DocVelocity is an end-to-end paperless solution designed tosimplify the loan origination experience. Imagine having all yourdocuments in the loan process as electronic files, all online, frompre-approval to closing. DocVelocity provides: Fast and easy loandelivery to any lender … Automatic doc sorting, naming and filing… Real-time online document sharing for anyone you choose …Friendly and intuitive user interface … No start-up fees, and freetraining and support. DocVelocity addresses importantcompliance issues while giving your office the competitiveadvantage of being paperless. It streamlines all aspects of themortgage process and most important, it does so in one easy-to-use and inexpensive package. DocVelocity is the flagship productof Paperless Office Solutions, Inc., a wholly owned subsidiary ofFlagstar Bancorp. Visit www.docvelocity.com to find out more.

DocVelocitywww.docvelocity.com

(877) [email protected]

Best Rate Referrals ............................................800-811-1402Mortgage marketing company with decades of combined expe-rience providing quality leads, mailers, lists and dialer products. www.bestratereferrals.com & www.mortgageleads.org

Continuing Education

Time is running out...are you ready?

Pass the S.A.F.E. Act Test, meet your 20 hours of Pre-licensure,and complete the 8 hours of Continuing Education you need

• The Ultimate Test Prep Kit and Test Prep Boot Camps – Covereverything to pass the S.A.F.E. Act Test — on your first try.

• 20-hour Pre-licensure - Packed with everything to successfullycomplete your pre-licensure requirements.

• Continuing Education - Exciting, NMLS approved courses thatmeet your Continuing Education needs and build your business.

MSS Learning Center(800) 963-1900

www.MortgageSuccessSource.comEmail: [email protected]

Events

“The Expo for Real Estate Professionals"For ongoing Networking Events throughout the year please visitwww.nycnetworkgroup.com.

NYC Real Estate Expo LLCAnthony Kazazis - Director

[email protected] • www.nycrealestateexpo.com646.210.2545 • 914.763.8008

FHA Audit and Licensing

First National Compliance Solutions Inc.1-800-400-4134

www.firstnationalcompliance.comBonnie Nachamie & Jonathan Pinard have assembled a team ofexperts to assist Mortgage Brokers, Mortgage Bankers, Federaland State Chartered Banks & Credit Unions with their mortgagecompliance needs.

Hard Money/Private Lending

ACC Mortgage, Inc.932 Hungerford Drive #6 • Rockville, MD 20850

240-314-0399 • 240-314-0336 faxWeApproveLoans.com

We are doing traditional subprime lending, fix & flip lending andhard money lending.

Windvest Corporation ............................877-285-0777Specializing in rehab loans for property investors in So. CA.Up to 60% ARV, 12.99% fixed rate, 3.5-5 points, 1 yr. term.Fast & professional service since '94! Visit windvestcorp.com!

Franchise

LenderCity Home Loans888.880.2489

www.LenderCity.com

LenderCity Home Loans is now offering individual franchises. Thisis perfect for the L.O. who has always wanted to open their ownbrokerage but didn't know how. Benefits include:

• Growing with a recognized brand

• Local and National marketing and advertising

• Online search engine marketing

• More aggressive lender pricing based on volumeincentives

• A proven system that generates more revenue thanaverage broker shops

• Ability to retain your license, existing corporation, andautonomy

• Lead generation

• Processing and closing services also available

ProClose provides compliant closing documents and software forResidential Mortgage Lending. Created with closers in mind, we help make a lender’s staff more efficient and supported.

Mortgage Banking Systems - ProClose1360 Beverly Rd. Ste 200, McLean, VA 22101

800-783-2283 · [email protected]

Leads

AAA Refi Leads.....AAA Refi Leads.....AAA Refi LeadsLearn how I went from failure to success by mailing cheap refiletters from home, closed 71 loans & made $248,954.62 last yr.I’ll show you exactly how I did it. Go to: www.Refi-Leads.NET

Sign-on weekly at nmpmag.com/lykkenonlending

The Lykken on LendingR A D I O P R O G R A M

Credit Reporting

Credit reports • Rapid rescore • Reissue • SupplementsIRS & Social verification • VOE / VOI • Title • Flood

Appraisals / BPO / AVM • Fraud alerts • Red Flag • LQIMOST AGGRESSIVE PRICING!

“A Full Service Lending Information Company”A/E: Jeremy “Judge” Honor

877-MFI- [email protected]

www.MfiCreditSolutions.com

TagQuest is a full service marketing firm created specifically forthe ever changing mortgage business. We have tested and provencampaigns for FHA -VA - HARP - CONVENTIONAL loan types.TagQuest knows what it takes to generate quality leads whetherthrough direct mail marketing, telemarketing, internet leads, datalists, tracking systems, or any combination thereof. TagQuest willbrand your company, prepare targeted marketing campaigns thatgenerate interest in your company, and most importantly, showyou how to turn sales leads into repeat customers.

TagQuestwww.myharpleads.com

TagQuest.com888-717-8980

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Leads

Loanbright helps mortgage companies capture and close morebusiness through its marketing and software tools. An INC. 500awardee, Loanbright has helped thousands of companies since1999 by providing them with well over 3 million qualified sales leads.

Loanbright27902 Meadow Drive, Suite 375

Evergreen,CO 80439866-391-2709 • www.Loanbright.com

Loan Origination Systems

Calyx Software, the #1 provider of mortgage solutions is dedicatedto offering reliable and affordable software that streamlines, inte-grates and optimizes the loan process. Find out how PointCentralcan streamline your business and create compliant processes today.

Calyx Software 800-362-2599

[email protected] www.calyxsoftware.com

Mortgage Forms

• HUD Settlement Cost Booklets• CHARM Booklets• Uniform Residential Loan Applications• HUD Case Binders

www.LendingForms.comSame Day Shipping (orders placed prior to 3pm et)

24/7 Secure e-Commerce SiteSave 33-50%

Regulatory/Compliance

Comergence Compliance Monitoring is the mortgage industry’s onlyComplete broker desk management software and outsource solutionfor TPO management and monitoring. We can supplement lenders in-house management and monitoring resources departments.

Comergence Compliance Monitoring, LLC630 The City Drive South, Suite 205 • Orange, CA 92868

Office: 714-740-9000 www.ComergenceCompliance.com

Are you a broker/owner or current branch manager looking toexpand your business into Mortgage Banking with FHA capabilities?Then our PARTNER BRANCH ADVANTAGE© program is perfect foryou. We are offering you all the benefits of partnering with an estab-lished lender while still enjoying your independence. US MortgageCorporation is a nationwide FHA Direct Lender with a 16 year longreputation of excellence.

YOUR SUCCESS IS OUR SUCCESS!

For more information contact THOMAS R. SIRICO, VicePresident of Business Development at (917) 923-1472 or emailat [email protected].

We look forward to sharing our services with you!

(800) LOANS-15www.usmortgage.com

Retail Branch

#1 USDA RD lender in multiple states with strong FHA/VA/CONVproduct lines as well. Don't be held hostage by a captive brancharrangement. Bank it or broker it. Have a business name/identityyou don't want to give up? We allow DBAs (subject to state rules).

Polaris Home Funding Corp.616-667-9000

[email protected]/timeforachange

Reach affluent and creditworthy consumers who are in-market andready to transact. Bankrate is a consumer direct Web site, NOT alead aggregator. Qualified leads for every sized budget, and payonly for performance. No set up fees! No contracts! No risk!

Founded in 2005, Best Rate Referrals has grown into one of thefastest growing marketing firms in the nation. By combining newtechnology with traditional direct marketing methods that produceprofitable results.

Best Rate Referrals is the direct marketing leader in the mortgageand banking industry.

• Mortgage Direct Mail & List Services• Mortgage Live Transfers• Mortgage Internet Leads• Mobile Marketing

Best Rate ReferralsThe Leading Direct Marketing Company

for Mortgage Professionals800-811-1402 • www.bestratereferrals.com

Wholesale/FHA

Icon Residential, a wholly owned subsidiary of Grand Bank N.A.,is one of the nation’s leading Conforming, Jumbo, FHA and VAwholesale lenders. Our strength, success and longevity isderived from delivering customers service that exceeds ourvalued business partners expectations. With deep industryknowledge, financial stability and innovative technology weprovide the solutions for our business partners to fund loanswhile avoiding risk.

• Direct Access to Underwriters• Competitive Pricing• Innovative Technology• Paperless Solution• Bank Funding

Icon Residential Lenders(888) 247-4207

www.iconwholesale.com

Wholesale/Residential

• Arizona • Nevada • Texas • California • New Mexico • Utah• Colorado • Oregon • Washington

88 Kearny Street, 3rd FloorSan Francisco, CA 94108

Phone: (415) 632-5150 • Fax: (925) 226-1938www.bayeq.com

CBC National Bank is one of the nation’s fastest growingwholesale lenders offering Conventional, FHA, VA, and USDA.The most important aspect of being a leader in today’s market isthe ability to build and maintain a meaningful relationship witheach customer. We understand that these meaningful relation-ships coupled with competitive pricing and efficient technologyare the pillars of today’s lending environment.

We are now hiring Account Executives in AL, TN, KY, VA, & MD.

Contact Stu Ehrlich in our HR department at

[email protected] for further details.

Big Enough to MATTER…Small Enough to CARE

CBC National Bank3010 Royal Boulevard South, Ste. 230

Alpharetta, GA 30022888-486-4304

Now Wholesale Lending in:

AMX/Land Home Financial ..................800-349-4172 AMX/Land Home Financial Services Wholesale LendingDivision - Great Rates, Great Programs, Great Service.Offering financing options that work in today's market.

Reach affluent and creditworthy consumers who are in-market andready to transact. Bankrate is a consumer direct Web site, NOT alead aggregator. Qualified leads for every sized budget, and payonly for performance. No set up fees! No contracts! No risk!

• Reach self directed, highly qualified consumers that are activelysearching for mortgage loans• Geo-targeting – reach the right consumers in the right markets• Our proprietary Advertiser Portal gives you complete controlover your campaigns, budgets, and performance reports.• YOU determine your daily/weekly/monthly budget• Pay only for consumers who click on your listing• NO cancellation fees

Try us risk-free! Call 561-630-1257or visit www.bankrate.com/cpcprogram/ for more details.

Internet’s Leading Consumer Mortgage MarketplaceAttracting over 8 million unique

consumers every monthwww.Bankrate.com • 561-630-1257

Wholesale/Residential

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Wholesale Reverse Mortgages

Veros Real Estate Solutions is a premier technology leader in the mort-gage industry and proven leader in enterprise risk management andcollateral valuation services. Veros combines the power of predictivetechnology and data analytics for advanced automated solutions.

Veros Real Estate Solutions2333 North Broadway, Suite 350 • Santa Ana, CA 92706

(866) 458-3767www.veros.com • @verosres (Twitter)

• Paperless! Quick and Easy!• Top Tier Account Executives• Committed to Wholesale• Operations that Earn Your Business

TMSfunding Wholesale Lending326 W Main Street • Milford, Ct. 06460

888.371.2989 • WWW.TMSFUNDING.COMYour Partner in Success!

We offer competitive pricing and fast turn-times for FHA, VA,Conventional, and USDA programs without having a retail pres-ence in the industry. We are a wholesale lender with 22 years ofexperience and believe in exceptional service.

Terrace Mortgage4010 W. Boyscout Blvd., Suite 550

Tampa, FL 33607866-934-4631 • www.terracemortgage.com

For Licensed Mortgage Brokers in NY, NJ, CT, PA and FLNo HUD Approval Required – Live Help DeskWill Provide Training at Our Office or Yours48 Hour Underwriting - Get Paid Within 48 Hours of Funding

NATIONWIDE Equities

Nationwide Equities Corporation201-529-1401

www.nwecorp.com

If your ad was here, you would be seen by191,181 Mortgage Professionals looking for

resources to help them in their business.The Resource Registry is a directory of lenders (wholesaler or retail that are

recruiting), affiliated services and resources that is seen by more than191,181 active Professionals.

Call 516-409-5555 ext. 4 to register your company.

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APRIL 2012Wednesday-Thursday,

April 18-192012 National Advocacy

ConferenceHyatt Regency on Capitol Hill

400 New Jersey AvenueNorthwest

Washington, D.C.For more information,

call (800) 793-6222 or visitMortgageBankers.org.

Sunday-Wednesday, April 22-25

2012 National Technology inMortgage Banking Conference

& ExpoArizona Biltmore

2400 East Missouri AvenuePhoenix

For more information, call (800) 793-6222 or visit

MortgageBankers.org.

Sunday-Wednesday, April 22-25

2012 National Fraud IssuesConference

Arizona Biltmore2400 East Missouri Avenue

PhoenixFor more information,


MAY 2012Sunday-Wednesday,

May 6-92012 National Secondary

Market Conference & Expo

New York Marriott Marquis1535 BroadwayNew York, N.Y.


MortgageBankers.org.

Thursday-Friday, May 10-11

New Mexico Association ofMortgage Professionals

2012 Real Estate & MortgageMarketing Expo

Sandia Resort & Casino30 Rainbow Road

Albuquerque, N.M.For more information,

call (505) 480-8514 or visitNMAMP.org.

Wednesday-Thursday, May 16-17

National Reverse MortgageLenders Association 2012 Western

Regional MeetingThe Hyatt Regency

17900 Jamboree RoadIrvine, Calif.


NRMLAOnline.org.

Friday-Wednesday, May 18-23

2012 Mortgage BankersAssociation of Georgia

Education Forum & ExpoSandestin Hilton Golf

Resort & Spa4000 South Sandestin Boulevard

Destin, Fla.For more information,

call (478) 743-8612 or visitMBAG.org.

Sunday-Wednesday, May 20-23

2012 Commercial/MultifamilyServicing & Technology Conference

Hilton Anatole2201 North Stemmons Freeway

DallasFor more information,


To submit your entry for inclusion in the National Mortgage Professional

Calendar of Events, please e-mail the details of your event, along with

contact information, to [email protected].

Sunday-Wednesday, May 20-232012 Legal Issues/Regulatory

Compliance ConferenceLa Quinta Resort & Club49-499 Eisenhower Drive

La Quinta, Calif.For more information,


Tuesday-Wednesday, May 22-2328th Annual Mortgage Bankers

Association of AlabamaConvention

“Staying the Course”Wynfrey Hotel

1000 Riverchase GalleriaBirmingham, Ala.


MBAAL.org.

Wednesday-Friday, May 30-June 12012 Hawaii Association of

Mortgage Brokers Annual Conference

“Get Your Eight in the 808”Sheraton Waikiki Hotel 2255 Kalakaua Avenue

Honolulu, HawaiiFor more information, call

(808) 783-4442 or visit HAMB.org.

JUNE 2012Monday-Friday, June 4-8

MISMO June 2012 Trimester Meeting

DoubleTree by Hilton Hotel201 East MacArthur Boulevard

Santa Ana, Calif.For more information,


Sunday-Tuesday, June 24-26Mortgage Bankers AssociationChairman’s Conference 2012

The Breakers1 South Country Road

Palm Beach, Fla.For more information,


JULY 2012Wednesday-Saturday,

July 11-14Florida Association of Mortgage

Professionals (FAMP) 2012 Convention & Trade Show

“Stay on Track”The Grand Hyatt Tampa Bay

2900 Bayport DriveTampa, Fla.


FAMB.org.

SEPTEMBER 2012Sunday-Tuesday,September 9-11

Mortgage Success Source 2012Mortgage Leadership

Today ConferenceThe Mirage Hotel & Casino

3400 Las Vegas Boulevard SouthLas Vegas


MortgageSuccessSource.com.

Monday-Wednesday,September 10-12

2012 American Mortgage Conference

Raleigh Marriott Crabtree Valley4500 Marriott Drive

Raleigh, N.C.For more information,

call (919) 781-7979 or visitNCBankers.org.

OCTOBER 2012Sunday-Wednesday,

October 21-24Mortgage Bankers Association

99th Annual Convention & Expo

The Hyatt Regency151 East Wacker Drive

ChicagoFor more information,


NATIONAL MORTGAGE PROFESSIONAL

calendarOF EVENTS

Looking for: TOP PRODUCERSCal l for Detai ls!

T he BEST B ranch Solu t ion, Period.

Nationwide FHA Lender

This information is provided to assist business professionals and is not an advertisement extended to the consumer,as defined by Section 226.2 of Regulation Z. Freedom Mortgage corporate office is located at: 907 Pleasant Valley Ave. Suite 3, Mount Laurel, NJ 08054. Lender NMLS ID: 2767. Licensed by the NJ Department of Banking and Insurance, License #9100861. All Rights Reserved. EOE

www.Fmbranch.com800.220.9498

[email protected]

HARP 2.0HARPP 2.0

ICON SAYS YES TOICONN SAYSS YESS TO

See product guidelines for restrictions

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No LTV/CLTV

No Assets (Second Home and NOO

will Require Reserves)

Only Current Fannie Mae Owned

Loans are Eligible

Reduction in Term to 20 Years or

Less will have Reduced Adjustors

MI Loans Allowed

Appraisal Waivers Accepted

Net Tangible Benefit Required

No Cash Back to Borrowers

620 FICO Required

Existing Loan must have Closed Prior to June 1, 2009

Accepting EA Levels I, II, III

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NOW ACCEPTING HARP 2.0 SUBMISSIONS

For additional information regarding Conforming, Jumbo,

FHA and VA lending, call us at

or visit us at

www.iconwholesale.com

888-247-4207Ranked

one of the

TOP 15Wholesale Lenders

in the Country