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Ours are 35% LESS.

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Mortgage PROFESSIONALT E N N E S S E E

M A G A Z I N E

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

OFFICERSPhone # E-mail

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

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

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

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

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

E-mail: [email protected]

For information on all TNAMP events, call the TNAMP state office at (615) 302-0001 or visit www.tnamp.com.

TNAMP

MAY 2010Monday-Thursday, May 3-6

2010 TNAMP Annual Convention & Trade Show“Tried, Tested & True”

The Hotel Preston • I-40 & Briley Parkway • Nashville

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

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

TNAMP’s Industry Partner Program

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

AAMB welcomes NAMB to beautiful Phoenix! Come see the new NAMB President and the new

NAMB Board installation, while participating in somegreat networking opportunities. State delegates can

also participate in the NAMB Delegate Council Meeting.

Phoenix Airport Marriott®

1101 North 44th StreetPhoenix, Arizona 85008 USA

Rooms are $99 per night, and will be honored at thesame rate if you wish to extend your stay.

Hotel Toll-Free: 1-800-228-9290

Visitwww.NAMB.org

for details.

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Mark your calendar now for the Tennessee Association of Mortgage Professionals 2010TNAMP Convention & Trade Show, scheduled for Monday-Thursday, May 3-6. Thisyear’s Annual Convention & Trade Show will return to the Hotel Preston in Nashville.The 2010 “Tried, Tested & True” TNAMP Convention & Trade Show will provide partic-ipants with opportunities to hear the message of taking TNAMP’s Educated and Testedprofessionalism, loan program options and expertise to those who need services themost. Don’t listen to the negative news from the press! The mortgage industry is com-ing back in 2010 and those industry professionals who are educated, tested andlicensed are closing loans for their neighbors, referral sources and customers!

TNAMP Affiliate Trade ShowThis event includes a two-day Trade Show with exhibiting TNAMP AffiliateMembers who are mortgage industry related vendors from across the UnitedStates. This is a great opportunity for hundreds of mortgage professionals to speakone-on-one with the exhibiting companies and learn more about new and exist-ing products and services available in the industry.

The TNAMP Trade Show has been one of the top mortgage trade shows in thesoutheast United States for the last 10 years. Parking is free and plentiful for allparticipants. The venue is well-known and easily accessible from I-40 and only afew minutes from the Nashville Airport. Luxurious hotel rooms are deeply dis-counted at $89 for this event if you tell them to use the TNAMP Convention &Trade Show Rate. The Trade Show will be held Wednesday, May 5 and Thursday,May 6. The Trade Show will feature over 20 TNAMP Affiliate Members exhibitingtheir products and services from across the country. The Trade Show begins with areception and cash bar from 3:00 p.m.-7:00 p.m. on May 5 and will run from 8:00a.m.-noon on May 6. Registered exhibitors will be listed on the TNAMP Web siteand e-mail promotions as they are added.

Seven Free TNAMP Affiliate SeminarsTNAMP also invites you to sponsor one of the seven free Affiliate Seminars. Theseven Affiliate Seminars will be held on May 6 from 8:00 a.m.-4:30 p.m., includinga Lunch Seminar, at the Hotel Preston in Nashville. The seven free AffiliateSeminars are free and open to any retail mortgage Professional or loan officer whopresents a business card. The luncheon featuring the president of the NationalAssociation of Mortgage Brokers as guest speaker will require a purchased ticket.

Registration Registration to attend the seven seminars and trade show is free to retail mortgageprofessionals, loan officers and their staff with the submission of a business cardor a completed registration form that will be available on-site. Non-exhibitingindustry affiliates will not be allowed on the Trade Show Floor or to attend theThursday Affiliate Seminars.

Seminar Schedule of Events(Subject to change)

Monday, May 38:00a.m.-5:00 p.m.........................................SAFE Act/NMLS Approved Class (Day 1)

Tuesday, May 48:00 a.m.-5:00 p.m. ......................................SAFE Act/NMLS Approved Class (Day 2)

Wednesday, May 58:00 a.m.-Noon ............................................SAFE Act/NMLS Approved Class (Day 3)

1:00 p.m.-3:00 p.m.......................................................Tennessee Law Review Class

1:00 p.m.-3:00 p.m. ....................................................................Exhibit Hall Set-up

3:00 p.m.-7:00 p.m. ..................Exhibit Hall Open/Opening Reception/Exhibit HallThe Exhibit Hall will be open free to all retail mortgage professionals and loanoriginators who present a business card at the door. A Food and Cash Bar will beavailable to all in the Exhibit Hall and will be served next to the Premium Boothswho are Opening Reception Sponsors.

Thursday, May 68:00a.m.-Noon..............................................................................Exhibit Hall OpenThe Exhibit Hall will be open free to all retail mortgage professionals and loanoriginators who present a business card at the door.

8:00a.m.-9:00 a.m. ..................................................................Affiliate Seminar #1

9:00 a.m.-10:00 a.m.................................................................Affiliate Seminar #2

9:30 a.m.-10:30 a.m. ......................................................Sponsored Morning Break

10:00 a.m.-11:00 a.m. ..............................................................Affiliate Seminar #3

11:00 a.m.-Noon ......................................................................Affiliate Seminar #4

Noon-1:30 p.m. ..............................Sponsored Luncheon/NAMB President Speaker

1:30 p.m.-2:30 p.m...................................................................Affiliate Seminar #5

2:15 p.m.-3:30 p.m. ......................................................Sponsored Afternoon Break



Want a bigger presence?TNAMP encourages affiliated companies to participate in the 2010 Convention &Trade Show by registering as an Affiliate Exhibitor/Sponsor. Where else can youfind unrestricted access to hundreds of Tennessee finest mortgage professionals,teach an exclusive seminar, display your best products and programs for 2010, andenjoy all of the Opening Reception food and drinks. Sign up for one of these spon-sorships before your competitor does!

For more information, contact TNAMP Executive Director Brian Short at (615) 302-0001, e-mail [email protected] or visit www.tnamp.com.

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SAFE Smart … Testing, Education and Licensing: TheDevil is in the Definition By Paul Donohue, CRMS

Forward on Reverse: HECM at 20: Leaders and Pioneersin U.S. Reverse Mortgage Series (VII) … The Engineers ofReverse Mortgage Securitization By Atare E. Agbamu, CRMS

FHA Insider: FHA Continues to Drop the Hammer: Is YourCompany Next? By Jeff Mifsud

Fighting Predatory Lending With Automation By Fred Gooch

Value Nation: Is More Regulation the Answer? By Charlie W. Elliott Jr., MAI, SRA

The Secondary Market Overview: From Bonds toProduction … The Good Faith Estimate and Rate Risk By Dave Hershman

The NAMB Perspective

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

NMP Mortgage Professional of the Month: Bruce Lawner,Senior Vice President of Wholesale, Presidents FirstMortgage Bankers

A View From the C-Suite: Five Keys to Helping First-TimeHomebuyers By David Lykken

Knowledge is King: Embracing First-Time HomebuyersWith eEducation By Cary Reines

Working With First-Time Buyers By Dave Hershman

The Decade of the First-Time Homebuyer By Mike Lesmeister, CRMS

First-Time Homebuyers Need to Realize the Opportunityis Now! By Laura Lynn Burke

Trend Spotter: Why Your Attitude Matters By Gibran Nicholas

Regulatory Compliance Outlook: March 2010—“Intent toProceed” and the New GFE By Jonathan Foxx

Experian Announces New Requirements for Brokers andNet Branch Companies By Terry W. Clemans

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March 2010Volume 2 • Number 3

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

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

Mortgage PROFESSIONALN A T I O N A L

M A G A Z I N E

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

STAFFEric C. Peck

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

[email protected]

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

[email protected]

Domenica TrafficandaArt Director

[email protected]

Karen KrizmanSenior National Account Executive

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

Jennifer MoellerBilling Coordinator

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

ADVERTISINGTo receive any information regarding advertising rates,deadlines and requirements, please contact SeniorNational Account Executive Karen Krizman at (516) 409-5555, ext. 326 or e-mail [email protected].

ARTICLE SUBMISSIONS/PRESS RELEASESTo submit any material, including articles and pressreleases, please contact Editor-in-Chief Eric C. Peck at(516) 409-5555, ext. 312 or e-mail [email protected]. The deadline for submissions is the first of themonth prior to the target issue.

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

Statements of fact and opinion in National MortgageProfessional Magazine are the responsibility of theauthors alone and do not imply an opinion on thepart of NMP Media Corp. National MortgageProfessional Magazine reserves the right to edit, rejectand/or postpone the publication of any articles, infor-mation or data.

National Mortgage Professional Magazine is published monthly by NMP Media Corp.

Copyright © 2010 NMP Media Corp.

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NMPNMP

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

Embracing the first-time homebuyerAs we near the expiration of the first-time homebuyer tax credit, we wanted to sharewith you some articles to help you capture the first-time homebuyer. This section startsoff strong on page 32 with an article from David Lykken sharing “Five Keys to Helpingthe First-Time Homebuyers” in his special installment of View from the C-Suite. David’sarticle is followed by Cary Reines’ focus on education as a tool in helping the first-timebuyer attain their dream of homeownership. Dave Hershman also shares his insights onidentifying the needs of the first-time homebuyer and helps connect them with otherexperts in your market. Mike Lesmeister, CRMS shares what he sees as trends of the first-

time homebuying market. I think we can all argee with with the trend continuing, based on the MortgageBankers Association’s (MBA’s) purchase market currently forecasted at $745 billion for 2010, going up to$907 billion in 2012, as the first-time homebuyer will plays a pivotal role in this market beyond the expi-ration of the tax credit. The section is wrapped up by a piece by Laura Lynn Burke giving details that everyoriginator should know about the first-time homebuyer tax credit. Just because the tax credit deadline isApril 1st, it doesn’t mean your marketing to the first-time buying market should end as well.

This month’s Mortgage Professional of the MonthWe have been giving a lot of focus to the retail channel in the last few Mortgage Professionals of the Monthcolumns. Our readers have asked for more wholesale leaders and we have delivered. This month, we spot-light Bruce Lawner, senior vice president of wholesale for Presidents First Mortgage Bankers in Melville,N.Y. Bruce is a guy who has had ample experience in the retail channel, from origination to managing largeteams. He has been having great success growing the wholesale channel of Presidents First since its incep-tion only two years ago. Read more about Bruce on page 26 of this issue.

More reverse mortgage industry leaders share their success ...We have been featuring the HECM at 20: Leaders and Pioneers in the U.S. Reverse Mortgage Industry Seriesby Atare E. Agbamu, CRMS for the last seven issues. Atare has done an amazing job of identifying the indi-viduals who have shaped the reverse mortgage industry, from the origination end to securitization. Thismonth, he profiles the deal manager who helped put the first securitization for non-HECM mortgages, JoeKelly, and mergers and acquisitions specialist Michael McCully. You can read Atare’s interview with Joe andMichael on page 4 of this issue.

How are we as an industry doing? This month in Tommy Duncan, CMT’s “Ask Tommy: Your QC Expert” feature, you will learn some verysuprising stats on how we are doing as far as the quality of work being done when putting together ourloans from application, to credit, to appraisals, and more. Tommy compares year-to-year data, and bankversus non-bank to act as an annual quality control report card on the industry. Tommy has given his fullreport on his Web site, www.qualitymortgageservices.com, however you can find some highlights of thisreport on page 22.

Dealing with negative equityAs the housing market continues to be plagued with negative equity, your attitude matters! This month’sinstallment of the Trend Spotter column by Gibran Nichols focuses on “Why Your Attitude Matters,” asGibran imparts some advice on how to coach your borrowers’ attitude on negative equity and put it intoa more positive perspective.

Upcoming Webinar with the FREE and LOW-COST lead expertI have been hearing from a handful of mortgage professionals who have been following national trainer,Ron Vaimberg’s proven strategies on how to generate an unlimited amount of leads on a zero dollar budg-et. I have known Ron personally for many years, and I called in a favor. I asked Ron to put together aWebinar for readers of National Mortgage Professional Magazine that will provide them some basic toolsand strategies to start their own free marketing campaigns that will deliver leads within minutes after theWebinar. Oh, here’s the kicker, I asked Ron to make the Webinar FREE for our readers. After hours of talksand flat out begging, Ron AGREED! So, on Wednesday, April 28 at 1:00 p.m. EDT, Ron Vaimberg will pres-ent “Generate an Unlimited Amount of Leads for $0.00 a Lead.” For more details and sign-up info, visitNMPMag.com/freeleads.

There’s a lot more …I’m trying to keep this message to under 600 words, however, that’s hard when we’ve got some great con-tent that I want to boast about in this letter. More on FHA (the hammer will fall on more companies), cred-it reporting (big changes that brokers and branches better know about), a strong message from NationalAssociation of Mortgage Brokers President Jim Pair, and much more follow in this month’s issue.

Sincerely,

Andrew T. Berman, Executive Vice PresidentNMP Media Corp.

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

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

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The National Association of Mortgage Brokers

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

Web site: www.namb.org

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

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

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

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

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

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

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

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

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

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

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

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

Daphne Large—Treasurer(901) [email protected]

William Bower—Director(800) [email protected]

Mike Brown—Director(800) [email protected]

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

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

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

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

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

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

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

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

James Sutton—NCRA Legal Counsel(972) [email protected]

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

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

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

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

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

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

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

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

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

TreasurerKay Talley, MML(919) [email protected]

ParliamentarianHulene Bridgman-Works(972) [email protected]

NAMB Board of Directors

National Association of ProfessionalMortgage Women

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

Web site: www.napmw.org

Officers

Directors 2010 Board of Directors

National Board of Directors

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The Devil is in the DefinitionDo you know who in your organization must be licensed as a “Mortgage LoanOriginator?” It’s a vital question that will affect processors, underwriters, howyou communicate with your borrowers and how you supervise your employees.The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) did awaywith our old notions of just who must be licensed. On this point, the devil is deepin the definition.

The SAFE Act defines a “Mortgage Loan Originator” (MLO) as an individual who,“Takes residential mortgage loan applications” and “Offers or negotiates terms ofa residential mortgage loan for compensation or gain.” It broadens the definitionfurther, stating an originator is an individual who “Assists a consumer in obtain-ing or applying to obtain a residential loan by, among other things, advising onloan terms (including rates, fees and other costs), preparing loan packages, orcollecting information on behalf of the consumer.” This seems clear, until you godeeper.

Administrative or clerical tasks, are defined to mean the “receipt, collectionand distribution of information common for the processing or underwriting of aloan” and “communicating with a consumer to obtain this information.” Clearly,a loan processor or underwriter would not fall under the definition of MLO ifthey only perform these duties and are employed by a licensed mortgage lenderor mortgage broker. But there is a catch …

Loan processor or underwriter, is defined as, “An individual who performsthese clerical or support duties at the direction of, and subject to the supervisionand instruction of, a state-licensed loan originator.” The first class of originatorsI taught this to had these silly grins, like self-important Cheshire cats. “Do youmean we are in charge of our processors and underwriters?” they asked. “Well,not so fast.” I answered. This means the licensed originator will be held respon-sible for the work of the processor or underwriter if, in fact, they supervise suchactivity. The key concept is that a licensee must directly supervise the processoror underwriter or they must be licensed.

HUD’s proposed ruleThe U.S. Department of Housing & Urban Development (HUD) recently extended thepublic commentary period until March 5 on a proposed rule interpreting respon-sibilities under the SAFE Act. This rule defines what it means to take an applicationand broadens the definition of originator, which impacts:

� Loan modification specialists� Unsupervised processors and underwriters� Housing counselors or other third parties influencing a consumer’s loan decision� Independent contractors that perform clerical and support duties

HUD interprets the lack of supervision by a licensed originator that triggers theneed for a license. Therefore, all processors or underwriters acting as independ-ent contractors must be licensed.

A SAFE-Smart tipLook closely at your employed processors and underwriters. To avoid the need for theirlicensure, be certain they are supervised by a licensed originator. Read HUD’s proposedrule to ensure you’re in compliance (www.hud.gov/offices/hsg/ramh/safe/safeprule.pdf).It may be time for your processor, underwriter or those who supervise them, to becomelicensed.

Be SAFE-Smart out there.

Paul Donohue, CRMS is a 23-year industry professional and founder of Abacus Mort-gage Training and Education. Paul served on two NMLS working groups, establish-ing the new national education protocols. Go to AbacusMortgageTraining.com tofind out more about your obligations for testing, education and licensure, or call(888) 341-7767.

The Engineers of ReverseMortgage Securitization

Lehman Brothers lives in U.S. reversemortgage history. The Federal HousingAdministration’s (FHA) home equityconversion mortgage (HECM) has hadFannie Mae’s deep pockets as a second-ary market source of cash for reversemortgage lenders since its inception in1989. And since 2007, Ginnie Mae hasopened HECM to worldinvestors through itsHECM mortgage-backedsecurity (HMBS).

For the proprietary(non-HECM) reverse mort-gage market to take off, astrong Wall Street cashmachine was needed.Lehman Brothers steppedin and the securitizationof non-HECM reversemortgages in the U.S. wasborn in 1999.

Among others, theLehman securitizationteam included veteranstructured finance expert,Joe Kelly, and mergersand acquisitions special-ist Michael McCully, co-founders of New ViewAdvisors, a Wall Streetboutique specializing inreverse mortgages.

A Wharton MBA and frequent indus-try speaker, Joe Kelly was the deal man-ager and chief designer of the 1999-pioneering securitization and four sub-sequent jumbo reverse mortgage secu-ritizations through 2007 during a 14-year career at Lehman Brothers.

During the 1999 securitizationprocess, it became clear that the deallacked a solid legal framework, yet Kellysuccessfully structured the transaction asa FASIT (Financial Asset SecuritizationInvestment Trust), a rarely used and nowdefunct, structuring tool. He later suc-cessfully lobbied Congress to wrap

reverse mortgages and other HELOCs(home equity lines of credit) into a realestate mortgage investment conduit(REMIC), a common structuring vehicle.In 2007, Kelly’s deal was nominated forthe Total Securitization’s North AmericanRMBS Deal of the Year.

Michael McCully was responsible forthe acquisition, manage-ment and sale of FinancialFreedom at LehmanBrothers between 1999and 2004. McCully’s exten-sive portfolio companymanagement experienceand strategic advice helpedthe management teambuild the company intoone of America’s largestoriginators and servicers ofreverse mortgages by 2004,when it was sold toIndyMac Bank FSB.

A Cornell University eco-nomics graduate, McCullyled teams of investmentbankers to buy, sell andoperate portfolio compa-nies during the last 10years of his 20-year careerat Lehman Brothers.

The following are thereflections of Joe Kelly

and Michael McCully on the first securi-tization of reverse mortgages in the U.S.and their roles in it:

At Lehman Brothers in 1999, you pio-neered the securitization of reversemortgages in the U.S. secondary mar-ket. What attracted you to reversemortgages as an asset class, and whydid you commit to them?We were attracted to the reverse mort-gage industry because it combined ourmultiyear expertise in mortgage

“There existed anopportunity to lendthe credibility of a

global mortgage franchise in Lehman

Brothers to a struggling asset class

with unlimited potential.”—Joe Kelly

continued on page 6

HECM at 20: Leaders and Pioneers in the U.S. Reverse Mortgage Industry Series (VII)

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Here’s what our customers are saying:

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

FHA Continues to Drop theHammer: Is Your Company Next?

Mortgagee Letter 2010-03 contains informa-tion about the procedures that the FederalHousing Administration (FHA) will follow forterminating the underwriting authority oflenders with a high default and claim rate(DCR). Many loan officers are unaware ofwhat a DCR is, let alone and where to findout what their company’s DCR is.

The DCR is the sum of the loans indefault and claim divided by the total loansoriginated within a 24-month period (orwhat FHA calls a “Performance Period”).The compare ratio (CR) is the lender’s DCRdivided by the DCR within a U.S.Department of Housing & UrbanDevelopment (HUD) field office jurisdiction.

To understand how the FHA uses theCR, here is a quote from the Code ofFederal Regulations 24 CFR 202.3:

“… A mortgagee’s default and claim ratewithin a HUD field office jurisdiction is com-pared to the overall default and claim rate ofthe entire HUD field office jurisdiction. BeforeHUD terminates the underwriting authority,it will consider mitigating issues raised by amortgagee during its informal conferenceand in its written response. HUD’s evaluationof mortgagees on the basis of HUD fieldoffice jurisdiction coincides with the mannerin which FHA approves mortgagees to oper-ate. This method of evaluation recognizesthat local market conditions and events maycontribute to higher defaults and claims.”

To view your company’s DCR and CR,go to the Neighborhood Watch Web site

(set up by FHA to make company datapublic) at https://entp.hud.gov/sfnw/pub-lic. Click on the “Early Warnings” tab andthen on “Single Lender.” Type in yourcompany’s name and click “Submit” toget the data. Any company with a CR of150 percent or less is considered accept-able. If, however, your company or thelender you sell loans to has a CR higherthan 200 percent, be prepared for thepossible termination of underwritingauthority of FHA loans.

By way of example, take Gold StarMortgage Financial, a recently namedInc. 500 company out of Ann Arbor,Mich. and led by Chief Executive OfficerDaniel Milstein, one of the country’s toporiginators. Gold Star originated 2,249FHA loans in the most recent perform-ance period and has a 4.45 percent DCRin a jurisdiction with a 5.03 percent DCR,so Gold Star’s CR is 88 percent (4.45divided by 5.03). This puts them withinthe top percentile in the country, any-thing under 100 percent is outstanding.

Try looking up some companies that areknown to do risky FHA loans and check outtheir CR. I’d suspect that since MortgageeLetter 2010-03 came out, many companiesin fear of losing their Direct Endorsement(DE) are working tirelessly on loss mitiga-tion efforts to get their CR down and to pre-vent their termination.

A loan officer recently contacted meabout moving to a different lender and

continued on page 10

HUD advances fightagainst loan mod scamsthrough online reportingtool

The U.S. Department of Housing &Urban Development (HUD), in partner-ship with the Loan Modification ScamPrevention Network, has announcedthe launch of PreventLoanScams.org.

The Loan Modification Scam PreventionNetwork, a national coalition of public andprivate enterprises, is led by the Lawyers’Committee for Civil Rights Under Law.Fannie Mae, Freddie Mac, theHomeownership Preservation Foundation,and NeighborWorks America assist theLawyers’ Committee in leading the coali-tion’s fight against loan modification scams.

“Troubled homeowners lose time andmoney when they are tricked by conartists who promise to help but neverdo,” said John Trasviña, HUD AssistantSecretary for Fair Housing and EqualOpportunity. “This initiative combinesthe collective energies of public and pri-vate enterprises to strengthen the abilityof law enforcement to prosecute scam-mers and protect homeowners.”

The Network developedPreventLoanScams.org to providehomeowners with a single destinationto report alleged scammers. Complaintsfiled online are added to a nationalcomplaint database and forwarded tothe appropriate law enforcement agen-cies for review. The Network estimatesthat the Web site will assist approxi-mately 50,000 homeowners affected byscams. Additionally, HUD has directedits local fair housing and housing coun-seling grantees to begin reportingalleged loan modification scams via theWeb site.

Prior to the launch ofPreventLoanScams.org, federal, stateand local government agencies couldnot share complaint data with non-profit organizations. The new systemallows for improved analysis of trendsacross jurisdictional lines and willlikely lead to an increase in privateenforcement action filings.For more information, visit www.hud.govor www.PreventLoanScams.org.

FTC proposes rule barring mortgage reliefcompanies from chargingupfront fees

The Federal TradeCommission (FTC)moved to protect dis-tressed homeownersfrom the promoters ofbogus foreclosurerescue and mort-

gage modification services by proposinga new rule that would forbid companiesto charge up-front for these services.Instead, companies could only collectpayment after providing services.

“Homeowners facing foreclosure orstruggling to make mortgage paymentsshouldn’t have to contend with fraudu-lent ‘companies’ that don’t providewhat they promise,” said FTC ChairmanJon Leibowitz. “The proposed rulewould outlaw up-front fees so compa-nies can’t take the money and run.”

According to the Notice of ProposedRulemaking, historic levels of con-sumer debt, increased unemployment,and an unprecedented downturn in thehousing and mortgage markets havecontributed to high rates of mortgageloan delinquency and foreclosure. Thismortgage crisis has launched an indus-try of companies purporting, for a fee,to obtain mortgage loan modificationsor other relief for consumers facingforeclosure. The FTC has brought 28cases in this area, and state and federallaw enforcement partners have broughthundreds more. Generally, these casescharged that companies do not providethe services they promise and that theymisrepresent their affiliation with thegovernment and government housingassistance programs, including theMaking Home Affordable Program.

The FTC notice seeks public input,particularly from attorneys and otherprofessionals, on a proposed rule thatwould require mortgage relief compa-nies to make good on their promisedresults before charging or accepting pay-ment from consumers. Under the pro-posed rule, companies could not be paiduntil they had a documented offer froma mortgage lender or servicer that livesup to the promises they have made.

“Far too many homeowners have

continued on page 6

structuring work involved. We also hadto design a reserve fund feature to fundthe borrower advances. Finally, we hadto use an unusual “FASIT” tax structure,as reverse mortgages were not yet eligi-ble for REMICs.

What is a prepayment curve? Whatare the factors that go into its design?What is a reserve fund feature? Andwhat is FASIT?The prepayment curve is a measure-ment of the rate at which loans pay offover time. For reverse mortgages, the

most significant variableis generally borrowerage, but the reversemortgage prepaymentcurve predicts the rate ofpayoffs using empiricaldata regarding mortality,mobility and refinancing.

In a securitization, areserve fund is an amountof cash or securities thatprovides cash for the bor-rower’s credit line draws.

“FASIT” stands forFinancial Asset SecuritizationInvestment Trust, a tax vehi-cle designed to accommo-date the securitization ofrevolving asset types, suchas home equity lines ofcredit or HELOCs. With afew exceptions, like theSASCO 1999-RM1 transac-tion, the FASIT was rarelyused. In 2004, FASITs weredisallowed by Congress,and reverse mortgagesand other HELOCs wereallowed, for the first time,

to be securitized using the more popularreal estate mortgage investment conduitor REMIC tax vehicle.

How informed were investors aboutreverse mortgages as an asset classwhen you began, and how educatedare they today?Investors were either uninformed, orworse, disinclined to invest because ofthe bad publicity surrounding reversemortgage fees and contingent interest.But a small number of enlightenedinvestors were smart enough to graspthe relative value story of stable pre-payments and credit protection. Therelatively low LTVs [loan-to-values] ofjumbo reverse mortgages and the veryconservative rating agency criteria alsohelped give them comfort. With eachsuccessive securitization, the number ofinvestors grew a little larger.

How has the secondary market forreverse mortgages evolved since yourpioneering work? Where is it headed?No securitized reverse mortgage classeshave suffered any ratings downgrades

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finance, corporate finance and capitalmarkets with a product that had a clearand tangible benefit to society. Thereexisted an opportunity to lend the cred-ibility of a global mortgage franchise inLehman Brothers to a struggling assetclass with unlimited potential. Webelieved it would become a main-stream product with sufficient educa-tion, secondary markets distributionand innovative product development.

Do you still hold that belief in theunlimited potential of reverse mort-gages? Why?We still believe thatreverse mortgages are anessential financial prod-uct that will grow dra-matically in numbers andimportance over the nextseveral years. The recentfinancial crisis took awaymortgage alternatives forseniors and has reducedwealth, thus increasinglymaking reverse mort-gages the last, best alter-native to supplementincome. The demograph-ic wave is too strong andthe need is too great, andwe also believe thatnecessity being the moth-er of invention, theindustry can adapt to thechanges in the financialmarkets.

How was the experi-ence of creating thefirst reverse mortgagesecuritization for yourinvestors, for Financial Freedom, forLehman Brothers, and for you?The SASCO 1999-RM1 securitizationrequired a great deal of work to createthe valuation and credit analysis frame-work required to securitize a new assetclass. There were no rating agency crite-ria and very little historical data regard-ing prepayments, mortality, mobility,crossover losses and other critical vari-ables. Investors had to analyze actuarialrisk, territory unfamiliar for most ofthem. Financial Freedom had to learnhow to service loans in a securitizationfor the first time, while simultaneouslydealing with a major acquisition.Lehman Brothers had to commit a lot ofresources to make it all work, includingthe two of us, Craig Corn, Jim Mahoney,Al Benedetti and many others.

Without a model, what were somestructural challenges you faced, andhow did you overcome them?The modeling challenges were consid-erable. The standard structuring modelhad no “reverse gear.” We had to con-struct a prepayment curve (whichturned out to be very accurate), sothere was a lot of programming and

forward on reverse continued from page 4

continued on page 9

“The recent financialcrisis took away mort-gage alternatives for

seniors and hasreduced wealth, thusincreasingly making

reverse mortgages thelast, best alternative to

supplement income.The demographic wave

is too strong and theneed is too great …”—Michael McCully

extension of HARP until June 30, 2011.”In 2009, Fannie Mae and Freddie

Mac purchased or guaranteed morethan four million refinanced mort-gages. Of this total, 190,180 were HARPrefinances with LTVs between 80 per-cent and 125 percent. The HARP beganin April 2009 and has grown over thepast few months. For more information, visit www.fhfa.gov.

HUD launches new Officeof Sustainable Housingand Communities

U.S. Department of Housing &Urban Development (HUD)Secretary Shaun Donovanhas announced the launchof HUD’s new Office ofSustainable Housing and

Communities (OSHC). The office will beoverseen by HUD Deputy Secretary RonSims who won national recognition forturning King County, Wash. into a modelfor sustainable communities. OSHC isdesigned to help build stronger, more sus-tainable communities by connecting hous-ing to jobs, fostering local innovation andbuilding a clean energy economy. Fundedby Congress for the first time in HUD’s 2010Budget, OSHC is a key component of theObama Administration’s Partnership forSustainable Communities.

“Through our new Office ofSustainable Housing and Communities,we will begin to tie the quality and loca-tion of housing to broader opportunitiessuch as access to good jobs, qualityschools, and safe streets,” said Donovan.“By working with DOT, EPA and otherfederal agencies, and with DeputySecretary Sims’ guidance, we will finallybegin to meet the needs of today with-out compromising the futures of ourchildren and grandchildren.”

Under the management of DirectorShelley Poticha, the OSHC will be thefocus of all of HUD’s sustainabilityefforts. The average household spendsmore than half of its budget on hous-ing and transportation, which havebecome American families’ two singlebiggest expenses. With OSHC as lead,HUD will work to improve access toaffordable housing and transportationoptions, saving money for Americanfamilies while allowing them moretime to spend at home and less timetraveling.

The office will also invest in energy-efficient homes and buildings, inrenewable energy, and in next-genera-tion infrastructure to lay the founda-tion for the clean energy economyAmerica needs to compete and createjobs in the 21st century. To meet thatgoal, OSHC will strengthen HUD’sEnergy Efficient Mortgage product andother energy retrofit financing options-for both single family homes andmulti-family rental housing—througha $50 million Energy Innovation Fund.

paid upfront fees to bad actors whopromised loan modifications but neverdelivered,” said Treasury SecretaryTimothy Geithner. “I commend the FTCfor proposing a strong set of safeguardsto protect consumers from thesepredatory practices.”

The proposed rule also would barproviders from telling consumers tostop communicating with their lendersor mortgage servicers, and from mis-leading them about key facts such as:The likelihood of getting the resultsthey want, and how long it will take;their affiliation with public or privateentities; payment and other existingmortgage obligations; and refund andcancellation policies.

In addition, the proposed rulewould require providers to tell con-sumers that they are for-profit busi-nesses, the total amount consumerswill have to pay, that neither the gov-ernment nor the consumer’s lender hasapproved their services, and that thereis no guarantee that the lender willagree to change their loan.

The proposed rules would apply tofor-profit companies that, in exchangefor a fee, offer to work with lendersand servicers on behalf of consumersto modify the terms of mortgage loansor to take other steps to avoid foreclo-sure on those loans. The proposedrules generally exempt entities thatown or service mortgage loans.Attorneys would have a limited exemp-tion from the proposed advance feeban if they represent consumers in abankruptcy or other legal proceeding.For more information, visit www.ftc.gov.

FHFA announces one-year extension of HARP

Federal Housing FinanceAgency (FHFA) ActingDirector Ed DeMarco hasannounced the exten-sion of the HomeAffordable Refinance

Program (HARP), a refinancing programadministered by Fannie Mae and FreddieMac, to June 30, 2011. The program is akey component of the Administration’sMaking Home Affordable Programannounced in February 2009. The HARPprogram expands access to refinancingfor qualified individuals and familieswhose homes have lost value. The pro-gram was set to expire June, 2010.

“FHFA has reviewed the currentmarket situation and the state of mort-gage insurance availability and hasdetermined that the market conditionsthat necessitated the actions taken lastyear have not materially changed,”said DeMarco. “Accordingly, to supportand promote market stability, and toencourage lenders and other mortgagemarket participants to fully adopt theHARP program, including the imple-mentation of the October 2009 expan-sion of loan-to-value ratios (LTVs) to125 percent, FHFA is authorizing the

news flash continued from page 5

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

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



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

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

offered to consumers by a representativesample of creditors for mortgages thathave low-risk pricing characteristics. TheAPOR for a broad range of types of trans-actions is published in a table updated atleast weekly, along with the methodolo-gy used to derive these rates.

In order to determine which loans arecovered, one must look at the definitions of

“consumer credit” and “prin-cipal dwelling.” “Consumercredit” is defined by the reg-ulation as “credit offered orextended to a consumer pri-marily for family, or house-hold purposes.” The mean-ing of “principal dwelling” isclarified in the commentaryto Regulation Z and is gener-ally understood to meanowner occupied real proper-ty. Thus loans that are notextended primarily for fami-ly or household purposes areexcluded, and so are loansthat are not occupied by theowner. Construction loans,reverse mortgages, bridgeloans and home equity linesof credit are also excludedfrom the HPML regulation.

HPMLs are subject tothe following restrictions:

� Repayment ability: Lenders are prohib-ited from extending credit based on theconsumer’s collateral without regard tothe consumer’s repayment ability.

� Prepayment penalties: Prepaymentpenalties are prohibited unless thepenalty will not apply until twoyears following the closing. A penal-ty will not apply if the source for theprepayment funds is a refinancingby the lender or its affiliate.

� Escrows: A lender may not extend amortgage secured by a first lien on aprincipal dwelling unless an escrowaccount for property taxes and mort-gage insurance premiums is estab-lished before closing.

While this regulation is specifically tar-geting sub-prime loans, since there is nosub-prime mortgage market to regulateat this time, the actual impact is anothercompliance concern for all lenders.

Disclosing the costs of a loanSince the beginning of the year, lendershave had to use the new Good FaithEstimate (GFE) for all mortgage transac-tions subject to the Real Estate SettlementProcedures Act (RESPA). The rule that man-dates that GFEs must be delivered to theborrower no later than three business daysafter a lender receives an application hasnot changed. However, the contents of thedocument have changed significantly.

We have entered a new era of predatorylending regulation and compliance forlenders. Since the beginning of 2009, law-makers have proposed and passed sever-al regulations that attempt to prevent therash of risky, and in some cases, predato-ry, loans that have rocked the mortgageindustry over the past few years.

The reason for these rules lies in theemotional nature of ahome purchase. Once abuyer has mentally com-mitted to buying a home,most will follow througheven if fees rise or termschange between the initialdisclosure and the closingtable. While the vast major-ity of lenders treated bor-rowers with fairness andrespect, a few unscrupulouslenders engaged in thesedeceptive practices, know-ing that most borrowerswould still sign the higher-cost loan, rather than walkaway from their new home.

New lending regulationsfall under two umbrellas—clarifying what constitutes ahigher priced, high-cost orpredatory loan and reform-ing the rules to disclose thecosts of a mortgage. Toavoid penalties for inadvertently funding ahigh-cost loan or messing up a disclosure,lenders must understand what the rulesmean. More importantly, they need toimplement systems to reduce the risk offunding a high-cost loan and improve thedistribution of initial disclosures.

Defining higher pricedloansOn Oct. 1, 2009, the Federal Reserveimplemented a new section of RegulationZ designed to regulate the closed-end sub-prime mortgage market—the “higher-priced mortgage loan” (HPML) rule. Therule establishes triggers for categorizingloans as HPML and sets forth special rulesand restrictions that apply to loans thatfall into the category. The rule helps pro-tect consumers from deceptive and abu-sive lending practices.

HPMLs are defined as a “mortgagewhere certain annual percentage rate (APR)thresholds are met.” An HPML occurs whenthe mortgage for a principal dwelling hasan APR that exceeds the average primeoffer rate for a comparable transaction by1.5 or more percentage points for loanssecured by a first lien on a dwelling, or by3.5 or more percentage points for loanssecured by a subordinate lien.

The thresholds are based on the“average prime offer rate” (APOR). TheAPOR is defined as an APR that is derivedfrom average interest rates, points andother loan pricing terms currently

Fighting Predatory Lending With Automation

“Lenders must usetechnology that elim-

inates data entry,provides strong

tracking and report-ing capabilities and

is updated to complywith new regulations

at all levels.”

By Fred Gooch

While the old GFE was primarily con-cerned with disclosure of settlementcosts to the borrower, the new GFE sum-marizes the loan terms and is gearedtoward aiding the borrower in shoppingfor settlement services.

The purpose of the GFE goes far beyondthe disclosure of settlement charges cur-rently being disclosed. This new documentis intended to give the borrowers a disclo-sure of loan terms in addition to the settle-ment service charges.

Ultimately, the document gives theborrowers a tool to use in shopping for aloan. However, it has caused lenders tochange the way they handle disclosuresand comply with predatory lending rules.

Easing the complianceburden The challenge lenders face is perfectinga process that eliminates the risk of fail-ing to properly disclose the terms of theloan upfront and catches potentialhigh-cost loan terms prior to closing.

For easing the cost and time spent ondisclosures, lenders should look intoeDisclosure systems. These systems areeasy to implement and nearly all bor-rowers have the capabilities to receive,sign and return the disclosures.

More importantly, from a compliancestandpoint, electronic disclosure systemsoffer monitoring and reporting on thestatus of all disclosures. These reportsprovide a paper trail to verify the receiptand acceptance of the disclosure.

On the back end, lenders should seekautomated high-cost lending andpredatory lending review systems thatflag suspicious applications prior toreaching the closing table. This enableslenders to make corrections to loansthat would trigger HPML regulations, aswell as other predatory lending laws, inenough time to issue revised disclosuresand ensure the loan closes correctly.

The best systems will pull data direct-ly from the loan origination software(LOS) to eliminate time-wasting andrisky data reentry. First Bank Mortgagefrom Augusta, Ga. implemented anautomated document and high-costloan software because the headachesassociated with manual predatory lend-ing checks became too much.

“The old system was very manual,”said Leslie Kromke, mortgage officer for

First Bank Mortgage. “We literally hadto enter everything from the final HUDreport into the system, which created ahuge margin of error. Since the finalhigh-cost lending and predatory lend-ing check is run at the closing table, wehad to find a method that would notleave our customers wasting time wait-ing on a computer program to run.”

The lender now uses a Web-basedtool that compares loan-level data toapplicable laws, regulations andinvestor requirements. The system isalso configurable for state and localregulations in addition to the federallaws. According to Kromke, the mostsignificant benefits to using an auto-mated system to manage predatorylending compliance are the speed andaccuracy of the checks.

“The old system added more thanfive minutes to the end of each closing,”said Kromke. “With HCL/PredCheck, wecan run the compliance checks and gen-erate the reports in less than a minute.”

Kromke also said the improvedaccuracy saves the lender potentialregulatory punishments or loansreturned by investors.

“In addition to the regulatory agen-cies, investors run their own checks toensure compliance with HCL andpredatory lending laws,” said Kromke.“Our software makes it easy to gener-ate the reports we need to prove com-pliance on all loans and improve ourcash flow with increased sales on thesecondary market.”

As First Bank Mortgage’s experienceshows, lenders can still close profitableloans with the new rules affectinglenders today. Lenders must use tech-nology that eliminates data entry, pro-vides strong tracking and reportingcapabilities and is updated to complywith new regulations at all levels. Theones who do will be able to close moreloans and remove the fear of a highcost loan or improper disclosure slip-ping through the cracks.

Fred Gooch is general counsel and vicepresident of compliance for Idaho Falls,Idaho-based DocuTech Corporation, aprovider of compliance services anddocumentation technology for the mort-gage industry. He may be reached by e-mail at [email protected].

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Is More Regulation the Answer?Whether you are a real estate attorney,agent, appraiser or lender, you have, nodoubt, felt the effects of mortgage loan gov-ernment regulation, in recent years, andparticularly, in recent months. Even amongthose whom have been less affected in thepast, there is the constant threat of addition-al regulation coming down the pike. Overthe past three or four decades, we have seengrowing government regulation creepinginto our industry at practically every level ofgovernment. Not only is the federal govern-ment involved, but everystate has also found it neces-sary to get its finger into thepie, and some cities areeven beginning to get in onthe act.

Examples of the typesof additional regulationinclude, new laws requir-ing banks to be very specif-ic about closing fees, evenbefore all of the facts areknown about the borrowerand the borrower’s proper-ty; regulations prohibitingmortgage brokers fromordering appraisals; lawsrequiring mortgage bro-kers to register at the fed-eral level and attorneys tofollow different guidelinesfor closing statements.Further, national appraisal managementcompanies (AMCs) are now required toregister, follow strict and varying guide-lines and pay high fees in many states.Most states, as well as the federal govern-ment, are expected to follow suit. For anational AMC, registering at the federallevel and in each state would require 51registrations, 51 different sets of rules and51 sets of fees. The fees alone are expect-ed to run into the hundreds of thousandsof dollars for each national AMC, whichcan only mean higher costs to the con-sumer. All of this regulation is in additionto, and on top of, other regulations,which, if properly implemented, shouldalready be protecting the consumer.

Why is this necessary?What is so wrong with our business model

that requires so much government inter-vention? Is it because there is an overabun-dance of crooks in the business? Who is real-ly benefiting from this regulation? Is it thosepurportedly being protected? Is the publicbenefit commensurate with the cost? Aregovernment lobbyist culprits gaining exces-sive control by promoting the special inter-ests of one group over another under theguise of protecting the public? We could goon and on with the whys and about the jus-tification. When asked, most politicians

claim that it is to protect thepublic interest. Suffice it tosay, the system is a mess.Our system is already bur-dened with excessive andineffective controls, suppos-edly designed to protect thepublic, while costing it anarm and a leg in unneces-sary fees and administrativecosts.

Further, the regulationsthat we have in place are, inmany cases, not beingenforced … case in point …the recent financial melt-down. With all of the regu-lation that we have in place,we are implementing newlevels of regulation with thesame or similar language,which has not proven toprotect us in the past. It

already is and has been illegal for mort-gage professionals to commit fraud fordecades, yet many honest and responsibleprofessionals are being saddled with addi-tional onerous and burdensome regula-tion, designed to accomplish the sameobjective.

An analogy would be that of the air-line industry. The honest and faithfulflying public continues to be burdenedwith additional inconveniences, such asthat of not being able to carry a bottleof shampoo on a plane. Meanwhile, ter-rorists, who pay cash for a ticket, carry noluggage and have bombs in their under-wear, are allowed to board, even thoughthey are on suspected terrorists lists.

“What is so wrong withour business model

that requires so muchgovernment interven-

tion? Is it because thereis an overabundance ofcrooks in the business?”

By Charlie W. Elliott Jr., MAI, SRA


Mich.; Dayton, Ohio; Youngstown-Warren-Boardman, Ohio-Pa.; andAkron, Ohio.

Five smaller housing markets postedeven higher affordability scores thanIndianapolis, with Kokomo, Ind., whichhistorically has had a favorable income-to-house price ratio, outscoring all oth-ers. In Kokomo, 98 percent of homessold during the fourth quarter of 2009were affordable to median-incomeearners. Other smaller housing marketsnear the top of the index includedMonroe, Mich.; Flint, Mich.; Lima, Ohio;and Bay City, Mich., respectively.

New York-White Plains-Wayne, N.Y.-N.J., continued to lead the nation as itsleast affordable major housing marketduring the fourth quarter of 2009. TheNew York metro area has occupied thisposition for seven consecutive quarters.Slightly less than 20 percent of all homessold during the final quarter of 2009 wereaffordable to those earning the New Yorkarea’s median income of $64,800. Theother major metro areas near the bottomof the affordability scale included SanFrancisco; Honolulu; Santa Ana-Anaheim-Irvine, Calif.; and Los Angeles-Long Beach-Redwood City, Calif.

San Luis Obispo-Paso Robles, Calif.was the least affordable of the smallermetro housing markets in the countryduring the fourth quarter. Others nearthe bottom of the chart included SantaCruz-Watsonville, Calif.; Ocean City,N.J.; Napa, Calif.; and Santa Barbara-Santa Maria-Goleta, Calif.For more information, visitwww.nahb.org/hoi.

MBA: Only 13 percent of non-bank commer-cial/multifamily debt tomature in 2010

The MortgageBankers Association(MBA) has releasedthe results of its2009 Commercial

Real Estate/Multifamily Survey of LoanMaturity Volumes. The survey indicatesthat the volume of commercial andmultifamily mortgage debt maturing in2010 and 2011 is relatively low. Of the$1.45 trillion balance of outstandingmortgages held by non-bank investors,only 13 percent of the total ($183.9 bil-lion) will mature in 2010 and sevenpercent ($99.8 billion) in 2011. The sur-vey also found that maturities vary con-siderably by the type of investor hold-ing the loan.

“Commercial and multifamily mort-gages tend to be long-term loans, oftenfor 10 years or more,” said JamieWoodwell, MBA’s vice president of com-mercial real estate research. “The factthat a disproportionate share of com-mercial and multifamily mortgageswere made in 2005, 2006 and 2007means that for most investor groups,only a fraction of the balance will bematuring in the next couple of years.”

HUD will also make available anAffordability Index that measures thecosts of where a home is located in rela-tion to jobs, schools and transportation.

Congress provided $150 million toHUD for a Sustainable CommunitiesInitiative. Of that amount, $100 millionis available for regional integratedplanning initiatives through HUD’sSustainable Communities PlanningGrant Program. To demonstrate HUD’scommitment to listening and learning,Secretary Donovan also announcedtoday that a description of the futuregrant program is available for com-ment, including through an interactiveWiki, on HUD’s Web site. For more information, visit www.hud.gov.

NAHB finds housingaffordability near record-high levels for fourthconsecutive quarter

Nationwide housing affordability, bol-stered by favorable interest rates andlow house prices, closed out the yearnear its highest level since the serieswas first compiled 18 years ago, accord-ing to the most recent NationalAssociation of Home Builders/WellsFargo Housing Opportunity Index (HOI).

The HOI showed that 70.8 percent ofall new and existing homes sold in thefinal quarter of 2009 were affordableto families earning the national medi-an income of $64,000, slightly higherthan the previous quarter and near therecord-high 72.5 percent set during thefirst quarter of 2009. Affordability dur-ing the final quarter of the year was upfrom 62.4 percent during the fourthquarter of 2008.

“Favorable mortgage rates and slid-ing house prices that have now startedto stabilize nationally have both con-tributed to a record year for housingaffordability in 2009,” said NAHBChairman Bob Jones, a home builderfrom Bloomfield Hills, Mich. “Withinterest rates still hovering at low levelsand the economy beginning torebound, the federal housing tax cred-it will encourage even more first-timeand repeat home buyers to enter themarket and help further stabilize hous-ing and the economy by creating newjobs, stimulating home sales andreducing foreclosures.”

Indianapolis was the most afford-able major housing market in thecountry during the fourth quarter, aposition the metro area now has heldfor four and a half years. More than 95percent of all homes sold were afford-able to households earning the area’smedian family income of $68,100. Alsonear the top of the list of the mostaffordable major metro housing mar-kets were Detroit-Livonia-Dearborn,


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

because the rating agency criteria arevery conservative. For example, AAA-rated reverse mortgage bonds must beable to withstand a drop in home val-ues exceeding 30 percent. Had the rat-ing agencies applied this standard uni-formly to all rated mortgage transac-tions, the mortgage securitization mar-ket would not have experienced any-thing close to the depth of collapse wewitnessed in 2008.

Because 98 percent of reverse mort-gages were never securitized, but ratherportfolioed by Fannie Mae, the second-ary markets are still in their infancy, orat best, in their adolescence. The marketneeds true market-clearing pricing, dataand supply for it to become fully accept-ed. As HECM mortgage-backed securitiesgain broad acceptance and other newsecuritization vehicles are introduced,more investors will take interest in theasset class. When that happens, webelieve that true secondary marketspricing and execution will become thenorm for reverse mortgages.

What are some lessons you havelearned about reverse mortgage-backed securities (RMBS) and investors’attitude toward them?We learned that reverse mortgages arenot immune to the vagaries of the mar-ket. Like other asset classes, they canget a bit frothy. During the height of themortgage bubble in 2005-2007, pricingof HECMs became irrational, and thewhole loan HECM securitizations soldduring the pre-HMBS era did not deliv-er a lot of value to investors. The mar-ket lost sight of HECM’s inherent value.

What makes Ginnie Mae’s HECM mort-gage-backed securities (HMBS) a bet-ter value proposition for investors?HMBS provides: (1) a “full faith andcredit” layer of credit guarantee, (2) thesuperior liquidity and execution of theGinnie Mae securitization program, and(3) insulation from other risks (borne bythe HMBS issuer) of tax and insurancedefaults, credit line and other advances.

What prospects and challenges doyou see for RMBS after the GreatRecession of 2008-2009?We believe the key to success for reversemortgages is the establishment of alower LTV, low-cost product with zeroupfront fees in exchange for lesser pro-ceeds. For 20 years, HECM proceedshave been calculated assuming fourpercent annual home price apprecia-tion—it is time for that to be recalibrat-ed with our current market environ-ment. The main lesson from the “greatrecession” of 2008-2009 is that we—individuals, corporations and govern-ments—borrowed too much and nowmust deliver. This is also true for reversemortgage borrowers. FHA’s recentactions are a first step in this direction.

What is your favorite reverse mort-gage story? The first National Reverse MortgageLenders Association (NRMLA) Conferencewe attended in Naples in 1999 was par-ticularly revealing. The following year’sconference in Dallas was the first timewe witnessed significant audience par-ticipation, and it was very good.

Author and columnist, Atare E. Agbamu,CRMS is director of reverse mortgages atMinneapolis-based AdvisorNet MortgageLLC. A member of the BusinessWeekMarket Advisory Board, Agbamu isauthor of Think Reverse! and more than130 articles on reverse mortgages.Through his advisory firm, ThinkReverseLLC, Agbamu advises financial profes-sionals, institutions and regulatorsacross the country. In a 2007 nationalreport on reverse mortgages, the AARPcited Agbamu’s work. He can be reachedby phone at (612) 436-3711 or (612) 203-9434, and e-mail at [email protected] or [email protected].

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

and insights on the reversemortgage marketplace.

forward on reverse continued from page 6

criminal background checks for mort-gage loan originators. All individualsapplying for a Mortgage LoanOriginator License through NMLS on orafter Jan. 25, 2010 will be required tosubmit fingerprints to NMLS andrequest a national criminal historybackground check with the FederalBureau of Investigation (FBI) as part ofthe application process. Additionally,all existing state-licensed mortgageloan originators must provide finger-prints to NMLS and request a nationalcriminal background check prior to adate established by their state regula-tor. Providing criminal backgroundcheck processing through NMLS fulfillsone of the mandates of the Secure andFair Enforcement for MortgageLicensing Act (SAFE Act).

The SAFE Act requires all mortgageloan originators to submit fingerprintsto NMLS in order for state mortgageregulators to obtain criminal historyinformation. The SAFE Act also man-dates minimum criminal history stan-dards be incorporated into state law.

Consistent with the goal of NMLS toimprove mortgage supervision throughthe sharing of information betweenstate regulators, the SAFE Act author-ized the Conference of State BankSupervisors (CSBS) to be a channellerwith the FBI so that a single back-ground check can be received on amortgage loan originator andreviewed by all states that regulate thisindividual. This process is more cost-effective and greatly improves uponthe current system of criminal back-ground check review which relies oneach state requesting a separate back-ground check—often at different time-frames and through various processesthat left states reviewing differentinformation on the same individual.Through NMLS, all state regulators thatsupervise a mortgage loan originatoror are considering an application forlicensure will have access to the mostup-to-date criminal history recordscheck from the FBI.

As part of the functionality in NMLSto process criminal history backgroundchecks, NMLS contracted with a firm toestablish a national network of NMLS-approved electronic fingerprint capturesites. NMLS has partnered withBusiness Information Group’sFieldprint unit to deliver this nation-wide coverage. Business InformationGroup (BIG) has made more than 700NMLS-approved electronic fingerprintcapture sites available for mortgageloan originators to schedule anappointment through their NMLSaccount. Fingerprints captured elec-tronically are cleaner and have a muchlower error rate which will greatlyreduce the need for mortgage loanoriginators to have prints retaken ifthey cannot be read by the FBI.Mortgage loan originators not locatedwithin a reasonable commuting dis-tance to an NMLS approved fingerprintcapture site will have the option to

MBA’s 2009 survey collected informa-tion directly from servicers on the matu-rity years of more than $1.5 trillion inoutstanding mortgages, including $1.45trillion of non-bank commercial/multi-family holdings. Only small shares of thecommercial and multifamily mortgagedebt held by life insurance companies,Fannie Mae, Freddie Mac or FHA, or infixed-rate commercial mortgage-backedsecurities (CMBS) will be coming due in2010 or 2011. Greater shares of mort-gages held in short-term and floating-rate commercial mortgage-backed secu-rities (CMBS) and by credit companies,warehouse facilities and other investorswill mature in 2010 and 2011.

“Investor groups’ maturity schedulesare generally designed to match their lia-bilities,” said Woodwell. “Many maturingmortgages have built-in extension options,and most investor groups and servicershave considerable discretion in how theydeal with loans that may not be able toimmediately refinance at maturity.”

Based on MBA’s survey, of the $1.45trillion balance of outstanding mort-gages held by non-bank investors, 13percent of the total ($183.9 billion) willmature in 2010 and seven percent ($99.8billion) in 2011. Commercial/multifami-ly mortgage maturities vary significantlyby investor group. Just two percent ($4billion) of the outstanding balance ofmultifamily mortgages held or guaran-teed by Fannie Mae, Freddie Mac, FHAand Ginnie Mae will mature in 2010. Lifeinsurance companies will see seven per-cent ($17.5 billion) of their outstandingmortgage balances mature in 2010.Among loans held in CMBS, 12 percentwill come due in 2010, including sevenpercent of the $650 billion of loans infixed-rate conduit CMBS and 72 percentof the $54 billion of loans in floating rateand large-borrower CMBS. Thirty-twopercent ($69 billion) of commercialmortgages held by credit companies andother investors will mature in 2010.

The bank lending market tends tobe distinct from the more institutionalcommercial/multifamily mortgagemarket represented by life insurancecompanies, Fannie Mae, Freddie Mac,FHA and the CMBS market. The largenumber and diversity of banks andthrifts also means that while the reportpresents information on more than$100 billion of commercial and multi-family mortgages held by banks andthrifts, those results are not believed tobe generalizable. The dollar figuresreported are the unpaid principle bal-ances as of Dec. 31, 2009. Becausemost loans pay down principle, the bal-ances at the time of maturity will gen-erally be lower than those reported. For more information, visit www.mort-gagebankers.org.

NMLS announces federalcriminal backgroundcheck processing for LOs

The NationwideMortgage LicensingSystem and Registry(NMLS) has begunprocessing federal continued on page 10

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fha insider continued from page 5

5. HUD will take underserved areas intoconsideration and compare a mort-gagee’s performance to the field office’saverage DCR for similar loans.

6. To lessen the effect this policy willhave on lenders with small volume,HUD will establish a minimum DCR andonly analyze lenders that exceed thisminimum DCR.

7. Mortgagees may appeal within 30 cal-endar days of the date of receipt of theproposed termination notice.

Since FHA is putting the hammerdown, it may have you reeling a bit. Butremember, a healthy and solvent sec-ondary market, which includes GinnieMae, is vital to your origination practice.

Go FHA!

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

Visit author Jeff Mifsud’s Website at http://mseminars.comfor tips and information on

FHA loans and details fromsome of the nation’s top FHA specialists.

wanted my opinion. I directed him to theNeighborhood Watch Web site, where wediscovered the lender he was consideringhad a CR in excess of 300 percent! Needlessto say, I advised him to look elsewhere.

If you’re the owner of a company andhave a low CR, use this as a recruiting toolto instill confidence prospective employ-ees that they’ll be working for a solid com-pany that writes good loans. If you have ahigh CR, it’s time to dust off your qualitycontrol plan, update it and get your stafffocused on writing quality loans.

Here are the seven things you needto know about the changes from thisMortgagee Letter:

1. The effective date of this policy isJan. 21, 2010.

2. This change allows HUD to terminatethe underwriting authority of lenderswith high DCRs. Previously, HUD onlyhad authority to terminate loan origi-nation approval authority.

3. Every three months, HUD will reviewthe previous 24 months of DCRs on allFHA-insured single family loans and ana-lyze the performance of every mortgagee.

4. HUD will target lenders with a DCRthat exceeds 200 percent of the DCRwithin the geographic area, and alsothose which exceed the national DCR.

Is more regulation theanswer?In a nutshell, the answer to that broad ques-tion is “No.” Is better regulation and stricterenforcement is the answer? Yes. Our govern-ment has a responsibility to provide simpleground rules that are fair, not only to con-sumers, but also to all of the stakeholders ina transaction. In order to curtail excessivecost to the consumer and to support somesemblance of a free market, regulationshould be kept to the minimum required toprotect the public interest. Regulationshould be simple and economical.Processes should be developed not only toprotect the public, but also to do so in amanner consistent with efficiency and com-mon sense. The ground rules must not bedeveloped along the lines of feathering thenest of special interest. They must only be toprotect the public interest. That means thatif we have too many professionals to servicethe legitimate demands of the industry,some of us should get out. Regulationdesigned to encourage the continuation ofmaking loans to people who do not qualifyfor them, just to create a few phony jobs,makes no sense and should be stopped.Much more attention should be directedtoward doing a better job of enforcing andtweaking the regulations that we alreadyhave in place. Up until and through the

mortgage meltdown, all major banks werebeing audited, and their mortgage portfo-lios were being evaluated for soundness.

Unfortunately, much of the new regu-lation that we are seeing today goes farbeyond that which is required to protectthe public interest, while current regula-tions are not being adequately enforced. Itis driven far too often by industry insiders,lobbyists, bureaucrats, labor unions, tradeassociations, large corporations or influen-tial individuals, seeking to protect theirown special interest.

Most, if not all, of the burden of comply-ing with excessive regulation is borne by theconsumer, taxpayer and small business.Paradoxically, the very people whom theregulation is designed to protect usually paya hidden price and receive little or no protec-tion. We are already paying a high price forprotection, which we are not getting. Addingadditional layers of regulation will be addinginsult to injury. We were already paying forthis service as taxpayers. Were we getting ourmoneys worth? I would say hardly so.

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

value nation continued from page 8

in HUD’s housing and community devel-opment programs to make them morestreamlined, efficient, and accountable.

HUD’s budget proposal seeks tomake targeted investments in peopleand places—instead of policies andprograms—to effectively support HUD’smission while being accountable to theAmerican taxpayer. Approximately $6.9billion in projected FHA and Ginnie Maereceipts contribute to the FY 2011 pro-posed $48.5 billion budget total and tothe administration’s deficit reductionplans. Net of the $6.9 billion in project-ed FHA and Ginnie Mae receipts theBudget proposes overall funding of$41.6 billion, five percent below fiscalyear 2010, and makes difficult deci-sions to cut funding for a number ofprograms.

“After a year of progress, we nolonger confront an economy or aDepartment in crisis,” said HUDSecretary Donovan. “But much workremains, in much changed fiscal cir-cumstances. Now that the economiccrisis has begun to recede, PresidentObama has committed to reducing thefederal deficit. HUD’s fiscal year 2011budget reflects that fiscal discipline.With the Recovery Act and fiscal year2010 funding having stabilized HUD’sprograms after years of slow starvation,the time has come to begin transform-ing them-to make HUD’s housing andcommunity development programsmore streamlined, efficient, andaccountable.”

The targeted investments in the FY2011 budget will enable HUD programs to:

� House more than 2.3 million familiesin public and assisted housing (morethan 58 percent elderly or disabled);

� Provide voucher assistance to78,000 additional families (morethan 47 percent elderly or disabled);

� Assist nearly 5.5 million households,over 200,000 more than at the endof fiscal year 2009;

� More than double the annual rate atwhich HUD assistance creates newpermanent supportive housing forthe homeless; and

� Create and retain 112,000-plus jobsthrough HUD‘s housing and eco-nomic development investments incommunities across the country.

HUD’s FY2011 Budget will helpstrengthen the nation’s housing marketto bolster the economy and protectconsumers. The budget will reflect $6billion in profit for the Federal HousingAdministration (FHA), generated thanksto the FHA reforms announced by FHACommissioner David H. Stevens. Thosepolicy changes will strengthen theFHA’s capital reserves, while enablingthe agency to continue to fulfill its mis-sion to provide access to homeowner-ship for underserved communities andsupport the nation’s housing market

have prints taken in card format andsubmitted to BIG for manual scanning.For more information, visit http://mort-gage.nationwidelicensingsystem.org.

Embrace Home Loansraises $20,000 forHaitian earthquake relief

Newport, R.I.-based Embrace HomeLoans recently organized and held anauction, in lieu of holding its annualsales meeting, to raise funds for earth-quake relief in Haiti. Raising more than$20,000, contributions will go towardsPartners with Haiti to support Haitianorphanages.

“To raise such a large volume ofmoney illustrates how giving and car-ing our employees are,” said DennisHardiman, chief executive officer andfounder of Embrace Home Loans. “Notonly is the local community veryimportant to us, but we’re also devot-ed to helping those outside our imme-diate reach to better the lives of oth-ers, especially those affected by suchdevastation as the people of Haitihave been. As implied by our name,we continuously embrace the globalcommunity and strive to improve thequality of life for our neighbors andfriends. Through this event, we hopethat our contribution will help make adifference.”

Auction items were donated byemployees, which included Yankees-Red Sox tickets, Boston Celtics tickets, asport fishing trip in Florida, use of anRV for a week, use of a vacation homein Florida for a week, use of convertiblefor a weekend, Taylor Swift concerttickets and more. The company nor-mally holds its annual company salesmeeting during this time each year.Given the tragic events that occurred inHaiti, the company decided to forgo itsannual meeting and instead use it asan opportunity to raise donations andcreate awareness about the dire needin Haiti.For more information, visit www.embrace-homeloans.com.

HUD unveils 2011 budget proposal

U.S. Department ofHousing & UrbanDevelopment (HUD)Secretary ShaunDonovan unveiledthe Department’s

fiscal year 2011 budget proposal, fol-lowing President Barack Obama’s pres-entation of his Administration-widebudget. The HUD budget focuses on fis-cal discipline, creating jobs and buildson the administration’s first yearaccomplishments by proposing reform


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

vicers and then providing that cash anddata, through trustees, to investors.Unless otherwise noted, MBA tabula-tions that combine different roles donot double-count loans for which a sin-gle servicer performs multiple roles.

Wells Fargo/Wachovia Bank,PNC/Midland, Berkadia, and Bank ofAmerica Merrill Lynch are the largestmaster and primary servicers of com-mercial/multifamily loans in U.S.CMBS, CDO and other ABS; GEMSA LoanServices, PNC/Midland, PrudentialAsset Resources, Northmarq Capital,and Northwestern Mutual are thelargest servicers for life companies;PNC/Midland, Wells Fargo/WachoviaBank, Deutsche Bank and Berkadia arethe largest Fannie Mae/Freddie Macservicers.

TriMont Real Estate Advisors ranksas the top master and primary servicerof commercial bank and savings institu-tion loans; GEMSA the top credit com-pany, pension funds, REITs, and invest-ment funds servicer; PNC/Midland thetop FHA and Ginnie Mae servicer; WellsFargo/Wachovia the top for mortgagesin warehouse facilities; and Berkadiathe top for other investor type loans.

MBA also asked firms to provideinformation about CMBS loans onwhich they are the “named special ser-vicer,“ that is, where the firm standsready to service the loan should specialproblems develop, such as delinquen-cy. The leading-named special servicerswere LNR Partners Inc., CWCapital LLC

& CWCapital Asset Management,Centerline and PNC Real Estate.

The MBA survey also collectedservicing volumes for loans on com-mercial/multifamily properties locat-ed outside the U.S. Hatfield PhilipsInternational ranks as the largestmaster and primary servicer of non-U.S. commercial/multifamily mort-gages, followed by Deutsche Bankand GEMSA.For more information, visit www.mort-gagebankers.org.

State ForeclosurePrevention WorkingGroup reports negative trends

A group of stateattorneys gen-eral and bank-ing regulatorspredict a devas-tating accelera-tion of foreclo-

sures unless policy makers step upefforts to assist homeowners. The StateForeclosure Prevention Working Grouphas issued a report that cited disturb-ing trends, including a rising tide ofdelinquent mortgages outpacing ser-vicer outreach and loss-mitigationefforts. The report also offered recom-mendations for action.

“Despite significant state and feder-al efforts to assist homeowners, moreforeclosures are predicted for this yearthan occurred in 2009,” said Attorney

General Rob McKenna. “Programs tohelp prevent foreclosure are jammedup, while 60 percent of delinquent bor-rowers aren’t getting any help.Servicers must do more.”

Findings of the Working GroupReport include:� Six of 10 seriously delinquent bor-

rowers are not even involved in lossmitigation efforts. The federal HomeAffordable Modification Program(HAMP) has helped slow down theforeclosure crisis, but current effortshave been insufficient to get aheadof the problem.

� Both loss mitigation and foreclosureefforts appear to be backlogged. Theaverage time to complete a loanmodification for some servicers ismore than six months. Many home-owners with trial modifications arenot yet qualified to transition to apermanent loan modification.

� Most modifications result in pay-ment reductions, but principalreductions remain rare. Given thecorrelation between negative equityand likelihood of default, the fail-ure to write down principal in con-nection with loan modifications is aglaring flaw in current efforts.

� Prime loans are increasingly drivingthe rising delinquency rates. Theforeclosure problem is broad-basedand not isolated to poorly-written orexotic loan products.

recovery. Due to FHA and Ginnie Maereceipts, the total HUD budget will be$48.5 billion, compared to $46.9 bil-lion in FY 2010.For more information, visit www.hud.gov.

Wells Fargo/Wachovia,PNC/Midland andBerkadia lead MBA’snational rankings ofcommercial/multifamilyservicing volumes

The MortgageBankers Association(MBA) has releasedits year-end rankingof commercial andmultifamily mort-gage servicers as

of the end of Dec. 31, 2009. On top ofthe list of firms is Wells Fargo/WachoviaBank with $473.8 billion in U.S. masterand primary servicing, followed by PNCReal Estate/Midland Loan Services with$322.9 billion, Berkadia CommercialMortgage with $217.9 billion, Bank ofAmerica Merrill Lynch with $131.7 bil-lion, KeyBank Real Estate Capital with$128.5 billion, and GEMSA LoanServices LP with $102.3 billion.

A primary servicer is generallyresponsible for collecting loan pay-ments from borrowers, performingproperty inspections and other proper-ty-related activities. A master servicertypically serves in a fiduciary capacityand is generally responsible for collect-ing cash and data from primary ser- continued on page 14

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Abacus partners withChip Cummings for SAFE Act training

Abacus Mortgage Training has announceda partnership with international speakerand acclaimed national mortgage trainerChip Cummings to offer a new, fun twist tothe required 20-hour NationwideMortgage Licensing System’s (NMLS)Secure and Fair Enforcement for MortgageLicensing Act (SAFE Act) training that mustbe taken by most loan originatorsthroughout the country.

“Chip has an entertaining yet highlyproductive approach to training thatnot only yields results, but allows par-ticipants to walk away with fresh ideasand strategies for success,” said PaulDonohue, founder of Abacus MortgageTraining. “For these mortgage profes-sionals, it’s not just training ... it’s anevent!”

“With the new SAFE Act require-ments, this is really a chance for me tobring quality information and first-classorigination strategies to thousands ofmortgage originators in a fun newway,” said Chip Cummings, CMC, anumber one best-selling author and 27-year veteran of the mortgage industry.“Paul and his team have put togetheran incredible two-day programdesigned to really elevate the level ofprofessionalism within our industry,and I’m pleased to be able to take itacross the country.”

Chip is the president and chief exec-utive officer of Northwind InternationalCorporation, a mortgage training andconsulting firm, and an industry veteranwith more than $1 billion in volumeunder his belt. He has written sevenbooks including three number one best-sellers, and has appeared on numerousTV shows such as FOX & Friends, NeilCavuto Show, NBC, FOX Morning News,MSNBC and dozens of radio shows. Chipis past president of the MichiganAssociation of Mortgage Professionals(MAMP), and has received numerousindustry awards. As an internationalspeaker, he trains thousands of mort-gage and business professionals everyyear.

While there are other NMLS-approved SAFE Act training programs

available, few provide the level ofexpertise and experience that Donohueand Cummings can bring to the table.With nearly 50 years of mortgage expe-rience between them, both are pastpresidents of state mortgage trade asso-ciations and have been active and visi-ble on the national mortgage educationscene for years.

Abacus’ training program, “MortgageOrigination Mastery” was the first-classapproved for the NMLS, which wasorganized under the national SAFE Act,and is available in a live or a live broad-cast training format.

Cummings, who is known for hishigh-energy delivery and creativestrategies, promises to bring some sur-prises to each city he visits. Initiallyover the first few months, he is sched-uled to appear in California, Oregon,Nebraska, Missouri and Kansas.

Paul Donohue founded AbacusMortgage Training in 2007, and hasauthored over a half dozen courses cer-tified for continuing education. He isthe past president of the North CarolinaAssociation of Mortgage Professionals(NCAMP), and has received numerousindustry awards. Paul is a regularly fea-tured columnist in several industrymagazines and newspapers, and hastrained over 16,000 loan originators.For more information, visitwww.AbacusMortgageTraining.com orwww.ChipCummings.com.

NetMore Americaengages ComergenceCompliance Monitoringto enhance TPO approval

NetMore America Inc., anexpanding next-genera-tion mortgage banker,announced that it hascontracted ComergenceCompliance Monitoring,a third-party originator(TPO) due diligence solu-

tion provider to the mortgage industry,to manage all reviews and continuousprofile monitoring of all TPOs workingwith NetMore.

Comergence, based in Orange, Calif.,provides mortgage lenders a compre-hensive alternative to an in-house TPOapproval desk, through an end-to-endservice solution, that provides due dili-gence, management and compliancesurveillance. Through a standardizedprocess, Comergence delivers mortgage

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lenders information on mortgage bro-kers, including a robust backgroundcheck of any TPO applying to do busi-ness with a mortgage lender. The multi-faceted check includes a 50-statelicense status and derogatory review,industry sanctions reviews, SocialSecurity Number verification forauthorized principals, Patriot Act com-pliance, civil and criminal convictions,business credit, address verification,bankruptcies, liens, and judgmentssearch among many others.

“NetMore is committed to workingwith the highest quality mortgage bro-kers in the industry in a ‘friction free’manner,” said Lisa Schreiber, chiefstrategy officer of NetMore. “We believeComergence’s centralized platform willnot only mitigate risk and lower ourcosts associated with the TPO approvalprocess, but also accelerate the oppor-tunity for NetMore to begin workingwith quality production partners.”

The Comergence online platform isavailable 24 hour a day, 365 days ayear, and aggregates and appends pub-licly available data with its own propri-etary data which offers mortgagelenders a richer view of any TPO. Alldata is verified by the company’s ana-lysts and made available in a compre-hensive report, which includes all doc-uments related to the application. AnyTPO that has been previously vetted byComergence for one mortgage lendercan quickly be approved by a newlender as the profile is current andreadily available.

“We are very excited about partner-ing with NetMore, a company thatclearly understands the power of theright relationships to drive business,”said James Deane, executive vice presi-dent of Comergence. “Our innovativesolution offers all parties in a mortgagerelationship the foundation to trust oneanother by providing an independent,consistent and comprehensive due dili-gence review and addresses the keyissues of transparency in the mortgageprocess.”For more information, visit www.net-moreamerica.com or www.comergence-compliance.com.

AllRegs and Motivity collaborate on mortgagemarketplace tools

Al lRegs , an infor-mation provider forthe mortgage indus-try, and Denver-basedMotivity SolutionsInc., creators of the

Movation Business ManagementPlatform, have announced a collabora-tion to bring sophisticated businessintelligence tools to the mortgage mar-ketplace. Specifically, the companiesare implementing intelligence aroundmortgage lender product and guidelineinformation.

“We are very excited to develop solu-tions with a company as innovative asMotivity,” said Dan Thoms, senior vicepresident for AllRegs. “Motivity’s plat-form, Movation, is a perfect match for

AllRegs’ underwriting guideline con-tent, and we expect to merge the twotogether in the near future.”

The AllRegs Information Service,known as AllRegs Online, is used byvirtually all of the top 100 lendersand throughout numerous govern-mental agencies. The Eagan, Minn.-based company provides mortgageprofessionals with subscription-basedaccess to single and multifamilyunderwriting and insuring guidelines,federal compliance laws and regula-tions, state compliance laws and reg-ulations with plain-language analy-ses, contract publishing services andtraining resources through AllRegsAcademy. In addition, AllRegs offersits LoanLibrary solution, an eligibilitysearch engine and loan product infor-mation management service, featur-ing more than 2,000 unique productsrepresenting 73-plus correspondentand wholesale investors.

Movation is a business managementplatform that focuses on the whole of amortgage-based operation, allowingadopters to maximize efficiencies andopportunities throughout their organi-zation. By applying Movation to theirexisting technology, companies willexperience real-time access to theircombined data in the form of key per-formance indicators, scorecards, dash-boards and on-demand reporting.Movation also fills the gaps in existingtechnology with its leading edge imag-ing, business rules, activity queues, andenterprise relationship management.

“Partnering with an industry leadingcontent provider to create productsthat are innovative and relevant isexciting for Motivity Solutions,” saidGabe Minton, chief strategy officer forMotivity Solutions. “The ability to com-bine our award-winning business intel-ligence tools with the industry’s pre-eminent content library will createtremendous value for mortgage compa-nies and continues to drive our missionto take the industry to the next level.”For more information, visit www.all-regs.com or www.movationnow.com.

PriceMyLoan works withGoogle on AdWordsComparison Ads affering

PriceMyLoan has announced a collabo-ration with Google to provide loan pric-ing technology for their AdWordsComparison Ads feature, which helpsusers looking for rate quotes onGoogle.com to more quickly and easilyconnect with mortgage lenders thatmeet their specific criteria.

“We’re excited to assist Google withour mortgage pricing capabilities,” saidGigi Campbell, national sales directorfor PriceMyLoan. “It’s gratifying toknow that Google considers our loanpricing technology to be on par with


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Wells FargoWholesale Lending

There is a reasonWells FargoHomeMortgageis one of the nation’s leadingwholesale lenders

Wells FargoWholesale Lending is well positioned to help you and your borrowers takeadvantage of today’smarket opportunities with a suite of products and programs, including:

• FHA loans• VAfinancing—larger loan amounts and assumable loans• Reversemortgages—Wells Fargo handles your processing1

• HomeOpportunitiesSM program• Guaranteed Rural Housing program (brokers do not need to be FHA-approved)• High Balance Conforming loans andHigh Balance FHA/VA loans• Our PerformanceWorksSM plan helps put you in control of your continued business success

And at our Broker’s First® website, you can register loans, price/lock, obtain credit, submit forDirect ExpressSM feedback – nowupload imaged documents – all in one convenient online location.

1. Borrowers must be at least 62 years or older. Prior Wells Fargo Home Mortgagereview and broker approval are required to originate FHA loans. Additionalapproval requirements apply to originate reverse mortgages. Please contactWells Fargo Wholesale Lending for details.This information is for use by mortgage professionals only and should not bedistributed to or used by consumers or other third parties. Information is accurateas of date of printing and is subject to change without notice.Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A.© 2009 Wells Fargo Bank, N.A. All rights reserved. #68212 12/09-3/10

Contact us today to learnmore.

www.brokersfirst.com

payment reductions alone will havelimited success in creating sustain-able homeownership in stateswhere a large percentage of mort-gage loans are significantly “under-water” (e.g., loan balance is greaterthan the home’s market value.)

� Servicers should pay particularattention to reforming payment-option ARM loans. If unaddressed,the payment shock on these loans,coupled with the high proportionthat are significantly “underwater,”will push a significant portion of

payment-option ARM loans intoforeclosure.

� The HAMP program must increasetransparency and reduce paperworkin order to reach its potential. Whilethe U.S. Treasury Department hasmade positive steps in reducingpaperwork burdens, we believemore streamlining is necessary toreduce burdens on both servicersand homeowners.

� States should consider expandinghomeowner counseling programs orimplementing temporary foreclo-sure mediation programs or othersuch measures. Given the numbersof homeowners facing foreclosureor likely to face foreclosure in the

next 12 to 24 months, it is likely thatmany will fall through the cracks ofeven the best-implemented systemfor working out mortgage loans.

� Both servicers and the U.S. Treasuryshould provide better options tokeep unemployed homeowners intheir homes. Unemployment andloss of income are key catalysts to amortgage default. While unemploy-ment insurance partially fills ashort-term gap in income from jobloss, unemployed homeowners facesignificant hurdles in keeping theirhomes.

The State Foreclosure PreventionWorking Group consists of 12 stateattorneys general (Arizona, California,Colorado, Florida, Illinois, Iowa,Massachusetts, Nevada, North Carolina,Ohio, Texas and Washington), bank reg-ulators for New York, North Carolina,and Maryland, and the Conference ofState Bank Supervisors. The group wasfounded in 2007 and has issued threeprior reports.For more information, visit www.csbs.org.

Your turnNational Mortgage Professional Magazineinvites you to submit any information onregulatory changes, legislative updates,human interest stories or any othernewsworthy items pertaining to themortgage industry to the attention of:

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

E-mail:[email protected]

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

Recommendations of the WorkingGroup Report include:� Servicers should suspend foreclo-

sure proceedings on any loaninvolved in the loss-mitigationprocess. In some cases, homeown-ers have lost their homes whilebeing told they are being consid-ered for a loan modification.

� Loss mitigation programs must beimproved to prioritize principalreduction in areas of significanthome price declines. Loan modifica-tion programs that rely on monthly


• Daily updated mortgage industry news

• Industry blogs• Write your own blog• Find loan programs• Discover local and

national events• Get access to video

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of risk is a major risk. Who is to say thatthe market does not move by 100 basispoints in one hour while you are in theloan application? Before this time, youcould always say at the end of the appli-cation, “Now, I will check rates.” Now, atthe end of the application, you cannotsay that. You have to honor the quote ofthe GFE you have compiled. How muchwould the loss be on a $300,000 loan? A100-basis point loss would be $3,000.Can you afford that risk on every loan?

Apparently, HUD thinks you can. Sounless HUD comes back to its senses, it isincumbent upon every loan officer tostay on top of the markets. You betterknow what the markets are doing whenyou fill in the form and if the markets aremoving while you are in a loan applica-tion, you better know that as well.

I asked Eric Holloman, our secondaryexpert and chief executive officer ofRateLink, what they do in order to keeptheir clients informed. RateLink has beenaround for almost two decades, and there-fore, they were doing such before theInternet was an option. Here is Eric’s reply:

“Before the Internet and cell phones, weused pagers to let our clients know thatchanges were occurring. Believe it or not,some of our clients from that period arestill using that technology. Now, whenthe markets are moving, loan officers aremore likely to ask us to alert them that achange is coming via text messaging ontheir cell phone. But it is not enough toalert them that the markets are moving.We must also give them word of what

economic releases are due the next morn-ing. Many loan officers take loan appli-cations at night and they need to knowwhat may move the markets in the morn-ing.”

In other words, looking on the comput-er is not enough. You must have a systemthat will keep you up-to-date frommoment to moment. For example, onethat will send a text message to yourphone as soon as the markets move a cer-tain amount. If ever there was a time forthis system to be implemented, the newGFE seems to have made it mandatory.Eric has consented to allow our readers a30-day trial of such a system, just go towww.RateLink.com in order to try it andfeel free to e-mail me at [email protected] to let me know what youthink of the system, and more important-ly, how are you limiting rate risk with thenew GFE. If you have another tool ormethod of limiting risk, we need to getthis information out to as many readers asquickly as possible. Many lenders are noteven aware that “N/A” is not an option.

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

There is no doubt that one of thebiggest changes a typical loan officer isdealing with today is implementing thenew and revised Good Faith Estimate(GFE). That is saying a lot because thereare so many changes that are beingimplemented in this challenging envi-ronment. These examples include theFederal Housing Administration (FHA)tightening up their policy significantlyto include a minimum credit score of580 for those who are using a 3.5 per-cent downpayment, lower seller contri-butions to three percent, higher upfrontpremiums and an audit system that isgoing to make every lender scared ofrunning afoul of FHA guidelines. It alsoincludes a National Licensing andRegistration System that will result infingerprinting, credit reports and test-ing for loan officers across the nation.There is certainly a lot on the plate forevery loan officer this year.

The “new” GFE brings severalchanges. For one, it is a standardizedform like the HUD-1 (and there is a newHUD-1 as well). In the past, the form hastaken many formats, varying fromlender to lender and software platformto software platform. It is also expand-ed to three pages and includes a “lumpsum” for all lender charges. For brokers,it will make the use of a yield spreadpremium (YSP) transparent by showingthe applicant how the YSP gets creditedto their closing costs, which includesthe broker’s charges.

We could spend four pages talkingabout the new GFE. However, this is acolumn on the secondary marketsand how these markets affect the

production and revenue of loan offi-cers. So, we will focus on one little-noted, but very important, part ofthis form. This is Line 1 of the firstpage of the form:

1. The interest rate for this GFE is avail-able through________. After this time,the interest rate, some of your loan orig-ination charges, and the monthly pay-ment shown below, can change until youlock your interest rate.

This may not seem like a very impor-tant part of the form, but let us exam-ine two very important points:

1. Most applicants will be “floating” whenthe GFE is made out. 2. The U.S. Department of Housing &Urban Development (HUD) has made itclear that the loan officer can only put“N/A” in the blank when there is no lockavailable for the program. If there is alock available, a date must be placed inthe blank.

In other words, the loan officer is goingto have to take the risk on a floating loanevery time a GFE is issued. How much risk?It may be hours (or even a day or more) forthe form to be delivered to an applicant.Here is the good news. HUD will let us notonly put a date in the form—but also atime. The following is a direct quote fromHUD’s Real Estate Settlement ProceduresAct (RESPA) office …

“The regulation does not prescribe theamount of time the interest rate must beavailable in the first box in the‘Important Dates Section’ on the initialGFE. That is why you can put a date anda time in the box. It cannot be zero, andmust be an actual date and time.”—David L. Friend Esq., office of RESPA andinterstate land sales, U.S. Department ofHousing & Urban Development (HUD)

Therefore, “N/A” is not appropriateand “zero” is not appropriate. It must bean actual date and time. Theoretically,since the date could not be expiredwhen the applicant receives the form (orit is sent out if mailed), even two hours

The Good Faith Estimate and Rate Risk

“So unless HUD comes back to itssenses, it is incumbent upon

every loan officer to stay on topof the markets. You better know

what the markets are doing whenyou fill in the form and if themarkets are moving while youare in a loan application, you

better know that as well.”

©2010 Inlanta Mortgage

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

Dear Mortgage Bankers,

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

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

W229 N1433 Westwood Drive, Suite 105 | Waukesha, WI 53186 | www.inlanta.com

JEAN BADCIONG Chief Operating Officer

Grow with us

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

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

Fighting the fight for the broker nationA Message From NAMB President Jim Pair, CMC

Many of you have asked if the National Association of MortgageBrokers (NAMB) has changed its position regarding the HomeValuation Code of Conduct (HVCC). The answer is a resounding“No!” We still believe that the HVCC is harmful to the consumer,to the mortgage broker, to the independent appraiser and to theeconomy.

NAMB was the first to recognize the harm that HVCC would cause to the con-sumer and the industry when the agreement was initially announced. NAMB, onits own, filed a lawsuit against Director James B. Lockhart and the FederalHousing Finance Agency (FHFA) to stop the HVCC. The suit was filed Feb. 23, 2009

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

before HVCC was implemented. Later, the suit was withdrawn when NAMBlearned that since Freddie Mac and Fannie Mae were in conservatorship, the suitcould not be adjudicated in a court of law.

As NAMB members, you have supported the efforts of your association tochange the HVCC. You contributed to the Legal Defense Fund to bring thelawsuit against the FHFA. You signed petitions against the HVCC and provid-ed information on how HVCC was harming the consumer, the industry andthe economy.

Through the efforts of NAMB and the National Association of Realtors (NAR),HR 3044 was introduced which called for an 18-month moratorium on HVCC. Todate, more than 200 representatives have signed on as co-sponsors of the billthanks to your efforts.

NAMB’s efforts to stop HVCC did not end there. On Oct. 15, 2009, NAMBsent a letter to Congress requesting that they support an amendment to HR3126 that would sunset HVCC within 90 days of enactment of the bill. Theamendment was accepted and attached to the bill and passed by the fullHouse.

NAMB is currently working to have the same amendment attached to theSenate bill that will be passed in the Senate Banking Committee. However, themechanism to implement the sunset provision is the creation of a ConsumerFinancial Protection Agency (CFPA) which is in question of surviving the legislativedebate.

NAMB has one big concern even if our efforts to sunset the HVCC are suc-cessful or the HVCC expires Nov.1, 2010. HVCC has become so ingrained withmost wholesale lenders that it will continue to be the predominant system forordering appraisals. It will take many months before the smaller wholesalelenders using a different system will cause a substantial change in the wayappraisals are ordered.

NAMB believes the random appraisal system will ensure the following:

� The consumer is not charged additional fees since the appraisal is portable.� Appraisers are paid a fair value for their professional services.� Investors in mortgage broker-originated products have confidence that there

was pressure applied to reach a certain valuation.� The mortgage broker will be allowed to order the appraisal in their name.

NAMB is working with Olde City Lending Solutions to have the government-sponsored enterprises (GSEs) and the Federal Housing Administration (FHA)approve a random appraisal system. We hope this template for appraisal order-ing takes root and is adopted by other parties. Additionally, the net profitsfrom this venture will go toward funding NAMB’s legislative efforts inWashington, D.C., another portion will go towards building a better communi-cation system with our membership and non-members, and the remainingportion will go toward reducing the amount of dues that members pay toNAMB. Many trade associations have for-profit ventures, and NAMB is on itsway to creating its own.

Again, NAMB has not abandoned its original position regarding the HVCC.We are committed to having it overturned and completely removed from theappraisal ordering system. That will take time and the random appraisal order-ing system is a stopgap until that happens. NAMB is creating a “mortgage bro-ker-centric” appraisal ordering system that saves consumers time and money.HVCC is like having a drug in your system and we all know that it takes time fora drug to be completely flushed out. In the meantime, the random appraisalsystem will give the consumer protection against increased costs that the HVCCdoes not do.

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

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Scenes From the 2010 NAMB Legislative & Regulatory Conference

February 21-24 at the Hyatt Regency Capitol Hill in Washington, D.C.

Ken Markison, AVP and regulatory counsel for the MortgageBankers Association (MBA); Jennifer Smith, assistant chief counselfor economic regulation and banking, Office of Advocacy for theSmall Business Administration (SBA); and Paul Mondor, seniorattorney, division of consumer & community affairs for the FederalReserve Board, take part in the “Regulations on OriginatorCompensation in 2010” session

Many thanks to NAMB’s Jon Otto, assistant director of governmentaffairs, and his staff for coordinating a very successful 2010 NAMBLegislative & Regulatory Conference

FHA Commissioner David H. Stevens (center) paus-es for a photo with NAMB Director Walt Scott (left)and NAMB Vice President Mike D’Alonzo (right)

Denise Leonard (right, at podium) with NAMB Director JohnCouncilman (left, seated) during the “FHA Changes in 2010”session

NAMB Past Presidents Neill Fendly and James L.Nabors smile for a photo in D.C.

NAMB Secretary Ginny Fergusontakes part in the Q&A portion ofthe “Regulations on OriginatorCompensation in 2010” session

NAMB Board members take partin the Delegate Council Meeting

NAMB President-ElectWilliam Howe moderates theDelegate Council Meeting inWashington, D.C.

NAMB ChiefExecutive Officer

Roy DeLoachintroduces speak-

ers during theNAMB DelegateCouncil Meeting

NAMB Treasurer DonaldFrommeyer addresses the

crowd during the 2010Legislative & Regulatory

Conference in D.C.

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Scenes From the 2010 NAMB Legislative & Regulatory Conference

February 21-24 at the Hyatt Regency Capitol Hill in Washington, D.C.

FHA Commissioner David H.Stevens delivers his keynotepresentation during the 2010Legislative & RegulatoryConference

Donald Fader fromNorth Carolina withNAMB PastPresident and currentGovernment AffairsCommittee ChairHarry Dinham fromTexas

NAMB VP of Government AffairsMike Anderson discusses theimportance of the Political ActionCommittee

NAMB SecretaryGinny Fergusonwith Rep. Gary

Miller (R-CA)

President Nichole Browning and Past PresidentChuck Anderson proudly represented the IdahoAssociation of Mortgage Brokers

Califiornia Rep. GaryMiller discusses the latesthousing issues on CapitolHill during the 2010NAMB Legislative &Regulatory Conference

FHA Commissioner David H. Stevens is welcomed to theNAMB Legislative & Regulatory Conference by DebKillian and Donald Derespinis from Charter Oak Lendingin Connecticut

Ivy Jackson, director of the Office of RESPA and Interstate Land Sales forHUD; Phil Schulman, partner with K&L Gates LLP; and Matt Dolan,director of the Federal Policy Group take part in the “RESPAin 2010” session

NAMB Directors WaltScott and Donald Starkstake part in the Delegate

Council Meeting inWashington, D.C.

Ron Smith, president-elect, and Kimberly Ward,statewide president, proudly represent the TexasAssociation of Mortgage Professionals during theNAMB Delegate Council Meeting

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Leads360 offers Web-based leadmanagement software to improve salesorganizations and increase profitabili-ty. The software is flexible enough toaccommodate the unique workflowand needs of any sales organization inany industry—and is specificallydesigned to address the needs of themortgage industry. Leads360 has beenworking with mortgage businesses toincrease profitability and scale effi-ciently since 2004. Currently, 2,800mortgage companies use Leads360’ssoftware to receive, distribute, contact,follow-up with, and convert more leads

into funded loans. Further, the compa-ny’s software platform is integratedwith more than 1,200 Internet leadsources including LendingTree,Quinstreet, Zillow and Lowermybills.For more information, visitwww.leads360.com.

Bank of Americabecomes first servicer tosign contract for HomeAffordable Second-LienModification Program

Bank of America announced that it hasbecome the first mortgage servicer tosign an agreement formally committing

to participation in the pending second-lien component of the federal govern-ment’s Home Affordable ModificationProgram (HAMP). The formal action fol-lows a verbal commitment to the pro-gram made by Bank of America’s ChiefExecutive Officer Brian Moynihan dur-ing a meeting with Treasury SecretaryTimothy Geithner.

Bank of America has systems inplace to begin implementing theSecond Lien Modification Program(2MP) with the release of final programpolicies and guidelines by federal regu-latory agencies. 2MP will require modi-fications that reduce the monthly pay-ments on qualifying home equity loans


their high standards. We’re really look-ing forward to the new business oppor-tunities that AdWords Comparison Adscan generate for our clients.”

When users perform searches onmortgage-related terms like “mortgagerates,” Comparison Ads will give usersthe option to enter their specific mort-gage loan parameters, such as loanamount, loan-to-value and creditscores. Users are then presented with alist of advertisers who match the speci-fied requirements, and their offeringscan be compared across a variety ofattributes to help them find the onesthat suit them best. If the user requestsa connection, Google notifies thelender and provides an anonymousphone number through which that usercan be contacted.

PriceMyLoan will supply loan pricingdata for this new mortgage pricing fea-ture. Lenders using PriceMyLoan areeligible to have their companies appearin the AdWords Comparison Ads toolwith the most current rates and pricingthat they offer.For more information, visit www.price-myloan.com.

Leads360 assists Googleon new Comparison Adsfunction

Leads360 has announced that it isworking with Google to help power itsAdWords Comparison Ads feature. Sinceits first offering as a beta in October,Google Comparison Ads has enabledusers of Google’s search engine toquickly and easily find comparativemortgage quotes from participatinglenders. Leads360 will be used by mort-gage originators to manage inquiriesthat are generated from GoogleComparison Ads. Leads360 workedclosely with Google during the develop-ment stages of the new ComparisonAds. Leads360 has integrated their leadmanagement software with Google toprovide mortgage lenders with anonline lead management service thatstreamlines the process, enables timelyfollow-up and greater sales results.

“We have watched and assistedGoogle with the development of theirfeature for some time and have beenextremely impressed,” said DanMorefield, chief executive officer ofLeads360. “The volume and quality ofleads that Google is able to generate islikely to attract significant new leadbuyers into the market. In addition,consumers are provided with a morereliable and speedy method for obtain-ing comparative mortgage quotes thanhas previously been available. We arevery pleased to be a Google collabora-tor and are excited to see the resultsour customers are able to achieve withthis new category of leads.”

heard on the street continued from page 13

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5. Will they pay you next day or are you going to hear, "we'll get back to you"?

Call Louis Tesoriero or Kelley Berkheiser today and find out why Professionals Join Guaranteed.

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A PRMI Company

If you would like to learn more about our BranchPartner business model, please inquire:

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I've never worked for a lender with such a hard work-ing closing department. I really appreciate all they doto help keep my business running smoothly.

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"I was ready to ink a deal with a commercial bank. Iheard about the Frost/PRMI business model, ran thenumbers and signed up. Greg has been out here help-ing me recruit, just as he promised. We have alreadyadded 2 Branches and have 2 more in the hopper.”

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I can't tell you how different this whole experiencehas been. I'm now going out to celebrate; not that Ifunded a loan, but that I didn't have to process thefile or beg the funder to review my conditions andhope that it funded on time.

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

Presidents first

� Conforming Fixed

� FHA 203B

� FHA 203k

� FHA Streamline

For additional information Please contact us at:1-877-773-7178445 Broadhollow RoadMelville, NY 11747 � www.presidentsfirst.com �

� Call Now: 1-877-773-7178 �

America’s LeadingWholesale Lender ™

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� WHOLESALE AE’S WANTED �

tion offered by Ellie Mae within thenext 12 months.”For more information, visit www.ser-vice1inc.com or www.elliemae.com.

Wells Fargo approvesLoan-Score’s AUS interfacewith FHA TOTAL Scorecard

Loan Score Decisioning Systems, anenterprise-class pricing and automated

underwriting solution provider, hasannounced that Wells Fargo is officiallyaccepting Federal Housing Administration(FHA) loans that have been determinedas eligible through Loan-Score’s auto-mated underwriting system (AUS),which interfaces with FHA TOTALScorecard.

In a statement issued by Wells Fargoon January 11, 2010 in its lender news-flash bulletin, Wells stated: “Wells FargoFunding is pleased to announce thateffective immediately, sellers approvedto deliver FHA loans, when FHA eligibil-ity results have been obtained usingLoan-Score’s integration with FHATOTAL Mortgage Scorecard. All FHAloans eligible for AUS submission mustbe submitted to FHA’s TOTAL Mortgage

Scorecard using one of the following eli-gible AUSs: Freddie Mac’s LoanProspector (LP), Fannie Mae’s DesktopUnderwriter (DU), Loan-Score orwww.LoanSCORECARD.com.”

In 2009, Loan-Score completed adirect system-to-system interfacebetween its AUS and the FederalHousing Administration’s TOTALScorecard platform for lenders toreceive eligibility results on FHA loans.

Loan-Score offers connectivity toScorecard by: Utilizing Loan-Score’scomprehensive PPE, AUS and cus-tomer-facing Web portals; using Webservices to transparently connect toLoan-Score’s AUS; and using the


and lines of credit under certain condi-tions, including completion of a HAMPmodification on the first mortgage onthe property.

“For many homeowners facing severefinancial difficulty, decreasing the pay-ment on the first mortgage without areduction in the payment on the secondlien may not produce an affordablecombined mortgage payment,” saidBarbara Desoer, president of Bank ofAmerica Home Loans. “We continue towork with elected officials and policy-makers on sound approaches to helpingstruggling homeowners keep theirhomes in these difficult economic times.Signing this contract ahead of therelease of the final program guidelines isa continued demonstration of Bank ofAmerica’s strong overall commitment tohomeownership retention and to theMaking Home Affordable program as thecenterpiece of these efforts.”

As one the nation’s largest mortgageservicers with nearly 14 million loans,including approximately three millionsecond liens, Bank of America willmodify eligible second liens regardlessof whether the first lien is serviced byBank of America or another participat-ing servicer.

“2MP will become a valuable addi-tion to Bank of America’s broad toolkitof potential solutions for customers fac-ing financial difficulty and will increaseour ability to help even more home-owners,” said Desoer.

Using non-government programs,Bank of America modified more than57,000 second liens to assist financiallystrapped homeowners over the last twoyears.For more information, visit www.banko-famerica.com.

Service 1st joins the EllieMae Network

Service 1st Valuation and SettlementServices Inc. has signed on with theEllie Mae Network. As a result of theService 1st integration, Service 1st willbe available as an independentappraiser on the Ellie Mae Network andavailable to all users of Encompass360.

Service 1st is a national appraisalmanagement company (AMC) commit-ted to developing the highest level ofcustomer service in the appraisal man-agement industry.

“Service 1st is committed to achiev-ing superior customer service by deliv-ering fast, reliable, efficient and serviceoriented appraisal management and byjoining the Ellie Mae Network, it onlystrengthens our abilities,” said MarkOliver, chief executive officer of Service1st Valuation and Settlement ServicesInc. “As Service 1st grows, we look for-ward to expanding our offering by uti-lizing the custom technology integra-


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What can loan officers learn from the 2009 Year-End Review forQuality Control?For starters, loan officers can learn to be responsible for the items in the loan processthat reflect directly to loan officer’s work. The Application 1003 initial and final is agood place to start.

When comparing non-supervised mortgagees (non-bank lenders) and supervisedmortgagees (bank lenders), the initial Application 1003 ranks number one in problemswith non-bank lenders at 11.14 percent in 2008 and 14.48 percent in 2009, a 3.34 per-cent jump. Bank lenders showed a 13.42 percent reading in 2008 and a 23.89 percentreading in 2009, a jump of 10.47 percent. Across the board, loan officers have per-formed poorly in meeting the standards on completing the initial 1003. However, banklenders had a significant increase from 2008 to 2009 as compared to non-bank lenders.

I must congratulate both loan officers who originate for non-bank entities andbank lenders for their good work in reducing errors on the initial Truth-in-Lending (TIL) and Good Faith Estimate (GFE). The initial TIL and GFE placedeighth for non-bank lenders and seventh for bank lenders. The non-bank lenderswon that race in ranking; however, they went from 12.06 percent in 2008 to 7.19 per-cent in 2009, with a 4.87 percent improvement. The bank lenders went from 10.28percent in 2008 to 6.91 percent, a 3.37 percent decrease. Bank lenders won the rank-ing as per the lease amount of problems by less than one percent, but non-banklenders showed the greatest improvement on issues with the TIL and GFE for 2009.

Non-bank lenders did better than bank lenders on the final 1003 Application.Non-banks placed sixth, with a 7.75 percent reading in 2008 and 9.19 percent in 2009with an increase of problems by 1.44 percent, and bank lenders placed third with13.16 percent in 2008 and 12.43 percent in 2009, a 0.73 percent improvement. Eventhough bank lenders improved their percentages in problems, their percentages withproblems were higher than non-bank lenders.

When comparing the same documents from non-supervised loan correspondents(brokers) to supervised loan correspondents (bank brokers), the number are just assurprising. Both the broker and bank broker had the initial 1003 Application rank asthe number one problem area. Brokers went from 11.77 percent in 2008, to 18.91percent in 2009, a 7.14 percent increase in problems. But the bank broker went from15.13 percent in 2008 to 23.5 percent in 2009, an 8.37 percent increase. The bankbroker maintains the highest problems with the initial 1003 Application.

Both the broker and bank broker initial TIL and GFEs ranked sixth, and the per-centiles remained somewhat consistent. However, brokers made slight improvementsby 1.35 percent and bank brokers showed a slight increase in problems by 0.26 per-cent. Even though the brokers made improvements, they had a slightly higher per-centile than the bank brokers.

Brokers ranked seventh on the final 1003 Application, coming in at 10.98 per-cent in 2008 and 7.35 percent in 2009, an improvement by 3.36 percent, wherebank brokers final 1003 Application ranked second for having highest qualitycontrol problems. Bank brokers went from 11.84 percent in 2008 to 14.29 percentin 2009 with a 2.45 percent increase in problems.

As the numbers speak, there is room for improvement, as loan officers and man-agement need to take steps in improving the quality of the loan process. This can bedone by requiring excellence in what one does and in training. Quality MortgageServices offers full mortgage compliance solutions and releases The 2009 Year-EndReview. You may obtain a copy of this report by visiting www.qcmortgage.com.

By Tommy A. Duncan, CMT

Sponsored by

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

becomes the third largest retail mort-gage lender in King County, Wash.,behind Wells Fargo and Bank ofAmerica.

“Coulombe and Evered has been ahigh quality mortgage company in theSeattle area for over a decade and hasestablished a solid reputation for greatservice and integrity in lending,” saidKeith Tibbles, president of CobaltMortgage. “This acquisition is part ofCobalt’s strategic plan to expand itsmarket presence in Washington state.At a time when many mortgage lendershave decreased their loan availability,Cobalt has sustained and grown its cus-tomer base. It’s this business strategythat has led Cobalt to become thestate’s largest independent lender. Themortgage industry now has moreopportunity for well-run, well-capital-ized companies than anytime in thepast 10 years. Most of the nationalcompanies are simply not focused onproviding great service to their cus-tomers and communities, which is ourfocus everyday.”

“We are ecstatic to be joining theCobalt family,” said Brad Evered, prin-cipal of Coulombe and Evered. “Cobalthas fantastic operations, support struc-ture and cutting edge technology thatwill greatly improve our efficienciesand service to our clients.” For more information, visit www.cobalt-mortgage.com.

OpenClose collaborateswith Google on newComparison Ads

OpenClose Mortgage Software, devel-opers of Web-based, end-to-end mort-gage loan origination software, is work-ing with Google to provide loan rateand fee data feeds for Google’sAdWords Comparison Ads for mort-gages. The new advertising feature willchange the way borrowers search forloan product and pricing informationand how mortgage lenders currentlygenerate quality leads via the Internet.

Users searching for “mortgage” onGoogle.com may see Comparison Adsthat prompt them to select the type ofloan to compare various rates.OpenClose will be providing lenderdata through its loan product and pric-ing engine, DecisionAssist. They canchoose directly from the offers listed orfurther refine their search by providingadditional information like income,home value or other parameters. Theycan also call the lender directly orrequest a quote. By using the directfeed from OpenClose, borrowersreceive accurate, up-to-date ratesempowering them to make informeddecisions.


www.LoanSCORECARD.com Web portalas a standalone solution.For more information, visit www.loan-score.com.

Mortgage finance andinvestment vets launchRMBS loan level datacompany, BlackBox Logic LLC

A team of mortgage finance and invest-ment management veterans haveannounced the formal launch of a newcompany, BlackBox Logic LLC, providinga database of loan level collateral under-lying non-agency residential mortgage-backed securities (MBS) for investors, bro-ker/dealers and researchers. BlackBoxLogic also announced the availability ofits loan level data aggregation service,called BBx Data, which covers the jumboA, sub-prime and Alt-A mortgage mar-kets. It includes more than 7,200 residen-tial MBS, 21 million loans and nearly 600million remittance records, dating backto 1999.

Headquartered in Denver, BlackBoxLogic has offices in New York andBethesda, Md. The company is majori-ty-owned by Braddock HoldingsCompany, the private equity affiliate ofDenver-based Braddock FinancialCorporation. Braddock is a Security &Exchange Commission (SEC)-registeredinvestment advisor.

The BlackBox Logic managementteam has more than 50 years of experi-ence in designing, building and manag-ing information technology systems forthe securitized mortgage market. Theteam is led by Larry Barnett, chief exec-utive officer; Wyck Brown, director ofmarketing and new business develop-ment; Bill Pugh, chief technology offi-cer; Marty Schwartz, lead data modeler;and Dmitri Raskes, director of e-com-merce solutions.

“BlackBox Logic’s BBx Data offers thehighest-quality payment data availableon non-agency residential mortgage-backed securities,” said Barnett. “We useproprietary data cleansing logic to cleanand verify each origination and paymentrecord. The result is more complete,more accurate data, to meet even themost demanding user’s needs.”For more information, visit www.bbx-logic.com.

Cobalt Mortgage acquiresCoulombe and Evered LLC

Cobalt Mortgagehas acquired themortgage broker-age firm, Coulombeand Evered LLC .

With this acquisition, Cobalt Mortgage


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FHA RETAIL BRANCH OPPORTUNITIESMortgage Brokers- Call Centers-Non FHA Approved Bankers Become a MortgageNOW Corporate Branch!

MortgageNow is one of the top CLOSING government lenders in the country!If qualified, we will buy your existing branch and offer you the most exciting

and profitable opportunity in the mortgage industry today!

Vice President position includes: - Starting Salary $60,000.00 a year- Bonus up to $100,000.00 a year

- 401K, Health - Commissions 85% -90%

- Rated # 1 for customer service in the country by LendingTREE!

From lead to loan, from approval to closing!

CLOSE IN 5 BUSINESS DAYS! INCREASE YOUR VOLUME – NOW!

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Ask about our Company ownership interest to qualified branches.

Our revolutionary LoanX Engine will simply change the way mortgage lending is done! Price, track,upload conditions!

Status, manage leads and pipeline, lock and close!

Mortgage Bankers866-421-8400

www.mtgnow.com

Contact: National Business Director

Thomas R. Sirico917-923-1472

[email protected]

mortgage inc.NOWLicensed Lender States: CA, FL, GA, HI, IL, IN, MD, MI, MN, MO, NJ, OH, PA, SC, TN, TX, WA… MORE PENDING!

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sent to borrowers as required by theReal Estate Settlement and ProceduresAct (RESPA). Wolters Kluwer can alsoprint and mail paper disclosures toFifth Third’s borrowers when neededthrough the company’s mail fulfillmentcenter.

“As mortgage lenders continue tocomply with updated regulatoryprocesses, we’ve found Wolters KluwerFinancial Services’ SDX service benefi-cial both for our customers and forFifth Third Mortgage Company,” saidCindy Manser, senior vice president andnational operations and fulfillmentmanager for Fifth Third MortgageCompany. “The SDX service is anotherproduct that is bringing the MortgageCompany into the digital age.”

“Wolters Kluwer Financial Services isvery excited to help Fifth ThirdMortgage Company become even morecompetitive in today’s challenginglending marketplace with our SDX serv-ice,” said Jason Marx, vice presidentand general manager, mortgage forWolters Kluwer Financial Services.For more information, visit www.53.comor www.WoltersKluwerFS.com.

Mortgage Professionalsto Watch� Tommy Duncan, CMT, executive

vice president of Quality MortgageServices LLC, has announced thehiring of Sherrie Reed to head upthe company’s new mortgage servic-ing division, QMS Servicing.

� Resource Title has promoted AndrewRennell to the position of chief oper-ating officer.

� Douglas Moritz has been appointedby the Mortgage Bankers Association(MBA) as associate vice president ofmultifamily.

� Bank of America Home Loans hasnamed Matt Vernon short sale andreal estate-owned (REO) executive ofthe company.

� George Phelps, executive managing

“Today, Internet users turn to Googlefor any and all questions they havefrom early stage investigation to finaldecision making—mortgages includ-ed,” said Jason Regalbuto, chief execu-tive officer of OpenClose. “AdWordsComparison Ads show targeted offers inless than a second with no long formsto fill out. There are no teaser rates orbait and switch offers, just standard-ized information presented to users,making it easy for them to sort andcompare offers on a side-by-side basis.Lenders are only able to contact theuser via an anonymized (non-trace-able) phone number if the user explic-itly requests more information aboutan advertiser’s offer. Google is settingthe standard for how borrowers willinteract with mortgage lenders movingforward.”

Lenders interested in being includedin Comparison Ads can work withOpenClose or one of a few loan pricingengine developers also providing data.OpenClose sets itself apart from othertechnology by offering a loan origina-tion system in addition to a productand pricing engine. That way, lenderswho receive interest from an onlineborrower can immediately funnel thatlead directly into its mortgage software.Borrowers, in turn, benefit from theaccurate transfer of data and elimina-tion of repetitious questions andrequests.For more information, visit www.open-close.com.

Fifth Third Mortgageenhances borrower experience using WoltersKluwer FinancialServices’ SDX Product

Fifth Third Mortgage Company, a sub-sidiary of Fifth Third Bank, announcedthat it is using Wolters Kluwer FinancialServices’ Secure Document Exchange(SDX) service to securely and electroni-cally deliver home loan application dis-closures and appraisals to borrowers.

The SDX service makes it more con-venient for Fifth Third MortgageCompany customers to receive disclo-sures and appraisals. It does so by deliv-ering these documents to them in min-utes electronically versus the days itwould take by mail. Borrowers alsohave the option of securelyeConsenting and returning disclosuresto Fifth Third Mortgage Companythrough SDX.

Additionally, the SDX service helpsFifth Third Mortgage comply with send-ing disclosures to borrowers within 72hours after application. As a result,Fifth Third is better equipped to docu-ment that required disclosures were



Sherrie Reed

Andrew Rennell

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Credit Plus to offer singleprice credit report

Credit Plus Inc. has announced that itwill offer a single-price credit report,the price of which will be based upon alender’s business model. The new pric-ing option will assist lenders and mort-gage brokers in achieving compliancewith regulatory changes, effective Jan.1, 2010, that were made to the RealEstate Settlement Procedures Act(RESPA) by the U.S. Department ofHousing & Urban Development (HUD).

The new rules require lenders and bro-kers to provide customers with a standardGood Faith Estimate (GFE) that clearly dis-closes all loan terms and closing costs.Closing agents are then required to pro-vide borrowers with the new HUD-1Settlement Statement that clearly com-pares consumers’ final costs with the orig-inally quoted costs. The final price for sev-eral services, including the credit report,must be within 10 percent of the quotedprice or lenders may face penalties begin-ning May 1, 2010.

“Offering the option of a single-pricecredit report provides much-needed flexi-bility in today’s mortgage environment,”said Greg Holmes, national director ofsales and marketing at Credit Plus Inc. “Webelieve the single pricing structure willfacilitate compliance with the new HUDregulations, particularly the GFE.”

The Credit Plus single-price creditreport will include: Supplements thatlenders can customize; potential scoreimprovement alerts; unlimited second-ary use fees; and unlimited Fannie Maeand Freddie Mac reissue fees.

The new standard GFE requires thatlenders and mortgage brokers clearly dis-close the loan term and type, interest rate,whether there is a pre-payment penaltyand/or balloon payment, and itemizedclosing costs. The new standard HUD-1Settlement Statement enables a borrowerto compare an itemized list of all fees fromthe GFE with actual closing costs.

Lenders and brokers who do notwish to purchase single-price creditreports will continue to have the abilityto purchase credit reports within CreditPlus’ traditional price structure. CreditPlus offers scoring tools, Tax ReturnVerifications, flood reports and otherservices in addition to credit reports.For more information, visit www.credit-plus.com.

LendingTree releases newiPhone app

LendingTreehas announcedthe launch of itsfirst-ever iPhoneApp, the MortgageRateFinder, now

available at the Apple Store. This freeapplication allows a user to get up-to-the-minute loan offers without any personalinformation being shared. MortgageRatefinder App is extremely user friendly.You simply enter information about theloan you would like. The App then per-forms a quick search of participatinglenders and instantly provides users withcustomized loan offers. Users can chooseto receive up to 30 different offers. Oncean offer is found, the user clicks to be con-tacted by that lender and move forwardwith the loan request.

“Whether refinancing or purchasing ahome, today’s consumer demands greaterspeed and accessibility to competitivemortgage offers and we are very excited tonow provide instant access to offers onyour iPhone,” said Doug Lebda, founderand chief executive officer of LendingTree.“LendingTree was the first company todeliver transparency and efficiency to themortgage process by forcing banks to com-pete for your business and we hope tobuild upon our success with our expansioninto the smartphone market.”

LendingTree is committed to protect-ing the privacy of all its customers.Mortgage RateFinder users’ personalinformation is not shared in order toreceive customized loan offers. Onlyonce the consumer requests to be con-tacted by a lender is their informationtransmitted to that specific lender. For more information, www.lend-ingtree.com/appstore.

AllRegs and FICO introduce new FICONational Certification

AllRegs, a publish-er of guidelines for the mortgage

industry, and FICO, a provider of analyticsand decision management technology, haveintroduced a new FICO National Certificationprogram: the Certified FICO Professional (FICOPro). This program is designed to recognizeindividuals who have a strong understandingof FICO scores and how the FICO scoreimpacts both the lender and the consumer.


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

This month, we had a chance to chatwith Bruce Lawner, senior vice presidentof the wholesale division for Melville,N.Y.-based Presidents First MortgageBankers. Presidents First opened itsdoors in March of 2008. Bruce works ona daily basis with quality mortgage bro-kers to expand the wholesale division.Under Bruce’s leadership, PresidentsFirst has experienced steady growth overthe past two years.

Bruce draws upon his 20-plus-yearcareer in the mortgage and housingfinance industry to lead Presidents FirstMortgage Bankers.

He began his career with a Mineola,N.Y.-based mortgage broker in 1986 asa loan officer, taking applications andspecializing in condominium and co-opconversions. In 1989, he began his longjourney into the mortgage banking

world and joined Arbor NationalMortgage in Westbury, N.Y. as a seniorloan officer. Earning great achievementssuch as the company’s President’s Clubfor high volume of originations andclosings with his tenure there. Heremained with Arbor until the companywas sold to Bank of America in 1993,when he then moved to a mortgagebanker in Melville, N.Y. in his first ofmany management roles as sales man-ager, responsible for all recruiting andthe training of sales staff for the com-pany. Bruce helped grow the companyby working with all members of theoperations staff on improving turn-timeand increasing quality customer service.It was there that he began learning allfacets of the mortgage banking indus-try. In 1995, Bruce became vice presi-dent of operations for a Westbury,N.Y.-based mortgage banker, obtain-ing his Direct Endorsement (DE) fromthe U.S. Department of Housing &Urban Development (HUD), oversee-ing all members of the operationalstaff, including processors, closers,funders and secondary marketing rep-resentatives.

In 1996, he furthered his career as asales manager for Roslyn Heights, N.Y.-based PMCC Mortgage Corporation, apublicly-traded company. Bruce man-aged the company’s retail sales produc-tion team and was instrumental inincreasing originations to over $1 bil-lion. He was later promoted to executivevice president of sales.

In 1999, Bruce became vice presidentof sales for Sterling National Mortgagein Great Neck, N.Y., managing the com-pany’s retail sales department and spe-cializing in the growth of FHA and Alt-Aoriginations.

In 2002, Bruce was recruited by pres-ident and chief executive officer,Frederick Assini, to join Franklin FirstFinancial Ltd. in Melville, N.Y. as vicepresident of branch banking. He super-

vised 25 of the company’s branches,overseeing more than 500 employees inthe retail division.

At that time, there was only one lastchallenge in his career that had to bemet, so in 2006, he partnered up as co-owner and chief operating officer ofGarden City, N.Y.-based Mortgage SourceLLC, a Federal Housing Administration(FHA) direct lender.

In 2008, Bruce returned to FranklinFirst Financial d/b/a Presidents FirstMortgage Bankers as senior vice pres-ident of the wholesale division.Presidents First is a multi-state, full-service mortgage banker that pridesitself on its dedication to providing itscustomers with mortgage products ataggressive rates and industry-bestservice levels.

How did you first get involved in themortgage business?After graduating from SUNY College atOld Westbury in 1986 with a bachelor’sdegree in business administration, I start-ed working in the family business, animport/export brokerage based out ofJohn F. Kennedy Airport. After about ayear-and-a-half of doing that, I real-ized that working for the family mightnot be the best future for me. One ofmy friends at that time had a mortgagebroker company. He told me how hewas taking a lot of mortgage apps, andasked if I was interested in helping outon the weekends, taking applicationson-site at condominium conversionprojects, and offered to pay me to doso. Seeing how easy it was and the factthat I was making money on the week-end, I started to inquire more andmore about the mortgage business anddecided to leave the family business in1988 and enter into the world of mort-gage and housing finance.

Do you feel that when you first start-ed in the mortgage industry, you

were working on deals that might notmake sense?Yes and no. In the late1980s and early1990s, I specialized in co-op and condoconversions, and there were bushels ofthem. Some of the lenders back then,such as Citi Corp., Columbia FederalSavings Bank, Dime and some of theothers, had these phenomenal prod-ucts for people already living in acondo or co-op complex. They wereoffering 100 percent financing with nomoney down. So, it was fairly easy ifsomeone had good credit and employ-ment to get them these mortgages.Banks didn’t even qualify their borrow-ers because there were many no-income check programs available. Eventhough I had my own apprehensionsthat the applicants qualified, they wereultimately the final decision-maker.

Were there any points in your careerwhere you didn’t have the luxury ofhaving a captured audience like youdid with the co-op conversion market?Absolutely. When that particular prod-uct and market dried up, we had todevelop other areas to specialize in orother niches to market to. And that’swhat we did.

There were many new investorscoming into the market, and they allwanted to gain market share; hencethe birth of Alt-A, stated-income, nodoc, etc. The LTVs kept rising higherand higher. to a point of 105 percent.That made the originator’s job a “nobrainer.”

Bruce Lawner, Senior Vice President of Wholesale,Presidents First Mortgage Bankers

“Right now, it is more challengingthan ever to stay in this business.

Some people love challenges intheir life and some people thrive

on pressure, while others may simply fold.”

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You do business in one of the EastCoast’s capitals of the mortgage mar-ket, on Long Island and in Melville,N.Y. to be exact. Are there others inthis area who may have influencedyou and have provided guidancethroughout the years?My parents were a big influence on me.They were very hard-working individu-als who worked crazy hours, and I idol-ized them for that. In fact, I believe thatwork ethic is hereditary and was passeddown to me. They didn’t make a lot ofmoney, but were good providers. As hardas they worked, they always found timeto make themselves available to meearly in my childhood when I was grow-ing up … they came to all of my ballgames. I’ve taken many of these valuesto my work ethic and managementstyle.

Early in my career as aretail loan originator …the first seven to eightyears of my career … Iwas just originatingloans. I worked for somevery good companies andtook pride in my knowl-edge of the company’sproducts and offerings.

In 1989, I startedworking for my first mort-gage banker, AmericanMortgage Banking, whichlater became ArborNational Mortgage. Thecompany’s owner andchief executive officer, IvanKaufman, sold the compa-ny to Bank of America in1993 for approximately$60 million. He is still oper-ating Arbor CommercialMortgage to date. He wasone of the guys who defi-nitely influenced me as a young man inthis industry. One of the most fascinat-ing things about Ivan is that he was justa regular guy who did some amazingthings which keeps me motivated tothis date.

My current employer, and a manwho I consider a good friend, who hastreated me like a brother for someeight years, Fred Assini, has been amajor influence and mentor as well.We have learned a lot from one anoth-er, compliment each other and alwaysmaintain positive energy in the workplace. His work ethic is second tonone and it shows in the success ofthe company.

What keeps you in the industry?I think what keeps me in this businessis the challenge. Right now, it is morechallenging than ever to stay in this

business. Some people love chal-lenges in their life and some peoplethrive on pressure, while others sim-ply fold. I like to think I am up for thechallenge of surviving in today’s mort-gage marketplace. These last fewyears were unquestionably the biggestchallenge in my mortgage career. Ilike to say that Presidents FirstMortgage Bankers is still here and weare surviving, paying our bills andhoping that this current phase of theindustry will be a thing of the past,and the industry will get back on trackwith the help of politicians and theinvestors.

What do you say to mortgage brokers tourge them to stay in business with all ofthe obstacles facing them today? What

is your advice to the bro-ker community, a com-munity that is facingissues such as legislativeand regulatory pressures,the Home Valuation Codeof Conduct (HVCC),mounting negative mediacoverage, etc.?Whether you are a mort-gage broker or mortgagebanker, we have many sim-ilar obstacles lately to over-come. I know we are in thefirst year of change toguidelines of the Real EstateSettlement Procedures Act(RESPA) and the many otherindustry changes that havecome across. I’ve been inthis business for a longtime, and ever since I canremember, there hasalways been a mystiqueabout mortgage brokers.They’ve been trying to ban

mortgage brokers for many years, andthey have yet to be successful. A lot ofbrokers are still around who are compli-ant and have a good book of business,and there are different ways of marketingto that book of business.

In the old days, I used to poundthe pavement and get my dealsstraight from real estate brokers, realestate attorneys, certified publicaccountants (CPAs), and by word ofmouth. I feel that this is still a verygood and viable way of getting busi-ness, as well as being confident withdoing some traditional marketing.You have to be diversified in order tosurvive in this current state of themarketplace.

There is still this perceived matterof the bad aura of mortgage brokersbeing responsible for the downfall ofthe mortgage business, which I do not

agree with at all. I truly feel thatmortgage brokers were not part ofany market demise; they just origi-nated and followed the bank’s guide-lines, which happened to be very laxat that moment in time. That is partof the reason why there is this mys-tique … brokers are not empoweredto make the loans, they are just thethird-party seeking the best deal forthe customer. Ultimately, it ’s thebanks and their lack of quality con-trol procedures, and greed and out-doing each other that led to the mort-gage crisis.

I think we learned a very valuablelesson during this recent mortgage andhousing crisis, and if and when thingsdo ease up, I think the housing financeindustry will still be a viable industry toearn a good living in.

What does Presidents First MortgageBankers do for the mortgage broker?What do you offer the mortgage bro-ker that the big banks cannot?I think that part of not being one of thebig boys, we offer great personal cus-tomer service, in addition to our greatturn-times. We personally know thesebrokers who deal with us locally.

Especially at this stage in the mort-gage market, with RESPA, regulatorychanges and so forth, we work with bro-kers through the red tape and the chal-lenges they are facing, along with otherobstacles. We have the ability to makephone calls that are more personablethan the big banks on workingthrough these issues facing the bro-kers. Sometimes, the reps at the bigbanks are difficult to even get on thephone. Even if you do get them onthe line, they are not going to neces-sarily have all the answers for you. Thatsort of personable service will continueto help us, and that personal attentionthat Presidents First gives to themshows that we have our finger on thepulse of the industry as far as turn-times are concerned to compete in thismarketplace. We pride ourselves on ourturn-times, and pride ourselves on ouraggressive rates and quality productofferings.

A lot of the bigger banks have closedshop in their wholesale divisions.There is a significant amount of vol-ume going to the big banks that areleft, and they are facing a backlogbased on all of this volume. Part of ourcorporate strategy is that we’ve alreadyreceived approval for is becoming aFannie Mae Seller/Servicer, somethingthat we are looking forward to workingwith this year.

We are also actively trying to makethe right types of loans in this chal-lenging economy, and when the timeis right, apply for our Ginnie MaeSeller/Servicing License as well. Thisway, we are not at the mercy of thebig boys left who are buying the loans.We are holding our own and are opti-mistic that, in the next few months,we will be in a position to continue inthis marketplace and continue togrow our company.

What can mortgage brokers do to geta leg up on the competition from thebig banks?Mortgage brokers, unfortunately, haveto work within the confines of theguidelines of the HVCC. That is some-thing on the conventional end wehave been following very closely. Idon’t think the brokers have sufferedmuch from turn-time issues, theyhave been okay.

Brokers may use things like the SAFEAct [Secure and Fair Enforcement forMortgage Licensing Act] and things likelicensing requirements to their advan-tage when telling a borrower that,because of the SAFE Act and licensingrequirements, they had to learn moreabout compliance and their business.

This shows the borrower they are deal-ing with a more ethical and knowledge-able individual. The borrower can feelcomfortable in dealing with a broker, asopposed to somebody who works forfederally-chartered banks who may nothave the answers to the questions a bor-rower may have. Reps in federally-char-tered banks haven’t been asked to brushup on any SAFE Act or RESPA require-ments because they are exempt from it.

In this industry, I have seen it all. Ihave been a broker and a banker, I’vespent time on the retail side, and now,in wholesale, so I’ve experienced allthe channels of loan origination.Some of the products that theseinvestors came out with, looking backin retrospect as we were all in themidst of enjoying the financialrewards from these products, youhave to think about who actuallycame up with these guidelines andjust how did the industry let itself go?There were no governing factorsinvolved that looked at these productsto realize what the repercussionswould be down the line. Whoevercame up with these guidelines did nothave the foresight to really thinkthese things through clearly enough.That is why we have all of these feder-al regulations coming forth thesedays, so that something as catastroph-ic as the recent mortgage and housingcrisis does not repeat itself.

Mortgage brokers are just an exten-sion of the banks. It is ultimately thelender who has to do their due dili-gence and perform quality controlchecks on that file … brokers do notapprove these loans. Whether it was an80/20, 100 percent, stated-income dealfor a W-2 employee as they felt a jani-tor could make $150,000 and approvedthat loan; it was the doing of the majorlending institutions, not that of thebroker. Things like that will likely neverhappen again in this marketplace.

“Mortgage brokers arejust an extension of

the banks. It is ultimately the lenderwho has to do theirdue diligence and perform quality

control checks on thatfile … brokers do notapprove these loans.”

“I like to say that Presidents FirstMortgage Bankers is still here to

stay and we are thriving, and confident that this current phase

of the industry will be a thing of the past.”

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Visit UnitedNorthern.Jobs, email [email protected] or call (888) 600-8808 ext 1.

United Northern is Seeking Highly

Qualified, Experienced Mortgage

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• Operations Manager

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company’s new senior managingdirector.

� Mortgage Services III LLC hasannounced that Brian Boyles hasjoined the company as senior vicepresident of business development.

� Advanced Funding Solutions Inc.,a provider of reverse mortgages, hasadded Kenneth Connolly as reversemortgage advisor and RickCashman as director of businessdevelopment.

� USA Funding Corporation hasannounced the additions of MarkRossetto as a mortgage consultantand Darnisha Cleveland-Davenportas a call center representative.

� Michael J. Langenkamp has joinedstrategic planner CCG Catalyst as apartner.

Your turnNational Mortgage Professional Magazineinvites its readers to submit any informa-tion, events, passages, promotions, per-sonal or professional occurrences thatseem appropriate and/or other pertinentdata to the attention of:

Heard on theStreet/Mortgage

Professionals to Watchcolumn

Phone #: (516) 409-5555E-mail: [email protected]

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

director of Primary Capital, hasannounced the addition of JanWagner and her team from the for-mer Canton Street Mortgage.

� Morris|Hardwick|Schneider hasnamed Natalie Hardwick, CristinaHunt and Jeffrey Sandler as partners.

� Raymond A. Redlingshafer Jr. hasjoined Clayton Holdings LLC as the


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In order to receive this certification,candidates must agree to a code ofethics and successfully complete threeone-hour online courses delivered byAllRegs Academy: Exploring FICOScores, Analyzing the Credit Report, andCommunicating Credit Information.

Certified FICO Professionals (FICO Pro),based on FICO scores and other credit andlending criteria, will understand howFICO scores are created, the categoriesand data utilized in the credit report andthe impact of FICO scores on consumers.

“We are excited to partner with FICO tooffer this unique national certification toprofessionals in the mortgage industryand other credit industries,” said DanThoms, senior vice president of AllRegs.“The FICO Pro certification provides aknowledge benchmark for individualswho assess credit risk and how that riskimpacts their company and customers.”

Registration in the program includesaccess to all three required courses. FICOPro certification candidates have 12months to complete the program fromthe date of enrollment.

“Because extending credit alwaysinvolves risk, FICO scores play a pivotalrole for both lenders and borrowers inmost credit decisions,” said RobertDuque-Ribeiro, vice president and generalmanager of Scores for FICO. “That’s why itis crucial that lenders, mortgage profes-sionals and their service representativesunderstand how FICO scores do their workof assessing credit risk. The knowledgeprovided by the new AllRegs curriculumgives financial services professionals thefoundation they need to discuss FICOscores confidently and accurately withtheir borrowers and applicants.”For more information, visit www.all-regs.com or www.fico.com.

RES.NET launchesAccelerated ManagementPlatform (AMP)

RES.NET (Real Estate Systems), a wholly-owned subsidiary of U.S. Real EstateServices Inc., has announced the launch ofits Accelerated Management Platform(AMP). AMP was designed to improve oper-ational efficiencies by managing tasks, stor-ing data, organizing prospects and contactsand provide global oversight of listings andhistorical data. This platform will also givereal estate brokers and agents maximumexposure to industry service professionalswithin the RES.NET community.

RES.NET, a software application companyestablished in 2003, by its parent company,U.S. Real Estate Services, created a real estate-owned (REO) management application forasset managers to manage real estate assetsand connect with the entire supply chain.

“RES.NET recognizes the real estateagent as the core element in any realestate transaction,” said Todd Mobraten,U.S. Real Estate Services chief operating

officer. “Offering a full scale application tothe agent was key in continuing to buildRES.NET’s community not only for today’sbusiness, but for tomorrow as well.”For more information, visit www.RES.net.

Cogent Road launchesRoohmz Mortgage Enterpriseto monitor workflow

Cogent Road, a provider of Web-basedmortgage technologies that facilitatecommunication between lenders andborrowers, has announced the launchof Roohmz Mortgage Enterprise, anInternet-based workflow managementsystem that manages the progression ofloan applications from origination toclosing, enforces compliance and pro-vides a robust communication platform.

Roohmz Mortgage Enterprise createstransparency in the loan originationprocess for both borrowers and lenders bycontinually monitoring application status,providing real-time updates and ensuringeach step is completed in full compliance.Through Roohmz Mortgage Enterprise,each loan file is digitized and rules areapplied to its path to closing, guarantee-ing that each prerequisite is met beforeRoohmz moves the loan to the next sta-tus. Once the status is attained, RoohmzMortgage Enterprise automatically deliv-ers the loan file to the next employee inthe workflow, and alerts the appropriatestakeholders that the step is complete.

Roohmz Mortgage Enterprise alsoensures full conformity with Equal CreditOpportunity Act’s (ECOA) Regulation B,Truth-in-Lending Act’s (TILA) Regulation Zand the Real Estate Settlement ProceduresAct’s (RESPA) new Good Faith Estimate (GFE)disclosure requirements. The system willautomatically warn originators when filesare about to fall out of compliance and bewithdrawn. Roohmz Mortgage automatical-ly delivers all adverse notices the moment afile is withdrawn or declined, either elec-tronically or via first-class mail, and createsan audit trail for compliance officers.

“Roohmz Mortgage Enterprise acts asa train track for the lender’s specificmortgage origination process, ensuringorigination happens as expected andwithin compliance timelines,” saidWilliam DiPaolo, chief executive officerof Cogent Road. “The loan applicationis moved along this predeterminedtrack, with checkpoints completedalong the way, without depending onindividuals and managers to make it hap-pen. Using this system empowers origina-tors with the knowledge as to why loanworkflow is suspended and how it can becorrected, and it also gives themenhanced communication tools to effec-tively explain any delays to the borrowerin a way that they can understand.”

Along with intuitive workflow manage-ment and assured compliance, RoohmzMortgage Enterprise offers loan applicants

new to market continued from page 25


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W E A R E R E M N W H O L E S A L E

At REMN, we understand that mortgage

companies perform best when they focus on

what’s important: their customers. We are

industry veterans and FHA specialists who

understand that every application is precious.

We treat each file with the respect – and

urgency – it deserves. Even better, at REMN,

same-day approvals are guaranteed.*

Real Estate Mortgage Network, Inc. is located at 499 Thornall Street, Second Floor, Edison, NJ 08837. NMLS #6521. This information is for use by mortgage professionals only and should not be distributed to or used by consumers or third parties. Information is accurate as of date of printing and is subject to change without notice.

* Same-day decisions guaranteed if file is received by 11 a.m. EST.

Learn more at www.remnwholesale.com

It’s about time.

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You don’t need to be a credit expert tostart your own Credit Repair businessFortunately, with HTDI Financial’s Credit Services Or-ganization (CSO) program, you will be able to handleALL aspects of your business except having to do theactual repairs; we do that for you! We will train you onhow to handle these customers and you will have thesupport you need every step of the way. We will makeyou look like a Fortune 500 company even if you workfrom home! YOU control how much money you make.In fact, through our CRM, we give you the tools andresources to harvest leads, manage prospects and mon-itor their progress.

You don’t have to spend tens of thousands ofdollars for start-up costs for your own CreditRepair CompanyOnce you are set up in our system, you will get accessto software and tools that HTDI has spent over $1 mil-lion on research and development. You don’t need tospend an arm and a leg to start building your owncredit repair business. Here is a quote from a mortgagecompany located in upstate New York who spentmonths of research before choosing HTDI:“Until last year, I owned a large mortgage com-pany in upstate NY with over 125 employees. Wegot hit hard during the mortgage industry crashand had to close our doors. I was stuck in a posi-tion with thousands of leads and customers thatcouldn’t get qualified for anything. I decided tostart looking for a way to capitalize on my leftover resources and help people in the process. Icalled many other credit repair companies andwas very unimpressed. One west coast basedcompany was charging $15,000 and had nothingbut negatives written about them on the Internet.Then I found HTDI. They helped me to getstarted at the beginning of this year and it hasbeen great. I have not only made great moneyhelping people to repair their credit, but I have re-financed 8 of them and helped 6 buy houses thatwould have never qualified with the new guide-lines. The software is very user friendly and all ofmy clients, affiliates and Brokers have increasedbusiness because of it.”

Get those impossible to close dealsCLOSED!As the number of loan programs are shrinking, the baron credit scores keep rising. This program will allowyour borrowers to become “Mortgage Ready” as soonas 45 days. As one of our CSO stated:“I have many loan officers that are now able tosend their clients through the credit repair, raisetheir scores, and then close the client’s loan that

they couldn’t close before due to bad credit! Itmeans more loans and more revenue for my loanofficers. Even better than that, it is very reward-ing to be able to help a client regain their creditand be able to get the loan they need.”

Get started in a business that is boomingand shows no signs of slowingThe credit industry, as a whole, is one of the most pow-erful and profitable industries in existence. Withloans, insurance and even employment taken into con-sideration individuals’ credit picture, the credit indus-try is getting bigger every day.

Inside the credit industry, Credit Services is helping byassisting consumers with getting back on track by re-moving unverifiable and inaccurate negative itemsfrom their credit reports. As a CSO, you can benefit inbeing in a profitable industry and helping clients withtheir futures.“I’ve been in the mortgage business over 22 years.A year ago, as the mortgage crisis worsened, Ibegan trying to find a way to help clients whoneeded a better credit profile in order to get amortgage. Fortunately for both me and myclients, I stumbled on HTDI. After a year of ex-perience, I can honestly say the success rate is100% and client satisfaction is through the roof.All of my clients have seen significant improve-ments, and some have experienced breathtakingjumps in their credit scores, even on the firstround!

From Day One you can be sure your “back of-fice” (HTDI) has you covered. They will executetheir part of the job seamlessly, with precision,on time, and with total consistency. All you haveto do is SELL the service! Just sign people up, col-lect the money, and send HTDI the paperworkthey need to get started. If you simply focus onselling the service, you will make lots of money,the work will get done, and you will never haveto worry about unhappy customers.Although I got into it as a part timer, I now realizethis is an excellent full time business opportunity.(Frankly, these days it’s probably a better businessthan the mortgage business!) You could easily makesix figures in the first year with a minimal invest-ment of money. How many opportunities like thisexist these days? What you must invest is your time– SELL, SELL, SELL & SELL some more! Ulti-mately, what you are selling is the professionalismof HTDI, which is why this really rocks as a busi-ness opportunity.”

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

If you are going to get involved in CreditRepair, be VERY CAREFULFirst you have “Fair Credit Reporting Act” (FCRA). TheFCRA holds credit bureaus and creditors to their report-ing methods and has guidelines they must comply with.There are numerous techniques that are used along withsimilar laws to maximize results for each client. You mustknow these laws inside out.You can’t forget “Credit Repair Organizations Act.”(CROA). Just like the FCRA, the CROA hold credit repaircompanies to specific guidelines as well. If you chooseHTDI Financial for your backend processing, we will en-sure you maintain compliance. Lastly, you have applicable State Laws. Depending onthe state you wish to conduct business in, you mayhave a state Credit Services Organizations act to com-ply with. As an active member in good standing of the NationalAssociation of Credit Services Organizations, you canbe sure that we take our job very seriously, making sureyou stay compliant and your clients.

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AAMB welcomes NAMB to beautiful Phoenix! Come see the new NAMB President and thenew NAMB Board installation, while participating in some great networking opportunities.

State delegates can also participate in the NAMB Delegate Council Meeting.


Rooms are $99 per night, and will be honored at the same rate if you wish to extend your stay.

Hotel toll-free: 1-800-228-9290

Visit www.NAMB.orgfor details.

A View From the C-Suite

The American Dream of owning a homeis never more alive and exciting thanfor the first-time homebuyer. And, likeany “first” in our lives, that first home isoften the most memorable home we’llever own. It brings back memories ofwhen we were first starting out … backat a time when life seemed simpler,exciting and filled with optimism.

Oh, how things have changed! Manytoday are struggling to make the pay-ment on that bigger house they movedup to and now cannot afford. Some findthemselves wishing for those “good olddays” of the lower home payments onthat first house. More than one personhas thought, “If I had only held on tothat first house, I would nearly have itpaid off by now … I wouldn’t be feelingso stressed out!”

The role of the mortgage lender iscritical in making the American dreamof homeownership a reality, especiallyfor the first-time homebuyer. But manymortgage lenders have forgotten (ornever learned how) to embrace thefirst-time homebuyer.

Here are Five Ps that will help you totransition your business to successfullywork with first-time homebuyers …

1. PositionGet yourself in position to work with

first-time homebuyers. For manylenders today, the bulk of their busi-ness has been refinance activity. Theyhave never developed the necessarybusiness relationships to come in con-tact with first-time homebuyers. Hereare some ideas to help you:

� Realtors: Excuse the obvious, but formany the “obvious” is easier said thandone. This is especially true of lenderswho only have experience with refi-nance transactions. I cannot tell you thenumber of lenders who have contactedour consulting firm asking us to teachthem how to successfully work withRealtors. We have been able to helpmany of them make the transition, butagain, most of them underestimatedhow much time and effort is required tosuccessfully make the transition. Keepin mind, there have been a number oflenders who have been working withRealtors successfully for years and havewell-established relationships that arenot easily unseated. But it can be doneif you employ the right strategy.

� Builders: Just like Realtors, workingwith builders that build homes targetedfor the first-time homebuyers seems tobe an obvious strategy. However, it issubstantially different than making a

loan to a consumer who already owns ahome. And to complicate matters evenmore, many well-established buildersown their own mortgage company. Theydo their best to capture as many of theirown sales as possible. While on the sur-face, this would seem like “game over”for any outsider trying to get their foot inthe door, it can be done. Again, our con-sulting firm has successfully been able tohelp originators transition their business-es to be successful in get-ting business referralsfrom builders. Keep inmind; the number onemission for builders is toget their homes sold. Inthe end, whoever is mostsuccessful in accomplish-ing this objective wins.

� Referrals: Believe it ornot, your existing data-base is a potential sourcefor first-time homebuyerreferrals. The key to thisstrategy is to have well-planned marketing cam-paigns to your past cus-tomers. It doesn’t neces-sarily matter how long ithas been since you lastcontacted them. Ofcourse you will be moresuccessful if you havecontinued to stay in touch with yourprevious customers. Don’t fret … con-sulting firms can help you get a plan inplace. Just make sure anyone advisingyou has a proven track record. Anunemployed mortgage person turned“consultant” (at least until they can findtheir next job) may be “affordable,” butnot necessarily have the experiencenecessary for your situation.

� Internet: As many have come toknow, more and more consumers areresearching loan programs on theInternet. Therefore, the Internet is anexcellent source of first-time homebuy-er leads. Consider this, first-time home-buyers are typically younger, and there-fore, already very comfortable and pro-ficient at using the Internet to do theirresearch. In fact, more and more stud-ies reveal that an increasing number ofconsumers are going to the Internet toresearch loan programs before contact-ing a mortgage professional. If you are

considering buying Internet leads, keepin mind that the key to successfullyworking with Internet leads is speed!The advantage goes to the first loanoriginator to speak to a consumer afterthey have hit the “Enter” key on theirkeyboard. We have clients who havewisely moved their entire office to beon a fast Internet service so that whenthe consumer hits the “Enter” key, theyreceived the lead a few seconds faster

than the competition.Again, he who talks to theconsumer first has anoverwhelming advantageover the second, third orfourth originator thatcalls the consumer.

Another important issueyou should consider iswhether or not you are bet-ter “positioned” to helpfirst-time homebuyers as amortgage broker, as a netbranch of a larger entity oras a mortgage banker. It isgetting increasingly moredifficult to survive as amortgage broker. Theadvantages brokers onceenjoyed are diminishing.Many brokers have madethe decision to convert andbecome a mortgage banker.

This strategy allows them to continue toremain autonomous, which gives them thebest advantage of all to best serve first-timehomebuyers.

2. ProductsIf there was ever an area where theplaying field has been leveled, it wouldhave to be with loan products. Intoday’s generic world, the productsoffered to first-time homebuyers byone mortgage originator are about thesame as another.

So, in a “vanilla world” how do youdifferentiate yourself? In a word, “mar-keting” … it comes down to how wellyou market your loan product versus thenext guy. We have clients who we havehelped create some amazingly successfulmarketing campaigns designed to get theattention of the first-time homebuyer. Itcan be as simple as giving your productsunique names. Features and benefits ofsome programs are more beneficial tofirst-timers. Yes, having the right prod-

By David Lykken

“Dealing with somefirst-time homebuy-ers is like managinga guillotine … it isessential that you

keep your head whenall those about youare losing theirs!”

Five Keys to Helping First-Time Homebuyers

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it is essential that you keep your headwhen all those about you are losingtheirs!”

5. PersistenceAh yes, another virtue … persistence …that dogged determination required inany endeavor worth pursuing. If youare going to successfully embrace abusiness model of working with first-time homebuyers, you have to keep inmind that if it was easy, everyonewould be doing it. Persistence is anessential key to building a successfulfirst-time homebuyers’ business model.The reason I recommend this model isthat it will provide you with a steadystream of business, regardless of inter-est rates and market conditions.Beyond that, I can personally attest tothe fact that few things in life are asrewarding as helping someone success-fully buy their first home … and themore challenging the circumstancessurrounding the loan transaction, themore rewarding it is!

I would recommend that you makethis your professional objective/mission… to facilitate the American dream ofhomeownership by providing reason-able and affordable financing optionsfor consumers so as to promote sensiblelong-term homeownership options. Andkeep in mind what I have been saying… more wealth will be created in thenext five years in mortgage lending thanall the wealth created in the previous 25years in our industry. One of the bestways for this to happen is to successful-ly embrace the first-time homebuyer.

I hope you have enjoyed reading thearticles written by my business partner,Andy Schell, over the past couple ofmonths. I want to thank NationalMortgage Professional Magazine forgiving us the opportunity to write toyou each month in this column … AView From the C-Suite.

David Lykken is president, mortgagestrategies and managing partner withMortgage Banking Solutions. David hasmore than 35 years of industry experienceand has garnered a national reputation.David has become a frequent guest on FOXBusiness News with Neil Cavuto, StuartVarney, Liz Claman and Dave Asman withadditional guest appearances on the CBSEvening News, Bloomberg TV and radio.He may be reached by phone at (512) 977-9900, ext. 101 or e-mail [email protected].

To listen to author DavidLykken’s online radio show, logon to www.blogtalkradio.com

and type in “Lykken onLending” in the “Search” box on the right-hand side of the page.

ucts is important, but how you marketthose products and your services canmake all the difference in the world.

3. PreparationYou may have heard that the definitionof “luck” as “opportunity met with prepa-ration!” Never is this truer than when theopportunity presents itself to work withfirst-time homebuyers. If you do notunderstand the unique needs of the first-time homebuyer, you can forget every-thing I have written to this point. I don’tcare if you have positioned yourselfextremely well with all the Realtors andbuilders in your area, and if you have thebest priced products and marketingmachine on the planet. If you do notknow how to work with first-time home-buyers, you are DOA (dead on arrival)!

Here are a couple of things to keepin mind:

� Be prepared to explain your loanproducts in non-industry terms.

� Be prepared to invest the time toanswer questions. Having aFrequently Asked Questions (FAQ)sheet can help save time, but there’sno substitute to spending the timetalking with them and answering alltheir questions. See this as a market-ing opportunity.

� There are more parties that needgood communication as to the sta-tus of what is going on with the loanonce it is in process. Those that haveonly had to communicate with bor-rowers in refinance transactions failto realize how important it is tocommunicate with the Realtors (thebuyers and sellers) and the seller ifthey are a builder.

It is in these simple basics that manyfail, which can provide that is youropen door.

4. PatienceIf you have heard that “patience is avirtue” in life, well let me tell you that“patience is a necessity” when dealingwith first-time homebuyers and theirRealtors. They can sorely test yourpatience, but you must be patient andkind, or you will never make it whendealing with first-timers. That is not tosay that you are not in control, but theone you first have to be in control of isyour own emotions. It will only be amatter time before your patience willbe severely tested. Realize that everyopportunity to demonstrate patience isan equal opportunity to market yourservices. Stress levels are typically attheir max with those buying a home forthe first time. Your ability to managecircumstances will determine your levelof success. I heard it explained this way:“Dealing with some first-time home-buyers is like managing a guillotine …

As April 1 nears and buyers race to beatthe deadline for the first-time home-buyer tax credit, lenders and Realtorshave taken out the racing flags to carrythem in. Real estate industry statisticssuggest that approximate-ly 1.8 million people areexpected to receive thefederal first-time home-buyer tax credit. They alsoindicate that the rebatehas currently spurredapproximately 350,000home sales.

With literally millionsof potential first-timehomebuyers who qualifyfor the tax credit, mort-gage professionals contin-ue to work hard to sell.But what is the best wayto “embrace” this group,and with what? Theanswer is education.

Hold educationseminars forfirst-time homebuyersAs mortgage profession-als, it’s our responsibilityto get information to theright people. If possible, hold educa-tion seminars in your local communi-ties for potential first-time homebuy-ers. This provides an excellent forumto educate this group on the benefitsof owning a home, the purchasingprocess, how much they can affordand so on.

For a Peachtree City, Ga. branch ofEmbrace Home Loans, a national lenderbased in Newport, R.I., seminars havebeen key to originating leads for years—even before the federal tax credit.

According to branch manager JoyMillard, the branch made a strategic deci-sion to target first-time homebuyers manyyears before the tax credit. In doing so, theybuilt relationships with downpayment assis-tance programs like the GeorgiaDepartment of Community Affairs thatenabled them to cultivate a pool of first-time homebuyers to target. But where theygenerated these leads was through semi-nars held by the downpayment associationsthroughout Atlanta. Members of the branchwould join the seminars, and afterwards,make themselves available to answer anyquestions and to pre-qualify potential buy-ers on the spot.

“We would often leave with 30 or 40leads after each seminar,” said Millard.

But this was before the current economyand the tax credit offer. Now, the branch isalso answering questions about how toqualify for the tax credit and what the guide-lines are. According to Millard, this is just one

more incentive they can dis-cuss at these seminars.

Educate yourselfand know yourtarget marketIn any selling situation, it’simperative to identify andknow your target market.And right now, who betterto target than recent col-lege graduates with securejobs?

With more than 30,000students, North Carolina’slargest university, NorthCarolina State University,is located in the heart ofRaleigh, N.C. Raleigh alsohas an unemploymentrate much lower than thenational average withbusinesses in multipleindustries such as pho-tonics, biotechnology, ITand communications,and computer and video

gaming, all looking for talent. This com-bination makes for a lot of potentiallygreat lending opportunities for mort-gage professionals.

According to Jan Sylvester, branchmanager for Embrace Home Loans’Raleigh, N.C. branch, now more than anyother time, they receive numerous directcalls from recent graduates looking foradvice on purchasing their first home.Many of these individuals are unsure ofthe process and simply need guidance.

“We make certain we’re available toadvise this group,” said Sylvester. “Thisgroup is new and inexperienced in buy-ing a home; therefore, it’s expectedthey’ll have lots of questions and wewant to be there to answer them.”

Sylvester continued, “What’s differentabout now is that there’s a lot more ofthem to advise. We’ve experienced a newwave of potential buyers calling, so we’renot as active in directly marketing.”

But it’s more than just knowing yourtarget market. It’s also critical to knowwhat other offers are being available inaddition to the tax credit. For instance, theGeorgia Homebuyer Tax Credit offers upto $1,800 in tax credits to Georgia home-

Knowledge is KingBy Cary Reines

Embracing first-time homebuyers with eEducation

“…statistics suggestthat approximately

1.8 million people areexpected to receive

the federal first-timehomebuyer tax cred-it. They also indicate

that the rebate hascurrently spurred

approximately350,000 home sales.”


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Web: www.appraisalsanywhere.com

actually afford. This can often be a con-fusing and cumbersome process thatwould justify being a permanent resi-dent of an apartment complex. Butthere are benefits, and these need to bemade clear.

Additionally, education is critical formortgage professionals, too. Knowingyour target market and their hesitanciesof buying a home are important. Andobviously knowing everything about thefederal tax credit is essential as well asknowing other opportunities available.

But according to Millard, it may betoo late for some lenders and mortgageprofessionals to jump on the first-timehomebuyer wagon.

“We’ve been targeting this marketsegment for many years,” said Millard.“When others in the industry were turn-ing their noses up at the idea of lendingto first-time homebuyers because itwasn’t as profitable, we were. We sup-ported and built relationships withdown payment assistance programsbecause we saw a need to reach first-time homebuyers. Now, everyonewants to because there is a profit.Unfortunately, we’re hearing from dif-ferent assistance programs that manymortgage professionals missed the boatby not participating earlier.”

But there will always be a demandfrom first-time homebuyers. And evenafter April 1, interest rates and home val-ues are likely to still be low for some time;therefore, it would be wise for mortgageprofessionals to begin building relation-ships in their local communities now, evenafter the tax credit is no longer offered,and keep themselves aware of otheropportunities available to this market.

Cary Reines is executive vice president ofEmbrace Home Loans, a direct lender forFannie Mae and Freddie Mac, approvedby the Federal Housing Administration(FHA) and the U.S. Department ofVeterans Affairs (VA), and an issuer forGinnie Mae.

buyers via a credit on their state incometax. This is in addition to the $8,000.

“It’s critical that lenders and othermortgage professionals are aware of allopportunities available to homebuyersin their area,” said Millard. “By combin-ing the Georgia and the federal taxcredits, this can be a very powerfulincentive for potential homebuyers.”

Educate your sales forceLet’s face it. Lenders aren’t the onlyones selling; it’s in large part theRealtors. So do them a favor and keepthem current on tax credit updates andother news that could help themencourage potential first-time home-buyers to purchase.

Today, we’re in an economic statewhere now really is the time to buy. Notonly has the tax credit provided an incen-tive, but also interest rates are at an all-time low and home values have plum-meted, making this a prime time to own ahome. Yes, it’s been rumored that the fed-eral tax credit will be extended again, andsome industry experts even believe thetax credit will be available for a very longtime until the economy fully recovers.Even if that’s the case, the combination ofthe tax credit, historically low interestrates and low home values will probablynot be available for a very long time, andmortgage professionals need to make cer-tain that potential homebuyers realizethis. Let this group know and understandto ensure they’re comfortable with theidea of owning a home. Build relation-ships with realtors in your community andsend emails, newsletters and alerts whennews breaks. It’s critical to give this groupthe tools necessary to sell and to sell well.

Lessons learned … or is ittoo late? To truly engage potential first-timehomebuyers, education is key. For thisgroup, owning a home might be a com-plete mystery from the lending processall the way down to how much they can

The market for first-time home buyersis as hot as it has ever been. With thegovernment offering tax incentives,home prices down and interest rateslow, homes are more affordable thanthey have affordable in history. Most ofthe recovery of the real estate market inthe past year has beenfocused upon the lowerend of the market.

Whether you are a realestate agent, insuranceagent, tax professional,loan officer or other pro-fessional, it is hard not tobe impacted by this mar-ket. On the contrary,many are stepping up tofocus upon this segmentof the market. This is nota short-term gold rush.Even when the marketnormalizes, first-timebuyers typically compriseclose to one-half of thepurchase market.

It is not enough to saythat you are going tofocus upon this segmentof the market. Those whoare going to servicerenters must understandthat these people have special needs.The home buying experience will betheir most significant financial transac-tion and it is important for the experi-ence to be a positive one instead of anightmare.

What are these needs? They needsomeone to learn from. That meansyou should not focus upon this mar-ket unless you are an expert. Youshould anticipate the questions theyhave and be ready for answers. As amatter of fact, it would be a greatidea to provide them with a sheet ofFrequently Asked Questions (FAQs) inyour area of expertise. There is somuch information being thrown atthese people that they are not likelyto remember what you tell them.Don’t limit this information to FAQs.Also include printed informationabout the process—including dia-grams and graphs that demonstratethe flow.

You must think of yourself as ateacher as well as a businessperson.When they see you as a teacherrather than someone trying to sellthem something, they are more like-ly to listen to your advice. How manytimes have transactions gone awrybecause people went off in the wrongdirection because there was not

enough of a level of trust? Peopletrust teachers.

One characteristic of a teacher issomeone who has a great deal ofpatience. Expect that questions will beasked repeatedly. Expect your clients tonot always follow through the way you

would like. All throughthese bumps and bruises,you will need to exercisean extraordinary amountof patience. You are nottheir parent. You cannotget angry with them. Youare their teacher.

Help them prepare.You have heard this amillion times: An ounceof prevention is worth apound of cure. Nowhereis this saying moreappropriate than withregard to the home pur-chase process. For exam-ple, having them spendtime with a loan officergetting a pre-approvalwill not only give themmore confidence to pur-chase, it will remove asignificant amount ofstress from the process.

Questions will be answered, issueswill be resolved and now, the searchcan occur with a focus on the goal offinding the right home instead of twoprocesses that are occurring at once.

During the process, do notassume that the clients understandwhat you are saying at all times. Donot use technical language and jar-gon that may be common to yourprofession, but foreign to them. Forexample, when you speak aboutrates fluctuating, do not assume thatthe clients know exactly how thataffects their payments. They areeven more likely not to know howrates shifting may affect their pay-ments after the tax factor is figuredinto the equation. They might noteven understand what the mortgagepayment is comprised of and otherareas they will be responsible for,such as home maintenance.

If you are an expert in your indus-try, you must also align yourself withother experts. The first-time buyerswill be looking for recommendations.Going back to the tax issue, they maywant to speak with a tax professionalwho may also be able to help themfile forms to take advantage of the taxcredit if the state and/or federal gov-ernment is offering one for which they

Working With First-Time BuyersBy Dave Hershman

“How many timeshave transactionsgone awry because

people went off in thewrong direction

because there wasnot enough of a levelof trust? People trust

teachers.”

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high level relationships should increaseyour business in the long run. A strongreferral starts you out in a position oftrust, which again, is imperative if youare going to lead first-time buyersthrough a successful and stress-freetransaction...?

Dave Hershman is a leading author for themortgage industry with eight books andseveral hundred articles to his credit. He isalso head of OriginationPro MortgageSchool and a top industry speaker. Dave’sCertified Mortgage Advisor Program canbe found at www.webinars.origination-pro.com. If you would like to stay aheadof what is happening in the markets, visitratelink.originationpro.com for a free trialor e-mail [email protected].

qualify. Referrals of other profession-als removes more stress from thetransaction because once again, theycan focus on the purchase instead ofshopping for all of the services associ-ated with the transaction.

In addition, referring them to otherexperts also makes it more likely theywill experience a smoother transac-tion. On their own, they are more like-ly to obtain the wrong information orhook up with service providers whodon’t provide the best customer serv-ice. Referring experts such as yourselfwith good service records should bethe least you can contribute to thetransaction.

Of course, these referral relation-ships should go both ways and these

Wayne Gretzky, the National HockeyLeague Hall of Famer, once told areporter, “A good hockey player playswhere the puck is. A great hockey play-er plays where the puck is going to be.”This philosophy shouldbe no different for amortgage loan originator,since we too must adaptto the market environ-ment around us. Wheredo you think the puck isgoing to be over thecourse of the next year (or10) and how have youpositioned yourself totake advantage of it?

Clearly, much of themortgage market over thepast year has been drivenby refinancing and first-time homebuyer purchas-es. The refinancing mar-ket has been as depend-able as the seasons forthe past couple ofdecades. You could restassured that every fewyears would bring a ratereduction that woulddrive homeowners to therefinancing table as pre-dictably as geese migrat-ing south for the winter.However, the future economic environ-ment will challenge this cycle and likelychange the dynamics of our businesssignificantly. One thing we will continueto be able to count on, however, is thestrength of the first-time homebuyermarket.

Now, many of you will argue that thefirst-timers who accounted for roughly50 percent of all home sales last yearwas an anomaly; that this new recordwas driven purely by the temporary

“fix” of the first-timehomebuyer tax credit.But before you go back toyour desk and pick up thephone to buy more refiand loan modificationleads, let’s take a look atsome facts.

First, every major con-sumer trend in our historyhas been driven by ourdemographics, most notably,the Baby Boomer Generationwhich drove the sale anddevelopment of everythingfrom disposable diapers tomutual funds. As theseBoomers age and moveinto their non-incomeearning years, the con-sumer effect of Boomer-related cohorts will beginto diminish. Who, if any-one, will take their place?The growth of our popula-tion, and the characteris-tics of the consumer, willbe driven once again byimmigration as it was for

the early part of the 20th Century. Unlikemany industrialized countries, the U.S.still benefits greatly from immigration.While our birth rate is roughly the popu-lation replacement rate, our populationgrowth rate of one percent is at or abovethe world average, which is significant

The Decade of the First-Time Homebuyer

By Mike Lesmeister, CRMS

“… the average ageof first-time buyers is

33, we should feelconfident that as thispopulation segment

ages, they will belooking for homes,

just as the BabyBoomers did, provid-ing fertile ground for

homeownershipopportunities for adecade or more.”

for a nation of more than 300 millionpeople. According to the U.S. CensusBureau, fully one-third of our popula-tion growth can be attributed to immi-gration, with Hispanic and LatinoAmericans representing more than halfof that growth. They also had thefastest-growing rate of homeownershipof any racial group over the last 10 years.These immigrants will be the homebuy-ers in the decades to come.

Beyond simply the growth of our pop-ulation, we are also seeing that while ouroverall population is “graying” due toour aging Baby Boomers, people underage 20 make up more than a quarter ofthe population. If, as Elliot Eisenberg’sstudy of First-Time Homebuyers found,the average age of first time buyers is 33,we should feel confident that as this pop-ulation segment ages, they will be look-ing for homes, just as the Baby Boomersdid, providing fertile ground for home-ownership opportunities for a decade ormore.

Beyond the long-term trends that favorfirst-timers, there are also tactical reasonsto focus at least part of your marketingeffort on this client profile because thefinancial incentives for purchasing ahome are considerable. In addition to thefirst-time homebuyer tax credit, there arealso downpayment assistance programsand other first-time homebuyer programssponsored by state and local governmentsthat can assist buyers in getting into theirfirst home. Far from the seller-fundedshell games of the past, these organiza-tions provide valuable resources at a timewhen virtually every privately-fundedconcern is tapped out and credit hasbecome tight, to say the least. These pro-grams can provide assistance in amountsof $30,000 or more depending on yourarea. To be fair, there is certainly bureau-cracy associated with downpayment assis-tance programs, and they are not foreveryone, but lenders who hope to pene-trate this market should become familiarwith what is available in their market.With possible Federal HousingAdministration (FHA) changes that includehigher downpayments and reduced sellerconcessions, these programs will take on agreat importance.

Lastly, as a result of the housingslowdown, home affordability is at itshighest level in decades. According tothe Center for Economic PolicyResearch, median home prices aver-aged 15 times annual rent for decades… until the housing bubble. In someparts of the country, this factorreached 25 times rents and only noware we seeing the averages approachequilibrium again. As we continue towork our way through the glut of hous-ing supply, the monthly debt service ona mortgage will become more econom-ically attractive than comparable rents,

driving those renters who can qualifyto homeownership.

If indeed, the first-time homebuyerrepresents the backbone of the housingmarket for years to come, how will youcapitalize on this trend? Here are somesimple strategies a mortgage originatorcan pursue to position themselves as anexpert:

1. Familiarize yourself with first-timehomebuyer assistance programs in yourstate and align yourself with lendersthat embrace these programs. Manylenders don’t want to invest the timeand money understanding and partici-pating in these programs.

2. Introduce yourself to the leaders ofthe various Community DevelopmentCorporations (CDC) in your area. Theseare the organizations holding the pursestrings of the first-time homebuyer anddownpayment assistance programs, sothey are certainly good people to know.

3. Determine who the real estate agents,builders and developers are that special-ize in entry-level housing. If this is wherethe buyers will be looking, you wantthem to find you. Perform online search-es for agents that work with first-timersand see who is conducting first-timehomebuyer seminars in your area.

4. FHA and VA loans are the overwhelm-ing financing choice for these buyers, sobecome intimately familiar with theseprograms and the ongoing changes withthem. Hosting Realtor and homebuyerseminars that focus on the intricacies ofgovernment loans programs will posi-tion you as an expert in the field.

In the ever-changing mortgage mar-kets, the successful mortgage originatorhas to be nimble. Relying on strategiesthat worked in the last few years won’tnecessary help you survive in a marketthat is expected to further contract overthe next couple of years. Maybe youhave more high-end purchase businessthan you can handle, but if you don’t,seeing yourself as too good for theentry-level buyer may end up costingyou more than just a loan or two.

Mike Lesmeister, CRMS, is a licensedmortgage loan originator and managingpartner with Home Loan Specialists Inc.based in Houston. He has more than 20years of financial services experienceand is also the founder of Blue RibbonAgents, a Realtor marketing program forHouston area real estate agents. Mikemay be reached by phone at (832) 286-1600, or by visiting www.hlstx.com. Youcan also follow him at twitter.com/mike-lesmeister or connect with him atlinkedin.com/in/mikelesmeister.

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where it should be the bank maybe moreapt to accept the second offer coming inat the same price, because they nowknow, they have just lost a previous buyerby asking for more.”

Jennifer has also stated that she to isseeing many investors trying to lowballthe sale of the homes because they areoffering cash. She said it is not out of thenorm to see a cash offer of $250,000-$350,000 come in on a $500,000 listing.The investors are hoping for an aggressivebank or seller willing to accept their cashoffer for well below the market rate.Appraisals are starting to come in slightlyhigher than sales prices.

Regardless, it is a great time for thefirst-time homebuyer to be out therelooking to purchase their first home,whether it is a condo, townhouse, cooper-ative (co-op), single-family home or a two-unit this still is the best time. The first-time buyer’s income tax credit from theIRS may go away. I don’t believe they willextend it again. I am not sure all first-timebuyers realize what a fantastic opportuni-ty this is. They can still buy a house with3.5 percent down, ask for seller-paid clos-ing costs, and receive a non-taxed, nointerest, no repayment credit from the IRSfor up to $8,000 (certain restrictionsapply). That is phenomenal. If they onlythought about the time and energy theywould have to put forth to save $8,000. Intoday’s employment climate and stockmarket fluctuations, savings and profit aredown. So taking advantage of this oppor-tunity is an American opportunity not tobe brushed off.

Let’s review the credits available:

First-time homebuyercredit programs (2008and 2009)This credit was available from April 9,2008 through Dec. 31, 2008. This cred-it was a refundable credit putting hardcash into the hands of the first-timehomebuyer. This could also be claimedon your 2008 (as an amended return)or 2009 tax return. This credit must berepaid over a 15-year period.

Both programs for 2008 and 2009 arefor first-time homebuyers. This credit isonly for first-time homebuyers. A first-time homebuyer is someone who hasnever owned a home in the past or whohas not owned a home in the past threeyears. Once you have met the first-timehomebuyer profile, then the followingrequirements must also be met:

� Home needs to be your primary res-idence.

� Cannot be acquired/purchased froma related person; a related personfor this first-time homebuyer taxcredit is a spouse, parent, grandpar-ent, children or grandchildren, a

corporation or partnership that is50 percent-owned by any above rel-ative. Brothers, sisters, aunts,uncles and step relatives are notconsidered a family member forthis credit.

� Home cannot be acquired as a giftor inheritance.

� No vacant land.� No rental property.� Property can be a single family

home, multi-family home one- tofour-residence, condo, co-op,mobile home, house trailer or boat.

� Closed on the purchase of qualifiedprinciple residence during qualifica-tion period and prior to claimingthe credit.

� Meet income limitations, phase outbegins at $75,000-$95,000 for singletaxpayers or $150,000-$170,000 formarried filing jointly.

� Non-resident aliens are not eligiblefor this credit.

� New construction closing date isdetermined by the later of; eitherclosing date or first date owner-occupied.

� Proper completion of IRS Form5405.

For 2008, the maximum credit is$7500, 10 percent of the purchase pricewith maximum set at $7,500. For exam-ple, if you paid $55,000 for a primaryresidence, then you could get a $5,500first-time homebuyer tax credit. If youpurchased a $150,000 home, you couldget the maximum amount of $7,500.

Only the 2008 credit must be repaid. Itis repaid back to the IRS over a 15-yearperiod, with repayment installmentsbeginning in 2010. The repayment periodof 15 years equals $500 per year. This willbe an additional tax-owed by the taxpayer. Use Form 5405 for this credit.

If a single taxpayer should die, then norepayment would be incurred. If married,filing jointly, then the surviving spouse isonly responsible to repay their half. Ifproperty is transferred due to a divorce,the person transferred to is responsiblefor making any and all repayments.

If the home ceases to be primaryresidence, then full repayment is due.Full repayment is due the year thehome ceased to be the primary home.

The full repayment is due the year thehome becomes a rental or business use.

The qualifying time period for 2008was between April 9, 2008 and Dec. 31,2008.

Even though this tax credit must berepaid, it is still a great deal. It’s like get-ting a $7,500 lump sum cash allowancethat has to be paid back over 15 years atzero percent interest. You are free tospend the money any way you want, nostrings attached, it is yours.

In the Midwest, first-time homebuyersare spurring on the market, and weare seeing some “out of the norm”first-time buyers. I am working with alady who has rented a home for 30years, and because of the tax credit,has decided to take the plunge intohomeownership and buy her firsthome. She is excited to be able tochoose how she wants to decorate,have a little vegetable garden andsome flowers of her own.

As the time windsdown to take advantageof this fabulous credit,Realtors are seeing moreaction.

Many potential home-buyers are actively pursuinghomeownership more thanever before. I have Realtorsworking long hours tryingto find them the righthome. Some are purchas-ing two units (duplex). Thisallows them to spend morethan they qualify for with asingle family home, thusbecoming a determiningfactor if they can find some-thing in their price range.

In our market, we areseeing “the investor” withdisposable cash gobblingup the lower-end homesthat potential first-timebuyers are trying to bidon. When going upagainst the investor, they typically have3.5 percent down working with aFederal Housing Administration (FHA)loan, and often asking for closing costassistance. So when going up against acash offer or an offer with 20 percentdownpayment, they are not winning thebid. Banks and sellers are choosing theinvestors first.

Gloria Spencer, managing broker ofBaker Spencer Realty noted that a major-ity of her first-time homebuyers are pre-approved for a home that is priced rightfor the area, based on other short salesand foreclosures. Investors are snatchingup these properties so fast making theexperience for the first-time homebuyersan unfavorable one. Sellers can count ontheir short sales and foreclosures to bepurchased by these investors offeringcash. It is my understanding that “blanketloans” are becoming a big thing forinvestors making it even harder for the

Realtors and the first-time homebuyers tofind an acceptable property and get anoffer accepted.

As a Realtor, I am writing multipleoffers in hope that at least one of themgets accepted. I am working harder forless of a commission on these proper-ties. The lenders should find a way tomake the process a little simpler forthe first-time homebuyers, especially ifminimal repairs are needed.

I have spoken tonumerous other Realtorsand they are experiencingsimilar issues. MelissaGray of Remax One Team,has noted more difficultyin dealing with the shortsales. Listings aren’t beingentered at what banks arewilling to accept. She haswritten contracts at fullprice only to find out theyare countered with a sub-stantially higher-than-ask-ing price counters. So thebuyers you showed homesto and took the time towrite offers for don’t qual-ify for the house you justwrote an offer on. It isfrustrating to both theRealtor and the first-timehomebuyer, not to men-tion, the loan officer whohas spent the time pre-qualifying them and offer-ing a prequalification

lender, waiting for contract approvalonly to find out the counter is more thanthey can afford.

It is happening in both the suburbs, aswell as in the city. I had another scenarioon a home in the city. The first-timebuyer submitted an offer to purchaseand she was putting 25 percent downand was countered at more than $10,000more. When she refused to match thecounteroffer, the Realtor put the listingback in the MLS as an active listing backat the original list price, knowing full wellthis offer was just declined.

In speaking to other Realtors, JenniferBarrett also of the Remax One Teamexplained to me that this is the way theyhave to work with the banks on the shortsales. She said she has seen this happentime and time again, but the Realtor isconditioning the bank for, “What themarket will bear, so by sending in theoffer and then re-listing it realistically

First-Time Homebuyers Need toRealize the Opportunity is Now!

By Laura Lynn Burke

“Investors are snatch-ing up these proper-ties so fast making

the experience for thefirst-time homebuy-ers an unfavorable

one. Sellers can counton their short sales

and foreclosures to bepurchased by theseinvestors offering

cash.”

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www.qcmortgage.com800-939-5383

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residence on or before April 30, 2010.The transaction for this home mustclose before June 30, 2010. The tax-payer can still claim 10 percent or$8,000 maximum for married filingjointly, or $4,000 married filing sepa-rately, single or head of household.The taxpayer is also allowed to takethe credit on either 2009 or 2010. Anupdated Form 5405 will be used. Thetax return cannot be filed electroni-cally as additional documentation isrequired to be attached. The IRS isrequiring a settlement statement,signed HUD be attached to the return.

Long-time residents of the samehouse can now also qualify for areduced credit of up to $6,500, mar-ried filing jointly, or ($3,250 marriedfiling separately) or 10 percent ofthe purchase price, whichever isless. The long-time resident musthave lived in the same house for anyfive consecutive years during aneight-year period that ends on thedate the new home is purchased.The settlement date must be afterNov. 6, 2009 through the April 30,2010, closing by June 30, 2010.

� Both the first-time homebuyers andlong-time residence credit cannot beused for homes that have a purchaseprice that exceeds $800,000.

� The purchaser must be 18 years old,and if married, one must be 18 yearsold.

� A dependent cannot claim eithercredit.

In the case of an audit the followingdocumentation is required:

� Copy of closing HUD-1 SettlementStatement must be signed by (atminimum) the buyers.

� Most recent monthly mortgagestatement.

� Occupancy permit, showing date ifnew construction.

� Cash sale; proof taxpayer paid for it,front and back of cancelled check.

A minimum of two of the followingitems:

1. Current Driver’s License or otherstate-issued identification.2. Recent pay stub (within the last twomonths showing name and newaddress).3. Recent bank statement (within thelast two months showing name andnew address).4. Current automobile registration.

If you closed on a primary residenceduring the correct time frame on 2009,you can claim your credit on either your

If you closed on a primary home in2008 and met the qualifications, but did-n’t claim the First-Time Homebuyer TaxCredit, there is still time to do so. Youwould need to file an amended return.

The American Recovery andReinvestment Act of 2009 made the follow-ing changes to the First-Time HomebuyersTax Credit: The maximum amount wasincreased to $8,000, 10 percent of the pur-chase price with max set at $8,000 andthere is no repayment required.

The qualifying dates would be Jan. 1,2009 through Nov. 30, 2009. They mustclose on or before Nov. 30, 2009. Thecredit was raised to 10 percent of thepurchase price with a maximum of$8,000. No repayment is required, onlya refundable credit. This credit wasallowed to be taken on either their2008 tax returns as an amended returnor on their 2009 return, due April 15,2009. Use From 5405 for this credit.

There are some instances that wouldtrigger the 2009 First-Time HomebuyerTax Credit to be repaid. The repaymentwould be due with the tax return filedwhen the event occurs. The followingare repayment triggers:

� If you sell the home to an unrelatedperson for a gain.

� Sell the home to a related party.� Convert the home to a rental or

business use.� If the home is disposed of through a

foreclosure, repossession or aban-donment.

� Still own the home, but no longeruse as a main home.

� Transfer home to ex-spouse due todivorce settlement.

� Home was destroyed, condemned ordisposed of under condemnationthreat.

If any of the above cause a repay-ment to be triggered and the taxpayershould die, no repayment is to bemade; however, if married, filing joint-ly and spouse dies, then survivingspouse must repay their half.

No repayment is required if youkeep the home as your primary homebeyond three years from the date ofpurchase, sell the home to an unrelatedperson, with no gain, or if the home istransferred to an ex-spouse in a divorcesettlement (the repayment require-ments are then passed to the ex-spouse).

The new credit, The Worker,Homeownership and Business AssistanceAct of 2009 was signed into law Nov. 6,2009. The new version of the First-Time Homebuyers Credit was revisedwith this law. The dates were extend-ed; you must buy or enter into a bind-ing contract to purchase a principle

2008 tax return you filed in 2009, or your2009 tax return to be filed in April of 2010.

If you didn’t claim it on your 2008return, but already sent it in, not toworry, the IRS will allow you to do anamended return to get your tax creditrefund now versus waiting until April15, 2010. Seek the advice of a tax pro-fessional to determine which way is thebest way for you to claim the credit.

Some common questionsrelated to the first-timehomebuyer marketWhat if one taxpayer owned a home andthe other has not?1. If not married, the tax payer that iseligible may claim the refund.2. If married, neither tax payer may takethe credit.

What about rental agreements with rent-to-buy options, to purchase the home?The First-Time Homebuyer Tax Creditdoes not kick in until the taxpayer actu-ally is transferred to the title; therefore,a rental agreement is not a purchase.No closing takes place.

What if the taxpayerowns other property?As long as the taxpayer’s other propertyisn’t a primary residence. The taxpayercan own a vacation home or a rentalproperty prior to or during the purchaseof their primary residence.

The IRS has stated that they arewatching the First-Time HomebuyerCredit with caution. They feel it has thepotential for a high risk of fraud.Common errors the IRS has seen:

� First-Time Homebuyer Tax Creditclaimed prior to closing or prior totaking occupancy.

� IRS Form 5405 completed incorrectlyor incomplete.

� Married filing separately taxpayerseach incorrectly claim either the

$7,500 or the $8,000 credit on eachseparate return.

� The taxpayer has owned a home inthe past three years.

� Married filing jointly for the First-Time Homebuyer Tax Credit whenone spouse was a prior homeowner.

� No purchase on rent-to-own agree-ments.

� Credit is claimed before the pur-chase date on IRS Form 5405.

� Splitting the First-Time HomebuyerTax Credit and exceeding the maxi-mum allowed.

� Claiming more than 10 percent ofthe purchase price.

I hope first-time homebuyers realizewhat a fabulous offer this is and really takeit seriously. Waiting until the summer oruntil next year is not a smart move, if thecredit goes away. The opportunity is now!

Laura Lynn Burke has been selectedfrom a nationwide search to be featuredin Stepping Stones to Success, a highlysuccessful book series. The book featuresbest-selling authors Deepak Chopra (ThePower of Purpose), Jack Canfield(Chicken Soup for the Soul), Dr. DenisWaitley (featured in The Secret) andLaura Lynn Burke (Networkolog) whoare joined by other well-known authorseach offering time-tested strategies forsuccess in frank and intimate inter-views. Laura is also the CEO and founderof Footprints International d/b/a TheMortgage Institute, a training and con-sulting company designed with you inmind. For more information, call (708)692-6199 or e-mail [email protected].

Visit author Laura LynnBurke’s Web site atwww.lauralynnburke.com

where she arms you withthe information to “Prepare today fortomorrow’s changes, and you will stayone step ahead of the competition.”

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problems. Your mission, should youchoose to accept it, is to simply domore business with CPAs and financialadvisors, and you will get your share ofbusiness from the 23 million home-owners with at least 25 percent equityin their homes. CMPS certification givesyou the training, tools, and resourcesto do just that.

#2: Your attitudeon originationopportunitiesThe Mortgage BankersAssociation (MKBA) report-ed that total originationvolume in 2009 was inexcess of $2.1 trillion. Thisrepresented $1.368 trillionin refinance volume and$740 billion in purchasevolume. The estimatedtotal origination volumethis year is expected todecline to $1.27 trillion.This represents $529 bil-lion in refinance transac-tions and $745 billion inpurchase transactions. Inother words, while pur-chase volume is expected

to remain stable, refinance volume isexpected to decline by a whopping 61percent or $839 trillion!

Again, you have two choices here:

� Choice #1: Take the attitude that a61 percent decline in refinanceopportunities is an excuse for you tohave a mediocre year

� Choice #2: Take the attitude that a 61percent decline in refinance opportu-nities may be a problem for your com-petition, but you are going to capturea bigger piece of the pie when itcomes to purchase opportunities inyour marketplace

You might ask, how can I capturemore purchase business? Again, let’sthink this through together. When peo-ple (who have money) are looking tobuy a home, what do they do? Somepeople contact their CPAs and financialadvisors and ask their advice. In fact, 81percent of investors said they wantadvice from their financial advisors onmore than just investments. Other peo-ple start shopping for a home and con-tact various Realtors in their market forinformation. Still, others talk to theirfamily, friends and co-workers.

A record number of originators con-tinue to exit the mortgage industry.Yet, many originators are experienc-ing record numbers in their origina-tion volume. What gives? Why aresome originators going out of busi-ness, while other originators are mak-ing record profits?

A big part of this difference in suc-cess rates is the attitude and perspec-tive of the originators involved.Depending on your attitude and per-spective, this is either the best time orthe worst time for you to be in themortgage industry. There is plenty oftruth to these words of Henry Ford whoonce said, “If you think you can, or ifyou think you can’t, you are right.” Infact, here are two examples that illus-trate why your attitude matters, andhow you could transform industrychaos into your opportunity to makerecord profits in 2010.

#1: Your attitude on negative equityAccording to First American CoreLogic, approximately 29 percent of allresidential properties in the UnitedStates are either in or within five per-cent of a negative equity situation.According to the latest report, whichreflected market conditions as of thefourth quarter of 2009, “Negativeequity continues to be concentratedin five states: Nevada, which had thehighest percentage negative equitywith 70 percent of all of its mort-gaged properties underwater, fol-lowed by Arizona (51 percent), Florida(48 percent), Michigan (39 percent)and California (35 percent).”

On the one hand, this seems likevery bad news. On the other hand,what about the other 71 percent ofhomeowners who are not in a negativeequity situation? There are even home-owners with equity in the five hardesthit states! In Nevada, 30 percent of allhomeowners with a mortgage havemore than five percent equity, followedby Arizona (49 percent), Florida (52 per-cent), Michigan (61 percent) andCalifornia (65 percent).

In fact, this very same report goeson to state that, “More than 23 mil-lion, or 49 percent of all homeownerswith a mortgage, have at least 25 per-

cent equity in their home and over12 million have at least 50 percentequity in their home.” This is consis-tent with the Federal Reserve Board’sFlow of Funds report that shows thatAmerican homeownershave $6.2 trillion ofhome equity remainingeven after the recorddownturn in housingprices over the last fewyears.

The bottom line hereis that you have twochoices:

� Choice #1: Take theattitude that nega-tive equity is a prob-lem for you as anoriginator, and use itas an excuse to havea mediocre year

� Choice #2: Take theattitude that nega-tive equity may be aproblem for yourcompetition, but you are going totake this opportunity to do somebrisk business with just a smallfraction of the 23 million home-owners who have at least 25 per-cent equity in their homes.

The choice is yours. The attitude youtake about negative equity in your mar-ket will spell the difference betweensuccess and failure.

You might ask, where can I findthe all these homeowners that don’thave a negative equity problem?Well, let’s think this through. If I ama homeowner who has done a reallygood job of managing my money andbuilding wealth over time, wheremight I be found? Would I use a CPA?What about a financial advisor ormoney manager?

Bingo! That’s your sales strategy!Find CPAs and financial advisors andyou will find homeowners that don’thave a negative equity problem. I’mnot saying that all homeowners whohave a CPA or financial advisor don’thave negative equity problems. What Iam saying is that all CPAs and financialadvisors have homeowners that theyknow that don’t have negative equity

BY GIBRAN NICHOLAS

Why Your Attitude Matters All of this points to three strategiesthat would result in you capturing morepurchase business:

� Strategy #1: Have a systematic wayof reaching CPAs and financial advi-sors in order to add value to themand their clients who may be in themarket to purchase a new home.

� Strategy #2: Have a systematic wayof adding value to Realtors in yourmarket by solving their problemsthat they are facing, reaching thebuyers in their prospect list, andmotivating fence-sitters to takeaction.

� Strategy #3: Have a systematic wayof adding value to your own clientdatabase and transforming yourclients into a referral-generatingsales force.

Again, Certified Mortgage PlanningSpecialist (CMPS) certification gives youthe training, tools, and resources toimplement these three strategies. Let’sface it. Some people get burned out,lose heart, and go personally and finan-cially bankrupt in troubled times. Otherpeople find heroic strength, inspirethose around them, and make theirpersonal and financial fortunes.

What kind of person areyou?If you are ready to transform unprece-dented chaos into unprecedentedopportunity and make 2010 your bestyear ever, it’s time for you to become aCertified Mortgage Planning Specialist!

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

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

his insights on economics, realestate and financial issues, includingthe current mortgage and credit crises.

“The choice is yours.The attitude you

take about negativeequity in your mar-ket will spell the dif-ference between suc-

cess and failure.”

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

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attestation, and contains the followingverbal affirmations:

� The initial GFE was provided to theapplicant(s) within three businessdays of the application date (busi-ness days, excluding Sundays andspecified, legal holidays).

� The applicant(s) received the initialGFE.

� The applicant(s) intend to proceedwith the loan application based onthe initial GFE.

� Other than a credit report fee, nofees were charged to the applicant(s)prior to receiving the GFE.

It is important that a statement onboth the applicant(s) Certificationand Loan Originator CertificationForms include, but not be limited to,further indicating that the subjectform itself is not a loan commitment;the loan originator cannot guarantyacceptance into any loan program,specific loan terms or conditions; andthe loan application is subject tocredit approval, acceptable propertyappraisal, title report, and satisfacto-ry completion of conditions stated incommitment or approval letter.

Submit your questions …Do you have a regulatory complianceissue that you’d like to see addressed inthe Regulatory Compliance OutlookColumn? If so, e-mail your issue or con-cern to Jonathan Foxx at [email protected].

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].

(2) The loan applicant’s notification ofan intention to proceed with the loancovered by the GFE.

It is not until both conditions are sat-isfied that a loan originator may collectfees from a loan applicant for services,other than the cost of obtaining a cred-it report.

Thus, a loan originator must issue aGFE no later than three business daysafter the loan originator receives anapplication or information sufficient tocomplete an application and must benotified of the loan applicant’s intentto proceed before collecting fees, withthe exception of the credit report fee.

There is a remedy and we have coun-seled our clients to implement it fortheir residential mortgage loan applica-tions. Either by written or verbal meth-ods, our clients now use a form, enti-tled “Intent to Proceed With MortgageLoan Application.” The written form,subtitled Applicant(s) Certification, con-tains the following written affirma-tions, is signed by the loan applicant,and returned with the application pack-age (alternatively, the loan applicantmay contact the loan officer to offerverbal affirmations):

� The initial GFE has been providedwithin three business days of theapplication date (business days,excluding Sundays and specified,legal holidays).

� The initial GFE was received.� I/We intend to proceed with the loan

application based on the initial GFE.� Other than a credit report fee, no

fees were charged prior to receivingthe GFE.

The fourth bullet contains theessential words about the applicant’sintention to proceed with the loanapplication based on the initial GFE.The verbal form, subtitled “LoanOriginator Certification,” is used byloan officers and requires their signed

Since the introduction of the new GoodFaith Estimate (GFE), several readers ofthis column have written to me abouttheir concern regarding the U.S.Department of Housing & UrbanDevelopment’s (HUD’s) new require-ment for a waiting period to elapsebefore collecting fees from the con-sumer, other than the credit report fee.HUD has taken the recently-revisedFederal Reserve Board Truth-in-Lending (TILA) regulations—which limitfees, charged in connection with earlydisclosures, and defines the timely pro-vision of the disclosures—and incorpo-rates this rule into a way of permittingthe borrower to shop for a mortgageloan without paying upfront fees that,in HUD’s view, impede shopping. ThatTILA rule, simply stated, is that credi-tors are not permitted to impose a feeon a consumer in connection with theconsumer’s application for a mortgagebefore the consumer has received theTILA disclosure. The Federal ReserveBoard makes an exception that allowsimposition of a fee that is bona fideand reasonable in amount for obtain-ing the consumer’s credit history. (73 FR44522, July 30, 2008)

HUD has a public policy goal of cre-ating a “circumstance” where con-sumers can shop for a mortgage loanwithout paying significant upfront feesthat may impede shopping.Consequently, HUD has, in effect,adopted the Federal Reserve Board’srule, limiting the charge originatorsmay impose on consumers for deliveryof the GFE. Specifically, HUD is limitingthe fee for the GFE to the cost of a cred-it report, and a loan originator isexpressly not permitted to charge, as acondition of providing a GFE, any feefor an appraisal, inspection or similarsettlement service. To be clear, the loanoriginator may not accept payment

from the consumer—except for thepayment of a credit report fee—in anyform whatsoever, such as by a post-dated check or an unprocessed creditcard impression, or any other kind ofpayment method which could consti-tute constructive receipt of payment.

Furthermore, and of greater signifi-cance, HUD has imposed an additionalrequirement that affects the collection offees from a consumer: The loan origina-tor may collect fees beyond the cost of acredit report for origination-related serv-ices only after a loan applicant bothreceives a GFE and indicates an intentionto proceed with the loan covered by theGFE. Note the two requirements:

(1) The delivery of the GFE to the loanapplicant; and

“Intent to Proceed” and the New GFEDisclaimer: The views, opinions and advice expressed in the following pieceshould not be taken as legal advice and do not reflect the views of NationalMortgage Professional Magazine, the National Association of Mortgage Brokers(NAMB), the National Association of Professional Mortgage Women (NAPMW)or the National Credit Reporting Association (NCRA). You should consult yourown legal counsel for professional advice.

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Come network and learn at Mortgage Revolution in San Franciscoon Thursday, May 6 and Friday, May 7, 2010.

We're featuring a first rate education from over20 speakers on a variety of hot topics - all in a

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The kicker - we're donating all profits to charity. Our goal for Mortgage Revolution San Francisco...

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This is an event being hosted for mortgage professionals by mortgage professionals. We feel thatnow, more than ever, we need to come together as an industry.

We're planning lots of fun networking events for everyone too.

Would you like to lend a hand to the Revolution? If so, please email us at [email protected]

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a personalized, collaborative online work-space called a “Roohm.” The Roohm servesto proactively guide consumers throughthe mortgage loan application process byshowing how the application is progressingand upcoming required steps such as whatdocuments are needed and which need tobe signed. Within the Roohm, the applicantcan e-sign documents, upload digital docu-ments and collaborate with appropriatemortgage lender employees and third-party partners such as title agents, realestate agents, appraisers and notaries.

Lenders also have access to their versionof the Roohm, where an expanded viewprovides a snapshot of their applicationpipeline, current statuses and pending steps.Within a file, the Roohm provides one-clickordering of state specific loan disclosuresand closing documents and automaticallyorganizes each one by name for underwrit-ing and investor delivery purposes.

“One of the most common consumercomplaints about the mortgage process isthat they never know what they need to donext, the current status of their loan or ifthey are on track for completion,” saidDiPaolo. “With Roohmz MortgageEnterprise, the borrower is given a real-timeview of their loan status and what steps arerequired to move it along. This, along withcontinuous communication with theirlender, shortens origination times andincreases loyalty with consumers.”

Roohmz Mortgage Enterprise is avail-able in a Software as a Service (Saas)model. All software and loan documentsare secured in Cogent Road’s SAS 70 com-pliant data center that undergoes third-party security audits each year. The datacenter is staffed 24/7 and contains bio-metric scanning, a waterless fire preven-tion systems, a 100 percent power uptimeguaranty and multiple redundancies.For more information, visit www.cogen-troad.com.

ARES launchesForeclosure Guard tool

Advanced Real Estate Systems (ARES) hascreated Foreclosure Guard, a tool for realestate professionals and investors who areworking with clients to complete shortsales and mortgage loan modifications.

“I’ve been working in the default marketsince 1989 as an investor, real estate broker,consultant, and most recently as a speakerrecognized by the National Association ofRealtors,” said Phil Tesoriero, co-creator ofForeclosure Guard, “I‘ve taught that theshort sale proposal is a necessary andpainstaking process. But with ForeclosureGuard I can do higher quality proposals insignificantly less time. I am proud to saythat with Foreclosure Guard, that processhas been reduced down to mere minutes.”

Foreclosure Guard allows for a singlepoint-of-entry where the user enters in thenecessary details on the default property.It then creates all of the necessary docu-

ments for either a short sale or loan mod-ification proposal. Foreclosure Guard’shigh quality documents include many ofthe most commonly requested bank docu-ments. In addition to that, it producesnumerous supporting documents to helpdefend one’s proposal and move the trans-action along to the closing table.

Foreclosure Guard is one of the onlysystems of its type that is compliant withthe new U.S. Treasury Guidelines effec-tive April 2010, as well as online shortsale platforms used by major lenders.For more information, visit www.foreclo-sureguard.net.

PriceMyLoan announcesinterface with FHA TOTALMortgage Scorecard

PriceMyLoan (PML) has announced thecompletion of their interface with theFederal Housing Administration’s (FHA)TOTAL Mortgage Scorecard loan approvalplatform. Lenders using PriceMyLoan’sautomated underwriting and pricingengine now have direct access to FHA eli-gibility and credit scoring, providing amore efficient and cost-effective methodfor approving FHA loans.

FHA’s Technology Open to ApprovedLenders (TOTAL) Mortgage Scorecard is asystem developed by the U.S.Department of Housing & UrbanDevelopment (HUD) that evaluates bor-rower credit worthiness for FHA loans.PriceMyLoan’s approval to interface withFHA’s TOTAL Mortgage Scorecard giveslenders a fast and cost-effective way ofapproving FHA loans. With the interfaceto FHA’s TOTAL Mortgage Scorecard,PriceMyLoan becomes an all-in-one plat-form for lenders to originate, underwriteand price FHA loans. All aspects of theapproval process—FHA insurance eligi-bility, investor guideline eligibility andreal-time pricing—are handled througha single, Web-based interface.

“PriceMyLoan’s ability to interface withHUD for FHA decisions is important both forlenders and borrowers,” said Gigi Campbell,national sales director for PriceMyLoan.“FHA’s decision to allow more vendors likeus to interface with TOTAL MortgageScorecard makes FHA lending more accessi-ble. Lenders can use our technology toimprove the speed and accuracy of theirFHA loan decisions, and borrowers benefitfrom lower costs and faster approvals.”For more information, visit www.price-myloan.com.

Nationwide Title Clearingreleases ReleaseLINK 2.0

Nationwide Title Clearing (NTC), a docu-ment and services provider for the residen-tial mortgage industry, announced that thenew version of its ReleaseLINK Web servicehas been working perfectly for NTC’s lien

new to market continued from page 29

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release clients since its soft launch on Jan. 4.The company is now making the new Webfeature available to all company clients.

“This is an important release thatadds a lot of functionality to the soft-ware and convenience to our cus-tomers,” said Jeremy Pomerantz, seniorvice president for marketing and salesat NTC. “Our customers now have muchmore control over their processes andaccess to better automation. We’re veryglad we could enhance our services atno additional cost to our clients.”

The newly enhanced Exception Queuefeature, which allows NTC lien releaseclients to view additional types of excep-tion loans mid-process and then allowsthem to resolve the issue online or flag theloan for various complex curative actions.Clients can also use the new tool to rush anorder, place the order on hold or cancel it.

“At a time when firms that enteredthis space to garner other lucrative serv-ices are leaving the business, I’m proudthat we’re investing in technologies tohelp our customers be more efficient,”Pomerantz said. “We’ve been in this lineof business for almost 20 years. It takesinvestment and focus on core competen-cies like this to remain a market leader.”For more information, visit www.nwtc.com.

New GPS for mortgage pricing tool released by FairMortgage Collaborative (FMC)

A new tool, available atFairLoanCertification.com,is part of the ongoing cam-paign by the non-profit FairMortgage Collaborative

(FMC) to promote “fair and safe mortgages”in the wake of the twin crises in predatorylending and mortgage foreclosures. Thenew FMC resource, entitled “FairMortgage Cost Check” is a tool that willallow homebuyers to determine ifmortgage pricing—including interestrates and closing costs—is significant-ly out of line with the local market-place. A consumer who has an offerfrom a mortgage lender can go to thesite and use the tool to compare whathe or she is being offered with averagelocal rates and quotes. The “FairMortgage Cost Check” encourages con-sumers to go beyond just looking atinterest rates to the fees that can beinflated and needlessly cost thousandsof extra dollars.

“We hope that consumers will usethis highly localized information forhome mortgage decision making inthe same way that they use GPS orMapQuest to plan a trip,” said HowardBanker, executive director of FMC.“Responsible lenders will have noth-ing to fear from empowering con-sumers with more and better informa-tion. However, this is decidedly badnews for the new generation of preda-tory lenders who are abusing con-sumers in the pricing of mortgages,including the interest rate and closingcosts. The Fair Mortgage Collaborativewas created to help encourage fairand safe mortgage lending practicesand also to help restore homebuyerconfidence, which had been shredded

by predatory lending abuses and themany horror stories associated withthe mortgage foreclosure crisis. Wesee today’s announcement as a majorstep in that direction.”

The new FMC tool maintains real-time loan pricing with all standardrisk-based (agency and government)pricing down to the zip code level. Noother tool of this sort provides zipcode level specifics and none includessettlement costs, which is an area thatis increasingly being exploited bysome lenders.

FMC’s “Fair Mortgage Cost Check” isnot a “prospecting” tool; it respects theprivacy of visitors, who are notrequired to provide personally identi-fiable information. Further, the FMCresources also completely avoids thebias that is inevitable when a tool ofthis sort is underwritten or ad-support-ed on a commercial basis by lenders,who then get clients sent to them.Instead, the “Fair Mortgage CostCheck” resource provides informationabout FMC-certified lenders to individ-uals who by using the system to checkloan pricing have identified them-selves as possibly having excessivelyhigh mortgage pricing terms. If they sowish, the homebuyer or homeownercan then contact FMC-certified lendingorganizations and check for betterpricing. However, the Web tool pro-vides no information to any lender orother organization.

Launched in June 2009, the FairMortgage Collaborative certifies thatlenders meeting its rigorous “Fair andSafe” Standards, which ban predatoryproducts and practices. Certified lend-ing organizations—such as BECU(Boeing Employees’ Credit Union),Prime Alliance Solutions, DirectLending Family, Federation ofAppalachian Housing Enterprises,Inc., and Clearinghouse CDFI— nowoperate from coast to coast. FMC’s cur-rent certified lending organizationsprovides mortgages currently totalingmore than a billion dollars per year.That level is expected to double ormore in the first year of the program,with further growth anticipated in outyears as the demand for mortgagesthat are certified as being non-preda-tory takes hold.For more information, visit www.fair-loancertification.com.

Your turnNational Mortgage Professional Magazineinvites you to submit any informationpromoting new “niche” loan programs,new products or any other announce-ment related to the introduction of anew program, to the attention of:

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

E-mail:[email protected]

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

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Generate an unlimitedamount of leads for

$0.00 a leadThat is not a misprint! The free and lowcost lead expert and national trainer, Ron Vaimberg will show you in a FREE webinar how to generate a never

ending pipeline of mortgage leads.

In this webinar, Ron Vaimberg will show you how to:� Use Craigslist to fill your inbox with prospects that are

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will be on the net branch mortgagecompanies. These firms will be requiredto submit separate contracts and inde-pendent site inspections and photo-graphs of each different net branchlocation. These independent siteinspections must be conducted by oneof the on-site inspection companiesthat is approved by Experian. There arehard costs associated with these newrules, as well as new contracts for

review. The fee for anindependent site inspec-tion with photographsaverage about $75 perlocation and can exceed$100 per site, pending thelocation.

While this new rule willfirst impact only mortgagebrokers and net branchcompanies that contractwith a new credit report-ing agency after April 1,2010, all mortgage brokers

and net branch companies will be subjectto the new requirements within a year tocontinue to have access to credit reportsfrom their current provider. The corpo-rate location for the mortgage broker ornet branch company will also need toacknowledge that they are responsiblefor the access of credit reports from eachbranch in accordance to the Fair CreditReporting Act (FCRA) and all other appli-cable laws and Experian policy. Finally,the corporate office must agree that aviolation for non-compliance to the newpolicy, the FCRA, or any of the other lawsby a net branch, is a potential reason forthe suspension or termination of creditreport access.

Watch for further information aboutthese new requirements from the creditreporting agency that you do businesswith sometime in the near future.

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

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

www.ncrainc.org.

Effective April 1, 2010 mortgage brokersand mortgage net branch companieswill have new requirements to fulfillbefore they sign up with a credit report-ing agency to access credit reports. Allmortgage brokers and net branch com-panies with access to mortgage creditreports that contain Experian creditdata (which is currently all creditreports for mortgage purposes due tothe repositories’ own requirements) willneed to be re-valuated bytheir current credit reportprovider to assure com-pliance with the newrequirements. This ismandatory to continue toreceive credit reports.

These new rules fromExperian are due to the“transitory” nature of themortgage business andthat the recent changes inthe industry have raisedconcerns about the quali-ty of due diligence of some mortgagebrokers or net branch operations. Thenew requirements are intended to miti-gate the risks that credit data will endup being used improperly and to makesure that these firms understand theresponsibilities associated with creditaccess. Along with the new require-ments, a reminder is also present thatmisuse can result in the termination ofExperian credit data access.

The new rules focus on the contract-ing and physical inspections of all “endusers” of the credit reports. The term“end users” is defined in the Fair CreditReporting Act (FCRA) as the person whoaccesses, or “uses” the credit reportdata. In this case, the end user for amortgage loan is the mortgage origina-tor and the actual mortgage lender thatwill fund the loan. As in previous policy,all of these firms are in the chain of endusers and need proper documentationfor disclosure to the consumer. The newrules will specifically address andrequire independent physical inspec-tions, copies of state issued photo iden-tification cards of certain employees ateach different location in which creditreports are accessed and more restrict-ed access to the credit report data.

The greatest impact of the new rules

Experian Announces NewRequirements for Brokers and Net Branch Companies

By Terry W. Clemans

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As an originator, he has hands-on experience educating seniors and their advisors.

As author of the “Forward on Reverse” column in The Mortgage Press since 2002,

Atare Agbamu communicates nationally with the housing finance community,

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“When I first began reviewing the contents of this book, I became quite jealous ... Atare Agbamu

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APRIL 2010Wednesday-Thursday, April 7-8

Maryland Association of Mortgage Brokers2010 Conference & Exposition

“MAMP: A New Game”Baltimore Convention Center

1 West Pratt Street • BaltimoreFor more information, call (410) 752-6262

or visit www.mdmtgpros.org.

Sunday-Wednesday, April 25-28Mortgage Bankers Association National

Technology in Mortgage Banking Conference & Expo

Hyatt Regency Chicago151 East Wackler Drive

ChicagoFor more information, call (800) 793-6222

or visit www.mortgagebankers.org.

MAY 2010Monday-Thursday, May 3-6

Tennessee Association of MortgageProfessionals 2010 Convention & Trade

Show, “Tried, Tested & True”The Hotel Preston

733 Briley Parkway • NashvilleFor more information, call (615) 302-0001

or visit www.tnamp.com.

Thursday-Sunday, May 13-16National Association of Professional

Mortgage Women’s 46th National EducationConference & Annual Meeting

Marriott South Austin4415 South IH-35

Austin, TexasFor more information, call (800) 827-3034

or visit www.napmw.org.

Sunday-Wednesday, May 23-26Mortgage Bankers Association

Commercial/Multifamily Servicing andTechnology Conference 2010

Sheraton New York Hotel & Towers811 7th AvenueNew York, N.Y.

For more information, call (202) 557-2790or visit www.mortgagebankers.org.

Sunday-Wednesday, May 23-26Mortgage Bankers Association National

Secondary Market Conference & Expo 2010Hilton New York

1335 Avenue of the AmericasNew York, N.Y.


JUNE 2010Thursday-Friday, June 24-25

National Association of Mortgage Brokers2010 Mid-Year Meeting

Phoenix Airport Marriott1101 North 44th Street • Phoenix, Ariz.

For more information, call (703) 342-5900or visit www.namb.org.

JULY 2010Wednesday-Saturday, July 7-10Florida Association of Mortgage

Professionals 50th Anniversary AnnualConvention & Trade Show

“From FAMB to FAMP … 50 Golden Years”Rosen Shingle Creek

9939 Universal BoulevardOrlando

For more information, call (850) 942-6411or visit www.famb.org.

AUGUST 2010Wednesday-Friday, August 18-20

California Association of Mortgage Brokers2010 Annual Convention & Grand Exposition

Hyatt Regency Long Beach200 South Pine Avenue

Long Beach Convention Center300 East Ocean Boulevard

Long Beach, Calif.For more information, call (916) 448-8236

or visit www.cambweb.org.

SEPTEMBER 2010Thursday, September 16

Iowa Association of Mortgage Brokers 2010 Annual Convention

White Oak Vineyards15065 Northeast White Oak Drive

Cambridge, IowaFor more information, call (515) 210-4675

or visit www.iowamortgagebrokers.org.

OCTOBER 2010Tuesday-Wednesday, October 19-20Utah Association of Mortgage Brokers

2010 Annual ExpoLocation to be determined

For more information, call (801) 787-6611or visit www.uamb.org.

Sunday-Wednesday, October 24-27Mortgage Bankers Association 97th Annual

Convention & ExpoAtlanta Georgia Congress Center285 Andrew Young International

Boulevard NWAtlanta


To submit your entry for inclusion in the National Mortgage ProfessionalCalendar of Events, please e-mail the details of your event, along with

contact information, to [email protected].

COMPANY WEB SITE PAGEAbacus Mortgage Training and Education .......... www.acethesafe.com ......................................4 & 41ACC Mortgage .................................................. www.weapproveloans.com ....................................12Calyx Software ................................................ www.calyxsoftware.com ........................................25Elliott and Company Appraisers, Inc................... www.elliottco.com ..............................................34Emigrant Mortgage Company ............................ www.emigrantmortgage.com ................................39Entitle Direct Group.......................................... www.entitledirect.com ..................Inside Front CoverFirst Source Capital Mortgage, Inc. .................... www.fscmortgage.com ..........................................16Franklin First Financial .................................... www.franklinfirstfinancial.com ............................12Freedom Mortgage .......................................... www.fmbranch.com ................................Back CoverFrost Mortgage Banking Group .......................... [email protected] ..............................................20Gateway Mortgage Group, LLC .......................... www.gatewayloan.com ........................................44Guaranteed Home Mortgage.............................. www.joinguaranteed.com ....................................19HTDI Financial ................................................ www.htdifinancial.com ........................................31Inlanta Mortgage.............................................. www.inlanta.com ................................................15Mortgage Concepts .......................................... www.mortgageconceptsonline.com ........................29Mortgage Now, Inc. .......................................... www.mortgagenow.com ........................................23Mortgage Revolution ........................................ www.mrev.org ....................................................40MortgageProShop.com...................................... www.mortgageproshop.com ..................................43NAMB.............................................................. www.namb.org......................................TN1, 29 & 32NAPMW .......................................................... www.napmw.org ..................................................24Platinum Credit Services, Inc............................. www.platinumcreditservices.com ............5, 7, 9 & 11Presidents First Mortgage Bankers .................... www.presidentsfirst.com ......................................21Quality Mortgage Services ................................ www.qcmortgage.com ..................................22 & 37REMN (Real Estate Mortgage Network)................ www.remnwholesale.com ....................................30Ron Vaimberg International, LTD....................... www.NMPMag.com/freeleads ................................42Titan Lists ....................................................................................................................................13United Northern Mortgage Bankers Ltd. ............ www.unitednorthern.jobs ...... 28 & Inside Back CoverWall Street List ................................................ www.wallstreetlist.com ........................................28Wells Fargo Home Mortgage.............................. www.brokerfirst.com ............................................14Xetus Mortgage Corporation.............................. www.xetus.com ....................................................25

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MAGAZINE

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

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United Northern Mortgage Bankers, Ltd. Corporate NMLS ID# 7230 New York State Banking Dept. - Licensed Mortgage Banker – License #100724 New Jersey Dept. of Banking and Insurance – Mortgage Lender – License #L0046623 Penn-sylvania Dept. of Banking – Mortgage Lender – License #20887 Connecticut Dept. of Banking - Mortgage Lender - License #20372 Massachusetts Div. of Banks and Loan Agencies - Mortgage Lender & Mortgage Broker – License #MC5070North Carolina Commissioner of Banks – Mortgage Lender – License #L140365 South Carolina State Board of Financial Institutions – Supervised Lender – License #S7,461 Florida Dept. of Financial Institutions - Mortgage Lender - License#ML0700679 Senior Security Home Advantage is a lending area of United Northern Mortgage Bankers, Ltd. Direct FHA Endorsed Lender

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