(PDF) NYMP_dec09 - DOKUMEN.TIPS (2024)

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Mortgage PROFESSIONALN E W Y O R K

M A G A Z I N E

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

OFFICERS

Phone # E-mail

Robert Duquette President (518) 562-0055 [emailprotected]

Susan A. Kreyer President-Elect (585) 259-2458 [emailprotected]

Richard Wilson Vice President (518) 798-0478 [emailprotected]

Bonnie Nachamie Treasurer (516) 678-7110 [emailprotected]

Mary Ann Pino Secretary (631) 584-5844 [emailprotected]

Richard Biondi Immediate Past President (516) 629-9999 [emailprotected]

REGIONAL LEADERSHIP

John Commons Long Island Regional President (516) 334-0200 [emailprotected]

Scott Schrager Long Island Regional Director (516) 593-5626 [emailprotected]

Louis Borsellino Lower Hudson Regional President (914) 273-2641 [emailprotected]

Frank LoPriore Lower Hudson Regional Director (914) 377-0003 [emailprotected]

Jeanne Wiles Western Regional President (716) 873-3500 [emailprotected]

Mary Jo LoTurco Western Regional Director [emailprotected]

Gigi Garver North East Regional President (518) 452-9040 [emailprotected]

Gene Tricozzi North East Regional Director (518) 371-6886 [emailprotected]

BOARD OF DIRECTORS

Todd Merritt (516) 495-1400 [emailprotected]

Michele Raab Frances (631) 776-7500 [emailprotected]

Scott Schrager (516) 593-5626 [emailprotected]

COMMITTEE CHAIRS

Richard Biondi By-Laws Committee (516) 629-9999 [emailprotected]

Susan A. Kreyer Business Development Committee (585) 259-2458 [emailprotected]

John Commons Convention & Events Committee (516) 334-0200 [emailprotected]

John Commons Education Committee (516) 334-0200 [emailprotected]

Richard Biondi Ethics & Grievance Committee (516) 629-9999 [emailprotected]

Bonnie Nachamie Finance Committee (516) 678-7110 [emailprotected]

John Commons Legislative Committee (516) 334-0200 [emailprotected]

Gene Tricozzi Legislative Committee (518) 371-6886 [emailprotected]

Scott Schrager Newspaper & Web Site Committee (516) 593-5626 [emailprotected]

Richard Biondi Nominating & Awards Committee (516) 629-9999 [emailprotected]

Richard Biondi Past President’s Council (516) 629-9999 [emailprotected]

Gene Tricozzi Philanthropic Committee (518) 371-6886 [emailprotected]

Robert Duquette Public Relations Committee (518) 562-0055 [emailprotected]

Empire State Mortgage Bankers Association800 Veterans Memorial Highway Suite 300 � Hauppauge, NY 11788

Phone #: (631) 885-5654 � Fax #: (631) 382-8214

Web site: www.esmba.org

BOARD OF DIRECTORSPhone # E-mail

Jonathan Pinard President (631) 885-5654 [emailprotected]

Michael McHugh Vice President (631) 549-8188, ext. 115 [emailprotected]

Judy Pilger Secretary (800) 523-2633

Richard Tschernia Treasurer (516) 867-6500

Milton Hirshfield Accountant (516) 293-1234

Michael J. Jackson Ex-Officio (212) 850-4848

Mortgage Bankers Association of New York Inc.P.O. Box 7361 � Hicksville, NY 11802-7361

Phone #: (516) 997-3707 � Fax #: (516) 997-1979

Web site: www.mbany.org

OFFICERS

Phone # E-mail

Michael J. Hurley Jr., Esq. President (212) 798-0124 [emailprotected]

Michael B. Fletcher Vice President (212) 648-0399 [emailprotected]

Vincent Nicoletta Esq. Treasurer (212) 532-5533 [emailprotected]

Brenda L. Kenny Secretary/Executive Secretary (516) 997-3707 [emailprotected]

Richard A. Nardi Esq. Counsel (212) 407-4009 [emailprotected]

BOARD OF DIRECTORS

James T. Freel (917) 368-2306 [emailprotected]

Richard L. Jarocki Jr., CMB (201) 288-1199 [emailprotected]

Lawrence J. Longua (212) 992-3277 [emailprotected]

Terence Tener, MAI, ASA (212) 906-9403 [emailprotected]

Gerard Zapata (516) 997-3707 [emailprotected]

Mark Zurlini (201) 894-5000 [emailprotected]

Association ResourcesNew York Association of Mortgage Brokers

100 Mamaroneck Avenue, Suite 303 � Mamaroneck, NY 10543Phone: (914) 332-6233 � Fax: (914) 630-0959

Web Site: www.nyamb.org

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Manhattan U.S. Attorney FilesCharges in $23 Million MortgageFraud SchemePreet Bharara, the United States Attorneyfor the Southern District of New York;Joseph M. Demarest Jr., the AssistantDirector-in-Charge of the New York FieldDivision of the Federal Bureau ofInvestigation (FBI); and Richard H.Neiman, the Superintendent of Banks forNew York State, have announced the sur-render of David Ramnauth, the presidentof GuyAmerican Funding Corporation, inconnection with a scheme that defraud-ed banks out of more than $23 million inhome mortgage loans. Ramnauth ischarged in a superseding indictmentwith bank fraud and wire charges alongwith eight other defendants who werepreviously charged in the same schemein October 2009.

Ramnauth was the president andowner of GuyAmerican FundingCorporation, a mortgage brokeragefirm in Queens, N.Y. Ramnauth facilitat-ed a massive mortgage fraud schemethat was being conducted though aGuyAmerican branch office located onLiberty Avenue, in Jamaica, N.Y. Threeof the defendants previously charged inthe scheme, Peggy Persaud, Orette

Killikelly, and George Esso, were loanofficers at GuyAmerican, and receivedthousands of dollars in commissionsbased on fraudulent loan applicationssubmitted to lenders.

Three other defendants previouslycharged in the scheme, Elton Lord,Rafick Baksh and Mahamood Hussain,worked with GuyAmerican loan officersto recruit homeowners in financial dis-tress who were willing to sell theirhomes. They used “straw buyers,” per-sons who posed as home buyers inexchange for a fee, but who had nointention to live in the mortgaged prop-erties to perpetrate their scheme. Thedefendants arranged home salesbetween these distressed sellers andthese straw buyers, and obtained mort-gage loans using fraudulent representa-tions, including about the supposedpurchasers’ net worth, employmentand income. The defendants re-sold orflipped, properties multiple timesbetween different straw buyers, strip-ping the equity from those propertiesas they were resold with inflated mar-ket values. For example, a property,

purchased by a straw buyer inDecember 2006 in Queens for $355,000was resold to another straw buyer inApril 2007—only four months later—for $680,000, with the profit going tothe defendants and their co-conspira-tors. In addition, the defendants oftenarranged for a single straw buyer topurchase multiple properties withindays or weeks of each other, withoutdisclosing the prior purchases on thesubsequent loan applications.

The loan applications submitted tothe lenders contained numerous falsestatements about the straw buyers,who often had little or no assets andmodest or no incomes. The loanapplications therefore contained falsestatements about the supposed bor-rowers’ employment, income, assets,and exiting debt. In addition, the loanapplications falsely represented thatthe straw buyers intended to reside inthe properties, when in fact they didnot. Cheddi Goberdhan and RaviPersaud, who acted as the closingattorneys for most of the transactionsand facilitated the fraud by disbursingillicit payments to co-conspirators,were also previously charged.

After becoming aware that fraudu-lent loans were being submitted underthe GuyAmerican license, Ramnauthdirected through a loan officer atGuyAmerican to have the closing attor-neys set aside six months’ worth ofmortgage pavements from the closingproceeds, so that the lenders would

not discover the scheme. Ramnauthwas also aware that Lord, Baksh andHussain were engaging in equity strip-ping in the sham real estate transac-tions, but permitted them to originateadditional fraudulent loans under theGuyAmerican license, and continued tomake commission payments to loanofficers in connection with the fraudu-lent loans.

Ramnauth is charged with conspira-cy to commit bank fraud and wirefraud. If convicted, he faces a maxi-mum sentence of 30 years in prison.

“The alleged fraud at GuyAmericanwent all the way to the top, costingthe firm’s lending institutions morethan $23 million,” said Bharara.“That’s $23 million that the bankscould not lend to honest, hard-work-ing people looking to buy homes.These allegations are a stark reminderof the damage that corrupt mortgagefirms can do, particularly in troubledeconomic times.”

“A key factor contributing to theongoing mortgage crisis is the failureof some gatekeepers—includingmortgage brokers,” said Neiman.“Unfortunately, instead of acting inthe best interest of consumers andthe industry, in some cases, theyabused their positions and joinedcriminal schemes to steal millions ofdollars. The Banking Department’sCriminal Investigation Bureau willcontinue to work with our lawenforcement partners to pursue indi-

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MARCH 2010Sunday-Friday, March 14-19

27th Annual Regional Conference of Mortgage Bankers AssociationsTrump Taj Mahal Casino Resort

Atlantic City, N.J.

New York

Driven by buyers wanting to close before the anticipated first-time home-buyer tax credit deadline, October sales jumped nearly eight percent fromthe previous month and nearly 6 percent compared to October 2008,according to preliminary existing single-family sales data accumulated bythe New York State Association of Realtors (NYSAR). The statewide mediansales price rose by more than two percent between September and October.

“There is no question that the federal first-time homebuyer tax cred-it has been a significant driver of home sales in New York State since itsinception,” said Duncan R. MacKenzie, NYSAR chief executive officer.“New York’s Realtors are grateful that our Congressional delegationunderstood this and forwarded legislation to extend and expand the taxcredit to President Barack Obama, who signed it into law.”

“Realtors know that the tax credit has helped to revitalize the hous-ing market and position it to once again lead our economic recovery,”said MacKenzie. “The extension of the first-time buyer credit and thecreation of a tax credit for existing homeowners who purchase their nexthome will allow both the housing market and our economy to hold onto the gains that have been made in recent months. We anticipate theexpansion of the tax credit will bring trade-up buyers back into the mar-ket, driving sales in all segments of the market in addition to helping toease the tightening of inventory in the first-time buyer segment.”

New York Realtors sold 7,783 existing single-family homes in NewYork State in October 2009, a 7.7 percent increase compared to theSeptember total of 7,224. The October 2009 sales total was 5.7 per-cent above the October 2008 total of 7,363. The October 2009 medi-an sales price in New York State of $209,900 represents an increase of2.4 percent compared to the September 2009 median of $205,000.

For more information, visit ww.nysar.com.

viduals that, through fraudulent activ-ities, attempt to undermine the finan-cial system.”

This case was part of the coordinat-ed takedown of “Operation BadDeeds,” a joint federal, state, andlocal law enforcement operation tar-geting mortgage fraud crimes,announced on Oct. 15, in which 41defendants were charged in various

mortgage fraud scams in New York,Pennsylvania, Ohio and NorthCarolina. Eight of the defendantscharged in the superseding indict-ment unsealed today were also thesubject of charges in an Indictmentunsealed on Oct.15, 2009.

For more information, visithttp://newyork.fbi.gov.

Albany Appraisal Business OwnerIndicted in Fraud SchemeAndrew T. Baxter, United States Attorney;Rene Febles, Special Agent in Charge,United States Department of Housing &Urban Development (HUD), Office ofInspector General; John F. Pikus, SpecialAgent in Charge, Albany Division of theFederal Bureau of Investigation; Patricia J.Haynes, Special Agent in Charge, InternalRevenue Service, Criminal InvestigationDivision (New York Field Office); andRobert Bethel, Inspector in Charge, UnitedStates Postal Inspection Service, announcethat Michael Cassadei of Schenectady andGalway, N.Y., was arrested following theunsealing of a five-count indictment by afederal grand jury in Albany.

The indictment alleges that defendantCassadei, d/b/a/ AAA Allstate AppraisalServices, violated Title 18, United StatesCode, Sections 1344(1), (2) and 2 by partic-ipating with others in a complex mort-gage fraud property-flipping scheme bymaking and causing to be made material-ly false and fraudulent misrepresentationsto a federally-insured financial institutionwith regard to, among others, certain loanapplications, down payments, seller-heldsecond mortgages, and HUD-1 forms, andby using his own appraisal business togenerate misleading appraisals in supportof the residential properties he soldthrough nominees, and through whom heobtained the bulk of the proceeds of theresulting mortgage loans. All of the prop-erties, which were located in Albany and

Schenectady, went into foreclosure andcaused significant losses to the financialinstitutions which held the mortgages.

The indictment further charges thatCassadei tampered with a witness byinstructing the witness to lie to a federalagent who participated in the investiga-tion. An indictment is merely an accusa-tion and the defendant is presumedinnocent unless and until proven guilty.

If convicted, Cassadei faces a maxi-mum sentence of up to 30 years ofimprisonment, a period of up to fiveyears of supervised release, and fines ofup to $1 million on each of the fourcounts of bank fraud in the indictment,and up to 20 years of imprisonment, aperiod of up to five years of supervisedrelease, and a fine of up to $250,000 onthe witness tampering charge.

The case is being investigated by theOffice of the Inspector General of the UnitedStates Department of Housing & UrbanDevelopment (HUD), the Albany Division ofthe Federal Bureau of Investigation, theInternal Revenue Service, CriminalInvestigation Division, the United StatesPostal Inspection Service, the New York StatePolice Special Investigations Unit, and theNew York State Banking Commission. It isbeing prosecuted by Assistant United StatesAttorney Joshua S. Vinciguerra.

For more information, visithttp://lbany.fbi.gov.

New York Home Sales RiseEight Percent in October

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Why you should attendThe number one reason you should attend this event is thesatisfaction of knowing you are doing your part to ensure thatmortgage broker issues are heard on Capitol Hill. You are thebest spokesperson for our issues. Your participation benefitsyou, the industry and your clients as a whole, by strengthen-ing the broker’s presence in the halls of Congress.

Key Issues in 2010 Include:� Regulatory reform (RESPA, TILA, HVCC and more!)� The National Mortgage Licensing Act (SAFE Act)� The Consumer Financial Protection Agency (CFPA)� And much more!

Hotel Accommodations Hyatt Regency Washington on Capitol Hill400 New Jersey Avenue, NWWashington, D.C. 20001Phone #: (202) 737-1234Toll Free #: (888) 421-1442

Here are a few reasons you should attend:

Lobby Your Representatives on Capitol Hill“There is no better way to build relationships with your sen-ators and representatives than by attending Lobby Day. Get-ting face-to-face with the decision-makers who createimportant policy is invaluable during such historic and un-precedented times in our industry.”—Bill Kidwell

Don’t Miss Out on What This Conference Hasto Offer “If you can only attend one national meeting this year,make it the NAMB 2010 Legislative & Regulatory Confer-ence. It is a great opportunity to meet with fellow NAMBmembers and work together to formulate NAMB’s policyagenda.”—Don Fader, CRMS

Sunday-Wednesday, February 21-24, 2010Hyatt Regency Washington, D.C.

Be prepared to go to the Hill!Includes Advocacy 101 training: General synopsis and "Question & Answer" on the best ways to

communicate NAMB's talking points with your congressman in an effective manner.

It’s all happening now! Visit www.NAMB.org for details!

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eSignatures: Be Sure You Know What You Are Getting By Ed F. Wallace Jr., Ph.D.

FHA Insider—Getting the FHA Business: Presentation &Paradigm By Jeff Mifsud

The NAMB Perspective

Trend Spotter: Motivating Move-Up Buyers By Gibran Nicholas

Value Nation: Challenging the Appraisal By Charlie W. ElliottJr., MAI, SRA

Ask Brian By Brian Sacks

NMP Mortgage Professional of the Month: Julio deCardenas, Executive Vice President United NorthernMortgage Bankers Ltd.

Scenes From NAMB/WEST 2009

Regulatory Compliance Outlook: December 2009—NewGood Faith Estimate and HUD-1 Settlement Statement By Jonathan Foxx

Mortgage Foreclosure Predictions for 2010 By Christopher G. Brown

The Secondary Market Overview: GovernmentIntervention By Dave Hershman

SAFE Smart … Testing, Education and Licensing: Era ofthe Mortgage Professional By Paul Donohue, CRMS

HVCC Awoken in the City That Never Sleeps By Eric C. Peck

Forward on Reverse: HECM at 20: Leaders and Pioneersin U.S. Reverse Mortgage Series (IV) … The ReverseQuarterback From Wall Street By Atare E. Agbamu, CRMS

A View From the “C” Suite By David Lykken

Your Game Plan to Social Media Success By John Seroka

Residential and Commercial: Working Together By William Pape, MSFS, CMC

Cultivating Your Relationships By Nat Hardwick

How to Gain New Clients in a Volatile Market By Dr. Kerry L. Johnson, MBA

The Art of Building Strategic Business Alliances in Today’sChallenging Economy By Greg Perrine and Tim Markel

Knotworking: Beyond Networking By Laura Lynn Burke

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December 2009Volume 1 • Number 8

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

[emailprotected]

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

[emailprotected]

Domenica TrafficandaArt Director

[emailprotected]

Karen KrizmanSenior National Account Executive

(516) 409-5555, ext. [emailprotected]

Jennifer MoellerBilling Coordinator

(516) 409-5555, ext. [emailprotected]

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 [emailprotected].

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 [emailprotected]. 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 [emailprotected] 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.

NATI

ONAL

MORTGAGE PROFESSIONAL

MAGAZINE

NMPNMP

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

NAMB/WEST was a HUGE success!If you haven’t heard, this year’s NAMB/WEST was a huge success. It kicked off with aco*cktail party with a great rock and roll band featuring Colorado Association ofMortgage Brokers Past President Douglas Braden.

While I would normally NEVER suggest putting an economist at the first session inthe morning in Vegas, however, when it’s Texan Dr. Ted C. Jones (director of investorrelations, Stewart Information Services Corporation), it’s a good idea. His energy andinteraction with the audience is just as powerful as any cup of coffee I have had. Theproof is that when Dr. Ted C. Jones asked the crowd, “How many of you feel we are in

a housing recovery?” almost the entire crowd gave a resounding, “No!” to which Ted concurred. Ted sharedwith us that, as part of the overall economic recovery, the next “36 to 48 months, gas will be at $5 per gal-lon.” And, the “30-year fixed will hit seven percent in 2010.”

That was followed by NAMB’s Government Affairs Team of NAMB President Jim Pair, Government AffairsCommittee Chair and Past President Harry Dinham, Denise Leonard and Chief Executive Officer Roy DeLoach.

“Net worth requirements will turn a lot of mortgage bankers into brokers,” said DeLoach at this session.“HUD didn’t want to be in the business of approving brokers. That job will be pushed to the lenders.”

Later on, when talks about the SAFE Act came up, Denise Leonard reported that North Carolina mort-gage loan officers (MLOs) will be required to have a score of 720. Denise stressed the importance of thestates keeping NAMB aware of any developments like this.

Later in the day, we had the chance to hear Ginger Bell (who, by the way, did a great job of coordinat-ing the conference speakers), along with Theresa Ballard, president of BFO Solutions and Ken Perry, pres-ident of Broker Knowledge, present a practical overview of the SAFE Act, MDIA, HVCC, Red Flags and otherregulatory updates.

The day continued with more powerful sessions, including an insider’s look at FHA, provided by NancyWest from HUD, and a closer look at VA loans, provided by Debra Paiva from the U.S. Department ofVeterans Affairs.

The 2009 NAMB/WEST education sessions wrapped up with two very powerful sessions. One featured threeof the industry’s best sales coaches, Ron Vaimberg, Rene Rodriguez and Fred Arnold, sharing the secrets totheir success. The other session was one of the most innovative sessions I have seen at a mortgage confer-ence in a long time. NAMB hosted a “speed dating-style” event, where participants had the opportunity tovisit with reps from the industry’s top companies in a fast-paced, “get to know you” networking session.

Day two of NAMB/WEST’s education started off with a social networking seminar presented by MarkMadsen and Jason Berman. I get into a more detailed account of their session on page 7 of this issue inmy communications article in “The NAMB Perspective” column. Following the social networking session,Frank Garay, co-founder of Think Big Work Small, shared his thoughts on how to capitalize on video mar-keting to build relationships. The last education session featured Jeff Mifsud presenting his real world inti-mate knowledge on the world of FHA.

The day wrapped up with a hugely successful trade show, where the industry’s top wholesalers, affiliat-ed service providers, technology vendors and marketing companies were on hand to help attendees findnew ways to make 2010 a great year.

Building relationships The fact is … if you reading this, you’re probably one of the remaining mortgage professionals who hasdone a great job at building and maintaining relationships. This could be with your account executives,warehouse line rep, referral partners, or just about anyone who can help you with your business. I havealways looked at building relationships like building equity. Assuming normal market conditions, thatequity will continue to rise as long as you maintain it with care and nurturing. In this issue, you will havethe chance to learn a number of ways to build these relationships through various channels, includingsocial networking and the Internet, traditional networking, working with commercial brokers, and puttingcustomer service at the forefront to gain new clients through quality referrals.

At NAMB/WEST, Fred Arnold told the group about carving out 10 min. a day to just e-mail somethingpersonal to your contacts. It could be a joke, photo, story or anything that is not directly related to yourbusiness, but no matter the message, it is your personal message … on that you took the time to constructand send out in order to keep those existing relationships ongoing and foster new relationships.

This month’s Mortgage Professional of the Month …This month, we had the chance to meet with Julio de Cardenes, executive vice president of United NorthernMortgage Bankers Ltd. Julio started in real estate at the age of 18 and soon found a love for the financing sideof the business. His training was as hands-on as you can get. With little formal industry education, he start-ed to learn the ins-and-outs of the mortgage business and his mentors had the confidence in him to gener-ate a pipeline of loans by actually doing loans (as opposed to hours upon hours of classroom training). Hisgrowth as a mortgage professional was a direct result of becoming an FHA expert and helping to train thou-sands of mortgage professional on how to structure loans and build relationships with referral partners.

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 208 � Corpus Christi, TX 78413(361) 853-9987 � [emailprotected]

President-Elect—William Howe, CMC, CRMSHowe Mortgage Corporation9414 E. San Salvador Drive, #236 � Scottsdale, AZ 85258(602) 200-8100 � [emailprotected]

Vice President—Michael D’Alonzo, CMCCreative Mortgage Group1126 Horsham Road, Suite D � Maple Glen, PA 19002(215) 657-9600 � [emailprotected]

Secretary—Penny fa*gan, CRMSP. fa*gan Mortgage Inc.222 East Moulton Street � Decatur, AL 35601(256) 355-5505 � [emailprotected]

Treasurer—Don Frommeyer, CRMSAmtrust Mortgage Funding Inc.200 Medical Drive, Suite D � Carmel, IN 46032(317) 575-4355 � [emailprotected]

Immediate Past President—Marc S. Savitt, CRMSThe Mortgage Center115 Aikens Center, Suite 20-B � Martinsburg, WV 25401(304) 267-9040 � [emailprotected]

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

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

Ginny Ferguson, CMCHeritage Valley Mortgage Inc.5700 Stoneridge Mall Road, Suite 150 � Pleasanton, CA 94588(925) 469-0100 � [emailprotected]

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

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

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

President—Judy Ryan(800) 929-3400, ext. [emailprotected]

Vice President—Marty Flynn(925) 831-3520, ext. [emailprotected]

Treasurer—Daphne Large(901) [emailprotected]

Ex-Officio—Nancy Fedich(908) 813-8555, ext. [emailprotected]

Director—Thomas Conwell(248) [emailprotected]

Director—Don Goldammer(661) [emailprotected]

Director—Sanford (Sandy) Lubin(805) [emailprotected]

Director—Dave Miller(317) [emailprotected]

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

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

Director—Donovan Williams(714) [emailprotected]

NCRA StaffExecutive Director—Terry Clemans(630) [emailprotected]

Office Manager/MembershipServices—Jan Gerber(630) [emailprotected]

Legal Counsel—James Sutton(972) [emailprotected]

PresidentLiz Roberts-Fajardo, GML(702) [emailprotected]

President-ElectGary Tumbiolo, CMI(919) [emailprotected]

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

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

Vice President/Western RegionTim Courtney(760) [emailprotected]

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

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

Vice President/Southeastern RegionJessica Edmonston(919) [emailprotected]

SecretaryLaurie Abisher, GML, CMI(661) [emailprotected]

TreasurerKay Talley, MML(919) [emailprotected]

ParliamentarianHulene Bridgman-Works(972) [emailprotected]

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

Board of Directors

National Board of Directors

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HUD to exercise restraintin RESPA enforcement

The U.S. Department ofHousing & UrbanDevelopment (HUD) hasannounced that for thefirst four months of

2010, the staff of the Mortgagee ReviewBoard (MRB) will exercise restraint inenforcing new regulatory requirementsunder the Real Estate SettlementProcedures Act (RESPA), due to take fulleffect on Jan. 1. The MRB has instructedits staff to exercise such restraint in con-sidering an action against FederalHousing Administration (FHA)-approvedlenders who have demonstrated thatthey are making a good faith effort tocomply with RESPA’s new requirements.

In addition, HUD is asking other fed-eral and relevant state enforcementagencies to exercise the same 120-dayrestraint in enforcement for non-FHAoriginators and other settlement serv-ice providers who demonstrate thegood faith effort to implement RESPA’snew rules. In determining whether amortgagee has made a good faitheffort, MRB staff will consider whetherthe mortgagee has relied on the newRESPA rule and other written guidanceissued by the Department, and theextent to which the mortgagee hasmade sufficient investment and com-mitment in technology, training, andquality control designed to comply withthe new rule.

“We will work with those who aremaking an honest effort to work with usas we implement these important newconsumer protections,” said HUDSecretary Shaun Donovan. “While wewill not delay implementation ofRESPA’s new requirements, we are sen-sitive to the concerns of the industry asit integrates these new rules into theirday-to-day business practices.”

On Jan. 1, 2010, HUD will requirethat lenders and mortgage brokers pro-vide consumers with a standard GoodFaith Estimate (GFE) that clearly disclos-es key loan terms and closing costs.Closing agents will also be required toprovide borrowers a new HUD-1Settlement Statement that clearly com-pares consumers’ final and estimatedcosts. The new RESPA rule becameeffective on Jan. 16, 2009, but provided

a one-year transition period for themortgage industry to incorporate thesechanges. HUD will continue to workwith the mortgage industry during thisperiod, including providing a compre-hensive set of frequently asked ques-tions (FAQs) on its Web site.For more information, visit www.hud.gov.

President Obama establishes interagencyFinancial FraudEnforcement Task Force

U.S. Attorney General EricHolder, Treasury Secretary Tim Geithner, Department ofHousing & Urban Development(HUD) Secretar y Shaun

Donovan, and Securities and ExchangeCommission (SEC) Chairwoman MarySchapiro have announced thatPresident Barack Obama has estab-lished by Executive Order an intera-gency Financial Fraud Enforcement TaskForce to strengthen efforts to combatfinancial crime. The Department ofJustice (DOJ) will lead the task force andthe Department of Treasury, HUD andthe SEC will serve on the steering com-mittee. The task force’s leadership,along with representatives from a broadrange of federal agencies, regulatoryauthorities and inspectors general, willwork with state and local partners toinvestigate and prosecute significantfinancial crimes, ensure just and effec-tive punishment for those who perpe-trate financial crimes, address discrimi-nation in the lending and financial mar-kets and recover proceeds for victims.

The task force, which replaces theCorporate Fraud Task Force establishedin 2002, will build upon efforts alreadyunderway to combat mortgage, securi-ties and corporate fraud by increasingcoordination and fully utilizing theresources and expertise of the govern-ment’s law enforcement and regulatoryapparatus.

“This task force’s mission is not justto hold accountable those who helpedbring about the last financial melt-down, but to prevent another melt-down from happening,” said U.S.Attorney General Eric Holder. “We willbe relentless in our investigation of cor-

account a number of different factorsand not just the input of randomlyselected letters and numbers that any-one opening an e-mail can enter. Asecured and certified eSignature goes asfar as to perform the transaction differ-ently for the borrower and co-borrower,making each signing ceremony inde-pendent of the other, while allowingthe lender to know a specific individualhas completed the process.

After the eSignature process is complet-ed, the documentation is sent to a tamp-er-proof eVault for delivery. Under thistype of process, the eSignature is as legaland binding as any signature notarizedface-to-face. Because the documents areimmediately sent to the eVault, they are

much more secure thanthose going through amanual process and hand-delivered to a lender. Fromthe eVault, documents canbe electronically transmit-ted to the MortgageElectronic RegistrationSystems (MERS) for registra-tion or delivered to a sec-ondary market investorwhich has the assurancethe eSigned certified docu-ments are genuine.

As the eSignature debatemoves to a completeeMortgage climate, it is vitalthat companies understandthe difference between anelectronic acknowledge-ment and a true eSignature.Choosing the wrong elec-tronic source may result inlegal and monetary prob-lems due to lack of adher-

ence to federal, state and local statues, aswell as investor requirements surroundingthe electronic signature process.

Ed F. Wallace Jr., Ph.D. is the chief integra-tion officer for Docu Prep Inc., a nationwideprovider of closing documents and initialdisclosure services, including secure elec-tronic delivery tools, loan analysis testing,and dynamic selection of documents, barcoding, secured and certified eSignaturesand eMortgages via LOS interfaces, Webservices and standalone systems. He may bereached by phone at (801) 574-2919 or e-mail [emailprotected].

As current regulations continue tochange, one topic that has moved tothe forefront among mortgage bankersis eSignatures. A normal assumption inreference to eSignatures is that any sig-nature obtained in a legal and bindingface-to-face meeting is comparable toeSignature. However, in the electronicworld, things are very different.

As can be seen throughout the indus-try, the term eSignature is used most oftenfor three distinctly different items, whichare an acknowledgement, an acknowl-edgement with a name being placed on apage, or a true certified watermarked andvaulted electronic signature. Although thefirst two may currently conform to the ini-tial disclosure regulatory requirements,they are not a true legal andbinding signature. Anacknowledgement in mostcases does not have thesecurity built around it,which, in turn, confirmsthat the individual complet-ing the process is actuallythe person of record. It sim-ply provides a verificationthat an electronic docu-ment is delivered to a speci-fied e-mail address, or eventhat a person has openedthe email to review it.

Additionally, acknowl-edgements may have cre-dentials built into thedelivery mechanism thatrequires the recipient to gothrough a simple processto open the documents,similar to buying ticketsonline to an event. Ineither case, the actions donot certify that the individual obtainingthe information is, in fact, the person ofrecord, only that someone is using thecomputer and opened a file.

A true eSignature has a very securedprocess. This process is transaction-spe-cific, borrower-specific, and certifies thateach borrower is in fact the person ofrecord. This certification ensures compa-nies that the information they havetransmitted is being received, reviewed,and signed by the actual borrower or co-borrower and not another member ofthe family or unrelated individual.

A true eSignature process takes into

eSignatures: Be Sure You KnowWhat You Are Getting

“As the eSignaturedebate moves to a

complete eMortgageclimate, it is vital

that companiesunderstand the dif-ference between anelectronic acknowl-

edgement and a trueeSignature.”

By Ed F. Wallace Jr., Ph.D.

continued on page 10

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Getting the FHA Business:Presentation & Paradigm

I’ve been asked many times by loanofficers just how to develop FederalHousing Administration (FHA) business.My patent response is: “You have tobrand yourself as an FHA specialist, getout there and give FHA presentations toyour FHA referral sources, and then, fol-low up.”

If you are proficient in the basic FHAguides and want FHA business, youneed to make yourself the resource forFHA information. Remember, one ofthe biggest burdens a real estate brokerhas is providing useful and effectivetraining to their agents. The FHA guidesare so vast and change quite often,even we loan officers have a hard timekeeping up. What do you think thatmeans for the overall real estate com-munity? In the last five years alone,there have been more than 1,000changes to FHA loan programs! Keepingup with FHA is hardly the priority of aRealtor! And yet the more knowledgethey have, the more it helps their busi-ness. That’s where you, the FHA infor-mation source, come in.

Real estate agents need some catch-ing up on FHA, and they need you tohelp them. Unfortunately, many loanofficers feel they lack the requisite FHAknowledge to go out there and do FHApresentations. I have to tell you that ifyou know the basics, then you start pre-senting the basics. Agents don’t need tobecome FHA underwriters, they justneed the FHA information that can helpthem add to the value they can givetheir clients. As you learn more guides,go out and present them to youragents. Over time, you will become anexpert and a valuable resource to asmany agents as you can effectivelymanage in your database.

The crucial factor in being successfulin growing your business through pre-sentations is the paradigm you estab-lish. The paradigm I’m referring to isthe pattern of steps you take after youwalk out of an office following yourFHA presentation. This is where manyLOs drop the ball … by failing to imple-ment a post presentation system (PPS).But this is where your referral base andyour income stream is at. Now, unfortu-nately I speak from personal experi-

ence when I say that many LOs get intoan office, establish great rapport withthe agents, and give a great presenta-tion. They feel great and on top of theworld, but then fail to follow up effec-tively because other things come up.Whether it’s a bunch of refinances,other referrals or any other legitimatedistractions, the bottom line is that ifyou allow other things to distract youfrom following up, then the seeds youplanted at the presentation—alongwith those important relationships (andfuture referral business) —will not bearfruit.

I would like to offer a Five-StepParadigm you can follow to help youdevelop FHA business through presen-tations:

1. Establish a series of three 15 min.FHA presentations you can offer toreal estate offices.Here are some ideas: “The 3 Things AllRealtors Must Know About FHA Buyers,”“How to Avoid the Top Three MistakesRealtors Make When Writing PurchaseAgreements,” and “How to Sell ThreeMore Homes in the Next Three Months.”In each presentation, include the guidesyou feel will benefit your agents.

2. Start with five real estate offices inareas that will bring you your idealbuyers.I got my FHA start in inner city Detroitin the mid-1990s when the auto com-panies were doing well and buyerscould easily qualify. I had to cultivate10 leads to close one loan. After time,that ratio changed to 30 leads per oneloan closed. I had to find businesselsewhere to bring that ratio down. Ifyou’re not sure who your ideal buyeris, you need to make that determina-tion before you start your campaign.Call each office, ask to speak to themanager, and then talk about your

continued on page 10

“In the last five years alone, therehave been more than 1,000

changes to FHA loan programs!”

Face the Future with Knowledge

attend the 27th Annual Regional Conference of

Mortgage Bankers AssociationsMarch 14 - 19, 2010

Trump Taj Mahal Casino Resort, Atlantic City, NJ

Commercial Property Highlights

Our 2010 Commercial Property Program features: General Session: A Market Perspective from Seasoned Industry Leaders - Panel I of our General Session will cover Office, Retail, Fannie Mae and Freddie Mac, Panel II will speak to Recreating the Capital Markets: The New Paradigm

Our Afternoon Session deals with Workouts on Commercial Loans: How to Handle a Commercial Loan Portfolio in a troubled market: How are the Banks handling Current Market Issues?

Tuesdays Session features a panel entitled Unlocking pension fund capital followed by a Lenders PanelCome hear about the concepts on how business can be done in the new credit underwriting cycle. The panel will share with you their vision and underwriting guidelines as to how they are closing deals in this unpredictable marketplace. The lenders will be in the house on Tuesday morning, will you?

Enjoy lunch in our Commercial Property Exhibit Hall

New for 2010 - Our Opening Residential Networking co*cktail Reception on Tuesday Evening is in the Exhibit Hall. We’ll start this year’s conference off with a BANG at our Grand Opening Reception on the Exhibit Hall Floor!

Residential Program Highlights

Our General Session will look at The Future of Mortgage Finance: Making a Profit in the Current and Future Markets.

Enjoy lunch in the Exhibit Hall and meet with your colleagues and gain valuable face time with your clients

Wednesday afternoon our Regulators Roundtablefeature Regulators from NJ, PA, NY and MD as well as NMLS Representatives.

Enjoy our Second co*cktail Reception sponsored by:

Thursday morning the Information Exchange experts will be seated at roundtables, which will be identified by a sign at each table, available for individual or group exchange on their respective topics.

Also in the program: Federal Law update; Special Speaker lunch on Thursday and much more!

SAFE Education will be provided at the 2010 Regional Conference on Tuesday, Thursday and Friday.

For Registration and Exhibit Information visit www.mbanj.com

$85 room rateAvailable

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We Will Weather This StormA Message From NAMB President Jim Pair, CMC

Like many of you in this time of unprecedented financial turmoilfor our industry, I have wondered whether or not we as mortgagebrokers will survive. And, if we do, what does our future hold?

My answer to the first question is a resounding, “Yes!” There aremany reasons that the mortgage broker will survive. First and fore-most, the mortgage broker fills an important role that the con-

sumer does not receive from any other channel of distribution. The mortgagebroker develops a unique relationship with the consumer, while other channelsof distribution are more interested in producing a volume of loans each monthand will not (or cannot) take the time to listen and work with the consumer toachieve their dream of homeownership. The mortgage broker is willing tospend the time necessary to work closely with the consumer who may havecredit issues, or perhaps suggest what steps they can take to accumulate thenecessary funds to purchase a home. The mortgage broker is available to theconsumer, seven days a week, 24 hours a day … a service other channels of dis-tribution do not provide.

Mortgage brokers are innovative and creative entrepreneurs. We are theones who began pre-qualifying and pre-approving the consumer in an effortto speed up the process of shopping and purchasing a home. This saves theconsumer time and allows the consumer to receive preferential treatmentfrom the seller. A real estate agent or builder is now able to spend morequality time with a consumer knowing what price range in which they arequalified to buy. This is an extremely valuable service for the consumer, thereal estate agent and the builder that was not being provided by other chan-nels of distribution.

The mortgage brokers who have survived the last few years and are membersof their state and national association are the true professionals in our industry.These professional brokers subscribe to a code of ethics and best business prac-tices. Many of them have obtained their certification and promote the NationalAssociation of Mortgage Brokers Lending Integrity Seal of Approval. All of this setsus apart from other originators and gives the consumer the confidence to workwith a mortgage broker.

Another question many of you are asking is, “How will we be compensatedin the future?” I believe our association will be able to protect the way in whichwe are compensated. We will still be able to assist the consumer with theirupfront costs and be fairly compensated for the services we provide. If, forsome reason, we are unsuccessful in protecting the way brokers are currentlycompensated, there are options open to us. One option would be to become acreditor. As a creditor, brokers would be entitled to indirect compensation justas other creditors. If you choose this option, it would mean added responsibil-ity. You may have to establish a warehouse line or find a wholesale lender whowill provide with that line. This is just one option and I feel certain there willbe several others.

As I mentioned earlier, mortgage brokers are innovative and creative. There isa sailor’s saying that goes like this, “We cannot direct the wind, but we can adjustthe sails.” That is who we are and what we do and the main reason the mortgagebroker will be here in the future.

I want to wish you and your family a very merry happy holiday season and aprosperous New Year. Thank you for the support you give to your state and nation-al association. The year 2010 will be a better year for us all.

We will weather this storm.

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 [emailprotected].

Certification? Certainly!ThankfulA Message From NAMB Certifications CommitteeChair Pava J. Leyrer, CMC, CRMS

It is December, and our thoughts now turn to holidays as we are oftenside-tracked by many things this time of year. We are busy changingclocks, changing our wardrobe (well most of us anyway), and especial-ly in our industry, changing our regulations and laws. The media doesnot have negative stories about us every five minutes, but our regu-lators have not forgotten how to get media attention using consumer

protection as the focus.The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) is in full

swing for most states and many have, or are currently, adapting changes to com-ply with licensing and the national registry requirements.

You are probably wondering why I would title this article “Thankful” withthe lead in I just mentioned. I am thankful for the opportunity to still providethe knowledge and expertise my community needs. I am thankful I obtainedmy National Association of Mortgage Brokers certifications several years agowhich helped me be more prepared for the licensing we are now goingthrough. I am thankful that I belong to an association (NAMB) that cares aboutmy business and profession by trying to be proactive with legislation andinformation.

As the month and 2009 ebb to a close, look at what you are thankful for andlet those around you know. Take a moment to look into areas, such as certifica-tion, that will benefit your professional status and knowledge. Have a great 2009holiday season!

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

The Credit CornerWho Moved My Credit?A Message From NAMB Credit Scoring CommitteeMember Dave Wheeler

The last few years were full of “change” for our industry, but thank-fully, credit scoring hasn’t been one of them. “What” you say? “But Iread somewhere that scores were completely different now. What isgoing on?”

Since 2006, there have been many announcements about newscoring models that are competing for acceptance in the mortgage

space. Quite a few entities need to put their seal of approval on a scoring modelbefore we can use it, including the rating agencies, Wall Street, Fannie Mae,Freddie Mac, the credit bureaus and our lenders. There are also a few pendinglawsuits that may need to be settled.

Two scores are currently going through that process, VantageScore and FICO 08,and neither have been fully accepted. However, both models have had a signifi-cant amount of attention in the media. VantageScore has been silent for the past

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

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few months, but FICO 08 is being implemented by the bureaus now, and is receiv-ing attention. These press releases prompt questions from NAMB members aboutwhat has changed already, and what should we expect?

First, only Trans Union and Experian have released their versions of FICO 08. Itis still unknown if and when Equifax will do the same. Secondly, the government-sponsored enterprises (GSEs), Wall Street and lenders will have to start using it.That process could take many months or even a few years.

So, what stays the same and what changes? FICO 08 has the same “look andfeel” as the older models. It still uses the same 300-850 scoring range, andinquiries are still treated the same as we know today. However, it uses newer ver-sions of bureau data, which means that it has more information to draw fromwhen making its score. Using these new fields allows for some new changes thatmake it a stronger model than ever before.

Collections, judgments and tax liens that were originally under $100 are nolonger evaluated by the model. We have been told that subsequent collectionattempts that add to the balance are still overlooked as long as they are reportedcorrectly.

Balances on revolving accounts are weighed more heavily. You will see agreater score change as you hold different balances across your credit cards.Also, a single delinquency will not hold the same negative impact as in pre-vious models.

And lastly, authorized users get their own special treatment using proprietarylogic. Originally, authorized user accounts were reported to be completelyignored, but the threat of an Equal Credit Opportunity Act (ECOA) lawsuit forcedthem to be included. The final result is a revised model that considers spousalauthorized user accounts, but diminishes the impact from “piggybacking” anauthorized user. This is not a complete list of changes, but are the ones that theCredit Scoring Committee of the National Association of Mortgage Brokers is mostfrequently asked about.

Keep this in mind: Credit is an illusion that has purpose. It is only useful in rela-tion to a goal and a time frame. The time frame for FICO 08 may be farther outthan many people need if they are going for a house right now, so stick with whatyou learned before. The NAMB Credit Scoring Class is still one of the premier cred-it education sources for your lending needs. And rest assured that when FICO 08becomes fully accepted, NAMB will be providing you with the most up-to-dateinformation.

Dave Wheeler is a regional account with Credit Plus Inc. is a member of the NAMBCredit Scoring Committee. He may be reached by phone at (610) 462-3763 or [emailprotected].

The Communications CornerViva La Communication!NAMB/WEST highlights social networking at annual Vegas event

A Message From NAMB Communications CommitteeMember Andrew T. Berman

NAMB/WEST was a great success. Sure, we all learned about thechallenges that we are facing when it comes to the new GFE, HUD-1 and TIL; potential obstacles created from the SAFE Act and more;however, there was lots of positive talk about new and excitingways to network and find new business. Among the regulatory andlegislative seminars and sessions, NAMB/WEST featured the ses-

sion, “Social Media: How to Use Facebook, Twitter & Blogging to Build YourBusiness.”

The session started off with Mark Madsen, a Las Vegas-based mortgage origina-tor, who shared his systems with a few hundred attendees on how to “Make theWeb work for them, and not work on the Web.” Mark was not talking aboutbecoming a social networking butterfly, but he described strategies in which youcould use social media to connect to referral partners, such as real estate agents.Mark defines social media as an online platform that allows us to participate andsocial networks as sites that use artificial intelligence to help us connect to otherlike-minded users.

Mark started blogging back in 2006, when the local Las Vegas real estate mar-ket began to crash. Mark started to closely pay attention to the real estate agentswho were still closing lots of deals, despite of the downturn of the Vegas market.By observing what these top agents were doing, he started to figured out ways tohelp these agents by providing them content, help get traffic to their blogs, andeven offer positive commentary and words of encouragement in the form of blogcomments (which, by the way, also link to your site bringing you traffic and SearchEngine Optimization [SEO] value).

Mark shared with us what social media savvy real estate professionals care

about. They care about content, traffic and links. They want to be found on pageone of Google searches for terms like “Las Vegas first-time homebuyer.”

Mark suggests subscribing to real estate agents blogs’ RSS feeds via GoogleReader. Using these tools, you can stalk your market’s top real estate agents,as well as get relevant location and industry news consolidated all in onelocation. I can tell you personally that I use Google Reader based on Mark’srecommendation. It ’s very easy to use and a huge time-saver for finding andreading the latest news. Once you find relevant content, share it with otheragents, post it onto Twitter, link to it on your blog and comment on it. Markstrongly recommends commenting as a way to build rapport with the bloggerand as a way to generate traffic to your site by way of including your Website’s URL.

“Content is King,” was a phrase that was used by offline publishers as theystarted to roll out Web sites in the mid-1990s. Mark makes a great point on howright now, “Content is King” for mortgage professionals. Using your knowledgebase, you have a bank of content that be leveraged to create your own blogs orblog entries for your real estate agent partners. Having relevant content target-ing the areas you focus on will help you get top ranking on Google for the key-words you desire.

After Mark’s presentation, Jason Berman delivered his presentation on Twitter.First off, Jason is a guy who understands the true value of tools like Twitter andFacebook. Jason was the first person in the mortgage industry, or even in realestate, that I heard use the term “Web 2.0,” long before it received mass adoption.Moreover, he was the first person I knew of that was using social media to buildhis mortgage pipeline.

Jason discussed the do’s and don’ts of Twitter. His main message was to be an“Informer,” not a “MEformer.” He emphasized that optimizing Twitter is possiblethrough sharing valuable information with your followers, and not just tellingeveryone what you are doing.

Both Mark and Jason are great resources when it comes to social media andsocial networking. Feel free to contact them by e-mail at [emailprotected](Mark Madsen) or [emailprotected] (Jason Berman).

Andrew T. Berman is executive vice president of NMP Media Corp. and a member ofthe NAMB Communications Committee. You may follow him on Twitter @andrewt-berman. He may be reached by phone at (516) 409-5555, ext. 333 or [emailprotected].

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the credit easy for people to under-stand. The best way to do this is to givethem a story, example or analogy towhich they can relate. Here’s the anal-ogy that I’ve been using to simplify thetax credit and make it easy for peopleto understand:

A tax credit is kind of like a gift cer-tificate that you can use to pay yourtaxes—it reduces your income tax billon a dollar for dollar basis. Imaginepaying your bill at IRS Restaurant, andthen later getting an IRS Restaurantgift certificate. Normally, you wouldneed to go back to IRS Restaurant andbuy more food in order to use yournew gift certificate. But what if IRS

Restaurant allowed youto just turn in your giftcertificate for cash?That’s how the homebuy-er tax credit works! Allyou need to do is file aform with the IRS afteryou buy your new homeand they will send you arefund check for $8,000(or $6,500), just like theexample of IRSRestaurant that allowsyou to exchange your giftcertificate for cash!

Number 3: Make it aboutthe client’s lifePeople are not motivatedby dollars and cents, butthey are motivated byhow dollars and centsimpact their life. Thebiggest mistake that loanoriginators make is tofocus on the numbersinstead of focusing on

the client. The way to motivate move-up homebuyers is to demonstrate theimpact that buying now would haveon their life, as opposed to theimpact of buying later. If they pur-chase now, would they be morefinancially equipped to send theirkids to college without breaking theirbudget? Would they be more finan-cially empowered to comfortablymeet their retirement goals? Wouldthey be in a better position to care forelderly parents?

For example, the $6,500 tax cred-it invested at a seven percent annu-al rate of return would grow to near-

Congress has extended the $8,000 first-time homebuyer tax credit and expand-ed it to include a $6,500 tax credit formove-up homebuyers who have livedin their primary homes for at least fiveout of the last eight years. We have onlya few short months (until April 30,2010) to generate business with thisincentive. How can we get the maxi-mum benefit out of this?

Number 1: Understandthe homebuyer tax credit� A “first-time homebuyer” is defined

as someone who has not owned ahome in the last three years. If youare a “first-time homebuyer,” yourtax credit will amount to 10 percentof the purchase price of your newhome not to exceed $8,000.

� A “long-time resident” is defined assomeone who has lived in the sameprimary home for five out of thepast eight years. If you are a “long-time resident,” your tax credit willamount to 10 percent of the pur-chase price of your new home not toexceed $6,500.

� The tax credit does not need to bepaid back if you continue living inthe home as your primary residencefor three years without selling it.

� The home must be purchased forless than $800,000 before May 1,2010. If you sign a binding contractto purchase a home before May 1,you would need to close the transac-tion before July 1, 2010.

� Single taxpayers with incomes up to$125,000 and married couples withincomes up to $225,000 qualify forthe full tax credit.

� You cannot purchase the home froma related party, such as a spouse,direct ancestor or direct linealdescendent (child or grandchild).However, you can still qualify for thecredit if you purchase a propertyfrom siblings, nephews, nieces andothers.

� If you are married, both spousesmust qualify for the credit.

� If more than one unmarried individ-ual is buying the property, the cred-it can be split up among all the indi-viduals who qualify. However, thetotal credit taken cannot exceed$8,000 (or $6,500 for “long-time res-idents”). Alternatively, if only one ofthe unmarried buyers qualifies forthe credit based on their income orpast homeownership status, theindividual who qualifies for thecredit can claim the full credit.

� The credit applies even if you haveco-signers on yourmortgage loan.

� The credit applies toone- to four-unit homes,as long as you live inone of the units as yourprimary residence. Youcould live in one unitand rent out the others.

� There are two specialrules that apply tomembers of the uni-formed services, theForeign Service of theUnited States, oremployees of the intel-ligence community:� If you have served

for at least 90 daysof the year outsideof the United States,you have until May1, 2011 to purchaseyour home andreceive the tax cred-it. In that case, ifyou sign a binding contract to pur-chase a home before May 1, 2011,you would need to close on thetransaction before July 1, 2011.

� If you end up selling the newhome you are buying in connec-tion with government orders forofficial service, the credit doesnot need to be repaid even if yousell your home within the threeyear timeframe.

Number 2: Simplify thehomebuyer tax creditNow that we understand the rulesbehind the credit, it’s time to make

BY GIBRAN NICHOLAS

“People are not moti-vated by dollars and

cents, but they aremotivated by howdollars and cents

impact their life. Thebiggest mistake that

loan originatorsmake is to focus on

the numbers insteadof focusing on the

client.”

Motivating Move-Up Buyers ly $13,000 in 10 years. Perhaps this$13,000, combined with the Fed’s$1.25 trillion mortgage rate subsidy(saving them at least one percent ininterest or $66,000 over the lifetheir $200,000 mortgage—see lastmonth’s TrendSpotter column), canbe used to help send the children tocollege, get the retirement fundback on track, or pay for an assistedliving facility for mom and dad whoare aging.

Once you paint a picture of the ben-efits of buying now, talk about the painof buying later—the kids will have atougher time with their college fund-ing, the retirement account will remainunder-funded, mom and dad’s ailinghealth will negatively impact the per-sonal and financial goals of you andyour children.

In other words, get creative with howyou talk to clients about the $6,500 taxcredit or any other numbers you aregoing over with them. Remember, num-bers don’t motivate people. Life moti-vates people. Your mission, should youchoose to accept it, is to make the num-bers come alive by talking to clientsabout what the numbers mean for theirlife. Certified Mortgage PlanningSpecialist (CMPS) certification equipsyou with scripts, strategies, dialoguestructures, resources and presentationtools to make the numbers come alivein every communication you have withclients, prospects and referral partners.

Gibran Nicholas is the founder andchairman of the CMPS Institute,which administers the CertifiedMortgage Planning Specialist (CMPS)designation. The CMPS Institute hasenrolled more than 5,500 memberssince its founding in 2005. Gibran isalso the chairman of Published Daily,a customizable online magazine,newsletter and marketing service thathelps professionals transform theirclients and prospects into a referral-generating sales force. He may bereached at (888) 608-9800, ext. 101 ore-mail [emailprotected].

Visit author GibranNicholas’s blog athttp://gibrannicholas.com

where he shares his insightson economics, real estate and finan-cial issues, including the currentmortgage and credit crises.

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FHA presentations. Sound excitedwhen you speak about them! Focus onthe benefits the agents will receive.You should be able to schedule at leasttwo presentations.

3. The big day!Your focus should be on establishingrapport with the agents and walkingaway with a list of the names, phonenumbers and email addresses of agents.You can do this by collecting their busi-ness cards for a small raffle item, or bypassing around an attendance form. Letthem know you will use their informa-tion to keep in touch and provideimportant FHA updates. Before endingyour presentation, let them know aboutthe next presentation by telling themthe title and what they will learn.

4. Make a follow up phone call toeach agent that attended, and sched-ule an appointment to meet withthem one on one.The purpose of this meeting is to estab-lish a more personal relationship andlearn more about them and what theirbusiness goals are. Building trust withthem is paramount to them feeling con-fident in referring their clients to you.

5. Follow through on your word.Provide your new database with FHA

tips and updates to keep theminformed. Continue to make appoint-ments with the ones you really feel youcan grow with, and make scheduledcalls to keep your name on the top oftheir minds.

Follow this paradigm and you willhave a fresh new group of Realtors towork with. Sometimes, we become stag-nant in our relationships and we neednew ones to provide excitement, newideas and enthusiasm. If you need assis-tance with your FHA marketing andaccess tools that can help you developmore FHA business, you can subscribeto my newsletter, The FHA Originator atMortgageSeminars.com.

Go FHA!

Jeff Mifsud founded Southfield, Mich.-based Mortgage Seminars LLC in 2004,has been an FHA originator for 12 years,is a contributor to LoanToolbox.com andis a former FHA underwriter. Jeff may bereached at (877) 342-9100 or [emailprotected].

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

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

fha insider continued from page 5

2010 before beginning to moderate aseconomic growth resumes sustainedgrowth in the second half of the year.Mortgage originations should reach$1.5 trillion in 2010. Modest increasesin home sales should drive purchaseoriginations, but refinance originationsare expected to decline as mortgagerates rise.

“The recession is behind us butthe effects of the recession will lingerfor some time in the form of higherunemployment, and lower levels ofbusiness investment and home con-struction,” said Jay Brinkmann,MBA’s chief economist and seniorvice president for research and eco-nomics. “One of the big questionsregarding growth will be the behav-ior of consumers. The large losses ofconsumer wealth in the form ofreduced home values and stock mar-ket losses, as well as the absolutelosses of income resulting fromunemployment, reduced employ-ment and the fear of unemploymenthave constrained consumer spend-ing. Timing of the economic recoveryis very much tied to the growth inconsumer spending. In addition, theeffect of the bulk of the federal stim-ulus package, particularly the con-struction components, is not expect-ed to be felt until 2010.

MBA found that real gross domesticproduct (GDP) growth was negative in2009, with the economy contractingby around 0.5 percent resulting fromsharp drops in the first half of theyear followed by growth in the secondhalf. Growth is expected to be aboutthree percent in 2010. The studyfound that the unemployment ratewill continue to increase from the cur-rent level of 9.8 percent, to about 10percent by the end of 2009 and peakat 10.2 percent in the second quarterof 2010, before declining slowlythrough 2011.

Fixed mortgage rates are expectedto average about five percent in thefourth quarter of 2009 and increaseto 5.6 percent by the end of 2010, astotal existing home sales for 2009 willend up about two percent higher thanthose for 2008. Existing home salesare projected to increase further in2010, increasing by approximately11.2 percent.

MBA found that new home sales for2009 will be down by about 18 percentrelative to 2008. Sales seemed to havebottomed in the first quarter of 2009 andhave been rebounding modestly since.For all of 2010, new home sales shouldpost an increase of about 21 percentfrom 2009’s very low levels. The nationalaverage home price declines shouldabate by early 2010, but will vary by stateand home value. The demand will behighest for entry-level homes.

porate and financial wrongdoing, andwill not hesitate to bring charges,where appropriate, for criminal mis-conduct on the part of businesses andbusiness executives.”

The task force is composed of senior levelofficials from the following departments,agencies and offices: The Department ofJustice; Department of the Treasury;Department of Commerce; Department ofLabor; Department of Housing and UrbanDevelopment; Department of Education;Department of Homeland Security;Securities and Exchange Commission;Commodity Futures Trading Commission;Federal Trade Commission; Federal DepositInsurance Corporation; Board of Governorsof the Federal Reserve System; FederalHousing Finance Agency; Office of ThriftSupervision; Office of the Comptroller of theCurrency; Small Business Administration;Federal Bureau of Investigation; SocialSecurity Administration; Internal RevenueService, Criminal Investigations; FinancialCrimes Enforcement Network; United StatesPostal Inspection Service; United StatesSecret Service; United States Immigrationand Customs Enforcement; relevantOffices of Inspectors General and relatedfederal entities, including without limita-tion the Office of the Inspector Generalfor the Department of Housing andUrban Development, the RecoveryAccountability and Transparency Boardand the Office of the Special InspectorGeneral for the Troubled Asset ReliefProgram; and such other executivebranch departments, agencies, or officesas the President may, from time to time,designate or that the Attorney Generalmay invite.

“To give American families the pro-tection and peace-of-mind they need,it’s clear the federal response must be asinterconnected and multi-dimensionalas the challenges we face,” said HUDSecretary Shaun Donovan. “No oneagency is going to be able to stop finan-cial fraud. This Task force will buildupon many of the inter-agency collabo-rations already underway to protect con-sumers and restore confidence.”

In addition, the attorney general willinvite representatives of the NationalAssociation of Attorneys General, theNational District Attorneys Associationand other state, local, tribal and territo-rial representatives to participate in thetask force through its EnforcementCommittee. For more information, visithttp://ustreas.gov.

MBA forecasts originationvolume to hit $1.5 trillion in 2010

The Mortgage BankersAssociation (MBA) expectseconomic growth to con-tinue through the rest

of 2009 before slowing in the first half of2010. Unemployment is expected toclimb to 10.2 percent by the middle of

news flash continued from page 4

continued on page 12

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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!

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Challenging the AppraisalYou have all been there; that is if youhave been in the mortgage businessfor longer than two or three transac-tions. You are shepherding a loanalong the pathway to a closing for aclient. The client has a job, you havequalified the client for income, youhave pulled the client’s credit report,they have the proper downpaymentand everything seems hunky-dory.Then, it happens … you get a call fromthe underwriting depart-ment, and you hear thatdreaded statement. “Itdidn’t appraise,” whichis colloquial for “Theappraiser is of the opin-ion that the property isworth less than the esti-mated value that theloan was based upon.”

What is a self-respect-ing loan officer to do?First, there is always thepossibility that the home-owner lied about whatthey paid for the propertyor that the tax card is inerror. Then, there is thepossibility that the mar-ket has tanked so muchwithin the past year ortwo because of the rotteneconomy that the subjectproperty has lost most ofits value. But wait … there is oneother possibility. The appraiser justmay be flat-out wrong. Are they com-petent, do they know the market,were they in too much of a hurry, orwas there data supporting a highermarket value than that which theappraiser came up with?

I have been an appraiser, reviewappraiser, appraisal manager and theowner of an appraisal managementcompany (AMC) for about threedecades. There is little about real estateappraisals that I have not been subject-ed to. We have all seen challengingmarkets, I have made my share of mis-takes, I have seen others make mis-takes, and when there is a question

about the accuracy of an appraisal, Ihave learned not to jump to conclu-sions one way or another.

When presented with an appraisalchallenge from a client, it is almostalways accompanied with an excess ofemotion and precious little in the formof relevant facts. To the borrower, it isgetting the proceeds from the loan. Tothe loan officer, it is closing the dealand paying this month’s rent. These,

however, are not reasonsto challenge the apprais-al. This must be donewith relevant facts, factsnot about either of theplayers among the cast ofcharacters, but about theproperty and the market.

I once heard a wiseappraiser talking to aproperty owner. Theowner had made thestatement that there wassomething wrong with acertain appraisal. Theappraiser calmly respond-ed, “Sir, there is some-thing wrong, but it is notwrong with the appraisal.There is something wrongwith the property.”

If we are to properlyevaluate the circum-

stances surrounding an appraisal with-in a transaction, we must get past thefact that we want the transaction toclose. We must honestly say to our-selves, “What is the property actuallyworth?” This must come from the mar-ket and not from a preconceived notionthat a property is worth “X” amount ofdollars.

That being said, I am listing threethings that we in our company common-ly find wrong with appraisals, when theappraiser has made a mistake.

1. The subject is superior to the com-parable sales used.In today’s market, finding good compa-

continued on page 18

“When presented withan appraisal challenge

from a client, it isalmost always accom-panied with an excessof emotion and pre-

cious little in the formof relevant facts.”

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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:

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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

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said Brinkmann. “While the lack ofinflation, high unemployment andexcess capacity in the economy shouldhold interest rates down, there is a lotof uncertainty regarding rates immedi-ately following the termination of theFederal Reserve’s purchase of mort-gage-backed securities. No doubt theFed will do its best to minimize adverseeffects, but the elimination of thesepurchases will put upward pressure onall long-term rates as well as the spreadbetween mortgage rates andTreasuries. The size of any resulting

rate move will largely determine thesize of the refinance market.”For more information, visit www.mort-gagebankers.org.

J.D. Power study concludes: Decline incustomer satisfactionwith primary mortgagelenders

The average time requiredto approve and close a loanhas increased in 2009compared with 2008, fuel-ing a decline in overall

customer satisfaction with primarymortgage lenders, according to theJ.D. Power and Associates 2009Primary Mortgage Origination

Satisfaction Study. The study measurescustomer satisfaction in four key factorsof the mortgage origination experi-ence: Application/approval process,loan officer/mortgage broker, closingand contact. The study is based onresponses from more than 3,400 con-sumers who originated new mortgageswithin the previous 12 months. Thestudy was fielded between July andAugust 2009.

Overall satisfaction among mort-gage customers has declined to 739on a 1,000-point scale, down 18 indexpoints from 757 in 2008, as a result oftighter underwriting standards andlonger turnaround times. The averagetime required to approve and close aloan has increased to nearly 47 days,compared with approximately 30 daysin 2008, primarily due to increasedscrutiny of loan applications andhigher origination volumes driven byincreases in refinancing. This increasein turnaround time has a consider-able impact on satisfaction, as satis-faction averages only 723 when thetime from application to approvaltakes six or more days, comparedwith 798 when the process takes lessthan six days. Similarly, satisfactiondrops from 772 to 736 when the timefrom approval to closing takes 14 ormore days.

In addition, lending criteria hastightened, as the study finds thatcredit scores are higher among mort-gage customers and the percentageof loan applicants who have beenfaced with requests for additionaldocumentation has increased consid-erably to 45 percent in 2009 from 33percent in 2008.

Branch Banking and Trust (BB&T)ranked the highest among primary mort-gage lenders with a score of 783, andperforms particularly well in the applica-tion/approval process and closing fac-tors. Wachovia (781) and National CityMortgage (769) follow in the rankings.

“Customers working with BB&T indi-cate they have a better idea of the stepsinvolved in all aspects of the mortgageorigination process and the time it willtake to complete each one,” said DavidLo, director of financial services at J.D.Power and Associates. “Customersreport that BB&T effectively managescustomer expectations around standardprocess-related elements of the experi-ence, which results in increased satis-faction with the application/approvaland closing processes. In turn, this cre-ates a lift in overall customer satisfac-tion and underscores the importance ofcommunication between lenders andcustomers.”

The study finds that there are ninekey practices that lenders shouldleverage to optimize customers’ satis-faction with the mortgage originationexperience. For example, satisfactionaverages 793 among customers whoselender provided and met a timeframe for the application/approvalprocess, compared with 632 among

Purchase originations for 2009 willbe $718 billion, about two percentbelow the 2008 level of $731 billion.Purchase originations should riseabout 12 percent in 2010, as existinghome sales recover and home pricesstabilize. Refinance originations willend 2009 at $1.245 trillion, up about60 percent from $777 billion in 2008.Refinance activity will likely decreasein 2010 to about $745 billion as mort-gage rates increase.

“Perhaps the biggest unknown is thelevel and volatility of interest rates,”

news flash continued from page 10

continued on page 17

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Dear Brian:I have been a fan of your articles and the site,www.loanofficerformula.com, for a numberof years. While I realize you have been in thebusiness a very long time (nearly 25 yearsright?), I am amazed at how you can keepyour composure during times like these.

The last two years have devastated ourbusiness, myself included. I have nowmade my wife go back to work, and I havetaken a part-time job. I still originate, butclosed down my company and work part-time just to keep my head above water.

What do you do to stay positive inthese times?Looking forward to your answer,—B. Stanovich, Wisconsin

Dear Bob:What a great and timely question. Yes,these past few years have been terriblefor most, but not all. Even those whor*main are not earning what they had.

One of my clients just reported earn-ing $92,000 in revenue from $8.3 mil-lion in closings for October … not bad!However, I do realize that he is theexception right now so keep reading.

First, let me give you somegood news, and then I willshare some ideas with you.The good news—the tax incentive isstill in place for the beginning of 2010.More good news … there are less of uschasing the same deal than there hasbeen for the past seven to eight years.

Yes, it may be tougher to get these dealsdone, but one big secret that I have alwaysshared is to work backwards. Find outwhat programs you have to offer, and onlythen, market to those folks. That is evenmore important now since most havefewer resources. But, more importantly,when you go after just anyone, you maybecome very frustrated with all the dealsthat you cannot do and that is not good!

Second … stay positive.I know, staying positive is easier saidthan done, but I read and listen to edu-cational audio every single day, includ-ing weekends. One of the keys to suc-cess I discovered was your self image. Itcontrols everything you do … period!

I used to read Think and Grow Rich byNapoleon Hill and all of the other motiva-tional books on success, and yes, they aregood, but something always seemed to bemissing. Ever see someone do well andreach a certain level and implode? Or, haveyou ever seen someone who has all of theskill and talent in the world, but just nevergets to that top level? Both are because of

self image. Most of these books, etc. areteaching you to think positively but thatjust doesn’t always work now does it? Iknew there had to be more than just think-ing positively and daily affirmations.

I searched far and wide, and finallyfound what I believe to be the answer tothese questions. It is contained in a clas-sic book called Psycho-Cybernetics by Dr.Maxwell Maltz. It’s a book I give to all ofmy brand new coaching and consultingclients. Go get this book! Everyone hasrough times … myself included. Howyou get through these rough patchesmentally will determine your success!Nothing else!

If you want even more tips I have puttogether a 32-page free report atwww.loanofficerformula.com/nmp.

Dedicated to having buyers chas-ing you …

If you have a question you would likeBrian to answer in this column, please

send an e-mail with “Ask BrianQuestion” in the subject line [emailprotected].

Brian Sacks is CEO of www.loanofficerfor-mula.com. He has been an industry expertfor more than 25 years, closing 6,000-plusloans totaling $1 billion. You can readBrian’s 32-page special report entitled “TheDeath of Mortgage Origination as WeKnow It” and “The 10 Things You Must DoNow to Survive and Thrive” at www.loanof-ficerformula.com/nmp. This report sells for$97 and has been downloaded by morethan 9,200 originators and company own-ers, but is free for a limited time for readersof National Mortgage ProfessionalMagazine. He may be reached by e-mail [emailprotected].

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Each month, National MortgageProfessional Magazine will focus on one ofthe industry’s top players in our “MortgageProfessional of the Month” feature. Ourreaders are encouraged to contact us by e-mail at [emailprotected] consideration in being featured in afuture “Mortgage Professional of theMonth” column.This month, we had a chance to chat withJulio de Cardenas, executive vice presidentof Levittown, N.Y.-based United NorthernMortgage Bankers Ltd. A 20-plus year veter-an of the mortgage and real estate indus-try, Julio attained his real estate license atthe age of 18, and sold his first home short-ly after while attending St. John’sUniversity. Success in real estate led Julio toleave the world of academia behind to pur-sue a career in home sales and homefinancing. Julio’s career has taken him fromresidential and commercial real estate, tomortgage banking, a four-year stint as anational sales trainer and consultant, nowback into mortgage banking.

Currently, Julio serves as the execu-tive vice president of United NorthernMortgage Bankers Ltd. Led by companypresident and co-founder Don Giorgio,United Northern currently averages $35-$40 million per month in closings, andas Julio stated in our conversation, thecompany is projecting growth of

approximately $50-$75 million permonth in 2010. In order to accommo-date the company’s financial growth,United Northern is set to move into alarger corporate headquarters, justblocks away from its current Levittown-based operations. They are licensed ineight states and currently have six otherlocations, with more in the works.

How did you get started in the mort-gage industry?After graduating LaSalle Military Academy,I was primed to begin a life of hard workto achieve my goals. I attended St. John’sUniversity, as I acquired my real estatelicense and sold real estate. After the saleof my first home at 18-years-old, I quicklyshifted to more commercial and invest-ment properties, mainly commercial leas-es, investment, specs and storefront prop-erties. I loved real estate, but my drivesought out more.

Around 1988-1989, I opened up myown real estate brokerage, High RiseAssociates. Unfortunately, around thattime is when the commercial marketbegan to crumble.

In 1990, I went to work for HomeMortgagee Corporation, as a loan offi-cer. On my first day, training in themortgage industry was pretty basic. Isat with the owner and another Home

Mortgagee employee for about 30 min.each. I was showed how to fill out a1003 and order a credit report. It wasafter that I was taken to a room with abox of pads and pens inscribed with theHome Mortgagee logo and was toldthose were the marketing materials Iwas to pass out on the road. The book-keeper smiled as she handed me a checkfor $150 for expenses my first week,while someone else had given me abeeper. My training was complete. I wasassigned my territory in New York, andpointed in the direction of the Bronx!

Thinking back, the smile on thebookkeeper’s face was more of anunspoken statement. “You’ll nevermake it, Hot Shot!” There was never adetailed explanation of what to do, butthat did not deter me. I took my back-ground in real estate, along with myambition to succeed, headed to theBronx and eventually made a fortune!

After a year-and-a-half with HomeMortgagee, I moved on to Mutual ofNorth America in the beginning of1992. My family at the time appliedpressure for me to return to college. Iweighed my options and realized thatthe amount of money I was making inreal estate was more favorable com-pared to what I was doing in macroeconomics at St. John’s. Everyone in myfamily has at least a degree, some mul-tiple, including my grandparents. I tookthe gamble, slung my calculator overmy shoulder and off I was again.

Within a few months, I was the com-pany’s top salesman, and 18 monthslater, I made enough to buy into thebusiness, so I became a partner withthe company’s owner. The bulk of mybusiness was FHA loans. When I startedwith Home Mortgagee, their idea wasto become a master in FHA … to go outthere and speak about FHA, give FHAseminars, and teach the real estate bro-kers and attorneys about FHA loans.That is what I did, and at that time,many people thought FHA was a thingof the past, as they were doing mostly

conventional and stated loans, but Istuck with FHA and it paid off in a bigway. Mutual became extremely success-ful and I prided myself in being the“Government Loan Guru.”

In 1997, I sold my shares in Mutual ofNorth America back to its founder andopened a mortgage bank called FirstEstate Funding. After five years as presi-dent of First Estate Funding and achiev-ing a certain level of success in our indus-try, in 2002, I sold off my portion to mypartner and walked away. At the end ofthat year towards the beginning of 2003,I went to work for Ron VaimbergInternational (RVI) as a trainer and coach.My time with RVI was during the heart ofthe sub-prime boom, and I was doingconsulting and training around the coun-try. I had a riot travelling from one lenderto another, motivating their staff and get-ting paid for it. For those four years, theonly thing I considered work was thetedious chore of making airline and hotelreservations. Those years were quiterewarding and educational for me. Iworked with Ron until May of 2007. Asour industry disappeared before oureyes, I looked for new opportunities.

I first met Don Giorgio, president andco-founder of United Northern MortgageBankers, when my ex partner in Mutual ofNorth America sold the company to himafter I had left. I was immediately takenby his intelligence, integrity, experienceand wisdom. I was living in Michigan atthe time, and even had a lucrative offerfrom a company in California, but I spoketo Don and genuinely liked him. I startedwith United Northern in June of 2007.

How do you motivate your employeesand instill in them the tools requiredto take the overall success of UnitedNorthern to the next level?In this profession, you have to like whatyou do. It’s not work to me. I still live inMichigan and come to New York duringthe week for work. For me, the realwork is getting up at 3:30 a.m. on aMonday, traveling to the airport to get to

Julio de Cardenas, Executive Vice President United Northern Mortgage Bankers Ltd.

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the office in time. The real work is doneby my wife who deals with six children!The phone goes off and I’m here in NewYork and she’s in Michigan dealing withvarious issues with my kids. I will repeatthe old saying, “Behind every great man,is a great woman.” By not having anyhome stress, I get to really enjoy my pas-sion … banking.

Mortgage banking, at the presentmoment, is both challenging and excit-ing. I enjoy the building of a business,and this time, it’s for keeps … I havefound my home. I know that familycomes first, but to me this is an extend-ed family. Many people count on me andI work hard to not let them down. I con-stantly preach to my children that thereare consequences for your actions. Onefalse move by me can impact the fami-lies of all 120-plus of United Northernemployees and beyond. As we continueto grow, that number grows. We’ll neverknow how many people’s lives areimpacted by what we do. Think abouthow many spheres were affected by theBernie Madoff scandal … charities, non-profits, etc. … it’s all a trickle-downeffect. There are serious consequencesfor your actions in this world. We, as asociety, haven’t really held peopleaccountable; we just give them a slap ontheir wrist for their ill-advised actions.

Just recently, Lend America closed itsdoors. Where is the accountability forthe 600 employees who lost their jobsbecause of the misdeeds of a few …from the maintenance guys whoworked for them, to the vendors,lenders, etc.? The chain reaction iscolossal. There may be a few who wereinvolved in wrongdoing, but there are600 people affected who have families,who have car payments and bills to pay.For the selfish acts of a few, the major-ity has to suffer. Everything I do affectshundreds of people. There is a majorripple effect that would take place ifsomething stupid happened within ourcompany. I try to instill in my loan offi-cers and my own kids that there areconsequences to your actions.

I always tell loan officers when theystart out to think about their jobbefore entering the mortgage industry.I tell them to take that same work ethicthey had in their previous job and nowapply it to being a loan officer. Theamount of money you can make in thisindustry is amazing. The problem iswhen they become complacent. In thiscountry, if you want something badenough, you can work hard andachieve it. My words are not emptyhype, I live them and my staff sees it.

What are some of the keys that haveled to the success of United NorthernMortgage Bankers?We have grown the company throughthe support of our staff. We believe thatour number one priority is our staff,and we are committed to creating anenvironment where everyone succeeds.You want to go to a place that will takecare of you. We are a 30-year-old com-pany that is not going anywhere any-time soon … we’re not a fly-by-night

operation. United Northern is asstronger than it has ever been.

We are constantly recruiting andtraining. At United Northern, you gethonesty and integrity. You may notalways like the answer I may give, butyou get it. There is no ego here.

Our business approach is pretty sim-ple … we sit back, take a look at the bigpicture and don’t react on a dime. Wedon’t hire and fire on a whim or even asmall boom in business.

At United Northern, we give peoplethe customer service needed and providea strong core. Buying a home is the singlemost important purchase a person willmake in your life. As you climb the ladderof success those mortgages become larg-er and the hand holding more intense.

All of these e-lenders have failedbecause no matter what transpires in theloan process, how do you trust all of thatinformation to a computer? People wanthuman feedback. A loan officer’s job is tohold their customers’ hand through themortgage process. There are also timeswhen we question if we canactually close on a deal.There is no substitute forthe one-on-one human ele-ment. We have, at times,had the applicant come andsit with myself, Don and theunderwriter on the file. I askthem to explain why weshould make this loan? Whydoes our loan officer feelthis is a good loan?Unfortunately, nor theunderwriter, Don or myselfwere present when a loanofficer sat at their kitchentable. Face-to-face, you canread in someone’s eyes ifthey are being sincere.

The independent mort-gage banker, like UnitedNorthern, can cater to theindividual … a large bankcannot possibly do that. We receivereferrals from larger banks because dueto their guidelines, they need “thesquare” to fit into that “square.” Theyneed everything to fit perfectly. If anyterms of the deal are even slightly ill-aligned, the loan won’t go through.These large institutions cannot do theone-on-one situations. Here at UnitedNorthern, we can.

Can an independent mortgage bankerlike United Northern compete with thebig banks of the world on pricing?Yes, we can. First off, our overhead isn’tthe same. We pride ourselves on beinglean and mean. Don and I currentlyshare an office in order to accommo-date our growth. Offices that oncehoused one or two salespeople are nowoccupied by four. It wasn’t until wewere absolutely bursting at the seamsthat we decided to acquire our new cor-porate space. These smart businesspractices are to ensure another 30 yearsin business. In the new facility, we havetaken on the first floor, third floor andthe lower level for storage.

Money comes from the same source

for everyone. We have a terrific sea-soned staff with a lot of experience. Ifyou take Don, myself, our underwritersand all of our processing staff, we haveabout 300 years of combined industryexperience. I remember one of myunderwriters saying that being called“seasoned” was the nicest way she hadever been called “old.” United Northernknows where the market is at all times,we react and we don’t play games withpeople’s locks. We are a retail operationand our job is to give people good serv-ice. Let’s not make it too complicated… it’s not rocket science. Our personal-ized service, energy and experience,topped with pricing that competes withthe big boys, often has me wonder howthey can compete with us! At the end ofthe day, everyone feels good aboutwhat they have done.

Are you active in industry tradeassociations?Yes, I make sure I attend all types of indus-try conferences. I believe in educating

myself with what’s going onin our industry. I am alsotrying to become moreactive with the MortgageBankers Association (MBA).The small- to mid-sizedmortgage banker’s needsare not always met.Through recent years, wehave watched the disap-pearance of mom and pophardware stores, pharma-cies, grocery stores, etc.Now is the time to getinvolved so that we avoidbecoming the next casual-ty of big business. We arethe voice that needs to beheard.

What are United Northern’sgrowth goals over the nextfew years?

United Northern is celebrating 30 yearsin this industry … 30 years of helpingpeople purchase and remain in theirhomes. We want to be here another 30years. As much as the doom and gloomof the American economy surroundsus, there are a lot of companies outthere that do plenty of good for people.

What we do is very well thought-out.My goal isn’t to grow overnight; this suc-cess was 30 years in the making. Even ina year from now, I just want to increaseby $10-$20 million per month in pro-duction, then we increase it a bit more… it’s not about growing haphazardly.Our projections are based on five-yearincrements, and we know where wewant to be five years from now.Truthfully, the worst thing that couldhappen would be if we did $2 billionworth of business next year. It soundscrazy, but that would not be a controlledgrowth … we may have compromisedthe quality and integrity of the files, wemay have bypassed areas of quality con-trol, may have missed a few steps, etc.That’s not what we are looking for andwe won’t do that.

In every industry we have seen, there

has been an almost mass elimination ofmom and pop stores. Everything is bigand very rarely can you find somethingon a smaller scale. We need to grow, andour target is to hit $750 million in 2010and to be over the $1 billion mark in2011. If we don’t get there, we could getswallowed up because the cost of main-taining our infrastructure is increasing.

With compliance and licensing issuesthese days and the costs involved, thelittle guy cannot survive. We employsomeone making a full-time salary justto follow up on licensing issues for us asa company, licensing on all of our loanofficers, educational requirements andcompliance in marketing. He works 40-50 hours a week on making sure wemaintain compliance. Every state hasspecific rules and requirements. Whenyou have loan officers licensed in sever-al states, and we, as a company, arelicensed in eight going on 10 states, it’s alot to keep track of!

Do you think the new GFE and HUD-1will address some of the borrower con-fusion that exists at the closing table?I actually think it could cause moreconfusion at the closing table. If I triedto explain loan programs to anyone offthe street, they won’t understandthem. Just as if that person were toexplain their profession to me, I would-n’t understand them. I think it willbecome more cumbersome.

It’s a three-page Good Faith Estimate(GFE), and you now have to comparethings that other people quoted in yourprice. Does the consumer really under-stand these concepts? Look at the autoindustry … whether they charge you a 14percent interest rate or two percent, youstill base your decision whether or not youpurchase the car on what you can afford.

At the same time, I like the otherchanges in the industry concerning edu-cation and licensing requirements. Ibelieve these initiatives are weeding outa lot of the people who have tarnishedthe industry. You want people you cantrust doing mortgages. We have taken somuch abuse in our industry, but onceupon a time, if you sent in a check for$500, you received a broker’s license. Ifthe industry is now policing itself and iscreating education requirements, thatbrings it to a higher level and raises thebar for the industry as a whole.

Are you in favor of increased lenderliabilities and net worth require-ments currently proposed by the U.S.Department of Housing & UrbanDevelopment?Yes, I am in favor of those initiativesbecause this will also weed out the badin this industry. United Northern is stilla small mortgage banker, but a keyphrase I heard at the recent MBAAnnual Conference was “skin in thegame.” You want to make sure that thelenders doing your loans have “skin inthe game” and are reputable. You wantthem to stand by what they did.

Loan officers, before they were

“Mortgage banking, atthe present moment,is both challenging

and exciting. I enjoythe building of a busi-

ness, and this time,it’s for keeps … I have

found my home.”

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Dr. Ted C. Jones, director ofinvestor relations for StewartInformation Services, delivers hiseconomic update at NAMB/WESTin Vegas

NAMB Immediate Past President Marc Savitt,Cheryl Savitt, and NAMB Treasurer andConvention Committee Chair Don Frommeyerduring the NAMB/WEST Opening Reception

Fellow Texans NAMBPresident Jim Pair andNAMB Director OlgaKucerak share a laugh inLas Vegas

Ken Perry of Broker Knowledge andGinger Bell of Go2Training, co-mod-

erators of the “SAFE Act, MDIA,HVCC, Red Flags and Other

Regulatory Updates” panel discussion

Jeff Mifsud of Mortgage SeminarsLLC leads the session, “NationalBroker Challenge: Thrive in 2010With the New FHA”

Fred Arnold, president ofAmerican Family

Funding, delivers his pres-entation, “Double Your

Profits Without DoublingYour Workload”

NAMB Chief Executive Officer RoyDeLoach discusses the importance ofeducation during NAMB/WEST

Nancy West, marketing andoutreach specialist for the U.S.Department of Housing &Urban Development (HUD),discusses the latest FHA changesduring her presentation

Rene Rodriguez, chief executiveofficer of Volentum, shares thesecrets to his success in a downmarket

Joe Camarena, chairman of theNAMB Education Committee,

welcomes attendees toNAMB/WEST 2009 in Las Vegas

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The U.S. Department of Housing & UrbanDevelopment (HUD) published a final regu-lation on Nov. 17, 2008. This final regula-tion made substantial changes toRegulation X, the implementing regulationof the Real Estate Settlement ProceduresAct (RESPA). Among other things, HUD hasmade substantial changes to the:

� Good Faith Estimate (GFE)� HUD-1 Settlement Statement (HUD-1)� HUD-1A Settlement Statement (HUD-

1A), and� Settlement Cost Booklet1.

This month’s column will highlightcertain features of the new Good FaithEstimate and the HUD-1 and HUD-1ASettlement Statements.2

Implementation Date: January 1, 20103

The new GFEThe new GFE is three pages in lengthand contains more information thanthe previous GFE. Main sections of thenew GFE include:

� General headings (originator andborrower information)—Page 1On the top of page one you will see theGeneral Headings information. The left-hand side gathers information aboutthe originator, including name, address,phone number and e-mail address. Theright-hand side gathers informationabout the borrowers, including nameand address. This section also includesthe date that the GFE is prepared.

�Purpose (See “Shopping for Your Loan”)� Shopping for your loanThe “Purpose” and “Shopping for YourLoan” sections, containing standardizedlanguage from HUD. These sectionsexplain to the borrower the purpose ofthe GFE and how to use it to shop forthe loan that is best for that borrower.

� Important datesThis section contains dates that areimportant to the borrower and lender.

� Line #1: The originator providesthe date (and time, if necessary)through which the disclosed inter-est rate information is available.Note: This is not intended to bean interest rate lock.

� Line #2: The originator providesthe date through which all settle-ment service charges disclosed onthe GFE are available. HUDrequires this date to be at least 10business days from the date of theGFE, in order to give the borrowertime to shop around for the bestmortgage.

� Line #3: The originator providesinformation about the rate lock.After the rate has been locked,the borrower will have a statednumber of days to go to settle-ment in order to receive thelocked interest rate.

� Line #4: The originator lists thenumber of days before settlementthat the interest rate must belocked.

� Summary of your loanThis section includes information aboutthe initial loan amount, loan term, ini-tial interest rate, and periodic (i.e.,monthly) payment amount.

� This section also includes specific“yes or no” questions with regardto whether the interest rate, loanbalance, and payment amountscan increase during the life of theloan.

� There are specific “yes or no” ques-tions with regard to whether theloan has a prepayment penalty or aballoon payment.

Note: If the answer to any of thesequestions is “yes,” then the new GFErequires additional information aboutthat feature.

There are many calculations in thisarea that have not been a part of previ-

New Good Faith Estimate andHUD-1 Settlement Statement

continued on page 20

those whose lender did not. In addition,satisfaction declines from 781 to 643when customers were asked to providethe same information more than once.

“The good news for lenders is thatoptimizing the mortgage experience is aseasy as adopting these key practices,” saidLo. “The bad news is that few customerssay they have an optimal experience—only 22 percent of customers report expe-riencing all nine service practices. Amongthese customers, satisfaction averages862 points. In contrast, satisfaction aver-ages only 566 points among customerswho report that their lenders missed fouror more of the key practices.”

The study also finds that satisfactionis a critical component in optimizingadvocacy, loyalty and cross-sell opportu-nities. Among customers with high satis-faction levels (scores of 800 or higher),58 percent say they “definitely will” rec-ommend their lender, compared withonly 8 percent of customers with lowsatisfaction levels (scores below 800).More than 60 percent of customers withhigh satisfaction levels say they “defi-nitely will” consider their lender whenthey refinance, while only 13 percent ofless-satisfied customers say the same.Highly satisfied customers are also morelikely to use additional products andservices from their lender, such as achecking or savings account, credit cardor home equity line of credit.For more information, visitwww.jdpower.com.

MBA releases modelwhole loan sale and servicing agreement

The Mortgage BankersAssociation (MBA) hasadopted a model saleand servicing agree-ment it anticipates

will become the standard form for indus-try participants to use voluntarily forwhole loan purchases and sales madewith an eye toward potential securitiza-tion. The agreement was adopted byMBA’s Residential Board of Governors(RESBOG) as an MBA supported bestpractice.

The model agreement is part of anMBA initiative to help increase liquid-ity and efficiency in the non-conform-ing residential mortgage market. Theagreement provides standard format-ting and text for standard practices,reducing the time, effort and cost oflegal and due diligence reviews. Theagreement also includes standard for-mats for transaction-specific terms.

“At the current time, there is virtuallyno private label MBS market to speakof,” said John A. Courson, MBA’s presi-dent and chief executive officer. “Whenthe market begins to return, we expect itwill start with whole loan transactions.This model agreement will provide con-sistency and transparency to helpinvestors get a better understanding of

the whole loans they are purchasing.”A working group of MBA’s Secondary

and Capital Markets Committee devel-oped the model agreement by consoli-dating elements of existing whole loanservicing agreements. MBA released adraft in July for public comment inorder to solicit feedback from all inter-ested stakeholders. The current modelagreement incorporates that input andis designed to increase transparencyand efficiency in the private labelmortgage backed security market. MBAanticipates further refinements to theagreement this year and a process ofregular periodic review going forward.

“The model agreement was drafted bymembers, for members and with signifi-cant input from a wide variety of stake-holders,” said Courson. “Plus, we’ve devel-oped protocols so that the agreementreflects standard practices and legalrequirements both now and in the future.”For more information, visit www.mort-gagebankers.org.

Ocwen completes nearly45 percent of industry’spermanent modifications

Almost half of the trialmortgage modificationsconverted to permanentmodifications for distressedhomeowners under theU.S. Treasury Department’s

Home Affordable Modification Program(HAMP) are attributable to Ocwen LoanServicing LLC, the principal subsidiaryof Ocwen Financial Corporation. Thereare 27 large banks and loan servicersparticipating in HAMP, but Ocwen alonecompleted 44.6 percent of all of thepermanent modifications done by theindustry.

According to a report released bythe Congressional Oversight Panelmonitoring the government’s TroubledAsset Relief Program (TARP), only 1.26percent of trial modifications underHAMP were able to convert to perma-nent status as of Sept. 1, 2009. Ocwen,however, converted 13.9 percent of itscustomers’ trial modifications duringthat timeframe, and its conversionrate is now at more than 20 percentand climbing.

Servicers collect HAMP incentive feesonly for modifications that convert topermanent status. To convert, the ser-vicer must obtain and verify all docu-mentation required of the homeownerunder HAMP guidelines and receivethree monthly payments on the modi-fied loan during the trial period. Theconverted modifications can also gen-erate second- and third-year bonus feesfor servicers, assuming the loans con-tinue to perform.

“Our technology and analytics-basedapproach to prudent modifications ispaying off, as shown by the proportion

continued on page 21

news flash continued from page 12

More foreclosures will befought successfullybecause of the industry’sfaulty systemI expect problems in the loan registrationsystem to slow or even halt some foreclo-sure proceedings. More courts will take adim view of Mortgage ElectronicRegistration Systems Inc. (MERS) which isthe system that’s supposed to keep track ofmortgage filings. I first challenged this sys-tem in court in 2008 and was able to halta client’s foreclosure completely becauseof its flaws. Then, last year, the Supreme

Court of Kansas and othercourts observed that theMERS system could createinsurmountable problemsfor a party seeking to fore-close. I predict that morecourt decisions like thesewill follow in 2010, as thespotlight becomes moreand more focused on theproblems with MERS.

The system was origi-nally created to keep trackof any changes in the own-ership of a mortgage.Today, it has some signifi-cant problems when itcomes to proving whatinstitution actually has theability to launch a foreclo-sure proceeding. Watch formore and more courts totake notice of that in 2010.

More foreclosureswill be defeated becausethe wrong party tried totake the houseOnly the owner of a loan has the rightto foreclose on a mortgage in most

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Expect 2010 to be another tough yearfor those having trouble keeping upwith their mortgage payments. As anattorney who spends my days fight-ing against mortgage lenders that’swhat I’m expecting in the comingyear. That said, I do expect somegood news for cash-strapped home-owners next year, because I seestrong indicators that tell me thatthe courts will take a good hard lookat the legality of some mortgageforeclosure proceedings. On theother hand, I don’t foresee much of adecline in the numberof mortgage foreclo-sures in 2010.

Looking into my crys-tal ball, here’s what 2010looks like to me:

The pace offoreclosures willnot slow in2010There will be no signifi-cant decline in the num-ber of mortgage foreclo-sures within the next 12months. The first waveof foreclosures was forthose who took out sub-prime loans. Theseposed the highest risk ofdefault, so it was naturalthat these loans wouldstart the foreclosure wave.Unfortunately, I expectthat wave to intensify asmore and more loans from the next riski-est loan category, Alt-A, fall into default.When you add that to a struggling econo-my, high unemployment rate and a terri-ble real estate market, you have a recipefor an increase in foreclosures for at leastthe next 12 months.

Mortgage Foreclosure Predictions for 2010

“I do expect some goodnews for cash-strappedhomeowners next year,

because I see strongindicators that tell me

that the courts willtake a good hard lookat the legality of somemortgage foreclosure

proceedings.”

By Christopher G. Brown

continued on page 20

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rable sales is tough. Do not be afraid toask your Realtor or borrower if they areaware of any other higher-priced prop-erties that may have recently sold nearthe subject, and may have not beenconsidered as comparable sales.

2. Watch for unfavorable adjustmentsin the square-footage section of theappraisal.This is especially troublesome when thesubject property is smaller than most orall of the comparable sales. Frequently,the dollar-per-square-foot adjustmentis much smaller than the depreciatedvalue of the improvements. Ask theappraiser for paired sales to demon-strate the difference in value-per-square-foot.

3. Inquire about unique characteris-tics, processed by the subject, but notproperly credited to the subject prop-erty in the appraisal.Items frequently overlooked or under-valued are additional land, detachedbuildings, such as mother-in-law apart-ments, exceptional views and waterfrontage.

While every property and appraisal isunique unto itself, those variables listedabove are among those that I havefound most often to be responsible forundervalued properties. Sometimes, wewill find that a property just is not worthmore than the appraisal and, undersuch circ*mstances, it may be time toswallow our pride and move on. Yet atother times, there may be good cause toquestion the appraiser. I think that youwill find that, in most cases, appraiserswill be receptive to suggested areas ofimprovement in appraisals.

Appraisers lose when they areunwilling to consider the relevant factspresented about an appraisal. Theircredibility is also the line, and few arewilling to risk losing business becausethey make mistakes that they areunwilling to address.

Charlie W. Elliott Jr., MAI, SRA, is presi-dent of Elliott & Company Appraisers, anational real estate appraisal company.He can be reached at (800) 854-5889, e-mail [emailprotected] or visit hiscompany’s Web site, www.appraisalsany-where.com.

value nation continued from page 11

licensed, would just travel from lenderto lender. Now, with the NationwideMortgage Licensing System & Registry,that license follows you. You now haveto meet particular licensing and educa-tion requirements. This is a career …treat it as a career. This isn’t a part-timejob at a fly-by-night operation, so takeit seriously. There has to be a way totake it to a certain level, and I am infavor of increased lender liabilities andstricter educational requirements.

What would you say to the mortgageprofessional to remain positive in

mortgage professional continued from page 15

today’s marketplace?When you break it down in its most sim-plistic form, we hold people’s handsand help them attain the Americandream. We give them that place, ahome that is their shelter, where theyraise their children, and where one day,when those children go to school, itmay become the source of equity forcollege education. Upon retirement,with a reverse mortgage, it could affordthem a second home or allow them tolive better in their retirement years.You are doing something noble, so treatit as such.

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There is no doubt that the housingindustry would have led us into adepression had the government notintervened with strong action duringthe past 12 months. Many are com-plaining that the government spent toomuch money and we will be paying forgenerations to come. However, notmany in the mortgage industry arecomplaining about the programs thatspecifically help the housing and mort-gage markets. Just as I am sure that notmany in the auto industry complainedabout the Cash for Clunkers Program.

With the year coming to a close, weare again focusing upon governmentalaction. With a pipeline of millions offoreclosures on the horizon, there is lit-tle doubt that the housing marketscould stand on their own without con-tinued government support. To thatend, the previous month held muchgood news in this regard:

The Fed released their statement aftermeeting for two days which indicatedthat conditions are “likely to warrantexceptionally low levels of the federalfunds rate for an extended period.”

Translation: Short-term rates are notgoing up anytime soon. Low rates arecritical to the housing recovery and,of course, the housing recovery is crit-ical to the recovery of our overalleconomy.

And that was not the end of the goodnews as Congress passed not only anextension, but an expansion of the taxcredit. The move to expand the credit tomove-up buyers is critical because thismarket has languished as the first-timehomebuyer markets have flourished sincethe beginning of this year. FromCNN/Money:

The legislation also would extend the$8,000 homebuyer tax credit to contractssigned by April 30 and closed by June 30.The credit was set to expire after Nov. 30.The legislation also created a $6,500credit for those who buy a home afterowning one for the last five years. Thatmeasure would apply to contracts signedby April 30 and closed by June 30. Thebill would raise the adjusted grossincome cap to $125,000 for single filersand $225,000 for joint filers.

Congress also passed an extension ofthe Economic Stimulus Act’s loan limitsfor high-cost areas. This means the“$729K” limits will stand for anotheryear. This action also is critical becausewhile the government has propped upthe conforming and government mar-kets with heavy loan purchases, thejumbo markets continue to suffer. Inorder for the housing market to recover,we need all segments of the market tobe firing on all cylinders.

Does this mean that the challengeis over? Unfortunately, no. Not onlyare we dealing with a huge pipeline offoreclosures, the Fed is still on sched-ule to exit the purchases of mortgage-backed securities (MBS) at the end ofthe first quarter of next year. Thosewho understand the markets knowthat the Fed’s control of short-termrates does not extend to long-termhome loan rates. Many are predictinga poor reaction to the Fed’s strategy.Here is what HousingWire had to sayon this issue:

Celebrated bank analyst MeredithWhitney put out an industry note thatzeroes in on the Fed’s MBS purchaseprogram. She calls the “Great Exit” thebiggest market and bank risk over thenext four months. Let’s hope it emergesinto the public view over the next fourmonths, because it could be, if the Fedexits as planned at the end of first quar-ter 2010, the biggest kick in the stomachhousing and financial markets havegotten since surviving the near totalshut down of credit last fall.

We checked with our resident sec-ondary expert, Eric Holloman, founder

Government Intervention

“Until the default rates movedown to acceptable and tolerablelevels, the markets cannot stand

on their own and government aidis critical. If the governmentleaves before the markets arehealthy, then we are talking

about a huge risk.”

continued on page 20

Era of the Mortgage Professional The mortgage industry is at the epicenter of the national financial crisis. Thishas caused damage to our reputation. It is our responsibility to restore lostconfidence and credibility. We should not waste energy thinking the irrespon-sible lending practices of the past will return. Those days are gone forever. Abold and better way is pushing up through the rubble like a phoenix risingfrom the ashes. Welcome to a New Era of the Mortgage Professional.

Regulatory activism and marketplace realities have spurred a top-to-bot-tom reformation of our industry. The old “safety and soundness” lendingprinciples, once the domain of the depository institutions, are beingpushed down into the non-bank mortgage channel. Skeptical consumers,emboldened by the financial crises, are taking control of their financialwell-being, demanding more for less with no tolerance for incompetenceor infidelity. And now we have a specific federal law driving this reforma-tion: The SAFE Act.

The SAFE ActOn July 30, 2008, as a central part of the Housing and Economic Recovery Act(HERA), President George W. Bush signed into law the Secure and Fair Enforcement(SAFE) for Mortgage Licensing Act. Through its creation of the Nationwide MortgageLicensing System and Registry (NMLS), this landmark legislation sets forth educa-tion, testing and other professional integrity standards. The SAFE Act sharplydefined and established a new official designation for the originating profession:The Mortgage Loan Originator (MLO).

Under the SAFE Act, every MLO in the country (yes, including thoseemployed by depository institutions) must register with the NMLS, obtain aunique identifier (UI) or an individual ID, and submit to fingerprinting for acriminal background check.

Additionally, all MLOs not employed by a depository institution mustobtain and renew a license from their state. State licensure will require theMLO to satisfy significant education mandates, pass rigorous state test com-ponents, submit to credit examination and meet other standards necessaryto command the confidence of the community. Last, but not least, the rumoris true: Every non-depository MLO must pass a rigorous 100-question nation-al test. Everyone must pass the test. There are no grandfather provisions.

SAFE purposeCongress established the NMLS for the registration and licensing of MLOs forthe following reasons:

� Database: To provide a comprehensive licensing and supervisory databasewith uniform application and reporting;

� Licensing: To streamline the licensing process, improve information flowand reduce the regulatory burden on multi-state entities;

� Public exposure: To provide for tracking of MLOs across state lines and giveconsumers access to the employment status and disciplinary actionsagainst MLOs; and

� Accountability: To enhance consumer protections by requiring MLOs to actin the best interest of the consumer and enforce responsible lendingbehavior.

In an interview with Chris Kukla, consumer advocate attorney for theCenter for Responsible Lending (CRL), I asked what his organization was fight-ing for. He replied: “We want to stop lending abuses, protect consumers at theorigination table through greater transparency and force the industry to lend

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of_____%. This credit reduces your settle-ment charges.” Note: The amount of thecredit is listed as a negative number.

(2) If points are paid to the lender,check the box that says, “You pay acharge of $_____for this interest rateof_____%. This charge (points) increas-es your total settlement charges.” Note:The amount of the charge is listed as apositive number.

Note: At the bottom of this subsec-tion is a line designated as Line A–“YourAdjusted Origination Charge.” Theamount disclosed here is the sum of the“Our origination charge” and the creditor charge for the specific interest ratechosen.

� Your Charges for All Other SettlementChargesThis subsection consists of variousblocks:

� Block #3: The fees disclosed arethose fees for which the loan orig-inator chooses the serviceprovider. The individual servicesand the charges for those servicesare disclosed and totaled in theright hand column.

� Block #4: Is for title services andlender’s title insurance. Thelender’s title insurance premiumis included in this total.

� Block #5: Includes the owner’stitle insurance fees, regardless ofwho pays for it.

� Block #6: Is for the required servicesfor which the borrower can choosethe service provider. The borrowercan choose a service provider from alist that the loan originator may pro-vide, or the borrower can shop for aprovider on his/her own.6

� Block #7: Discloses the total of thegovernment recording charge.

� Block #8: Discloses the total ofthe transfer taxes.

� Block #9: Discloses the initialdeposit for the escrow account (ifapplicable).

� Block #10: Discloses the amount ofdaily interest charges from the dateof settlement until the first day ofthe next month of the first day of thenormal mortgage payment cycle.Note: Also discloses the per diemcharges, the number of days forinterest charges, and the estimateddate of settlement.

� Block #11: Discloses the types and

ous RESPA requirements before (i.e.,new monthly payment at first interestrate change date or maximum monthlypayment for a variable rate loan).Review carefully.

� Escrow account informationThe Escrow Section discloses if the orig-inator requires an escrow account to beset up to pay such items as hazardinsurance, real estate taxes, and soforth. Note: The monthly paymentamount disclosed here includes onlyprincipal, interest, and any mortgageinsurance, but does not include taxesand insurance (escrows).

� Summary of your settlement chargesThis section contains a summary of (A)the adjusted original charge, (B)charges for all other settlement servic-es, and (A + B) the total estimated set-tlement charges. Detailed informationabout the charges appears on Page 2.The amounts are summarized on Page1 for the borrower’s convenience.

� Understanding your estimated set-tlement charges—Page 2� Your Adjusted Origination ChargeThis subsection consists of blocks.

� Block #1: The loan originator dis-closes all the charges that theloan originator will receive,except for any charges for the spe-cific interest rate chosen (i.e., thediscount points).4

� Block #2: Discloses the credit orcharge (points) for the specificinterest rate chosen.5

� Transactions not involving a broker.There are two choices:

(1) Lender discloses the points or yieldspread premium as part of the origina-tion charge in Block #1. If the lenderchooses this approach, then in Block #2,the lender should check the box that says,“The credit or charge for the interest rateof_____% is included in ‘Our originationcharge.’ (See item one above)”

(2) Lender discloses the points or yieldspread premium as a separate line itemin Block #2. If the lender chooses thisapproach, then in Block #2, the lendershould follow the instructions for trans-actions involving brokers.

� Transactions involving a broker.For transactions involving brokers, bro-kers do not have the option of using thefirst check box in Block #2 (to indicatethat the credit or charge for the interestrate is included in the origination charge).Brokers must check either the second orthe third check box under Block #2.

(1) If there is a yield spread premium beingpaid, check the box that says, “You receivea credit of $_____for this interest rate

regulatory compliance outlook continued from page 17

continued on page 23

jurisdictions. There is, however, a dis-tinction in the law between owningthe loan and having a right to enforcethe note and that distinction canmake the difference between whethera foreclosure action is proper or not.In the past, courts allowed parties tofile foreclosure actions based on theassertion that those parties had theright to enforce the note. I’ve foughtthese actions by arguing to the courtthat the foreclosing party needs toprove ownership, which is more thanjust a right to enforce the note. Ianticipate that more courts in 2010will recognize the distinction betweenthe right to enforce the note and theright to foreclose the mortgage andmore foreclosure actions will be dis-missed as a result.

Mortgage modificationsand other foreclosurealternatives will becomescarceI believe that it will be harder to avoidforeclosure in 2010. If a borrower isseeking a mortgage modification, theywill probably be talking to one

department in the bank. If they areseeking a short sale, they will likely bespeaking with a different department.Foreclosures are handled by yetanother department in the bank. Theproblem is that the different depart-ments don’t talk to each other andwhat one department is doing doesnot affect the other. This means that,for example, borrowers could be work-ing on a modification with the lossmitigation department, only to findthat the foreclosure department hashad them served with a foreclosuresummons. A pending modificationapplication does not prevent the bor-rowers from losing their house in fore-closure.

In general, I’m looking towards 2010as a year in which foreclosures will con-tinue at the current pace, but that bor-rowers will have more success in keep-ing the foreclosure wolves at bay.

Christopher G. Brown is foreclosure defensepractice chair for the Westport, Conn. lawfirm, Begos Horgan & Brown LLP. He maybe reached by phone at (203) 226-9990 ore-mail [emailprotected].

predictions for 2010 continued from page 18

of RateLink. Eric indicated that heshares these fears. “The Fed must even-tually exit from this market and howthis plan plays out could very well sig-nificantly affect rates and thus our pro-duction next year.” If you would like arecording of a Webinar in which Ericgives a secondary update, e-mail us [emailprotected].

We are walking a tightrope right now.The reason the mortgage markets can-not exist on their own is the fact thatmortgages are not seen as a safe invest-ment. Until the default rates movedown to acceptable and tolerable lev-els, the markets cannot stand on theirown and government aid is critical. Ifthe government leaves before the mar-kets are healthy, then we are talkingabout a huge risk. The tax credit will nothelp if rates move up significantly,while lenders are still underwriting tofind gold in every file.

What does this mean for you? Ratesare low now. The tax credit is expanded.

Foreclosures will keep a lid on priceincreases. We suggest you market theseconditions heavily to your sphere. Thismay be the last chance for many inAmerica to obtain bargain real estateprices with super low rates and a gov-ernment kickback. There are not manytimes in our history when the condi-tions will be so ideal for millions to pur-chase. You may want to consider mar-keting right through the holiday season… and hope that the Fed makes theright decision so that the momentumcontinues through the New Year!

Dave Hershman is a leading author forthe mortgage industry with eight booksand several hundred articles to his cred-it. He is also head of OriginationProMortgage School and a top industryspeaker. If you would like to stay aheadof what is happening in the markets,visit ratelink.originationpro.com for afree trial or e-mail [emailprotected].

the secondary market overview continued from page 19

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the strategic application of technologyin financial services based on a surveyof senior mortgage credit risk man-agers who collectively account for 58percent of first mortgage outstandingdebt.

Findings show that many moreloan servicers are moving toward astronger implementation of analyti-cal tools, with half saying they arecurrently implementing a solution,and another 20 percent evaluatingsolutions with the intent to imple-ment them in the next six to 12months. Executive management is tak-ing note: 72 percent of survey respon-dents said their management has tight-ened its focus on credit risk manage-ment; the same number said they havehad organizational restructuring toincrease focus on distressed assets.

In a risk-averse environment,lenders have responded with moreconservative loan underwriting prac-tices, yet these practices are too oftenapplied to all loan applicants, puttinglenders in jeopardy of losing theirbest clients. The report suggests thatuse of customer segmentation analyt-ics will be critical in order to keepclients and maintain profitability. Yetwhile most institutions have begun toincrease spending on analytic andreporting tools, only 24 percent havesignificantly increased their IT spend-ing budgets.

Additionally, with the high demandfor loan modifications, servicers areunder increasing pressure to executeunprofitable transactions in order tokeep people in their homes, all thewhile trying to manage their ownportfolios to be lucrative enough tostay in business. In these cases, adapt-ing and adding technology for loanmodification programs can be critical.Many are already implementing thesetechnologies, with two-thirds usingnet present value software to auto-mate required borrower eligibilityguidelines for government loan-modi-fication programs. Yet only 36 percentare using decisioning technology tocompare alternative loan forbearanceprograms and decide on the optimalprogram option.

“We’ve gained invaluable experienceworking with mortgage lenders and ser-vicers through our FICO MortgageRecovery Initiative (FICO MRI),” saidJoanne Gaskin, FICO director of mort-gage scoring solutions. “We commis-sioned this study to more fully under-stand the loan remediation challengesour clients face, and to gather bestpractices for our clients to help themimprove portfolio profitability andreduce the loan modification re-defaultrate. By sharing what we’ve learned,FICO can work even more effectivelywith our clients, bringing the power of

of permanent HAMP modificationscompleted for Ocwen customers,” saidOcwen President Ronald M. Faris. “Webelieve it’s better for our business, andbetter for struggling homeowners, forus to do the difficult, detailed re-under-writing work up front. We’re committedto modifications that stick; those arethe ones that help homeowners for thelong run, mitigate the mortgage crisisand, importantly, generate incrementalrevenue for our shareholders.”

Ocwen was one of the first servicersto begin executing modifications underHAMP and has pledged to work withthe Obama Administration to imple-ment and improve its foreclosure pre-vention efforts.

“Sustainable modifications are thekey to a lasting solution to the dauntingforeclosure crisis which threatens somany families,” said Ocwen Chairmanand Chief Executive Officer William C.Erbey. “We applaud and support theAdministration’s efforts to assist home-owners with unaffordable mortgages.”

Ocwen recently convened more than30 representatives of grassroots andnational housing advocacy organiza-tions for a roundtable discussion toshare new ideas and insights related topreventing foreclosures and helpinghomeowners. The Ocwen and commu-nity groups’ representatives agreedupon a number of imperatives, includ-ing: Working closely with Treasury toarrive at more flexible guidelines somore distressed homeowners qualify formortgage modifications under HAMP;developing a national HAMP awarenessand information campaign to increasehomeowner outreach; focusing moreintensely on homeowners who areunemployed or under-employed andthus need state or federal assistance toqualify for mortgage modifications; agreater collaboration between servicersand grassroots groups in providing real-time solutions for homeowners, includ-ing being more proactive about helpingborrowers early on, before they face theprospect of foreclosure.For more information, visit www.ocwen.com.

FICO publishes study:Best practices in creditrisk management toincrease profitability

With minimal resourcesavailable to them, few mortgage servicers

have invested sufficiently in data manage-ment and predictive analytics to ade-quately identify borrowers most atrisk. But this appears to be changing,according to new research conductedby TowerGroup and distributed byFICO. The study is published in theFICO Mortgage Credit Risk Manager’sBest Practices Handbook. It assessesthe current state of mortgage creditrisk management best practicesamong leading institutions, analyzing

news flash continued from page 17

continued on page 22

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analytics and automation to helphomeowners receive the most appropri-ate loan treatment and help preservehomeownership.”For more information, visit www.fico.com.

Report finds opportunitiesfor commercial real estate investors in current market

Commercial real estateindustry investors andprofessionals remaindecidedly negative,colored by distress

over prospects for an extended period ofanemic demand and costly de-leveraging,according to respondents of the EmergingTrends in Real Estate 2010 report, releasedby PricewaterhouseCoopers LLP and theUrban Land Institute (ULI).

Survey respondents predict that com-mercial real estate vacancies will contin-ue to increase and rents will decreaseacross all property sectors before themarket hits bottom in 2010 and projectsvalue declines of 40 percent to 50 percentoff 2007 market peaks. Survey partici-pants also believe that 2010 and 2011 willpresent generational opportunities forinvestors to buy at or near cyclical lows.

“Our report participants find that asense of nervous euphoria is growingamong liquid investors who can makeall-cash purchases,” said ULI SeniorResident Fellow for Real Estate FinanceStephen Blank. “Those that are patient,daring and selective could score gener-ational bargains on premium proper-ties from both distressed sellers andbanks that are clearing out unwantedbad loan and real estate owned portfo-lios. However, once the property mar-ket recovery begins and gains traction,likely before 2012, any rebound couldbe restrained by a lackluster economyand rising interest rates.”

The survey data also indicates thatinvestors believe that capital will slowlybegin to flow back into commercial realestate markets by the end of 2010, ledby all cash investors seeking qualityassets. The debt markets will start torebound too, but remain “far from nor-malized” in the wake of unprecedentedde-leveraging. Any lending will be con-servative, expensive, and extended onlyto the most-favored banking relation-ships. REITs, private equity funds, andeven refashioned mortgage REITs willstart to provide loans to battered bor-rowers but at a steep price.

“For 2010, our report finds that

news flash continued from page 21

• Daily updated mortgage industry news• Industry blogs• Write your own blog

• Find loan programs• Discover local and national events• Get access to video

investors will need to time the cycle andonly cash-buyers will benefit from theemerging opportunities,” said Tim Conlon,partner and U.S. real estate sector leader,PricewaterhouseCoopers. “Investors willneed to be patient and transaction triggerpoints will be improving job numbers, vis-ibility into asset pricing and stepped uptenant deals. Equity investors will need tofocus on quality assets and expect to holdfor at least a five to seven year period dur-ing the recovery, allowing fundamentals toslowly improve.”

Survey participants believe that themarkets performing well before thecrash should perform better comingout of it and the laggard markets willcontinue to suffer. The report finds thatinvestors will continue to favor globalgateway markets on the East and WestCoasts. Cities and urbanizing infill sub-urbs with 24-hour attributes, brainpow-er centers that offer universities andhigh-paying industries, as well as ‘barri-er to entry’ markets where geographicconstraints limit development and helpcontrol overbuilding will be top marketperformers.

According to the survey, Washington,D.C. ranks number one as the “reces-sion-proof” city. Value declines havebeen less than other markets asemployment is buffered by the federalgovernment. Long-term confidenceholds for New York and Boston, despitefinancial industry downsizing. WestCoast gateways, such as San Francisco,Seattle and Los Angeles, have all suf-fered ratings declines, but remainamong the survey’s top 10 major mar-kets. Texas markets continue to showstrength after years languishing in thesurvey basem*nt.For more information, visit www.uli.orgor www.pwc.com.

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:[emailprotected]

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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borrower or the transaction, thatwas relied on in providing theGFE and that changed or wasfound to be inaccurate after theGFE was provided.

• New information particular to theborrower or the transaction, whichwas not relied on in providing GFE.

Exceptions:(1) GFE expires (i.e., exceeds the 10 busi-ness days disclosed on page 1 and the bor-rower requests another initial GFE); and

(2) Interest rate dependent fees, if theloan has not yet been locked.

� Using the tradeoff tableThe table in this section is meant tohelp the borrower compare the transac-tion disclosed on the GFE with similartransactions:

� The same loan with lower settle-ment charges but a higher interestrate.

� The same loan with a lower inter-est rate but higher settlementcharges.

Note: Loan originators have theoption of completing this section.

� Using the shopping chartThe shopping chart section is meant to givethe borrower the ability to compare theinformation from this GFE with the informa-tion from the GFEs of other loan originators.

� The “This loan” column is completedby the loan originator. Columnslabeled “Loan 2,” “Loan 3” and “Loan4” would be completed by the bor-rower by hand as the borrower shopsaround with other loan originators.

� If your loan is sold in the futureThis section informs the borrower that thelender may sell the loan after settlement.

amounts of homeowners insurancethat will be required to be paid bysettlement and totaled in the righthand column.

Note: At the end of this subsection isa line designated as B – “Your Chargesfor All Other Settlement Charges.” Theamount disclosed here is the total of allthe charges under “Your Charges for AllOther Settlement Charges.” Lines A andB are totaled together to disclose the“Total Estimated Settlement Charges.”

� Understanding which charges canchange at settlement—Page 3This section gives information to theborrower to help the borrower under-stand what to expect for final chargeson the HUD-1 Settlement Statement.There are no completion fields in theUnderstanding section; therefore, it isimportant to place each fee in theappropriate category. Charges fall intoone of three categories:

1. Charges that cannot increase atsettlement.2. The total of these charges canincrease up to 10 percent at settlement.3. These charges can change at settlement.

Note: These charges can be under-stood as three types of tolerances(respectively):7

1. Zero Tolerance2. 10 Percent Tolerance3. No Tolerance

� The loan originator is bound by theinitial GFE and the tolerancesdescribed in the Understandingabout which charges can change atsettlement. There are a limitednumber of circ*mstances underwhich a revised GFE may be given.The revised RESPA rules refer to thissituation as a “changed circum-stance.” If a changed circ*mstanceallows for re-disclosure of the GFE,then the charges from the re-dis-closed GFE will be used when com-paring the GFE charges with theHUD-1 charges. This comparison isfound on page 3 of the new HUD-1.8

� Note: the rule also provides a reme-dy for tolerance violation (and HUDitself has acknowledged that fee tol-erance may be difficult to meet attimes): Violations of fee tolerancecan cured by reimbursing borrowersthe amount by which the tolerancewas exceeded. (Reimbursem*ntmust be made at settlement orwithin 30 days of settlement.)

� A “changed circ*mstance” includesthe following:

• An act of god, war, disaster, orother emergency.

• Information particular to the

regulatory compliance outlook continued from page 20

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National Mortgage Professional Magazinerecently had an opportunity to follow upwith National Association of MortgageBrokers Immediate Past President MarcSavitt of The Mortgage Center inMartinsburg, W. Va. to discuss his trip toNew York City and the offices of New YorkState Attorney General Andrew Cuomo.The purpose of the trip was to present theOffice of Attorney General Cuomo with120,000-plus signatures from consumersand the mortgage industry agreeing that

the Home Valuation Code of Conduct(HVCC) is harmful to the housing marketand detrimental to the home buyingprocess. Included among the signatures,which were hand-delivered in 35 boxesby a group of mortgage professionalswho made the trip from as far as Virginia,were letters and HVCC “horror stories”from consumers, appraisers, real estateagents and mortgage brokers.

“We have one state Attorney Generalwho appears to be promulgating a ruleor regulation across the entire country,”said Savitt.

Along for the ride with Savitt wereFrank Garay and Brian Stevens, co-cre-ators of Think Big Work Small. BothFrank and Brian have used their Website, ThinkBigWorkSmall.com to discussthe HVCC and present the industry’s viewon how the HVCC should be haltedimmediately through the duo’s dailyvideo updates. Frank and Brian served asa driving force behind soliciting the

120,000-plus signatures from both indus-try professionals and consumers.

Savitt’s day in Manhattan started at thestudios of Fox News for a live interviewwith the anchors of Fox Business News todiscuss the harmful effects of the HVCC.Savitt described the people at Fox News asvery helpful in wanting to get the messageout on the negative impact of HVCC.

“The Attorney General’s Office is look-ing at a lot of opposition to this rightnow,” said Savitt. “They really don’t have

a lot of friends out there, soit would be in their bestinterest to create some typeof modification or revisionto this Code so that every-body can live with it. Theconsumer will still be pro-tected, but at the same time,it will not harm the con-sumer or small business.”

After the Fox interview,Savitt and the contingent ofmortgage professionals ven-tured off to Broadway to deliv-er 35 boxes of letters and peti-tions to Cuomo’s office. Thedelivery was covered by anoth-er major media outlet, CNBC.

Savitt, along with Garay and Stevens,went up to the offices of the New YorkState Attorney General and had a meet-ing with two of Cuomo’s senior attor-neys. The meeting was the fourth bySavitt with Cuomo’s office since May.

“This, by far, was the most productivemeeting,” said Savitt. “The first two meet-ings, of course, we tried to get them not toimplement the HVCC. I met with them last

NAMB Immediate Past President Marc Savitt andthe group of mortgage professionals outside theoffices of New York State Attorney General AndrewCuomo in Manhattan

May after the Code was in effect forabout three weeks. They weren’tinterested in hearing anything anddidn’t think there were going to beany problems with it.”

In addition to the petitions, Savittalso presented a study conducted byInterthinx, which cited mortgagefraud in property valuation havingincreased 25 percent from the sec-ond quarter of 2009 to the thirdquarter of ‘09, an overall increase of46 percent from the previous year.The third quarter of 2009 represent-ed the first full quarter that the HVCC hasbeen in effect.

“The Attorney General’s Office nowacknowledges that there are problemswith HVCC,” said Savitt. “They want tohave dialogue with us to correct theseproblems. We told them that the onlyway to get rid of this list of problems isto have the brokers back in charge ofthe ordering process.”

The two sides agreed to meet againbetween Thanksgiving and the end of theyear, and both sides will come to the tablewith options to get the HVCC issues resolved.

“To get a meeting like this, you usuallysend three or four e-mail requests that goignored,” explained Savitt. “The AttorneyGeneral’s Office is deathly afraid of negativepress, so the final e-mail I sent stated thatwe were going to the press with this issueand that they would be contacted for aninterview. Within three minutes of sendingthat final e-mail, on a Saturday afternoonno less, I received correspondence from asenior attorney with the Attorney General’sOffice granting the meeting.”

In February of 2009, NAMB, with thesupport of Baker & Hostetler LLP, filed alawsuit with the United States DistrictCourt for the District of Columbiaagainst then Federal Housing FinanceAgency (FHFA) Director James B.Lockhart over the HVCC included in theappraisal agreements between theFHFA, Fannie Mae and Freddie Mac(GSEs), and Attorney General Cuomo.

“They never followed the AdministrativeProcedure Act, which was the basis of ourlawsuit against them,” said Savitt. “Theynever followed the proper procedures to

determine if harm would be caused tosmall businesses, consumers and others.The problem they are having right now is tokeep their Code in place, perhaps withsome modifications and revisions so thateverybody can live with this … the con-sumer will be protected and small business-es won’t be harmed.”

NAMB continues to update the mort-gage broker community through itsHVCC Resource Center section on theirWeb site, www.namb.org.

“One thing this issue has done is high-light the need for everybody to worktogether as a team,” noted Savitt. “That isthe only way we will accomplish not onlyfixing HVCC, but maybe future issues thatmay come down the road. We are living ina world today where people can’t go at italone … everybody has to work togetherfor the common good of not only theindustry, but the consumer. Hopefully, thisis the beginning of that process and wewon’t be dealing with this much longer.”

Members of the group gather and prep for themeeting with reps from Cuomo’s office

Frank Garay (third from left) of ThinkBig Work Small is joined by some vol-unteers who wanted their voice heard inNew York City on the ills of the HVCC

Boxes containing petitions with120,000-plus signatures are unloadedfor delivery to Attorney GeneralCuomo’s office

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Informative Research and ValuFinders formpartnership

Informative Research,a provider of mort-gage credit informa-tion nationwide, and

ValuFinders, a provider of valuation serv-ices to national lenders and governmentagencies, have announced a strategicpartnership which provides seamlessintegration of their systems enablinglenders to maximize the best of bothcompanies’ core strengths. As a result ofthis partnership, lenders and brokers nowbenefit from a comprehensive onlineappraisal ordering and delivery service.

Specifically, clients of InformativeResearch will benefit from seamless inte-gration into ValuFinders AppraisalConcierge, an online appraisal orderingand delivery service that allows lendersto use a blind-draw system to randomlyselect certified and Federal HousingAdministration (FHA)-approved realestate appraisers. Used in conjunctionwith Informative Research’s comprehen-sive suite of mortgage credit informationservices, Appraisal Concierge enableslenders to easily stay in compliance withfederal guidelines including the HomeValuation Code of Conduct (HVCC).

“In today’s constantly changing mort-gage marketplace, accurate and timelyvaluation is critical,” said Brad Kelso, vicepresident of marketing at InformativeResearch. “Our business model is built onquality and superior customer satisfac-tion. Our customers are demanding alter-natives to appraisal management compa-nies due to their high fee structure andinexperienced appraisers. We respondedto meet our clients’ needs and we discov-ered the perfect partner in ValuFinders.”

With ValuFinders Appraisal Concierge,Informative Research customers canmeet HVCC requirements, source apprais-ers from a national network of certifiedappraisers, attach documents to orderrequests, coordinate and confirm thedelivery date and fee, and track ordersfrom inspection to delivery. The AppraisalConcierge service includes appraiserindependence, monitored communica-tions and automatic delivery of theappraisal to the lender, streamlining theprocess while ensuring compliance.

“We are extremely pleased to be part-nering with Informative Research, a com-pany who shares our passion and com-mitment to exceeding client expecta-

tions,” said Joe Williams, president ofValuFinders. “Since 1999, we have strivedto deliver the industry’s most compre-hensive and reliable suite of valuationand collateral risk solutions, backed bythe most trusted network of certifiedFHA-approved appraisers. We go to greatlengths to pay our appraisers full fees toensure our high standards for quality aremet each and every time.”For more information, visit www.informa-tiveresearch.com or www.valufinders.com.

Credit Plus pushes greeninitiative

Credit Plus Inc. hasannounced that support-ing documents to com-plete supplements cannow be directly uploaded

through its credit system. This new pro-cedure is an important step towards thecompany’s overall goal to adopt moregreen initiatives that have a positiveimpact on the environment.

“Credit Plus is determined to help pro-tect the environment,” said Greg Holmes,national director of sales and marketingat Credit Plus. “We are focusing on mak-ing the mortgage transaction as paperlessas possible and plan on rolling out addi-tional green efforts in the near future.”

Previously, when a loan officer wasworking on a file and the potential bor-rower stated that there was an inaccura-cy on his/her credit report, the support-ing document would have been faxed ore-mailed to Credit Plus. Now, there is ahyperlink from the trade line thatallows the document to be immediatelyattached to it in Credit Plus’ system.

Additionally, and since June of 2008, allof Credit Plus’ customers receive a one-page invoice with a link to a secure Website to review account details. This has sub-stantially reduced the amount of paperbeing utilized. The company estimatesthat it has reduced its paper usage by 30reams a month, which is the equivalent ofsaving nearly two trees every month.For more information, visit www.credit-plus.com.

Pro Teck moves to newHQ and unveils new logo

Pro Teck ValuationServices, a realestate valuation

provider, has announced a new corporate

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responsibly.” This is not a revelation.This is good business. We should take itto heart.

SAFE outcomeThe good news is that we will no longerbe competing against shortsightedopportunists with no commitment toprofessionalism; a higher-level playingfield of competition has been set.However, you must brace yourself: Thesenew standards demand excellence andwill challenge even the most experiencedoriginators. In the New Year, we’ll allhave to earn our place in this profession.All who fall short will be shown the exit.

My SAFE-smart positionWe must rethink our marketing impres-

sions to reposition ourselves as mort-gage professionals and consumer advo-cates. We are operating in a skepticalmarketplace looking for someone totrust. When we become the borrower’sadvocate, we will earn that trust, watchour business flourish and restore pro-fessional excellence to this business welove so much.

Paul Donohue, CRMS is a 23-year industryprofessional and founder of AbacusMortgage Training and Education. Paulserved on two NMLS working groups, estab-lishing the new national education proto-cols. Go to AbacusMortgageTraining.com tofind out more about your obligations fortesting, education and licensure, or call(888) 341-7767.

safe smart continued from page 19

Why you should attendThe number one reason you should attend this event is the satisfaction ofknowing you are doing your part to ensure that mortgage broker issues areheard on Capitol Hill. You are the best spokesperson for our issues. Your par-ticipation benefits you, the industry and your clients as a whole, by strength-ening the broker’s presence in the halls of Congress.

And if that doesn’t convince you, here is just one reason given a by pastattendee ...

Debate the Hottest Issues Affecting Your BusinessToday“I have been attending this conference for the past 10 years and each year revi-talizes my knowledge of how the political process contributes to the mortgageindustry. It is essential for NAMB members to discuss issues and make positivechange for mortgage brokers and their customers.”—John Marcell

Key Issues in 2010 Include:� Regulatory reform (RESPA, TILA, HVCC and more!)� The National Mortgage Licensing Act (SAFE Act)� The Consumer Financial Protection Agency (CFPA)� And much more!

It’s all happening now! Visit www.NAMB.org for details!

Hotel Accommodations Hyatt Regency Washington on Capitol Hill400 New Jersey Avenue, NWWashington, D.C. 20001Phone #: (202) 737-1234Toll Free #: (888) 421-1442

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account payments.” Unlike the GFE, thisarea of the HUD-1 gives the initialmonthly payment, which includes prin-cipal, interest, mortgage insurance (ifany), taxes and insurance (escrows).

Note: The area on the GFE correlatingto this are of the HUD-1 gives the dollaramount for the initial monthly pay-ment, including only principal, interest,and mortgage insurance (if any).

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 [emailprotected].

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 [emailprotected].

Footnotes1-HUD is publishing revisions to theSettlement Cost Booklet. This newbooklet must be used along with thenew GFE and HUD-1.2-For more detailed information,please review the following Appendicesfrom the RESPA regulation: AppendixA—Instructions for completing theHUD-1 and HUD-1A; Appendix C—Instructions for completing the GoodFaith Estimate (GFE).3-Lenders can choose to implement theGFE and HUD-1 earlier than Jan. 1,2010.4-All of these various charges (i.e., origi-nation fee, application fee, underwritingfee, etc.) and their impact on APR andSection 32 are all lumped together intothe “origination charge” for purposes ofdisclosure on the GFE and the HUD-1. 5-Completed in different ways, depend-ing upon whether a broker is involvedin the transaction.6-If the loan originator does provide alist of service providers, the loan origi-nator is held accountable for the accu-racy of the disclosed charges.7-The revised RESPA rule allows for theuse of an “average charge,” based onthe average charge for a class of trans-actions. For instance, averages from aspecific time period between, say, 30days and six months, given a commongeographic area, and the same loantype. The “average charge” must beused for all transactions within thatclass. The “average charge” rule wentinto effect Jan. 16, 2009.8-The only fees that may change arefees that were affected by the changedcirc*mstance.

The new HUD-1 and HUD-1A SettlementStatementsThe new HUD-1 (and HUD-1A) comparesthe fees disclosed on the GFE and the HUD-1 Settlement Statement. However, theHUD–1 Settlement Statement now consistsof three pages (the HUD–1A consists of twopages). It should be noted that HUD madesimilar revisions to both the HUD-1 andthe HUD-1A. Therefore, references hereinto HUD-1 apply as well to the HUD-1A.

Main sections of the new HUD-1:� Page 1: No substantive changes.� Page 2: Certain substantive changes.Lines now refer to Block numbers fromthe GFE. This is meant to help the borrow-er understand how the charges from theGFE are now populated on the HUD-1.

� Page 3: New page, with numeroussubstantive changes.

Top SectionThe top of the page has a comparison ofthe GFE and HUD-1 charges. Comparisonsare divided into three areas:

� Charges That Cannot Change� Charges That in Total Cannot IncreaseMore Than 10 Percent� Charges That Can Change

This part of the new HUD-1 is correlat-ed to the “Understanding” section dis-cussed above (Page 3 of the GFE), indicat-ing which charges can change at settle-ment. As noted above, the newUnderstanding section gives detailed infor-mation regarding which of the three areasis appropriate for a particular charge.

Note: In the subsection “Charges Thatin Total Cannot Increase More Than10%,” the GFE charges and the HUD-1charges are totaled (for those chargesthat fall into this category). If the HUD-1totals higher, the dollar amount of thedifference must be disclosed, along withthe concomitant percentage change.The change may not exceed 10 percent,without violating the 10 percent changelimitation in this category.

Bottom SectionThe bottom half of Page 3 provides a sum-mary of the loan terms, similar to the“Summary” on the GFE (see above). Thesection includes information about the ini-tial loan amount, loan term, initial interestrate, and periodic payment amount. Thereare also certain “Yes” or “No” questionsregarding whether or not the interest rate,loan balance and payment amounts mayincrease during the life of the loan, and ifthe loan includes a prepayment penalty ora balloon payment.

Any affirmatively answered itemrequires additional information, and spacesare provided for completing required infor-mation relating to that feature.

The final block contains the “Totalmonthly amount owed including escrow

regulatory compliance outlook continued from page 23

The Reverse Quarterback From Wall Street

Home Equity Conversion Mortgages(HECMs) and private reverse mortgages gavebirth to a new asset class, but the sharpfinancial minds on Wall Street missed thisseminal event for almost a decade. Then in1998, Lehman Brothers tapped a younginvestment banker to start its reverse mort-gage business, the first on Wall Street.

To understand the new industry andto plant Lehman’s flag in it,the banker ventured intoreverse country. First, heidentified the industry’skey players and assessedtheir needs: They neededcapital to grow. Second, heinitiated Lehman’s acquisi-tion of some jumbo propri-etary reverse loans fromTransamerica HomeFirst(THF), a reverse mortgagepioneer which was exitingthe business. The THFloans became the collater-al for the first reverse mort-gage securitization in theU.S. engineered by LehmanBrothers in 1999.

Third, calling on othertalents at Lehman andusing cash from the THF-LBassets (jumbo reverseloans) sale, the bankerhelped Financial FreedomSenior Funding Corporation(FFSFC … then a unit of Union Labor LifeInsurance Company [ULLICO]) to buy theorigination and servicing assets of THF, atransaction which propelled FinancialFreedom into the front ranks of reversemortgage lenders and servicers in the U.S.

Then, the banker envisioned and ini-tiated Lehman’s investment in FFSFC,Unity Mortgage, and other reverse mort-gage lenders, giving Lehman a strategicposition in the emerging industry, aswell as access to loans for jumbo reversemortgage-backed securities.

Craig Corn, head of MetLife Home

Loans’ reverse mortgage division, is theinvestment-banker-turned-industryexecutive who brought the U.S. reversemortgage industry to Wall Street andvice-versa, a reverse quarterback of sort.

Following his stint at Lehman, Cornjoined Financial Freedom as executivevice president with responsibility forwholesale/correspondent, capital markets

and secondary marketing.Twelve months later, heleft Financial Freedom tocare for an ailing parent.

Corn resurfaced as part ofthe transition managementteam at BNY Mortgage.When EverBank took overBNY Mortgage and createdEverBank Reverse Mortgage,Corn became a co-presidentof the company. In 2008,Metlife Bank boughtEverBank Reverse Mortgage,and Corn was named vicepresident and head of itsreverse mortgage business.

A 1987 accountinggraduate of MuhlenbergCollege, Craig and his wife,Laura, have four children.The following are hisreflections on the industryhe has helped to shape.

At Lehman Brothers in1999, you were part of the team that pio-neered the securitization of reversemortgages in the U.S. secondary market.What attracted you to reverse mortgagesas an asset class, and why did you com-mit to them? I had been involved in reverse mortgage-type products before joining LehmanBrothers in 1998. In the United Kingdom,I helped develop the market for sharedappreciation mortgages, a type of equity-release mortgage product, similar to

“Some investors under-stand it, but many

potential investors haveyet to purchase a reversemortgage-backed secu-rity, so there is much

education ahead.”—Craig Corn, VicePresident, Head ofReverse Mortgages,

Metlife Bank

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

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logo and the move of its corporate head-quarters. The new logo is part of a largerrebranding project. With record growthover the past few years, including beingrecognized in the Inc. 5000 as the 12thfastest-growing privately-held real estatefirm in the United States, Pro Teck saw theneed to ensure its culture and purposewere clearly articulated to a growing fam-ily of employees, vendors and clients. Therebranding effort will sharpen Pro Teck’smission and message.

“Pro Teck’s shift to a new look symbolizesthe accuracy, service and expertise we deliv-er to our customers. Our focus is to providethe most accurate real estate valuations,custom configured to meet the businessneeds of originators, servicers, investors andunderwriters,” said Tom O’Grady, chief exec-utive officer of Pro Teck. “We believe thenew logo captures the spirit of how Pro Teckeffectively delivers its services.”

Pro Teck will also be moving its corpo-rate headquarters to a new building thatwill more than double its current space.

“Success has made this move neces-sary,” said O’Grady. “Fortunately, wewere able to find a new home less thana half mile from our current location,making the transition seamless to ourcustomers and employees. The new siteprovides an excellent working environ-ment for our staff, and will allow us tomeet the future needs of our clients.”For more information, visit www.protk.com.

NAR announces techacquisition of LPS RealEstate Group

The National Associationof Realtors (NAR) hasacquired technology tocreate a database ofall properties in the

U.S. The technology acquisition includeslicensed data and secured data aggregationservices from LPS Real Estate Group, a whol-ly-owned subsidiary of Lender ProcessingServices Inc. NAR will use the assets to devel-op the Realtors Property Resource (RPR), aparcel-centric information database cover-ing all of the more than 147 million proper-ty parcels in the country as a resource forNAR members. NAR is planning to launchRPR in the second quarter 2010.

“Realtors are the first, best source forreal estate information, and the RPR isanother emphatic feature to thatresource,” said NAR President CharlesMcMillan, a broker with Coldwell BankerResidential Real Estate in Dallas-FortWorth. “RPR will give Realtors nationwidedata on all properties at their fingertips sothey can respond quickly to consumersinterested in residential and commercialreal estate. This is exciting news and a ter-rific NAR member benefit. NAR is commit-ted to keep Realtors central to the trans-action and to the buying and selling expe-rience with their clients and customers.”

The management team of RPR includesChief Executive Officer Dale Ross, co-founder of the Metropolitan Regional

Information System; President MartyFrame, former general manager ofCyberhomes; Senior Vice President ofIndustry Relations Mona Steen, former sen-ior vice president with Cyberhomes; andJeff Young, NAR director of the RealtorsProperty Resource and 2008 president ofthe Michigan Association of Realtors.

RPR will provide nationwide access topublic record information, such as taxand assessment data, liens, zoning, per-mits, environmental information andinformation on neighborhoods, schooldistrict and community demographics,along with advanced search features forproperty searchers, as well as market-to-market comparisons and referral oppor-tunities not currently available.

“These acquisitions will allow Realtorinterests to control the program and thecontent,” said NAR Chief Executive OfficerDale Stinton. “Realtors need to respondquickly to today’s tech-savvy consumers,and the RPR provides a means for multiplelisting services (MLS), commercial informa-tion exchanges (CIEs) and real estate broker-age business models to support the Realtorcommunity, rather than requiring Realtorsto purchase data aggregated by third par-ties. RPR is not a national MLS, and will carryno offers of cooperation and compensation.It is a private, NAR members-only benefit.The assets acquired by NAR will be directedthrough a wholly owned subsidiary corpora-tion, Realtors Property Resource LLC.”

RPR will develop business strategies tomake it affordable and feasible for NARmembers, and will complement, not com-pete with, MLSs and CIEs. While many MLSand CIE systems provide a range of servic-es, no two are alike. Brokers are lookingfor tools that support their agents acrossmultiple markets with similar service lev-els and access to robust and valuabledata. RPR is designed to support local MLSand CIE models to create a common expe-rience for agents and brokerages.

“We’re honored to have been selectedby the National Association of Realtors toprovide technology, data and other servic-es for the RPR,” said Jay Gaskill, president ofLPS Real Estate Group. “Being involved withsuch a transformational industry initiativeserves as an endorsem*nt for our companyand the premier products and services weprovide to MLSs and associations, brokers,franchisors and sales associates.”For more information, visit www.realtor.orgor www.lpsvcs.com.

Equifax acquires RapidReporting

Equifax Inc. hasannounced that

it has acquired Rapid ReportingVerification Company, a privately-heldnational provider of IRS tax transcript infor-mation and Social Security Numberauthentication services. The addition ofRapid Reporting will enhance Equifax’sability to provide lenders with improved

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A few months ago, I wrote metaphorical-ly about the C-level executive who waslooking out over the landscape of theindustry from a high-rise corporateboardroom window pondering thestorm clouds that were coming at theindustry, and therefore, at their compa-ny. It is true that as C-level executives, wespend most of our time looking external-ly at the risks that could threaten ourbusiness. However, often overlooked arethe hidden internal risks that can sinkour “boats” … and there is nothing likethe F-word that can do just that.

For the mortgage lender, there is nogreater internal risk to a company’s sur-vivability than fraud. Using that veryword as an acronym, allows me to high-light five areas every C-level executiveshould consider when examining inter-nal risks. They are as follows:

FinancialsRepurchasesAccountingUnderwritingDue diligence

As a consulting firm with clientscoast-to-coast, it is in these five areaswhere we see internal risk that hasproven life-threatening to many mort-gage companies.

FinancialsTrusting in inaccurate or even fraudu-lent financials has been the undoing ofmany companies. In today’s world ofcomputerization, it isn’t surprising thatvirtually every mortgage company usessome type of accounting software sys-tem to generate financial statements.Of all the software systems in the mar-ket, the one we see the most is Intuit’sQuickBooks. It is not because it is thebest system … far from it. That said, itcan and does work for thousands ofmortgage companies today. No matterwhich system the company chooses, itcomes down to the old acronym “GIGO”(Garbage In, Garbage Out).

C-level executives need accuratefinancials to make critical business deci-sions. “Manage by the numbers” is theonly way to effectively manage any busi-ness. Yet, most C-level executives are typ-ically not known for their strongaccounting skills. They are more entre-preneurial by nature with strong intu-itive skills. But when you have someonewith strong intuitive skills trying to applythem to the financial management oftheir company, the results can often bedisastrous. This is the classic “flying bythe seat of your pants” gone bad.

It is analogous to flying an airplanewith a faulty compass. Not knowingwhere “true north” is, could lead to disas-ter. You don’t necessarily need to knowhow a compass works to navigate an air-plane. But you absolutely have to knowhow to read a compass. That may seemlike an over simplification, but it works.

Here’s where I am going with this …and I am going to expand upon this inthe “Accounting” section below. Toomany C-level executives have no clue iftheir financials are accurate. They areflying blind. When in this condition,they are unable to detect if there arethings going on “below the surface”such as someone embezzling moneyfrom the company. You would be sur-prised to know how much of that isgoing on in companies across America.

RepurchasesThere’s an old saying that has been cir-culated around the mortgage industryfor years that goes something like this… “A mortgage lendernever really ‘sells’ a loanto an investor … hemerely ‘rents’ it to aninvestor until somethinggoes wrong with the loanand then the investormakes them take theloan back”

Starting in 2007, morecompanies have been drivenout of business by investorrepurchase demands thanalmost any other singlething. It used to be that onlymortgage bankers had todeal with repurchasedemands. However, today,mortgage brokers are fac-ing repurchase demands also, it seemedlike this threat seemed to abate someuntil just recently. In recent weeks, wehave seen another round of repurchasedemands, but this time, with moreincreased intensity than ever before. Thatold saying seems to be more true todaythan ever before.

The easiest and best way for a C-levelexecutive to mitigate repurchase risk isto read all legal agreements beforesigning. If there is language in thoseagreements that represents undue risk,you have one of two choices: Not sign-ing it or changing it. Unfortunately,many C-level executives wait until theyare presented with a repurchasedemand to read the agreement. Believeit or not, you can mitigate this risk byinserting and/or deleting language inthe agreement. I know, to many of you

reading this, that seems like a fantasy. Most of the investors that are

demanding loans to be repurchased areclaiming fraud as the basis for therepurchase demand. One of the mosteffective ways to manage repurchaserisk is to closely manage your produc-tion operation. I don’t care how goodsomeone might be at negotiating con-tracts, no investor in their right mindwould agree to buy loans if the mort-gage company would not indemnifythat investor against fraud. We all knowthat the problem with many repurchasedemands is that the investor is claiming“fraud” when no fraud was committed.The solution to this problem may seemover simplistic and “Pollyannaish” butit really isn’t. And the solution is two-fold.

� Mortgage companies that originateloans must have a demonstrated“zero tolerance” policy against fraud,and the definition of fraud needs to

be clearly spelled out. � Investors need to stop

making ridiculous repur-chase demands andinventing “fraud” whereno fraud existed. Theinvestors who intention-ally do “forensic under-writing” to “discoverfraud” are about asmorally bankrupt as theoriginator that purpose-fully does something inthe origination processthat is fraudulent.

AccountingIn this article, we are pri-marily focusing on fraud

… and now specifically, accountingfraud that involves embezzlement. Thisis the worst nightmare of every busi-ness owner.

As a consulting firm, we are frequent-ly asked by C-level executives, usuallythe business owner, to come into theircompany because he or she has begunto suspect embezzlement has or is tak-ing place. And when we confirm thatthat there is or has been an embezzle-ment going on, more than 90 percent ofthe time it is being done by someonethat the C-level executive trusted implic-itly. There are not too many thingsworse than a trust violated. It can takeyears to recover financially and emo-tionally and many never do.

Accounting systems such asQuickBooks are too easily manipulated.Frequently, accounting “irregularities”

start off as innocent mistakes, but thenwhen someone discovers a way to “cre-atively” resolve the mistake, they alsodiscover how easy it is to manipulatethe system. Therefore, someone with a“motive” (i.e., short on cash to pay theirbills) can start “manipulating” thebooks to misrepresent the facts so theycan “borrow” some money from thecompany “on a short-term basis” to“make ends meet” until “some othermoney (miraculously) can be found.”This is regrettably becoming increasing-ly more common given our country’seconomy and the financial stressesbeing experienced by many.

To understand how accounting fraudcan be avoided, we first need to cometo grips with the core of the problem …at least most of the time. As I said ear-lier in the “Financials” section, most C-level executives are not known for thein strong accounting skills. To them,diving deep into transactional details ison the same level as having a root canal… they hate details. They love the say-ing, “Don’t tell me about the laborpains … just show me the baby!” Evensome of the biggest control freaksquickly delegate accounting details to atrusted “bean counter” type. However,the further away they get from thenumbers, the more susceptible they areto accounting fraud that then leads toembezzlement.

If you rely upon a Certified PublicAccountant (CPA) firm to do your annu-al audit, think again. In every situationwe are brought in where there wasembezzlement, the CPA firm that didthe annual audit failed to discover thefinancial fraud. All too often, the CPAfirm that does the audit can becometoo comfortable with those people inaccounting doing the fraud. It is a goodidea to change CPA auditors every sooften. You, as the C-level executive,should select the auditing firm. It is aconflict to have accounting staff selectthe CPA firm that does the audit.

In almost every situation where wewere called in to a company whereembezzlement has taken place, we dis-covered these common denominators.

� The embezzlement was done by ahighly trusted employee.

� It was someone they had known per-sonally for a long time.

� It had been going on for a fairly longtime.

� They trusted this person as if theywere family.

BY DAVID LYKKEN

“Trusting in inaccu-rate or even fraudu-lent financials has

been the undoing ofmany companies.”

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products, quality and services to helpthem better control fraud. Equifax will pay$72.5 million in cash for the company.

“More than ever, today’s lenders needbetter tools to determine creditworthinessbefore qualifying a loan,” said TreyLoughran, Equifax’s senior vice president,corporate development. “Rapid Reporting’scapabilities will allow us to offer lenders newand improved products, as well as moreadvanced fraud management services.”

Based in Fort Worth, Texas, RapidReporting offers products, includingIncomeChek, which provides IRS verifica-tion of income tax information, andDirectChek, which provides Social SecurityAdministration verification of social secu-rity numbers and also meets USA PatriotAct compliance requirements. Operatingthrough a secure Web-based portal, theseproducts offer financial institutions anefficient and cost-effective means to con-firm borrower identity and income.

“This transaction is a logical nextstep for our company,” said JayMeadows, president and chief execu-tive officer of Rapid Reporting. “Thecombination of Rapid Reporting’sassets with Equifax’s mortgage-relatedand employment verification serviceswill enable us to effectively mitigatefraud and offer more advanced prod-ucts for mortgage lenders.”For more information, visit www.equifax.comor www.rapidreporting.com.

MetLife Reverse named a Lenders One preferredinvestor

Lenders OneM o r t g a g e

Cooperative, a national alliance ofindependent mortgage bankers, hasannounced that MetLife Bank NA, asubsidiary of MetLife Inc., as its newestpreferred investor. The relationship willposition MetLife Home Loans’ ReverseMortgage Division to purchase coopera-tive members’ closed reverse mort-gages and fixed-rate home equity con-version mortgage (HECM) products.

“The reverse mortgage product isvery important to seniors looking forways to fund a comfortable retirement,as well as to our members, for whomthe reverse mortgage business repre-sents significant opportunities forgrowth,” said Scott Stern, chief execu-tive officer of Lenders One. “Reversemortgage lending is still a relativelyuntapped business channel for manylenders. We believe that MetLife’s experi-ence in this sector of the industry willsupport our members’ efforts to growtheir business in this market and allow anadditional way for them to provide need-ed products in the communities theyserve. We are so pleased to welcomeMetLife as a preferred investor, especiallybecause they are the top issuer of GinnieMae HECM mortgages in the country.”

“With maybe 10 investors in the coun-try buying reverse products, there are lim-

ited resources and knowledge available tolenders,” explained Michael Mooney,wholesale and correspondent sales direc-tor for MetLife Home Loans, a unit ofMetLife Bank NA. “Partnering withLenders One provides us a great opportu-nity not only to help those lenders alreadyoffering reverse mortgages, but also tohelp more small- to mid-sized lendersventure into this special market and sup-port them with an appropriate level ofunderstanding to be successful—and,above all, to help more seniors to remaincomfortably in their homes.”For more information, visit www.lender-sone.com or www.metlife.com.

Servicing Sourceannounces its acquisitionof Level 1 Loans

The Servicing Source,a division of theSextant Group Inc.and provider ofmortgage asset pric-

ing services and models, has announcedthe purchase of Level 1 Loans fromIntraPrise Solutions. Concurrent with thisacquisition, the Servicing Source will berenamed Level 1 Loans. IntraPriseSolutions will continue to provide techni-cal support for this new brand of assetvaluation models.

The mission of Level 1 Loans is tobring mortgage asset pricing as close to atrue level 1 valuation under FAS 157 aspossible. This means striving for quotedprices, of identical assets, in active mar-kets, at the measurement date. Level 1Loans will combine its proprietary cash-flow model with its newly-acquired loanlevel slotting and pricing engine.

“This system avoids the subjectivityinherent in the cashflow modeling reliedon by most valuation systems,” said Dr.Thomas J. Healy, CMB, president of Level1 Loans Inc. “It identifies what the activeloan market will pay for an identicalasset as of the measurement date.Pricing validity has been demonstratedfor both new and seasoned loans.”

Todd Fisher, president of IntraPriseSolutions, said “This system is madepossible by the marriage of Level 1Loans’ understanding of mortgage assetpricing and IntraPrise solutions technol-ogy that allows for the capture ofinvestor prices, the slotting of loan prod-uct against those prices, and the execu-tion and delivery of valuation runs.”For more information, visit www.L1Loans.comor www.intraprisesolutions.com.

UnitedTech acquires theassets of LandAmericaOneStop

UnitedTech LenderServices (UTLS) haspurchased the assetsof LandAmericaOneStop, which

reverse mortgages. So I was alreadyfamiliar with the reverse mortgage prod-uct when I returned to the U.S.

What attracted me to the reverse mort-gage was its newness. It was differentfrom anything I had seen before, and ithad potential for growth along withAmerica’s older population. Moreover,once we understood the favorable traits ofreverse mortgages (for example, that pre-payment was linked not to interest rates,but to mortality), we felt they would beattractive to investors once we overcometheir inherent lack of periodic cash flow.

How was the experience of creatingthe first reverse mortgage securitiza-tion for your investors, for LehmanBrothers, and for you?The experience of creating the firstreverse mortgage securitization was veryexciting. The team at Lehman Brothersknew that we were breaking new ground,and although the process of working withlawyers, accountants, rating agencies,investors, etc. was long and involvedmany late nights, there was a tremendousamount of pride in being involved in sucha ground-breaking transaction. In addi-tion, this securitization led to LehmanBrothers’ investments in the business bybuying several reverse mortgage compa-nies, including Financial Freedom.

Without a model, what were somestructural challenges you faced? Andhow did you overcome them? The great challenge in any securitization ofa new asset class, especially one as funda-mentally different as reverse mortgages, isthat there is no blueprint on how to do it.As a result, the team had to develop itsown model, which was vetted by seniormanagement, rating agencies, lawyers,accountants and investors. The most sig-nificant challenge was developing the rat-ing agency criteria for this asset class.Literally, we had to work with the ratingagencies for several months in developingcriteria for ratings, from Triple AAA rightthrough to Triple BBB. Since there was nohistorical experience to draw upon, the cri-teria were developed while we were figur-ing out the structure, modeling the trans-action, and convincing investors of theproduct’s merits.

How informed were investors aboutreverse mortgages as an asset class whenyou began? How educated are they today?Investors knew very little about reversemortgages when we started speaking withthem about this new asset class. As aresult, we not only had to educateinvestors about the investment structureand the nuances of the product, but wealso had to explain to them the origina-tion process, how the loans were serviced,what happens when a maturity event[borrower moves, sells, or dies] occurs.

It was an education of the entirebusiness. Today, investors are moreeducated about the product. We have

had many securitizations since 1999,both of HECM and non-HECM reversemortgages, worth billions of dollars.Some investors understand it, but manypotential investors have yet to purchasea reverse mortgage-backed security, sothere is much education ahead.

How has the secondary market forreverse mortgages evolved since yourpioneering work? Where is it headed?For the first six to seven years after thefirst securitization, only a handful ofreverse mortgage securitizations wereissued, and only with non-HECM propri-etary product. Two significant changeshave happened since then: The securiti-zation of HECM in 2006 and the develop-ment of Ginnie Mae’s HMBS program forHECM securitization, beginning in 2007.These events have changed the reversemortgage securitization market by mak-ing HECMs the underlying collateral.

From investors and rating agenciesstandpoint, the significance of the 2006HECM securitization and the 2007 GinnieMae HMBS stems from the elimination ofcrossover risk (thanks to Federal HousingAdministration [FHA] insurance) and thecertainty of pre-payment when loan bal-ance approaches 98 percent of FHA’smaximum claim amount (MCA).

Because HECM products dominatereverse mortgage origination, theirincreased use as collateral for GinnieMae’s securitizations gives investors theconfidence to consider reverse mort-gage-backed securities as a viable assetclass, knowing that securitizations willbe regular.

What are some lessons you havelearned about reverse mortgage-backed securities (RMBS) and investors’attitude toward them?The greatest lesson I have learned is thatwhen dealing with investors, it is usefulto discuss the importance of reversemortgages in the lives thousands of olderAmericans. Put differently, the humanelement should be a critical part of theinvestment discussion, but not necessari-ly the investment decision.

Obviously, investors control billions ofdollars and they are looking for assetclasses and investment structures thatprovide them with the appropriaterisk/reward characteristics. However,these investors also have parents andgrandparents, and they appreciate therole the reverse mortgages can play inhelping people live more comfortableand dignified lives in retirement.

In addition, they want to understandissues like fraud, cross-selling and coun-seling. Over the years, it has become clearto me that when dealing with investors,the discussion about the non-investmentside of the reverse mortgage business canbe just as important as the discussion ofthe investment in the product itself.

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ADAPT releases decisioning engine forstreamlined loan mods

A u t o m a t e dDecisioning AssetP e r f o r m i n g

Technologies (ADAPT) Enterprise LLC,provider of an on-demand software solu-tion for loss mitigation specialists, hasannounced the release of ADAPT, aWeb-based NPV Decisioning Enginedesigned to empower mortgage bro-kers, attorneys, community-basedorganizations and others to supportservicers by preparing loan modifica-tion packages that conform to thegovernment ’s Home AffordableModification Program (HAMP) guide-lines automatically.

The tool enables loss mitigation pro-fessionals to instantly determine theeligibility of a loan modification, basedon HAMP guidelines. The systemapplies the base NPV calculations anddefines the reduced rate, modifiedterm, step-rate along with principal for-bearance (if suggested), in real-time. Itthen produces the package for the ser-vicer’s review.

“Servicers are overwhelmed withthe volume of loan modificationsthey are receiving right now and cannot deal with them because they areso busy dealing with borrowers whoare closer to being foreclosed upon,”said Tom Sato, president of ADAPT.“This tool will allow loss mitigationspecialists to do the heavy lifting formortgage loan servicers, providingthem with deals that will meet HAMPguidelines, complete with the paper-work to move the deal through toclosing. This is the solution the indus-try has been looking for.”

ADAPT provides a secure pre-qualifi-cation application exchange, which istriggered by the end-user, enabling thehomeowner to enter data in a secureWeb environment. The tool informs allparties that the homeowner is requiredto enroll into a U.S. Department ofHousing & Urban Development (HUD)-approved housing counseling programautomatically if it detects that the back-end debt-to-income exceeds 55 per-cent. The system will automaticallyimport the borrower’s data into theFreddie Mac Loss Mitigation TransmittalSummary Form as soon as it automati-cally confirms borrower eligibility.For more information, visit www.adapt-now.com.

Freddie Mac announcespilot program to providestandby purchase agreements to warehouse lenders

Freddie Mac hasannounced a pilotto help lenders

obtain warehouse lines of credit withparticipating warehouse lenders. The ini-tiative is designed to help single familyand multifamily lenders (Freddie Macseller/servicers) find adequate ware-house lines of credit to fund loans forsale to Freddie Mac. Freddie Mac current-ly is working with warehouse lenderNatty Mac, a Guggenheim Partners com-pany, in the pilot program.

“The warehouse lending industry hasnearly exited the market making itincreasingly difficult for lenders to fundloans,” said Charles E. Haldeman Jr.,chief executive officer for Freddie Mac.“We’re proud to help bring much-need-ed additional liquidity to the residentialand apartment financing community.”

Freddie Mac will provide participat-ing warehouse lenders with standbycommitments to purchase qualifyingloans in the event a seller/servicer can-not meet its contract obligations or fails.Pre-funding reviews are required andnormal Freddie Mac purchase and origi-nation processes and procedures apply.

Consistent with its charter and withoutobjection from its regulator, the FederalHousing Finance Agency (FHFA), FreddieMac is providing this standby purchasecommitment arrangement with NattyMac as part of the pilot program. FreddieMac seller/servicers interested and whoqualify for this program will need to enterinto a separate agreement directly withthe participating warehouse lender. Thecredit line from the warehouse lenderthat is supported by the standby commit-ment will fund only the loans the partici-pating seller/servicer intends to sell toFreddie Mac.For more information, visit www.fred-diemac.com.

Interthinx adds MDIA testto compliance tool

I n t e r t h i n xannounced thatit* PredProtect

Compliance Suite now performs MortgageDisclosure Improvement Act (MDIA) calcula-tions that automatically determine when

� During the duration of the embez-zlement, all normal “checks and bal-ance” type controls had beenremoved or had never been in place.

While there may be an opportunityfor recovery by making a claim onyour Errors & Omissions (E&O) insur-ance, oftentimes, the loss is so signifi-cant that it is a almost impossible torecover all the money stolen. Thesolution for most companies is tobring in an outside consulting firmthat has depth in accounting andknows where and how to look at areasof the company that can create expo-sure. If interested go to our Web site,www.MortgageBankingSolutions.com,and check out our CFO2Go services.

UnderwritingThere are any number of directions Icould go with this one, but here is onethat you may not have considered. Weall have been told that private mort-gage insurance (MI) companies arethere to pay claims in the event a loangoes into default. The problem today isthat so many loans have defaulted thatmortgage insurance companies havebegun to renege on paying insuranceclaims, most likely for survival. I knowthis is hard to believe, but it is happen-ing with increasing frequency. The sce-nario is that a when a home is fore-closed upon and resold, it is not uncom-mon for there to be a loss. When thereis an MI policy in place, a claim is filed.With increasing regularity, MI compa-nies are claiming that loans were inac-curately underwritten and/or loanfraud was involved. The end result isthat the claim is denied. This results ina repurchase demand back to the com-pany that originated the loan. As a con-sulting firm, we are often called to getinvolved. Here are the lessons we arelearning.

� Contract underwriting via an MIcompany may not provide you therisk protection you thought. We areat a place that you need to selectyour vendors such as an MI companybased upon something more thanhow good the MI rep is.

� Document your loan underwritingdecisions thoroughly, especiallythose marginal transactions. Havinga good paper trail could make all thedifference when filing an insuranceclaim or defending a repurchasedemand.

Due diligenceThe most effective way to prevent fraudthroughout your organization isthrough due diligence. What I am talk-ing about is something broader thanjust the routine monthly quality controlprocess. Due diligence can mean differ-ent things to different people, but basi-cally it is a process of investigation that

looks deeply into every aspect of anorganizations operations.

This can and should be done on anongoing basis with your own internalstaff, as well as bringing in a third-party consulting firm every six to 12months. When our consulting firmdoes due diligence reviews, and wedo a lot of them all over the countryon companies of all shapes and sizes,it quickly becomes evident that thismay be the first time anyone haddone a thorough examination of allaspects of their operations. It opensthe eyes of the C-level executives tothe importance of doing this on a reg-ular basis. Without fail, things arerevealed that are surprising andsomewhat embarrassing to the C-level executive.

There are two basic benefits thatcome from doing regular ongoing duediligence reviews. The first and mostobvious is catching things that arebeing missed in the normal day-to-day operations. The second and lessobvious is this … just having an ongo-ing thorough due diligence reviewprocess can stop an employee fromdoing things that can cost the compa-ny precious capital … both time andmoney. The thorough due diligencereview exposes weaknesses wherefraud and embezzlement take place.As wise old Benjamin Franklin said,“An ounce of prevention is worth apound of cure.”

If you don’t get anything else fromthis article, I hope you give seriousconsideration to implementing anongoing due diligence program withinyour company.

When selecting an outside firm toperform due diligence, make sure theyhave hands-on operating experience ofactually running a company like yours.Otherwise, how will they know wherethings can go wrong?

We have a team of dedicated mort-gage professionals that have ownedand operated their own mortgagecompanies and are dedicated to help-ing C-level executives like you to do athorough examination/investigation ofyour internal operations. Thank youfor reading this article, and I welcomethe opportunity to talk with you aboutyour company’s needs.

David Lykken is president, mortgagestrategies and managing partner withMortgage Banking Solutions. David hasmore than 34 years of industry experi-ence and has garnered a national repu-tation. David has become a frequentguest on FOX Business News with NeilCavuto, Stuart Varney, Liz Claman andDave Asman with additional guestappearances on the CBS Evening News,Bloomberg TV and radio. He may bereached by phone at (512) 977-9900,ext. 101 or e-mail [emailprotected].

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includes the Default Services Division (for-merly known as LandAmerica DefaultServices Company) and BackInTheBlack,the industry’s most comprehensive end-to-end default servicing technology plat-form. These former LandAmerica businessunits are now known as UTLS DefaultServices and UTLS BackInTheBlack.

“With proven client focused method-ologies in place, we will quickly build onthe foundation of providing innovativeand superior business solutions to ourclients,” said Tim Walsh, president ofUTLS. “Our default management clientsare increasingly challenged with delin-quencies and foreclosures, as well as theincreased focus on regulatory complianceand loss mitigation. Blending the servicecapabilities with the BackInTheBlacktechnology enables UTLS to offer themortgage industry the best and mostintegrated default and technology servic-ing solutions in the marketplace.”For more information, visit www.unit-edtechls.com.

LPS acquires auction solu-tions provider for resi-dential REO properties

Lender ProcessingServices Inc. (LPS), aprovider of integrat-ed technology andservices to the mort-

gage and real estate industries, hasannounced its acquisition of Rising TideAuctions, known for its property auctionexpertise and innovative property auctionstrategy. The acquisition will expand theasset management offerings of LPS andallow the company to provide comprehen-sive property auction solutions to help ser-vicers minimize real estate-owned (REO)timelines and reduce costs. Furthermore,real estate buyers and investors will be pro-vided with the ability to purchase individ-ual or multiple bank-owned propertiesdirectly from the nation’s leading REO dis-position service provider.

Mortgage servicers have long relied on awide range of default-related solutionsfrom LPS, including national field services,full-service asset management, title andclosing services, as well as bankruptcy andforeclosure management. With the addi-tion of property auction services throughLPS, servicers now have more REO man-agement options from a single provider.

Additionally, servicers working with LPSAuction Solutions will benefit from the com-pany’s ability to manage all aspects of the auc-tion process from beginning to end, includingdata collection, property due diligence, openhouse showings and the auction event. Tohelp ensure timely REO dispositions, the com-pany also utilizes a comprehensive brokeroutreach program to encourage broker partic-ipation in the auction events.

“Rising Tide Auctions brings significantassets to LPS, including an impressive team ofexecutives with more than 30 years of suc-cessful property auction marketing experi-ence,” said Chad Neel, president of LPS AssetManagement and Field Services. “By integrat-

ing property auction services with LPS’ otherleading default solutions, we can offer ourclients an unparalleled toolset for managingand disposing of REO assets that delivers thebest overall results. This acquisition solidifiesLPS’ position as the leading provider of assetmanagement solutions.”

LPS Auction Solutions takes a cre-ative and comprehensive approach toauction property marketing, includingthe development of compelling proper-ty sales materials, as well as extensiveoutreach involving radio, television andprint advertising, direct mail and e-mail campaigns, public relations initia-tives and social media engagement.

“With access to a powerful array of pro-motional channels and our unique under-standing of local market conditions, wecan quickly adjust our marketing strategyfor each individual auction,” said Neel.“This helps ensure that we’re attractingthe maximum number of potential buy-ers and investors to each auction event.”For more information, visit www.lpsvcs.com.

Lenders One partnerswith Cenlar FSB

Lenders OneM o r t g a g eCooperative, a

national alliance of independent mortgagebankers, has announced its newest part-nership with subservicing giant Cenlar FSB,which will provide cooperative memberswith the ability to maintain the servicingrights on their loans. Cenlar has servicedresidential loan portfolios for more than 40years in all 50 states, allowing the compa-ny to reach all Lenders One members.

“Loan servicing is quickly emerging asa trend—as well as necessary businesscomponent—for independent mortgagebankers, and we want our members to beon its forefront,” said Scott Stern, LendersOne chief executive officer. “Partneringwith Cenlar benefits our members withtimely, scalable term and interim mort-gage servicing. These benefits are thentranslated to borrowers in the form of amore diverse, quality loan offering.”

Cenlar is working with Lenders One toprovide its membership with customizedsubservicing for a wide variety of mortgageproducts, all private-labeled under eachlender’s name and logo. Offering coopera-tive members the opportunity to maintainthe servicing rights to their loans helpsthem reap the benefits of that servicing rev-enue without fixed operational costs. It alsoenables them to avoid the added expensesand time to build this capacity internally.

“Based on the volatility and ongoingevolution of the industry, lenders need theflexibility to adapt to changing marketconditions,” said Lori J. Pinto, CMB, seniorvice president of business developmentfor Cenlar FSB. “This relationship providesLenders One’s members a means to effec-tively grow their business models andexpand new offerings to their respectivecommunities. Lenders One is committedto the industry’s mortgage bankers andfocused on providing the business partner-

What prospects and challenges doyou see for RMBS after the GreatRecession of 2008-2009?The prospects are very encouraging.Ginnie Mae’s HMBS program has made asignificant difference in changinginvestors’ attitude toward the reversemortgages. Given the massive flight toquality we have seen over the past fewyears, any product with governmentguarantee is going to be seen as attrac-tive to many investors. As a result,investors are much more open to dis-cussing the product with us.

When you factor in the zero risk[really?] weighting of a Ginnie MaeHMBS with the favorable pre-paymentcharacteristics of HECMs and HMBSstructure, it is not surprising that inter-est in reverse mortgages as a new assetclass has grown significantly in the pasttwelve months.

What is your favorite reverse mort-gage story?I have heard and have been involved inmany feel-good stories about howreverse mortgages have made a differ-

ence in people’s lives. But I have to saythat during 1998-1999, when my col-leagues and I at Lehman Brothers wereworking on the first securitization andgetting to understand the product, themarket and its growth potential, is wasone of my favorite times in the reversemortgage business. We knew we werenot simply working on a transaction, butrather, building a business and thatsecuritization is vital to the growth ofthe industry.

Author and columnist, Atare E. Agbamu,CRMS is director of reverse mortgages atMinneapolis-based AdvisorNet MortgageLLC. A member of the BusinessWeek MarketAdvisory Board, Agbamu is author of ThinkReverse! and more than 100 articles onreverse mortgages. Through his advisoryfirm, ThinkReverse LLC, Agbamu advisesfinancial professionals, institutions and reg-ulators across the country. In a 2007 nation-al report on reverse mortgages, the AARPcited Agbamu’s work. He can be reached byphone at (612) 436-3711 or (612) 203-9434,and e-mail at [emailprotected] [emailprotected].

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ships that will bring the most value to itsmembers. For this reason, we are lookingforward to not only expanding our rela-tionship with them, but also assistingthese lenders explore new markets.”For more information, visit www.lender-sone.com or www.cenlar.com.

Mortgage Professionals to Watch� Flagstar Bancorp has announced the

election of president and chief execu-tive officer Joseph P. Campanelli to theposition of chairman, replacing ThomasJ. Hammond who retired in October.The company has also announced theappointments of Salvatore Rinaldi tothe position of vice president and chiefof staff, and Marshall Soura to the posi-tion of executive vice president anddirector of corporate services.

� Credit Plus Inc. has promoted GregHolmes to the position of nationaldirector of sales and marketing.

� NetMore America has hired John Cassell as senior vice president of retail production.

� At its 96th Annual Convention & Expo inSan Diego, the Mortgage BankersAssociation (MBA) has elected Robert E.Story Jr., CMB of Seattle FinancialGroup as association chairman; MichaelD. Berman, CMB of CWFinancialServices as association chairman-elect;and Michael W. Young of Cenlar FSB asassociation vice chairman.

Joseph Campanelli

Greg Holmes

John Cassell

Robert Story

Michael Berman

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Copyright © 2009 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 advertisem*nt 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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new disclosures are required and whetherthe timing of the disclosures meets statu-tory requirements. PredProtect comparesthe annual percentage rate (APR) at appli-cation to the most recently disclosed APR,applying a tolerance of one-eighth of onepercent. The system then provides an“earliest closing date” calculation toensure that the timing for initial or re-dis-closure follows the new requirements.Users are automatically notified when aloan is out of compliance. This new fea-ture, although optional, is being providedat no additional cost to Interthinx clients.

“MDIA compliance presents one of thebiggest challenges of 2009 for manylenders, especially those with dated orig-ination platforms that lack the elasticityto adapt quickly,” said Roger Fendelman,vice president of compliance forInterthinx. “PredProtect offers lenders aneasy way to comply with MDIA. It pro-vides instant protection from additionalscrutiny with written proof of compli-ance placed right in the loan file.”

MDIA is a federal law that is part ofthe Housing and Economic RecoveryAct of 2008 (HERA). MDIA requires thatlenders wait seven days after the initialdisclosure is provided before closing ahome loan and an additional periodany time the APR changes by more thanone-eighth of one percent and re-dis-closure is required. The law thenrequires an additional cooling-off peri-od before the loan can be closed. Thissequence is frequently referred to asthe 3-7-3 Rule.

“The time is right for lenders todeploy new, practical technology andready themselves for more regulationto come,” said Mike Zwerner, seniorvice president of business developmentfor Interthinx. “It seems like there’snever a good time to implementchange, but now it’s a matter of keep-

ing up with tough new regulation andsurvival. Another way to look at the cur-rent environment is to recognize theindustry is in a state of rebuilding con-sumer trust and brand confidence.Hidden costs or errors add up to lostopportunity. The new MDIA test inPredProtect provides lenders with asimple approach to compliance, helpsavoid costly errors, and mitigates repu-tational risk with inexpensive, fastautomation.”For more information, visitwww.interthinx.com.

Experian launches consumer income assessment tool

Experian hasannounced itssuite of lead-ing “ability to

pay” products—Income Insight andIncome View—designed to determine aconsumer’s ability to pay. IncomeInsight was designed to support recentlegislation by providing an estimate ofa borrower’s individual income utilizingverified income data and proprietarycredit bureau attributes. Income Viewis a Web-based tax verification servicethat provides clients with reliable IRS4506-T processing and prompt access toapplicants’ verified income via theInternal Revenue Service (IRS).

“With a number of new or proposedlending regulations, there is an increas-ing emphasis being placed on morediligent and more informed lending,”said Steven Wagner, president ofExperian Consumer InformationServices. “Our new ‘ability to pay’ prod-ucts are an important part of this con-tinuously changing picture. The capa-bility to accurately estimate or verify aborrower’s income provides a key

insight into that consumer’s ability torepay a loan.”

Some of the features of IncomeInsight include: Support of a lenders’ability to comply with recent legisla-tion; assistance to lenders with respon-sible provision of credit through consid-ering a borrowers’ ability to pay; com-pliance with the Fair Credit ReportingAct (FCRA) and the Equal CreditOpportunity Act (ECOA); the targeting ofcustomers while considering the com-plete financial picture; an improve-ment on risk management efforts byincluding modeled debt-to-incomeratios; accuracy in segments defaultedborrowers to maximize collectionprocesses; and streamlined resultsonline or in batch.

Some of the key benefits of IncomeView include: Income tax return sum-maries and detailed transcripts for indi-viduals and businesses, including IRS1040, W-2, 1099 and 1065, the securedelivery of IRS transcripts within 24 to 48hours; identification of potential fraudthrough discrepancies in stated-income,Social Security Number, filing status,name or address; and no rush fees.For more information, visit www.experi-anplc.com.

Byte integratesLoanSifter into BytePro

Byte Software,a provider of

loan origination software for banks, creditunions, mortgage bankers and mort-gage brokers, has partnered withLoanSifter Inc. to offer a product andpricing engine. LoanSifter’s best-of-breed solutions include an intuitivepoint-of-sale loan eligibility and pricingengine, lock desk and rate sheet gener-ator satisfying the most demandingloan officer.

“LoanSifter’s streamlined, easy-to-read format means originators don’thave to waste time searching throughunnecessary numbers and suggestionsto get the information they need,” said

Bruce Backer, president of LoanSifter.“Secondary managers and originatorstell us that they are looking for ways tomanage risk and efficiently securemore transactions. They understandthat integration translates to increasedcontrol and immediate answers—twofactors that can make the difference ingrowing your business in a challengingmarket.”

LoanSifter provides pricing, auto-mated underwriting systems and lockdesk features. Secondary departmentsutilize the thorough, real-time stream-lining and maintenance of the entiremortgage pricing process (margins,adjustments, incentives, service releasepremiums [SRPs] and underwritingguidelines), no matter if servicing isretained or if correspondent andwholesale investors are used.

The partnership between ByteSoftware and LoanSifter reduces datainput and errors by giving customersthe ability to submit existing loan datafrom within BytePro, instantly accessingpricing and product information.For more information, visit www.byte-software.com or www.loansifter.com.

Avista announces Webportal launch and FHAintegration

Avista Solutions,developer of AvistaAgile loan origina-tion software (LOS),

has unveiled its completely redesignedconsumer Web site capability that putsmuch greater functionality into thehands of borrowers. The extensivemakeover improves the borrower expe-rience and helps lenders meet thegrowing desire of consumers to obtainmore information and functionalityindependently when visiting lenderWeb sites.

The new Web portals are privatelabeled by Avista and branded to beconsistent with the lender’s own Website. Visitors can submit applicationsonline, obtain automated approvals,receive online disclosures, and if “justlooking,” can receive notification whenthe rates they want are available.Payment calculators, loan type scenar-ios and other tools are available, withcustomer-input information feedingdirectly into the lender’s Avista Agileloan originator software (LOS).Borrowers stay abreast of their loan’sprogress with automated email updatesand online status, saving expensive andtime-consuming phone calls back andforth with the lender’s staff.

Avista has also announced that itsautomated underwriting system (AUS)has been interfaced with the FederalHousing Administration’s (FHA)“Technology Open to ApprovedLenders” (TOTAL) Scorecard. This inter-face allows lenders who are underwrit-ing FHA loans to submit borrower infor-mation to the TOTAL Scorecard, whichcombines the capabilities of Avista’sAUS to determine whether a loan is eli-

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

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

ALL aspects of your business except having to do the

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

how to handle these customers and you will have the

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

you look like a Fortune 500 company even if you work

from home! YOU control how much money you make.

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

resources to harvest leads, manage prospects and mon-

itor their progress.

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

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

lion on research and development. You don’t need to

spend an arm and a leg to start building your own

credit repair business. Here is a quote from a mortgage

company located in upstate New York who spent

months of research before choosing HTDI:

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

pany in upstate NY with over 125 employees. We

got hit hard during the mortgage industry crash

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

tion with thousands of leads and customers that

couldn’t get qualified for anything. I decided to

start looking for a way to capitalize on my left

over resources and help people in the process. I

called many other credit repair companies and

was very unimpressed. One west coast based

company was charging $15,000 and had nothing

but negatives written about them on the Internet.

Then I found HTDI. They helped me to get

started at the beginning of this year and it has

been great. I have not only made great money

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

financed 8 of them and helped 6 buy houses that

would have never qualified with the new guide-

lines. The software is very user friendly and all of

my clients, affiliates and Brokers have increased

business because of it.”

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

on credit scores keep rising. This program will allow

your borrowers to become “Mortgage Ready” as soon

as 45 days. As one of our CSO stated:

“I have many loan officers that are now able to

send their clients through the credit repair, raise

their scores, and then close the client’s loan that

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

means more loans and more revenue for my loan

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

ing to be able to help a client regain their credit

and be able to get the loan they need.”

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

erful and profitable industries in existence. With

loans, insurance and even employment taken into con-

sideration individuals’ credit picture, the credit indus-

try is getting bigger every day.

Inside the credit industry, Credit Services is helping by

assisting consumers with getting back on track by re-

moving unverifiable and inaccurate negative items

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

being in a profitable industry and helping clients with

their futures.

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

A year ago, as the mortgage crisis worsened, I

began trying to find a way to help clients who

needed a better credit profile in order to get a

mortgage. Fortunately for both me and my

clients, I stumbled on HTDI. After a year of ex-

perience, I can honestly say the success rate is

100% and client satisfaction is through the roof.

All of my clients have seen significant improve-

ments, and some have experienced breathtaking

jumps in their credit scores, even on the first

round!

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

fice” (HTDI) has you covered. They will execute

their part of the job seamlessly, with precision,

on time, and with total consistency. All you have

to do is SELL the service! Just sign people up, col-

lect the money, and send HTDI the paperwork

they need to get started. If you simply focus on

selling the service, you will make lots of money,

the work will get done, and you will never have

to worry about unhappy customers.

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

this is an excellent full time business opportunity.

(Frankly, these days it’s probably a better business

than the mortgage business!) You could easily make

six figures in the first year with a minimal invest-

ment of money. How many opportunities like this

exist these days? What you must invest is your time

– SELL, SELL, SELL & SELL some more! Ulti-

mately, what you are selling is the professionalism

of 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). The

FCRA holds credit bureaus and creditors to their report-

ing methods and has guidelines they must comply with.

There are numerous techniques that are used along with

similar laws to maximize results for each client. You must

know these laws inside out.

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

(CROA). Just like the FCRA, the CROA hold credit repair

companies to specific guidelines as well. If you choose

HTDI Financial for your backend processing, we will en-

sure you maintain compliance.

Lastly, you have applicable State Laws. Depending on

the state you wish to conduct business in, you may

have a state Credit Services Organizations act to com-

ply with.

As an active member in good standing of the National

Association of Credit Services Organizations, you can

be sure that we take our job very seriously, making sure

you stay compliant and your clients.

Why some Mortgage Professionals fail in Credit Repair while others

Make Serious Money

There is only one step you need to take; visit www.startacreditrepaircompany.com or

call us at 877-877-4834 option 5.

Mortgage Professionals make money in credit repair while getting borrowers Mortgage Ready!

Industry Leading Results

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FREE demo availablewww.startacreditrepaircompany.com

heard on the street continued from page 31

� Pro Teck Valuation Services hasannounced the hiring of JeffMarchetti as senior sales directorand Al Dalupan as sales director,business development.

� Antonio Catalano has joinedResource Title’s Independence,Ohio office to help in developing thecompany’s retail division.

� New Oak Capital has appointed JayLown as managing director of thecompany’s financial institutions group.

� PHH Corporation has named JeromeJ. Selitto as president and chief execu-tive officer, and has also been appoint-ed to company’s board of directors.

� Teresa Switzer has joined propertypreservation and inspection servicesprovider Mortgage Contracting Services(MCS) as vice president of business devel-opment and client relations.

� BankUnited has named RaymondS. Barbone as executive vice presi-dent of mortgage services.

� William Mueller has been appointedchief executive officer of iServe RealEstate Operations, a wholly-ownedsubsidiary of National Asset Direct Inc.

� DebtX has promoted Bill Looney,former executive vice president ofthe company, to the role of presi-dent of U.S. sales.

� USA Funding Corporation has wel-comed the following as trusted mort-

gage advisors: Janice Cole-Thornton,Keith Fansher, Doris Hansen,Thomas Harty, James Janik, ChueLee, Elisabeth Schaller and JosephScheurell. The company has alsoannounced that Zachary den Daashas joined as executive assistant, andthat John Guirau and Michelle Lewinhave been added as call center repre-sentatives.

� Assurity Financial Services LLC hasannounced that Vanessa Giacoman,CMB has been named the compa-ny’s new chief operating officer andmanaging member.

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: [emailprotected]

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

Michael Young

Jeff Marchetti

Al Dalupan

Antonio Catalano

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gible to be insured by the FHA. Thedirect system to system interfacebetween the Avista’s AUS and FHAallows approvals to happen in minutes,speeding up and simplifying the entireprocedure for lenders and reducingorigination costs in the process.

“FHA is understandably busy at themoment, as it undergoes a renaissancein the use of its products and pro-grams,” said Mark Phlieger, Avista chiefexecutive officer. “By interfacing ourautomated underwriting capabilitywith the TOTAL Scorecard, originatorscan get answers very quickly, withoutdata reentry and other inefficienciesthat can lead to mistakes and delays.”For more information, visit www.avista-solutions.com.

DartAppraisal.com offersnew FHA appraisal compliance solution

DartAppraisal.com,an independentprovider of residen-tial real estate valu-

ations, has announced an updated ver-sion of its popular DartExpress system toensure compliance with all FederalHousing Administration (FHA) MortgageeLetters related to valuations. The tech-nology updates come in advance of theFHA policy changes which will takeeffect Jan. 1, 2010, allowing mortgagebrokers, lenders and appraisers an earlyadvantage in compliance.

DartAppraisal.com originally devel-oped DartExpress technology in May2009 to streamline the appraisalprocess for mortgage brokers whilemaintaining Home Valuation Code ofConduct (HVCC) compliance. Theenhanced system now maintains com-pliance with all new FHA appraisal poli-cies for FHA-insured loans as well.DartExpress provides a quick and easyonline system to initiate an appraisalorder, pay for and track the progress ofthe order, and finally deliver a copy tothe mortgage broker and lender in fullcompliance with HVCC and all new andexisting FHA Mortgagee Letters.

“We have enhanced our DartExpresstechnology to now offer the fastestpath to FHA policy compliance formortgage brokers, lenders andappraisers,” said Marko Berishaj, vicepresident of DartAppraisal.com and acertified mortgage banker. “The Web-based system is a complete solutionthat ensures our appraisals adhere toall FHA Mortgagee Letters related tovaluations. DartExpress continues tobe extremely popular within theindustry for HVCC-compliant services,and we are confident it will deliverhigh quality results for users seekingFHA compliance.”

DartExpress users register on theDartAppraisal.com secure Web siteand receive their own account pass-word. The mortgage broker then

picks from a list of FHA-approvedlenders who have “authorized”DartAppraisal.com to process theappraisal order. Next the user paysonline with a credit card, providingimmediate credit verification andprocessing of the order without manyof the common delays associatedwith consumer appraisal coordina-tion. Brokers can track up to sevensteps in the appraisal pipeline via theDartAppraisal.com Web site to deter-mine the status of each order in theaccount. The viewable trackingprocess includes receipt, acceptance,scheduling, appointment set, inspec-tion, quality control and possibleaddendums. Notations of any compli-cations which may have arisen withinthe process are also visible.For more information, visit www.DartAppraisal.com.

Loan-Score launches siteto underwrite FHA loans

Loan-ScoreDecisioningSystems hasannounced

it has of f ic ia l l y launchedwww.LoanSCORECARD.com for mort-gage bankers, community banks, cred-it unions, lenders and originators toconnect to the Federal HousingAdministration’s (FHA) TOTAL Scorecardloan approval platform. The new siteseamlessly interfaces with Scorecard tooffer users an easy, efficient and costeffective automated FHA underwritingexperience.

Earlier this year Loan-Score inter-faced its automated underwritingsystem (AUS) with FHA TOTALScorecard, which was initially addedas functionality to Loan-Score’s exist-ing decisioning suite. The launch ofLoanSCORECARD.com, however, nowallows the entire mortgage industryto utilize the portal as a standaloneapplication to decision and under-write FHA loans, complete with con-ditions and an FHA certification thatthe home ownership centers (HOCs)will accept and review to insure.

The site allows lenders, loan officersand brokers the ability to create anaccount, upload a 1003, pull/re-pullcredit, instantly return underwritingdecisions on FHA loans and managetheir FHA pipeline. The primary valuein LoanSCORECARD.com is that userspay only a fraction of the typical cost toautomatically return eligibility.

“LoanSCORECARD.com serves thegamut of mortgage bankers, commu-nity banks, credit unions, lendersand originators to conveniently andcost effectively decision FHA dealsusing our portal’s interface withScorecard,” said Joe Bowerbank, sen-ior vice president of marketing atLoan-Score. “What we’re providing isan attractive industry-wide alterna-

new to market continued from page 32

iif you originate

you must pass it.

The NMLS National Testwill examine your understanding of terms,

federal laws, ethics, math, loan products anda broad range of mortgage knowledge with

100 challenging questions.

No grandfathering. No exemption. No escape.[if originating for a depository institution the exam is not mandated. Yet.]

The Exam

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free trial -- gauge your readiness.

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We are the lender, and

final decision maker, not a broker.

Never A Pre-Payment Penalty

WE ARE NOT CREDIT SCORE DRIVEN,

We look for loans that improve a clients situation, in factwe recently increased our funding capacity.

• No Credit Score Minimum --

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Our 3 Point Lending Philosophy:

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low ball your appraisal.

It's Just That Simple...

Visit our website or Call 877.353.2233

or For Faster Service

Please Fax Your Scenarios To 240.241.5160

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tive to using other FHA decisioningoptions.”For more information, visitwww.LoanSCORECARD.com.

Docu Prep designs newapp for new GFE changes

In prepara-tion for thefederally-

mandated Good Faith Estimate (GFE)changes and requirements, Docu PrepInc. has created a feature which willprovide customers with an easy transi-tion to comply with any GFE changesthat are on the horizon. With the U.S.Department of Housing & UrbanDevelopment’s (HUD’s) new GFErequirements (which will go into effectJan. 1, 2010), lenders are scrambling toupdate their systems to ensure compli-ance to the upcoming changes.

“Our customers can continue to usetheir LOS [loan originator software] sys-tems without any technical upgrade,”said Docu Prep Senior Architect JoshArceo. “Users will be able to use the oldforms or new forms simultaneously.”

Docu Prep’s new feature will allowusers to easily disclose their fees andcomply with the GFE’s regulatoryrequirements while maintaining a par-allel structure to their current LOS sys-tems. Adhering to compliance withthese new regulations will be a simpletask for Docu Prep’s customers, whileminimal changes will be made to theircurrent processes.

“Compliance with the new GFE/HUDrequirements is greatly enhanced withthe simple, client-driven approach,”said Ann Savage, general counsel forDocu Prep. “Early testing and parallelsystems will help our clients ensurethey understand the product and legalchanges and how they work in practicebefore the Jan. 1st deadline.”

Not only will Docu Prep’s new appli-cation minimize changes to customers’current processes, but it will alsoenhance their understanding of thenew requirements to be put into place.

“The new feature will provide aclearer understanding of how feesinteract with the new GFE and HUD-1Settlement Statement, and will ensurea more precise comparison of feesbetween initial disclosure and closingdocuments,” said Docu Prep SeniorAnalyst Britt Christiansen.For more information, visitwww.docuprep.com.

Kroll introduces verifica-tion solution to assistwith FHA compliance

Kroll Factual Data,a provider of busi-ness information

solutions to financial organizations hasannounced the release of anIndependent Verification Solution whichhelps lenders comply with the proposedFederal Housing Administration (FHA)credit policy changes announced onSept.r 18, 2009.

“It is vital for lenders to prepare forthe new FHA requirements to avoid

repurchase claims and sanctions,” saidJames Donnan, president of KrollFactual Data. “For the highest level ofsafety and soundness, verificationsshould be performed by an expert thirdparty that is financially independentfrom the transaction.”

Under the proposed guidelines,mortgage brokers will no longerreceive independent FHA approval fororigination eligibility, but will insteadbe required to originate through anFHA-approved lender. Since FHA-approved lenders will carry the liabili-ty for broker-originated loans, theyneed to bolster their verificationprocess to support the additional vol-ume that will come from the corre-spondent channel. Adding to this newstrain on scarce underwriting andquality control resources is a new rulefor FHA streamlined refinances whichrequires lender certification of theborrower’s capacity to pay at the timeof application.

“This raises the bar at a time whenFHA market share is soaring,” saidTeresa Grove, senior vice president ofmarketing for Kroll Factual Data. “TheIndependent Verification Solutionhelps lenders keep up with demand forFHA loans by delivering timely, inde-pendent verifications so underwritersand quality control personnel can focustheir efforts on making good loansinstead of on gathering information.”

Kroll Factual Data’s economies ofscale and proprietary processes allowthem to deliver capacity-to-pay verifi-cations at a lower overall cost thandoing the verifications with in-houseresources or by assembling a complexset of disparate verification products.Since the verifications are performedexternally to the lender’s operationand billed according to actual use,lenders also ensure that expense staysin sync with volume fluctuations forhigher profits and better capital effi-ciency. The detailed billing and report-ing that is included with the serviceincreases traceability and transparencyfor Real Estate Settlement ProceduresAct (RESPA) compliance. To give lendersan extra measure of protection againstthe risk of errors, Kroll Factual Data’sverifications are backed by representa-tions and warrantees of accuracy.Lenders can customize the solution toinclude additional types of verifica-tions and risk assessment analytics asrequired for their specific risk manage-ment program.For more information, visit www.kroll-factualdata.com.

MERS and Interthinx collaborate on fraud prevention

MERSCORP Inc. (MERS)and Interthinx haveannounced the launchof a national fraudprevention database

that will allow lenders to seek, identify andshare suspected fraudulent activity in loan

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Your Game Plan to Social Media Success

Think about the last time you attendeda major sporting event, such as a profes-sional basketball game. One connec-tion—an interest in how the team’splayers will perform that day—broughtyou and thousands of people together.The idea of a shared connection helpsexplain why social media is now adynamic marketing force for businesses.The Internet is your arena to connectwith a crowd that’s inter-ested in what you bring tothe home financinggame. But how do you getthe crowd’s attention andmake them your fans?

First, you need to be astarter … you have to getoff the bench and get intothe action. Social Web sitesare buzzing with activity.Best of all, no tryouts arerequired, so you can easilyjoin the game and becomea major participant.

A main point to under-stand is that online socialnetworking is about rela-tionship-building. Take thetime to build your onlinerelationships and under-stand that rewards willcome your way in due time… and it snowballs. Afterall, Kobe Bryant didn’t become a house-hold name after his first few games.

Online networking is an inexpensiveway to reach people, but you may needto pace yourself in the beginning. Toomany people new to social networkingget overzealous at first and then dropoff completely because they don’t seeimmediate results from all the postingsthey have done.

Like a coach developing a gameplan, you too will need to plan a strate-gy that successfully uses social media.

Identify your purpose,know your audience No pro makes it onto the court withoutknowing his purpose based on the posi-

tion they play. As a broker, your pur-pose for participating in social mediashould be to build a solid following ofloan originators, other business refer-rals and loan prospects.

Avoid sales pitching Just as fans entering a basketball arenahave expectations about what will tran-spire there, social media users have expec-

tations too. They turn toblogs, Facebook or othersocial Web sites for interest-ing and informative onlineconversation. Sales pitcheswill drive people away fromyou. Instead, let peopleknow what your key inter-ests are, what your functionis within your company, andshare key industry informa-tion to help their careers.Remember that people dobusiness with people theylike, which ties into the rela-tionship-building purposeof a social media strategy.

Know the toolsavailable Each social Web site has adifferent playbook to fol-low. For example, Twitterrevolves around Tweets,

which are messages of 140 characters orless. Facebook is designed to be person-al and communicate the personality ofyou and your business. LinkedIn is a sitethat enables you to describe your profes-sional background and display recom-mendations from customers and associ-ates. A blog is a Web-based journal thattypically focuses on one subject.

There are other websites for socialnetworking, but we’ll take a closer lookat the most popular examples so you’llbe ready to score points in any of them.

BlogsSelecting a blog host such asWordPress.com, Blogger, Typepad orVox is the easiest way to begin. A hosted

blog is very inexpensive and takes lessthan 10 min. to establish. If you wantthe look and feel to be completely cus-tomized, however, you may feel limitedby a hosted blog. The other option is aserver side or stand alone platform.

As a mortgage professional, yourblog will target business referrers (loanofficers, past customers and other pro-fessionals), so anything you write needsto keep this audience in mind.

There are more than 40 documentedways to drive traffic to a blog. One popu-lar method is to submit your blog to sev-eral blog directories like Blogarama orBloggapedia. This is just one of the manyeffective tools available to get your blognoticed in the social media arena.

Include your contact information andpicture to personalize your blog. Beloweach post, install a bookmarking widget. Ifyou have Facebook or LinkedIn pages,include a link in your profile and sendTweets driving people to your blog. Be sureto put your blog URL on all your marketingpieces, including your business card.

Another tip is to research keywordsand be sure to use them in the title andfirst sentence of your posts. For exam-ple, don’t try to rank in Google for theterm “mortgage news,” but instead tryto rank for something specific like“mortgage news in Venice, Calif.” UseWordtracker to find keywords with lessthan 100 competitors if you can.

Also ensure that people can sub-scribe to an RSS feed, leave commentsand leave trackbacks.

Twitter Strategic page development is an impor-tant key to the success of your Twitter pageand can help set you apart from the com-petition. When you design your Twitterpage, it’s best to customize the page back-ground so it complements your brand. Besure to include a photo and select some-thing professional that communicatesyour personality. A Twitter page with yourpicture will do a better job attracting fol-lowers. Just look at the top 100 Twitterersand you’ll see that they include pictures ofpeople, not logos or objects.

After you have your Twitter page setup, Tweet several messages of strategicvalue and substance before you inviteyour colleagues and business prospectsto follow you. This way your followerswill understand the value.

As a mortgage professional, you may

wish to communicate information aboutrates, new guidelines, mortgage industrytrends or other topics that would be ofvalue to your audience. When communi-cating this information, use a hashtag (#)in front of keywords in your Tweets. Thiswill make it easier for people to find you.

There are several ways you canencourage people to follow you. Oneway is to click on “Find People” at thetop of your Twitter page where you’llfind several options for drawing them in.

You can also install a Twitter widget onyour Facebook page so that every time yousend a Tweet, your Facebook wall is updat-ed. You won’t have to go to both sites tosend the same message, which saves time.Remember to include your Twitter URL inyour e-mail signatures and add the Twitterlink icon on your Web site landing page.

In addition, there is a new feature atLinkedIn that allows integration withyour Twitter account.

FacebookEstablishing a strategy for your Facebookpage before creating your profile is neces-sary in order to best optimize your pres-ence on this Web site. One idea is to useyour company logo or your picture as theprimary photo … it depends on your over-all social media strategy. You can also postphoto albums with pictures of yourselfand your employees to more personallyconnect with your audience. Including pic-tures of you or employees engaged ingroup activities or corporate events is per-fectly acceptable.

Attracting people to follow you onFacebook is fairly simple, but you mustremember why people become followersto begin with—it’s because they like you,your company and you are a source ofinformation to them. While establishingyour fan base, be personable andinformative. People on Facebook will beinterested in knowing a bit about whatyou do during your personal time; how-ever, overdoing this at the cost of inform-ative communications will cost you.

To find people to follow you, you canclick on “Friends” and then click on“Invite Friends” or “Find Friends.” Afterclicking “Invite Friends,” you simplyinput e-mail addresses of those youwish to invite or import addresses fromyour address book, write a message andsend it out. “Find Friends” helps youfind people in your e-mail contacts whoalready have Facebook accounts.

By John Seroka

“Too many peoplenew to social net-

working get overzeal-ous at first and thendrop off completelybecause they don’t

see immediate resultsfrom all the postings

they have done.”

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Keep a consistent presenceand post relevant contentPlayers who have a reputation for slamdunks and three-point shots quickly becomefan favorites. If you consistently post inter-esting and reliable updates that affect youraudience directly and immediately, then themore loyal your fan base will become.

In the mortgage industry, things areconstantly changing and these changeshave a definite impact on consumers, loanofficers and other business referrers. Thereis a constant flood of economic and indus-try news—keep track of what’s happeningand frequently update your messages.

Social networking is all about two-waycommunication. So how do you respond tonegative feedback? Quickly and directly!This always requires tact. You have toremember that putting something out thereis like taking the final shot at the buzzer—you cannot take it back. If you have a prob-lem client who posts something derogatory

about you or your business, resolve it quick-ly, first privately and then online. Do notcontinue an argument online.

Connect with your crowdBy understanding how to use socialmedia effectively, your online game planwill help your company grow. There arebooks available that can provide morestrategy details, and marketing firms cangive you a jump start to help achievequicker results. With the widespread useof social networking sites, now’s the timeto get off the bench.

John Seroka is vice president of Seroka &Associates, a full-service branding, adver-tising, marketing and public relationsfirm that serves a nationwide client base.He may be reached by phone at (866) 379-0400, e-mail [emailprotected], or con-nect with him at linkedin.com/johnserokaor at twitter.com/johnseroka.

Residential and Commercial:Working Together

There are all types of direct relation-ships: Personal-business-client-lender-etc., in the lending world. But, thereare also relationships built within alarger framework of ourindustry and beyond thescope of your daily con-nections. Let’s considerthe relationship betweenthe residential and com-mercial mortgage broker.This relationship maytake us out of our normsand into a temporary, oreven an evolving, associ-ation that may lead to along-term alliance.

Relationships thatwork must allow for bothparties to contribute sothat the sum of theresults of the work ofboth parties is greaterthan the sum of the workof the two individualsconsidered separately.Generally, the beginningof this relationship occurs when theresidential mortgage broker needs helpin obtaining financing for a commercialproperty, with which he or she is notfamiliar. The commercial broker musthave already cultivated a measure ofconfidence within the residential bro-kerage community or they would not

have been called upon to co-broker thecommercial transaction. Co-brokerageof a specific transaction is the evolutionof the relationship between the resi-

dential and the commer-cial loan broker.

So, how do you buildthis relationship betweenthe residential and com-mercial broker, whenthere is limited interac-tion between the partiesand their interests arereally not the same,except for the fact thatboth seek financing fortheir respective client?Generally, it is often thecommercial broker whoseeks out the residentialbroker, who may, in thefuture, have a commer-cial transaction comeacross their desk thatthey cannot handle forthe client. Typically, asocial relationship begins

even prior to a possible working rela-tionship. Of course, at times, the resi-dential broker has an inquiry from aclient regarding a commercial transac-tion and initiates the relationship with aqualified commercial broker or at leastattempts to find someone to help themcomplete the commercial transaction.

By William Pape, MSFS, CMC

“In real estate, theslogan of greatest

importance seems tobe ‘location, location,

location.’ In financ-ing, the greatest con-cern should be ‘ethics,

ethics, ethics.’”

If I were the commercial broker, inorder to develop these contacts, I wouldfirst consider joining the local, stateand/or national organization that bestrepresents both brokerages. This affilia-tion adds credibility to your endeavors towork as a co-broker. Second, I would try toeducate your local residential brokers sothat they may determine if they are reallyconsidering a “do-able” transaction.Third, I would offer assistance to anyoneinterested in learning more about evalu-ating commercial transactions.

Whereas, if I were the residential bro-ker, first, I would determine what areasof interest the various commercial mort-gage brokers have, i.e. multi-family,small or large commercial, SBA, special-ty or other types of properties. Second, Iwould determine the success rate of thepotential co-broker. Third, I woulddetermine what specific expectanciesthe commercial broker had in regard tomy involvement in the transaction.Fourth, an equitable fee split arrange-ment must be agreed upon and a docu-ment signed. In both cases, referencesshould be exchanged and consideredand everything should be in writing.

Very few “partnerships” are success-ful in the long-term. Consider thosebusiness partnerships of which you areaware and calculate how many havelasted say 10 years. Why? There may bea number of reasons:

1. Simply that one partner feels that hedoes not need the other partner;

2. One feels he is doing the majority ofthe work and only receiving a smallpercentage of the income;

3. One want to be “the boss;” and4. One does not like the way the busi-

ness is going, etc.

Partnerships just don’t last very long.So, the answer may be to look at a co-bro-kerage or a referral relationship as beingdifferent than a true partnership. You cando that, if you have clearly defined theobligations of both parties. In a “referral”relationship, the referring entity is simplyexpecting a small pre-agreed fee to intro-duce the potential commercial client tothe commercial broker. In a co-brokeragerelationship, both parties are workingtogether to obtain the financing for theclient. Complexities can occur … is thereferral fee to be paid for each separatetransaction in the future? Who has thecontract with the borrower? How muchwill the fee be? What happens if, in thefuture, the client contacts the commercialbroker directly? The same questions comeup in a co-brokerage arrangement withthe addition of:

1. What work will be completed by eachparty?

2. Will all future business be split thesame way between the parties?

3. Who has the relationship with thelender and what happens to thatcontact, if the two brokers separate?

4. Are you sharing forms, documents, etc.?

The bottom line is that both the res-idential and the commercial brokershould assume that the relationshipwill not be long-lived and decide intheir early negotiations how any futureconcerns may be handled.

Certainly there are a number ofthings that one must consider prior toentering into a referral or co-brokeragerelationship with another broker. In realestate, the slogan of greatest impor-tance seems to be “location, location,location.” In financing, the greatest con-cern should be “ethics, ethics, ethics.”The ramifications of not taking the rela-tionship between brokers seriously canbe devastating to both parties.

Have you thought about your licens-ing and your ability to continue to workin our industry? If you are a residentialbroker, whether you refer a client to acommercial broker or you enter into aco-brokerage relationship, you are prob-ably receiving some compensation.Don’t you think that that means youhave some fiduciary relationship to theclient? If the client feels as though hehas not been treated fairly, he undoubt-edly will go back to the referring brokerto vent his anger and maybe evenrequest financial compensation. So,what to do? You should check refer-ences, qualifications, confirm licensingand general reputation before making areferral to anyone you do not personal-ly know well. You should review thecontract that your client is expected tosign. Are you a party to the contract?Does the client know exactly what roleyou are playing in the transaction?

As a commercial broker working inconcert with a residential broker to pro-vide financing for one of the residentialbroker’s clients, you must consider yourreputation within the lending communi-ty. Do your due diligence. Speak directlywith the client and ascertain what, if any,information has been provided to theclient by the residential broker. Does thepotential client understand what isexpected of him? Does he know what theresidential broker’s role is in the financingendeavor? Does the client have any ques-tions regarding the fee agreement? Arehis expected financing results realistic?

Networking is possible within a multi-tude of areas. We have stressed the rela-tionship between the residential andcommercial mortgage broker, but othernetworking relationships are also avail-

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able to both the residential and com-mercial broker. Not only do you have thepossibilities within professional lendingassociations, but also within real estateand other organizations such as thenational and local realtors’ associations,Certified Commercial InvestmentMembers (CCIMs), Members of theAppraisal Institute (MAIs), financial advi-sors, insurance professionals, etc., butalso with lenders, title companies andothers either directly or indirectly relat-ed to the financing industry. One of thereasons that I have had some success indeveloping relationships within otherprofessional groups is that I have contin-ued to pursue professional designationswithin not only the lending industry, butalso the financial services industry. It ismuch easier to “sell” yourself to otherprofessionals, if you have the back-up ofacademic degrees or professional desig-nations. We can all continue to educateourselves—so take continuing educa-

tion whenever it is available. Good relationships are time-consuming

and require effort on your part. It takes along time to develop a sense of confidencewithin your fellow brokers, but only onemistake to ruin that relationship. Mostthings that are worthwhile are worth work-ing hard to get. So get out there and devel-op great relationships with your residentialor commercial counterpart and be moresuccessful than you already are.

William Pape, MSFS, CMC is withCommercial Mortgage Brokers, a companywith offices in Arizona and Missouri. He hasbeen a commercial mortgage broker formore than 20 years and handles only com-mercial transactions in excess of $1 millionon a national basis. He served on theNational Association of Mortgage Brokers(NAMB) board of directors for five years anddirected six national commercial conferencesfor NAMB. He may be reached by phone at(480) 836-8681 or e-mail [emailprotected].

Cultivating Your RelationshipsMany of the most rewarding personalfriendship relationships in my life havegrown out of business relationships thatwere nurtured over time. Early on in mycareer, I learned that therecipe for successful, mean-ingful, long-term businessrelationships contains manyof the same key ingredientsthat we subconsciously usein developing and main-taining our personal friend-ships—those key ingredi-ents include being open andhonest with strong lines of communication; beingaccessible; properly follow-ing through; dependabilityand a willingness to dowhatever it takes to help theother side out.

Put simply, one shouldnurture their business rela-tionships with the samelevel of care and concernthat they nurture their per-sonal friendships. The realityis that when one adopts thismindset, one quickly learnsthat, just like meaningfulfriendships, highly success-ful business relationships also take a lot oftime, effort, hard work and commitment.

Regular contact and open, direct com-munication are critically important todeveloping meaningful business relation-ships. One of the worst mistakes that I seeprofessionals make in this business is

going out to a marketing event, aggressive-ly shaking hands and collecting clients’business cards and then believing that thehard work is over. They don’t periodically

check in with their new orpotential clients, assumethat no news is good news,and wait until the clientpicks up the phone first.Instead, please understandthat it is once a new clientrelationship has beenestablished that the realwork should begin. Checkin with your clients regular-ly, solicit honest feedbackand then take action basedon the recommendationsthey make. Listen to yourclients and show them thatwhat they tell you is impor-tant. Think of your clientsas outside consultants ortrusted friends who can reg-ularly advise you on waysyou can improve.

One technique that I’vefound to be highly success-ful to facilitate regular andongoing communication isoffering my clients around-

the-clock accessibility. I give new clientsmy personal cell phone number andassure them it is fine to call any time, dayor night, to reach me. It is a small gesturein which I demonstrate to them that theyare important and offer the reassurancethat a decision-maker is always accessible

By Nat Hardwick

“One of the worstmistakes that I see

professionals make inthis business is going

out to a marketingevent, aggressivelyshaking hands andcollecting clients’

business cards andthen believing that

the hard work isover.”

to them in any situation. Whatever methodyou choose, make sure clients know theycan get a hold of you when they have aconcern and ensure that they feel like it isappropriate to contact you directly.

I have also discovered over the yearsthat regularly checking in and communi-cating with existing clients is an excellentway to increase your existing client base.One successful way to generate new busi-ness relationships is through the kind rec-ommendations and the referral of existingclients. If you have provided a client with apositive experience, ask them if they wouldrecommend your services to a friend oftheirs. Better yet, ask them to facilitate anintroduction to other key producers withintheir office. I cannot stress how importantthis technique was to helping my firm,Morris|Hardwick|Schneider, grow. In fact,if I sit down with our current client list, Ifeel that it is a “family tree” of sorts, whereeach loyal client has led to a fruitful rela-tionship that led to another and so on. Justas your circle of personal friends grows nat-urally as you meet friends of friends social-ly, so should your network of business net-work expand over time.

Just as important as regularly touch-ing your clients and showing them thatyou care about their business concerns,as well as them as people, is a require-ment that you respond and react appro-priately to the information you receive.Solicit earnest feedback from yourclients and then use that feedback as aspringboard in implementing governingpolicies and procedures within yourorganization. Frame your servicearound your clients’ needs.

In today’s marketplace, practicallyevery business pays lip service to thesame ideal that the client is priority num-ber one and customer service is tops.These often-repeated claims appear ineverything, from commercials and mar-keting materials, to printed receipts andcoupons. Due to this overexposure, whatshould be highly meaningful businessstatements have become merely emptywords in the eyes of many consumers.Rather than preaching about your superi-or service, demonstrate your commit-ment to exceptional service by showingyour client that they are your number onepriority. Showing, in addition to telling,will earn you credibility and loyalty fromclients who often hear empty promises ofthe same from your competitors.

One way I have undertaken todemonstrate my commitment to put-ting our clients first is by embracingexceptional service as a company-widecommitment. We have put this promiseinto practice by using client feedbackand suggestions to devise a specific setof service standards, our BASICS. TheseBASICS govern our daily operating pro-cedures; the very heart of their purpose

is to maintain and build positive andfruitful client relationships. The BASICSare not an amorphous “vision state-ment,” rather, they are specific require-ments and timelines. We publish theseBASICS to our clients, and ask that theyhold us accountable for them. Puttingyour neck on the line in this way is noteasy, and it certainly involves reputa-tion risk, but by publicly setting the barhigh and continually striving to improveto exceed our own standards, we havebuilt lasting client relationships thathave enabled our success.

As an owner or manager, youabsolutely must make sure that youhave a team working with you that alsoshares the belief that meaningful busi-ness relationships are essential to con-tinued success. Enlist their support inmanaging and maintaining the businessrelationships that you initiate. As a busi-ness grows, it becomes impossible forone person to be the “do all and end all”of managing every client relationship. Iam constantly reminded how importantmy team is in maintaining every clientrelationship within our firm. Certainlythose whom you surround yourself withas employees within your organizationcan make or break the client relation-ships that you have worked so hard toput into place. Ensure that everyonedown the line who interacts with theclient shares the same respect for therelationship that you espouse.

Our BASICS:

� Treat everyone with courtesy andrespect.

� Demonstrate professionalism and apositive attitude.

� Return all phone calls and e-mailswithin two hours.

� Meet all promised deadlines.� Always go the extra mile to close the

loan.� Communicate with clients and bor-

rowers and address potential prob-lems prior to closing.

� Send the HUD-1 Settlement Statementto all parties within four hours ofreceipt of closing instructions.

� Complete the title commitment andsend to the client within 48 hours ofreceipt of title order.

� Follow the Good Faith Estimate(GFE).

� Start all closings on time.

Nat Hardwick is a managing partner withthe firm of Morris|Hardwick|Schneider.Nat serves as chairman of the board ofdirectors and chief executive officer ofLandCastle Title. He also serves on theBoard of Directors of the LandCastle TitleFoundation. He may be reached by phoneat (678) 298-2100 or [emailprotected].

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The Dow decreases by 38 percent andthen increases by 42 percent, all in oneyear. There is a high likelihood that themarket will correct itself. Mortgagerates have increased and thendecreased. It has been easy to qualifyfor a loan and now it’s hard. Even if theFed is able to stabilize the credit mar-kets, people are fright-ened of change. Yourhope is to maintain yourclient base, but you cando much more. You cangrow your business evenduring these treacheroustimes.

Are you diligent inmaking calls to your toptier clients? In past “turbu-lence,” you have learnedthe lesson that makingfrequent client calls is agreat way to hand-holdyour clients. In a Foresterresearch study, brokerswho talk to their clients atleast once a month duringvolatiles times, lose fewerclients to the competitionand gain many morereferrals. But what shouldyou say on those calls?Here is a four-step processto not only avoid losingclients and their assets butalso build your practice.

I. Bring your client backto their original goalsOne of my coaching clients audiorecords with permission the openingmeeting laying out the needs anddesires of the client in preparation tocreate a mortgage plan. When makingthe monthly follow-up calls, he thenuses the exact words the client statedin that meeting. “When we first mettwo years ago, you mentioned thatyour most important goals are havingan income of $8,000 a month andmake it last until you pass away, payyour home off in 15 years and providefor your children’s college expenses.You also want to travel during retire-ment at least four times a year at anexpense of $5,000 per trip. Are thesegoals still important to you?”

Bringing your clients back to theiroriginal goals will assure them you arestill in control and still on track to meettheir goals.

II. Let your clients knowthat their own biases willcause them to make badmortgage choices.In one University of Michigan study, if aninvestor missed the 40 best-performingdays in the market from 1963 to 1993, theaverage return would have dropped from

12 percent to seven per-cent. While you aren’t aninvestment broker, thesame concept is truewhen looking for the rightmortgage. In the Journalof Economic Behavior andOrganization, RichardThaler wrote that morepeople make mistakes bynot making decisionsthan by making the wrongones.

There is also a hightendency for yourclients to avoid makingchanges to their mort-gage plans despite goodreasons for doing it. Inone Boston Universitystudy, subjects wereoffered a choice of vari-ous investment productsand expected returns.After making choices,the participants wereinformed some of the

choices were already in their portfo-lio. Forty-seven percent changed theirmind and decided to stay with theproducts currently in their portfolio.This is one of the reasons clients areoften willing to ride an inappropriatemortgage into ruin. This status quobias of only accepting 30-year-fixedloans or the lowest monthly paymentmay be the wrong decision but yet theone the client is used to owning.

III. Be armed with at leastthree solid stories of yourclients who weatheredvolatile periods in thepast and came out aheadusing your adviceThe reason your clients panic duringrecessionary periods is due to emotion,not logic. Don’t try to console them onlywith logic, they won’t stay convinced.They cannot remember the logic and areagain consumed by emotion. That is whyyou should always use solid behavioraleconomics arguments followed with sto-

ries the clients can remember. If you cando that, you won’t have to say the samethings over and over to the same clients.

IV. At the end of the conversation, ask forreferralsI am sure the last thing you think of ina volatile period is ask for referrals. It’slike asking a car crash victim to buylife insurance while still in the ambu-lance. Yet while most brokers don’teven call their clients during down-turns. You will be able to pick up moremarket share (clients) who are terrifiedabout losing their home or makingpayments in the future. You may alsobe able to attract more clients alreadydisgruntled with the lack of client con-tact from most brokers. I played tennisrecently in my regular Sunday matchin Newport Beach, Calif. The topic ofconversation was how much moneywe all lost the prior week. The conver-sation also migrated to our respectivehome mortgages. I flippantly asked ifany mortgage broker had contactedthem over the last 12 months. Allshook their heads no.

According to one study, 57 percent ofyour clients would never use you again ifanother mortgage broker approachedthem. This means that many high networth (HNW) clients would meet with youif you had the courage to ask. In anotherstudy at the University of Connecticut,researchers discovered that 89 percent ofclients cared more about the relationshipwith their broker than about interest rate.

After steps one through three, here arethe words you can use to gain referrals:

“I really enjoy working with you. I amalways trying to build my business withmy best clients. Who do you know whocould benefit from the kind of relation-ship we’ve had so far?”

Using this script will secure tworeferrals and one new client within sixmonths from every referral request.

Contrary to common sense, yourclients depend more on your ability tocommunicate than your ability to pick theright mortgage for them. There is no rulethat you have to lose clients duringvolatile periods. In fact, most of my coach-ing clients who keep in contact with theirown clients are having a record year. Theyare gaining clients and because prospectsare scared and need someone to advisethem on the right real estate financingdecisions. Seventy percent of these HNWprospects don’t have a mortgage brokerthey can trust and the remaining 20 per-cent have absentee brokers. This is thebest time since 2003 to protect your clientbase and gain more referrals.

Dr. Kerry L. Johnson, MBA is a best-sell-ing author and speaks at mortgageindustry conventions around the world.His personal coaching company, PeakPerformance Coaching, promises toincrease your business by 80 percent ineight weeks. He may be reached byphone at (714) 368-3650 or visitwww.KerryJohnson.com/coaching.

How to Gain New Clients in a Volatile Market

By Dr. Kerry L. Johnson, MBA

“In a Foresterresearch study, bro-

kers who talk to theirclients at least once a

month duringvolatiles times, losefewer clients to the

competition and gainmany more referrals.But what should yousay on those calls?”

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Relationships can be defined as the way inwhich two or more concepts, objects orpeople are connected. The art of buildinglong-lasting relationships is essential togrowing your business and flourishing inyour respective industry. Successful peoplehave the ability to develop relationshipsthat are effective, beneficial and endureover time. Given the currenteconomic climate, estab-lishing and maintainingrelationships has neverbeen more imperative.

Even with the bestproducts and businesspractices, you still needstrong relationships to suc-ceed in the real estateindustry. Building strategicalliances and partnershipsis an important aspect ofkeeping your business rel-evant and enabling you togrow as an individual andan organization. The art ofdeveloping and maintain-ing relationships comesmore easily to some peo-ple than others. However,with a strategic plan, a lit-tle practice and deter-mined follow-up, anyonecan become an effectivenetworker.

The first step is to iden-tify your target: Who arethe individuals and businesses that canenhance your bottom line or play avital role in the growth of your busi-ness? In addition to prospective clients,think about contacts who might begood referral sources or can connectyou with those hard-to-reach peoplethat may have work for you. Establish apriority list and map out a plan as tohow you can connect with each of thoseresources.

Your goal should be to establish amutually beneficial relationship. Theconcept of reciprocity in business hasbeen around for ages, but too often weforget that sometimes it’s better to givethan to receive—especially in thebeginning. The next time you meetsomeone who can help your business,ask first what you can do for them.

There are many different ways toeffectively build mutually beneficial

relationships. It starts with doing yourhomework in advance, so that you havepertinent knowledge about the individ-ual, their employer and their businessin general. Being able to identify com-mon interests, work-related and non-work-related, also provides a solid foun-dation for establishing an effective rela-

tionship based on person-al camaraderie. And final-ly, you must put yourselfin the right situations tomeet your top tier con-tacts and capitalize onthe encounter throughdiligent follow-up.

Doing a little researchbefore you approach apotential client or busi-ness contact sounds obvi-ous, but a surprising num-ber of people don’t takethe time to do it right. Thecompany Web site, if thereis one, is the place to start.Here you’ll find informa-tion on what the companydoes, who its clients areand, if you’re lucky, a bioof the person you plan tomeet. Of course, there’salways a Google searchand other online toolsthat can lead you to newsarticles, organizations andother tidbits about your

contact. Check Web-based networkingand social sites such as LinkedIn, Plaxo orFacebook for more details with an eyefor other ways to engage with and estab-lish a concrete connection. And don’t for-get to tap the knowledge of other peo-ple, including your own team.

Our firm has a bi-monthly meetingto talk about new contacts, relevantevents and changes in the industry. It’salso a great way to get feedback on yournetworking strategy or find out if any ofyour co-workers can help you with aconnection. We keep details notes onour networking in spreadsheet formatand note contact information for eachperson or business. Our combined con-tact list—accessible to the entire teamand constantly updated—forms thedatabase through which we send e-mailannouncements on our services andrecent accomplishments.

Perhaps the most challenging step,and the one that some people dread, isthe face-to-face meeting with a poten-tial contact. At times, it can be challeng-ing to initiate, let alone maintain a rela-tionship, but below we have outlinedsome successful tactics that have beenbeneficial for our business networkingefforts:

� Always be prepared! It is amazing howmany times you will meet someone ofrelated interest when you least expectit. Being open to all options is crucialbecause sometimes you meet peoplein the most ordinary of places. Howmany times have you been at a restau-rant, on a plane or at your kid’s soccergame and started talking with the per-son next to you—onlyto find out that at onepoint you both workedfor the same companyor on the same project.Being able to leveragepast experiences orencounters on the flywill prove to beextremely beneficial forestablishing or rekin-dling a relationship.

� Face time is veryimportant to main-taining a relationship.With all the text mes-saging and e-mailsthese days, the impor-tance of putting a faceto a name has taken aback seat. Stopping bya client’s office to sayhello or asking themto lunch will implythat your client isalways on your mind. Remember, inorder to maintain a relationship overtime, they must be nurtured andtaken care of with the required com-ponents noted above.

� One way to engage quickly with peo-ple is to establish a common interestor friendship prior to discussingbusiness. Being able to relate on apersonal level first will make futureinteractions about business muchmore effortless. Don’t try too hard toforce the issue. Allow the conversa-tion to dictate the topics of interest.

� Get involved with industry commit-tees and community activities.Making time for groups play a vitalrole in how well-rounded an individ-ual you are. Look beyond the obvi-ous professional organizations thatrelate to your own industry. You maywant to be a member of a group that

includes your potential clients,rather than your peers.

� Honesty is the best policy. Beinghonest and truthful at all times willshow your credibility and prove thatyou are the real deal and that youare always looking out for their bestinterest.

� Provide a service that is unmatchedby others in your industry. At the endof the day, providing a great serviceis what will make your clients contin-ue to do work with you.

The above-mentioned tools havegiven us an advantage in building ournetwork. There are times when we do

not want to attend eventsor meetings, but at theend of the day, if you arediligent with your effortsthe rewards you reap willbe immense.

Relationships are greatand essential to your busi-ness, but it is the ones thatcan be sustained over timethat will prove to be prof-itable. You can go throughthe trouble of preparingyourself and putting your-self in the best position,but all will be for naught ifyou can’t sustain thoserelationships over time.Being proactive and antici-pating your clients’ needswill give you a leg up overyour competition. Youneed to show your poten-tial client you have theskills and knowledge toanticipate their every need

and that you will put them in the bestposition to benefit. Relationships aresomething that constantly needs to benurtured and taken care of.

It is not easy to establish a firm rela-tionship let alone sustain one for theforthcoming years. Relationships canbe compared to a redwood tree. A red-wood has a solid foundation based onenriched roots and can grow to be thetallest tree in the forest, but withoutthe necessary ingredients, it will notachieve its greatest potential.Consistency and timeliness in a rela-tionship provide an individual and/orclient a mechanism to depend on you.It is going to take time to establish aworthwhile relationship and being con-sistent and unrelenting with yourefforts, will significantly increase theeffectiveness of your hard work. It hasbeen said that you have only ten touch-es (phone calls, personal interactions ore-mails) with a prospective client

The Art of Building StrategicBusiness Alliances in Today’s

Challenging EconomyBy Greg Perrine and Tim Markel

“The art of developingand maintaining rela-tionships comes moreeasily to some people

than others. However,with a strategic plan,a little practice and

determined follow-up,anyone can become an

effective networker.”—Greg Perrine,

Project Manager, TheMoote Group

“Remember, respectand trust are the glue

that holds togetherfunctioning teams,

partnerships and man-aging relationships.”—Tim Markel, CFD

Administration/Reim-bursem*nt Division

Manager, The MooteGroup

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become more productive and profitable,by eliminating cold calls, phone-a-thonsand unproductive, busy work that wastesyour time, replacing it with knotworking.

I once heard Dr. Kerry Johnson,author of Mastering the Game: TheHuman Edge in Sales and Marketingsaid, “The definition of a ‘top producer’is someone who has the ability to makecold calls, but never actually has to.Nine out of 10 cold calls will end inrejection, while seven out of 10 referral-based calls will gain new business.”

We’re facing serious challenges withbusiness as we know it. Our industry isfaced with extreme changes, includingslow downs and shut downs. In the mort-gage business, we routinely see new rulesand regulations, less lenders and tight-ened guidelines, while technology contin-ues to expand our marketing capabilities.

Our business is referral driven, so youmust learn to combine traditional meth-ods of networking with current technolo-gy in order to take control of your busi-ness. In order to win in today’s market-place, you cannot afford to make a wrongmove. Knotworking provides solutionsand the tools to prepare you for higherlevels of networking that will be expect-ed. Knotworking will put you on the cut-ting-edge by learning where to mine forreferrals, how to build strong allianceswith bonds that tie and give you knowl-edge to create your own hubs or referraltrees that will keep you flourishing.

Knotworking isn’t something you canturn on and or off. It’s an ongoing processthat you continuously improve and per-fect. Some people are natural born net-workers or have acquired the skill some-where during their childhood; othersmust learn the skill and techniques. Ourmost important skills can be learned.Once you’ve started to knotwork, you willnever want to stop. It will be a dynamictool you can use to build your business.

hard work and persistence, you can real-ly make a difference in establishing aneffective relationship that is mutuallybeneficial to both sides.

Greg Perrine is a project manager and TimMarkel is a CFD administration/reim-bursem*nt division manager at The MooteGroup, a full-service construction manage-ment firm serving California, Nevada andArizona. Greg may be reached by phone at(714) 751-5557, ext. 246 or e-mail [emailprotected]. Tim may be reached byphone at (714) 751-5557, ext. 217 or e-mail [emailprotected].

before the opportunity is lost. Thatbeing the case, it is vital to treat eachinteraction with the importance itdeserves because it could be your last.

In today’s challenging market, youhave to build successful relationships andinteract with people in a positive way toattain your organizational goals. Buildingrelationships is such a vital aspect of yourbusiness, so vital, there are divisionswithin your company where their soletask is to bring in business. Remember,respect and trust are the glue that holdstogether functioning teams, partnershipsand managing relationships. Through

Now is the time to take action, startknotworking, forming alliances, buildingrelationships, bonding and partneringtoday! Many individuals refer to network-ing as an activity that is done for the bene-fit of obtaining business, but knotworkersunderstand that networking is an activitythat can be used for purposes other thanbusiness gains. Knotworkers know that trueknotworking can lead to life-long relation-ships that often become great friendships.

I am stressing the importance ofknotworking, not for a specific need,but for the gain of new and lastingrelationships. A comparison would be atransactional salesperson or a relation-al salesperson? Which one are you?

Are you a transactionalperson or a relationalperson?A transactional person is in the mindsetof what’s in it for the moment. “I needto close this transaction, and if I neverhear or see from you again, so be it.”The relational person is quite the oppo-site. The main focus is to make thisexperience a positive one for you, aswell as build a bond, friendship, or unityof some form, regardless how weak orstrong. It’s the initial tie that the rela-tional person is looking for. Therefore,in my eyes they are a knotworker.

While there are far too many achiev-ers pushing to succeed at whatever thecost may be, individuals and teammembers become dispensable, whennecessary. This has become an accept-able business practice. It is an inexcus-able to use an act in this manner topropel yourself forward.

We must look at business differently.Knotworking, combined with “net-workology” is the key to the future, andmore importantly, basic principles that

Networking is the sharing of referrals.Knotworking is the sharing of abilities,resources and knowledge. It is throughknotworking that you will understandthe power and benefits of investing inrelationships. Networking was a mustin the past, in today’s marketplace“Knotworking” will be your survival.

You’re losingmoney!Everyday that you are nottalking to somebody, youmiss an opportunity toknotwork. By using the artof “knotworking” which is aword I coined, you willbecome more effective atnetworking, know whenthe best time to ask for areferral is, and once youhave the referral, you willknow how to take it to thenext level.

The difference betweennetworking and knotwork-ing is the same differencebetween a transactionalsale and a relational sale.Networking, like the trans-actional sale, is for todaycoupled with the attitudeof “What’s in it for me?”Networking is the exchange of superficialpleasantries between parties and thencomes, “What’s in it for me?” The otherparty counters, “What I need is referrals.”

Knotworking, on the other hand, iscreating teams, forming partnershipsand building relationships throughtrust, loyalty and mutual respect. It’s abond, a unity, a tie or knot that strong-ly holds those involved together likefinely woven fabric. It’s the differencebetween being a thread or a piece offinely woven fabric.

It’s a team or group effort of promot-ing one another and mutually benefiting,void of the “What’s in it for me?” attitude.That attitude doesn’t exist in knotwork-ing. In knotworking, all (team membersor groups) are working towards long-termgoals, binding win-win relationships—relationships that both nurture and feed

one another.I remember hearing a

story about a town trying tobuild a very large monu-ment of stone many, manyyears ago. The men in thetown would hoist largestones up with a rope andpull. Eventually, the statuebecame too tall for any oneperson to pull the singlerope up and lift the stone.

They stumbled uponthe idea of braiding thesingle ropes they hadtogether, and tying them,this added strength to therope, and they used ateam of men to pull theropes with the very largestones to the top. Thisstory exemplifies two keypoints, the tying andbraiding of the ropesmade the rope stronger,

like a group of people with similarthoughts bonding together to make adifference, the second is that by work-ing together as a team they were able tolift much heavier stones than trying todo so individually. This old story reflectsmy theory on knotworking implicitly.

The difference betweennetworking and knotworkingBy understanding the difference betweennetworking and knotworking, you will

Knotworking: Beyond NetworkingBy Laura Lynn Burke

“LinkedIn, Facebook,Plaxo and Twitter arekey marketing compo-

nents, as well as afabulous way to stay

in touch with possiblereferral sources. By

build the relationshipfirst, referrals will

come later.”

continued on page 42

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current market rates. I knew that wewere higher than others at this timeand there wasn’t anything I could do. Soit was my dilemma! I knew my rateswere not the best, competitive maybe,but not the best! This was my greatbusiness associate and referral source. IfI quoted Larry my rates and he made afew phone calls, he could think I wastaking advantage of our relationship,especially after all the business he hadreferred to me. He would have probablylaughed and said, “What are your realrates?”

I made a quick decision. I knewwhich lender had the best rates in town.It was also the lender who was kickingmy butt! I also knew on a normal dailybasis they weren’t the lowest and theydidn’t have the niche products that Ihad. He didn’t need a niche product. Allhe wanted was the best rate. He waslooking to me to give him the best rate.So I did!

I took a risk. I said to him, “I can tellyou where to go today. They have thebest rate not only in town, but also inthree counties. I cannot come close totheir rate. Please, this is between youand me. I’m telling you this for yourpersonal business. Next week, my rateswill be down again, but not today. Iwant you to be happy as my businesspartner, so I am sending you to my com-petition.” I was playing Miracle on 34thStreet, Macy’s referring Gimbels …Gimbels referring Macys. I referred himto another lender.

Keep the relationship,lose the transactionI lost the transaction, but kept the rela-tionship! In fact, I even solidified ourrelationship. I lost the transaction, but Ididn’t lose my friend as a colleague inthe process. I strengthened his trust inour relationship and in me. I looked likea “hero” instead of a “loser!” If I hadtried to sell him on a bogus interestrate, I would have risked our entire rela-tionship, one of mutual trust andrespect. I also kept control of where Isent him. I knew they couldn’t fill myshoes for the future needs of his cus-tomers. What if he’d been dissatisfiedwith my assistance and went in searchof another lender on his own. Who thenmight he have stumbled upon, a poten-tial new source for his customers. I did-n’t want that to happen.

He was happy and respected my can-dor because in his time of need, I camethrough. It didn’t matter that I didn’thave the best interest rate. What mat-tered was that I was the person whofound the lender who did give him thebest interest rate.

What if I had said to him, “I expectyou to take the rate and program I am

planned nor Free Fall Networking is bet-ter than the other. They are just differ-ent. Know the difference; learn tounderstand the dynamics of both to bean expert in networking.

Futurists are telling us that relation-ships will be the most important factorin doing business. The author of EndlessReferrals, Bob Burg tells us that “Peoplewill do business with those people theyknow and trust!”

Investing in relationshipsQuite a few years back, I had an unusu-al situation occur. I was working as aloan officer for a bank. I had to make ajudgment call very quickly. I believe Idid the right thing. The situationinvolved a great referral source, abuilder, Larry, who had been my clientfor years. We had a comfortable,lengthy business relationship. He knewhe could count on me to get the jobdone. We made a deal a few years backnever to ask the other person to jumpthrough burning hoops unless absolute-ly necessary. When asked, then youknew it was serious and immediateaction would be taken on both sides.We discussed situations rationally, with-out unreasonable expectations of oneanother. We had built a relationship ontrust, loyalty and mutual respect.

He called me one morning and wasinterested in refinancing his own homeloan. He asked me, “What could I do tohelp?” He called during the worst possi-ble week! This was during the 1993 refi-nance craze when banks, from time totime, would raise their rates just highenough to slow down the volume givingthem a chance to catch up and breathe.The bank I represented had done justthat, raised its rates just slightly over

individuals are people and are to betreated with kindness and respect. Onenever knows who could be a diamondin the rough. Through knotworking,you can start building those ties andbonds today.

Free Fall NetworkingI went to a convention in Atlanta forone of my business ventures. I walkedaway with three potential deals foranother business in which I wasinvolved in. I also made two newfriends and one acquaintance whoshared a great story with me. I encoun-tered these other business transactionsfor two reasons.

� First, the woman I was travelingwith, a friend Betty had a great dealof respect for me within the indus-try and felt comfortable referringme to her friends, because she trust-ed me. She opened the door for con-versations and it was up to me tobuild the relationship and ask forthe business. A referral.

� Second is what I call “Free FallNetworking.” No, you’re not net-working without a net, but you real-ly aren’t there for business nor didyou plan or position yourself to bethere. It’s an event that leads you tounexpected knotworking opportuni-ties. You bond almost instanta-neously with someone, and beforeyou know it, you’re doing businesstogether. This is considered “FreeFall Networking.”

Planned networking is when weplan to meet a certain person or to dosomething, such as attend a function,mixer, seminar or party. Neither

offering. I know it’s slightly higherthan most, but we have a relationshipso you have to work with me. You haveto do your deal at the higher ratebecause it’s me. No other reason, Icannot beat the rate. I have the sameservice, but you have to take this ratebecause of our relationship.” How longdo you think that our relationshipwould have lasted? I would have lostnot only the relationship, but hisrespect as well. I opted to lose thetransaction but keep the relationship.

The very next week, he referred me toone of his construction clients, as always,no reservation or hesitation on his part.

When you find yourself in a similarsituation, think twice before you makea sales pitch to someone with whomyou have a relationship. Always put therelationship before the transaction andcommission!

What lies aheadThere will be changes in the future thatwill affect the way business is conduct-ed. Technology will appear as astronger force in sales, marketing andcustomer service. It is convenient, rela-tively easy to set-up and cost effective.

LinkedIn, Facebook, Plaxo andTwitter are key marketing components,as well as a fabulous way to stay intouch with possible referral sources. Bybuild the relationship first, referralswill come later.

The world is evolving and we are his-tory in the making. We may not see ithappening, but we are creating history.We all need to take inventory regardinghow we expect to grow our business inthis “new marketplace.”

Laura Lynn Burke has been selected froma nationwide search to be featured inStepping Stones to Success, a highly suc-cessful 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) who arejoined by other well-known authors eachoffering time-tested strategies for successin frank and intimate interviews. Laurais also the CEO and founder ofFootprints 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 [emailprotected].

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

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

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“Atare Agbamu is one of only a handful of people in the reverse mortgage arena

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As an originator, he has hands-on experience educating seniors and their advi-

sors. As author of the “Forward on Reverse” column in The Mortgage Press since

2002, Atare Agbamu communicates nationally with the housing finance commu-

nity, bringing the unique insights and experience of an ardent reverse mortgage

expert into a wider business context.

“This book combines Atare’s keen insights and know-how with extensive re-

search to create a first of its kind resource for the reverse mortgage industry. It offers a comprehen-

sive overview of the industry plus detailed information on marketing and originating reverse mortgages.

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decades of experience skillfully woven into this book. If you plan to succeed in this industry, this

book is the place to start.”

—Sarah F. Hulbert, President, Senior Financial Corporation and former four-term Co-Chairof NRMLA’s Board of Directors

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has set down an impressive amount of information ... And he delivers it in an easy-to-read,

simple-to-understand style that will make this book essential reading for all reverse mortgage

professionals.”

—from the Foreword by Jim Mahoney, Co-Founder and Former Chairman, Financial FreedomSenior Funding Corporation, and former four-term Co-Chair of NRMLA’s Board of Directors

“The stories [Chapter 15: Profiles in Satisfaction] are the best vehicle to increase understanding and

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“This book should be required reading for all new loan consultants originating reverse mortgages

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mation on preparing ahead to provide the service our seniors deserve, to ensure a smooth loan

process and shorten the time to closing. Most of the problems caused in the processing and clos-

ing of reverse mortgages come from inadequate preparation.”

—Deanne Opstad, AVP, Senior Underwriter, Generation Mortgage Company

Think Reverse!Table of Contents

Part I:

The new pillar of retirement security

Part II:

Marketing reverse mortgages: It’s all about education

Part III:

Originating reverse mortgages

Part IV:

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Part V:

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applications from the point of origina-tion. MERS FraudALERT, powered byInterthinx, will help identify and pre-vent fraud through the sharing andreporting of key data among the morethan 62 million loans currently regis-tered on the MERS System. Lendersusing MERS FraudALERT will submitloan application data and incidentreports with suspected or confirmedfraudulent activity to a centralizeddatabase. The system will then notifyother lenders who have loans that mayhave connections to the data, alertingthem to possible fraudulent transac-tions in their pipelines.

“While the industry currently hasaccess to excellent loan-level frauddetection technology, lenders still faceunacceptable risk,” said R.K. Arnold,MERS president and chief executiveofficer. “Fraudsters circumvent thosetools by perpetrating multiple instancesof fraud concurrently because no one isspeaking to each other. Only by creatinga collaborative industry wide fraud pre-vention database can this activity bestopped. MERS FraudALERT will becomethe national mortgage fraud detectionand prevention utility. By participating,lenders can show that they take fraudprevention seriously.”

MERS FraudALERT combines MERS’sinfrastructure and industry-wide inte-gration with the proven fraud detectioncapabilities of Interthinx. Lenders whor*gister their loans on the MERS Systemwill have immediate access to the firstindustry wide database of fraud-relatedinformation through the new product,making any fraud screening technologymore effective.For more information, visitwww.mersinc.org or www.interthinx.com.

LPS launches automatedproperty valuation model

Lender ProcessingServices Inc. (LPS), aprovider of integrat-ed technology andservices to the mort-

gage and real estate industries, hasannounced the availability of its newautomated property valuation model,LPS AVM, to assist the mortgage indus-try in establishing and verifying proper-ty values for underwriting, quality con-trol and due diligence.

LPS has combined its public recordsdata, analytics and modeling resourceswith its valuation experience to delivera thorough automated valuationreport via LPS AVM. The report, whichdelivers increased hit rates andimproved accuracy, will include avalue estimate; up to 10 comparablesales listings with a location map; astatistical confidence interval band; ahistory of subject property transac-tions and finance activity; and region-al price trends.

“LPS AVM is powered by our robust

public records database and multiplevaluation modeling methodologies,and is complemented by ongoing qual-ity control and reliable customer serv-ice. However, we offer mortgagebankers far more than an AVM,” saidNima Nattagh, Ph.D., senior vice presi-dent of LPS Applied Analytics. “In addi-tion to our suite of AVMs and a cascadeinterface, LPS is also a leading providerof desktop and field valuations. Theextensive collateral valuation expertiseoffered by our modelers and develop-ers enables LPS to partner with lenders,servicers and capital market profession-als to determine the right products atthe right points in the collateral valua-tion process.”

LPS Applied Analytics collects andcompiles real estate public recordsdata directly from the county assessorand recorder offices in jurisdictionsthat cover 89 percent of U.S. residen-tial market activity. The databasedescribes property characteristics,ownership change, sales and financ-ing data.For more information, visitwww.lpsvcs.com.

eLynx launches e-closingnetwork

eLynx, a portfolio com-pany of AmericanCapital, has announced

an innovative electronic closing network(eCN) service that lenders are integratinginto their existing closing process toincrease loan quality and providemore control in order to meet the gov-ernment’s demands for more accurateclosings. The move will help lendersensure borrowers and settlementagents have a better experience at theclosing table. Lenders and their cus-tomers will benefit from eCN’s settle-ment agent management component,which provides vital informationabout the agents who handle the clos-ings, their processes and disburse-ment. These details will help lendersaccelerate the delivery of the closingpackage and funds, avoid fraud, serv-ice issues and other problems that canbe costly to all parties to a closing andnegatively affect the customer experi-ence. eLynx reports that over 65,000of the 300,000 plus settlement agentsthe company works with have alreadyregistered on the eCN system.

Built on eLynx’s expedite platform,eCN connects disparate industry partiesand their supporting systems in waysthat never existed before. The result is asingle view into regulatory compliance,a streamlined process, reduced risk oferrors and fraud, and improved cus-tomer service.

“More than 98 percent of the indus-try’s closing agents already use eLynx’sexpedite services, and now, through

new to market continued from page 35

continued on page 44

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FEBRUARY 2010Monday-Thursday, February 1-4

Mortgage Bankers AssociationCREF/Multifamily Housing

Convention & ExpoMandalay Bay Resort & Casino

3950 Las Vegas Boulevard SouthLas Vegas

For more information, call (800) 793-6222 or visit www.mortgagebankers.org.

Tuesday-Thursday, February 9-11Nationwide Mortgage Licensing System

2010 User Conference & TrainingRancho Bernando Inn

17550 Bernando Oaks Drive • San DiegoFor more information, call (202) 296-2840 or visit www.nationwidelicens-

ingsystem.org.

Wednesday, February 17Florida Association of Mortgage BrokersBroward Chapter 2010 Annual Chapter

Trade ShowThe Broward Convention Center

1950 Eisenhower BoulevardFt. Lauderdale, Fla.

For more information, call (954) 761-1422 or e-mail [emailprotected].

Saturday-Thursday, February 20-25National Association of Mortgage

Brokers 2010 Legislative & Regulatory Conference

Hyatt Regency Washington on Capitol Hill

400 New Jersey Avenue NWWashington, D.C.

For more information, call (703) 342-5900 or visit www.namb.org.

Tuesday-Friday, February 23-26Mortgage Bankers Association NationalMortgage Servicing Conference & Expo

Manchester Grand Hyatt1 Market Place • San DiegoFor more information, call

(800) 793-6222 or visit www.mortgagebankers.org.

MARCH 2010Sunday-Wednesday, March 14-1727th Annual Regional Conference of

Mortgage Bankers AssociationsTrump Taj Mahal Casino Resort

1000 Boardwalk at Virginia AvenueAtlantic City, N.J.

For more information, call (973) 379-7447 or visit www.njamb.org.

APRIL 2010Tuesday-Wednesday, April 13-14

Mortgage Bankers Association’sNational Policy ConferenceHyatt Regency Washington

on Capitol Hill400 New Jersey Avenue NW

Washington, D.C.For more information, call

(800) 793-6222 or visit www.mortgagebankers.org.

Sunday-Wednesday, April 25-28Mortgage Bankers Association National

Technology in Mortgage BankingConference & Expo

Hyatt Regency Chicago151 East Wackler Drive • Chicago

For more information, call (800) 793-6222 or visit

www.mortgagebankers.org.

Sunday-Wednesday, April 25-28Mortgage Bankers Association National

Fraud Issues Conference 2010Hyatt Regency Chicago

151 East Wackler Drive • ChicagoFor more information, call

(800) 793-6222 or visit www.mortgagebankers.org.

AUGUST 2010Wednesday-Friday, August 18-20California Association of MortgageBrokers 2010 Annual Convention &

Grand ExpositionHyatt Regency Long Beach

200 South Pine AvenueLong Beach Convention Center

300 East Ocean BoulevardLong Beach, Calif.

For more information, call (916) 448-8236 or visit www.cambweb.org.

OCTOBER 2010Sunday-Wednesday, October 24-27Mortgage Bankers Association 97th

Annual Convention & ExpoAtlanta Georgia Congress Center285 Andrew Young International

Boulevard NW • AtlantaFor more information, call

(800) 793-6222 or visit www.mortgagebankers.org.

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 [emailprotected].

COMPANY WEB SITE PAGEAbacus Mortgage Training and Education .......... www.acethesafe.com ............................................34ACC Mortgage .................................................. www.weapproveloans.com ....................................35AMB Links/DBA Alliance AMC ..........................................................................................................4Byte Mortgage Software/CBC Companies ............ www.byte-cbc.com ..............................................18Calyx Software ................................................ www.calyxsoftware.com ..............................NY3 & 22Closing.com .................................................... www.closing.com ................................................18Direct Group, LLC ............................................ www.dgmortgagemarketing.com ..........................18Elliott and Company Appraisers, Inc................... www.elliottco.com ..............................................39Emigrant Mortgage Company ............................ www.emigrantmortgage.com ................................32Entitle Direct Group.......................................... www.entitledirect.com ..................Inside Front CoverEtrafficers........................................................ www.etrafficers.com ............................................42First Source Capital Mortgage, Inc. .................... www.fscmortgage.com ..........................................11Franklin First Financial .................................... www.franklinfirstfinancial.com ............................22Frost Mortgage Banking Group ........................................................................................................9Guaranteed Home Mortgage.............................. www.ghm.com ....................................................23HTDI Financial ................................................ www.htdifinancial.com ........................................33Jules A. Epstein A.A.L ..................................................................................................................NY1MBA-NJ/NJAMB ................................................ www.mbanj.com ..........................................NY5 & 5Mortgage Concepts .......................................... www.mortgageconceptsonline.com ........................10Mortgage Now, Inc. .......................................... www.mortgagenow.com ..........................Back CoverMortgage Trainers of North America .................. www.mtgtna.com ................................................39MortgageProShop.com...................................... www.mortgageproshop.com ..................................43Multiple Listing Service of Long Island .............. www.mlsli.com ..................................................NY2NAMB Legislative Conference ............................ www.namb.org ..................................................NY6NAPMW .......................................................... www.napmw.org ..................................................27New York Islanders .......................................... www.newyorkislanders.com ................................NY4Platinum Credit Services, Inc............................. www.platinumcreditservices.com ..........................21Presidents First Mortgage Bankers .................... www.presidentsfirst.com ......................................13Presti & Naegele Accounting Offices .................. www.prestinaegele.com ......................................NY1Solid Solution Escrow ....................................................................................................................41Stearns Lending, Inc. ........................................ www.stearns.com ................................................18United Northern Mortgage Bankers Ltd. ............ www.unitednorthern.jobs ...... 11 & Inside Back CoverUnited Wholesale Mortgage .............................. www.uwmco.com ................................................41US Home Loan Advocates .................................. www.ushla.com ..................................................20Wall Street List ................................................ www.wallstreetlist.com ..........................................7Wells Fargo Home Mortgage.............................. www.brokerfirst.com ............................................12

NATI

ONAL

MORTGAGE PROFESSIONAL

MAGAZINE

NMPNMP

eCN, eLynx can offer detailed informa-tion on these vital partners,” saidSharon Matthews, eLynx president andchief executive officer. “This additionaldata gives our lenders insight into whois interacting with its customers, helpsthem mitigate fraud more effectively,and ultimately gives them more controlover the entire customer experience.”For more information, visit www.elynx.com.

Your turnNational Mortgage Professional Magazineinvites you to submit any information

promoting 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:[emailprotected]

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

new to market continued from page 43

• Daily updated mortgage industry news

• Industry blogs• Write your own blog

• Find loan programs• Discover local and

national events• Get access to video

Anthony L. GiorgioFounder

Don Giorgio

President and Co-Founder

Many thanks for 30 years of success

and many more to come …

A message from United Northern Mortgage Bankers Ltd.

President Don Giorgio

To the staff of United Northern Mortgage Bankers Ltd.:

As we approach the 30th anniversary of the company, I felt it would be a good time to stop for a

moment to recognize what we, as a group, have achieved. United Northern Mortgage Bankers

Ltd. would not exist today without the support and team effort from all of you. These past few

years have been an amazing journey in so many different ways.

It’s been a very difficult few years in this industry. We have seen so many of our colleagues and

competitors collapse under the weight of the mortgage implosion. We were not totally immune

to these issues. As each crisis reared itself, you all showed your unwavering belief in United

Northern and me. I watched adversity turn us into a more strongly-bound team. As I joked with

everyone, “Failure is not a luxury we can afford.” I didn’t realize the impact of that joke and the

positive effect it would have.

Here we are today, nearing the end of 2009. The results for the company are truly unexpected and

wonderful to report. You exceeded all volume expectations. During that climb, we were able to

maintain the quality of our business, keep our average FICO score at 695.

I would like to personally thank the administrative staff and production staff for their sacrifice

and dedication. You all persevered and put in long hours despite the complaints of our spouses

and significant others. I applaud the determination of the sales staff to succeed in a market that

is in a constant state of change and turmoil.

As I watch our company family grow, my only regret is that my father who started with me 30

years ago is not here is to see what has blossomed, a full-service mortgage banker that faced the

industry’s adversity and came out a leader. I look forward to our celebration year and sharing it

with you and the rewards it will bring us.

Again, a heartfelt thank you.

Don Giorgio, President

United Northern Mortgage Bankers Ltd.

UnitedNorthern.Jobs • [emailprotected] • Call (888) 600-8808 ext 1.

3017 Hempstead Turnpike • Levittown, NY 11756

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