NMP January12

P R E S O R T E D S T A N D A R D
U . S . P O S T A G E P A I D
N M P M E D I A C O R P .
1 2 2 0 W A N T A G H A V E N U E
W A N T A G H , N E W Y O R K 1 1 7 9 3
To learn more about Jims perspective,
Go to www.iambenchmark.info or call 800-236-1824
Jim McMahan
Benchmark President & Partner
I AM BENCHMARK
www.IamBenchmark.info
Success Relationship Dynamic Excellence
Positive
Attitude
We are a community of mortgage professionals who are united by the Benchmark Core Values:
"As an industry professional
your outcome depends now
more than ever on your team
and your foundation that you
align with."
A Special Look at
Managing & Selling REOs
Soaking Up REO Inventory Like a Sponge
By Daren Blomquist ..............................................................36
REOs in 2012: They Key Word is Trust
By David Lykken & Jon Traver ..................................................38
An REO Obstacle Course By Ivan Choi ..............................39
Rehab or Sell As-Is? By Cheryl Lang ..............................40
HUD REOs: Six Things Every MLO Needs to Know
By Jeff Mifsud ......................................................................42
Managing and Selling REOs in a Flooded Market
By Frank Danna....................................................................................43
Features
New Years Resolutions By Mary Beth Doyle ........................4
Pursuing Excellence By Casey Cunningham ..........................4
Controlling Credit Risk By Jonathan Foxx ............................8
ValueNation: In Uniformity Lies the Path to Progress
By David Rasmussen ............................................................10
The NAMB Perspective ..................................................12
NMP Mortgage Professional of the Month:
Brett McGovern, President of Bay Equity
Home Loans....................................................................16
For Managers Only: The Management Dilemma
By Dave Hershman................................................................18
The Mortgage Battlefield of 2012:
A View From the Frontlines By John Walsh........................20
Credit Repair Still a Threat to Your
Mortgage Business By Terry W. Clemans ..................................28
Leadership and Culture: Are Your Model-Matched
With Your Current Mortgage Lender?
By Drew Waterhouse ............................................................32
Make Real Estate Agents Your Soldiers!
By Raymond Bartreau ............................................................35
Columns
Heard on the Street ........................................................6
NMP News Flash: January 2012 ....................................19
New to Market ................................................................29
NMP Mortgage Professional Resource Registry ..........44
NMP Calendar of Events ................................................48
Visit Our
ADVERTISERS
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Bay Equity LLC ................................................ www.bayeq.com ..................................................41
Benchmark Mortgage ...................................... www.iambenchmark.info ..............Inside Front Cover
Best Rate Referrals, LLC .................................... www.bestratereferrals.com ..................................13
Calyx Software ................................................ www.calyxsoftware.com ......................................43
CBC National Bank .......................................... www.cbconnex.com ..............................................9
Elliott and Company Appraisers, Inc................... www.appraisalanywhere.com ................................42
Equity Loans LLC .............................................. www.equityloans.com ..........................................21
Flagstar Wholesale Lending .............................. www.paperless.flagstar.com......................Back Cover
Freedom Mortgage .......................................... www.fmbranch.com ......................Inside Back Cover
Frost Mortgage Lending Group .......................... www.frostmortgage.com/nmp ..............................24
GSF Funding .................................................... www.gogsf.com ....................................................7
Hometown Lenders .......................................... www.hometownbranch.com ................................29
Icon Residential Lenders, LLC ............................ www.iconwholesale.com ................................5 & 15
Land Home Financial Services .......................... joinamx@lhfinancial.com ....................................39
Loyalty Express ................................................ www.loyaltyexpress.com ......................................15
Menlo Park Funding ........................................ www.menloparkfunding.com ................................37
Mortgage Brokers Network Corp, Inc. ................ www.mortgagebrokersnetwork.com ......................19
NAMB.............................................................. www.namb.org/legconference ..............................35
NAPMW .......................................................... www.napmw.org ..................................................6
PB Financial Group Corp. .................................. pbfinancialgrp.com ..............................................24
Polaris Home Funding Corp. (Branches) .............. www.polarishfc.com/TimeForAChange ..................25
Polaris Home Funding Corp. (Wholesale) ............ www.polarishfc.com ............................................31
REMN (Real Estate Mortgage Network)................ www.remnwholesale.com ....................................11
Shortsale Speedway.......................................... www.shortsalespeedway.com/freedemo ................30
TMS Funding.................................................... www.tmsfunding.com ..........................................33
Veros Real Estate Solutions .............................. pmc2012.com ......................................................23
National Mortgage Professional Magazine
TABLE OF CONTENTS
January 2012 Volume 4, Number 1 Company Web Site Page
P R E S O R T E D S T A N D A R D
U . S . P O S T A G E P A I D
1 2 2 0 W A N T A G H A V E N U E
W A N T A G H , N E W Y O R K 1 1 7 9 3
A Message From NMP Media Corp.
Executive Vice President Andrew T. Berman
2
January 2012
Volume 4 Number 1
1220 Wantagh Avenue Wantagh, NY 11793-2202
Phone: (516) 409-5555 / (888) 409-9770
Fax: (516) 409-4600
Web site: NationalMortgageProfessional.com
STAFF
Eric C. Peck
Editor-in-Chief
(516) 409-5555, ext. 312
ericp@nmpmediacorp.com
Andrew T. Berman
Executive Vice President
(516) 409-5555, ext. 333
andrew@nmpmediacorp.com
Joey Arendt
Art Director
joeya@nmpmediacorp.com
Jon Blake
Advertising Coordinator
(516) 409-5555, ext. 301
jonb@nmpmediacorp.com
Kelsey Domino
Executive Sales Assistant
(516) 409-5555, ext. 316
kelseyd@nmpmediacorp.com
Tara Cook
Billing Coordinator
(516) 409-5555, ext. 324
tarac@nmpmediacorp.com
ADVERTISING
To receive any information regarding advertising rates, deadlines and require-
ments, please contact Senior National Account Executive Karen Krizman at
(516) 409-5555, ext. 326 or e-mail karenk@nmpmediacorp.com.
ARTICLE SUBMISSIONS/PRESS RELEASES
To submit any material, including articles and press releases, please
contact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or e-mail
ericp@nmpmediacorp.com. The deadline for submissions is the first of
the month prior to the target issue.
SUBSCRIPTIONS
To receive subscription information, please call (516) 409-5555, ext.
301; e-mail orders@nmpmediacorp.com or visit www.nationalmort-
gageprofessional.com. Any subscription changes may be made to the
attention of Circulation via fax to (516) 409-4600.
Statements, articles and opinions in National Mortgage Professional Magazine
are the responsibility of the authors alone and do not imply the opinion or
endorsement of NMP Media Corp., or the officers or members of National
Association of Mortgage Brokers and its State Affiliates (NAMB), National
Association of Professional Mortgage Women (NAPMW), National Credit
Reporting Association (NCRA) and/or other state mortgage trade associations.
Participation in NAMB, NAPMW, NCRA, and/or other state mortgage
trade associations events, activities and/or publications is available on
a non-discriminatory basis and does not reflect the endorsement of the
product and/or services by NMP Media Corp., NAMB, NAPMW, NCRA,
and other state mortgage trade associations.
National Mortgage Professional Magazine, NAMB, NAPMW, NCRA,
and/or other state mortgage trade associations do not make any misrepre-
sentations or warranties concerning the regulatory and/or compliance
aspects of advertisers, products or services and/or the editorial content con-
tained in NMP Media Corp. publications. National Mortgage Professional
Magazine and NMP Media Corp. reserve the right to edit, reject and/or post-
pone the publication of any articles, information or data.
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A new year a new attitude and a new direction
So 2012 is finally here. Did you make a list of resolutions prior to midnight on Dec. 31,
2011? Have you taken these resolutions to heart and actually stuck to them. Sure, we
all vow to lose weight and eat better, but judging by the dwindling crowds at the gym,
I can see that not many have been in the mood to stick to that one. What about your
business? Have you made a commitment to improving your bottom line in 2012?
This month, we have assembled some of the industrys top experts four our January
2012 Special Focus on Managing & Selling REOs. In todays marketplace, theres a
good chance youre either dealing with a large inventory of REOs or trying liquidate
your REO portfolio. Perhaps that improvement on your bottom line can start with stepping into the REO
marketplace. Daren Blomquist of RealtyTrac kicks things off by sharing his expertise and providing the facts
and figures as to why you should no longer neglect this niche in his piece, Soaking Up REO Inventory Like
a Sponge on page 36. Following Daren, our resident leadership experts David Lykken and Jon Traver of
Mortgage Banking Solutions tackle REOs in their piece on page 38. REOs in 2012: The Key Word is Trust
examines just who out there can be relied upon for expert advice when entering the real estate-owned
marketplace as a trustworthy and knowledgeable individual on the other side of the table can make or
break a deal. On page 39, Ivan Choi of Matt Martin Real Estate Management takes a closer look at the hur-
dles and obstacles in place when trying to close an REO transaction. Cheryl Lang of Integrated Mortgage
Solutions opens the debate on whether you should make the investment in fixing up an REO property or
sell it in its current state in her aptly titled piece, Rehab or Sell As-Is? on page 40. Our section continues
on page 42 as our FHA expert Jeff Mifsud of Mortgage Seminars LLC provides our readers with six points
that every loan originator should know before looking into purchasing a HUD REO property. Our special
focus wraps up on page 43 with a submission from Frank Danna of Appraisal Logistics, effective ways of
opening the dam on your flooded REO pool.
NMPs Professional of the Month
We kick off January 2012 with a closer look at Brett McGovern of Bay Equity Home Loans on page 16, the
subject of our NMP Mortgage Professional of the Month. Brett took a leap of faith in 2007 as the mortgage
meltdown began to rear its ugly head. It was at that time that he decided to open Bay Equity and enter the
wholesale marketplace and has enjoyed growing success ever since.
See you in D.C. this March
Back to the subject of resolutions for the new year did you make a pledge to become more involved
with your industry? Do you want to stand alongside your peers as they take on the regulators who have
been imposing their will on the industry? If you answered yes, a unique opportunity is on the horizon,
March 19-20 in Washington, D.C. as you can join your peers in getting a firsthand look at the legislative
process on Capitol Hill at the 2012 NAMB Legislative & Regulatory Conference. NAMB is assembling a great
list of speakers and guests, as attendees will be armed with the knowledge and talking points needed when
meeting on Capitol Hill with your elected officials on Lobby Day. NAMBs Legislative & Regulatory
Conference is highlighted by the annual trip to Capitol Hill where you, as a constituent of your senators and
representatives, can provide your elected officials with the knowledge on legislation that may impact your
industry. For more information, see NAMB President Donald J. Frommeyers message on page 12 or visit
NAMB.org/legconference for more details on this event.
New year, new faces
Our resolution here at National Mortgage Professional Magazine is to go above and beyond providing you
with the tips necessary to take your business to the next level from the industrys top experts. This year, we
welcome a few new columns to the fold, starting with Casey Cunningham o XINNIX on page 4 and her new
monthly feature, Pursuing Excellence. Casey drives home the message of settling for nothing short of the
best in 2012, and how to take the steps necessary to attain your goals. Another new column for all you man-
agers out there is Dave Hershmans new entry, For Managers Only on page 18 where Dave shares his 30-
plus years of industry experience in helping you find and train the right people to lead your team.
You get all this and much more in this months issue of National Mortgage Professional Magazine. Was
12:00 a.m. on Jan. 1 just another tick of the clock for you? Or, did it mark the time to take action and stand
firm to make the changes necessary, both personal and in business, that will set you toward your intend-
ed goal not only in 2012 but beyond? Only you can make the choice to step off the sidelines and step into
the ring. If you are reading this publication, you are a survivor so far. Take what youve gone through and
build upon your experiences while making an investment in yourself.
Until next month ...
Andrew T. Berman, Executive Vice President
NMP Media Corp.
is published monthly by NMP Media Corp.
Copyright 2012 NMP Media Corp.
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The Association of
Mortgage Professionals
2701 West 15th Street, Suite 536 O Plano, TX 75075
Phone #: (703) 342-5900 O Fax #: (530) 484-2906
Web site: www.namb.org
PresidentDonald J. Frommeyer, CRMS
Amtrust Mortgage Funding Inc.
200 Medical Drive, Suite D
Carmel, IN 46032
(317) 575-4355 O dfrommeyer@amtrust.net
Vice PresidentDonald Fader, CRMS
SMC Home Finance
P.O. Box 1376
Kinston, NC 28503-1376
(252) 523-5800 O dfader@smchf.com
TreasurerJohn Councilman, CMC, CRMS
AMC Mortgage Corporation
2613 Fallston Road
Fallston, MD 21047
(410) 557-6400 O jlc@amcmortgage.com
SecretaryOlga Kucerak, CRMS
Crown Lending
222 East Houston, Suite 1600
San Antonio, TX 78205
(210) 828-3384 O olga@crownlending.com
Past PresidentJim Pair, CMC
Mortgage Associates Corpus Christi
6262 Weber Road, Suite 208
Corpus Christi, TX 78413
(361) 853-9987 O jlpair@aol.com
Rocke Andrews, CMC, CRMS
Lending Arizona LLC
1996 North Kolb
Tucson, AZ 85715
(520) 886-7283 O randrews@lendingarizona.net
Fred Arnold, CMC
American Family Funding
24961 The Old Road, Suite 101
Stevenson Ranch, CA 91381
(661) 284-1150 O fred@fredarnold.com
Kay A. Cleland, CMC, CRMS
KC Mortgage LLC
200 South Wilcox Street #224
Castle Rock, CO 80104
(720) 810-4917 O kaycleland@comcast.net
Deb Killian, CRMS
GMAC
246 Federal Road, Unit C-24
Brookfield, CT 06804
(203) 778-9999, ext. 103 O debkillian@snet.net
Linda McCoy
Mortgage Team 1 Inc.
6336 Picadilly Square Drive
Mobile, AL 36609
(251) 610-0494 O linda@mortgageteam1.com
Donald J. Unger
President
(303) 670-7993, ext. 222
don@advcredit.com
Daphne Large
Vice President & Treasurer
(901) 259-5105
daphnel@datafacts.com
Tom Conwell
Ex-Officio & Legislative
Chair
(800) 445-4922, ext. 1010
tconwell@credittechnologies.com
Nancy Fedich
DirectorConference Chair
(908) 813-8555, ext. 3010
nancy@cisinfo.net
Judy Ryan
Director-New Membership
& Elections Chair
(800) 929-3400, ext. 201
jryan@Kroll.com
Susan Cataldo
DirectorEducation
& Compliance Chair
(404) 303-8656, ext. 204
susancds@cdsusa.net
William Bower
DirectorTenant Screening
Chair
(800) 288-4757
wbower@confinfo.com
Mike Brown
DirectorTechnology Chair
(800) 925-6691, ext. 4350
mike.brown@ncogroup.com
Maureen Devine
DirectorEducation
& Compliance Co-Chair
(413) 736-4511
mdevine@strategicinfo.com
Renee Erickson
DirectorTenant Screening
Co Chair
(800) 311-1585, ext. 2101
renee@zipreports.com
Terry Clemans
Executive Director
(630) 539-1525
tclemans@ncrainc.org
Jan Gerber
Office Manager/Membership
Services
(630) 539-1525
jgerber@ncrainc.org
President
Laurie Abshier, GML, CME, CMI
(661) 283-1262
lauriea@gemcorp.com
President-Elect
Candace Smith, CME
(512) 329-9040
csmith@wrstarkey.com
Senior Vice President
Jill Kinsman
(206) 344-7827
jill.kinsman@usbank.com
Vice President-Northwestern Region
Nita Cook, GML, CME, CMI
(360) 705-5053
nita.cook@legacyg.com
Vice President-Western Region
Lyman King III, CME, CMI
(916) 967-4653
lking@gemcorp.com
Vice President-Central Region
Lisa Puckett, CME
(405) 741-5485
lpuckett@ameagletitle.com
Vice President-Eastern Region
Christine Pollard
(607) 656-5005
cpollard1046@gmail.com
Secretary
Katheryn M. Farrell
(509) 528-0349
katherynfarrell@yahoo.com
Treasurer
Jeanne Evans, CME
(918) 431-0155
drmjevans@att.net
Parliamentarian
Hulene Bridgman-Works
(800) 827-3034
hulene137@yahoo.com
NAMB Board of Directors
National Association of Professional
Mortgage Women
P.O. Box 451718 O Garland, TX 75042
Phone #: (800) 827-3034 O Fax #: (469) 524-5121
Web site: www.napmw.org
OFFICERS
DIRECTORS
2012 Board of Directors & Staff
National Credit Reporting Association Inc.
125 East Lake Street, Suite 200 O Bloomingdale, IL 60108
Phone #: (630) 539-1525 O Fax #: (630) 539-1526
Web site: www.ncrainc.org
National Board of Directors 2011-2012
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New Years Resolutions
by Mary Beth Doyle, Founder
Theres an old proverb that says, Tomorrow belongs to
the people who prepare for it today. As we begin a
new year, its important to focus on maximizing business
through strategic, proactive marketing. But thats
easier said than done. Reaching out to all your clients,
partners & prospects in an effective way takes valuable
time & resources. Fortunately, LoyaltyExpress provides
comprehensive, cost-effective solutions that motivate your
book of business to take action. As a result, you can
focus on closing loans.
LoyaltyExpress is the #1 choice of top-producing loan
offcers & executives across the nation. Heres why:
t Our proprietary technology enables you to
automate high-impact communications that
consistently deliver new & repeat business.
Intelligent data mining identifes and promotes
new opportunities and referrals.
t Our wide selection of targeted programs delivers
exceptional results. By combining high-quality
direct mail, e-mail, and on-demand marketing
solutions your messages will successfully reach
& engage your target audience through cross-
media formats and channels.
t Our solutions are easy to use. With only a few
clicks of the mouse, youll be sending targeted
marketing campaigns & pieces that convert your
book of business into closed loan production.
Our industry-leading client services team is
always available to answer questions.
Time is of the essence. Take a few minutes to explore
the benefts of working with LoyaltyExpress. Its the
best investment you can make in your business for 2012
and beyond.
LoyaltyExpress is the leading mortgage marketing
company in the nation. For more information:
call 877.938.1175
or visit
www.loyaltyexpress.com.
By Casey Cunningham
I titled this piece Pursuing Excellence because I believe in it so pas-
sionately. For you, for me, and for our industry. And I dont think I
am alone in that belief. After all, what is the number one topic for
book sellers? Motivation, average to exceptional, 100 ways to excel-
lence, the power within, the power without, the power to change,
how to excel, how to succeed, how to whatever you get it, every-
one is looking to achieve their best, and we in the mortgage business are no exception.
Lets face it; weve had a few challenges lately. The past 12 months (the past 36
months, actually) have been anything but pleasant. The days of quick approvals,
sufficient values and paychecks with lots of lovely zeros have been replaced by
Dodd-Frank, appraisals that resemble some hybrid offspring of the Titanic and
Hindenburg, and loan conditions on a slam-dunk file that make Tolstoys War and
Peace look like a sticky note reminding you to buy milk at the grocery store.
In short, the success we enjoyed and the excellence we achieved seems a little
out of reach these days or is it?
The new world in which we live has resulted in a much-needed cleansing of the
industry, sending nefarious senior loan officers to throw in the towel and slither on to
their next opportunity. In the meantime, weve seen interest rates fall to levels not
seen since dinosaurs roamed the Earth. With this in mind, I believe this is a year worth
getting excited about and where we can unabashedly pursue excellence to the fullest.
That said, it is my opinion, we first need to jettison the idea that three or four loans
a month is acceptable. Lets be completely honest, despite contractual obligation to
XYZ Mortgage Company Inc. stating three loans in monthly production keeps you
employed and allows you to still make a reasonable living, is that really the standard
we pursue? Why has the bar been set so low? The standards today are lower than
they were 30 years ago. Lets just call it what it is, shall we excuses. We justify, delay,
become lazy, blame the market, blame the economy, become complacent and settle
for mediocrity. With the current market conditions, there are countless loan officers
still very successful who dont use the excuses to hamper their success.
Does it not speak to the essence of what plagued our industry for the past four
years? Why do we, as humans, have a tendency to justify scraping our derrires as
we Fosbury Flop (look that one up) over this bar of mediocrity?
The setter of standards is not the boss boss boss who sits at a desk in an office
building nine states away. Clich as it may be, the setter of standards is that lone-
ly soul that stares back at you in the mirror. Not just in the mortgage game, but
in life, your relationship with your spouse, your children, your personal finances,
your health and the list goes on.
The age old questions remains: How many people truly pursue the excellence
that puts them on a road to success and goal achievement? The answer is very
few. But you can be counted in this elite group?
Ask yourself: What will it take? What will you commit to this year? Are you will-
ing to abandon your comfort zone? What will you read to aid in your pursuit of
success? How will you invest in yourself? Are you going to let your success be pred-
icated on anyone else? Are you ready to succeed? When will you start? Find some-
thing, ANYTHING to hold you accountable!
Professionally, partner with a co-worker, become a student of your profession,
conduct site visits, find a top producer with whom you can extract ideas and emu-
late their success, or best practices. Hire a business coach. Personally, hire a life
coach, challenge your spouse, your kids, create a personal mission statement. Set
goals that motivate you. Find your purpose and establish a path to get you there.
The simple yet unavoidable question is not, what are you doing to pursue excel-
lence, but will you pursue excellence? Its there if you want it. Answer these two
questions to begin your pursuit of excellence:
I What will you do today?
I Who will you tell?
Casey Cunningham is president of XINNIX, a provider of mortgage sales and lead-
ership development programs. She may be reached by phone at (678) 325-3501 or
e-mail casey@xinnix.com.
[NOTE: Develop Pursuing Excellence
header artwork to be picked up monthly]
Pursuing Excellence
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Bay Equity Home
Loans Goes Completely
Paperless
Bay Equity Home Loans has
announced that it has completed its
initiative to implement a completely
paperless loan processing system.
While Bay Equitys loan processing sys-
tem has been predominantly paper-
less for some time, the companys
electronic document management sys-
tem now virtually eliminates printing
hardcopies of loan documents. By not
having to print hundreds of pages of
papermany of them legal-sizedon
each and every loan, Bay Equity helps
the environment while realizing signif-
icant financial savings. It also consid-
erably reduces the time and man-
hours necessary to take a real estate
loan from application to funding.
Loan documentation processing has
always been an albatross to the real
estate industry, said Philip Mikolaj,
director of information technology for
Bay Equity. Each and every loan
required hundreds of pages of paper.
By implementing a fully electronic and
paperless system, we help the environ-
ment and save money that goes right to
the bottom line. We can also better
manage the entire process and mini-
mize the time it takes to get a loan
funded and closed.
The DataTrac EDM document man-
agement software was developed by
Del Mar DataTrac, a division of Ellie
Mae. The software was tailored to Bay
Equitys specific needs by Mikolaj,
whose deployment takes full advantage
of the systems capabilities, including:
I Up-front Submission Indexing: The
new system validates that the entire
loan document package was
received and is ready to be submit-
ted to loan underwriters.
I Appraisal Integration: Appraisals will
automatically appear in electronic
document management for UW
review, with no human action
required to upload appraisals to the
system.
I Remote Virtual Underwriting: Loan
underwriting can be done virtually,
and from any operations center,
allowing overflow management
among operations centers.
I Document Coding: The electronic
document management system will
digitally generate comprehensive
loan closing packages inclusive of
barcodes, which, when returned, will
auto-magically scan and index
every page to its respective and
appropriate category.
I Pre-funding Auditing: Loan funders
can audit and run pre-funding bun-
dles and checklists to ensure file is
complete and ready for funding.
(Post-closing audits can also be per-
formed and reviewed to ensure that
all documentation is ready for deliv-
ery to investors, who will accept
secure electronic transfers directly.
StreetLinks Announces
UCDP-Compliant
Integration With ACI
ACI has announced
that StreetLinks
Lender Solutions has integrated with
ACIs eServices, an appraisal delivery
service to help ensure compliance with
client/lender and investor require-
ments. eServices combines appraisal
compliance and quality rules with elec-
tronic delivery as a standard feature
accessible from the appraisers ACI
desktop software. ACIs approach helps
ensure that appraisal data complies
with both the Uniform Appraisal
Dataset (UAD) and MISMO XML require-
ments before the appraiser completes
the appraisal report.
ACI uses integration services from
its appraisal software to create cus-
tomized delivery solutions. The new
StreetLinks eService provides a connec-
tion for us to seamlessly receive native
XML directly from appraisers comput-
ers with the assurance of our quality
and compliance standards, said Tony
Ebeyer, chief strategy officer for
StreetLinks. The ACI system is intuitive
and allows for additional flexibility in
processing and managing appraisal
reports. Thats why thousands of
StreetLinks appraisers will rely on it
every month.
Prior to delivering the appraisal
report to StreetLinks, the new eService
performs an in-depth quality control
review using ACIs PAR Logic review
rules. The comprehensive library of
both industry best practices and job-
specific business rules checks the
appraisal report for compliance with
StreetLinks policies. Once the appraiser
has satisfied the requirements, the file
N
M
L
S
National Education
National Training
National Networking
NAPMW is a community of nearly 2,000 professionals across the
Country who engage in the mortgage / banking industry. Men
and women from all backgrounds have joined NAPMW because
they want to excel at what they do. Employers who want excel-
lence from their employees engage with NAPMW for up-to-date
education. Both professionals and employers have found there is
a place for them in NAPMW.
To Join NAPMW visit:
www.napmw.org
or call: 1-800-827-3034
Have Questions? Please
feel free to e-mail us at:
napmw1@aol.com
Organized for the purpose of providing education to profession-
als in all phases of the mortgage industry, NAPMW ofers educa-
tion via many venues seminars and workshops held around the
country, on-line, and at its National Education Conference held
each May.
NAPMW membership gives you exclusive access to timely educa-
tion regarding the regulations afecting your career such as a
FREE TO MEMBERS monthly webinar on industry updates AND
our 8 hour NMLS continuing education class ofering (NMLS
Provider # 1400309)
If you believe in helping to elevate the educational standards of
this industry, or assisting in developing the most competent
industry work force, then you believe in NAPMW.
NAPMW is not a womens organization. But since women make
up the majority of professionals in the mortgage/banking profes-
sion, our purpose is to help them advance in business, personal,
and leadership development.
Coast to Coast Associations
Discounted Services
Industry Updates
Education
Networking
Leadership
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Three Simple Reasons
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pany introduce their customer-centric,
quality focused way of doing business to
homebuyers and real estate profession-
als throughout the region.
REMNs new Dallas office is currently
staffed by a team of 17 professionals
and will be overseen by Joe Greiner, the
offices area manager, the branch will
offer a wide variety of home lending
products, including conventional, FHA
and VA loans, as well as REMNs FHA
203(k) Concierge Service, a unique ini-
tiative that ensures the home improve-
ment process of 203(k) mortgages runs
smoothly for all of the involved parties.
Greiner will report to REMN Executive
Vice President Tim Bartosh.
Im very pleased with how quickly
REMN has grown throughout the area
and the reception weve received in
Dallas, said Bartosh. REMNs history
of first-class customer service is well-
0known in the mortgage industry and
with this new office, well be able to
share this experience face-to-face with
current and future Dallas homebuyers.
AllRegs and Total
Learning Solutions Join
Forces on FHA Training
The Federal Hous-
ing Administration
(FHA) has awarded
Total Learning Solu-
tions (TLS) with a contract to provide
nationwide technical assistance train-
continued on page 10
is delivered to StreetLinks for further
processing and eventually delivered to
either of the government-sponsored
enterprises (GSEs), Fannie Mae or
Freddie Mac.
As a result of this technology collab-
oration with StreetLinks, we have devel-
oped a comprehensive pre-delivery
UAD audit and XML delivery service that
makes the process for the appraiser
simple and efficient, said George
Opelka, SVP of ACI. The upgrade pro-
vides greater accuracy, which benefits
all partiesappraisers, management
companies, the GSEs and borrowers.
Total Mortgage
Services Now Licensed
in West Virginia
Total Mortgage Services LLC has
announced that it received its West
Virginia Mortgage Lender License from
the West Virginia Division of Banking
and is able to originate residential
mortgage loans throughout the state of
West Virginia. Total Mortgage is
licensed as a mortgage lender in West
Virginia and holds Mortgage Lender
License ML-30789.
We believe we are entering the West
Virginia market at a very beneficial
time for borrowers, as mortgage rates
are close to historical lows and afford-
able housing opportunities are avail-
able throughout the state, said John
Walsh, president of Total Mortgage. We
are excited to help responsible borrow-
ers find the right mortgage solution in
todays challenging environment for
their purchase or refinancing needs.
Total Mortgage is now licensed in 25
states and the District of Columbia and
has three additional state licenses
pending.
REMN Continues
Westward Expansion
With New Colorado
and Texas Branches
Real Estate
Mo r t g a g e
N e t w o r k
Inc. (REMN)
has announced the opening of its first
Denver area location. As REMNs first
branch in the state of Colorado, this
new location will help the company
better service the needs of the regions
year round residents, vacation home
buyers and real estate professionals.
Located in Englewood, Colo., the
new office will be overseen by the
recently hired Cathy Stroud, who joins
REMN as their first regional vice presi-
dent for the area. A Denver resident
and mortgage industry professional for
more than 20 years, Stroud is a gradu-
ate of Colorado State University, an
active board member of the Colorado
Mortgage Lenders Association (CMLA)
and volunteers with Susan B. Komen for
the Cure.
Stroud is joined by Vickie Newman
and Kevin Feakes as mortgage loan
originators, bringing with a combined
50 years of experience to REMN. Scott
Newman joins REMN as the Denver
offices area manager and will oversee
day-to-day operations.
REMN is well-known in the industry
for their terrific customer service and
commitment to finding the best possi-
ble mortgage solutions for homeown-
ers, a reputation that will follow them
here in Denvers growing and diverse
market, said Stroud. Weve recruited
some true local all-stars for this office
and I look forward to sharing the REMN
way of doing business with the greater
Denver community.
REMN has also announced the open-
ing of its first Dallas retail location. As
REMNs first branch in the state of
Texas, this new office will help the com-
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Controlling
Credit Risk
By Jonathan Foxx
W
e begin 2012
with the cer-
tain knowl-
edge that many new
regulations and respon-
sibilities have made sig-
nificant and costly demands on lenders,
servicers, mortgage brokers, banks,
investors, and mortgage securitizers to
revise and strengthen plans to assure their
economic survival. Many compliance
departments throughout the country have
set forth robust compliance calendars in
order to monitor, test for, and implement
federal and state guidelines.
The primary source of revenue for the
aforementioned companies (collectively,
financial institutions) is the negotiating,
extending, administering, and packaging
of credit. Extension of credit and credit
risk are really inseparable features of
mortgage loan originationsone does
not exist without the other.
Credit risk is quite measurable, espe-
cially with respect to any activity that
poses a risk to earnings and capital. It is
no secret that inadequate risk manage-
ment is a leading cause of the failure of
financial institutions. Just as credit risk
and extension of credit are inseparable,
so also are they inseparable from risk
management. Only to the extent that
credit risk and appropriate risk man-
agement procedures are identified,
analyzed, established, and implement-
ed may financial institutions claim to
have safe and sound lending practices.
Risk management (often referred to,
generically, as Compliance) should not
formally come under the rubric of the so-
called Best Practices section of corpo-
rate governance. In my view, risk man-
agement is not an elective, a negotiable
issue, a good operating practice, a mere
technique consistently providing superior
results, a Six Sigma template, or a busi-
ness management strategy. Rather, risk
management is, and ought to be, an
inherent and essential, evaluative and
ministerial function reaching to virtually
all intrinsic aspects of a financial institu-
tions business model. This is why
I coined the term
Mortgage Risk
Management,
because it stands on its own, a specializa-
tion that provides a firm foundation to
the residential mortgage loan flow
processfrom point of sale to securitiza-
tion. Put otherwise, it is the one and only
fail-safe means by which a board of
directors may ensure that management
effectively implements internal processes
designed to identify, measure, monitor,
and control credit risk.
Close consideration of appropriate
risk management practices is vital to a
financial institutions stability, most
especially in the outset of a new year
and at all other times. But what is risk
management? And, how does risk man-
agement affect a financial institutions
way of doing business?
In this article, I will provide a brief
outline of two key areas where credit
risk review and risk management con-
join directly to impact a financial insti-
tutions capability to conduct business
and manage a thicket of regulations.
Drawing on my own experience in work-
ing with our clients, I will offer an
overview of what risk management
entails, whether conducted internally or
through external resources.
To get a sense of a typical approach
involved in evaluating credit risk and
the concurrent role played by risk man-
agement, I will outline the following
areas: Quantity of Risk and Quality of
Risk Management.
In a penultimate section, entitled
Implementing Risk Management, I will
offer some guidance about how to use
credit risk information effectively to for-
tify a financial institution.
Quantity of Risk
I define quantity of risk as the level of
credit risk associated with the credit port-
folio of a financial institution. Generally,
there are three levels for quantity of risk:
Low, moderate or high. In evaluating
credit risk, there are nine areas of review
that should be undertaken.
1) Risk Level
I Consider in the analysis the size of
the exposure associated with each of
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heard on the street continued from page 7
ing to its business and industry part-
ners. AllRegs Inc. is the exclusive
mortgage industry partner of the TLS
team. TLS and AllRegs (referred to as
Team TLS) will be responsible for pro-
viding professional, technical and
administrative services to deliver
technical-assistance training nation-
wide via FHA, in conjunction with the
Office of Fair Housing and Equal
Opportunity (FHEO) and the Office of
the Inspector General (OIG), to its
business and industry partners. The
purpose of this training is to address
the housing crisis by ensuring educa-
tion on, and compliance with, FHA
program guidelines.
The delivery of this comprehen-
sive training curriculum will support
the implementation of policies and
program changes to FHA programs
as a result of legislation and other
issues.
We are excited to be a part of Team
TLS and for AllRegs to help deliver this
important FHA training initiative to the
mortgage lending industry, said Dan
Thoms, EVP of AllRegs.
Equator Reports
Nearly 1.2 Million
Short Sales Initiated
Equator (EQ),
a provider of
default serv-
icing technol-
ogy, has announced in its fourth
quarter report that approximately
1.2 million short sales have been ini-
tiated since the launch of its short
sale module in November of 2009.
The report also states that Equators
Loan Segmentation Module has deci-
sioned more than 875,000 loans
since early 2011 and in excess of
$150 billion in assets have been sold
through its platform since 2003.
Equator now offers servicers a
complete, end-to-end default solu-
tion, said Equator Chief Executive
Officer Chris Saitta. Our platform
can handle every aspect of default
that our clients need, from loan seg-
mentation to loan modification,
short sales, deeds in lieu, invoicing,
foreclosure processing and REO.
Equator recently announced plans
to launch a new comprehensive soft-
ware solution for Real Estate
Professionals called REvolution Basic
in early 2012, an enterprise level
solution for real estate professionals
which will allow them to handle both
distressed and traditional properties
seamlessly through one system.
Equators loan segmentation
module has been a huge success with
proven results, said Equator COO
John Vella. The enormous volume
that has run through the model has
allowed Equator to validate its value
and we anticipate that the volume in
2012 will at least double.
Avista Solutions
Announces Partnership
With ComplianceEase
Avista Solutions
has announced
the completion
of a direct inte-
gration to ComplianceAnalyzer, an
automated compliance auditing solu-
tion from risk management solution
provider ComplianceEase. Avista
Solutions and ComplianceEase have a
number of mutual customers and this
integration allows those customers to
access the ComplianceAnalyzer solution
directly from their Avista Agile LOS.
ComplianceAnalyzer provides real-
time compliance audits at any point in
the lending process, safeguarding them
from potential loan risks. As part of
recent electronic examination (e-Exam)
initiatives, state regulators have been
using ComplianceAnalyzer and other e-
Exam tools to audit as much as 100 per-
cent of licensees loans in regulatory
examinations. By leveraging integrated
audits using the same auditing soft-
ware, lenders can prepare in advance
for their e-Exams.
ComplianceAnalyzer covers a full
spectrum of government regulations,
including the Home Ownership and
Equity Protection Act (HOEPA), the
Truth-in-Lending Act (TILA), Real Estate
Settlement Procedures Act (RESPA),
state and local anti-predatory lending
laws, state license-based consumer
lending regulations and secondary mar-
ket investor and government-sponsored
enterprise (GSE) compliance guidelines.
Avista Solutions recognizes the impor-
tance of providing our customers with
access to industry leading compliance
tools, said Avista Solutions Chief
Operating Officer & Chief Financial Officer
Jerry White. As the company behind
robust tools that state banking and mort-
gage regulators rely on, ComplianceEase is
a significant force in the mortgage indus-
try and we are excited to now offer a
seamless, system-to-system interface to
their ComplianceAnalyzer solution.
Avista customers who choose to
sign up for ComplianceAnalyzer may
utilize the tool to pinpoint a mortgage
loans compliance risk factors,
whether the loan is in the pre-close or
post-close stage, with a single click
and without leaving their Avista Agile
LOS. ComplianceAnalyzer returns com-
prehensive, user-friendly audit reports
to lenders within seconds. Each report
features the industry standard
RiskIndicator, a score that reflects a
loans compliance risk, as well as
quantitative analysis of thresholds
and detailed qualitative overviews
with narrative descriptions of regula-
tory requirements.
Avista users can enjoy the best of
both worlds with this seamless integra-
tion, continuing to use their LOS of
choice, while managing compliance
By David Rasmussen
Automating the acceptance of appraisal and other val-
uation services has been an objective of lenders for a
long time. While it has been possible to convert apprais-
al data into an electronic format for transmission and
storage, the lack of consistency among providers has
significantly limited the ability to do anything more.
When Fannie Mae and Freddie Mac implemented the
Uniform Mortgage Data Program (UMDP), along with its three main ini-
tiatives, the Uniform Loan Delivery Dataset (ULDD), Uniform Appraisal
Dataset (UAD) and Uniform Collateral Data Portal (UCDP), its purpose was
to keep data provided to the mortgage industry consistent. Now, we are
seeing this positive step in uniformity take on a multitude of new forms
and break down barriers to data access.
From a broad perspective, valuation management platforms can allow
an organization to effectively extend itself in a unified manner, typically
connecting lending branches, or perhaps, linking the origination arm to
the servicing arm. However, in todays climate, lenders can leverage
these solutions to extend from internal originations efforts into the sec-
ondary market government-sponsored enterprise (GSE) investor initia-
tives to create more cohesion than ever before.
A robust valuation management platform, combined with the new
uniformity of appraisal data, also greatly improves an organizations abil-
ity to convert data to information that can be used to identify new prod-
ucts, services and opportunities. The industry is already seeing UAD def-
initions and terms being embraced in the production of non-traditional
valuation products, making it possible for an organization to gather
input from various sources in a common language to facilitate better
analysis and understanding of the underlying collateral throughout the
life of the loan.
Looking at a more detailed level within the platform itself, there are
at least three functional benefits of integrating UCDP and UAD modules
and embracing the concept of data uniformity.
I Benefit #1: Advanced valuation management platforms can pro-
vide the ability to convert first-generation appraisals into an elec-
tronic data format compliant with GSE initiatives. When that for-
mat is not readily available from an appraiser or an appraisal
management company (AMC), or a lender chooses not to utilize the
portal-level conversion tool, lenders need to have the ability to
convert it for submission. Valuation platforms can provide this
facility without ever leaving the native application for appraisal
order, receipt and review.
I Benefit #2: Advanced valuation management platforms can pro-
vide the ability to automate expectations and resolve issues
before submission. Specifically, when an appraisal is returned, a
valuation management platform can confirm if the data is UAD
SPONSORED EDITORIAL
In Uniformity Lies
the Path to Progress
11
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with ComplianceAnalyzer, said
ComplianceEase Senior Vice President
Jason Roth. Major secondary market
investors use ComplianceAnalyzer to
check every loan prior to purchase and
state regulatory examiners are using it
to audit as much as 100 percent of
licensees portfolios. To safeguard their
reputations and reduce financial risks,
it makes a lot of sense for lenders to do
the same.
radius Selects
MortgageFlexs
LoanQuest for
Cloud-Based LOS Needs
radius financial group
inc. has announced
that is has selected
LoanQuest from Mort-
gageFlex Systems for their loan origi-
nation software (LOS) needs. Their
decision was based on the desire to
have an adaptable, modern platform
without the back-end hardware
costs. The hosted LoanQuest system
selected includes the enterprise-level
LOS and a Web consumer portal that
allows consumers immediate access
to loan status.
Our business needs required a
system that is flexible enough to con-
form to our origination workflow
requirements, not the other way
around, said Keith Polaski, princi-
pal at radius. LoanQuest proved
that it was versatile and could be
adapted as needed without signifi-
cant programming resources.
MortgageFlex offers several host-
ing options, including transactional
and SaaS. The transactional option
allows lenders to pay-as-used on a
per loan basis and is very beneficial
for lending organizations that do not
have technical infrastructure and
support readily available. Hosted
options also give lenders high levels
of security with SSAE16-certified
facilities and full Disaster Recovery
sites.
We understand radius business
requirements and are confident we
will meet and exceed their needs,
said Craig Bechtle, chief operating
officer of MortgageFlex. Were look-
ing forward to a long and beneficial
partnership.
DocuTech Acquires
LSSI Software Assets
From Emphasys
DocuTech Corporation has announced
the acquisition of the assets of Lender
Support Systems Inc.s (LSSI) Docs3D
mortgage document software from par-
ent company, Emphasys Software. The
acquisition of LSSIs Docs3D software
and customer base enables DocuTech
to continue growing its existing pres-
ence among regional banks and cred-
it unions. Current LSSI customers will
see no disruption of services and can
look forward to benefiting from the
expanded compliance services offered
by DocuTech, including dedicated
legal staff tracking all regulatory
changes and monthly updates to
ensure all systems are up-to-date.
We are thoroughly excited to
begin offering our proven compli-
ance and easy-to-use document and
disclosure services to LSSI users, said
Ty Jenkins, chief executive officer of
DocuTech. We welcome Docs3D cus-
tomers to the DocuTech family and
look forward to bringing our indus-
try-standard levels of compliance,
service and innovative document
technology to them.
DocuTech will provide full support to
all of LSSIs customers. This includes
customer support call centers, educa-
tional materials on regulatory issues
and legal staff to track and implement
new regulations.
Mortgage Information
Services Announces
Integration With UCDP
M o r t g a g e
I nf ormat i on
Services Inc.
(MIS) has announced that it has inte-
grated with the Uniform Collateral Data
Portal (UCDP) and is compliant with the
Uniform Appraisal Dataset (UAD).
Clients of MIS working with the
government-sponsored enterprises
(GSEs) will continue to be able to
place their orders through MISs pro-
prietary Web-based order placement
and tracking platform. They will not
need to take the additional step of
uploading the appraisal report
themselves to the UCDP as MIS has
the ability to deliver it to both the
client and the GSEs. In the current
environment, MIS prides itself on
providing services that streamline
the valuation, title and closing
processes, allowing their clients to
focus on growing and maintaining
their businesses.
MIS has been a national provider
of real estate information to the res-
idential mortgage market since 1990,
offering title insurance, closing and
valuation services to loan originators
and servicing companies.
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o here we are,
looking at a
new year and
wondering about all of
the good things that we
can start over, so we
do not make the
same mistakes that
we made last year. So I found some-
thing that we want to change right
away at NAMB, the Association of
Mortgage Professionals? Membership!
It has come to my attention from a few
loan originators out there that they
paid their state for an NAMB
Membership, but they are not able to
get onto the Web site, get the discount-
ed rate at an NAMB event as a member,
renew their certification, nor get their
Lending Integrity Seal of Approval.
I need all of you to make sure and
verify that your NAMB Membership is
active. Go on and make sure that you
are listed in the Find an NAMB
Broker search feature. If you are
not, either you membership has
expired and you did not renew, or if
you paid your dues to your state,
contact your states treasurer and/or
executive director and have them
check out the problem. If your mem-
bership has expired, now is the time
to RENEW! And because the Delegate
Council changed the by-laws of the
association, you can renew you
NAMB dues online by going online to
JoinNAMB.com and you can renew
you membership. The best thing that
you can do is ask your friends if they
are members of NAMB. If they ask
Why reply to them, Why not?
I have also been speaking with
originators nationwide about our
Lending Integrity Seal of Approval. Do
you currently have yours? This is a
great point to make to your cus-
tomers that you have this Seal. You
can go online to NAMB.org and click
on the Membership icon and under-
neath the heading, you will find infor-
mation on the Lending Integrity Seal of
Approval where you can apply for the
Seal. There is no reason that you should
want to advertise yourself without the
Lending Integrity Seal.
To change direction, we are current-
ly approaching the time that all NAMB
members need to start to make plans to
join us in Washington, D.C. for the
2012 NAMB Legislative & Regulatory
Conference, set for Monday-Tuesday,
March 19-20 at the Capitol Skyline
Hotel in Washington, D.C. Please visit
NAMB.org and click on the 2012
Legislative Conference logo to see
what is in store for this years speakers
and panels. This year is going to be
really important and all members
need to come, attend the Legislative
Program on Monday, March 19 and
visit your elected officials to let them
know what NAMB and its members
are doing. There is nothing like being
a constituent and walking into their
office as a voter. They are there to lis-
ten to you and get information from
you. Remember, this is for NAMB
members only, so you are on the Hill
representing your national associa-
tion, state association and yourself.
Come to the Conference, get your
information and go talk to your repre-
sentative on the nations capital.
If you have never been to
Washington, D.C., now is the time to
make your mark and get a firsthand
look at our nations legislative process.
We will be hosting classes on key
points to discuss with your congress-
men and senators, and what you need
to do on each and every visit with
them. If your state is organizing your
Capitol Hill visits, which most state
associations do to make sure that the
meetings are coordinated, you need to
contact your state leadership and let
them know that you will be attending.
They will welcome you with open
arms, and get you set up to walk with
them through the halls of Congress.
I can remember the first time I
went to Washington, D.C. back in
1999. It not only was an honor to be
able to walk in as a member of NAMB
and my great state of Indiana, but I
also got to meet those people that
really only existed on the TV. You see
them on political talk shows and you
wonder what they are like in person,
and I had the opportunity to meet
most of them personally. During the
time that we were in their office, they
listened to what we were saying, and I
had the chance to engage in conversa-
tion with them. It was really exciting.
So, get on the bandwagon and get to
the 2012 Legislative & Regulatory
Conference where you will get some
great information, learn a great deal
about government, and you will learn
how you can keep in touch with your
elected officials and follow up in your
home state if we ever need you to
contact them during our grassroots
events.
The NAMB board of directors has
gone through a few changes since
NAMB/WEST. Walt Scott has resigned
from the board due to not being able to
spend a lot of free time performing his
board duties. Walt lost his father about
a year-and-a-half ago and is now the
caregiver to his mother, and this
accounts for a lot of his time. I will miss
Walt and I wish him well. And lets hope
Villanova has a pretty good basketball
team this year!
We have added two new people to
the board. First Rocke Andrews, CMC,
CRMS from Arizona, NAMBs Education
Committee Chair, was appointed to the
board in November. Rocke has had a lot
of experience working on several NAMB
and state committees, and will bring a
different perspective to the board. Also
at NAMB/WEST, we added Kay Cleland,
CMC, CRMS from Colorado to our ranks.
Kay is a past president of the Colorado
Association of Mortgage Professionals
(CoAMP) and is CoAMPs current
Membership Committee Chair. As most
of you who know Kay, she brings a vital-
ity of life to every meeting, and she will
be heading up the new Membership
Committee and NAMBs membership
campaign.
As I think most of you know, since
we got back from NAMB/WEST, Mike
Anderson, our vice president and
Government Affairs Committee
Chairman, has had to resign his posi-
tion with NAMB due to his mortgage
company expansion and the increase
in time he needs to spend training his
staff for this expansion. Over the past
two years, Mike and I have had a rela-
tionship where we spoke every day
and passed ideas back and forth
about NAMB. When I took over as
NAMB president in November, we
actually started talking more as I was
beginning my presidency and sharing
ideas with Mike so that when he
would take over, he would be pre-
pared to do the things that I am cur-
rently doing on a daily basis. I am
going to miss Mike here at NAMB, but
I do know that our friendship will
continue long past our involvement
with NAMB. I wish him the best, and I
know that he is only a phone call
away to brighten my day or to ask his
advice. One promise that Mike did
make to me is that he may be going
away from the day to day trials and
tribulations, but he will be attending
all of NAMBs events. Mike, I will see
you in D.C.
We have promoted John Hudson from
Texas as NAMBs new Government Affairs
Committee Chair. John was serving as
vice chair of the Government Affairs
Committee, and Mike was already get-
ting him ready to take over next June, so
he is ready. John is jumping in with both
feet and he should be already having his
monthly Government Affairs meetings
by the time this issue is published. Make
sure you stop by and introduce yourself
to John when in D.C.
In conclusion, I really appreciate
the support and kind e-mails that I
have received from all of you since I
took over this position. I do spend a
lot of my own free time working on
things that need to be addressed.
Your board of directors is also work-
ing very hard and none of us are
receiving any money for what we do.
This is truly an all-volunteer associa-
tion, and I am proud of each and
every one of our board members. I
appreciate the e-mails to
President@NAMB.org, so keep them
coming with your ideas and sugges-
tions. So far, I have been able to
answer each message personally. If
you want to become actively involved
with NAMB, let me know. It will soon
be time for nominations for the board
and we need people, but I will write
more on that in a future message.
So renew your membership now, or
if not a member, now is the time to
join, and remember Why not?
Sincerely,
Donald J. Frommeyer, CRMS,
President
NAMB, The Association of Mortgage
Professionals
The Presidents Corner: January 2011
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controlling credit risk continued from page 8
the areas bulleted below, their risk
profiles, credit quality indicators,
amounts, volatility, and trends:
N Delinquencies
N Criticized and classified loans
N Non-accrual or non-performing
loans
N Losses
N Other credit quality metrics used
by the financial institution (i.e.,
weighted average: risk grade or
default probability)
N Underwriting standards
N Exceptions to policy
2) Risk Implications
I There are two areas in particular that
are determinative with respect to
risk implications:
N Significant growth in the size of a
credit risk exposure, including
whether such growth might be
masking deterioration in credit
quality indicators; and
N Material changes in policies, pro-
cedures, or underwriting stan-
dards.
3) Risk Assessments
I Prepare, review, and discuss with
management any internally pre-
pared risk assessments of credit risk
(i.e., borrower profiles, disclosures,
procedures, compliance with regula-
tory mandates).
4) Economic Environment
I Review the local, regional, and
national economic trends and out-
look, and assess their impact on the
credit risk.
5) Business Plans
I Review business and strategic plans,
and evaluate how their implementa-
tion may affect the level of risk posed
by any credit risk.
6) Earnings and Capital
I Review and discuss with manage-
ment the results from applicable
testing of product evaluations with
respect to potential impact on earn-
ings, investment and raising or main-
taining capital.
7) Mitigation Strategies
I Evaluate the impact of mitigation
strategies on the quantity of risk in
all areas of the loan flow process.
Consider the objectives of programs,
and evaluate all departments expe-
rience with these risk levels, includ-
ing managements experience in
addressing problems that may arise,
or have previously arisen, in such
risk levels.
8) Asset Classes
I Determine and give in-depth
attention to asset classes and loan
products with more volatility in
performance.
9) Capital
I Based on the above-listed reviews
and findings, assess whether the
financial institution has adequate
capital to support the risk posed by
the quantity of risk.
Quality of Risk
Management
Having worked with clients on their risk
management needs over the years, I
have often felt that quality of risk man-
agement is where the most work is
needed. Financial institutions usually
can compile most, if not all, of the
quantity of risk information. But then
what?
I define quality of risk management,
broadly, as the exercise of producing
evaluative findings with respect to the
areas of Policy, Processes, Procedures
and Personnel for the purpose of iden-
tifying, measuring and appropriately
mitigating credit risk.
Generally, there are three levels for
quality of risk management: Strong,
Satisfactory, or Weak.
Policy
Determine whether the management
has adopted effective policies that are
consistent with safe and sound prac-
tices, given the financial institutions
size, nature, complexity, and risk pro-
file.
Evaluate the following areas to
determine whether relevant policies
provide appropriate guidance for iden-
tifying and managing the financial
institutions credit risk.
I Consider whether the financial insti-
tution:
N Establishes a tolerance for risk,
which would be shown, for
instance, as a percentage of capi-
tal or expressed in terms of risk,
but not simply by the financial
institutions size (i.e., tolerance
should be expressed as risk of
dollar loss, risk to earnings, or
risk to capital).
N Develops a company-wide frame-
work for identifying credit risk
across business lines, and origi-
nation channels, including con-
sideration of distinct groups of
loans whose credit performance
may be correlated.
N Establishes a process for testing
the identification of potential
credit risk, and to use such test-
ing to evaluate the potential
impact of adverse scenarios for
credit risk on capital and liquidi-
ty, and for reporting those results
to senior management and/or
the board of directors.
N Clarifies the roles and responsi-
bilities associated with identify-
ing and managing credit risk,
particularly those that may cross
business lines or otherwise not
be under common management.
N Defines the process for setting
credit risk limits and for approv-
ing changes and exceptions
thereto.
N Determine whether credit risk
limits are well defined and rea-
sonable. Consider the way that
limits are measured and the use
of limits or parameters for differ-
ent types of exposure within a
credit risk class (i.e., property
types, product types, geographi-
cal considerations, and so forth).
N Verify that management period-
ically reviews and approves the
financial institutions credit risk
policies, including relevant lim-
its or strategies on significant
credit risk.
Processes
Determine whether the financial insti-
tution has processes in place to provide
accurate and timely assessments of
credit risk associated with its activities
involving the extension of credit. There
are two areas that we look for in deter-
mining quality of risk management
processes:
1. We evaluate how policies, proce-
dures, and plans affecting credit risk
are communicated. This analysis
involves considering whether man-
agement has clearly communicated
objectives and credit risk parameters
to the board of directors and affect-
ed staff. And this review also
includes a determination of whether
the board has approved the existing
credit risk limits.
2. In light of the scope and complexity
of a financial institution, we evalu-
ate the adequacy of its processes for
analyzing credit risk by considering
the following questions:
N Does the financial institution
assess the level of risk associated
with each credit risk?
N Does the financial institutions
risk assessment aggregate expo-
sures on a company-wide basis
and across lines of business?
N Are the results of the risk assess-
ments, including those from test-
ing, appropriately incorporated
into the overall capital planning
process?
N Do the conclusions concerning
credit risk appear reasonable in
light of information available
from other sources?
N Is the capital level adequate to
support the levels and types of
credit risk exposures?
N Is a formal analysis of higher cred-
it risk conducted periodically, and
does the financial institution have
an effective system for monitoring
developments in the interim?
N Are the financial institutions
analyses adequately document-
ed and the credit risk conclu-
sions communicated in a way
that provides decision makers
with a reasonable basis for
strategic development?
N Are the resources devoted to the
analysis of credit risk, including
the number and expertise of staff
members, considered adequate?
Procedures
In reviewing procedures, we determine
whether the financial institution has
systems and guidelines in place to pro-
vide accurate and timely assessments
and feedback of credit risk associated
with its credit extension activities.
There are four areas that we look at
in determining quality of risk manage-
ment procedures:
1. Determine whether management
information systems (MIS) provide
timely, accurate, and useful infor-
mation to evaluate risk levels and
trends in credit risk by considering
the following questions:
N Are all material credit risk expo-
sures captured across all lines of
business?
N Does the entirety of the data ele-
ments collected in the review of
procedures appear to be ade-
quate, given the scope and com-
plexity of the portfolio?
N To whom are MIS and all reports
involved in the loan flow process
distributed and how timely are
these reports?
2. Analyze how complying with credit
risk parameters is monitored and
reported to senior management and
the board of directors.
3. Assess the level of review for credit
risks that are nearing their credit risk
limits. For instance, is there suffi-
cient reporting to senior manage-
ment and is oversight heightened?
4. Evaluate the adequacy of the proce-
dures for monitoring current condi-
tions in higher credit risks, and
assess the reliability and accuracy of
the types of internal and external
resources used.
Personnel
Staffing is a pivotal area for the quality
of risk management, because it reveals
the overall ability of the financial insti-
tution to meet the demands and
responsibilities relating to administer-
ing the loan flow process. In effect, the
level assigned to this quality of risk
management indicates managements
ability to supervise its credit risk in a
safe and sound manner.
There are four areas that we look at
in determining quality of risk manage-
ment personnel:
1. Given the scope and complexity of
the financial institutions portfolio,
assess the appropriateness of the
credit risk management structure
and the experience of designated
personnel, by evaluating:
N Whether the expertise, training,
and number of staff members
assigned to manage credit risk
issues are adequate.
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N Whether reporting lines encour-
age open communication and
limit the chances of conflicts of
interest.
N Whether there is an unusual
level of staff turnover and the
effect of any staff turnover on
credit risk management.
2. Determine whether management
has ascertained the adequacy of
written policies for managing credit
risk and assess managements
knowledge thereof.
3. Ascertain the adequacy of manage-
ments practices and capabilities for
managing credit risk, including timely
responses to a changing environment.
4. Assess the performance of manage-
ment and the compensation pro-
grams for staff members managing
credit risks. Consider whether these
programs measure and reward
behavior that supports the financial
institutions strategic objectives and
risk tolerance limits. (If the financial
institution offers incentive compen-
sation programs, ensure that (1) they
provide employees with incentives
that appropriately balance risk and
reward, (2) are compatible with
effective controls and risk manage-
ment, and (3) at all times are sup-
ported by strong corporate gover-
nance, including active and effective
oversight by the financial institu-
tions board of directors.)
Implementing Risk
Management
Now that we have given consideration
to certain features of Quantity of Risk
and Quality of Risk Management, lets
outline what is required to implement
risk management in a practical and
effective way.
If the methodologies outlined above
have been completed, we have reached
the point where we may determine,
perhaps on a preliminary basis, certain
overall conclusions, and communicate
our findings regarding quantity of risk
and quality of risk management.
Keeping in mind that risk manage-
ment, as previously stated, involves the
ability to identify, measure, monitor,
and control credit risk, there are sever-
al areas of guidance that we usually dis-
cuss with or provide to management as
part of a due diligence review.
1) Memorandum
We provide a summary that elucidates
the quantity of risk and quality of risk
management, thereby clarifying the
direction of credit risk and the adequa-
cy of the financial institutions process
for managing credit risk.
A typical summary includes:
I Quality of the financial institutions
process for managing credit risk,
including the adequacy of policies
and procedures.
I Asset quality of credit risk.
I Appropriateness of strategic and
business plans in light of their
impact on credit risks.
I Responsiveness of strategic and busi-
ness plans to test results that identify
credit risks and materially affect risk
exposure due to adverse economic
scenarios.
I Accuracy and timeliness of manage-
ment information systems and the
entirety of data captured relative to
the scope and complexity of the loan
portfolio.
I Quality of staffing, and manage-
ments capability to manage credit
risk.
I Recommendation of corrective
actions for deficient policies, proce-
dures, practices, or other concerns,
which include:
N Adequacy of adherence to poli-
cies and credit parameters.
N Adequacy of loan review or audit
functions.
N Other matters of significance.
2) Impact
For any issues of concern identified
when performing the credit risk proce-
dures, we determine and discuss their
impact on the financial institutions
aggregate credit risk and its direction.
3) Corrective Action
We encourage a discussion regarding
previous, regulatory examination find-
ings and conclusions, including a list of
those credit risks that posed a challenge
to management or presented unusual
and significant credit risk to the finan-
cial institution. If needed, we provide a
Corrective Action Matrix, which is a
form that tracks all recommended
changes and monitors compliance with
those changes.
I Corrective Action Matrix. We issue
the Corrective Action Matrix most
often when conditions indicate (1)
there has been a deviation from
sound, fundamental principles that
is likely to result in financial deterio-
ration or increased risk if not
addressed, and (2) there is substan-
tive noncompliance with laws or reg-
ulations.
I When a Corrective Action Matrix is
not used, the following features
should still pertain:
N Describe the defect.
N Identify contributing factors or
the root cause(s) of the defect.
N Describe likely consequences or
effects from inaction.
N State the record management
commitment to corrective action.
N Include the time frame and the
person(s) responsible for correc-
tive action.
4) Discussion
We set aside time to carefully review the
actions that management and all rele-
vant staff will take in the future to effec-
tively supervise credit risk. In this set-
ting, we discuss various findings with
management, suggesting ways to fur-
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ach month, National Mortgage
Professional Magazine will focus
on one of the industrys top players
in our Mortgage Professional of the
Month feature. Our readers are encour-
aged to contact us by e-mail at news-
room@nmpmediacorp.com to be consid-
ered for a future Mortgage Professional
of the Month feature article.
This month, we had a chance to chat
with Brett McGovern, founder, president
and board member of Bay Equity LLC,
and president of Bay Equity Home
Loans. Brett has more than 17 years of
experience in real estate sales and lend-
ing. Prior to founding Bay Equity, he was
a senior vice president of Grubb & Ellis
Company in San Francisco. He is respon-
sible for key corporate functions, includ-
ing investor and warehouse line rela-
tions, oversight of accounting and sec-
ondary functions, marketing and corpo-
rate communications.
How did you first get started in the
mortgage business?
I started as senior vice president of
Grubb & Ellis Company in San
Francisco, leasing and selling office
buildings in the commercial real estate
marketplace. My brothers and a num-
ber of my friends were working as sales
executives at Washington Mutual
(WAMU) and were doing pretty well. In
2004, I decided to join WAMU and orig-
inate loans and did well with WAMU.
When things began to deteriorate in
the marketplace around March of 2007,
I called a mentor of mine, Jim Corbett.
Jim founded the non-profit Sacramento
Entrepreneurship Academy, a program
for students of Sacramento State
University and UC Davis. Its a year-long
program every Saturday from 8:00
a.m.-1:00 p.m. where you form a team
and develop a business plan over the
course of the year. In addition, each
Saturday successful businesspeople
from the area come and talk to you
about accounting and law, and a vari-
ety of subjects that can help you craft
your business plan. I went through the
Academy in 1995 when I was a senior at
UC Davis. There, I got the framework on
what it takes to start a company.
Students who go through the program
all go through their own gestation peri-
od. It doesnt mean you are going to
start a company when you complete it,
but you know what to do when you are
ready to take that leap.
In 2007, I saw an opportunity with
the landscape of the mortgage industry
changing, so I decided to start Bay
Equity. I called Jim and pitched him the
idea of Bay Equity and he agreed to
serve as the firms chairman. Jim is a
long-time entrepreneur and successful
real estate investor, who has served as
chairman of Bay Equity since its incep-
tion. We developed the business plan
for Bay Equity, and my brothers,
Managing Directors Jon and Casey
McGovern, joined shortly thereafter.
We raised $1,750,000 in startup cap-
ital just for balance sheet purposes, and
formed Bay Equity in June of 2007. The
credit crisis started the next month,
causing us to revise our original busi-
ness plan and delaying our ability to
actually get in business. Warehouse
lines were in a defensive mode and not
providing liquidity to start up ventures.
I ended up calling around 100 commu-
nity banks to try and get a line of credit
that we would use like a warehouse line
and finally found one, Bridge Bank in
San Jose who agreed to give us a line of
credit. We showed them how it could
function as a warehouse line with the
help of some operations expertise that
was involved early in the companys
development.
We now had the line of credit from
Bridge Bank and got approval from Citi
to buy our loans, funding our first loan
in May of 2008. Gradually, from May of
2008 onward, we increased our volume
and eventually got more investors in
the mixGMAC, Bank of America and
Wells Fargo. Wachovia, which later
became Wells Fargo, was the first ware-
house provider to give us a normal
warehouse line for $2.5 million We
grew that warehouse line from $10 mil-
lion to $20 million upward and are cur-
rently at $60 million. We have other
warehouse lines that filled out our mix
as we got a bigger track record.
How has Bay Equity continued its
growth?
In April of 2009, we started focusing on
growing retail, with 12 retail branch
offices located in California and
Washington. We also have 28 wholesale
account executives in 10 western states,
Our wholesale/retail mix is probably
65/35, and since funding our first loan,
weve done over $3.5 billion in volume
and more than 9,500 loans. Our busi-
ness model is based on a culture of
responsible lending, hard work and
dedication to providing financing to our
customers. In 2010, we made great
progress in completing our executive
team. Our management team is made
up of industry veterans with experience
in secondary marketing, finance, opera-
tions, compliance, credit and human
resources. We are working hard to leave
the entrepreneurial phase of our com-
panys development behind us and to
have the ability to scale. As long as we
can stay safe and compliant, and make
sure that we are doing the right thing by
keeping the ship safe and sound, we are
going to be set up for success. Were
now selling direct to Fannie Mae, which
is exciting especially in light of the
recent volatility in the marketplace.
Whether it be large loan aggregators
leaving the correspondent space, or
changes in the way servicing is valued
and accounted for, we feel its impor-
tant to be able to sell direct to the agen-
cies as another option for our daily best
execution and loan delivery.
Do you think there is a future in pri-
vate-labeled products?
Yes I do, but I dont think were quite
there yet. Private capital will need to
come in and fill the void left from the
lack of any securitization market out-
side of the agency products. I think
originators like Bay Equity will see
opportunities to find niches for new
Brett McGovern, President
Bay Equity Home Loans
Government regulations have added yet another layer of complexity
to the difficulty of running a mortgage business in this environment,
so our model works very well for mortgage brokers.
How has your profit-per-
loan changed over the past
few years?
There is a great deal more
compliance that must be
performed these days as
opposed to 2008. The
things we have to do now
to get a loan through the
pipeline, known in our com-
pany as manufacturing
quality, has changed dra-
matically. We now comply
with newer requirements
like Fannie Maes Loan
Quality Initiative which help
tighten the overall quality of
the loans as they head to the
secondary market, in addi-
tion to other compliance
controls. The barriers to
entry are much greater than
they use to be.
Our profit margins fluctu-
ate based on market condi-
tions and how things are
with the rates, but it has
been tougher to operate.
Those who can master these
compliance issues will do
very well moving forward.
What would you consider
your greatest accomplish-
ment in the industry?
We have weathered the
storm so far, from starting
Bay Equity as the market
was deteriorating in 2007,
to overcoming the chal-
lenges of getting a mortgage bank start-
ed with no track record. We have been
able to get our company to the point
from a balance sheet perspective
through retained earnings where we
now are considered a quality counter-
party and are eligible for key industry
programs that will help us get to the
next level. We would like to take what
we have accomplished and use that to
become one of the next successful mid-
level lenders in the marketplace. We
think we are well on our way.
Do you have any regrets?
We have definitely made mistakes as
any entrepreneurial company does
when just starting out and trying to
make it. We probably would have start-
ed building our retail channel right
away, but I think that being mostly
wholesale for the first year or so helped
us overcome some of the growing pains
that you experience as you are trying to
Bay Equity can beat the big banks on price,
lower the cost to originate and deliver
greater service. Its a real value proposition
for us against the banks that have most
of the market share.
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products that make sense for the bor-
rower. Combine this ability to originate
with the private capital required to take
it to the securitization market, and
youll see successful new products enter
the market. Just when that might hap-
pen is still up for speculation. Its likely
that a jumbo product that fills the void
left by reduced agency high-balance
loan limits, but that still has the under-
writing quality of an agency loan will be
first to the market.
What is it like working so closely
with your two brothers, Jon and
Casey McGovern?
Its great. Were a pretty tight-knit fam-
ily. Over time and over the develop-
ment of Bay Equity, we have identified
our key roles and what we are in charge
of. I oversee secondary and finance,
and serve as the main contact for third
parties like investors or warehouse line
providers. I also spearhead raising cap-
ital and investor relations. We have
done a couple of rounds of preferred
equity and did a subordinated debt
round a few years ago. It bolsters our
balance sheet and provides additional
capital to grow the company. My broth-
er Jon oversees human resources, oper-
ations and the IT department, while my
other brother Casey oversees sales in
both the wholesale and retail channels.
We try and separate our duties and
responsibilities as to maximize our time
as much as possible.
What led to Bay Equity branching
out into retail in 2009, and what
factored into the broker-to-banker
programs?
The writing was clearly on the wall in
2009, with regulations looming and the
wholesale origination channel under
increased scrutiny. We felt like it was
important for Bay Equity to become
more diversified, by not just relying on
the wholesale channel, but to also have
a strong retail network. The regulatory
environment helped push this agenda
with changes in both disclosure laws, as
well as the way loan officers were to be
compensated. Brokers began to take a
look in the mirror and assess whether it
was more advantageous to be under
the mortgage banking umbrella.
There are a number of mortgage
brokers who see the value of rolling in
under a mortgage banking platform
like us. Bay Equity handles many of the
administrative tasks that have become
burdensome to independent mortgage
brokers, such as accounting, human
resources, compliance, licensing, and
other administrative tasks which take
away time from mortgage brokers, and
in turn, frees them up to do what they
do best originate loans. Government
regulations have added yet another
layer of complexity to the difficulty of
running a mortgage business in this
environment, so our model works very
well for mortgage brokers.
We want to support our customer, no
matter who they are. We think the
wholesale market will stick around.
There will be a certain percentage of
the originator market who will want to
be independent and run their own busi-
ness like brokers in this environment
and we are going to support them as
much as we can. But if a certain per-
centage of that broker community is
looking at joining a mortgage bank, we
want to have a very competitive and
appealing platform for them to enter-
tain. Weve been pretty successful in
recruiting, but have also been very
selective.
Could you define which business
models are best for the mortgage
broker and which are best for the
mortgage banking branch?
There is just such a mixed bag out there
that I dont think you can pin it down to
saying that a certain model works best.
I think its more in each individual cir-
cumstance and how professionally run
the mortgage brokerage operation is.
Bay Equity has a diverse group of retail
offices that drum up business in all dif-
ferent ways, from a call center model to
purchase business-driven realtor rela-
tionships, to long time LOs who have
their own book of business. We also
have a new branch in San Francisco that
fits the last category. Manny Kagans
office is the longest-running mortgage
brokerage in San Francisco, having
opened its doors in 1984. Manny has
loan officers who have been with him
for years and who have their own book
of business. He does a lot of purchase
business with Realtor relationships.
Manny has found that the banking plat-
form works well especially where his
team works with the same internal sup-
port staff, including underwriters, fun-
ders, etc. You get a lot of close coopera-
tion and chemistry with one group of
people, and you get the attention that
you need instead of putting 10 percent
of your business with a lender which
makes you just a number amongst all
the other loans.
At the Mortgage Bankers Association
(MBA) Annual Conference in October,
one of the speakers mentioned that in
2008, it was taking 30 days to close a
loan, and in 2010, it was taking an
average of 52 days to close a loan.
What do you feel has caused that time
delay and what is the typical closing
time for a Bay Equity loan?
There has been a lot of consolidation in
the industry, and the big banks have
swallowed up a lot of the market share.
The big banks have the dominant mar-
ket share nowadays, and I think that is
why you see this difference due to the
sheer volume of business they are
doing. When rates went under the four
percent mark four months ago, the turn
time for a refinance went to 90 days at
some big banks. An independent mort-
gage banker like Bay Equity can better
streamline that process. Currently, we
can close a loan in 21 days based upon
the volume that we are doing and the
structure of our operations. Bay Equity
can beat the big banks on price, lower
the cost to originate and deliver greater
service. Its a real value proposition for
us against the banks that have most of
the market share. continued on page 18
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By Dave Hershman
I still remember two
events that happened
which shaped my
career in the mort-
gage industry some
30 years ago. Event
number one involves my entry into the
mortgage business, which was as ran-
dom as it could be. I had worked in
government out of college. Six years in
the State of North Carolina Attorney
Generals Office, during which I also fin-
ished my masters degree and worked
on a Ph.D in public policy. My next two
years were spent on Capitol Hill man-
aging an office for a congressman.
As the two-year term ended, I was
looking feverously for opportunities. I
happened to mention this fact to a
group of people I played racquetball
with on a weekly basis. It turns out that
one owned a real estate company and
another ran that real estate companys
mortgage entity. One was a mortgage
insurance representative. I didnt even
know what mortgage insurance was.
The owner of the company said to
come down and talk with them. When I
met with the president of the mortgage
company, he encouraged me to
become a Realtor. Translation: I am not
really that interested in having you as a
loan officer. When I went to see the
owner of the real estate company, he
said, You will become a loan officer.
I went back down to Tim and said,
Al said I should become a loan offi-
cer. Tim said, I guess you are going to
become a loan officer.
I came in the first day and a staff
member said, You are a loan officer,
right? I guess it was a mistake, but I
said, yes. She said, there was someone
in the waiting room that needed a loan
application taken, the loan officer did
not show up. Right there I should have
questioned something, but it is the first
day and you dont rock the boat on day
one. She gave me a bunch of forms and
I took them, and as I walked away, she
said, Keep in mind, it is a VA loan. I
thought to myself, no problem. I am,
after all, from the state of Virginia.
When I was done, I gave the forms to
the staff person who turned out to be
an underwriter. She looked them over
and told me that I was going to be a
great loan officer. I asked her how she
could know that. She replied, Because
you filled in all the blanks on the
forms. I laughed because I thought
she was joking. Little did I know
Event number two came about 18
months later. My boss who hired me
was gone and another president of the
mortgage company was hired. In that
18-month period, I had originated and
closed more than 550 loans. I was far
and away the top producer. The new
president had big plans to expand the
mortgage company. He asked me if I
wanted to manage. Sure, no prob-
lem, was my reply. Of course, no one
told me what a manager of loan offi-
cers actually did. So I called the
Mortgage Bankers Association (MBA)
and asked for their books on manage-
ment. They said they had books on sec-
ondary, underwriting, sales and a host
of other topics. No books on mortgage
management existed. So not only did I
learn to manage in this industry on my
own, but in my third year in the indus-
try, I also wrote the MBAs book on
management, Managing a Branch
Office. Dont call the MBA for it because
its out of print. That is how old I am, I
have books that I have written that are
now out of print.
Now, lets get back to the manage-
ment dilemma. Training programs for
loan officers in this industry are pretty
much non-existent. It is true that the
government now asks us to get licensed
and requires training, at least for those
who dont work for a federally-char-
tered bank. But this licensing training
has nothing to do with a loan officer
being successful at their job.
Training for managers is even less
prevalent. Keep in mind that these are
the most important leaders in our indus-
try. They are supposed to lead the rank
and filethose who are on the front-
lines. They are supposed to train the
loan officers, processors and other oper-
ations personnel, and they get no help in
doing their jobs. When I held national
management conferences across the
nation, I had hundreds upon hundreds
come to me and thank me profusely
because they felt alone and lost.
The Management Dilemma
nmp mortgage professional continued from page 17
grow something like this. We didnt bring
on retail branches until we were more
mature and had our legs underneath us. I
also would have tried harder to diversify
our investor mix earlier with the addition
of the agency outlets.
Over the next two years, what do you
think will be the greatest opportunities
in the field of mortgage origination?
I think we will see continued consolidation
in the industry. Its getting tougher to oper-
ate as a mortgage business, due in large
part to the regulatory environment that
has been created. And while it has been
tough, it has increased the professionalism
of the mortgage loan originator. There
arent many part-time originators left, as
now, loan originators have to be licensed
through the Nationwide Mortgage
Licensing System (NMLS), obtain education
credits, etc. What is left is a population of
MLOs who are good at what they do and
can increase their market share.
There are a number of different ways to
originate loans. We are focused on the pur-
chase market. We want to be known as a
dependable and reliable purchase lender
that Realtors and LOs can feel safe sending
their purchase loans to. Thats a natural
hedge against the rates rising. Wed like to
not be at the mercy of a volatile interest
rate market or rising rates. Hopefully, at
some point, the real estate market bot-
toms out, becomes healthier and we can
see the market recover and sales pick up
again, and thats where we want to posi-
tion. We want to have a strong network of
branches that are purchase-driven and are
situated in local strong real estate markets
and have a reputation as a reliable choice
for purchase loans.
Earlier you mentioned Jim Corbett as
your mentor. Do you have any other
mentors who may have guided your
professional career?
At Bay Equity, we have a pretty strong
team that collaborates and navigates
through a variety of issues on a daily basis.
Jim Corbett is definitely a mentor of mine
in a bigger sense of providing me with the
entrepreneurial spirit to seize the opportu-
nity and start Bay Equity. He showed me
that if you do things in a sound, ethical
and transparent way, success will follow.
Charles Hine also was an important
mentor for me as I grew up in the business
world in commercial real estate. Charles
was instrumental in teaching me valuable
life lessons, including how to treat people,
how to handle yourself with honesty and
integrity, the value of a strong work ethic,
and how to make good decisions in light of
the bigger picture.
Do you think there is an opportunity
for newcomers who are looking to
get into the mortgage business?
What advice would you pass on to
those new to the industry?
In this environment, it is very difficult just to
do what it takes to get the right approvals,
with the biggest barriers being net worth
and experience. We have been fortunate
enough to do well over the last few years,
and have retained our earnings and main-
tain our balance sheet to be a strong count-
er party in this environment. But to do it all
over again and see that kind of success
would be difficult. Today, you see some of
the older industry players who have been
out of the game now getting back in. I think
people see our current marketplace as a
good time to return, but these are individu-
als who have enjoyed past success and are
taking another run at it and know what they
are getting into.
Are there any industry-related issues that
keep you up at night? What do you see as
the biggest threats to your business as a
multi-channel mortgage banker?
The uncertainty of the regulatory environ-
ment is a big concern, along with the
uncertainty of the Consumer Financial
Protection Bureau (CFPB). The CFPB is an
unknown for a lot of us who are working
hard to maintain a compliant business and
simply do business the right way. Will new
laws be passed that will further impact the
way we do business? At what point will all
of this ease up? While the laws passed have
weeded out a lot of the part-timers in the
industry, uncertainty about the state of the
regulatory environment remains.
The landscape of the industry is also
changing. Big banks like GMAC and Bank of
America are getting out of correspondent
lending and pulling reigning in their mort-
gage divisions. What will the future be like?
Will private capital replace the big loan
aggregators? Will rates continue to drop?
These are just a few of the issues that we
track on an ongoing basis.
What do you see in the future for Bay
Equity?
I think we have a tremendous opportunity
for continued growth. The big banks are a
little dysfunctional in some measure with
the way they are pulling back from the
marketplace. Bay Equitys geographic foot-
print is limited to California, but we have
measures in place to expand both our
wholesale and retail channels initially into
the northwestern United States. We are
adding new branches and have the right
team members in place to lead this expan-
sion. We have opened up a Portland, Ore.
office as a third operations center.
I think with the continued migration of
mortgage brokers to mortgage bankers, we
will keep adding experienced professionals
to our team as we expand throughout the
West Coast. As long as we continue to man-
ufacture loans properly and continue to
grow our balance sheet, the future of Bay
Equity is very bright.
The next phase of our business is going
to focus on re-engineering Bay Equity
how we do things, continuing to improve
our totally paperless operation, making the
most of the efficiencies that come with
technology and upgrading to better tech-
nology platforms.
SEC Charges Former GSE
Heads for Mortgage
Securities Fraud
The Securities &
Exchange Commission
(SEC) has charged six
former top executives
from Fannie Mae and
Freddie Mac with secu-
rities fraud, alleging they knew and
approved of misleading statements
claiming the companies had minimal
holdings of higher-risk mortgage loans,
including sub-prime loans. Fannie Mae
and Freddie Mac each entered into a
Non-Prosecution Agreement with the
SEC in which each company agreed to
accept responsibility for its conduct and
not dispute, contest, or contradict the
contents of an agreed-upon Statement
of Facts without admitting nor denying
liability. Each also agreed to cooperate
with the Commissions litigation against
the former executives. In entering into
these Agreements, the SEC considered
the unique circumstances presented by
the companies current status, includ-
ing the financial support provided to
the companies by the U.S. Department
of the Treasury, the role of the Federal
Housing Finance Agency (FHFA) as con-
servator of each company, and the costs
that may be imposed on U.S. taxpayers.
Three former Fannie Mae execu-
tivesformer Chief Executive Officer
Daniel H. Mudd, former Chief Risk
Officer Enrico Dallavecchia, and former
Executive Vice President of Fannie
Maes Single Family Mortgage business,
Thomas A. Lundwere named in the
SECs complaint filed in U.S. District
Court for the Southern District of New
York.
The SEC also charged three former
Freddie Mac executivesformer
Chairman of the Board and CEO Richard
F. Syron, former Executive Vice
President and Chief Business Officer
Patricia L. Cook, and former Executive
Vice President for the Single Family
Guarantee business Donald J.
Biseniusin a separate complaint filed
in the same court.
Fannie Mae and Freddie Mac execu-
tives told the world that their subprime
exposure was substantially smaller than
it really was, said Robert Khuzami,
Director of the SECs Enforcement
Division. These material misstate-
ments occurred during a time of acute
investor interest in financial institu-
tions exposure to subprime loans, and
misled the market about the amount of
risk on the companys books. All indi-
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viduals, regardless of their rank or posi-
tion, will be held accountable for per-
petuating half-truths or misrepresenta-
tions about matters materially impor-
tant to the interest of our countrys
investors.
The SEC is seeking financial penal-
ties, disgorgement of ill-gotten gains
with interest, permanent injunctive
relief and officer and director bars
against Mudd, Dallavecchia, Lund,
Syron, Cook, and Bisenius. Both law-
suits allege that the former executives
caused the federal mortgage firms to
materially misstate their holdings of
sub-prime mortgage loans in periodic
and other filings with the Commission,
public statements, investor calls, and
media interviews. The suit involving
the Fannie Mae executives also includes
similar allegations regarding Alt-A
mortgage loans. The suit against the
former Fannie Mae executives alleges
they made misleading statements or
aided and abetted othersbetween
December 2006 and August 2008. The
former Freddie Mac executives are
alleged to have made misleading state-
mentsor aided and abetted others
between March 2007 and August 2008.
The SECs complaint against the for-
mer Fannie Mae executives alleges that,
when Fannie Mae began reporting its
exposure to sub-prime loans in 2007, it
broadly described the loans as those
made to borrowers with weaker credit
histories, and then reportedwith the
knowledge, support, and approval of
Mudd, Dallavecchia, and Lundless
than one-10th of its loans that met that
description. Fannie Mae reported that
its 2006 year-end Single Family expo-
sure to subprime loans was just 0.2 per-
cent, or approximately $4.8 billion, of
its Single Family loan portfolio.
Investors were not told that in calculat-
ing the Companys reported exposure
to subprime loans, Fannie Mae did not
include loan products specifically tar-
geted by Fannie Mae towards borrow-
ers with weaker credit histories, includ-
ing more than $43 billion of Expanded
Approval, or EA loans.
Fannie Maes executives also knew
and approved of the decision to under-
report Fannie Maes Alt-A loan expo-
sure, the SEC alleged. Fannie Mae dis-
closed that its March 31, 2007 exposure
to Alt-A loans was 11 percent of its port-
folio of Single Family loans. In reality,
Fannie Maes Alt-A exposure at that
time was approximately 18 percent of
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By John Walsh
F
or the past three-
and-a-half years,
it is very accurate
to say that the mort-
gage industry has
undergone a battle for
its very survival. One of the deepest
recessions in our nations history, the
sharpest decline in single-family
housing values since the Great
Depressions, and the highest unem-
ployment rates since the 1970s have
all combined to make the past few
years the most difficult ever faced in
our industry. The survivors of this dif-
ficult time must focus on being part
of the solution and building a
stronger mortgage industry.
Over the next few months, you will
likely read numerous prognostica-
tions from economists, politicians
and Wall Street analysts of what will
transpire in the mortgage industry in
2012. What I hope you will find dif-
ferent about my thinking below is
that it comes from someone who is on
the frontlines working with borrow-
ers, originators, processors, under-
writers, account executives and
investors every day.
The following are five key trends
likely to impact the mortgage industry
and housing market in 2012:
1. Mortgage rates will remain attrac-
tive through at least the first half of
the year
2. Home values will slowly stabilize
3. Innovative products will begin to
reappear
4. The industry will grapple with regu-
latory uncertainty
5. New industry leaders will emerge
Mortgage rates will
remain attractive
through at least the first
half of the year
As we enter 2012, two competing
forces are impacting mortgage
ratesa slowly strengthening U.S.
economy, and a growing sovereign
debt and banking crisis in Europe.
But for the situation in Europe, mort-
gage rates would have likely already
moved higher, perhaps to a rate of
4.5 percent on the benchmark 30-year
fixed-rate loan. However, with bond
yields increasing throughout Europe
(not just in initial trouble spots like
Greece and Italy), U.S. mortgage-
backed securities (MBS) remain a safe
haven for investors.
This push-me, pull-me interest
rate environment may or may not
last. My view is that both competing
forces will continue into 2012, but
that the situation in Europe could sta-
bilize, thereby clearing the way for
rates to rise modestly, along with
employment, consumer spending and
inflation. If rates rise to near five per-
cent by the end of 2012 as the
Mortgage Bankers Association (MBA)
forecasts, we will see a major shift in
loan mix in favor of purchase loans.
The MBA also says, A faster eco-
nomic recovery, led by the housing
market, would mean faster home
price growth and more sales volume,
increasing purchase originations
somewhat, but would cut off refi-
nance volume sooner than in our
forecast. Barring a major shock from
Europe, I expect a slow recovery based
on recent employment, retail sales,
industrial production and housing
starts data.
Home values will
slowly stabilize
What are the three rules of real
estate? Location I knownobody
wants to hear that again, but the
truth of the matter, as it relates to
property value stabilization, is that it
will occur at different rates depend-
ing on geographically-specific crite-
ria. Areas of the U.S. that see the
strongest growth and have the small-
est foreclosure/unsold inventories
will see the quickest progress. Signs
of stabilization are already appearing
in some areas of the U.S. Zillow
Chief Economist Dr. Stan
Humphries says, While we
still have a ways to go in terms
of home value depreciation, the
pace at which home values are
falling has declined considerably
during the course of this year. This
slower pace signals that stabilization
is on the horizon.
As the job picture improves, the
number of homes falling into foreclo-
sure will decline. More significantly,
new households who have not felt com-
fortable purchasing a home will begin
to gain confidence in their long-term
prospects and begin to take advantage
of the very affordable housing opportu-
nities available. Single-family home
prices will likely be flat or see a mar-
ginal increase in 2012.
Innovative products
will reappear
Congress is set to raise Federal Housing
Administration (FHA) lending limits
back to $729,750 in designated high-
cost areas across the country. Yet, given
the opportunity to raise the limits for
Fannie Mac and Freddie Mac loans,
they chose to leave the limit at the
lower level of $625,500. This may open
the market to new jumbo loan products
from lenders, and we are already expe-
riencing progress in this area.
Additionally, there are signs that some
lenders are developing non-agency
products which will respond to unmet
market demands and provide new
investment opportunities for investors
seeking higher returns. Any new prod-
ucts developed will be carefully
designed and underwritten, but will
help open responsible homeownership
to more people.
The Mortgage
Battlefield of 2012:
A View From the Frontlines
21
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nmp news flash continued from page 19
its Single Family loan holdings. The
misleading disclosures were made as
Fannie Maes executives were seeking
to increase the companys market share
through increased purchases of sub-
prime and Alt-A loans, and gave false
comfort to investors about the extent of
Fannie Maes exposure to high-risk
loans, the SEC alleged.
In the complaint against the former
Freddie Mac executives, the SEC alleged
that they and Freddie Mac led investors
to believe that the firm used a broad def-
inition of subprime loans and was dis-
closing all of its Single-Family subprime
loan exposure. Syron and Cook rein-
forced the misleading perception when
they each publicly proclaimed that the
Single Family business had basically no
sub-prime exposure. Unbeknown to
investors, as of December 31, 2006,
Freddie Macs Single Family business was
exposed to approximately $141 billion of
loans internally referred to as sub-
prime or sub-prime like, accounting
for 10 percent of the portfolio, and grew
to approximately $244 billion, or 14 per-
cent of the portfolio, as of June 30, 2008.
FHA Grants Year-Long
Extension of Anti-Flipping
Regulations
Carol Galante,
A c t i n g
Commissioner
of the Federal
Housing Ad-
ministration (FHA), has announced that
the FHA will extend its temporary waiv-
er of the anti-flipping regulations in
2012 through Dec. 31, 2012. The exten-
sion was granted in an effort to contin-
ue stabilizing home values and improve
conditions in communities with high
foreclosure activity.
With certain exceptions, FHA regula-
tions prohibit insuring a mortgage on a
home owned by the seller for less than
90 days. In 2010, FHA temporarily
waived this regulation through Jan. 31,
2011, and later extended that waiver
through the remainder of 2011. The
new extension will permit buyers to
continue to use FHA-insured financing
to purchase U.S. Department of
Housing & Urban Development (HUD)-
owned properties, real estate-owned
(REO) properties, or properties resold
through private sales. It will allow
homes to resell as quickly as possible,
helping to stabilize real estate prices
and to revitalize neighborhoods and
communities.
This extension is intended to acceler-
ate the resale of foreclosed properties in
neighborhoods struggling to overcome
the possible effects of abandonment and
blight, said Galante. FHA remains a crit-
ical source of mortgage financing and
stability and we must make every effort
that to promote recovery in every
responsible way we can.
The extension is effective through
Dec. 31, unless otherwise extended or
withdrawn by the FHA. All other terms of
the existing Waiver will remain the same.
The Waiver contains strict conditions and
guidelines to prevent the predatory prac-
tice of property flipping, in which prop-
erties are quickly resold at inflated prices
to unsuspecting borrowers. The Waiver
continues to be limited to sales meeting
the following conditions:
I All transactions must be arms-
length, with no identity of interest
between the buyer and seller or
other parties participating in the
sales transaction.
I In cases in which the sales price of
the property is 20 percent or more
above the sellers acquisition cost,
the Waiver will only apply if the
lender meets specific conditions and
documents the justification for the
increase in value.
I The Waiver is limited to forward
mortgages, and does not apply to the
Home Equity Conversion Mortgage
(HECM) for purchase program.
MBA Announces
the Completion of
MISMO Transition
The Mortgage Bank-
ers Association (MBA)
has announced
that it has complet-
ed the transition, announced in
September, and will resume support for
the Mortgage Industry Standards
Maintenance Organization Inc.
(MISMO). With the successful transition,
MISMO will now focus efforts on regula-
tory implementation and advocating
for broader adoption of data standards
throughout the industry.
MBA supports greater efficiency and
lower costs throughout the industry by
advocating for broad adoption of indus-
try consensus standards developed by
MISMO. We are actively engaging both
regulators and industry in this effort,
said MBA President and CEO David H.
Stevens. MBA will also provide educa-
tional opportunities aimed at helping
industry and government better under-
stand and implement MISMO standards.
Standardization and transparency are
critical to the return of investor confi-
dence and liquidity in the mortgage mar-
ketplace, and MISMO has a crucial role to
play. I would recommend that MBA
members become MISMO subscribers in
order to help guide this effort.
To assist with these efforts, MBA has
hired Cindy Bojokles as its new director
of industry standards. In this role,
Bojokles is responsible for supporting
and advancing the activities of MISMO.
Bojokles will work closely with industry
executives to increase the standards
available to the industry. Bojokles will
also help government agencies under-
stand the benefits of adopting the vol-
untary consensus standards developed
by MISMO.
valuenation continued from page 10
compliant. The platform may also
run the appraisal through UCDPs
known requirements before it is
submitted, providing alerts on any
hard stops that might prevent the
loan from processing for GSE review.
Why is this important? Because it
allows lenders to identify and han-
dle problems before the GSEs get
involved to assist in maintaining a
positive seller/servicer relationship.
I Benefit #3: Advanced valuation
management platforms also cre-
ate significant improvements in
vendor management processes by
instantly identifying marginal
performers and re-directing
assignments to the best perform-
ing vendors to save time and
money and ultimately increase
customer satisfaction.
The Dec. 1, 2011 deadline for
ULDD compliance is now past, and
the final March 19, 2012 deadline for
full UCDP compliance is swiftly
approaching. Its not too late for
lenders to take a critical look at what
they can manually process through
the online portal versus the auto-
mated efficiency and additional ben-
efits in data uniformity that can be
realized with a valuation manage-
ment solution.
David Rasmussen is senior vice president
of operations at Veros Real Estate
Solutions. For more information, call
(714) 415-6300 or visit Veros.com.
The industry will
grapple with regulatory
uncertainty
The coming 2012 elections could be a
tumultuous time for the mortgage
industry. Not surprisingly, the mort-
gage and banking industries are likely
to be the subject of much critique
and demagoguery during the cam-
paign. With Fannie Mae and Freddie
Mac potentially seeking billions more
in support from taxpayers, and con-
sumer sentiment so negative toward
banks and Wall Street, expect regula-
tory agencies to come down hard on
the financial services industry as part
of a populist effort to attract votes.
Throughout the year, it will seem as
though our industry is in a constant
struggle to demonstrate our value to
the country.
We will have to participate in the
debate over the role of government in
mortgage finance. We will have to
engage in the effort to adopt new regu-
lations that are part of the Dodd-Frank
legislation. According to Tom
Donatacci, executive vice president of
Clayton Holdings, Among the major
unanswered questions regarding Dodd-
Frank: Whats a qualified mortgage?
How much skin in the game will be
required of the issuer and seller? How
will the conflicts-of-interest provisions
impact securitization and various par-
ties ability to buy and sell securities?
What is the future role of the rating
agencies? New regulations are certain-
ly coming, but their scope and impact
are very much up in the air.
New industry leaders
will emerge
With the challenges of the last few
years forcing hundreds of thousands
of 2007-era employees, thousands of
small businesses and dozens of large
firms out of the mortgage industry, it
is somewhat surprising that some
brave souls would invest their time
and resources to develop, grow and
improve the industry in 2012.
But that is exactly what I see when
I survey they the mortgage landscape.
I see:
I Entrepreneurs and business profes-
sionals battling to build a sustain-
able industry;
I New and better technology that
makes our tasks easier and the loans
originated of higher quality;
I New originators committed to con-
sumer-engagement and education;
and
I Investors eager to bring safe, reliable
returns to their clients.
The new mortgage industry is
emerging with leaders who are focused
on efficiency, accountability, and sound
ethical behavior. That sounds like a
great industry to be part of!
The year 2012 will not present a
return to the industry of the past, but it
will represent a real foundation for a
successful future. I, for one, cannot wait
for 2012 to unfold, so let the battles
begin!
John Walsh is president of Milford,
Conn.-based Total Mortgage Services.
John founded Total Mortgage Services
in 1997 with a customer-centric
approach and a mission of responsible
lending. He may be reached by e-mail at
JWalsh@TotalMortgage.com or visit
TotalMortgage.com.
the mortgage battlefield continued from page 20
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controlling credit risk continued from page 15
ther monitor and mitigate credit risk.
Often, management offers a pledge to
implement corrective action.
Preparation is Prevention
Compliance cannot be reverse engi-
neered. I have stated many times that
preparation is prevention. Working to
evaluate credit risk is critical to the stay-
ing power needed by any financial insti-
tution involved in the loan flow process.
Some mistakes may have a minor
effect. But there are costly mistakes that
bring with them virtually catastrophic
consequences. It is unacceptable and
indefensible to attempt to fix mistakes
belatedly, when they could have been
avoided in the first place. And, for the
most part, the tardy and delayed
approach just does not work.
Allowing exposure to credit risk is
such a potentially fatal and fundamen-
tal flaw that there really is often no way
to undo the damage done by risk man-
agement failures. However, by using the
above-mentioned tools to determine
Quantity of Risk and Quality of Risk
Management, a financial institution
may still have the proactive opportuni-
ty to be stable, strong, and vibrant.
Certain information provided in this
article is based on the research and
work I have done in developing one of
my firms risk management tools,
called the CORE Compliance Matrix.
This may be part of a due diligence
review. It is a unique analysis that
offers, among other things, a compre-
hensive assessment of a financial
institutions compliance with federal
and state regulations, thereby provid-
ing quantitative ratings of regulatory
risk. A CORE review consists of an in-
depth evaluation of a financial institu-
tions CORE features: Compliance
Program (C), Organizational Structure (O),
Regulatory Risk (R), and Enforcement
Strategies (E). For more information about
the CORE Compliance Matrix, please visit
our Web site at www.lenderscompliance-
group.com.
Jonathan Foxx, former chief compliance
officer for two of the countrys top pub-
licly-traded residential mortgage loan
originators, is the president and manag-
ing director of Lenders Compliance
Group, a mortgage risk management
firm devoted to providing regulatory
compliance advice and counsel to the
mortgage industry. He may be contacted
at (516) 442-3456 or by e-mail at
jfoxx@lenderscompliancegroup.com.
The premier conference on mortgage risk
Keynote from
FREAKONOMICS CO-AUTHOR
STEPHEN DUBNER
June 4-6 in Dana Point, CA
PMC2012.com
Hosted by
The Predictive Methods Conference, PMC and Veros are registered trademarks of Veros Software. 2011 Veros Software - All rights reserved.
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Become a NationalMortgageProfessional.com Blogger!
It's free and easy. Just head on over to NMPMag.com, register and
follow the link in the upper right hand side of the page to
become a blogger on our site today!
Got an opinion? Want to share your
thoughts on the industry?
U
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e
sso
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Major East Texas Mortgage Fraud Scheme: Out of Florida
203(k) Rehab Loan Program: Foreclosures Present Challenges, Opportunity
NMLS and State Testing for Mortgage Professionals
Cindy has spent over 15 years work-
ing on data standards, data quality and
business solutions for the mortgage
industry. Her detailed knowledge of
technology and business processes will
prove invaluable to MBA and the mort-
gage industry as it continues to advance
MISMO and industry standards, said
Stevens.
Federal Agencies Join
Forces to Prevent HAMP
and Loan Mod Fraud
The Office of the
Special Inspector
General for the
Troubled Asset
Relief Program (SIGTARP), the Consumer
Financial Protection Bureau (CFPB), and
the U.S. Department of the Treasury have
announced the creation of a joint task
force to combat scams targeted at home-
owners seeking to apply for the Home
Affordable Modification Program (HAMP).
SIGTARP, CFPB and the Treasury have part-
nered to protect taxpayers by investigating
and shutting down these scams and by
providing education programs to vulnera-
ble homeowners. The joint task force also
issued a consumer fraud alert to protect
homeowners from HAMP-related mort-
gage modification scams. The fraud alert
will also be provided directly to home-
owners eligible for HAMP.
The goal of our consumer fraud alert is
to empower homeowners with the knowl-
edge of how to recognize and avoid these
scams, said Christy Romero, Deputy
Special Inspector General for SIGTARP.
These scams prey upon the most vulnera-
ble homeowners as they desperately hold
out hope of saving their homes. SIGTARP,
the CFPB and Treasury want to make sure
that homeowners know a scam when they
see one and know where to turn for help.
SIGTARP will work with the CFPB and
Treasury in this joint task force and with
other law enforcement partners to shut
down these scams and to ensure that the
perpetrators pay for their crimes.
SIGTARP, CFPB and the Treasury investi-
gate mortgage modification schemes,
among other things, in which companies
charge struggling homeowners a fee in
exchange for false promises of lowering
the homeowners mortgage debt or pay-
ments through HAMP, a foreclosure pre-
vention program funded by the Troubled
Asset Relief Program (TARP) and adminis-
tered by the Treasury.
Mortgage scams harm not only home-
owners but legitimate businesses and the
market as a whole, said Richard Cordray,
chief of enforcement for the CFPB. By
joining forces with SIGTARP and Treasury,
the CFPB hopes to protect Americans and
the integrity of one of the largest consumer
financial markets in the U.S.
Rapidly Growing
REO Inventory Going
to Investors, Not
Owner-Occupied Buyers
New Vista Asset
Management, a
San Diego-based
provider of real
estate services
for banks and other sellers of foreclosed
residential homes, has published the
results of a three-year study examining
buyer types in 18 U.S. counties hit hardest
by Americas mortgage crisis. The study
uses data extracted from local recorder,
courthouse and tax assessment records to
determine whether the purchasers buying
foreclosed houses from banks, the U.S.
Department of Housing & Urban
Development (HUD), the government-
sponsored enterprises (Fannie Mae and
Freddie Mac), are owner-occupants or
absentee owners using single family
homes as rental or vacation properties.
New Vistas data indicates that the per-
centage of real estate-owned (REO) homes
sold to owner occupant buyers has
decreased in almost every market ana-
lyzed by the company in a study that
began tracking real estate sale transactions
closed in the first quarter of 2009 and
includes consecutive quarterly data
through the third quarter of 2011.
Although, quarter-by-quarter, we have
observed some market-specific increases,
over the entire period, owner occupancy
rates for REO sales have broadly weak-
ened, said Brian Hurley, New Vistas pres-
ident and chief operating officer. With
eleven consecutive quarters of data, we
can look beyond both seasonality and the
temporary impact of demand stimuli such
as the homebuyer tax credit, and observe
a clear pattern of decline.
In Los Angeles County, Calif., the New
Vista data shows 79.36 percent of single-
family REO houses were purchased by
owner occupants in 2009, compared with
only 60.32 percent in the third quarter of
2011. Most counties covered by the study
saw declines of more than five percentage
points during the same period, with a few
dropping more modestly.
According to the New Vista study, only
one county included in the Index (Wayne
County, Mich.) had an owner occupancy
rate for single-family REO sales below 50
percent in 2009. By the third quarter of
2011, owner occupancy rates for REO sales
in an additional four of the studied coun-
ties had fallen below 50 percent, including
Maricopa County, Ariz.; Osceola County,
Fla.; Miami-Dade County, Fla.; and Clark
County, Nev.
The decline in owner occupant sales in
Maricopa County over the past two years
has altered the fabric of our neighbor-
hoods, said Patricia Garcia Duarte, presi-
dent of Neighborhood Housing Services of
Phoenix and chair of the Arizona
Foreclosure Prevention Task Force. We
need to look carefully at this trend and
refocus on giving homebuyers a chance to
own a piece of the American Dream.
BofA Reaches $335 Million
Settlement With
Government Over
Countrywide Discrimination
and Steering
The U.S. Department
of Justice (DOJ) has
filed its largest resi-
dential fair lending settlement in history to
resolve allegations that Countrywide
24
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We have proven closing records
NMLS #357614
Financial Corporation and its subsidiaries
engaged in a widespread pattern or
practice of discrimination against qual-
ified African-American and Hispanic
borrowers in their mortgage lending
from 2004 through 2008. The settle-
ment provides $335 million in compen-
sation for victims of Countrywides dis-
crimination during a period when
Countrywide originated millions of res-
idential mortgage loans as one of the
nations largest single-family mortgage
lenders. In addition, the settlement
requires Countrywide to implement
policies and practices to prevent dis-
crimination if it returns to the lending
business during the next four years.
Countrywide operates as a subsidiary of
Bank of America, but does not originate
new loans.
The settlement, which is subject to
court approval, was filed in the U.S.
District Court for the Central District of
California in conjunction with the
departments complaint which alleges
that Countrywide discriminated by
charging more than 200,000 African-
American and Hispanic borrowers high-
er fees and interest rates than non-
Hispanic white borrowers in both its
retail and wholesale lending. The com-
plaint alleges that these borrowers were
charged higher fees and interest rates
because of their race or national origin,
and not because of the borrowers cred-
itworthiness or other objective criteria
related to borrower risk. The U.S. also
alleges that Countrywide discriminated
by steering thousands of African-
American and Hispanic borrowers into
sub-prime mortgages when non-
Hispanic White borrowers with similar
credit profiles received prime loans. All
the borrowers who were discriminated
against were qualified for Countrywide
mortgage loans according to
Countrywides own underwriting criteria.
The Departments action against
Countrywide makes clear that we will
not hesitate to hold financial institu-
tions accountable, including one of the
nations largest, for lending discrimina-
tion, said Attorney General Eric Holder.
These institutions should make judg-
ments based on applicants creditwor-
thiness, not on the color of their skin.
With todays settlement, the federal
government will ensure that the more
than 200,000 African-American and
Hispanic borrowers who were discrimi-
nated against by Countrywide will be
entitled to compensation.
The complaint alleges that African-
American and Hispanic borrowers paid
more than non-Hispanic White borrow-
ers, not based on borrower risk, but
because of their race or national origin.
Countrywides business practice
allowed its loan officers and mortgage
brokers to vary a loans interest rate
and other fees from the price it set
based on the borrowers objective cred-
it-related factors. This subjective and
unguided pricing discretion resulted in
African-American and Hispanic borrow-
ers paying more. The complaint further
alleges that Countrywide was aware the
fees and interest rates it was charging
discriminated against African-American
and Hispanic borrowers, but failed to
impose meaningful limits or guidelines
to stop it.
The complaint also alleges that, as a
result of Countrywides policies and
practices, qualified African-American
and Hispanic borrowers were placed in
sub-prime loans rather than prime
loans even when similarly-qualified
non-Hispanic white borrowers were
placed in prime loans. The discrimina-
tory placement of borrowers in sub-
prime loans, also known as steering,
occurred because it was Countrywides
business practice to allow mortgage
brokers and employees to place a loan
applicant in a subprime loan even when
the applicant qualified for a prime loan.
In addition, Countrywide gave mortgage
brokers discretion to request exceptions
to the underwriting guidelines, and
Countrywides employees had discre-
tion to grant these exceptions.
California and Nevada
AGs Merge Resources Into
Mega Mortgage Fraud
Task Force
Attorneys General
Kamala D. Harris
of California and
Catherine Cortez
Masto of Nevada
have jointly announced that their states
have entered into an alliance, the
Mortgage Investigation Alliance,
designed to assist homeowners who
have been harmed by misconduct and
fraud in the mortgage industry. By forg-
ing this alliance, California and Nevada
will combine investigative resources,
including litigation strategies, informa-
tion, and evidence gathered through
their respective ongoing investigations,
assisting each state as it pursues inde-
pendent prosecutions. The alliance will
link the offices civil and criminal
enforcement teams, speeding along the
full, fair and adequate investigation of
wrongdoing in the two states, which
have experienced similar foreclosure
and mortgage fraud crises.
The mortgage crisis is a man-made
disaster that has taken a heavy toll on
the country, but it saved its worst for
California and Nevada, said California
AG Harris. The mortgage crisis is a law
enforcement matter, and we will prose-
cute to hold accountable those who are
responsible and also protect the home-
owners who are targeted for fraud. I am
delighted that California and Nevada
are entering into this alliance to lever-
age the best results for our investiga-
tions and look forward to forging simi-
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lar collaboration with other states.
California and Nevada have been the
states hit particularly the hardest by the
nations foreclosure crisis. In October
2011, Nevada and California ranked
first and second, respectively, for the
percentage of their housing units that
entered the foreclosure process, reflect-
ing a parallel surge in foreclosures in
the two states. One in every 180 Nevada
properties entered the foreclosure
process in October, and one in every
243 California homes received a filing
that month. In 2010, California led the
nation with a total of 546,669 foreclo-
sure filings (four percent of the states
housing units), while Nevada led the
nation with 9.4 percent of its homes
receiving a foreclosure filing (totaling
106,160 units).
The crisis in these Western states is
similar because both states share a
foreclosure system in which a bank can
foreclose on a borrowers home with-
out court oversight, also called non-
judicial foreclosure. The collective
result has created a rich opportunity for
predators, leading both states to make
mortgage-related law enforcement
action a top priority.
I am pleased to join forces with
General Harris to fight against fraudu-
lent mortgage and foreclosure practices
that continue to devastate lives, homes,
and the economy in Nevada and
California, said Nevada Attorney
General Catherine Cortez Masto. This
strong partnership will allow our states
to make an even more concerted effort
to hold fraud perpetrators accountable
and ensure law-abiding homeowners
receive justice.
HARP Refis Through
GSEs Increase 11 Percent
During Q3
Foreclosure prevention
activity by both Fannie
Mae and Freddie Mac
increased in the third
quarter of 2011 and
totaled nearly two million foreclosure
prevention actions since the beginning
of conservatorship by the Federal
Housing Finance Agency (FHFA) in 2008.
During this period, the government-
sponsored enterprises (GSEs) completed
one million loan modifications, helping
borrowers stay in their homes.
According to the FHFAs third quarter
2011 Foreclosure Prevention &
Refinance Report, the increase in com-
pleted foreclosure prevention activity
in the third quarter was driven primari-
ly by loan modifications and repayment
plans. Two-thirds of all borrowers who
received loan modifications in Q3 had
their monthly payments reduced by
over 20 percent. Additionally, the GSEs
cumulative refinancings through the
Home Affordable Refinance Program
(HARP) increased 11 percent during the
third quarter to nearly 928,600 loans.
Other findings in the 2011
Foreclosure Prevention & Refinance
Report include:
I The GSEs have completed nearly two
million foreclosure prevention
actions since the start of conservator-
ship. Nearly 1.7 million of these
actions have allowed borrowers to
retain homeownership, with more
than one million being permanent
loan modifications.
I Loans modified since the start of
HAMP are performing substantially
better compared with loans modified
in earlier periods.
I Serious delinquency rates continued
to decline. However, the percentage
of loans that have missed one pay-
ment increased during Q3 of 2011.
I Real estate-owned (REO) inventory
declined for the fourth consecutive
quarter as property dispositions con-
tinued to outpace acquisitions in the
third quarter.
Shadow Inventory
Remains at 1.6 Million
Units Nationwide
CoreLogic has reported
that the current resi-
dential shadow inven-
tory as of October 2011
nationwide remained at 1.6 million
units, representing a supply of five
months. This total was down from
October 2010, when shadow inventory
stood at 1.9 million units, or at a seven-
months supply, but approximately the
same level as reported this past July.
Currently, the flow of new seriously
delinquent loans into the shadow
inventory has been offset by the rough-
ly equal flow of distressed sales, such as
short sales and real estate-owned (REO)
sales.
CoreLogic estimates the current stock
of properties in the shadow inventory,
also known as pending supply, by calcu-
lating the number of distressed proper-
ties not currently listed on multiple list-
ing services (MLSs) that are seriously
delinquent (90 days or more), in fore-
closure and REO by lenders. Transition
rates of delinquency to foreclosure
and foreclosure to REO are used to
identify the currently distressed non-
listed properties most likely to become
REO properties. Properties that are not
yet delinquent but may become delin-
quent in the future are not included in
the estimate of the current shadow
inventory. Shadow inventory is typically
not included in the official metrics of
unsold inventory.
The shadow inventory overhang is a
large impediment to the improvement
in the housing market because it puts
downward pressure on home prices,
which hurts home sales and building
activity while encouraging strategic
defaults, said Mark Fleming, chief
economist for CoreLogic.
Florida, California and Illinois
account for more than a third of the
shadow inventory. The top six states,
which would also include New York,
Texas and New Jersey, account for half
of the shadow inventory.
Nationwide, shadow inventory is
approximately four times higher than its
low point (380,000 properties) at the
peak of the housing bubble in mid-2006.
A healthy housing market should have
less than one-months supply of shadow
inventory, which would be an easily
absorbed stock of distressed assets with
little or no discernible impact on house
prices, unless the inventory was geo-
graphically concentrated.
Despite three million distressed sales
since January 2009, a period when
home prices were declining at their
fastest rate, the shadow inventory in
October 2011 is at the same level as
January 2009.
Because shadow inventory is often
concentrated in suburban and exurban
submarkets, where distressed sales com-
pete with new construction sales, it is one
of the reasons why new home sales con-
tinue to be weak. In normal times, new
home sales account for 12 percent of all
sales, but they are currently running at
seven percent of all sales.
Based on current estimates of the
visible inventory (both distressed and
non-distressed), the shadow inventory is
approximately half of all visible inven-
tory listings. For every two homes avail-
able for sale, there is one home in the
shadows.
OCC Reports Q3
Foreclosures Rise
21.1 Percent
The performance of first-
lien mortgages serviced
by large national banks
and federal savings asso-
ciation was stable, but
delinquencies remained elevated during
the third quarter of 2011, according to the
quarterly Mortgage Metrics Report
released by the Office of the
Comptroller of the Currency (OCC). The
report showed delinquencies remained
elevated, but stable, during the third
quarter of 2011, but have declined from
2010s totals. The report covers about
62 percent of all first-lien mortgages in
the United States, worth $5.6 trillion in
outstanding balances.
The number of new foreclosures
increased by 21.1 percent during Q3, as
servicers lifted voluntary moratoria
implemented in late 2010 and exhaust-
ed alternatives to foreclosure for the
large inventory of seriously delinquent
mortgages working through the loss
mitigation process. The increase in new
foreclosures and the increase in average
time required to complete foreclosures
sales has resulted in the number of
foreclosures in process increasing to 4.1
percent of the overall portfolio, or
1,327,077 loans, at the end of the third
quarter of 2011.
At the end of Q3 of 2011, 88 percent
of the 32.4 million loans in the portfo-
lio were current and performing at the
end of Q3, almost unchanged from the
previous quarter. The percentages of
mortgages that were 30 to 59 days
delinquent and mortgages that were
seriously delinquent (loans 60 or more
days delinquent or delinquent mort-
gages to bankrupt borrowers) did not
change from the previous quarter.
However, both categories of delinquen-
cies have declined from a year earlier.
Other findings of the study include:
I On average, the modifications imple-
mented in the third quarter of 2011
reduced borrowers monthly princi-
pal and interest payments by 24.4
percent, or $382. Modifications
made under the Home Affordable
Modification Program (HAMP)
reduced payments by 35.1 percent
on average or $567.
I Loan modifications that reduced
payments by 10 percent or more per-
formed better than those that
reduced payments by less. At the end
of the third quarter of 2011, 58.8
percent of modifications made since
the beginning of 2008 that reduced
payments by 10 percent or more
were current and performing, com-
pared with 36.4 percent of modifica-
tions made during that time that
reduced payments by less than 10
percent.
I Since the beginning of 2008, ser-
vicers have modified 2,258,026
mortgages through the end of the
second quarter of 2011. At the end of
the third quarter of 2011, 50.8 per-
cent of those modifications
remained current or had been paid
off. Another 8.8 percent were 30 to
59 days delinquent, and 17.8 per-
cent were seriously delinquent.
Eleven percent were in the process of
foreclosure and 5.8 percent had
completed the foreclosure process.
Nevada Attorney General
Files Deceptive Practices
Suit Against LPS
Nevada Attorney Gen-
eral Catherine Cortez
Masto has filed a law-
suit against Lender
Processing Services Inc. (LPS), DOCX LLC, LPS
Default Solutions Inc. and other sub-
sidiaries of LPS (collectively known as LPS)
for engaging in deceptive practices against
Nevada consumers. The lawsuit, filed in the
8th Judicial District of Nevada, follows an
extensive investigation into LPS default
servicing of residential mortgages in
Nevada, specifically loans in foreclosure.
The lawsuit includes allegations of wide-
spread document execution fraud, decep-
tive statements made by LPS about efforts
to correct document fraud, improper con-
trol over foreclosure attorneys and the fore-
closure process, misrepresentations about
LPS fees and services, and evidence of an
overall press for speed and volume that
prevented the necessary and proper focus
on accuracy and integrity in the foreclosure
process.
The robo-signing crisis in Nevada has
been fueled by two main problems: Chaos
and speed, said Attorney General Masto.
We will protect the integrity of the foreclo-
sure process. This lawsuit is the next, logical
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step in holding the key players in the fore-
closure fraud crisis accountable.
The lawsuit alleges that LPS:
I Engaged in a pattern and practice of
falsifying, forging and/or fraudulent-
ly executing foreclosure related doc-
uments, resulting in countless fore-
closures that were predicated upon
deficient documentation;
I Required employees to execute
and/or notarize up to 4,000 foreclo-
sure related documents every day;
I Fraudulently notarized documents
without ensuring that the notary did
so in the presence of the person
signing the document;
I Implemented a widespread scheme
to forge signatures on key docu-
ments, to ensure that volume and
speed quotas were met;
I Concealed the scope and severity of
the document execution fraud by
misrepresenting that the problems
were limited to clerical errors;
I Improperly directed and/or controlled
the work of foreclosure attorneys by
imposing inappropriate and arbitrary
deadlines that forced attorneys to
churn through foreclosures at a rate
that sacrificed accuracy for speed;
I Improperly obstructed communica-
tion between foreclosure attorneys
and their clients; and
I Demanded a kickback/referral fee
from foreclosure firms for each case
referred to the firm by LPS and
allowed this fee to be misrepresent-
ed as attorneys fees on invoices
passed on to Nevada consumers
and/or submitted to Nevada courts.
LPS misconduct was confirmed
through testimony of former employees,
interviews of servicers and other industry
players, and extensive review of more than
one million pages of relevant documents.
Former employees and industry players
describe LPS as an assembly-line sweat-
shop, churning out documents and fore-
closures as fast as new requests came in
and punishing network attorneys who
failed to keep up the pace.
LPS has cooperated with the Attorney
Generals office for more than 14 months to
resolve its inquiry in a manner which would
benefit the citizens of Nevada, read a state-
ment from LPS. Unfortunately, the compa-
nys efforts to engage in meaningful discus-
sions with the Nevada Attorney Generals
office have been frustrated by the Nevada
Attorney Generals decision to outsource its
investigation to Cohen Milstein Sellers & Toll
PLLC, a plaintiffs law firm located in
Washington, D.C., in apparent violation of
Nevada law. The complaint highlights mis-
conceptions about LPS and seeks to sensa-
tionalize a variety of false allegations in a
misleading manner. LPS will vigorously
defend against the complaint filed by the
Nevada Attorney General.
New Jersey Tops in U.S.
With an Average
Downpayment of
13.76 Percent
With the housing
market continu-
ing to struggle and
fewer consumers
being able to purchase a new home or
apartment, LendingTree.com has released
data highlighting the average downpay-
ments on residential real estate purchases
for all 50 states and Washington, D.C. The
study finds that New Jersey leads the coun-
try with the highest average downpayment
of 13.76 percent. The state with the lowest
average downpayment is North Dakota,
where buyers put down an average of
11.37 percent when purchasing a home.
The locations rounding out the top five
for highest downpayments including
Washington, D.C. (13.54 percent), New York
(13.51 percent), Hawaii (13.37 percent) and
California (13.25 percent). The states com-
pleting the bottom five are Wyoming (11.42
percent), Oklahoma (11.67 percent), Utah
(11.75 percent) and Tennessee (11.75 per-
cent). Overall, the average downpayment
for all states is 12.29 percent.
If Federal regulators were to adopt the
proposed 20 percent downpayment
requirement, a majority of borrowers
wouldnt be able to meet the standard given
the findings in this report, said Doug Lebda,
founder and chief executive officer of
LendingTree. The proposed rule is part of a
larger set of requirements that would
exempt qualified borrowers from risk reten-
tion requirements and would have access to
the lowest rates available. While this rule has
yet to be put into effect, borrowers should
be aware of the possibility and plan for
future home loan needs. By utilizing
LendingTree, borrowers can find the lowest
rates available, find the best deal, and
decrease monthly payments to make the
dream of owning a home a reality.
Additional findings from the
LendingTree data include:
I New Jersey, a state with a loan-to-
value (LTV) ratio lower than the
national average, also has a higher
average home price than most other
states. However, New Jersey falls into
the higher end of the spectrum in
terms of average debt-to-income
(DTI) ratios.
I Nevada, a state that has had high
foreclosure rates and sharp decrease
in the numbers of homes purchased,
actually ranks as the state with the
ninth highest average downpayment
at 13.05 percent.
I The state with the most closings to
date in 2011 is Texas, with 39,498
(through October 2011). South
Dakota has the fewest closings this
year with only 807.
Total Loan Mods for
2011 Nearing the
One Million Mark
HOPE NOW has released
its October 2011 data
showing that perma-
nent loan modifications
totaled almost 80,000 for the month,
bringing the total for the year to approxi-
mately 885,000. Included in the data is the
continuing trend that the majority of pro-
prietary loan modifications have lower
monthly principal and interest payments
and fixed interest rates of more than five
years. Additionally, Octobers data showed
declines in 60-plus days delinquent loans
and foreclosure sales.
Last month, the industry hit a sig-
nificant milestone with five million
completed loan modifications since
2007. With almost a million loan
mods completed this year, it is clear
that the industry and its partners con-
tinue to invest a tremendous amount
of resources into assisting homeown-
ers across the country, said Faith
Schwartz, HOPE NOW executive direc-
tor. Mortgage servicers, non-profit
housing counselors and the govern-
ment continue to incorporate innova-
tive ways to reach families struggling
with their mortgages and each month
we see the results of these collabora-
tive efforts.
Since HOPE NOW began reporting
data in 2007, the mortgage industry
has completed 5.05 million loan mod-
ifications for homeowners. This
includes approximately 4.17 million
proprietary modifications and
883,076 completed under the Home
Affordable Modification Program
(HAMP). For the month of October,
more than 53,000 loan modifications
were proprietary and 26,102 were
HAMP modifications.
According to the survey data, the
inventory of 60-day plus delinquen-
cies is 2.65 million for October 2011,
down from the 2.81 million reported
in September. Completed foreclosure
sales for October 2011 decreased from
the previous month64,000 com-
pared to 68,000. Foreclosure starts
increased by seven percent for the
month209,000 compared to
196,000.
Massachusetts AG Coakley
Targets Five Major Banks
for Illegal Foreclosure
and Servicing Practices
Mas s ac hus et t s
Attorney General
Martha Coakley
has filed a lawsuit
in Suffolk Superior Court against five
national banks, Bank of America,
Wells Fargo, JP Morgan Chase, Citi and
GMAC Mortgagein connection with
their roles in allegedly pursuing ille-
gal foreclosures on properties in
Massachusetts, as well as deceptive
loan servicing. The suit also names
Mortgage Electronic Registration
System Inc. (MERS) and its parent,
MERSCORP Inc., as defendants.
The single most important thing
we can do to return to a healthy econ-
omy is to address this foreclosure cri-
sis, said AG Coakley. Our suit alleges
that the banks have charted a destruc-
tive path by cutting corners and rush-
ing to foreclose on homeowners with-
out following the rule of law. Our
action today seeks real accountability
for the banks illegal behavior and real
relief for homeowners.
In the complaint, AG Coakley alleges
these five entities engaged in unfair and
deceptive trade practices in violation of
Massachusetts law by:
I Pervasive use of fraudulent docu-
mentation in the foreclosure process,
including so-called robo-signing;
I Foreclosing without holding the actual
mortgage (Ibanez violations);
I Corrupting Massachusetts land
recording system through the use of
MERS; and
I Failing to uphold loan modification
promises to Massachusetts home-
owners.
According to the complaint, the
banks used false documentation in
the foreclosure process, including
robo-signing, whereby bank person-
nel signed affidavits that were
untrue, or not based on the signors
actual knowledge. An entity wishing
to foreclose on a property must
demonstrate it has filed an affidavit
in compliance with Massachusetts
law.
The suit also alleges that the five
entities participated in unlawful fore-
closures when they commenced fore-
closures on mortgages where they
were not the holders of those mort-
gages. The Supreme Judicial Court
(SJC), in Commonwealth v. Ibanez,
recently upheld Massachusetts law
and stated that only the present
holder of a mortgage is authorized to
foreclose on the mortgaged proper-
ty. The complaint alleges that these
entities ignored this fundamental
legal mandate and proceeded to
foreclosure even though they did not
hold the mortgage, and thus had no
legal authority to conduct the fore-
closure. The banks failure to obtain
a valid assignment of the mortgage
prior to foreclosure has adversely
impacted titles to hundreds, if not
thousands, of properties in the
Commonwealth. The complaint
alleges that the banks falsely
claimed to be the holder of a mort-
gage in several foreclosure docu-
ments even though they failed to
obtain a valid assignment of the
mortgage.
The complaint also alleges that
these banks have undermined our
public land record system through
the use of MERS, a private electronic
registry system. According to the
complaint, the creation and use of
MERS was adopted by these defen-
dants primarily to avoid land regis-
tration and recording requirements,
including payment of recording and
registration fees, and to facilitate
sales of mortgage loans. The use of
MERS has resulted in a lack of trans-
parency as to the entities that have
the legal authority to enforce mort-
gages, and unfairly conceals from
borrowers the true identity of the
holder of the debt. Since 1997, more
than 63 million home loans have
been registered on the MERS System,
accounting for more than 60 percent
of all newly-originated mortgage
loans. The complaint also alleges
that through the use of the MERS sys-
tem, the banks unlawfully failed to
register assignments of mortgages
and transfers of the beneficial inter-
ests in mortgages.
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Mortgage Professionals
to Watch
I James E. Iley Jr. has been named
senior vice president, national pro-
duction manager of Supreme
Lending.
I James Cromartie has joined First
Guaranty Mortgage Corporation as
assistant vice president of busi-
ness development, national retail
production.
I Sara W. Stephens, MAI has been
elected 2012 president of the
Appraisal Institute. Joining Stephens
on the Appraisal Institutes board for
2012 are President-Elect Richard L.
Borges II, MAI, SRA; Vice President
Ken P. Wilson, MAI, SRA; Immediate
Past President Joseph C. Magdziarz,
MAI, SRA; and Chief Executive Officer
Frederick H. Grubbe, CAE.
I U.S. Attorney Eric Holder has named
Michael J. Bresnick as executive
director of the Financial Fraud
Enforcement Task Force.
I Stewart Information Services has
announced a new executive team
consisting of Glenn Clemente as
group president, direct operations;
George Houghton as group presi-
dent, agency operations; Jason
Nadeau as group president, mort-
gage and title services; Mike Skalka
as group president, international
title operations and chief legal offi-
cer; Allen Berryman as chief finan-
cial officer; Murshid Khan as chief
information officer; and John
Arcidiacono as senior vice president
of marketing.
I Rob Pommier has been named vice
president of business development
for Genpact Limiteds Quantum
mortgage technology platform.
I Urban Lending Solutions has
named T.J. Lewis Jr. as corporate
diversity and business develop-
ment executive.
I Prudential Mortgage Capital
Company has announced that Brian
Salyards has joined its multifamily
originations team.
I DataQuick has announced the
addition of Frank ONeill Jr., SRA as
the companys chief appraiser.
I Shore Financial Services Inc., par-
ent company of United Wholesale
Mortgage (UWM), has hired Paul
Orlando as the firms new chief
information officer and has named
Bill Van Nort to the position of
chief technology officer.
I Ben Itkin has joined Mortgage
Capital Trading Inc. as senior trade
desk executive.
I Paul Leonard has been promoted to
the position of senior vice president
of government affairs for the
Housing Policy Council of the
Financial Services Roundtable.
I WFG National Title Insurance
Company has appointed Michael
Kelly Esq. as its new vice president,
state counsel for its New York agency
office.
Your turn
National Mortgage Professional
Magazine invites its readers to submit
any information, events, passages, pro-
motions, personal or professional
occurrences that seem appropriate
and/or other pertinent data to the
attention of:
Heard on the
Street/Mortgage
Professionals to Watch
column
Phone #: (516) 409-5555
E-mail:
newsroom@nmpmediacorp.com
Note: Submissions sent via e-mail are
preferred. The deadline for submissions
is the 1st of the month prior to the tar-
get issue.
heard on the street continued from page 11
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Credit Repair Partnerships Still a
Threat to Your Mortgage Business
And Your State May Take the Action
Against You!
By Terry W. Clemans
In the spring of 2010,
I wrote a column
warning mortgage
originators that asso-
ciating with credit
repair firms could jeop-
ardize their career. Well, its been almost
two years since that was written, and I am
saddened to feel the need to revisit this
issue as the treat is still out there despite
increased legal action to stop it.
I the past few months, the Attorneys
General (AGs) from Colorado, Arkansas
and Indiana have all either filed suits or
have settled suits against credit repair
firms. These state AGs join the Federal
Trade Commission (FTC) and AGs in
Massachusetts, Illinois, Pennsylvania,
California, North Carolina and West
Virginia who have taken action against
credit repair firms in recent years for a
variety of actions claimed to be illegal
under various state and federal laws.
The most recent case on Nov. 15,
2011 (http://goo.gl/joebT) settled by
Colorado AG John Suthers against
Veracity Credit Consultants LLC, a
Denver-based company, bars the com-
pany from charging upfront fees in
exchange for credit repair services as
well as misleading consumers about
their abilities to cleanse consumers
credit reports. Under the terms of the
agreement, Veracity Credit Consultants
must pay the state $400,000 in restitu-
tion, costs and fees.
Veracity, according to the complaint,
required that consumers pay an initial
setup fee of up to $99 and monthly fees
of up to $79. Under both federal (Credit
Repair Organization ActCROA) and
Colorado law, a credit repair firm can
only charge fees once its services are
complete. According to the Web site of
Veracity as of Jan. 1, 2012, they are still
charging the same fees that got them
sued. Many credit repair firms play
semantics with the law and claim that
they are not credit repair, but credit
consultants or some other name to try
to avoid these laws. However, regard-
less of what a company claims they are,
the actions of their business will deter-
mine what they are in the eyes of the
courts, should they be brought to one
based on the complaints of an aggra-
vated consumer.
In Arkansas, the AGs office sued a
Texas firm that purports to repair a con-
sumers damaged credit history, claim-
ing its services are ineffective and an
advance fee it charges is prohibited by
Federal law (http://goo.gl/Ackga). Any
time a firm wants to charge an upfront
fee for a credit consulting or repair serv-
ice, warning flags should be flying high.
This suit, filed in U.S. District Court in
Little Rock against TRW Ventures LLC
(who also operates under four company
names according to the complaint),
seeks to bar the firm from engaging in
the practices alleged in the complaint.
It also seeks restitution for affected con-
sumers and the imposition of civil
penalties and attorneys fees. The suit
says the company claims to be able to
remove all negative information from a
customers credit report, even that
which is accurate and not obsolete. This
is another major warning flag for illegal
activity under CROA.
Many consumers with bad credit
see offers of this kind as their last hope
to improve their financial situation
unfortunately; TRW readily takes the
money, but offers no real benefit,
despite the sales pitch, said Arkansas
AG Dustin McDaniel.
And then, hitting closer to the mort-
gage marketplace, the Indiana AG filed
suit against two credit repair and foreclo-
sure consultant companies. Indiana AG
Greg Zoeller brought suit against Florida-
based Marucci Law Firm and Illinois-
based E.A.C. Financial, claiming they were
illegally operating in Indiana when each
company entered into contracts with two
local individuals, according to the filing
(http://goo.gl/jjudb).
Hoosier homeowners facing foreclo-
sure or financial insecurity are often tar-
gets for out-of-state organizations look-
ing to make a profit off of their misfor-
tunes, AG Zoeller said. This activity not
only preys upon some of our most vul-
nerable citizens, but often places them in
further financial distress. The fact that a
law firm is involved is all the more disap-
pointing to me.
And dont forget the treat written
about back in 2010, that your ability to
access credit information for your mort-
gage business can be lost due to associ-
ation with credit repair companies. The
national repositories each keep an
independent list of companies not to
sell credit reports to, based on viola-
tions of their policies. One of those poli-
cies they strictly enforce is the ban on
partnerships with credit repair firms.
So the bottom line to all this be
very careful when it comes to credit
repair companies soliciting referrals of
your consumers. You dont want to find
your name listed in one of these AGs
press releases or your company cut off
from access to credit reports vital to
your mortgage originations.
Terry W. Clemans is executive director of
the National Credit Reporting
Association Inc. (NCRA). He may be
reached at (630) 539-1525 or e-mail tcle-
mans@ncrainc.org.
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StreetLinks Launches
USPAP-Compliant
Liquidation Valuation
Report for Servicers
StreetLinks Lend-
er Solutions has
announced the
launch of their new USPAP-compliant
product StreetLinks LVR, a liquidation
valuation report for mortgage servicers
and asset management firms. LVRs will
be performed by StreetLinks nation-
wide panel of licensed appraisers using
a strict appraisal-like methodology
based on property condition, compara-
bles and local market trends to provide
a thorough and objective analysis of the
liquidation price around a strict 90-day
marketing window. This fast, accurate
valuation review is designed to deliver
the assurance servicers seek in their
appraisal values.
Lenders use objective analysis to
make a financial decision when funding
loansthe same is used during servic-
ing and default. A transactions ultimate
financial decision requires an accurate
and reliable value, which StreetLinks
and the appraiser will stand behind,
said Ric Holder, director of StreetLinks
Mortgage Services Division. StreetLinks
LVR is a versatile servicing tool that can
provide relevant data to multiple sec-
tors of the industry, from foreclosure
bids to REO sales predictions and initial
sales listing price. Were excited to put a
much-needed sense of confidence
behind such appraisal values.
Select StreetLinks clients have
already purchased LVR reports and have
been impressed with the results.
As StreetLinks promised, the LVR left
us more informed and more confident
in our ability to perform a financial
analysis of the collateral related to a
seasoned mortgage loan portfolio, said
Joe Huntzinger, vice president of lend-
ing at the Indianapolis Neighborhood
Housing Partnership.
REMN Launches New
Wholesale 203(k) Product
Real Estate Mortgage Network Inc.
(REMN) has
announced the intro-
duction of its
Wholesale FHA 203(k) Rehabilitation
Product to remove the complexity out
of the process for independent retail
lenders across the country. This new
REMN wholesale product looks to
improve the 203(k) experience for
everyone involved by leveraging an in-
house REMN team to manage the
entire procedure. While there are an
overwhelming amount of distressed
properties on the market, many
lenders do not offer FHA 203(k) prod-
ucts because of the intricacies
involved. REMN assigns a dedicated
team to handle the 203(k) loans post-
closing management, home inspec-
tion and other matters until the final
draw is released.
Todays market offers massive
opportunities for 203(k) products,
but they can be so complex that a lot
of lenders just wont offer them,
said Joe Amoroso, director of nation-
al wholesale sales for REMN. REMN
wholesale has the experience with
203(k) products and the commitment
to customer service to help inde-
pendent brokers offer these loans in
a way that simplifies the process for
the home buyer and the loan origina-
tor. We recently had more than 1,200
people register for our last FHA
203(k) Webinar, further proof that
the industry sees value in 203(k)
products, but needs help getting
them implemented. REMN has always
offered industry leading support and
our commitment to simplifying the
203(k) process is one more way were
helping the independents on the
ground compete.
REMN Wholesales 203(k) offerings
include both Streamlined 203(k) and
Full Consultant 203(k) loans for use
with one- to four-unit residential
properties in more than 30 states.
These products allow for maximum
loan-to-value (LTV) ratio of 96.5 per-
cent on new home purchases and 97.5
percent on refinances.
Out of 1,200 registered for the
recent REMN Webinar on 203(k) loans,
only 113 were actively using this prod-
uct, said Andrew T. Berman, execu-
tive vice president of NMP Media
Corp., publishers of National Mortgage
Professional Magazine. The primary
reasons cited why registrants were not
using the 203(k) product was due to a
lack of product knowledge and a
shortage of lenders offering 203(k)
programs.
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For a free demo, contact Erik Wind, at
(800) 262-3783, ext. 701 or visit
shortsalespeedway.com/freedemo
Why Is It Easy to Trap Real Estate Agents
with ShortSaleSpeedway?
Many real estate agents shy away from short sales because of the complexity
involved in doing it themselves. When they refer the work to an attorney or third
party negotiator, they risk losing a great chunk of their commission.
ShortSaleSpeedway automates the short sale process, by creating all of
the documents a real estate agent needs to create the superior short sale
proposal exactly how banks want to see them.
How Can ShortSaleSpeedway Help YOU
Trap Real Estate Agents?
Your company can have your very own, private labeled version of
ShortSaleSpeedway that you offer at no cost to your real estate agents.
They will now have the tools provided by your company to be a true short sales
specialist. Now they can negotiate short sales with ease and not have to give
away their commission to someone else. Youre providing them with a tool that
puts more money in their pocket.
What Do We Provide You?
When you have your own ShortSaleSpeedway, we provide you with the
following:
Q Your own customized private labeled ShortSaleSpeedwaysite
Q Access to reporting on all borrowers being put into the system
Q Training for you, your real estate agents and a dedicated support team
Q Marketing materials to promote your ShortSaleSpeedwayto real estate
agents
In many cases, the setup for the private labeled site costs you nothing!
new to market continued from page 29
QMS to Begin Offering
Third-Party MERS Audits
Quality Mortgage Services
LLC (QMS) has announced
that the company is now
offering third-party Mort-
gage Electronic Registra-
tion Systems Inc. (MERS)
audits as required by MERS Training
Bulletin No. 2011-03, dated July 1,
2011. The bulletin requires
Independent Annual Attestation by
Dec. 31, 2011, which may be per-
formed by an independent control
function within the organization. It
must be provided by an independent
auditor outside of the company after
2011. The rule impacts all servicers
and sub-servicers.
MERS tracks servicing rights for loans
registered on the MERS System. MERS
acts as the mortgagee of record in the
public land records and as nominee for
the lender and its successors and
assigns.
MERS is taking steps to make it eas-
ier for the industry to operate in a man-
ner that has worked well in the past,
said Tommy A. Duncan, CMT, president
of QMS. In order to comply with
upcoming requirements, independent
third-party auditors will be needed to
provide audit services to support annual
attestations for servicers and sub-servicers.
The QMS audit compares the informa-
tion contained in MERS to the servicing
system. In addition to the system com-
parison, QMS will review the note and
security instrument and if applicable,
the assignment, release of mortgage,
modification or subordination agree-
ment to ensure that the document has
been prepared correctly and that the
information reported to MERS is accu-
rate. Quality Mortgage Services is proud
to offer the industry our services in this
area.
United Wholesale
Mortgage Unveils New
Jumbo Product
United Wholesale
Mortgage (UWM)
has announced
that it has
launched a unique jumbo product with
loan amounts up to $2.5 million and
loan-to-value (LTV) ratios up to 80 per-
cent. This product is exclusive and has
extremely competitive low fixed rates
in the mid four percent range, along
with multiple adjustable-rate mortgage
(ARM) options if the borrowers choose.
Investors have been slow to
embrace the return of jumbo loans
over the past year as a result of the risk
factor, said Mat Ishbia, president of
United Wholesale Mortgage. We are
one of the few lenders in the country
that have the capability to underwrite,
close and fund jumbo loans all under
one roof. UWM has the ability to offer
this program based on its exceptional
reputation of originating the highest
quality loans across the country.
UWM has dubbed the product The
Big and Easy due to the size of the
loan it can fund coupled with the
straightforward, trouble-free process
that UWM has established. UWM
offers brokers a number of different
tools to make them more successful.
Among them are EASE (Easiest
Application System Ever), its broker
portal, and Easy Qualifier (EQ), its
product and pricing engine. Further,
the accessibility to UWMs customer
service staff and quick underwriting
turn times attracts top tier brokers
who produce high volumes of quality
loans. The Big and Easy can be priced
and underwritten using EASE and EQ.
Our quality of business is a direct
result of our account executives work-
ing only with brokers that have
proven to originate quality loans and
our centralized team of underwriters
ensuring that these loans will per-
form, said Ishbia.
The Big and Easy offers a variety of
financing options that include a 30-
year fixed, 15-year fixed, 10-year ARM
and also a five-year ARM. This pro-
gram accepts FICO scores as low as
720. Eligible property types for The
Big and Easy include primary resi-
dences, second homes, condomini-
ums, PUDs (planned unit develop-
ments) and double units. Officials at
UWM say it is the only true jumbo
loan in the country that originators
can close in two weeks or less and
they expect UWMs volume to rise sig-
nificantly within the next year.
New LPS Offering
Further Protects
Military Personnel
From Foreclosure
Lender Processing
Services Inc. (LPS)
has announced
added functionali-
ty in its Military
Service Personnel (MSP) loan servicing
platform that will help servicers better
track and manage loans belonging to
military service members. LPS devel-
oped its Military Service Relief (MSR)
functionality within MSP, which adds
additional stop-gap measures to help
servicers further identify and process
protected loans with greater ease and
confidence.
The Servicemembers Civil Relief Act
(SCRA) prohibits mortgage servicers
from foreclosing or seizing property
from active-duty military personnel
unable to meet their mortgage obliga-
tions. The protection from foreclosure
lasts up to nine months after active
duty has ended, and service members
also qualify for interest rate limits and
other shields under the law.
Due to the current mortgage envi-
ronment, LPS saw a widespread need to
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#1 USDA RD lender in
multiple states
Quality FHA/VA lender
Innovative technology
Direct access to your underwriter
Instant closing docs
www.PolarisHFC.com
616-667-9000
info@PolarisHFC.com
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A Bright Spot in
Same owner navigating industry since 1986.
Privately held.
Wholesale Lending
add additional holds and stop-gap
measures to help servicers identify
loans belonging to our nations mili-
tary personnel, said LPS Chief
Information Officer Joseph Nackashi.
The expanded functionality can cap-
ture and store information about a
borrowers active duty status, while
other unique identifiers detect SCRA-
eligibility to ensure fees are not
assessed or collected in error and that
payoff interest is calculated using the
correct SCRA rate limits.
The MSR functionality delivers 30
more loan-level fields in MSP, the
technology used to service approxi-
mately half of the nations mortgage
loans by dollar volume. With these
expanded capabilities, servicers can
better manage loans for active-duty
military personnel. Future MSR
enhancements will deliver greater
functionality related to default and
credit bureau reporting, as well as
reconciliation of advances.
PriceMyLoan Unveils
LendingQB Cloud-Based
Platform
Aut omat ed
underwriting
and loan pric-
ing technology provider PriceMyLoan
has released LendingQB, a 100 percent
Web-based mortgage lending platform.
With LendingQB, we believe we are
doing more than just providing a cloud
computing loan origination system,
said Binh Dang, LendingQBs managing
partner. We believe we are fundamen-
tally changing the way that lenders use
technology.
Since 2004, PriceMyLoan has been
providing lenders with advanced tech-
nology to automate the underwriting
and pricing of their loans. Over the past
seven years, PriceMyLoan has had the
unique opportunity to work closely
with their clients and carefully observe
their utilization of technology.
Each one of our clients had a valu-
able LOS story to tell us, said Gigi
Campbell, national sales director for
LendingQB. What became evident is
their desire for a one-stop shop lend-
ing system, and a system that would
adapt to the way they work.
To that end, LendingQB was built
to include a comprehensive list of
features, such as electronic docu-
ments with e-signatures; a full com-
plement of tools for loan processing,
underwriting, secondary marketing,
closing and post-closing; and special-
ized tools for wholesale and retail
environments, such as broker Web
site portals and online consumer loan
applications. Naturally, PriceMyLoan
powers the automated underwriting
and loan pricing aspects of the
LendingQB platform.
ClosingCorp Announces
Enhancements to
SmartGFE Calculator
ClosingCorp has
announced new
enhancements to
its SmartGFE Calculator. The tool now
provides discounted refinance (reis-
sue) rates and conditional fees, and
features single sign-on capabilities,
improving the convenience of the
application by only requiring users to
enter one log-in to access the calcula-
tor when it is embedded within a
secured, third-party Web site. The
SmartGFE Calculator only requires
answers to questions that are critical
to calculating accurate discounted
refinance rates for each title company.
When embedded onto secure Web
sites, single sign-on makes using the
tool incredibly convenient, as users
only have to log onto the system
once, said Tim Armbruster, chief
technology officer for ClosingCorp.
We are not only committed to seek-
ing customer input regarding our
products, but are also truly dedicated
to acting on those recommendations
and enhancing our offerings. The abil-
ity to generate discounted refinance
rates and conditional fees based on a
specific location are two features that
are critical to our clients businesses,
and we continually strive to ensure
that our products deliver the function-
ality mortgage professionals need
today.
By also including conditional fees,
the calculator now allows title agen-
cies with several locations to manage
the multiple fee structures and deliver
accurate rates based on county, region
or zone.
We make every effort to create the
best user experience possible with all of
our products, which is the reason for
continuously improving capabilities and
adding features such as single sign-on,
said Bob Hart, vice president of sales for
ClosingCorp. By taking the time to
identify only those questions that are
relevant to delivering accurate discount-
ed refinance rates and conditional fees,
we ensure that busy loan officers and
title professionals are not burdened
with answering any unnecessary ques-
tions. Through these extra steps the
SmartGFE Calculator gives title compa-
nies the most user-friendly, precise way
to deliver title and settlement rates,
recording fees and transfer taxes to
their lender clients.
Zillow Mortgage
Marketplace Debuts on
AOL Real Estate and
DailyFinance
Zillow Inc. has
a nno unc e d
the launch of
the Zillow Mortgage Marketplace shop-
ping experience on AOL Real Estate and
DailyFinance, providing tools to
research, shop for and compare mort-
gages. AOL Real Estate and DailyFinance
visitors now have easy access to impor-
tant home financial information, such
as mortgage calculators, real-time mort-
gage rates, and Zillows innovative mort-
gage shopping experience, which allows
users to compare personalized loan
By Drew Waterhouse
The mortgage industry
is on the verge of a
new chapter, charac-
terized by lower over-
all production vol-
umes relative to years
past, greater compliance burdens and
lower product-based differentiation
among participants. However, lost in
this seemingly depressing news are the
seeds of real opportunity for firms and
individual originators well-suited to the
new environment. A much smaller pool
of players has created a need to achieve
greater production with fewer originators.
No, that is not a contradictiondue to
the shrinking of the mortgage
industry, the loans closed
per originator figures
are actually head-
ed higher. This
reality has
put origi-
nators with a documentable track record
of strong production in great demand.
Could this be the time for you to consider
a move to a mortgage lender in which you
are better model-matched?
Model-matching is the process of
improving the mutual results from rela-
tionships between lenders and origina-
tors. It is a comprehensive process of
assessment of both parties across a wide
range of factors, including leadership, cul-
ture, business type, operations and tech-
nology. This process involves due dili-
gence and consideration of both objective
and subjective factors of a relationship in
order to produce a holistic picture of pos-
itive-matched and negative-matched
areas within the relationship. Leadership
and culture are among the most impor-
tant, yet difficult, business relationship
components to evaluate. However, lets
take a look at how they can be evaluated.
Leadership
For high-achieving organizations and pro-
fessionals, it is vital that engagement
between managers and producers be con-
ducted in a clear, concise and consistent
way. The study of leadership clearly
demonstrates that talent (producers and
other creative employees) appreciate clar-
ity of vision, a voice in, and an impact on
the business processes and freedom to
reasonably adapt to their unique circum-
stances or style (empowerment). Where
this environment exists, organizational
and individual goals are achieved, culture
is seen and morale is high. Questions to be
considered include:
Vision
I Can you restate, without prompting
or referring to notes, the vision and
key strategies of your current
employer?
I Do you believe that the vision
expressed by your current employer
is a prudent one given your under-
standing of the mortgage industry
and market currently?
Voice
I Does your current employer actively
seek input from you and others
throughout the organization before,
during and after implementation of
a new project, process or product?
I Do you feel that you can voluntarily
share your opinion on matters of
concern to you without fear of
ridicule or retaliation?
Empowerment
I Can you point to specific initiatives
or changes in policies or processes at
your current employer that are
directly attributable to employee
suggestions or recommendations?
I Has the firm been reasonably accom-
modating to you with regard to
minor variations from company poli-
cies or protocols as it relates to the
unique features of your business?
Leadership can be a subjective qual-
ity to evaluate in corporate America.
Yet, there are fundamental questions
related to a companys stated vision,
proactivity in seeking input from
employees and responsiveness to indi-
vidual employee needs that can help to
assess whether your current companys
leadership is a positive or negative
model-match for your business.
Culture
The culture of a business is most
assuredly influenced by the leadership
factor we have just examined. But cul-
ture goes well beyond the direct influ-
ence of managers from aboveit con-
siders the values displayed within the
organization. Values comprise a wide
range of factors including:
1. Compensation, benefits and recog-
nition;
2. Development and growth;
3. Job characteristics;
4. Organizational character and repu-
tation and;
5. Relationships.
A true, positive model-match can
only occur when you, the originator,
are aligned with your organization
across the full range of these values.
Questions that can help to illuminate
this alignment or lack thereof include:
Compensation, benefits
and recognition
I In light of the recent compensation-
related regulatory changes in the
mortgage industry is your employ-
ers compensation program compet-
itive, clear and compliant?
I In your market, how does your com-
pensation package compare to your
peers?
I Is your employers benefit package
competitive and sufficient for sup-
porting your career, family and
retirement goals?
I Are employees at your current com-
Leadership
and culture are
the first of the core
business factors any
mortgage originator
should evaluate
when determining
the company with
which they have
the best
model-match.
Leadership and Culture:

Are You Model-Matched With Your Current
Mortgage Lender?
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response to the anticipated increase in
refinance activity from HARP Phase II.
With interest rates at an all-time low in
the four percent range, and an estimat-
ed one million eligible homeowners
under the government expanded Home
Affordable Refinance Program (HARP),
lenders are in a great position to proac-
tively treat existing customers as new
leads, showing they have their best
interest at hand. In this environment,
effective lead management is critical to
capture, nurture and track these impor-
tant sales opportunities.
HARP 2.0 offers a great opportunity
for LSI Mortgage Plus to continue to
build trust as a go-to lender for our cus-
tomers, said Brigitte Marshall, director
of marketing at LSI Mortgage Plus.
Leads360 is critical to our HARP 2.0
campaign, allowing us to set up specif-
ic campaign workflows, including nur-
turing efforts, customized distribution
and more, to effectively market to exist-
ing customers.
Leads360 HARP 2.0 Toolkit empower
lenders with three main tools: Data
mining of their Leads360 database to
identify qualified borrowers; pre-sale
nurture efforts with direct mail tracking
and email nurturing campaigns and
sales process workflow to aggressively
track opportunities through to the close
of the mortgage.
HARP 2.0 will generate a welcome
spike for the mortgage industry, and its
quotes and lender reviews, and connect
directly with lenders.
Home and mortgage shoppers can
find the Zillow Mortgage Marketplace
shopping experience on AOL by visiting:
the AOL Real Estate home page; the
AOL Real Estate listing pages; or the
AOL Real Estate home finance center.
We planned to launch this integra-
tion next year, but as mortgage rates
remain at historic lows consumers are
clamoring for quick and useful mort-
gage information. In less than two
months, Zillow and AOLs development
teams worked closely together to
launch Zillow Mortgage Marketplace on
AOL Real Estate and DailyFinance, said
Spencer Rascoff, Zillow chief executive
officer. Expanding Zillow Mortgage
Marketplace to AOL is an important
milestone, and will expose our unique
mortgage offering to many more mil-
lions of mortgage shoppers.
In October, AOL and Zillow
announced the partnership to add the
Zillow Mortgage Marketplace shopping
experience on AOL Real Estate and
DailyFinance in 2012.
Our goal is to provide a suite of best
in class financial tools and resources to
support our users as they make person-
al finance and real estate decisions
through their life stages, said Jay
Kirsch, senior vice president and gener-
al manager of the AOL Marketplace.
We are thrilled to have Zillow join our
team of outstanding partners.
Collectively, we are bringing the best of
the Web to our AOL users in one com-
prehensive online destination.
Aklero Unveils New
MERS Data and Doc
Validation Module
Aklero Risk Analytics Inc.
has announced the
release of DQx for MERS
Data and Document
Validation Module.
The module is part of Q-Close, Akleros
Loan Quality Management Platform,
and provides an automated method to
validate the accuracy of data resident
in the MERS Electronic Registry.
We developed this offering in
response to the requirements outlined
in the MERS Quality Assurance
Procedures issued in September requir-
ing servicers to validate the accuracy of
the data held on the MERS system
against source documents, said
Richard J. Downing, executive vice pres-
ident of sales for Aklero.
As a result, lenders are required to
attest that they have performed a
three-way document to data validation,
including comparing the data on the
MERS system against the banks data
and against the true data, or original
documents, a process that ensures a
high degree of accuracy. That approach
enables Aklero to review the docu-
ments and identify discrepancies. For
servicers, the benefit of using this mod-
ule is that Aklero can validate thou-
sands of loans overnight, while in the
same amount of time, servicers that
cling to expensive manual processes
complete far fewer loans files.
Leads360 Releases
New Refi Product
for HARP Phase II
Leads360 has announced the release of
the Leads360 HARP 2.0 Toolkit in
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Think about it. How do you become
a manager or owner in this industry?
Usually like me.
1. You become a loan officer without
any training. Usually because you
know someone in this industry
because most companies dont want
to train rookies. If I had knocked on
the door of 10 mortgage companies
30 years ago, none of them would
have hired me.
2. You become a top producer.
Perhaps you are more competitive,
a harder worker or just fall into the
right situation. I think for me it was
the right situation being inside a
real estate office.
3. You are then promoted to manager.
Or, you start your own company
because you get little guidance or
support from your present manager.
There you area good producer. You
are probably missing a few fundamentals
of production. Now you must teach others
to do what you do. And here is the prob-
lemyou are still producing. Now you
must produce, recruit, hire, train, coach,
administer, fight fires and more. If I count
all of these, it would be at least five full-
time jobs. Think you can do any of them
well? Most producing managers make 70
percent of their income from personal
production. Therefore, where are you
going to spend most of your time? For
those not good in math, that leaves 30
percent or less on the other four jobs.
And you wonder why I felt that man-
agement training was important? And
that is why I have teamed with National
Mortgage Professional Magazine to deliv-
er a column on leadership for mortgage
managers. That is also why I ask that I not
set the agenda each month. It has to be
what is important to you. E-mail me at
Dave@HershmanGroup.com and let me
know what you are would like to see in
this column.
Dave Hershman is a top author in the
mortgage industry with seven books pub-
lished, as well as hundreds of articles.
Dave has delivered hundreds of keynote
speeches, seminars and schools for the
industry as well. He may be reached by
e-mail at Dave@HershmanGroup.com or
visit OriginationPro.com.
for managers only continued from page 18
one that lenders cannot afford to miss out
on, said Nick Hedges, president and CEO at
Leads360. The past few years have been a
challenge for the mortgage industry with
foreclosures at an all-time high, lower loan
origination volumes and a heavily regulat-
ed default space. HARP revisions, combined
with lower interest rates, have the potential
to drive a much needed boost for the mort-
gage industry and the economy.
ACI Releases New
UCDP-Compliant
Appraisal Reader Tool
ACI has announced
the release of a new
Appraisal Reader
powered by Apprais-
al.com. The new
technology helps lenders and reviewers
view and validate appraisal reports pre-
pared by any appraisal software vendor
that supports the new MISMO XML format.
Appraisal.com is an ACI brand that serves
the appraiser and lender communities.
The Appraisal Reader is compact and pro-
vides mortgage professionals with a critical
tool to conduct a review while keeping all
the components of the appraisal report
intact. The review is performed using ACIs
PAR Logic rules, a comprehensive library
that checks the appraisal report for com-
pliance. Custom client-specific rules can
also be applied on demand using PAR
Logic to highlight errors and omissions.
The Uniform Appraisal Dataset (UAD)
information embedded in the PDF apprais-
al report is also available in a concise,
organized manner using the QuickView
Summary Report within the Appraisal
Reader. The QuickView Summary Report
presents the UAD information in a form
and helps streamline the review and vali-
dation process prior to submission to the
Uniform Collateral Data Portal (UCDP).
With the advent of the UCDP, ensuring
regulatory compliance before submitting
appraisal reports to the portal is increas-
ingly important for lenders and apprais-
ers, said Dave Roberts, president of ACI.
Weve developed a sophisticated, yet free,
solution that enables lenders, credit
unions, and community banks to easily
view and validate MISMO XML appraisal
reports using Appraisal.com technology.
Your turn
invites you to submit any information pro-
moting new niche loan programs, new
products or any other announcement
related to the introduction of a new pro-
gram, to the attention of:
New to Market column
Phone #: (516) 409-5555
E-mail:
Note: Submissions sent via e-mail are pre-
ferred. The deadline for submissions is the
1st of the month prior to the target issue.
Finally, the complaint alleges the
banks deceived and misrepresented
to borrowers the process, require-
ments, and availability of loan modi-
fications. The banks publically
claimed to be engaged in widespread
loan modifications aimed at preserv-
ing home ownership and avoiding
unnecessary foreclosures. Through the
National Homeownership Retention
Program, which commenced on Nov. 6,
2008, these banks represented that they
would work with borrowers to help
them avoid unnecessary foreclosures by
reducing monthly mortgage payments
to affordable and sustainable levels.
The complaint alleges these banks mis-
led borrowers about their eligibility for
this program and the amount of relief
available, failed to achieve a significant
level of modifications, and often strung
along borrowers for months in trial
modifications that were ultimately
rejected.
The AGs lawsuit seeks civil penalties,
restitution for harm to borrowers and
compensation for registration fees that
were avoided. The lawsuit also seeks to
hold the banks accountable through
permanent injunctive relief to provide
a solution for prior unlawful foreclo-
sures and to require that the banks,
going forward, register assignments and
other documents in accordance with
Massachusetts law.
Your turn
National Mortgage Professional
Magazine invites you to submit any
information on regulatory changes, leg-
islative updates, human interest stories
or any other newsworthy items pertain-
ing to the mortgage industry to the
attention of:
NMP News Flash column
Phone #: (516) 409-5555
E-mail:
Note: Submissions sent via e-mail are
preferred. The deadline for submissions
is the 1st of the month prior to the target
issue.
pany recognized for achievements in
ways that go beyond basic sales
incentive contests?
Development and growth
I Are you given the opportunity and
encouragement/support by your cur-
rent employer to seek training that
goes beyond continuing education?
I Do you have access to internal train-
ing relative to business planning,
professional development, products,
technology and marketing?
I Are there key leaders and managers
that take a vested interest in coach-
ing and accountablilty with you?
Job characteristics
I Are you given sufficient autonomy and
independence by your current employer?
I Does your company provide you with
leadership opportunities?
I Would you consider your current
position to be conducive for proper
work/life balance?
Organizational character
and reputation
I Are you proud to work for your cur-
rent employer?
I Does the reputation of your employer
create value for you in your market with
your business partners and cllients?
I Does your current employer engage
in community service or industry
leadership initiatives?
Relationships
I Do the relationships you have with
fellow employees at your current
organization ...
N Do you have relationships with
fellow employees and team
members or is it transactional?
N Is it an environment where you are
able to share and benefit from hav-
ing relationships that can tangibly
enhance your productivity and long
term objectives?
N Do you enjoy being in the office
and work environment or is it
something you would rather
avoid?
The culture of an organization can
also be hard to quantify, but it is neces-
sary to do so if a true assessment of
your current situation can be accom-
plished and then compared to other
opportunities in the marketplace.
Leadership and culture are the first of
the core business factors any mortgage
originator should evaluate when deter-
mining the company with which they have
the best model-match. Honestly answering
the questions poised above can prepare
you to build where you stand or to figu-
ratively Go West, young man (or woman)
in search of better opportunities.
Drew Waterhouse is managing director
of Hammerhouse LLC, a national recruit-
ing and strategic growth firm for the
financial services industry with mortgage
sales and leadership placement at its core.
Drew may be reached by e-mail at
Drew.Waterhouse@TeamHammerhouse.co
m or visit TeamHammerhouse.com.
leadership and culture continued from page 32
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Make
Real Estate Agents
Your Soldiers!
BY RAYMOND BART REAU
The age-long question of, the best way to gain and keep relationships with
real estate agents is becoming more obvious you must give them business
to get their business. Of course it isnt as simple as it sounds. It takes strategic
planning, research and the right relationships to help you achieve this goal.
First, you must determine who you want to work with. A few suggestions
would be looking for the real estate agents with the most listings. Or, who is
the most aggressive buyer agents in your market. My advice would be to tar-
get two or three new real estate partners to work with and send business to.
Once you have your target list of new partners, you now must gain a
source of business for them. There are many ways you can do this and lower
you overall cost per acquisition. One of the easiest ways with an almost
immediate return on your investment is providing homebuyer leads to high-
producing buyers agents/brokers. Real estate agents are in desperate need
of leads, and when they have a strategic partner providing them leads, they
are guaranteed to send you all their loan business.
Make the real estate agents your soldiers, your army on the frontline. As
we know, getting a hold of any lead is the first major battle. By sharing home-
buyer leads with a real estate agent, you are doubling your chances of con-
tacting the individual to pre-qualify them for a loan. This is another battle
within itself as you always have to make sure that your real estate partners
are calling the leads multiple times a week until they get a hold of them.
I have spent the last six months putting together a business model to tar-
get real estate agents using our traditional marketing methods as our core
value to the real estate industry. If you can consistently feed a real estate
partner leads day in and day out for less than half of your current budget,
you will have real estate agents eating out of the palm of your hand. Activity
breeds higher sales, easier recruiting, more agents working in office and pay-
ing desk fees to receive leads, and MOST important to you a happy real
estate partner or two.
Where do you get exclusive buyer and seller leads and how can you deliv-
er them to your partners on a real-time basis? Our staff of mortgage and real
estate marketing professionals can help with the entire process, in fact, we
are giving 10 leads away free on any purchase loan marketing consultation.
I can personally set you up with a specialist in your state, simply e-mail me
at RBartreau@BestRateReferrals.com.
Raymond Bartreau is Chief Executive Officer of Best Rate Referrals. He may
be reached by phone at (800) 811-1402 or e-mail
RBartreau@BestRateReferrals.com.
SPONSORED EDITORIAL
Visit www.NAMB.org/legconference
for details!
The number one reason you should attend this event is
the satisfaction of knowing you are doing your part to
ensure that mortgage broker issues are heard on
Capitol Hill. You are the best spokesperson for our
issues. Your participation benefits you, the industry and
your clients as a whole, by strengthening the brokers
presence in the halls of Congress.
Highlights Will Include:
I Mortgage industry trade association panel discussion featuring representatives
from NAMB, the Mortgage Bankers Association (MBA), the National Association of
Realtors (NAR) and the National Association of Home Builders (NAHB)
I A closer look at the powers of the Consumer Financial Protection Bureau
(CFPB) and what they will be looking for in their audits
I Loan originator (LO) compensation and the impact of HR 2509, the Preserving
Consumers Mortgage Origination Choices Act of 2011, sponsored by Rep.
Gary Miller (R-CA)
Hotel Accommodations
Capitol Skyline Hotel
10 "I" Street, Southwest Washington, D.C. 20024
Phone #: (202) 488-7500
www.capitolskyline.com
Special "NAMB" rates will be available for a limited time only. Book early!
You must be registered for the conference in order to book your room.
Monday-Tuesday,
March 19-20, 2012
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 congressional leaders
in an effective manner.
Soaking Up REO Inventory Like a Sponge
By Daren Blomquist
T
he perception continues to persist
that bank-owned properties are
saturating the housing market
nationwide, making it difficult for
banks to unload these properties and
giving buyers the upper hand in sub-
mitting lowball offers.
I overheard a conversation at
lunch recently confirming this. A
group of businessmen were talking
about a real estate-owned (REO)
property just listed for sale in Ladera
Ranch, Calif., a large development in
Orange County sold at the peak of
the boom and now littered with fore-
closures. One gentleman said he was
surprised at the asking price per
square foot of just $183, which he
considered a bargain. But one of his
lunch buddies chimed in and recom-
mended that he should still come in
with an offer well below the asking
priceand move on to another
property if that offer was rejected.
But trends in REO inventory
(http://goo.gl/yg76B) suggest this cli-
mate may be changingat least in
some local markets. In the Orange
County market, for example, REO
inventory decreased 12 percent from
the beginning of 2011 to the end of
November, according to RealtyTrac
data. We estimate that REO invento-
ry in Orange County now represents
a 12.5-month supplycertainly on
the high side but not the towering
tsunami that some reports of shadow
inventory conjure up.
Dwindling REO inventory
Nationwide, REO inventory shrunk
35 percent from January to
November and now represents an
estimated 12-month supply based on
the sales pace of REOs. In some
states the estimated supply of REO
inventory is down to less than 10
monthsstates like Idaho, Arizona
and Virginia (seven-month supply)
and Missouri, Colorado and Nevada
(eight-month supply).
This dwindling supply of REO
inventory in many areas is the result
of delays in the foreclosure process
slowing down the pace at which
lenders foreclose. The average time
it takes to foreclose nationwide
(http://goo.gl/xlI19) has increased by
19 percent over the past year, from
281 days in the third quarter of 2010
to 336 days in the third quarter of
2011, according to RealtyTrac data.
The average time it takes to fore-
close nationally is up more than
twofold from the third quarter of
2007, when it was 140 days.
These delays were caused by a
firestorm of controversy surrounding
the propriety and legality of the
foreclosure process itself, in some
cases calling into question whether
an REO property can be sold to a
third party or obtain clear title. One
recent example of this was a Sept. 29
bankruptcy court ruling in Arkansas
that found some lenders are not
properly authorized to do business
in the state and therefore are in vio-
lation of the states non-judicial
foreclosure statutes. As a result of
the ruling, now under appeal, some
title companies in the state no
longer issue title insurance for fore-
closed properties.
But despite some extreme exam-
ples like the Arkansas case, lenders
appear to be ramping up foreclosure
activity in select areas and for select
portions of their distressed portfo-
lios that will presumably stand up to
increased scrutiny.
Evidence of this ramp up is a
recent surge in the earlier foreclo-
sure filings that start the foreclosure
process. These default filings spiked
33 percent back in August
(http://goo.gl/a32yV) and have
remained elevated since then,
RealtyTrac data show. Scheduled fore-
closure auctions, the second stage of
the foreclosure process in most states,
reached a nine-month high in
November (http://goo.gl/t15uX), indi-
cating this wave of delayed foreclo-
sures is gradually making its way
through the foreclosure process.
Many of these delayed foreclo-
sures will eventually become REOs,
meaning an increase in REO invento-
ry. But that wont necessarily be a
terrible thing for many markets that
are primed to quickly absorb addi-
tional REO inventory
particularly if that
inventory is in reason-
ably good condition.
In contrast, some other
local markets are in still
saddled with a large
inventory of REOs. In
these REO saturated mar-
kets, lenders and servicers
should think twice before
adding more bank-owned
properties to the backlog.
Instead they may need to
more seriously consider
foreclosure alternatives
such as loan modification,
short sale or even donat-
ing property to local land
banks.
Top REO absorbent
markets
All of these markets had REO invento-
ry representing less than eight
months as of the end of November
and at least 400 REO sales in the sec-
ond quarter of 2011, according to the
RealtyTrac U.S. Foreclosure Sales
Report (http://goo.gl/CdgGP).
The Virginia Beach-Norfolk-
Newport News metro area topped the
list, with 1,250 REO properties repre-
senting a 3.07-month supply. Boise
was second on the list, with 812 REO
properties representing a 3.66-month
supply.
Even though the Phoenix metro area
posted a massive REO inventory of
27,307 properties as of
the end of November,
the blazing pace of REO
sales in the city is help-
ing to keep its estimated
monthly supply of REO
inventory at 6.28
monthsenough to be
third place on our list of
REO absorbent markets.
Other top REO absorbent
markets were Modesto,
Calif.; Sacramento, Calif.;
Richmond, Va.; Lakeland,
Fla.; Stockton, Calif.; Denver
and Akron, Ohio.
Top REO
saturated
markets
All of these markets had
an active REO inventory of more than
4,000 properties as of the end of
November, representing at least a
15-month supply. The Boston-
Cambridge-Quincy metro area led
the pack with 5,678 active REOs rep-
resenting a whopping 133-month
supply because of an anemic REO
sales pace.
Some landmark rulings by the
Massachusetts Supreme Judicial
Court in 2011 have largely frozen up
sales of foreclosed property in the
state. Most recently, the court ruled
in October that the purchaser of a
property in a flawed foreclosure sale
is not the true owner of that proper-
ty. This October ruling, in the case of
Nationwide, REO
inventory shrunk
35 percent from
January to November
and now represents an
estimated 12-month
supply based on the
sales pace of REOs.
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Bevilacqua vs. Rodriguez, built on
the courts January decision in the
case of US Bank vs. Ibanez, which
said that a bank cannot foreclose on
a property when the bank does not
sufficiently prove that it owns the
mortgage.
Second place on the REO saturated
list was the Birmingham, Ala., metro
area, with total REO inventory of 5,417
representing a nearly 100-month
supply. The most populous county in
the metro area, Jefferson County,
filed the largest municipal bankrupt-
cy in U.S. history in November.
With an REO inventory of 4,698
representing a 24-month supply, the
Salt Lake City metro area is number
three on our list of REO saturated
markets. Kandy Clayton, broker/owner at
Clayton & Associates Real Estate in
Sandy, Utah, and member of the
RealtyTrac Agent Network, noticed
an increase in the number of HUD
REO properties in the region starting
as early as November 2010.
Listing brokers for HUD started
receiving properties in November
(2010). With that came a huge influx
of properties on the market. said
Clayton, a HUD listing broker who
noted that many of those properties
were in poor condition and in need
of significant repairs. I never
thought Id sell a $50,000 house
again but I did this year.
Clayton said that investors have
been willing to snatch up many of
those highly distressed HUD proper-
ties, but that a large shadow invento-
ry of REO remains unlisted.
Im seeing a ton of trustees sales
going on, also a lot of REOs out there
that are not on the market yet, said
Clayton.
Other top REO saturated markets
were Milwaukee; Cincinnati;
Orlando; Detroit; Philadelphia; Cape
Coral-Fort Myers, Fla. and
Minneapolis-St. Paul.
Options in REO
saturated markets
A closer look at the REO saturated
market of Detroit may provide some
insight on how lenders and servicers
might most effectively manage and
sell REO inventory in similar mar-
kets.
With 33,309 unsold bank-owned
homes in the six-county region
down 36 percent from the peak of
52,341 unsold REOs in December
2008Detroit has an estimated 16-
month supply of REO inventory,
according to RealtyTrac data. Much
of that inventory is highly distressed
and unattractive to most buyers,
according to Anne Piekarz,
broker/owner at MI Realty Group in
Sterling Heights, Mich., and a mem-
ber of the RealtyTrac Agent Network.
We list for Fannie Mae, and we
have some properties in Detroit, she
said. Horrible, horrible, horrible.
You cant go down there by yourself.
You have to go in the morning and
you have to go with a partner.
But in the suburbs surrounding
the city of Detroit, well-priced REO
inventory in good condition is hard
to come by, according to Piekarz and
other local real estate agents.
There is a vast majority of buyers
who cannot find homes for sale for a
good price in good condition, said
Oakland County real estate broker
Ian Whitelaw, who added he thinks
there is a backlog of buyers for
these types of properties.
Lenders and servicers could effec-
tively approach markets like Detroit
with a two-pronged strategy. Highly
distressed inventory in the foreclo-
sure pipeline could be donated to a
local land bank, if one exists, since
little demand exists for this invento-
ry. On the other hand, REO proper-
ties in decent condition and in desir-
able neighborhoods could be pushed
more quickly to market as these are
likely to be snatched up quickly if
priced correctly.
Daren Blomquist is director of mar-
keting communications for Realty
Trac Inc. With RealtyTrac since 2001,
Daren currently manages the comp-
any s public relations, marketing
and advertising efforts. His duties
include the creation of the compa-
nys monthly and quarterly foreclo-
sure reports, which are cited by
thousands of media outlets nation-
wide, including all the major news
networks and leading publications
such as The Wall Street Journal, The
New York Times and USA TODAY. He
may be reached by e-mail at
Daren.Blomquist@RealtyTrac.com.
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REOs in 2012: The Key Word is Trust
By David Lykken & Jon Traver
W
ebsters Dictionary defines the
word Trust as: Reliance on
the integrity, strength, ability,
surety of a person or thing; confidence.
When dealing in the wonderful world of
real estate-owned (REO) properties, I
dont think there is a more important
word than trust. Let me explain what I
mean
As we begin 2012, many of the so
called experts we see on television
and in the print media are talking as
though the industry has turned the cor-
ner with regards to REOs and foreclo-
sures. Those of us who live and work in
the mortgage and real estate industries
know better. Im not sure that anyone
really knows the true scope of the prob-
lem, but we all know we have several
more years of work to do. Having said
that, lets get to work!
Our hope with this article is to give
everyone who works in the REO space a
fresh and hopeful start to what is sure
to be another challenging year. There
are so many different angles to take
when faced with this unique challenge.
Lets look at our first option, hiring real
estate agents to list and help sell our REOs.
This has been one of the most common
ways that REOs have been moved. Success
is dependent upon a number of things;
however, there are a few common mis-
takes when using this method.
The first mistake made is in how an
agent is chosen to list a REO. Jon Traver,
who is co-authoring this article, has a
unique perspective on the REO business,
as both a long-time member of the
Mortgage Bankers Association (MBA) and
a successful mortgage banker and loan
originator, and as a member of the
National Association of Realtors (NAR) and
successful Realtor. It has always been
amazing to us the caliber, or lack thereof,
of Realtors who are chosen to handle this
business. Dont get us wrong, there are
many great and knowledge Realtors
working and succeeding in this space, but
the vast majority of the time, the inter-
view process is lacking and usually driven
by the Realtors willingness to work for as
cheap as possible. If the saying You get
what you pay for doesnt mean anything
to you, it should.
The best and most successful Realtors
are busy and have no need to work for next
to nothing. If you choose a Realtor to han-
dle your REO business by who is willing to
discount their fees, you will find many tak-
ers. However, a closer look at that group
will show you that many of the agents are
simply not that good or they are only inter-
ested in getting a listing. Selling REOs is
tough enough, but trying to do so with a
Realtor who doesnt have the ability or
desire to help you determine the best price
for your property is not very smart.
You must first find the real estate
agents who are committed to doing the
best job for you. Build a plan with that
agent and TRUST them when they give
you advice. If you are simply sending
listings to the lowest bidder, do you
really have the confidence in them and
will you trust them to do the job you
want and need? Will they work as hard
for you if they are only making a small
percentage of their usual commission?
While we have worked with agents who
have provided volume discounts for
high volume and have done a great job,
but if your primary decision revolves
around getting a discount, you theres a
good chance you will be disappointed.
Now lets move on and assume that
you have chosen the right Realtor,
you must trust them. If you are working
on a long-term relationship, you should
be able to trust their advice. If you
dont, you have to go back and examine
whether or not you made the right
choice. Whether the issue is that of
determining the right listing price, or
whether to accept or counter an offer,
listening to the professional is impor-
tant. We have seen so many poor deci-
sions made because a decision to
counter an offer was made by someone
who either never worked in real estate
or was very inexperienced. A good
agent will earn their commission many
times over and save you money with
their professional advice. If you are not
sure how to find these types of agents,
heres some real simple advice ask
around and ask for references. There
are plenty of them out there who are
ready, willing and able to help.
Mistake number two we forget
that a seller is a seller, whether it be a
person or a bank. There is so much
advice that real estate
agents give to normal sell-
ers, and yet banks almost
never take the same
advice from their agents.
There is a reason these
topics are consistent
throughout the industry,
they WORK!
When Mr . Tr aver
worked as a listing agent,
he gave the same advice
on every listing appoint-
ment. Almost always, the
client would take his
advice and his success
would come when he sold
the home. It is amazing to
us that banks almost
never take the same
advice when given.
Its important to minimize the out
of pocket expenses for any seller, bank
or otherwise. However,
sometimes there is work
that needs to be done,
and will provide a good
return on investment
(ROI) when the house
sells. Whether we are
talking about something
as simple as painting the
front door or something
as major as replacing car-
pet, sometimes money
needs to be spent. If you
have followed our first
tip, hire the best agent
you can to help with your
listings, and trust them
when they recommend
that work needs to be
done. There are ways to
keep costs down and even
ways to delay the expense
until you sell the proper-
ty. But dont be afraid to
spend a little money to make that prop-
erty a little more desirable. We can
assure you that an as-is home in poor
condition must be discounted much
more than the cost of a little work.
Another big mistake made in the
REO marketplace, and probably the one
that costs banks the most money, is the
length of time it takes to close a pur-
chase. This is a lesson in Business 101.
Most businesses work to make it as easy
as possible to do business with them.
Why do we make it so hard? Buyers
agents are well aware of how long it
usually takes to purchase an REO prop-
erty. Due to this fact, the
vast majority of buyers
are instructed to not even
consider one. Even if a
client is willing to wait,
do you think the agent
wants to wait for their
commission? Of course
not! We simply must
make the process faster
and simpler for the
buyer. This brings more
buyers into the market,
which increases the
prices we can expect.
Trust is the issue here as
well, since most delays
seem to occur while wait-
ing for a higher-level
employee to approve a
contract. If we trusted
our plan and our team, this wouldnt be
necessary as often.
With so many chal-
lenges to overcome when
selling REOs, many are
looking into turning their
properties into rentals.
Even Fannie Mae is mov-
ing in this direction, and
before long, we might
have a whole new group
of landlords. Choosing
the right property man-
agement company to
help you through this
channel is going to be a
very important process.
In many markets, proper-
ties are so far underwa-
ter, that renting seems to
be the only option. If you
do decide to become a
landlord, be very, very care-
ful. Once you have picked
your property management
company, TRUST them.
They are the experts and the ones with the
experience, so listen to them.
When Jon used to meet with clients
during a listing appointment, here is
what he told them, I cannot promise
you what your home will sell for, but I
can promise you that we will get the
best price possible. His clients trusted
his expertise and his ability to help
them get the best price. Would you
trust your partner if they made the
statement to you?
In summary, we leave you with this
advice to help you work through your
REOs in 2012 surround yourself and
If you choose a
Realtor to handle
your REO business
by who is willing to
discount their fees,
you will find
many takers.
David Lykken
With so many
challenges to overcome
when selling REOs,
many are looking into
turning their properties
into rentals. Even
Fannie Mae is moving
in this direction, and
before long, we might
have a whole new
group of landlords.
Jon Traver
your company with knowledgeable pro-
fessionals and TRUST them! Whatever
your position, the path to success is
always the same surrounding your-
self with smartest people, and then lis-
ten and TRUST them and their advice. If
you follow this simple advice, your 2012
will be better than your 2011.
David Lykken is president of mortgage
strategies and managing partner with
Mortgage Banking Solutions. He has
more than 35 years of industry experi-
ence and has garnered a national repu-
tation, and has become a frequent guest
on FOX Business News with Neil Cavuto,
Stuart Varney, Liz Claman and Dave
Asman with additional guest appear-
ances on the CBS Evening News,
Bloomberg TV and radio. He may be
reached by phone at (512) 977-9900, ext.
10, or e-mail dlykken@mortgagebank-
ingsolutions.com or dlykken@mbs-
team.com. Jon Traver is production con-
sultantbranching, recruiting and LO
training for Mortgage Banking Solutions.
Jon has spent 12 years forging referral
relationships with builders and realtors
for his own mortgage company. He has
extensive experience working with
branch companies to grow their busi-
nesses through branch and LO acquisi-
tion, as well as building long-term busi-
ness development plans. Jon trains exec-
utives, branch managers, and loan offi-
cers how to redefine who they are and
what they do. He then helps them build
a game plan for taking that new knowl-
edge to the streets, including the execu-
tion. He may be reached by phone at
(512) 977-9900, ext. 112, (972) 467-3990
or e-mail jtraver@mbs-team.com.
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An REO Obstacle Course
By Ivan Choi
vicers need to reduce
mortgage payments to
levels affordable for bor-
rowersfor a minimum
of three months and up to
six months for some
while these eligible
homeowners can look for
a new job.
Through forbearance,
ratios of monthly housing
payments-to-income are
allowed to move up to 31
percent while a borrower
is unemployed. The typi-
cal percentage of housing
payment-to-income would
be at 28 percent. Servicers
must now offer temporary
assistance to unemployed
borrowers who meet specif-
ic criteria.
The criteria also factors
into loans insured under
the Federal Housing
Administration (FHA). All servicers are
required to consider an alternative modi-
fication approach that emphasizes a prin-
cipal write-down for HAMP-eligible bor-
rowers. The alternative principal reduc-
tion allows some underwater homeown-
ers to reduce the principal balance of
their mortgage in steps over three years if
they remain current on payments.
However, these rules do not comply
with capital-stack investors in an RMBS
trust. Servicers are supposed to initially
treat the write-down amount as for-
bearance and will forgive the forbear-
ance amount in three equal steps over
three years, as long as the homeowner
remains current on payments. How
does this help the loan
trust or the investor if the
value of the homes
decline while a borrower
keeps making payments?
A recent CoreLogic
study found that national
home prices continue to
be pressured by a stream
of distressed properties
that threaten to push
prices even lower. The
report said the nations
shadow housing invento-
ry stood at 1.6 million
units, or a five-month sup-
ply in October, as the
National Association of
Realtors (NAR) revised its
existing home sales down-
ward by 14 percent from
2007 to 2010.
Enter the second
phase of the Home
Affordable Refinance
Program, or HARP 2.0. Homeowners
making current payments can also refi-
nance with an unlimited LTV ratio.
Despite being underwater on the home,
the borrower can stay in their home if
they have only missed one payment with-
in the past six months.
The U.S. Department of the Treasury
said forbearance will not cost taxpayers
anything. However, the Treasury seeks to
penalize future homeowners with an
increase in guarantee fees for Fannie Mae
and Freddie Mac because of their losses.
These programs are costing investors
and capital-stack investors in RMBS trusts
If we continue to see
home values decline
through 2013, as
Zillow reported, and
no incentives to
foreclose on homes, we
may see valuations
decline even further to
the point that they
will never regain
anything close to their
original value.
A
n obstacle course, unlike a sim-
ple sprint to the finish line, is
filled with walls to climb, tires to
step through and hurdles to jump over. Its
not a simple race, but a skillful art in
maneuvering quickly to the finish line.
The same can be said for servicers
working through loan modifications
and real estate-owned (REO) disposi-
tions. In a normal environment, ser-
vicers would have a smooth REO dispo-
sition. In the current situation, unless
they map out a proper course for it
taking care of all the obstacles that
stand in the waythey can face a
number of unexpected hurdles.
A wall of properties in distress is the
first obstacle in this race, and one that
sustains itself through regulatory hurdles
set up by the federal government to try
and keep borrowers in their homes.
Some of those hurdles include the
Home Affordable Modification Program
(HAMP) and the second phase of the
Home Affordable Refinance Program. I
think of them as hurdles because they are
obstacles that do not necessarily align ser-
vicers with their responsibilities to the
investors or residential mortgage-backed
securities (RMBS) trusts. Indeed, these
obstacles sometimes stand in the way of a
servicer doing what is best for the investor
or the trust.
Servicers now need to maneuver and
step through higher loan-to-value (LTV)
and debt-to-income (DTI) ratios, for-
bearance and extensions while all the
time, ensuring proper maintenance
and condition of the property. All of
these obstacles stand in the way before
servicers can climb a wall of distressed
properties and work toward getting to
the finish line.
Normally, servicers would follow
through investor guidelines and have the
wind at their backs knowing that they are
doing their best for the investor or residen-
tial mortgage-backed security (RMBS) trust.
An unemployed borrower would go
through the normal procedures, working
with a servicer at trying to make their
monthly mortgage payments. If the bor-
rower could not make their monthly pay-
ments in 12 months, the house would even-
tually need to go into REO. The wall at the
end of the course would be manageable.
Then, in a normal REO disposition, the
bank would auction the property to the
highest bidder, ensuring that the proper-
ty brings the highest value for the
investor. It was not necessarily a sprint to
the finish line, but a manageable course
without any major hurdles or obstacles
that stood in the way, apart from prevail-
ing market conditions.
Today, however, under HAMP, ser-
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time and declining valuations. Servicers
face a double-edged sword and are
crushed by both sides of the equation.
They face lawsuits by not following HAMP
or HARP Phase II, but they may also face
lawsuits from RMBS trust investors.
Even runners on an obstacle course
have room to maneuver among the
tires, hurdles they must jump over and
walls they have to climb. Servicers, how-
ever, are being asked to jump major
hurdles and climb huge walls in order
to fulfill their priorities.
While nobody wants to see home-
owners evicted from their properties,
the HAMP program will cause further
delays on homes likely to go into fore-
closure, thus decreasing their value. As
a result, this obstacle course increases a
final wall of properties that may be los-
ing value rather than gaining it.
RealtyTrac recently reported a 14 per-
cent decline in foreclosures during the past
year, but there still remains a significant
number of foreclosures across the country.
The same report said that with nearly
224,400 U.S. properties in foreclosure dur-
ing November, a three percent decrease
from the previous month, one in every 579
U.S. housing units had a foreclosure filing
during the month.
A slow, methodical walk to the foreclo-
sure finish line only means more foreclo-
sures and, with so many REO properties
already, their condition becomes more
difficult to maintain.
Neighborhoods and communities can
become blighted as foreclosure filings
continue to increase. The result is that
home values decline and, when they go to
auction, the investor or RMBS trust is the
one left holding the bag.
A recent survey conducted by Zillow
Inc., reported U.S. home prices will con-
tinue to decline through late 2012 or early
2013, as negative equity and weak job
growth hinder a real estate recovery.
More than 100 economists, property
experts and investment and market strate-
gists said prices could rise nearly three per-
cent each year after 2013 and through
2016, but how will this be possible without
job growth and purchase activity?
Investors will most likely purchase
foreclosed properties, fix them up and
rent homes rather than occupy them until
valuations start to increase. What will that
do to the communities and the home val-
ues and what will that do to new multi-
family construction?
Meanwhile, if borrowers do not remain
current on their payments in the HAMP
program, servicers need to double reloca-
tion assistance payments for borrowers
successfully completing a foreclosure alter-
native, up to $3,000. Under HARP Phase II,
homes can remain well underwater if bor-
rowers can refinance. How many times will
they be able to refinance before not mak-
ing their monthly payments?
Despite increased incentives to servicers
and lenders under the HAMP program,
including increased incentives for extin-
guishment of subordinate liens to encour-
age more short sales and other alternatives
to foreclosure, servicers must still bear these
costs, including the addition of a single
point of contact under the program.
Some servicers decided to drop out of
this obstacle course race and let someone
else run it for them. For this reason, there
has been a considerable increase in sub-
servicers handling these loans. A recent
survey found that the nations sub-ser-
vicers were processing $386 billion of
loans as of Sept. 30, a 20 percent increase
from the same period a year earlier.
The key to keeping valuations high is to
find true value in the marketplace
through purchase activity, and to ensure
that homes are properly maintained and
managed to keep values from declining
before they are ready to sell.
If we continue to see home values
decline through 2013, as Zillow reported,
and no incentives to foreclose on homes,
we may see valuations decline even further
to the point that they will never regain
anything close to their original value.
Lower values remain a large hurdle to
overcome in this obstacle course. The
result will simply cause investors, includ-
ing RMBS investors, to stay away from the
marketplace longer and we will continue
to see mortgage originations through FHA,
Fannie Mae and Freddie Mac. If this hap-
pens, not only will investors and trusts end
up holding the bag, but taxpayers as well.
And that will be yet another hurdleper-
haps a huge wallwe will all have to
attempt to climb over even after this
obstacle course race has ended.
Ivan Choi is senior vice president for
Matt Martin Real Estate Management
(MMREM) based in Arlington, Va. He is
the current president of the board of
directors of REOMAC, was a senior execu-
tive in Bank of Americas mortgage
organization and an expert consultant in
business development and default man-
agement services prior to joining
MMREM in 2011. He may be reached by
e-mail at I.Choi@SperlongaData.com.
Rehab or Sell As-Is?
By Cheryl Lang
T
odays mortgage
lenders and ser-
vicers have much in
common with medieval
alchemists ... but instead
of turning common met-
als into gold, they strive
to transform non-per-
forming properties into
profitable assets.
Properly managing and
selling distressed properties
is a difficult task, and one
that will undoubtedly con-
tinue to challenge the
industry throughout 2012.
It will take 45 months to
clear the $384 billion in dis-
tressed homes on the mar-
ket in the U.S., according to
a report released by
Standard & Poors in
November 2011.
A chief question for those holding
distressed properties: Should these
properties be rehabilitated before
being placed on the market for sale, or
should they be sold as-is? It takes a
savvy asset manager with a good net-
work of real estate and construction
professionals to know when it is worth
rehabbing a real estate-owned (REO)
property for the greatest return-on-
investment (ROI).
Often, properties are needlessly sold in
as-is condition when they would fetch a
considerably higher price with some reha-
bilitation work. The average pricing for
distressed property was substantially
lower than for non-distressed property,
according to Campbell/Inside Mortgage
Finance HousingPulse Tracking Survey
released in late December. Non-distressed
properties sold for an average of $258,900
in November, the survey showed. The
average short sale sold for $209,000, while
the average move-in ready REO sold for
$189,700. As would be expected, the aver-
age sale price for a damaged REO proper-
ty was well below at $98,600, according to
the HousingPulse survey.
Clearly, repairs and renovations to
make a home move-in ready can
make a big difference in the selling price.
Companies that specialize in buying dis-
tressed assets, rehabilitating them and
selling them quickly can
make substantial profits.
Outsource professionals,
such as asset management
companies that specialize
in all aspects of REO man-
agement, are especially
adept at knowing when
and where to rehab prop-
erties for their clients. They
realize that ROI is individ-
ual to each property and
market, and that there are
times when a more exten-
sive rehab will yield a
greater return.
Its a delicate balanc-
ing act, as more extensive
rehabs can take longer to
complete and have the
potential to increase the
holding period. So, what
sorts of things should be considered
when deciding whether to rehabilitate
a property, or to sell it as-is? And, when
does it NOT make sense to rehabilitate
a property?
The following are some of the main
factors to be considered:
Location
The old real estate adage, Location,
location, location holds especially true
in the distressed property management
business. Where is the property locat-
ed? If its in a desirable area, typically it
makes sense to do some rehab before
putting it on the market to sell.
Some of the factors to consider when
determining whether a location is desirable
are: Is the homeownership rate greater than
50 percent? What is the percentage of
households with children? What is the edu-
cation level of the residents? What is the
average annual income of the residents?
Answers to those questions can help estab-
lish whether to rehabilitate houses in a par-
ticular neighborhood or area.
There are certain areas of the coun-
try where it just doesnt make sense to
rehabilitate a home. Parts of Detroit,
Los Angeles and some Cleveland neigh-
borhoods are so rundown and crime-
ridden that theft and vandalism often
ruin any attempts made at repair. Short
of putting an armed guard or a trained
As communities
continue to struggle
with growing
inventories of vacant
properties, the trend
for legislators to
hold property
owners accountable
will grow.
guard dog on a property 24 hours a day,
its difficult to protect properties in
these neighborhoods, so lenders or ser-
vicers would be wasting their money on
repair and rehabilitation costs.
Natural disasters
When a natural disaster, such as a hurricane
or tornado occurs, there are often insurance
funds available for repairs. It makes perfect
sense to use the insurance proceeds to
repair the properties and improve the
neighborhood. In some cases where a set-
tlement has been announced, there are
pools of funds available for repairs.
For example, in late December, there
was a settlement announced that allows
for the repair thousands of homes with
Knauf Plasterboard Tianjin drywall that
was manufactured in China. A fund will be
created with up to $1 billion to cover the
defective drywall repairs at Knaufs
expense. Most of the homes are in Florida
and Louisiana, with some located in
Mississippi and Alabama.
In those states, large quantities of defec-
tive Chinese-made drywall were imported
during the housing boom and after a string
of Gulf Coast hurricanes. After the housing
bubble burst, lenders and servicers found
themselves holding many distressed prop-
erties in those Southeast states with the
defective drywall, which typically requires
a costly repair or replacement.
Asset managers had little choice but to
sell these toxic non-performing assets in
as-is condition as the cost of remediation
protocols was too prohibitive. Last year, a
much less invasive and more cost-effective
solution for drywall remediation was
brought to the market. By spraying a spe-
cially-formulated foam-type biochemical
into damaged areas, a newer in-situ
remediation technique is providing a
long-term remedy for the odor and the
damaging effects of the airborne emissions
from defective drywall.
The development of the in-situ drywall
remediation technique is a great example of
how a resourceful solution can make reha-
bilitation of damaged properties feasible.
Distressed properties that were previously
deemed too expensive to repair are now
being upgraded to move-in condition effi-
ciently, with costs kept to a minimum.
Target market
Is the target market comprised of owner-
occupants or investors? If the goal is to
reduce turn times and get the asset off the
books, the target market would be a cash
buyer, which is almost always an investor.
If the repairs are extensive and may
require an extended hold time, which
translates into money, the target market
may, again, be the investor.
On the other hand, preserving proper-
ties is good for neighborhoods, so if the
goal is to keep the community intact, then
owner-occupants would be the target mar-
ket. Often, the underwriting and investor
guidelines will dictate whether repairs
need to be made. For example, the Federal
Housing Administration (FHA) requires that
the property be in acceptable condition
and pass an FHA inspection in order to
qualify for FHA financing.
So, when targeting first-time home-
buyers or buyers who may be eligible
for an FHA mortgage, rehabilitating the
property is generally called for. The
property will need to meet the mini-
mum standards set by the FHA in order
to qualify for FHA funding.
Rehabbing helps
restore neighborhoods
In addition to the obvious benefit of
repairing or rehabilitating a propertyan
increased selling pricethere are a few
other advantages. From a societal perspec-
tive, fixing up vacant or rundown proper-
ties helps preserve neighborhoods.
Rehabilitated homes are generally sold to
owner-occupants, which helps bolster the
integrity of a community.
Lawmakers are taking note. As legis-
lators at all levels of government work
to combat crime, blight and other
threats to the health and safety of their
citizens, they are starting to look to the
owners of distressed and vacant proper-
ties for answers. Chief among their
questions: What is being done to pre-
serve communities?
Lawmakers see vacant properties
with maintenance and safety issues as a
haven for drug houses and prostitution,
and the longer a property remains
vacant, the more apt it is to invite crime
and vandalism. Repairing and selling
the properties can help breathe new
life into potentially dangerous areas.
As communities continue to struggle
with growing inventories of vacant
properties, the trend for legislators to
hold property owners accountable will
grow. Consider the State of Californias
probe into the handling of foreclosed
properties by the government-spon-
sored enterprises (GSEs). In late
December, California Attorney General
Kamala Harris filed a lawsuit against
Fannie Mae and Freddie Mac over mort-
gage and foreclosure problems in the
state. AG Harris is investigating Freddie
Macs and Fannie Maes involvement in
12,000 foreclosed properties in
California where they serve as land-
lords. The lawsuit also asks the GSEs to
reveal whether they have information
on the decreased value of those homes
due to drug dealing or prostitution, as
well as explosives and weapons found
on those vacant properties.
New laws are also taking effect at the
local level. Banks that own vacant or
dilapidated properties in Las Vegas could
face fines or jail time under a foreclosure
ordinance approved by the city of Las
Vegas in December. The ordinance
requires banks to list empty, foreclosed
properties on a registry and contains mis-
demeanor penalties for allowing a proper-
ty to fall into disrepair.
Theres no doubt that the world of
distressed asset management has
changed dramatically in the past few
years. Savvy property owners and asset
managers realize that simply crunching
numbers on a spreadsheet is not
enough anymore. A new and more cre-
ative approach to dealing with non-per-
forming assets is called forone that
meets the needs of the owner or
investor of the property, while still
helping to foster stable and safe neigh-
borhoods. Doing so is important to the
health and recovery of the housing
market, and the economy overall.
Cheryl Lang is president and chief execu-
tive officer of Integrated Mortgage
Solutions, a Houston-based provider of
collateral protection resources for the
mortgage servicing sector. She may be
reached by phone at (281) 994-4538 or e-
mail Cheryl.Lang@IMSToday.com.
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HUD REOs: Six Things Every MLO
Needs to Know
By Jeff Mifsud
T
his article is written for, in my
opinion, some 99 percent of the
mortgage loan originators who do
not specialize in providing financing for
U.S. Department of Housing & Urban
Development (HUD) real estate-owned
(REO) purchases, but over the course of
time, are likely to come across a few buy-
ers who may want to purchase HUD
homes. The purpose of this article is to
provide insight into the more important
aspects of processing these loans. This will
assist you in having greater success when
working with buyers of HUD homes.
A significant percentage
of these homes are
in disrepair
HUD homes are generally sold as-is, with
little to no repairs done on behalf of the
buyer. Given this reality, HUD tends to
price their homes in order to attract cash
buyers who dont need your services. On
occasion, you may have FHA buyers who
want to by a HUD home, but the condi-
tion of the property may not meet the
FHA Minimum Property Requirements.
In such an instance, having the ability to
do 203(k) financing is crucial since the
203(b) doesnt always work. Having
access to the (k)s, however, is quite dif-
ferent than having the knowledge to
process and close them. Suffice it to say
that if you have to flip a (b) to a (k), dont
go at it alone. Get help from an expert in
structuring the (k)s, because the last
thing you want is a horrible experience
that will guarantee that your clients will
never refer business to you!
Implore your clients to
get a home inspection
This is, of course, good advice for all
homebuyers, but critical in these situa-
tionsyes, even when the Federal
Housing Administration (FHA) appraisal
performed by HUD doesnt state any
deficiencies. HUD does REO appraisals
on their HUD listings and forwards
these appraisals on to the buyers
lender when requested. Lenders can
underwrite from this REO appraisal and
are responsible for making sure the
property meets FHAs Minimum
Property Requirements (MPR) and may
need to request a copy of the buyers
home inspection to learn more about
the property. The last thing you want is
for a buyer to purchase a home, move
in, and then discover an expensive
repair that needs to be made.
The highest and
best bid wins
I use the term bid because all offers on
HUD homes are done online through
HUDs Web site, HUDHomeStore.com.
Knowing this, you can help your buyers
real estate agent structure the transac-
tion to win the bid. HUD likes to sell
homes to primary occu-
pants, so if you have a
homebuyer who is trying
to buy a HUD home as
their primary residence,
you have an advantage.
HUD wants to earn as
much as possible on the
sale, so one strategy, if
the buyers can afford it,
would be not to ask for
HUD to pay for any of the
buyer closing costs.
Additionally, if the clients
can afford it, have the
buyer pay a portion of the
real estate agents com-
mission directly in order
to decrease the amount
HUD has to pay the buyer
agent (HUD will pay three
percent to the buyer
agent and three percent of the buyer
closing costs).
For example: On a $100,000 offer,
instead of asking for the full $3,000 (three
percent) toward mortgage closing costs
and $3,000 (three percent) for the buyer
agent commission, ask for $0 toward
closing costs and only $2,000 in buyer
agent commission (have the buyer pay
their agent $1,000 directly so they receive
the full commission for their services).
This is a winning strategy and few real
estate agents will use this structure, but
will instead, submit the bid with the full
three percent commission and three per-
cent toward closing costs.
You have to order
a new case number
Each HUD home will have a current
case number attached to it. Since it was
FHA financing that was defaulted on to
produce the foreclosure. However, you
will have to order a new case number
for your buyer because it will be new
FHA financing. When entering the case
information in FHA Connection, the
lender should select Real Estate-
Owned for the Processing Type.
A buyer can submit
offers on multiple
HUD homes at one time
Real estate brokers may submit multi-
ple bids on an individual property, as
long as each bid is from a different pur-
chaser. If a buyer submits multiple bids
on the same property, only the bid pro-
ducing the highest net return to HUD
will be considered. If an owner-occu-
pant buyer submits a bid
on more than one prop-
erty, the bid that pro-
duces the greatest net
return to HUD will be
accepted while all other
bids from that buyer will
be eliminated from con-
sideration. However, if
the prospective owner-
occupant buyer has sub-
mitted the only accept-
able bid on another
property, then that bid
must be accepted and
all other bids from that
buyer on any other
properties will be not be
considered.
Earnest money
deposits are not
automatically refunded
Should the buyers home inspection be
unsatisfactory or the loan be denied,
HUD does not have to refund the
deposit as would be the case on a regu-
lar FHA purchase. HUD determines
their refunds on a case by case basis, so
you must make this clear to your client
at the time of pre-approval and do not
rely on the real estate agent disclosing
this information.
HUD homes are usually priced very
low and you will have an opportunity to
help first-time homebuyers purchase a
home that will give them a very afford-
able payment. One of the greatest aspects
of our recent housing crash is the avail-
ability of affordable housing. For home-
buyers in todays market, the crash has
been a blessing. I have found that the
most satisfying experiences in my career
are those assisting a family achieve the
goal of homeownership, especially when
they thought it was out of their reach.
Theres nothing more gratifying than wit-
nessing the joy on their faces, sometimes
accompanied by tears of joy, when that
dream becomes a reality.
Go FHA!
Jeff Mifsud is founder of Michigan-based
Mortgage Seminars LLC, a former FHA
underwriter with 15-plus years of experi-
ence originating FHA loans, an FHA
expert for LoanToolbox.com and cre-
ator of The FHA Originator, a monthly
FHA newsletter. Jeff may be reached by
phone at (248) 403-8181 or visit
www.MortgageSeminars.com.
One of the greatest
aspects of our recent
housing crash is the
availability of
affordable housing.
For homebuyers
in todays market,
the crash has been
a blessing.
Web: www.appraisalsanywhere.com
Managing and Selling REOs
in a Flooded Market
Accurate Property Valuation Equals Successful
Portfolio Management and Movement
By Frank Danna
B
anks are in liquidation mode. Most
are experiencing losses, and with the
Office of Thrift Supervision (OTS) now
under the supervision of the Office of the
Comptroller of the Currency (OCC), banks
cannot show the same losses that they
could prior to this merger. There is a lot of
inventory that must be managed, main-
tained and ultimately moved off the banks
books. Banks are under pressure from both
the regulatory agencies, and also face pres-
sures from the market. Some are struggling
to make this movement happen, while oth-
ers are quickly selling properties that are
severely undervalued. The marketplace is
flooded with real estate-owned (REO) prop-
erties that are ill-maintained and not in the
condition to compete with comparable
resale properties.
Best practices approach:
In-house or outsource?
There are steps, however, that a bank can
take in order to more effectively manage
this process and their REO portfolio, con-
tributing to the overall health of the bank,
despite a flooded market. A bank has two
options when it comes to managing an
REO property: Outsource the job to an REO
management service, or control the
process internally. REO management serv-
ices may or may not have the background
and expertise to seize, secure, maintain
and sell the property on behalf of the bank,
but banks are not in the business of man-
aging properties and are challenged when
it comes to filling this role.
If a bank chooses to outsource, there are
several factors to consider in evaluating REO
management services. Before the mortgage
meltdown, there was not a high demand
for these types of services. Accordingly,
most have not been around for more than
a few years. Is the company equipped to
deal with seizure of the property, i.e. is the
property owner squatting in the home, or
has the property owner contributed to sig-
nificant destruction? Secondly, can the
company secure and maintain the proper-
ty? Mold is the number one contributing
factor in rehab expenses and can cost
upwards of 20 to 30 percent of the homes
value to remediate. If the property is not
secured properly, mold will be the biggest
problem and will dramatically decrease the
salability of the home.
Once the home has been secured and
properly maintained, a price must be set.
When it is time to sell the property, there
are a lot of market indicators that could
determine what that property is worth
based on the original appraisal report. An
accurate price determines if a property
moves quickly, or if the bank will need to
manage it for months, if not years.
Undervaluing an REO property will result
in market flooding and will push the resale
market down along with it. The resale
market is forced to drive down prices in
order to compete with the flooded and
undervalued REO market.
If a property is listed for more than six
months, there is a very good chance that
the value of the home is no longer close to
accurate. The market is a moving target,
typically in a downward trend. Six months
of non-movement equals a considerable
amount of expense for the bank in main-
tenance and upkeep.
Invest now to save later:
BPO doesnt mean best
price option
Most properties are valued by a broker
price opinion (BPO), which is set by the
selling agent. Since few banks are able to
gauge the true value of the home, the BPO
is the most commonly used and driving
force behind the value of the home.
Unfortunately, BPOs dont work. Some
agents are in the practice of providing very
aggressive BPOs to banks. A low BPO
enables the bank to price the property at
the low end of the market, theoretically
allowing the bank to move the property
faster and the agent to turn a profit faster.
One of the main issues with this is that
agents only make $20-70 per BPO, which
might have a negative effect on the overall
quality of work and may not provide true
value to the bank.
As an alternative to a BPO, banks can
obtain an appraisal to set the price.
There are several benefits from choos-
ing this route, but all start
with more initial cost
from the bank upfront.
An appraisal will cost the
bank between $300-$400,
as compared to $70-140 for
a BPO. This cost becomes
negligible when there is
potential to add thousands,
if not millions of dollars in
some cases, in potential
value. When a bank lever-
ages a highly-qualified
appraiser, the appraiser
becomes personally knowl-
edgeable of the REO portfo-
lio in order to better under-
stand the banks position,
goals and strategy: A six-
month timeline to liquidate
is significantly different
than a nine-month time-
line. Understanding this nuance could be
the equivalent of success for the bank.
On average, an appraiser will value the
banks portfolio higher than a BPO. Banks
sell a property for what the understood
value is. If a bank has a more accurate ini-
tial value, even if it is higher, it can more
than likely sell the property just as quick-
ly. Understanding what other active REO
properties in the market are selling for, at
any income level and state of condition,
will put the bank in a better position to
garner higher value for the REO. While
there is more upfront cost, an experienced
appraiser will value the property for what
it is truly worth, enabling the bank to
move it quickly and ultimately recover
more value in the end.
Depending on the size of the REO port-
folio, a bank can better manage the
process from a micro
standpoint as opposed to a
macro standpoint. From
taking back the property, to
valuing it, to putting it back
on the market, a bank can
analyze this progression to
more effectively control
and even cut its losses.
Being more involved in the
valuation and more suc-
cessfully managing the
method will put the bank
in a much better position
when the property goes on
the market.
Regulatory pressures
and market conditions are
forcing banks to move REO
properties at values that
may not accurately reflect
home values in the area.
Several factors contribute to the success of
selling these properties, but can be more
efficiently and profitably managed in
order to promote the highest value and
highest quality sale. Every day that a bank
maintains a property that isnt valued cor-
rectly, it is leaving money on the table and
walking away from found value. An accu-
rate price does not mean depending on a
subjective BPO, but requires a more
hands-on approach in which a bank will
be better equipped to handle a flooded
REO marketplace.
Frank Danna is chief executive officer for
Appraisal Logistics, a provider of compli-
ance risk management for appraisal
independence. He may be reached by
phone at (866) 991-2574, ext. 222 or e-
mail fddanna@GoToALS.com.
A low BPO enables
the bank to price the
property at the low
end of the market,
theoretically allowing
the bank to move the
property faster and
the agent to turn a
profit faster.
43
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e-mail: sales@calyxsoftware.com
visit: www.calyxsoftware.com
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sales@streetlinks.com
We help you Meet & Exceed UMDP enforced by the GSEs
We Improve your evaluation of collateral with REALview
TM

Appraisals submitted in a MISMO/XML or PDF format.
Weve raised the bar for Appraisal Management Services!
HVCC Appraisal Ordering
National Appraisal Management Center
www.HVCCAppraisalOrdering.com
Please call 866-396-6260
Accounting and Audit
A full service CPA firm specializing in the needs of the mortgage
industry. Providing monthly bookkeeping services,FHA and
financial statement audits , corporate tax preparation and con-
tract CFO services. Contact us today to learn more.
Branch Manager
iServe offers a complete product mix - aggressively priced, with
hassle-free service & turntimes. Branching & Loan Offcer
opportunities available nationwide. For a change, focus on
production, quick closes & a good night's sleep!
iServe Residential Lending
www.iservelending.com
afriedman@iservelending.com
415-298-2500
United Northern Mortgage Bankers......888-600-8808
Limited room available for established Team Leaders and
Licensed Mortgage Originators. Become part of an established
30-year Mortgage Banker with a proven track record and success.
Mortgage Branch Employment Opportunities
We work with some of the top mortgage branch companies in
the industry!
With hundreds of branch employment opportunities out there,
making a choice on who to sign up with is not an easy task! We
are here to help!
Hiring Licensed Mortgage Originators for branch management
and loan origination.
Bank and Broker status to choose from, multi-State lending and
more...
Visit our site or call us today to speak to one of our representatives.
Mortgage Brokers Network Corp, Inc.
1-888-589-7048
The Mortgage Industrys Matchmaker
http://mortgagebrokersnetwork
Mark Wilson Certified Public Accountants
9455 Ridgehaven Ct, Suite 101 San Diego, CA 92123
619-649-0712
www.markwilsoncpa.com
CENTERED ON YOUR NEEDS - FOCUSED ON YOUR SUCCESS
NO File Fee or Monthly Fees
Get a BPS payback from our volume incentive that your loan
officers cant see
You have the ability to control your loan officers pricing
Create, Customize and Optimize your branchs compensation
plan
Recruiting Support Our network of recruiters place producers
in your branch!
Full Eagle Lender and were currently looking for high-quality
Producers in TX, GA, AL, TN, FL, MS, and SC
Hometown Lenders
(888) 606-8066
moreinfo@htlenders.com
www.hometownbranch.com
Does Advertising in the Resource Registry Work? It just did!
Call 888-409-9770 ext. 4
to Register your company.
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Direct Mail
Specializing in Official Snap Packs for Greater Open Rates
Envelope Mailers, Business Reply, Postcards and Much More
Targeted Mortgage Lists with Many Selects
Complete Design, Printing and Mailing Services
Your Complete Mortgage Marketing Solution.
Call Us Today!
(800) 922-9860
www.envisiondirect.net/catalog/mortgage.htm
Document Preparation
Document Preparation (SaaS)
ProClose provides compliant closing documents and software for
Residential Mortgage Lending. Created with closers in mind,
we help make a lenders staff more efficient and supported.
Mortgage Banking Systems - ProClose
1360 Beverly Rd. Ste 200, McLean, VA 22101
800-783-2283 sales@proclose.com
www.ProClose.com
Mortgage Loan Closing Document Preparation & Compliance Services
Fulfillment Services Including Pre-Funding Review & Post-Closing
Interfaces with Leading Loan Origination Software Systems
Foreclosure Loss Mitigation Services
Robertson | Anschutz
800-343-7160
sbertrand@radocs.com
www.radocs.com/info.html
Mortgage Loan Closing Document Preparation & Compliance Software
Loan Documents and Compliance Web-based/SaaS Easy to Use
Intuitive Secure and Reliable Integrates with Leading LOS
Free Setup and Support Extensive Compliance Audits
Docs on Demand
800-343-7160
stephen.bertrand@docsondemand.net
www.docsondemand.info
Errors and Omissions Insurance
Doc Management
DocVelocity is an end-to-end paperless solution designed to
simplify the loan origination experience. Imagine having all your
documents in the loan process as electronic files, all online, from
pre-approval to closing. DocVelocity provides: Fast and easy loan
delivery to any lender Automatic doc sorting, naming and filing
Real-time online document sharing for anyone you choose
Friendly and intuitive user interface No start-up fees, and free
training and support. DocVelocity addresses important
compliance issues while giving your office the competitive
advantage of being paperless. It streamlines all aspects of the
mortgage process and most important, it does so in one easy-to-
use and inexpensive package. DocVelocity is the flagship product
of Paperless Office Solutions, Inc., a wholly owned subsidiary of
Flagstar Bancorp. Visit www.docvelocity.com to find out more.
DocVelocity
www.docvelocity.com
(877) 362-8356
sales@docvelocity.com
CB Malaga Insurance Services LLC......877-245-5887
Insurance broker providing errors & omissions (E&O)
insurance to mortgage brokers and bankers. All loan types.
Available in 22 states. www.CBspecialty.com
Best Rate Referrals ............................................800-811-1402
Mortgage marketing company with decades of combined expe-
rience providing quality leads, mailers, lists and dialer products.
www.bestratereferrals.com & www.mortgageleads.org
Contact Management/CRM
LoyaltyExpress, the leading mortgage marketing company in the
nation, delivers high-impact marketing that substantially increases
production levels. Direct mail, e-mail, and intelligent alerts are
combined to deliver unprecedented results. Learn more today.
LoyaltyExpress
877.938.1175
start@loyaltyexpress.com
www.loyaltyexpress.com
Continuing Education
NMLS approved 20 hour Prelicensing Education
NMLS approved Continuing Education
Live Classroom Instruction, Web Delivery and Private Events
The SAFE-Smart ExamCram, Powerfully Innovative Test Prep
Abacus Mortgage Training and Education
PO Box 780
Summerfield, NC 27358
888-341-7767 www.GetYourEd.com
Time is running out...are you ready?
Pass the S.A.F.E. Act Test, meet your 20 hours of Pre-licensure,
and complete the 8 hours of Continuing Education you need
The Ultimate Test Prep Kit and Test Prep Boot Camps Cover
everything to pass the S.A.F.E. Act Test on your frst try.
20-hour Pre-licensure - Packed with everything to successfully
complete your pre-licensure requirements.
Continuing Education - Exciting, NMLS approved courses that
meet your Continuing Education needs and build your business.
MSS Learning Center
(800) 963-1900
www.MortgageSuccessSource.com
Email: info@MortgageSuccessSource.com
Events
The Expo for Real Estate Professionals"
For ongoing Networking Events throughout the year please visit
www.nycnetworkgroup.com.
NYC Real Estate Expo LLC
Anthony Kazazis - Director
apkazazis@optonline.net www.nycrealestateexpo.com
646.210.2545 914.763.8008
FHA Audit and Licensing
First National Compliance Solutions Inc.
1-800-400-4134
www.firstnationalcompliance.com
Bonnie Nachamie & Jonathan Pinard have assembled a team of
experts to assist Mortgage Brokers, Mortgage Bankers, Federal
and State Chartered Banks & Credit Unions with their mortgage
compliance needs.
Hard Money/Private Lending
ACC Mortgage, Inc.
932 Hungerford Drive #6 Rockville, MD 20850
240-314-0399 240-314-0336 fax
WeApproveLoans.com
We are doing traditional subprime lending, fix & flip lending and
hard money lending.
Windvest Corporation ............................877-285-0777
Specializing in rehab loans for property investors in So. CA.
Up to 60% ARV, 12.99% fixed rate, 3.5-5 points, 1 yr. term.
Fast & professional service since '94! Visit windvestcorp.com!
Franchise
LenderCity Home Loans
888.880.2489
www.LenderCity.com
LenderCity Home Loans is now offering individual franchises. This
is perfect for the L.O. who has always wanted to open their own
brokerage but didn't know how. Benefits include:
Growing with a recognized brand
Local and National marketing and advertising
Online search engine marketing
More aggressive lender pricing based on volume
incentives
A proven system that generates more revenue than
average broker shops
Ability to retain your license, existing corporation, and
autonomy
Lead generation
Processing and closing services also available
Call 888-409-9770 ext 4,
to register your company.
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Leads
Leads
Our network attract over one million visitors per month. Our paid
lead program as well as our free lender directory will help you con-
nect with targeted new consumer traffc from with high-intent con-
sumers searching online for the right mortgage lender.
MortgageLoan.com
SM
www.mortgageloan.com 877-390-4750
MortgageLoan.com is the largest online directory
for mortgage professionals and a favorite of
consumers shopping for mortgage loans.
AAA Refi Leads.....AAA Refi Leads.....AAA Refi Leads
Learn how I went from failure to success by mailing cheap refi
letters from home, closed 71 loans & made $248,954.62 last yr.
Ill show you exactly how I did it. Go to: www.Refi-Leads.NET
Income Verification Services
Advanced Data
(800) 537 - 0458
www.advanceddata.com
verifications@advanceddata.com
Advanced Data is a leading national provider of data services,
streamlining income and employment verification with proprietary
software. Clients can submit 4506-T directly through Encompass360.
Also ask about our AVM and flood services!
Loanbright helps mortgage companies capture and close more
business through its marketing and software tools. An INC. 500
awardee, Loanbright has helped thousands of companies since
1999 by providing them with well over 3 million qualified sales leads.
Loanbright
27902 Meadow Drive, Suite 375
Evergreen,CO 80439
866-391-2709 www.Loanbright.com
Reach affluent and creditworthy consumers who are in-market and
ready to transact. Bankrate is a consumer direct Web site, NOT a
lead aggregator. Qualified leads for every sized budget, and pay
only for performance. No set up fees! No contracts! No risk!
Reach self directed, highly qualified consumers that are actively
searching for mortgage loans
Geo-targeting reach the right consumers in the right markets
Our proprietary Advertiser Portal gives you complete control
over your campaigns, budgets, and performance reports.
YOU determine your daily/weekly/monthly budget
Pay only for consumers who click on your listing
NO cancellation fees
Try us risk-free! Call 561-630-1257
or visit www.bankrate.com/cpcprogram/ for more details.
Internets Leading Consumer Mortgage Marketplace
Attracting over 8 million unique
consumers every month
www.Bankrate.com 561-630-1257
Loan Origination Systems
Calyx Software, the #1 provider of mortgage solutions is dedicated
to offering reliable and affordable software that streamlines, inte-
grates and optimizes the loan process. Find out how PointCentral
can streamline your business and create compliant processes today.
Calyx Software
800-362-2599
sales@calyxsoftware.com
www.calyxsoftware.com
Mortgage Forms
HUD Settlement Cost Booklets
CHARM Booklets
Uniform Residential Loan Applications
HUD Case Binders
www.LendingForms.com
Same Day Shipping (orders placed prior to 3pm et)
24/7 Secure e-Commerce Site
Save 33-50%
Income Verification Services
Platinum Credit Services, Inc.................631-299-2084
Tax return vertification (4506 tax transcript done in less than
24 hours in most cases). Call Lorenzo Pugliano, President
and CEO at 631-299-2084.
Regulatory/Compliance
Comergence Compliance Monitoring is the mortgage industrys only
Complete broker desk management software and outsource solution
for TPO management and monitoring. We can supplement lenders in-
house management and monitoring resources departments.
Comergence Compliance Monitoring, LLC
630 The City Drive South, Suite 205 Orange, CA 92868
Office: 714-740-9000
www.ComergenceCompliance.com
Are you a broker/owner or current branch manager looking to
expand your business into Mortgage Banking with FHA capabilities?
Then our PARTNER BRANCH ADVANTAGE program is perfect for
you. We are offering you all the benefts of partnering with an estab-
lished lender while still enjoying your independence. US Mortgage
Corporation is a nationwide FHA Direct Lender with a 16 year long
reputation of excellence.
YOUR SUCCESS IS OUR SUCCESS!
For more information contact THOMAS R. SIRICO, Vice
President of Business Development at (917) 923-1472 or email
at tom.sirico@usmortgage.com.
We look forward to sharing our services with you!
(800) LOANS-15
www.usmortgage.com
Retail Branch
#1 USDA RD lender in multiple states with strong FHA/VA/CONV
product lines as well. Don't be held hostage by a captive branch
arrangement. Bank it or broker it. Have a business name/identity
you don't want to give up? We allow DBAs (subject to state rules).
Polaris Home Funding Corp.
616-667-9000
timeforachange@polarishfc.com
www.polarishfc.com/timeforachange
Reach affluent and creditworthy consumers who are in-market and
ready to transact. Bankrate is a consumer direct Web site, NOT a
lead aggregator. Qualified leads for every sized budget, and pay
only for performance. No set up fees! No contracts! No risk!
Founded in 2005, Best Rate Referrals has grown into one of the
fastest growing marketing firms in the nation. By combining new
technology with traditional direct marketing methods that produce
profitable results.
Best Rate Referrals is the direct marketing leader in the mortgage
and banking industry.
Mortgage Direct Mail & List Services
Mortgage Live Transfers
Mortgage Internet Leads
Mobile Marketing
Best Rate Referrals
The Leading Direct Marketing Company
for Mortgage Professionals
800-811-1402 www.bestratereferrals.com
Sign-on weekly at
nmpmag.com/lykkenonlending
The Lykken on Lending
R A D I O P R O G R A M
Wholesale/Residential
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Wholesale/Residential
Wholesale/FHA
Icon Residential, a wholly owned subsidiary of Grand Bank N.A.,
is one of the nations leading Conforming, Jumbo, FHA and VA
wholesale lenders. Our strength, success and longevity is
derived from delivering customers service that exceeds our
valued business partners expectations. With deep industry
knowledge, financial stability and innovative technology we
provide the solutions for our business partners to fund loans
while avoiding risk.
Direct Access to Underwriters
Competitive Pricing
Innovative Technology
Paperless Solution
Bank Funding
Icon Residential Lenders
(888) 247-4207
www.iconwholesale.com
Wholesale Reverse Mortgages
Veros Real Estate Solutions is a premier technology leader in the mort-
gage industry and proven leader in enterprise risk management and
collateral valuation services. Veros combines the power of predictive
technology and data analytics for advanced automated solutions.
Veros Real Estate Solutions
2333 North Broadway, Suite 350 Santa Ana, CA 92706
(866) 458-3767
www.veros.com @verosres (Twitter)
Arizona Nevada Texas
California New Mexico Utah
Colorado Oregon Washington
88 Kearny Street, 3rd Floor
San Francisco, CA 94108
Phone: (415) 632-5150 Fax: (925) 226-1938
www.bayeq.com
Now Wholesale Lending in:
Wholesale/Correspondent
BankFinancial ..........................................800-894-6900
We have money to lend for apartments, $250M to $2MM, up to
75% LTV. We offer competitive rates, fees & terms. Were com-
mitted to helping you and your clients close the deal. Call us.
AMX/Land Home Financial ..................800-349-4172
AMX/Land Home Financial Services Wholesale Lending
Division - Great Rates, Great Programs, Great Service.
Offering fnancing options that work in today's market. Paperless! Quick and Easy!
Top Tier Account Executives
Committed to Wholesale
Operations that Earn Your Business
TMSfunding Wholesale Lending
326 W Main Street Milford, Ct. 06460
888.371.2989 WWW.TMSFUNDING.COM
Your Partner in Success!
We offer competitive pricing and fast turn-times for FHA, VA,
Conventional, and USDA programs without having a retail pres-
ence in the industry. We are a wholesale lender with 22 years of
experience and believe in exceptional service.
Terrace Mortgage
4010 W. Boyscout Blvd., Suite 550
Tampa, FL 33607
866-934-4631 www.terracemortgage.com
CBC National Bank is one of the nations fastest growing
wholesale lenders offering Conventional, FHA, VA, and USDA.
The most important aspect of being a leader in todays market is
the ability to build and maintain a meaningful relationship with
each customer. We understand that these meaningful relation-
ships coupled with competitive pricing and efficient technology
are the pillars of todays lending environment.
We are now hiring Account Executives in AL, TN, KY, VA, & MD.
Contact Stu Ehrlich in our HR department at
sehrlich@cbcnationalbank.com for further details.
Big Enough to MATTERSmall Enough to CARE
CBC National Bank
3010 Royal Boulevard South, Ste. 230
Alpharetta, GA 30022
888-486-4304
If your ad was here,
you would be seen by
191,181 Mortgage
Professionals looking
for resources to help them
in their business.
The Resource Registry
is a directory of lenders
(wholesaler or retail that
are recruiting), affiliated
services and resources
that is seen by more
than 191,181 active
Professionals.
Call 888-409-9770 ext. 4
to register your company.
Bookmark this!
Access these listings
online at
nmpmag.com/directory_list
Flagstar Wholesale Lending, a division of Flagstar Bank, is one of
the nations largest wholesale and correspondent mortgage
lenders, providing the technology, products, service and support
that independent mortgage brokers, correspondents, and bankers
need in todays mortgage arena. In the ever-changing environ-
ment of mortgage banking, Flagstar takes pride in accommodat-
ing the specific needs of each customer. At Flagstar, we under-
stand that you need every available advantage to stay ahead of
the competition. This is why we provide multiple technology
options to meet your needs to register, lock, underwrite, close,
fund and deliver your loans. Our wholesale website
(wholesale.flagstar.com) and the loan processing tool Loantrac
provides our customers with the functionality that make it easier
and faster to close loans, saving you time and money! Visit whole-
sale.flagstar.com to learn more.
Flagstar Wholesale Lending
www.wholesale.flagstar.com
(866) 945-9872
WLSC@flagstar.com
For Licensed Mortgage Brokers in NY, NJ, CT, PA and FL
No HUD Approval Required Live Help Desk
Will Provide Training at Our Office or Yours
48 Hour Underwriting - Get Paid Within 48 Hours of Funding
NATIONWIDE Equities
Nationwide Equities Corporation
201-529-1401
www.nwecorp.com
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JANUARY 2012
Monday-Friday, January 23-27
MISMO January 2012
Trimester Meeting
One Ocean Resort Hotel & Spa
1 Ocean Boulevard
Atlantic Beach, Fla.
For more information,
call (800) 793-6222 or visit
MortgageBankers.org.
FEBRUARY 2012
Sunday-Wednesday,
February 5-8
2012 CREF/Multifamily Housing
Convention & Expo
Atlanta Marriott Marquis
265 Peachtree Center Avenue
Atlanta
call (800) 793-6222 or visit
Tuesday-Friday,
February 21-24
The Mortgage Bankers
Associations 2012 National
Mortgage Servicing
Conference & Expo
Orlando World Center Marriott
8701 World Center Drive
Orlando, Fla.
call (800) 793-6222 or visit
MARCH 2012
Sunday-Thursday, March 11-15
29th Annual Regional Conference
of Mortgage Bankers Associations
Trump Taj Mahal Casino Resort
1000 Boardwalk at Virginia Avenue
Atlantic City, N.J.
call (732) 596-1619
or visit MBANJ.com.
Wednesday, March 14
Florida Association of Mortgage
Professionals Broward Chapter
2012 Annual Trade Show
Broward County Convention
Center
1950 Eisenhower Boulevard
Ft. Lauderdale, Fla.
call (850) 942-6411
or visit FAMB.org.
Monday-Tuesday,
March 19-20
2012 NAMB Legislative &
Regulatory Conference
10 I Street Southwest
Washington, D.C.
For information,
call (972) 758-1151,
or visit NAMB.org/legconference.
Thursday, March 29
Maryland Association of
Mortgage Professionals 2011
March Mortgage Madness
Convention
Martins Crosswinds
7400 Greenway Center Drive
Greenbelt, Md.
For information,
call (410) 752-6262,
or visit MDMtgPros.org.
APRIL 2012
Wednesday-Thursday,
April 18-19
2012 National Policy
Conference
Hyatt Regency on Capitol Hill
400 New Jersey Avenue Northwest
Washington, D.C.
call (800) 793-6222 or visit
To submit your entry for inclusion in the National Mortgage Professional
Calendar of Events, please e-mail the details of your event, along with
contact information, to newsroom@nmpmediacorp.com.
Sunday-Wednesday,
April 22-25
2012 National Technology in
Mortgage Banking Conference
& Expo
Arizona Biltmore
2400 East Missouri Avenue
Phoenix
call (800) 793-6222 or visit
Sunday-Wednesday,
April 22-25
2012 National Fraud Issues
Conference
Arizona Biltmore
2400 East Missouri Avenue
Phoenix
call (800) 793-6222
or visit MortgageBankers.org.
MAY 2012
Sunday-Wednesday, May 6-9
2012 National Secondary Market
Conference & Expo
New York Marriott Marquis
1535 Broadway
New York, N.Y.
call (800) 793-6222
Friday-Wednesday, May 18-23
2012 Mortgage Bankers
Association of Georgia Education
Forum & Expo
Sandestin Hilton Golf Resort & Spa
4000 South Sandestin Boulevard
Destin, Fla.
call (478) 743-8612
or visit MBAG.org.
2012 Commercial/Multifamily
Servicing & Technology
Conference
Hilton Anatole
2201 North Stemmons Freeway
Dallas
call (800) 793-6222
2012 Legal Issues/Regulatory
Compliance Conference
La Quinta Resort & Club
49-499 Eisenhower Drive
La Quinta, Calif.
For more information, call (800)
793-6222 or visit
JUNE 2012
Sunday-Wednesday, June 3-6
Mortgage Bankers Associations
2012 Chairmans Conference
The Breakers
1 South County Road
Palm Beach, Fla.
call (800) 793-6222 or visit
OCTOBER 2012
Sunday-Wednesday,
October 21-24
Mortgage Bankers Association
99th Annual Convention
& Expo
The Hyatt Regency
151 East Wacker Drive
Chicago
call (800) 793-6222
Daily updated mortgage industry news
Industry blogs
Write your own blog
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The BEST Branc h Sol ut i on, Peri od.
Nat i onwi de FHA Lender
This information is provided to assist business professionals and is not an advertisement extended to the consumer,
as dened by Section 226.2 of Regulation Z. Freedom Mortgage corporate ofce is located at: 907 Pleasant Valley Ave.
Suite 3, Mount Laurel, NJ 08054. Lender NMLS I D: 2767. Licensed by the NJ Department of Banking and Insurance,
License #9100861. All Rights Reserved.
EOE
www.Fmbranch.com
800.220.9498
Info@Fmbranch.com
Some restrictions may apply. All borrowers are subject to credit
approval. Programs subject to change. The information provided
herein is for dissemination to and for the use of real estate and
financial business entities only and is not an advertisement for
the extension of credit to consumers.
2011 Flagstar Bank

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