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FEBRUARY 2013PRESORTED STANDARDU.S. POSTAGE PAIDNMP MEDIA CORP.

NMP MEDIA CORP.1220 WANTAGH AVENUEWANTAGH, NEW YORK 11793

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Mortgage PROFESSIONALO H I O

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

OAMP BOARD OF GOVERNORSPhone # E-mail

Shane Marzullo Board Chairman (419) 861-9008 [email protected] Vogel Executive Director (614) 761-1200 [email protected] Nabors Board Member (419) 627-4531 [email protected] Limes Board Member (419) 353-9819 [email protected] Vu Board Member (513) 771-7177 [email protected] McGeorge Board Member (513) 965-0015 [email protected] Fisher Board Member (937) 748-8888 [email protected]

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Phone#: (513) 602-1852 v Fax #: (513) 965-0016Web site: www.oamp.biz v E-mail: [email protected]

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For more information on becoming an OAMP Sponsor,please contact Executive Director Mark Vogel at (614) 419-3323 or e-mail [email protected].

Ohio Couple Guilty in $7Short Sale Fraud SchemeDeborah L. Kistner and her husband, Mark A. Kistner, both of Hilliard, Ohio, pleadedguilty three days after their trial started to a $7 million mortgage fraud scheme theycarried out between June 2006 and July 2010. Carter M. Stewart, United States Attorneyfor the Southern District of Ohio; Darryl Williams, Special Agent in Charge, InternalRevenue Service Criminal Investigation (IRS); Edward J. Hanko, Special Agent in Charge,Federal Bureau of Investigation (FBI); and other agencies participating in the mortgagefraud task force announced the guilty pleas entered before U.S. District Judge GregoryL. Frost.

Deborah Kistner pleaded guilty to three counts of conspiracy to commit bank fraud,three counts of conspiracy to commit money laundering, and one count of bank fraud.Mark Kistner pleaded guilty to one count of conspiracy to commit money laundering.

Deborah Kistner operated Premiere Title Company in Hilliard. She deceived lendersin connection with the purchases of real estate in Ohio and Florida. Evidence present-ed during the first three days of the trial showed that she conspired with others tosecure inflated loans for real estate and kept the excess proceeds or used them to payothers involved in the conspiracy. Deborah Kistner intentionally failed to providelenders with critical purchase contract language and accurate settlement statements.

Deborah and Mark Kistner also schemed to defraud lenders and launder the moneythey received through simultaneous “short sale” closings where the lenders wouldagree to absorb losses on existing mortgage loans while Deborah Kistner actually soldthose properties on the same day for a profit and laundered the profits through bankaccounts controlled by Mark Kistner. The government was prepared to show that theysecured as much as $7 million in fraudulent loans through their schemes.

Deborah Kistner faces a maximum penalty of up to 30 years in prison and a fine of$1 million on each of the three counts of conspiracy to commit bank fraud and theone count of bank fraud; and up to 10 years in prison and a fine of $250,000 on thethree counts of conspiracy to commit money laundering. Mark Kistner faces a maxi-mum penalty of up to 10 years in prison and a fine of $250,000 on the one count ofconspiracy to commit money laundering. Lenders suffered losses of at least $3.3 mil-lion. The plea agreements they signed include forfeiture of investment accounts andrestitution to victims.

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A Special Look at “It’s All About Marketing!”Lead Generation and Conversion Strategies for Online Mortgage Marketers By Scott Schang ..............42Generating New Leads With Direct Mail: Back to Basics By Molly Greene ........................................43The Customer Experience as a Competitive Advantage By Steven J. Ramirez ..........................................45Top 10 Tips to Grow Your Mortgage Business By Judith Brower Fancher ......................................................46The Four Elements of a Perfect Marketing Plan By Joy Gendusa ..................................................................47New Ideas to Make Your Direct Mail Stand Out By Jean LeBlanc ..................................................................48Lead Generation Through Organic Search and SEO By Kat Hollowell & Steven Muldrow ..........................................48

FeaturesWhat to be Aware of When Marketing in Multiple StatesBy Bob Caruso ......................................................................4The Elite Performer By Andy W. Harris, CRMS ........................4Three Reasons You Should Join the Professionals at Directly.com Now By Carolyn Warren................................6Social Media and Networking Compliance By Jonathan Foxx ..................................................................................8HECM for Purchase Transaction Volume Increases ByRalph E. Rosynek Jr. ..............................................................10Lykken on Leadership By David Lykken ..............................14For Managers Only By Dave Hershman ..............................18NAMB Perspective..........................................................20HECM to Undergo Major Changes ................................24Maximize Your Option Options to Minimize Your Surprises By Sharon Bitz ............................................26Lack of Short Sale Code in Credit Reporting SystemCreating Hardship for Many Consumers By Terry W. Clemans ............................................................28Bonded With NAMB By Mason Grashot, CPA ........................30CFPB Publishes Ability-to-Repay Rule By Laurie Spira ......32NMP Mortgage Professional of the Month: Don Iannitti, President and CEO of DocMagic Inc.By David J. Coster................................................................................34Why is the Regional Conference of MBAs so Special? By E. Robert Levy Esq. ......................................40The Last Frontier By Andrew Liput ..............................................50NMP’s Book Review: “Why Some Firms Thrive While Others Fail” By Tom LaMalfa ....................................53

ColumnsHeard on the Street ........................................................6NMP News Flash: February 2013 ..................................12New to Market ................................................................36NMP Calendar of Events ................................................60

Visit Our

ADVERTISERSAmerica’s Choice Home Loans .......................... www.achlonline.com ............................................25

Brokers Compliance Group................................ www.brokerscompliancegroup.com ........................41

Calyx Software ................................................ www.calyxsoftware.com ......................................12

CBC National Bank .......................................... www.cbconnex.com ............................................19

Cendix ............................................................ www.zairmail.com/mortgage_marketing ................12

Credit Plus, Inc. .............................................. www.creditplus.com/undisclosed-debt-monitoring ....9

Data Facts........................................................ www.datafacts.com ..............................................49

Document Systems, Inc./DocMagic .................... www.docmagic.com ............................................29

Equity Loans LLC .............................................. [email protected] ......................................5

FindMortgageJobs.com .................................... www.findmortgagejobs.com ..........................14 & 44

First Guaranty Mortgage Corp. .......................... www.fgmcwholesale.com ......................................39

Guaranteed Home Mortgage Company .............. www.joinGHMC.com ............................................37

HomeBridge .................................................... www.homebridgewholesale.com ..........................11

Hometown Lenders ........................................www.whotookmybacon.com ..................................13

Icon Residential Lenders, LLC ............................ www.iconwholesale.com ......................................17

Maximum Acceleration Coaching ...................... www.maccelcoach.com ........................................27

MBA-NJ/NJAMB ................................................ www.regionalconferencembas.com ......................51

Meadowbrook Financial Mortgage Bankers Corp. .. www.mortgagesalesjob.com ..................................31

Menlo Park Funding ........................................ www.menloparkfunding.com ................................19

NAPMW .......................................................... www.napmw.org ..................................................16

PB Financial Group Corp. .................................. www.pbfinancialgrp.com ......................................12

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

Residential Home Funding Corp. ...................... www.RHFBranch.com ..........................................15

Streetlinks LLC ................................................ www.streetlinks.com ....................Inside Front Cover

TagQuest ........................................................ www.tagquest.com ..............................................33

The Bond Exchange .......................................... www.thebondexchange.com ................................18

Titan List & Mailing Services, Inc. ...................... www.titanlists.com ................................Inside Back

United Wholesale Mortgage .............................. www.uwm.com ........................................Back Cover

National Mortgage Professional Magazine

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NMPNMPFebruary 2013 Volume 5, Number 2 Company Web Site Page

From The Publisher’s DeskFebruary 2013Volume 5 • Number 2

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

Web site: NationalMortgageProfessional.comSTAFF

Eric C. PeckEditor-in-Chief

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

Joel M. BermanPublisher - CEO


David J. CosterSenior Editor

[email protected]

Robert Peter OttoneAssistant Editor


Joey ArendtArt Director

[email protected]

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

[email protected]

Beverly KoondelNational Account Executive


Scott KoondelBilling Coordinator


ADVERTISINGTo receive any information regarding advertising rates, deadlines andrequirements, please contact National Account Executive Beverly Koondelat (516) 409-5555, ext. 316 or e-mail [email protected].

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

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

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

Participation in NAMB, NAPMW, NCRA, and/or other state mortgagetrade associations events, activities and/or publications is available ona non-discriminatory basis and does not reflect the endorsement of theproduct and/or services by NMP Media Corp., NAMB, NAPMW, NCRA,and other state mortgage trade associations.

National Mortgage Professional Magazine, NAMB, NAPMW, NCRA,and/or other state mortgage trade associations do not make any misrepre-sentations or warranties concerning the regulatory and/or complianceaspects of advertisers, products or services and/or the editorial content con-tained in NMP Media Corp. publications. National Mortgage ProfessionalMagazine and NMP Media Corp. reserve the right to edit, reject and/or post-pone the publication of any articles, information or data.

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How am I doing?Many of you may not know my early roots before I was a publisher or my previous career as a mort-gage broker, but I had the opportunity to work in government. I started in 1971 as a $28 a dayadministrative aide in the administration of the City of New York under Mayor John V. Lindsay, con-tinued through the administration of Mayor Abraham Beame and left as a Deputy Commissioner in1978 under the administration of Mayor Ed Koch. I was in my 20s, and those seven years of employ-ment provided me with a major foundation of what I brought with me into the private sector whenI exited my government career.

I am sharing this retrospective not out of nostalgia, but to pay tribute to the last mayor I workedfor who recently passed away at the age of 88, Mayor Ed Koch. Nationally, before, during and after his reign as the mayorof the City of New York, he was known as a character whose persona and energy enveloped every day of his life. Whatstands out most was his ability to deal with the toughest of financial times for the city of New York with a focused plan toovercome every obstacle with a smile on his face and a tremendous amount of determination. His positive mental atti-tude until the day he passed carried him through success after success, and the City of New York survived during his termsof office as mayor solely because of that personality trait alone.

There wasn’t a day in his life when he didn’t walk into a room and ask, “How am I doing?” He knew that the respons-es he’d receive would sometimes be complimentary and he invited criticism as well, using both responses to mold his out-look on the future. How many of us would feel comfortable every day waking up and asking our family, friends and fel-low workers, “How am I doing?” I don’t think there are many, but think of how refreshing that would be to get that typeof honest feedback to carry forth your personal and business agenda.

We go through life every day sometimes thinking that what we are doing is right and weigh that solely on what we per-ceive is both “correct” and “successful.” The mortgage industry, for me, has and continues to be one in which I am bothproud to be part of and continues to move up and down with the ever-changing economy. I hope that the chosen fewmortgage professionals who survived and thrived through those difficult years of the past stop every so often, if not daily,and take the chance to ask their employees, co-workers and yes, even their clients, and ask “How am I doing?” I assureyou, just as the iconic Mayor Ed Koch found out, the revelations of those responses, both positive and negative, will inspireyou for the rest of your days. Rest in peace Mayor Koch, and by the way … you did real good!

March on the HillAs we segue into March, NAMB—The Association of Mortgage Professionals is gearing up for its annual pilgrimage toWashington, D.C. at the association’s Annual Legislative & Regulatory Conference. This year, with issues such as the qual-ified mortgage (QM), the Consumer Financial Protection Bureau (CFPB) and their LO compensation rules, the ability-to-repay rule, the qualified residential mortgage (QRM) rule and much more, now is the time to book you plans to be in D.C.from Sunday-Tuesday, March 10-12. Be among your fellow peers and share in this unique opportunity to meet and edu-cate your elected officials on the issues that are of importance to your livelihood. You are, in essence, their lifeblood. Youare their constituents. They look to you to stay in office. They look to you for your votes. It only makes sense to let themknow your concerns and have your voice be heard. Attendees will be provided with talking points and be guided throughhow to approach the Lobby Day portion of the event. In addition to the actual Lobby Day, you will also have the oppor-tunity to learn from some of the industry’s top speakers from Lenders Compliance Group, the MBA, NAR, the SBA and theCFPB. See pages 20-23 of this issue for more information.

And just north on the I-95…Washington, D.C. is not too far from another early March destination, the 2013 Regional Conference of Mortgage BankersAssociations 30th Annual Conference in Atlantic City, N.J. For the past 30 years, mortgage professionals from across thenation have attended this event and for good reason. Between its Commercial Property Program and Residential Program,this event has something to offer to all who attend. See the article by E. Robert Levy, executive director of the MortgageBankers Association of New Jersey, on page 40 of this issue for all the details on yet another can’t miss March event.

How do you reach your customer base?Marketing. Bottom line … marketing is a necessity in today’s mortgage marketplace, and if you do not market correctlyto the correct base, you are wasting both time and money. This month, we focus on marketing and take varied looks athow proper marketing can boost your presence in the industry. From ideas on lead generation and online marketing fromScott Schang of Broadview Mortgage on page 42, to Kat Hollowell & Steven Xavier Muldrow’s piece on lead generationthrough SEO on page 48, we bring together some marketing ideas that will ideally boost your bottom line. Are you a tra-ditionalist in the sense that technology and marketing is not your cup of tea? If so, the old standby of direct mail is tack-led as well, as Molly Greene of Guaranteed Home Mortgage discusses ways in which to generate new leads on page 43, JoyGendusa of Postcardmania suggests ways in which to dress up your post card mailers on page 47, and on page 48, JeanLeBlanc of Guaranteed Home provides ideas on marking your marketing strategies stand out. Rounding out the section,Judith Brower Fancher of Brower, Miller & Cole provides 10 tips to grow your business through marketing on page 46 andon page 45, Steven J. Ramirez of Beyond the Arc Inc. details how to enhance the customer experience to create not onlyreferrals for the future, but to create a customer for life.

So … how am I doing?As I end this column, I ask our readers to take the time and personally e-mail me at [email protected] with theanswer to the question most frequently asked by Ed Koch, “How am I doing?” I’d love to hear from as many of you outthere that can take the time to give me your feedback, both positive and negative, on how National Mortgage ProfessionalMagazine is doing. Let me know what you like, what you don’t like and just exactly what you would like to see. Thank youfor giving me this forum for being in the publishing business in the mortgage industry for 20-plus years, and I would onlyhope that when my run ends, my efforts will likewise be portrayed as “He did good!”

Sincerely,

Joel M. Berman, Publisher-CEONMP Media [email protected]

National Mortgage Professional Magazineis published monthly by NMP Media Corp.

Copyright © 2013 NMP Media Corp.

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The Association of Mortgage Professionals

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

Web site: www.namb.org

Donald J. Frommeyer, CRMS—PresidentAmtrust Mortgage Funding Inc.200 Medical Drive, Suite D v Carmel, IN 46032(317) 575-4355 v [email protected]

John Councilman, CMC, CRMS—Vice PresidentAMC Mortgage Corporation11920 Fairway Lakes Drive, Suite 2 v Fort Myers, FL 33913(239) 267-2400 v [email protected]

Fred Arnold, CMC—TreasurerAmerican Family Funding24961 The Old Road, Suite #101 v Stevenson Ranch, CA 91381(661) 284-1150 v [email protected]

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

Jim Pair, CMC—Immediate Past PresidentMortgage America Corpus Christi Inc.22800 Bulverde Road, Apt. 1402 v San Antonio, TX 78261(361) 774-7314 v E-mail: [email protected]

Rocke Andrews, CMC, CRMS—DirectorLending Arizona LLC1996 North Kolb v Tucson, AZ 85715(520) 886-7283 v [email protected]

Rick Bettencourt—DirectorMortgage Network300 Rosewood Drive v Danvers, MA 01923(978) 777-7500 v [email protected]

Donald E. Fader, CRMS—DirectorSMC Home FinancePO Box 1376 v Kinston, NC 28503-1376(252) 523-5800 v [email protected]

Andy W. Harris, CRMS—DirectorVantage Mortgage Group Inc 15962 SW Boones Ferry Road, Ste. 100 v Lake Oswego, OR 97035 (503) 496-0431, ext. 302 v [email protected]

Olga Kucerak, CRMS—DirectorCrown Lending328 West Mistletoe v San Antonio, TX 78212(210) 828-3384 v [email protected]

Linda McCoy—DirectorMortgage Team 1 Inc.6336 Piccadilly Square Drive v Mobile, AL 36609(251) 650-0805 v [email protected]

Dick Morin—DirectorConsumers First MortgageP.O. Box 918 v Kennebunk, ME 04043207-985-2895 v [email protected]

Valerie Saunders—DirectorRE Financial Services13033 West Lindburgh Avenue v Tampa, FL 33626(866) 992-0785 v [email protected]

John Stevens—DirectorBank of England d/b/a ENG Lending11650 South State Street, Ste. 350 v Draper UT 84020(801) 427-7111 v [email protected]

Daphne LargePresident(901) [email protected]

Maureen DevineVice President(413) [email protected]

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

Mike BrownTreasurer(800) 925-6691, ext. [email protected]

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

William BowerDirector–Chair Tenant Screening Committee(800) [email protected]

Tom ConwellDirector–Liaison Legislative Committee(800) 445-4922, ext. [email protected]

Judy RyanDirector–Chair Strategic Alliance PartnershipCommittee(800) 929-3400, ext. [email protected]

Renee EricksonDirector–Chair New Membership Committee(866) [email protected]

Sharon BieszkDirector(262) [email protected]

Mary CampbellDirector(701) [email protected]

Terry ClemansExecutive Director(630) [email protected]

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

PresidentCandace M. Smith, CME(512) [email protected]

President-ElectJill Kinsman(206) [email protected]

Senior Vice PresidentChristine Pollard(607) [email protected]

Vice President—Central RegionKelly Hendricks(314) [email protected]

Vice President—Eastern RegionKatrica J. Driscoll, MML, CME, CMI(919) [email protected]

Vice President—Northwestern RegionDebbie Tofte, GML(425) [email protected]

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

SecretarySara Vasura(703) [email protected]

TreasurerJeanne Evans, CME(918) [email protected]

ParliamentarianHulene Works(972) [email protected]

NAMB 2012-2013 Board of Directors

National Association of ProfessionalMortgage Women

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

Web site: www.napmw.org

2013 Board of Directors & Staff

National Consumer Reporting Association701 East Irving Park Road, Suite 306 v Roselle, IL 60172

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

National Board of Directors 2012-2013

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Sponsored Editorial

By Bob Caruso

It is common practice for banks and lenders to expand into newstates with the direct marketing efforts after finding success in theirlocal markets. We commonly encounter clients that learn of a“friend” in another state using an approach with great success andhave the desire to do the same in their local market. For theseclients, the typical “broad stroke” approach for their data and mailpiece design does not apply to all markets. When you are going fromstate to state, experience and research are paramount to continuedsuccess.

When building a multi-state marketing campaign, you must recog-nize that successful campaigns in your current state may not translateinto the same results in new markets. What may generate a two per-cent-plus response in your local market may only produce half of thatin a new market with a similar approach. When expanding, multipleaspects of the campaign must come under scrutiny; data selects, mailpiece design and product offering are pivotal starting points to max-imizing your efforts.

Let’s take, for example, a customer who successfully markets FHAstreamline loans in California and is looking to expand into the NewYork market. What changes are necessary to duplicate success in NewYork? Would the same piece be as effective, or has it been saturated?Are the standard demographics appropriate to the new market, or dothey need to be modified in order to accommodate this new poten-tial clientele? Furthermore, is the FHA approach in New York cur-rently profitable, or should it be modified completely to target anoth-er program such as HARP 2.0? How do you get around this? By beingaware of what your competitors are using, you can exploit the mailpieces they are not, target the demographics they overlook and focuson products that are not as saturated.

One of our main focuses when advising clients on multi-stateapproaches is the saturation rate of their approach and how itrelates to their new states. You don’t want to add to the saturationrate by sending a similar mailer to the same prospect pool as yourcompetitors, so we may recommend changing the outer appearanceor overall design of the mailer. In addition to the piece, we considerthe data selects. Would it benefit them to increase the loan amountor modify the seasoning to capture consumers that their competitorsover look? These small tweaks can make or break the success of thecampaign.

Your current marketing firm should be able to provide theirexpertise with your newly intended states. Keep in mind that theirexperience may be the single most important aspect of your multi-state marketing efforts. A marketing professional will be able toadvise you on the proper steps to take to ensure your efforts aren’twasted on targeting an already saturated prospect base. While thereis not a “crystal ball” for marketing, proper guidance as you expandinto new markets will ensure that your efforts are not wasted.

Bob Caruso, sales manager and an asset at Titan List and Mailing Services,has specialized in mortgage-specific marketing since 2007. Bob takes a no-nonsense approach to effective marketing and has demonstrated to his cus-tomers the value of effective direct mail marketing. He may be reached byphone at (800) 544-8060, ext. 210 or e-mail [email protected].

What to be Aware of When Marketing in Multiple States

Back in 2009, the National Associationof Realtors (NAR) stated that more than80 percent of homebuyers began theirsearch online. These numbers have sig-nificantly increased since then, and Iwould not be surprised if nearly 100percent of potential homebuyers, atsome point during the homebuyingprocess, at least did some kind ofresearch online. Mobile devices andsmartphones are also making theseonline searches higher than ever. Thesame is true when consumers areresearching mortgage loan programsand interest rates and it’s imperativethat you have a local online presence.

Reputation and branding is a criticalpart of marketing. While referrals arethe bread and butter of our business,neglecting your online presence caneven reduce the number of referralconversions if they cannot find addi-tional information easily accessibleonline about you or your firm. Onlineavailability should be a requirementfor any business, but especially whenthe business is a local service-orientedestablishment relying on new mort-gage origination transactions throughinformation, rather than just productsales.

There are many benefits associatedwith having an online exposure andmarketing online. Here are just a few:

Customer reviews andtestimonialsThere is no doubt that asking yourclients to rate and review you onlinepublicly is the most effective way toclose more loans. In my opinion, thereis nothing stronger than this by havingpeople call you rather than you callingthem. Referred or not, building thispositive reputation through the experi-ence of your clients is unmatched. Theyare your best sales force and best of allthey are free. These reviews on popularsites will also help your organic searchratings and search engine optimization(SEO).

Get Online!

Low costIn comparison to other forms of adver-tising, online marketing can be muchmore affordable on conversion compar-ison and many of the tools are free. Ifmoney is budgeted for marketing cam-paigns online such pay-per-click orother advertising in addition to freetools, it is easy to make the adjustmentsnecessary to obtain the highest returnon investment (ROI) possible.

Build your brandWith all the competition in the market,you want to stand out and be different.The Internet is the best method to cre-ate new content, unique information,blogs and videos that will separate youfrom the pack. Be creative and standout to effectively attract new clients.

Targeting and immediateresultsPeople who are looking online areinterested in information now. They callor e-mail quickly and you can expectreal-time results. In addition, you cantarget specific areas such as the state(s)in which you are licensed. The goal is toattract the clients you are seeking whichare those likely to qualify for the prod-ucts you offer, along with being local inyour immediate area.

It is easy to track successFree products such as Google Analyticshave the ability to track all site visits,unique visits, time spent on each page,

“Every year, the marketinglandscape changes, every year the

customers become moredemanding, every year they’re

wanting more things. You have toalways be sprinting to stay ahead

of the competition.” —Jacob Hawkins, Overstock.com

continued on page 54

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New DocMagic FacilityWins PrestigiousArchitecture Award

DocMagic Inc. hasannounced that itsnew multi-milliondollar facility has

been recognized by the AmericanInstitute of Architects (AIA) with a 2013AIA Institute Honor Award for InteriorArchitecture. The 25,000 square foot,state-of-the-art technology center wasdesigned by Rania Alomar Design &Architecture in West Hollywood, Calif.This is the profession’s highest recogni-tion of works that exemplify excellencein architecture, interior architectureand urban design. Selected from over700 total submissions, DocMagic and 27other recipients located throughout theworld will be honored at the AIA 2013National Convention and DesignExposition in Denver.

“This is a great honor and we arevery proud of the new facility,” saidDominic Iannitti, CEO of DocMagic. “Wedidn’t set out to win an award. We sim-ply wanted the very best facility in theworld from which to deliver our equal-ly stellar service. This award is evidencethat we have achieved that goal.”

DocMagic and its architects wantedto create a space that played to boththe virtual aspects of a company thatsecurely transmits highly sensitiveinformation over global networks andthe physical aspects of a firm built on afoundation of professional customerservice. The AIA’s jury said, “This objec-tive was achieved, in short, with theunique play of light and careful sculpt-ing of passageways that connect theopen work spaces,” and called the newDocMagic facility a “beautiful design(that) creates a powerful and fluidspace where light dominates.”

Mortgage Master OpensNew Location inBrooklyn, N.Y.

Mortgage Master has announced that ithas opened a new branch in New York,the Brooklyn neighborhood ofWilliamsburg. Mortgage Master’s newBrooklyn will be led by Co-BranchManagers Peter Costakos and Peter Lucia.Costakos and Lucia bring 27 years of com-bined residential lending experience to

the Brooklyn real estate market and arecommitted to helping borrowers find theright mortgage solution by combining thelowest rates on the majority of productsin the industry and best in class service.

“With a wave of economic develop-ment spurred by zoning changes, taxbreaks and other incentives, Brooklyn hasbecome an important real estate market,which increasingly includes new condos.Mortgage Master’s offerings are ideal forthis market, and opening an office inWilliamsburg is simply a win-win for usand Brooklyn borrowers looking to refi-nance or purchase a home,” said PaulAnastos, president of Mortgage Master.“From DUMBO to East Brooklyn, the needfor personalized mortgage lending hasincreased in order to help move the eco-nomic revitalization of the borough for-ward and enhance its powerful culture.”

“Mortgage Master has been assistingborrowers in Brooklyn for nearly adecade,” said Costakos. “We know thesemarkets inside and out, particularly thecondos and co-ops markets. MortgageMaster is privately-owned with a history ofexceptional volume and quality over thepast 25 years, which allows us to provide afull-suite of lending solutions where othersmall and large lenders fall short. We arehere to help borrowers, and fill the voidthat was once dominated by mortgagebrokers who have left this market.”

“The arrival of the Brooklyn Nets isjust one of the many changes we haveseen in various neighborhoods over thepast decade. We are proud to be part ofhistory, providing the fundamentalfoundation of sustainable homeowner-ship for families throughout Brooklyn,”said Lucia.

Nationstar to AcquireApproximately $215Billion in Bank ofAmerica Assets

Nationstar Mortgage Holdings Inc. hasannounced that Nationstar MortgageLLC, a wholly-owned subsidiary, hassigned a definitive agreement toacquire nearly $215 billion in residen-tial mortgage servicing rights (MSRs), asmeasured by unpaid principal balance(UPB) as of Nov. 30, 2012, and certainother assets from Bank of America(BofA). Approximately 47 percent of theservicing portfolio, as measured byUPB, consists of loans that are owned,

Three Reasons You Should Join the Professionals at

Directly.com NowBy Carolyn Warren

Directly.com is the new online community where borrowerscan meet mortgage professionals as they receive answers totheir questions. Savvy originators are joining early to buildtheir reputations and earn rewards. I’ll show you how to dothis in a moment; but first, I’ll explain why I think communi-ties like Directly are important and three reasons you should

consider becoming a part of it. Five years into the crash, borrowers are still reeling. Homebuyers are frus-

trated with the mound of paperwork, and they’re baffled by underwriting con-ditions. Homeowners looking to refinance are being blocked by poorappraisals and stiffer credit requirements. People seeking loan mods complainof being stonewalled or misled with double-talk. All of these folks needanswers—and that presents an opportunity.

Institutions and regulations are ever-changing—purportedly in an effort tohelp borrowers—but the reality has been higher costs, slower processing, andcontinued confusion. Surprisingly, while the Internet is revolutionizing indus-try after industry, its impact on any aspect of mortgage outside of originationhas been minimal.

But things are changing. Online real estate communities are springing uparound popular real estate websites like Trulia and Zillow, allowing consumersto speak quickly and openly with a broad set of professionals. Many of theextraordinary dynamics of these sites, and social networks like Facebook andLinkedIn, promise to bring a new level of trust and transparency to the area ofmortgages. Consumers are sick and tired of feeling like they are in the dark.

Directly.com is the first community designed to help borrowers with spe-cific questions about their mortgages via answers that come from a narrow setof experienced mortgage professionals that provides rewards to the profes-sionals. Here are three specific reasons I think you’ll want to join the site:

1. Reputation. Online reputation has become critical to success. As a Directlyprofessional, you receive a profile page that showcases how you’ve helped con-sumers. Your reputation helps you and the institution you’re affiliated with.

2. Rewards. On Directly, you earn cash rewards from customers who offerremuneration for help. You can cash these rewards out via PayPal, or doubleyour impact by donating them to the non-profit of your choice.

3. Reach. On Directly, in addition to reaching tens of thousands of borrowers,you can build and cultivate a following (like Twitter) of people you’ve helpedin the past, and use this network to drive referrals and a bigger audience.

One silver lining to the crash is that many of the unskilled and less scrupu-lous originators have been flushed out. There’s a chapter in my book called,“Mortgage Stars Who Rock” that refers to the honorable loan officers who workhard to be available to consumers anytime and anywhere they’re needed.Today, consumers are benefiting from online communities that are poweredby the true professionals who are focusing their careers on helping people.

If this sounds like you, then you will not want to be left behind. I invite youto join me in helping good folks while you earn rewards and build a strong rep-utation. It only takes a few minutes to submit your application for acceptanceat www.directly.com/mortgage.

Carolyn Warren is the best-selling author of Mortgage Ripoffs and MoneySavers: An Industry Insider Explains How to Save Thousands on YourMortgage or Refinance. She is the owner of www.mortgage-helper.com. Shemay be reached at directly.com/in/carolyn-warren.

SPONSORED EDITORIAL

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ware systems don’t integrate seamlesslywith one another, which makes it diffi-cult for lenders and their appraisalmanagement companies (AMCs) toshare crucial data and communicateeffectively.”

LendingQB has also announced thatits Web-based loan origination system(LOS) has been integrated withMortgage Capital Trading’s (MCT) propri-etary HALO (Hedging And Loan salesOptimization) platform. The interface,dubbed HALO-Link, allows for pipelineand trade data to automatically beexchanged from LendingQB’s LOS to theHALO platform.

“Lenders are increasing turning tothe utilization of a hedging strategy insecondary marketing to achieve greater

profitability,” said David Colwell, vicepresident of corporate strategy atLendingQB. “The integration betweenour LOS and MCT’s HALO-Link enablesthe timely delivery of data so that loanscan be hedged more frequently andaccurately. Eliminating manual steps inthe data exchange process reduceserrors, mitigates risk, saves money andultimately drives profitable loan salesto investors. It’s a win-win for ourmutual customers.”

MCT’s bi-directional HALO-Link inter-face enables for consistent time orchange-based delivery of loan pricing,trade and pipeline data from the prod-uct and pricing engine (PPE) within


insured or guaranteed by Fannie Mae,Freddie Mac, and Ginnie Mae, withapproximately 53 percent of the portfo-lio consisting of loans in private-labelsecuritizations. With this transaction,Nationstar anticipates adding morethan 1.3 million customers to an exist-ing customer base of 1.2 million.Nationstar’s total servicing portfolio isapproximately $425 billion, pro-formafor this transaction plus an additional$13 billion Bank of America govern-ment servicing portfolio acquisitionthat closed in Q4 2012 and Nationstar’sUPB as of Sept. 30, 2012.

The purchase price for the mortgageservicing rights is approximately $1.3billion. The MSR portfolio purchaseswill close as investor and other third-party approvals are received, whichNationstar expects the majority to occurin Q1 2013. In addition to the MSRs,Nationstar will also be acquiringapproximately $5.8 billion in relatedservicing advance receivables as theassociated portfolios are boarded dur-ing 2013. Nationstar expects to enterinto third-party financing agreementsto fund the servicing advances.

“This landmark transaction is a testa-ment to our employees and their recordof servicing performance and the sup-port of our business partners,” saidNationstar CEO Jay Bray. “This transac-tion builds upon our strong track recordof portfolio acquisitions and is furthervalidation of our strategy to drive prof-itability over the entire economic cyclethrough our servicing, solutions, andorigination businesses.”

Nationstar will fund approximately$680 million of the MSR purchase pricewith the proceeds of a co-investment byNewcastle Investment Corporation andFortress-managed funds, similar instructure to previous transactions.Nationstar will fund its $665 millionportion of the MSR acquisition pricewith investable cash.

LendingQB Partners WithGlobal DMS’ ValuationManagement Platformand Partners With MCT

Global DMS has announced that it hasintegrated its valuation managementsoftware with LendingQB’s end-to-end,browser-based loan origination system(LOS). This integration is part of a majorinitiative to advance valuation compli-ance by tightly integrating the compa-ny’s eTrac platform with LOS vendors.As a result, the entire appraisal order-ing and management process becomesseamless, efficient, cost effective andfully compliant with state and federalregulations.

Without having to leave LendingQB’sLOS, lenders are now able to accessGlobal DMS’ eTrac platform to handleall of their valuation needs, includingautomated valuations, ordering fullappraisals, automated appraisalreviews, and delivery to the UniformCollateral Data Portal (UCDP) and insti-

tutional investors. This new seamlessinterface establishes system-to-systemtransaction processing that dramatical-ly speeds up the ordering and appraisalmanagement process for lenders byeliminating duplicate data entry, pro-viding real-time appraisal process sta-tus updates and robust communicationfunctionality between lenders and theirvaluation vendors.

“Our interface to Global DMS’ eTracsystem utilizes a three-point integra-tion to allow our clients to easily orderand manage appraisals; check real-time order status; and receive complet-ed appraisal files back into theLendingQB LOS E-Docs Platform,” saidBinh Dang, president of LendingQB.“Most LOS platforms and valuation soft-

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Social Media andNetworking Compliance

By Jonathan Foxx

When you think ofadvertising, do youinclude social media?These days, most ofyou do!

However, socialmedia compliance … which I shall call“SMC” … is a considerable undertaking,far more involved than just issuing a pol-icy and procedure. Often, implementingSMC includes working with internet tech-nology and information security profes-sionals, collaborating with sales, compli-ance, legal, marketing, and humanresources personnel, and ensuring thatvirtually all employees understand theirown obligations with respect to usinginternet communications.

We have drafted SMC policy state-ments that call for constant vigilance bymanagement and appointed staff tomonitor for and find the appropriateremedies to transgressions relating touse of a company’s name, logo, prod-ucts, and services, in casual and evenformal social media interactions.

Recently, Federal FinancialInstitutions Examination Council (FFIEC)issued a request for comments, entitledSocial Media: Consumer ComplianceRisk Management Guidance (Notice)1.FFIEC issued this notice on behalf of itssix members, Office of the Comptrollerof the Currency (OCC); the Board ofGovernors of the Federal ReserveSystem (FRB); the Federal DepositInsurance Corporation (FDIC); theNational Credit Union Administration(NCUA); the CFPB (collectively, theAgencies); and the State LiaisonCommittee (SLC). Succinctly put, what-ever the federal agencies eventuallyadopt, the states will issue the finalguidance as a supervisory guidance notonly to the institutions that are, byextension, under its supervision butalso through the State LiaisonCommittee, thereby encouraging stateregulators to adopt the guidance.

This means that institutions will beexpected to use the forthcoming guid-ance in their efforts to ensure that theirpolicies and procedures provide over-sight and controls commensurate withthe risks posed by their social mediaactivities. State agencies that adopt theguidance will expect the entities thatthey regulate to use the guidance intheir efforts to ensure that their riskmanagement and consumer protectionpractices adequately address the com-pliance and reputation risks raised by

activities conducted via social media.In this article, I will consider certain

features of FFIEC’s social media Notice,as well as some important subjects tobe addressed in constructing an SMCpolicy and procedure.

Defining social mediaSocial media has been defined in a num-ber of ways. For purposes of the proposedguidance, the Agencies consider socialmedia to be a form of interactive onlinecommunication in which users can gen-erate and share content through text,images, audio, and/or video.

Social media can take many forms,including, but not limited to, micro-blogging sites (i.e., Facebook, GooglePlus, MySpace, and Twitter); forums,blogs, customer review Web sites andbulletin boards (i.e., Yelp); photo andvideo sites (i.e., Flickr and YouTube);sites that enable professional network-ing (i.e., LinkedIn); virtual worlds (i.e.,Second Life); and social games (i.e.,FarmVille and CityVille).

A simple test to distinguish socialmedia from other online media is thatthe social media communication tendsto be more interactive.

Use of social mediaFinancial institutions use social mediain a variety of ways, including market-ing, providing incentives, facilitatingapplications for new accounts, invitingfeedback from the public, and engagingwith existing and potential customers.

For instance, social media has beenused to receive and respond to com-plaints. They have been used to provideloan pricing. Since this form of cus-tomer interaction tends to be informaland occurs in a less secure environ-ment, it presents some unique chal-lenges to financial institutions.

To manage potential risks to finan-cial institutions and consumers, howev-er, financial institutions should ensuretheir risk management programs pro-vide oversight and controls commensu-rate with the risks presented by thetypes of social media in which thefinancial institution is engaged.

Risks of social mediaThe use of social media by a financialinstitution to attract and interact withcustomers can impact a financial insti-tution’s risk profile.

The increased risks can include therisk of harm to consumers, complianceand legal risk, operational risk, and rep-utation risk.

Increased risk can arise from a vari-ety of directions, including poor duediligence, oversight, or control on thepart of the financial institution.Obviously, procedures must be imple-mented that help financial institutionsto identify potential risk areas andappropriately address as well as ensurethat they are aware of their responsibil-ities to oversee and control these riskswithin their overall risk managementprogram.

Therefore, financial institutionsshould address the applicability ofexisting federal consumer protectionand compliance laws, regulations, andpolicies to activities conducted viasocial media by banks, savings associa-tions, and credit unions, as well as bynon-bank entities supervised by theCFPB.

Risk managementA financial institution should have a riskmanagement program that allows it toidentify, measure, monitor, and controlthe risks related to social media. Thesize and complexity of the risk manage-ment program should be commensu-rate with the breadth of the financialinstitution’s involvement in this medi-um.

FFIEC gives this rule of thumb: afinancial institution that relies heavilyon social media to attract and acquirenew customers should have a moredetailed program than one using socialmedia only to a very limited extent.

The risk management programshould be designed with participationfrom specialists in compliance, technol-ogy, information security, legal, humanresources, and marketing. FFIEC makesit clear that a financial institution thathas chosen not to use social mediashould still be prepared to address thepotential for negative comments orcomplaints that may arise within themany social media platforms and pro-vide guidance for employee use ofsocial media.

In FFIEC’s view, there are seven com-ponents of a risk management program:

1. A governance structure with clearroles and responsibilities wherebythe board of directors or seniormanagement direct how using socialmedia contributes to the strategicgoals of the institution (for example,through increasing brand aware-ness, product advertising, orresearching new customer bases)and establishes controls and ongo-

ing assessment of risk in socialmedia activities;

2. Policies and procedures (eitherstand-alone or incorporated intoother policies and procedures)regarding the use and monitoring ofsocial media and compliance withall applicable consumer protectionlaws, regulations, and guidance.Policies and procedures shouldincorporate methodologies toaddress risks from online postings,edits, replies, and retention;

3. A due diligence process for selectingand managing third-party serviceprovider relationships in connectionwith social media;

4. An employee training program thatincorporates the institution’s poli-cies and procedures for official,work-related use of social media,and potentially for other uses ofsocial media, including definingimpermissible activities;

5. An oversight process for monitoringinformation posted to proprietarysocial media sites administered bythe financial institution or a con-tracted third party;

6. Audit and compliance functions toensure ongoing compliance withinternal policies and all applicablelaws, regulations, and guidance; and,

7. Parameters for providing appropri-ate reporting to the financial institu-tion’s board of directors or seniormanagement that enable periodicevaluation of the effectiveness ofthe social media program andwhether the program is achieving itsstated objectives.

Risk areasThe use of social media to attract andinteract with customers can impact afinancial institution’s risk profile,including risk of harm to consumers,compliance and legal risks, operationalrisks, and reputation risks.

Compliance and legal risk arise fromthe potential for violations of, or non-conformance with, laws, rules, regula-tions, prescribed practices, internalpolicies and procedures, or ethical stan-dards. These risks also arise in situa-tions in which the financial institution’spolicies and procedures governing cer-tain products or activities may not havekept pace with changes in the market-place.

Furthermore, the potential fordefamation or libel risk exists where


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heard on the street continued from page 7

LendingQB’s LOS directly to and fromMCT’s clients-specific HALO database. As aresult, data the consistency fromLendingQB’s LOS to MCT ensures thatmutual clients’ pipelines of locked loansare accurately priced and optimallyhedged. The new interface helps lendersrealize higher profit gains from MCT’smandatory trade executions to investors.

Quicken Loans Sets Recordand Closes $70 Billion-Plusin Volume in 2012

Detroit-based Quicken Loans Inc. hasannounced it closed more than $70 bil-lion in home loan volume in 2012, a133 percent increase over its $30 billionprevious record set in 2011. In addition,Quicken Loans became the third largestretail lender in America, as well as solidi-fying its position as the largest onlinelender in the country. The company near-ly doubled its number of full-time teammembers over the past year and nowemploys more than 8,000 in offices inDetroit, Cleveland and Scottsdale, Ariz.,including almost 900 technology relatedpositions.

“Our success and accomplishmentsover the past year can once again beattributed to our unique culture and 50-state centralized mortgage processingand closing platform, built and managedby our incredible, dedicated, and innova-tive brain-force of passionate team mem-bers,” said Dan Gilbert, Quicken Loansfounder and chairman.

In 2012, Quicken Loans was rankedhighest in customer satisfaction for thethird consecutive year among all homeloan lenders in America by J.D. Power andAssociates. Quicken Loans also became theexclusive home loan provider of CharlesSchwab Bank, and licensed its proprietaryloan origination technology to JP MorganChase. The organization also significantlyentered the mortgage servicing business,announcing it had built an $80 billion-plusservicing portfolio as of the end of calendaryear 2012.

“We handled our explosive growthquite well over the past year,” said BillEmerson, CEO of Quicken Loans. “In addi-tion to record revenue and volume, wepositioned ourselves for 2013 andbeyond by developing key partnershipsthat will serve as a foundation for thecontinued future growth of our businessand market share.”

McLean MortgageCorporation BreaksProduction Records in2012

McLean MortgageCorporation hasannounced thatthe companyclosed more than

$1.5 billion in mortgage volume in2012, an increase of over 140 percentcompared to the production levelsachieved in 2011. This improvement inproduction performance far exceededthe industry average increase of 40 per-cent during the past year.

Nathan Burch, president of McLeanMortgage Corporation, remarked thatthe company was able to outperformthe industry average by expanding theMcLean’s sales force and by providingsuperior service levels throughout therefinance boom of 2012—especiallywith regard to purchase loans.

“While much of the industry focusedupon refinances which ran at over 70percent of total industry volume for theyear, McLean Mortgage Corporationwas able to average more than 40 per-cent purchase volume in 2012,” saidBurch. “Our ability to hold underwrit-ing turnaround times for purchasetransactions to an average of 48 hoursthroughout 2012 was a key contributorto this success.”

Pat Peavley, CEO of McLeanMortgage Corporation, noted thatMcLean continued to add staff as thecompany’s sales force expanded by 25percent from 2011. That expansion willcontinue in 2013 as McLean is slated toopen their first office in Maryland dur-ing the first quarter of the year.

“We already have demand comingfrom the State of Maryland as our repu-tation for delivering great service hasspread throughout the entireWashington Region,” said Peavley.

Solidifi and KirchmeyerForm AppraisalPartnership

Solidifi and Kirchmeyer & Associateshave joined forces in a deal that will seeSolidifi become the third largest inde-pendent provider of residential realestate appraisals in the country. Thecombined entity will operate under theSolidifi name. “Following a $22 millionfinancing in 2012, Solidifi is in growthmode and Kirchmeyer is an importantpart of our overall growth strategy. It isthe ideal fit for Solidifi,” said JasonSmith, Solidifi’s president and CEO.

Solidifi looks to evolve the appraisalmanagement business through its tech-nology and analytics platform. In effect,it is using technology to build efficiencythroughout the appraisal process,increase quality, drive costs out andimprove the client experience. Solidifi’stechnology identifies the right apprais-er for each assignment who will deliverhigh-quality comprehensive appraisalsto the lender.

“Solidifi’s technology and broad


Sponsored Editorial

By Ralph E. Rosynek Jr.

Recent media and reverse mortgage industry sources con-tinue to report increased loan volume transactions for sen-ior Americans utilizing the HECM for Purchase Program. Thisvolume is largely fueled by continuing efforts and resourcesby the reverse mortgage industry to educate realtors andconsumers regarding the features and benefits of the HECM

for Purchase program. Additionally, housing reports of property values appreci-ating are also adding new loan opportunities for seniors looking to downsize andrelocate.

HECM guidelines permit a real estate purchase for eligible senior borrowers.Similar to borrower and property eligibility under the standard HECM refinanceprogram, there are some additional requirements which loan originators shouldbe aware of when presenting this option to potential borrowers or providingprogram information to real estate agents. Consult the lenders guidelines formore detailed explanation of the following:n Eligible borrowers must be 62 years of age at the time of application and

must occupy the property as their primary residence within 60 days of clos-ing. Borrowers retaining their prior residence or owning other real estatemay be subject to additional underwriting requirements.

n Borrowers are responsible for the payment of property taxes, insurance andother fees and assessments.

n FHA prohibits seller contributions (also known as “seller concessions”),including the use of loan discount points, interest rate buy downs, closingcost downpayment assistance, builder incentives, gifts or personal propertygiven by the seller or any other party involved in the transaction. Also pro-hibited are customary charges that are normally paid on behalf of the bor-rower by the seller.

n Lenders will require the verification and source of earnest money and allother funds prior to closing. HECM mortgagors must use cash on hand orcash from the sale or liquidation of the mortgagor’s assets for the requiredmonetary investment. The monetary investment requirement can also bemet by the use of approved funding sources as defined in HUD Handbook4155.1 REV-5, section 2-10, with the exception of credit card advances, sweatequity, trade equity and rent credit.

n The seller or any other person or entity that financially benefits from thetransaction or any third-party that is reimbursed directly or indirectly is pro-hibited.

n HECM borrowers may not obtain a bridge loan (“gap financing”) or engage inother interim financing methods to meet the monetary investment require-ment.

n The loan principal limit will be calculated based upon the lesser of the finalappraised value, the contract sales price or the national maximum claimamount. Loan proceeds will be applied to satisfy the difference between theHECM principal limit and the final sales price for the property plus any HECMloan related fees that are not financed into the loan minus the amount ofthe earnest deposit.

n Only FHA HECM property types are eligible for FHA insurance under theHECM for Purchase Program. New property construction must be completedand evidenced by issuance of a Certificate of Occupancy (CO) or its equiva-lent by the appropriate local authority.

n Repairs as indicated in the appraisal report must be completed by the sellerprior to loan closing and may not be charged or transferred to the borrower.

n Sales contracts must be complete and include required addendums andexhibits.

n Real estate must be held fee simple only.

RMS provides complete HECM for Purchase training, product availability andresource access through wholesale and correspondent relationships with mort-gage professionals. For more information on the HECM for Purchase Pprogramcontact RMS at [email protected].

Ralph E. Rosynek Jr. is senior vice president, national production manager for RMS,Reverse Mortgage Solutions Inc. He may be reached by phone at (281) 404-7970 ore-mail [email protected].

HECM for PurchaseTransaction Volume Increases

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FEBRUARY 2013

DOJ Sues S&P Over MBSMisrepresentations

U.S. Attorney Gen-eral Eric Holder hasannounced that theU.S. Department ofJustice (DOJ) has

filed a civil lawsuit against the creditrating agency Standard & Poor’s RatingsServices alleging that S&P engaged in ascheme to defraud investors in struc-tured financial products known asResidential Mortgage-Backed Securities(RMBS) and Collateralized DebtObligations (CDOs).

The lawsuit alleges that investors,many of them federally insured finan-cial institutions, lost billions of dollarson CDOs for which S&P issued inflatedratings that misrepresented the securi-ties’ true credit risks. The complaintalso alleges that S&P falsely representedthat its ratings were objective, inde-pendent, and uninfluenced by S&P’srelationships with investment bankswhen, in actuality, S&P’s desire forincreased revenue and market share ledit to favor the interests of these banksover investors.

“Put simply, this alleged conduct isegregious–and it goes to the very heartof the recent financial crisis,” said AGHolder. “Today’s action is an importantstep forward in our ongoing efforts toinvestigate and punish the conduct thatis believed to have contributed to theworst economic crisis in recent history.It is just the latest example of the criti-cal work that the President’s FinancialFraud Enforcement Task Force is mak-ing possible.”

Attorney General Eric Holder wasjoined in announcing the filing of thecivil complaint by Acting AssociateAttorney General Tony West, PrincipalDeputy Assistant Attorney General forthe Civil Division Stuart F. Delery, andU.S. Attorney for the Central District ofCalifornia André Birotte Jr. Also joiningthe Department of Justice in makingthis announcement were the attorneysgeneral from California, Connecticut,Delaware, the District of Columbia,Illinois, Iowa and Mississippi, who havefiled or will file civil fraud lawsuitsagainst S&P alleging similar misconductin the rating of structured financialproducts.

The action was filed in the CentralDistrict of California, home to the nowdefunct Western Federal CorporateCredit Union (WesCorp), which was thelargest corporate credit union in the

country. Following the 2008 financialcrisis, WesCorp collapsed after sufferingmassive losses on RMBS and CDOs ratedby S&P.

The complaint, which namesMcGraw-Hill Companies Inc. and itssubsidiary, Standard & Poor’s FinancialServices LLC (collectively S&P) as defen-dants, seeks civil penalties under theFinancial Institutions Reform, Recovery,and Enforcement Act of 1989 (FIRREA)based on three forms of alleged fraudby S&P: (1) mail fraud affecting federal-ly insured financial institutions in viola-tion of 18 U.S.C. § 1341; (2) wire fraudaffecting federally insured financialinstitutions in violation of 18 U.S.C. §1343; and (3) financial institution fraudin violation of 18 U.S.C. § 1344. FIRREAauthorizes the Attorney General to seekcivil penalties up to the amount of thelosses suffered as a result of the allegedviolations. To date, the government hasidentified more than $5 billion in loss-es suffered by federally insured finan-cial institutions in connection with thefailure of CDOs rated by S&P fromMarch to October 2007.

“It’s unfortunate that there wasn’tmore transparency into the underlyingcollateral backing up the loans in thesepools or the credit due diligence thatwent into the underwriting,” said GuyTaylor, CEO of Santa Barbara-basedEqui-Trax Asset Solutions, a firm thatprovides collateral valuation productsand services for lenders across thecountry. “But was this a failing on thepart of one or more of the ratings agen-cies or of the industry overall? I thinkwe have to conclude that it was both.”

According to the complaint, S&Ppublicly represented that its ratings ofRMBS and CDOs were objective, inde-pendent and uninfluenced by thepotential conflict of interest posed byS&P being selected to rate securities bythe investment banks that sold thosesecurities.

“Clearly, we must all do a better jobidentifying economic trends that couldlead to future crises,” said S&P in a pub-licly released statement. “For their part,governments have established newinstitutions to identify risks to financialstability, such as the Financial StabilityOversight Council in the U.S. At S&P wehave taken to heart lessons learnedfrom the financial crisis and madeextensive changes that reinforce theintegrity, independence and perform-

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By David Lykken

When we think about leadershipin the context of business, mar-keting isn’t usually the first

thing that comes to mind. Usually, whenwe think about leadership in business,we think about motivating our employ-ees. Leadership is the softer side of man-agement. Management is about control-ling the behavior of employees, andleadership is about inspiring the behav-

ior of employees. But, for business exec-utives, both management and leader-ship center around relationships withemployees.

In this article, I want to take leadershipin a different direction. I want to discuss,not leading your employees, but ratherleading your customers. In an increasinglytransparent marketplace, where the dia-logue between customers and business

leaders is becoming more direct, playing aleadership role for your customers is moreimportant than ever. Marketing is nolonger an ancillary function of leader-ship—they are now amazingly inter-twined. Marketing, in today’s day and age,can simply be defined as leading your cus-tomers. Let’s talk a little bit about whatthis looks like in the real world …

In 2008, marketing expert Seth Godinwrote a leadership book called Tribes. Thesubtitle: “We Need You to Lead Us.” That’sexactly what customers are telling busi-ness leaders. Customers in a variety ofindustries share interests with other cus-tomers. Those with shared interests, eitherconsciously or subconsciously, form atribe. And they are looking for a leader—looking for someone in business to pro-vide them with the marketplace solutionsthat they need and can rally behind.

“A tribe,” Godin tells us, “is a group ofpeople connected to one another, con-nected to a leader, and connected to anidea. For millions of years, humanbeings have been part of one tribe oranother.” Perhaps you haven’t thoughtmuch about connecting to your cus-tomers as their tribal leader. Perhapsyou have separated yourself from yourmarketing efforts … for a long time,such a separation made sense. Beforethe Internet, communication with cus-tomers was less direct and business lead-ers could be somewhat detached frommarketing efforts. Now, in an age whereconsumers can speak directly to businessleaders, it is imperative that businessleaders be willing to respond. “Leaderslead,” Godin says, “when they take posi-tions, when they connect with theirtribes, and when they help the tribe con-nect to itself.” Isn’t it time that you con-nected with your tribe?

So, what is your tribe and how do youconnect with it? Well, another way ofasking this question is, “Who are yourcustomers and how do you connect withthem?” In the new economy—the age of

free flowing information and communi-cation—marketing is no longer aboutadvertising to customers. Marketing isnow about connecting with customers.In other words, it is more importantthan ever that you the business leaderplay an active role in communicatingdirectly with your customers. The time ofleading your customers has come.

Does this mean that traditional adver-tising is dead? Have television commer-cials, print ads in trade magazines, bill-boards, radio spots, and other forms ofone-way communication become ineffec-tive in this brave new world? No, of coursenot … traditional advertising still serves apurpose. It isn’t dead. On the contrary, theproblem is that it is far too alive.

Consumers have been bombardedwith advertisements for decades and,consequently, have trained their minds tofilter out most of them. Investing in yourmarketing efforts in new media (such ase-mail marketing, social networking,Webinars, etc.) isn’t about replacing tradi-tional advertising. Rather, it is about ren-dering traditional advertising more effec-tive. Consumers still watch TV, listen tothe radio (even Internet radio has ads),and drive along the street passing bill-boards. Consumers are still exposed totraditional, one-way media. So, if they dorun all of the media they encounterthrough a mental filter, what media real-ly sticks? I believe that it’s all about trust.

Leading your customers in the neweconomy is all about building trust. Whencustomers connect with you through asocial network or sign up for your e-mailnewsletter, they are extending their trust… they are joining your tribe. They maynot ever buy anything from a link onFacebook or in your e-mail newsletter.But when they are flipping through amagazine and they see your ad, they willtake notice of it even if no other ad in themagazine sticks out. If they are in themarket, you can be sure that you are theone they will call. Why? Because they

Leading Your Customers: Marketing for Mortgage Bankers

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trust you and they are a part of yourtribe. Because you are leading them.

So, let’s delve a little further into howyou can use new, interactive media tolead your customers and build trust inyour tribe. For the rest of the article, Iwant to talk about two essential compo-nents of new media, content marketingand social networking, and how they playinto one another to help you be a moreeffective leader for your customers. First,let’s discuss content marketing …

Content marketing is all about beingseen as a trusted resource for informa-tion. It isn’t a platform for talking aboutyour products or services. Rather, it is aplatform for giving advice to your cur-rent and potential customers. Who arethose customers? As mortgage bankers,they are potential homebuyers. So, whatkind of advice should you be sharing?Advice about purchasing homes or evenancillary advice about home improve-ment, increasing the value of homes, oreven lifestyle commentary about cre-ative uses for rooms in homes. Basically,you will want to provide useful informa-tion centered on customers and theirhomes. That’s it.

Content marketing can take manyforms. Probably the oldest and stillarguably the most effective is the e-mailnewsletter. Create a monthly or weekly e-mail that you send to subscribers thatcontains homebuying tips. But make surethey opt-in to the list—that they willinglysign up. Then, you know you are provid-ing information to potential customerswho actually want it. So, how do you getpeople to sign up for your newsletter?That’s where a blog comes in.

A blog is part of your Web site thatconsists of entries (or blog posts) dis-played in reverse chronological order.The purpose of the blog is much like thatof the newsletter, but for a more generalaudience. You are providing informationthat anyone can get access to. Give gener-al advice on your blog and save the beststuff for readers who sign up for yournewsletter after reading your blog. Thebest thing to do for your blog is to takefrequently asked questions and write outthe answers as blog posts. When you pro-vide useful information to potential cus-tomers, you build trust. That’s what con-tent marketing is all about.

The second key component of newmedia is social networking. Whereas con-tent marketing deals more with trying toget customers onto your website, socialnetworking is about meeting customerswhere they already are. The big threesocial networks at this time are Facebook,Twitter and LinkedIn. As a mortgagebanker, you can leverage each of theseplatforms to build relationships withpotential buyers and position yourself asa leader in their “homebuying” tribe.

Facebook is a “closed” social network.That means that you can only communi-cate with the people who have “Liked”your Facebook business page or havebecome “Friends” with you as an individ-ual on Facebook. Also, Facebook tends tobe more personal. I would recommendFacebook for building relationships withfamily and friends, making it clear to

them what you do for a living. You canalso use your Facebook page to interactwith people you don’t know. Facebook isthe world’s largest social networking plat-form and it isn’t going away anytime soon.

Twitter is an “open” social network.That means that you can interact withanyone on Twitter, whether they “fol-low” you or not. Use Twitter as a way toconnect and discuss issues with potentialhome buyers. Obviously, you eventuallywant to get as many “followers” as possi-ble on Twitter. Those are the people whowill see the messages that you send out.But I would suggest starting off by inter-acting with people. Once you show inter-est in them, people will follow you.

LinkedIn, like Facebook, is a “closed”social network. You can only interact

with people to whom you are connected.But, unlike Facebook, LinkedIn is moreprofessional in nature. As someone inthe mortgage banking industry, youprobably have a large amount of profes-sional connections. Use LinkedIn tosolidify those relationships and positionyourself as a thought leader in the mort-gage banking industry.

Again, I want to reiterate that tradi-tional advertising isn’t a thing of the past.It’s still important for building brandrecognition. But, as far as building brandloyalty, you’ll want to focus on newmedia. In the end, people are going to dobusiness—especially when that businessis as costly as buying a home—with peo-ple and entities that they trust. Now morethan ever, marketing is about building

trust with your customers. Marketing isabout positioning yourself as the leaderof your customer’s tribe. Marketing isabout leading your customers.

David Lykken is president of mortgagestrategies and managing partner withMortgage Banking Solutions. He has morethan 35 years of industry experience andhas garnered a national reputation, andhas become a frequent guest on FOXBusiness News with Neil Cavuto, StuartVarney, Liz Claman and Dave Asmanwith additional guest appearances onthe CBS Evening News, Bloomberg TVand radio. He may be reached by phoneat (512) 977-9900, ext. 10, or [email protected] [email protected].

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NMLS

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:

[email protected]

Organized for the purpose of providing education to profession-als in all phases of the mortgage industry, NAPMW offers 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 affecting your career such as a FREE TO MEMBERS monthly webinar on industry updates AND our 8 hour NMLS continuing education class offering (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 women’s 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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nmp news flash continued from page 12

ance of our ratings, including compliancewith today’s enhanced regulatory over-sight.”

Contrary to these representations,from 2004 to 2007, the governmentalleges, S&P was so concerned with thepossibility of losing market share andprofits that it limited, adjusted anddelayed updates to the ratings criteriaand analytical models it used to assess thecredit risks posed by RMBS and CDOs.According to the complaint, S&P weak-ened those criteria and models from whatS&P’s own analysts believed was neces-sary to make them more accurate.

“Our industry has never been strongerbut I fear this latest lawsuit from the DOJmay re-open a Pandora’s box of guide-lines which were expelled several yearsago,” said Andrew WeissMalik, chief oper-ating officer at 360 Mortgage Group.

The complaint also alleges that, fromat least March to October 2007, andbecause of this same desire to increasemarket share and profits, S&P issuedinflated ratings on hundreds of billions ofdollars’ worth of CDOs. At the time,according to the allegations in the com-plaint, S&P knew that the quality of non-prime RMBS was severely impaired, andthat the ratings on those mortgage bondswould not hold. The government allegesthat S&P failed to account for this impair-ment in the CDO ratings it was assigningon a daily basis. As a result, nearly everyCDO rated by S&P during this time periodfailed, causing investors to lose billions ofdollars.

CFPB Seeks to BetterEquip Protections forHigh-Cost Mortgages

The Consumer Financial ProtectionBureau (CFPB) has issued final rules tostrengthen consumer protections forhigh-cost mortgages and to provide con-sumers with information about home-ownership counseling. The Bureau alsofinalized a rule that requires escrowaccounts be established for a minimum offive years for certain higher-priced mort-gage loans.

“Addressing problems in the mortgagemarket is critical to helping our economyrecover,” said CFPB Director RichardCordray. “Today’s changes will better helpconsumers to understand the real costs ofowning a home while protecting themfrom harmful practices that can trapthem into high-cost mortgages.”

For loans that are high-cost mortgages,the final rule:n Bans potentially risky features: For

mortgages that qualify as high-cost, therule generally bans balloon payments(a large, lump sum payment usuallydue at the end of the loan) with someexceptions, such as for certain types ofloans made by creditors serving ruralor underserved areas, and bans penal-

ties for paying the loan early.n Bans and limits certain fees and prac-

tices: The CFPB’s rule bans fees formodifying loans, caps late fees at fourpercent of the payment that is pastdue, generally prohibits closing costsfrom being rolled into the loanamount, and restricts the charging offees when consumers ask for a payoffstatement (a document that tells bor-rowers how much they need to pay offthe loan). The rule also prohibits cer-tain bad practices, such as encourag-ing a consumer to default on an exist-ing loan to be refinanced by a high-cost mortgage.

n Requires housing counseling: The rulerequires consumers to receive housingcounseling before taking out a high-cost mortgage.In addition to strengthening the pro-

tections for high-cost mortgages, theBureau today is implementing a require-ment of the Dodd-Frank Act that lendersprovide a list of homeownership counsel-ing organizations to consumers shortlyafter they apply for a mortgage so con-sumers know where to get help whendeciding what loan is best for them.

The CFPB is also implementing otherchanges made by the Dodd-Frank Act con-cerning escrow accounts. An escrowaccount is an account that a lender may setup to pay certain recurring property-relat-ed expenses on a consumer’s behalf, suchas property taxes and homeowner’s insur-ance. Escrow accounts help to ensure thatconsumers have enough money to paythose bills when they come because thelender breaks the expenses down intomonthly installments and adds them to themonthly mortgage payment. Through anescrow account, consumers can better seethe true cost of owning a home with insur-ance and tax costs laid out with each mort-gage payment and are better assured thatthose costs are paid in a timely manner.

Under current regulations, creditorsare required to establish escrow accountsfor certain higher-priced mortgage loansfor a minimum of one year. The final ruleimplements changes from the Dodd-Frank Act that generally extend therequired duration of an escrow accounton such mortgage loans from a minimumof one year to a minimum of five years.To preserve access to credit, the ruleexempts loans made by certain creditorsthat operate predominantly in rural orunderserved areas, as long as certainother criteria are met.

Ten Servicers to Shell Out$8.5 Billion-Plus forDeficient Practices

Ten mortgage servic-ing companies subjectto enforcement ac-tions for deficientpractices in mortgageloan servicing and


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By Dave Hershman

So many times, man-agers ask me why theirloan officers don’t askfor the businessenough, or are theloan officers asking for

business but asking the wrong way orasking the wrong question. In this case, Ibelieve that the real problem is not whatyour loan officers are saying, but wherethey say it. And by location, I am not say-ing indoors versus outdoors or any othergeographical reference. I am actuallyreferring to where in the marketingprocess they are asking it.

Note that I consider “asking” part ofthe marketing process, not the salesprocess. It is the marketing process thathelps us develop leads and the salesprocess that helps us convert the leads.Too many confuse marketing with adver-tising. Advertising is a form of marketing.It is expensive and not as effective as gar-nering personal referrals. In other words,

the term marketing is much broaderthan advertising.

Regarding asking for referrals, hereare some important points to considerregarding your loan officers:

n The inability to ask is typically a resultof call reluctance. Everyone has callreluctance—or in this case I will callthe affliction, marketing reluctance.

n Your loan officers can ease this reluc-tance by getting in a more “comfort-able” position to ask. Not by forcingthem to do something which isuncomfortable. This is not like work-ing out—no pain, no gain. That iswhy you so many in sales fail. Ibelieve in finding a better way.

n For example, if your loan officers arenot experts and are unsure regardingtheir ability to help people, then theyneed to become an expert. Thatmeans reading, taking classes andpracticing or role-playing. They need

Why Are Your Loan Officers Not Asking

for the Business?

to invest the time, money and energyinto their career and this includes averacious appetite for learning! Howmany of your loan officers have read abook about mortgages?

n Another example of not being in theright position is loan officers not feel-ing they have delivered enough valueto the client. This is why loan officersoften wait until the loan closes to ask.Waiting ignores the law of selectiveperception, which indicates that thebest time to ask is actually the earliestpossible time in the process becausethe client is more aware of others whoare doing same thing as them (pur-chasing, refinancing).

n The key to moving up the askingprocess is delivering value more quick-ly during the process. This includes notonly helping them obtain a loan, butwith their overall financial condition.It also includes giving them education-al materials to read so they betterunderstand their choices and theprocess.

n Delivering more value also puts themin position to ask for referrals in astronger way. Instead of saying, “Imake my living off of referrals, do youhave someone you know who needs torefinance or purchase?” They can say,“I am glad you felt this was helpful, doyou know anyone else who I couldhelp or would find this valuable?”

n With regarding to business-to-businesssales, including relationships with realestate agents, delivering value meansoffering referrals or the ability to helpthem. This means your loan officershave to be a giver, as well as a taker.Their personal network/sphere isimperative in this regard. They need tobuild their sphere and not be afraid toleverage it! They need to be always onthe lookout within their sphere for

We have them! Do you?Because we bond thousands of mort-

gage companies across the countrywe use our buying power andleveraged competition among

multiple surety companies to offerunderwriting parameters andlower rates that other bond

agencies only wish they had.

Don’t wait for your bond’s expiration.

Trade in your overpriced bond fora new bond – And start savingmoney today!

referrals to give to others. For exam-ple, when they take a loan applica-tion, do they ask about the insuranceneeds of the applicant? From thebook, Money on the Table by thefounder of BNI, Dr. Ivan Misner andLee Abraham—What other challengesare you facing in your life right now?This question opens up a whole newworld of possible referrals for theirnetworking partners.

n Their close personal network is impor-tant because they have deliveredvalue to many in their life in thepast—and not necessarily with regardto mortgages. Your loan officers havebuilt up green stamps or an emotion-al bank account, as described byStephen Covey. For example, in a pre-vious job, did they help someone withtheir career? They are always in a posi-tion to ask, but many do not. Or if theydo, they don’t do so effectively.

n What is effective? Telling people how tohelp them … do not assume theyknow. And it is not always about badg-ering them about referring business.Perhaps they can refer a real estateagent, financial planner, CPA or insur-ance agent. Perhaps their brother orsister is one. It is not only about knock-ing on your neighbor’s door and seeingif they want to refinance. Everyone isnot refinancing today. But everyonehas relationships you can leverage.

Again, it is not just about asking theright question. It is about being in posi-tion more quickly and being comfort-able. Asking is a skill, but the deliverymust be personalized for each individ-ual. Your job as a manager is to helpeveryone get in a comfortable positionso they can find their groove.

Dave Hershman is a top author in themortgage industry with seven books pub-lished, including The CompleteMortgage Management Kit. Dave is alsodirector of branch support for McLeanMortgage. He may be reached by e-mailat [email protected] or visitOriginationPro.com.

“Too many

confuse marketing

with advertising.

Advertising is a

form of

marketing.”

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foreclosure processing have reached anagreement in principle with the Officeof the Comptroller of the Currency (OCC)and the Federal Reserve Board to paymore than $8.5 billion in cash pay-ments and other assistance to help bor-rowers. The sum includes $3.3 billion indirect payments to eligible borrowersand $5.2 billion in other assistance,such as loan modifications and forgive-ness of deficiency judgments. The pay-ments involve mortgage servicers oper-ating under enforcement actions issuedin April 2011 by the OCC, the FederalReserve, and the Office of ThriftSupervision. The agreement ensuresthat more than 3.8 million borrowerswhose homes were in foreclosure in2009 and 2010 with the participatingservicers will receive cash compensa-tion in a timely manner.

Eligible borrowers are expected toreceive compensation ranging fromhundreds of dollars up to $125,000,depending on the type of possible ser-vicer error.

This agreement includes Aurora,Bank of America, Citibank, JPMorganChase, MetLife Bank, PNC, Sovereign,SunTrust, U.S. Bank, and Wells Fargo.For these participating servicers, fulfill-ment of the agreement would meet therequirements of the enforcementactions that mandated that the ser-vicers retain independent consultantsto conduct an Independent ForeclosureReview.

As a result of this agreement, theparticipating servicers would cease theIndependent Foreclosure Review, whichinvolved case-by-case reviews, andreplace it with a broader frameworkallowing eligible borrowers to receivecompensation significantly more quick-ly. The OCC and the Federal Reserveaccepted this agreement because it pro-vides the greatest benefit to consumerssubject to unsafe and unsound mort-gage servicing and foreclosure practicesduring the relevant period in a moretimely manner than would haveoccurred under the review process.Eligible borrowers will receive compen-sation whether or not they filed arequest for review form, and borrowersdo not need to take further action to beeligible for compensation.

“The lesson is clear: Moving forwardwe must do all we can to prevent suchforeclosures from happening in the firstplace,” said Julia Gordon, Director ofHousing Finance and Policy at theCenter for American Progress. “Thatmeans enacting strong standards formortgage servicers, especially on fore-closure prevention activities, and mak-ing sure that consumers, as well as pub-lic enforcement bodies, have the powerto hold banks accountable for viola-tions of predatory lending laws.”

The agencies continue to work toreach similar agreements in principlewith other servicers that are not parties

to the agreement announced today, butthat are also subject to enforcementactions for deficient practices in mort-gage loan servicing and foreclosure pro-cessing. OCC and Federal Reserve exam-iners are continuing to closely monitorthe servicers’ implementation of plansrequired by the enforcement actionsissued in April 2011 to correct theunsafe and unsound mortgage servicingand foreclosure practices.

Final Rule on AppraisalsIssued by Agencies forHigher-Priced Mortgages

Six federal financialregulatory agencieshave issued the finalrule that establishesnew appraisal require-

ments for “higher-priced mortgageloans.” The rule implements amend-ments to the Truth in Lending Act madeby the Dodd-Frank Wall Street Reformand Consumer Protection Act of 2010(Dodd-Frank Act). Under the Dodd-Frank Act, mortgage loans are higher-priced if they are secured by a con-sumer’s home and have interest ratesabove certain thresholds.

For higher-priced mortgage loans,the rule requires creditors to use alicensed or certified appraiser who pre-pares a written appraisal report basedon a physical visit of the interior of theproperty. The rule also requires credi-tors to disclose to applicants informa-tion about the purpose of the appraisaland provide consumers with a free copyof any appraisal report.

If the seller acquired the property fora lower price during the prior sixmonths and the price differenceexceeds certain thresholds, creditorswill have to obtain a second appraisalat no cost to the consumer. Thisrequirement for higher-priced home-purchase mortgage loans is intended toaddress fraudulent property flipping byseeking to ensure that the value of theproperty legitimately increased.

“A fair and accurate appraisal is acritical tool for lenders and borrowersalike. The appraisal rules announcedtoday, under both ECOA and TILA,appear to be reasonable, commonsensesolutions,” said Debra W. Still, CMB,Chairman of the Mortgage BankersAssociation (MBA). “These standardswill increase transparency for borrow-ers and give lenders a uniform set ofguidelines under which to operate,hopefully without unnecessarilyincreasing costs or reducing access forborrowers.”

The rule exempts several types ofloans, such as qualified mortgages,temporary bridge loans and construc-tion loans, loans for new manufacturedhomes, and loans for mobile homes,trailers and boats that are dwellings.


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As I look ahead to get-ting ready for theNAMB 2013 Legislative& Regulatory Confer-ence, I am drawn backto my first experiencein Washington. I trav-eled to D.C. with a del-egation of about 20

from my home state of Indiana. In thosedays, everyone went to the LegislativeConference. This is where we got to goand talk with our legislators about themortgage business and what was goingon. Many times, we were meeting withstaffers and trying to explain to themwhat we were doing and how we weredoing it. Most of us were followers, withsome designated people doing most ofthe talking and the others listening andlending support. It opened my eyes to seethat almost all of the aides were veryyoung, younger than I both myself andthe other attendees. I remember askingmyself, “Are these young people actuallyrunning the country?” I was shocked atthe presence and understanding thatmost of them had.

Now, we look forward to 2013 and weare again mounting a charge to D.C. todiscuss several items that can make a dif-ference in what we do in our everydaylife. We are at a crossroads that makes itagain an important reason that you needto attend this conference. OurGovernment Affairs Committee ChairJohn Hudson has an article here in thismonth’s NAMB Perspective that will dis-cuss exactly what we are doing and whatwe need to say when in D.C., but we needpeople to show up and help us on our

quest. There are 435 Congressmen andCongresswomen and 100 Senators that weneed to reach. What better way to helpthan to be that constituent who lives inthe district to go and visit their electedofficial. You can go into their offices andtalk with them about how these rules willimpact you in your job and how it willaffect your friends and neighbors in yourdistrict.

What better way than to talk withthose who represent you. NAMB will havepackets for you to go and distribute, butyou have to get there and register for theevent. Go to NAMB.org and register today.You can make your hotel reservationsthere as well. So get on board and help ushelp you by coming to Washington onMarch 10-12. Make sure that you arriveon Sunday to attend the compliance por-tion of the conference from 2:00 p.m.-6:00 p.m., presented by Jonathan Foxxfrom Lenders Compliance Group. This is avery important session that you need toattend, and it is free with your Conferenceregistration of $99.

It is that time of year again that westart to look for new board members toserve NAMB. We are in need of peoplewho want to get involved, but there are afew things that you must first need toknow. To start, you have to be a memberof NAMB. We are now a fully volunteer-run organization that requires you to be alittle more involved than before. We havetwo meeting per year that require you tobe in attendance, the Legislative &Regulatory Conference in Washington,D.C. in March, and the NAMB Nationalthat will take place in September orOctober. Your room is covered at these

events, but not your flight and travel. Allother board meetings and conferencecalls are done at your office for conven-ience. Depending on the committee thatyou are on, the amount of time you needto devote to doing things to make theassociation run will vary. I hope that ifyou know of someone that you feel woulddo a great job or even if you feel like thisis a task you would like to take on, pleasefeel free to contact Jim Pair [email protected] to get an application.

We are still in the fight of our life in thegovernment affairs arena. Items of thequalified mortgage (QM) and the loanoriginator (LO) compensation rules arestill being reviewed as I write this. Watchthe NAMB Web site (NAMB.org) and theNAMB Government Affairs e-mails forupdates and potential “Calls to Action” oncertain things we need your help on. Iknow we are always saying this, but YOUare what makes NAMB so successful in thegrassroots campaigns and getting infor-mation out there to members and non-members. You do make a difference eachand every day, and I thank all of themembers for helping us do our jobs …thank you for being a member.

Our current Government AffairsCommittee Chair John Hudson will behanding over the Government AffairsCommittee to Rick Bettencourt at thisyear’s Legislative Conference. John hasdone an excellent job for us and has givenup countless hours for our association,most of which he will never get back. Aspresident of NAMB, I want to publiclythank John for all of the time and efforthe has devoted to the Government Affairsteam. As he prepares for the birth of his

first child, he really is not going away. Hewill still be a member of the GA team, juststepping back to help his wife in this greatexperience that he is about to encounter.Those of us who have grown children canthink back to what it was like when wewere just beginning our families. We wishJohn the very best.

Rick Bettencourt, our newGovernment Affairs Committee Chair,hails from the great state ofMassachusetts. For those of you whoremember Denise Leonard, Rick followsin these footsteps of those people wholove government affairs. Rick has workedclosely with Denise over the years in theMassachusetts Mortgage Association(MMA) and shares her passion for the GACommittee. I know he will do an excellentjob as he has worked very intensively withJohn over the past to prepare for this job.I look forward to working with Rick overthe next several months.

As I conclude this February edition, Iam invigorated to go to Washington, D.C.again. It seems that every time we gothere, we get a great response to ourissues and our needs. Please make surethat you join us and help us make a dif-ference. We can only do it with your help.And remember, if you are not a memberof NAMB, now is the time to make a dif-ference and join today. Go to NAMB.organd become a member today!

Sincerely,

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

The President’s Corner: February 2013

By John G. Stevens

The NAMB NationalConference just a fewshort months ago wasa terrific success. Weended the event withnearly 1,500 regis-trants, and with a

waiting list for booths and sponsorships.We are already preparing for NAMB

National 2013. Our goal is to move theevent out of early December, an arecurrently exploring various options inSeptember and October, but are look-ing forward to returning to Las Vegasfor another exhilarating expo.

We were honored to have hostedsuch luminaries as Spencer Rascoff,chief executive officer of Zillow;

Theodore Tozer, president of GinnieMae; and Ed Pinto of the AmericanEnterprise Institute, on hand for our2012 NAMB National event. TheNationwide Mortgage LicensingSystem (NMLS) presented a compellingpicture of what is happening withmortgage origination licensingthroughout the U.S., and Greg Frostkicked off NAMB National in 2012 withhis usual energy, positive attitude andinspirational messaging.

Mortgage originators across thenation are seeing their business surgeonce again. But as that happens, it’simportant that we all maintain thehighest levels of professionalism. Weneed to seek out the best education, thebest products and the best partners toinsure that consumers continue to hold

us in the highest regard—so that wecan be sure we are offering borrowersthe best service possible.

That’s why NAMB National is soimportant. Attendees had the chancethis year to hear about best practices inreverse mortgages. They learned newsocial media skills, and got the insidestory on compliance training. Weoffered nearly two dozen workshops,seminars and keynote sessions over thecourse of two days.

We mixed those formal educationalopportunities with informal ones aswell. Networking was terrific, from theopening evening cocktail reception inthe exhibit hall, to fun games beingoffered by a number of the vendors.From the hospitality suites to businesslounges, attendees had ample opportu-

nity mix and mingle, and to learn one-on-one how to build their business.

NAMB came roaring back this yearwith the new NAMB National. Nowwe’re looking to make it even biggerand better for everyone. Keep watch-ing future installments of “The NAMBPerspective” column and your inboxfor news as it develops. We’ll be set-tling on our dates soon. Remember:book early before all of the hotelrooms are taken.

We’ll be in Vegas, waiting for you!

John G. Stevens is Utah manager for ENGLending. He is a board member ofNAMB, and chairman of the NAMBNational Committee. He may be reachedby phone at (801) 432-0660, ext. 101 ore-mail [email protected].

NAMB National to Roll Into Vegas This Fall

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By Fred Arnold

There are a whole lotof things that we needto keep track of thesedays. From e-mails totext messages, net-working groups toaffiliations, sometimes

it seems impossible to get everythingdone that needs to get done, let alonefind time to generate new business. Howmany times have you started a day with ato-do list that you’re bound and deter-mined to accomplish, only to find the dayis over and you haven’t done anything toearn referrals or generate repeat or newbusiness? You’re not alone.

The reality is … things have heatedup in the mortgage industry over thepast two years. That doesn’t mean,though, that any of us can afford to reston the loans we currently have in theworks. We need to always remain con-sistent in our efforts to secure futureopportunities.

Fortunately, by dedicating just anhour and an half in the morning to prac-ticing simple disciplines, we can restcomfortably knowing that we’re alwaysworking towards earning new business.Here are five disciplines to incorporate inyour morning routine to keep your busi-ness flourishing.

1. Schedule a lunch or coffee meet-ing with a referral partner every day Before you even open your e-mail inthe morning, get on the phone. Call an

existing referral partner or a potentialreferral partner and ask for a quick coffeeor lunch meeting. Make it a point to letthem know that you’re interested in help-ing them to grow their business. It shouldonly take a few phone calls in order tosecure a meeting for later in the week aslong as you make the focus about them.Avoid asking for referrals, instead focus-ing on their growth and nurturing therapport between the two of you. Thisneeds to be a daily discipline. Meet witha referral partner every day.

2. Call five clients to say “thank you”Last year was a very good year for mostmortgage professionals. As such, weowe it to our clients and/or our referralpartners to say thank you. Let themknow how much you sincerely appreci-ate their business or referral. This isn’t acall to solicit new business, but instead,is a show of genuine gratitude. You arelikely to be surprised by how happypeople are to hear from you and, often,how many may know someone whocould also use your expertise. But don’tmake that the goal of the call. Your goalshould be simply to let them know thatyou appreciate their past business andyou’re available to serve them, theirfamily and their friends in the future.

3. Send five e-mails recognizing aspecial dateE-mails recognizing special days showthat you care about your client or refer-ral partner’s well-being and not just thebusiness they can send you. Send five e-

mails to clients wishing them a happybirthday or to acknowledge an anniver-sary, such as the one, two, three yearanniversary of moving into their newhome. People will be pleasantly sur-prised that you have remembered andyou may be shocked at how quicklythese e-mails turn into opportunitiesfor new business. Clients may remem-ber that they have a family memberwho wants to refinance or you may joga referral partners’ mind who had beenmeaning to call you. This quick, easyand thoughtful action on your part is asurefire way to keep yourself positionedfavorably in your clients’ minds.

4. Spend 20 minutes sharpening yourskillsAfter completing your daily disciplines asoutlined above in steps one through three,but before diving into your daily tasks,remember that you have a responsibilityto your clients and referral partners to beat the top of your game. Taking 20 min-utes each morning to read educationalarticles (such as NAMB’s DailyInformation Update or NatonalMortgage-Professional.com) will help you to stayahead of notable industry events and willremind you of valuable business practicesthat may have slipped by the wayside.Articles written by colleagues can illumi-nate areas where you can improve as wellas introduce you to new strategies andbusiness growth tactics.

5. Get movingBefore doing anything in the morning,

get your endorphins going. The impor-tance of clearing the clutter from yourmind cannot be underscored and exer-cise is a surefire way to do it. Take timeevery morning before sitting down atyour desk to get a bit of exercise. Youwill energize both your body and yourmind, so that when you sit down towork, you have the momentum you willneed to make the necessary phonecalls, send the necessary e-mails andhave a productive day.

By refusing to allow yourself to bedistracted by the items that come upday-to-day and, instead, adhering tosimple disciplines, you’ll ensure thatyou’re always working to grow yourbusiness. Implementing these five disci-plines into your daily routine willimmediately pay off in terms of helpingyou to stay focused, all the while, keep-ing you in touch with clients and part-ners, which will pay off for the future.

Fred Arnold is a Certified MortgageConsultant (CMC), past president of theCalifornia Association of MortgageBrokers, current treasurer of NAMB, andmortgage professional at AmericanFamily Funding, a branch of AmericanPacific Mortgage in Southern California.Fred hosts the radio show, “SCV Chamberand Business Spotlight,” on AM 1220KHTS, as well as the televised program“Out of The Rough” on SCVTV.com,Channel 20. He can be reached by phoneat (661) 284-1150, ext. 109 or [email protected].

Daily Disciplines to Ensure Success in Your BusinessKeep your focus and your pipeline full by adhering to five proven practices

By Kay A. Cleland, CMC, CRMS

Are you a member of NAMB—The Association of MortgageProfessionals? Are you a member of your local state asso-ciation? There is no time like the present to get involvedand support the industry that is supporting you … yourvoice does matter.

Here are the top 10 reasons to become a member ofNAMB:

1. Take control … get involved: If you don’t get involved, you will not havea job.

2. Legislative updates and activities.3. Best business insurance4. Professional mortgage industry designations: The General Mortgage Associate

(GMA), Certified Mortgage Consultant (CMC), Certified Residential MortgageSpecialist (CRMS) and the NAMB Lending Integrity Seal of Approval.

5. Become recognized as a professional … join a trade association just likethe nation’s doctors, real estate agents and builders do.

6. You will have power and strength in numbers.7. Receive NAMB Members Only discounts.8. Credibility and notoriety.9. Education and career growth.10. Networking among peers.

Log on to NAMB.org and click on the “Membership” tab to join today.

Kay A. Cleland, CMC, CRMS of KC Mortgage LLC in Castle Rock, Colo. is secre-tary of NAMB—The Association of Mortgage Professionals. She may be reachedby phone at (720) 810-4917 or e-mail [email protected].

NAMB Membership ... Benefiting the Entire Industry

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Mark Your Calendar2013 NAMB Annual Legislative

& Regulatory ConferenceSunday-Tuesday, March 10-12

Hilton Garden Inn-Capitol • Washington, D.C.The 2013 NAMB Legislative and Regulatory Conference will be heldSaturday-Tuesday, March 10-12 in Washington, D.C. This is a “mustattend” event for all mortgage professionals. Last year, more than10,000 Realtors attended NAR’s Lobby Day. This year, NAMB wouldlove to get 1,000 mortgage professionals to D.C. to help NAMB lobbyon Capital Hill. Join NAMB as the association rallies to fight for con-sumers, small business and mortgage professionals everywhere.

For more information, visit NAMB.org.

a past customer or a past member, theart of communication is a skill worthhoning and keeping sharp. In this age ofsocial networking, the Internet makesreaching out to your client databaseeasier than ever before. BetweenFacebook, Twitter, LinkedIn and e-mailblasts, there is no reason why informa-tion cannot be quickly shared and atminimal expense.

However, remember when using e-

mails for promotion that you abide byall federal laws such as the CAN-SPAMAct. If e-mail is your tool of choice,please make sure that it is clear thatthe message you are sending is a solic-itation for marketing purposes. Inaddition, it is important to providerecipients with the ability to“Unsubscribe” from receiving furthere-mail correspondence, if they sochoose.

Thank you for the opportunity tostress the importance of communica-tion and shine a light on some impor-tant items to keep in mind when reach-ing out to your target audience throughthe worldwide Web.

Valerie Saunders is NAMB Communica-tions Committee Chair. She may bereached by phone at (904) 992-0785 or e-mail [email protected].

A Message From the NAMB Communications CommitteeBy Valerie Saunders

As CommunicationsCommittee Chair ofNAMB, I want to takethis opportunity tostress the importanceof staying in touchwith your clientele.

Whether you are a small business or atrade organization and your clientele is

The biggest issue mortgage profes-sionals face at this time revolvesaround the Qualified Mortgage (QM)rule released in January and theimpact it will have on consumersapplying for home loans in the future.

So what are you going to do about it?Your elected members of Congressand the Senate were chosen to repre-sent you. Now is your opportunity towork with NAMB to get valuable “facetime” with influential legislators anddecision-makers to not only let themknow how their decisions haveimpacted small business and con-sumers, but to educate them in orderto improve and help save the housingindustry and the overall economy ofthis country.

Special thanks to ProvidentFunding for sponsoring the NAMB2013 Legislative & RegulatoryConference. Provident Funding hasonce again demonstrated their com-mitment and loyalty to mortgage bro-kers and all mortgage professionals inthe housing industry.

Support your industry andlet your voice be heardNAMB has organized a tremendous pro-gram for the 2013 Legislative &Regulatory Conference: For more infor-mation, please visit NAMB.org and clickon the “Conference” tab or e-mail us [email protected]. Also, besure to visit us on Facebook for regularupdates as our conference gets closer.

Here is the bottom line … NAMB’sadvocacy has been effective over theyears because our members getinvolved. NAMB members are leaderswithin the mortgage business becauseof their experience and expertise. Theyare widely regarded as leaders withintheir communities because they recog-nize the importance of getting involvedand making a difference. In order forNAMB to continue to be an effectiveadvocate for mortgage brokers andmortgage professionals, you must par-ticipate in the political process.

Your involvement ensures that mem-bers of Congress hear a perspective thatthey care most about—a constituentwho can communicate the impact ofpotential legislation on the market-

place, homebuyers and the generalpublic. We must continue to look outfor the interests of the customers weserve and for the general good of theAmerican people.

We continue to face enormouschange. You need to know the issues,learn about what’s on the horizon andwhat you can do to protect your inter-est through political action.

The number one reason you shouldattend this event is the satisfaction ofknowing you are doing your part toensure that mortgage professionalissues are heard on Capitol Hill. You arethe best spokesperson for our issues.Your participation benefits you, mort-gage professionals and our clients as awhole by strengthening our presence inthe halls of Congress.

See you in March …

John H. P. Hudson of PremierNationwide Lending in San Antonio,Texas is Government Affairs CommitteeChair of NAMB—The Association ofMortgage Professionals. He may bereached by phone at (817) 247-4766 or e-mail [email protected].

Now More Than Ever, Your Participation Is NeededBy John H.P. Hudson

Last year, NAMBmortgage profession-als from across thecountry convened inWashington, D.C. toparticipate inNAMB’s Annual

Legislative & Regulatory Conference.Not only did the attendees learn thelatest news on issues affecting theirbusiness, they passionately advocatedon behalf of all mortgage profession-als, small business, and the preserva-tion of consumer choice on CapitolHill. On March 10, 11, and 12, NAMBwill rally the troops once again andyour presence is imperative!

The year 2013 is already proving tobe a significant year for mortgage pro-fessionals, consumers and small busi-ness. Mortgage professionals must beready, willing and able to get involvedin the legislative process along withNAMB to ensure that our industry andconsumers are protected from theunintended consequences of ill-advised regulation and legislation.

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Sunday March 10

Noon- 6:00 p.m. ..........Registration

2:00 p.m.-6:00 p.m. ....Compliance Sessions n Jonathan Foxx, Lender Compliance Groupn Alan Cicchetti, Brokers Compliance Groupn Michael Barone, Lender Compliance Group

2:00 p.m. ....................Compliance Symposium: Policies and Proceduresn What policies are required for your office?n The challenge of implementationn Regular reviews and updatesn Q&A Session

3:15 p.m. ....................Compliance Symposium: Regulator’s Examinationn Compliance examinations, scope and purposen How to prepare for a visit from your regulator?n Q&A Session

4:30 p.m. ....................Compliance Symposium: Making CompliancePart of Your Business Model

n Managing the daily compliance needs of your officen On-site or off-site compliance?n Third-party compliance servicesn Q&A Session

6:30 p.m.-8:30 p.m. ....Opening Reception/Registration

Monday, March 11

7:00 a.m.-6:00 p.m. ....Registration

7:30 a.m.-8:30 a.m. ....Breakfast

8:30 a.m.-8:45 a.m. ....Opening Remarks n Donald J. Frommeyer, CRMS, NAMB President n Herman Churchwell, Provident Funding, Provident Funding is the

Exclusive Sponsor of the NAMB Legislative Conference

8:45 a.m.-10:15 a.m. ..The Industry United: NAMB, MBA, NAR & NAHBFighting for Small Business and Consumer Choice

10:30 a.m.-11:45 a.m. SBA: Discussion on SBA’s Protection of SmallBusiness

Noon-1:00 p.m. ..........Break for Lunch

2013 NAMB Legislative & Regulatory ConferenceSunday-Tuesday, March 10-12

Hilton Garden Inn-Capitol • Washington, D.C.

Program of events(Subject to change)

1:30 p.m.-2:30 p.m. ....Keynote Address

2:45 p.m.-3:45 p.m. ....Consumer Financial Protection Bureau (CFPB)

4:00 p.m.-5:00 p.m. ....Advocacy Day Preparation n John Hudson, Government Affairs Chair, NAMBn Rick Bettencourt, CRMS, Government Affairs Vice Chairn Roy DeLoach, D.C. Strategies

6:30 p.m.-8:00 p.m. ....PAC Fundraising Reception

8:30 p.m.-10:00 p.m. ..PAC Function: Dinner With The President

Tuesday, March 12

7:00 a.m.-Noon............Lobby Day Registration

9:30 a.m.-5:30 p.m. ....Lobby Day Hill Visits

6:00 p.m. ....................Open Discussion on Your Capitol Hill VisitsMeet with the NAMB Board of Directors and review your visits with your legislators.

For more information, visit www.namb.org/namb/National.asp.

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Sponsored Editorial

HECM to Undergo Major Changes

Some things to keep in mind when the future is … UNKNOWN?

Big changes to reverse mortgages this month. What will HUD impose?Will they combine the Standard and Saver loans? If so, what will thatmean? Are you waiting to see?

HECM, HUD, Congress, Senate Banking Committee, and big-namedsenators are being thrown around the water cooler the last fewmonths. There are hundreds of questions being asked. People aregathering to talk about what they plan on doing when the changeshit. Are you prepared?

The truth is no one knows what changes are coming or if we willeven be writing reverse mortgages much longer. During times likethis a lot of people hold off on marketing not wanting to waste goodmoney. Then there is always that select group of people that are clos-ing a lot of loans while everyone else waits to see what happens.These people choose to roll the dice and end up making a lot ofmoney. This is for a variety of reasons. The biggest reason is thatthere is less marketing going out which increases response rates foreveryone. So while some people wait, closing no new business, oth-ers spend extra money on marketing and get three or four times thereturn they normally would.

Here’s what we know about the reverse mortgage business:

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appraiser network will complement ourown network and I and my team areexcited to continue to service our cur-rent and future customers with theseextended capabilities,” said JamesKirchmeyer, CEO of Kirchmeyer &Associates.

Solidifi’s network of appraisers inevery county nationwide will comple-ment the Kirchmeyer panel. Solidifi hasinvested more than $25 million to datein its technology platform which willfurther enhance appraisal performancefor Kirchmeyer customers. The Solidificloud-based technology provides cus-tomers with a flexible and scalableappraisal management solution highstandards in data security and reliabili-ty which includes providing redundantservers in SAE 16 certified data centersin Dallas, Texas and Washington, D.C.

Mortgage Professionals to Watchn Mat Ishbia has been named presi-

dent of United Shore FinancialServices LLC (USFS). Ishbia had previ-ously served as president of UnitedWholesale Mortgage (UWM), USFS’slargest division.

n Real Estate Mortgage Network Inc.(REMN) has expanded its SouthAtlantic presence with a new officein Richmond, Va., which will bemanaged Lindy Pond.

n Titan Capital Solutions (TCS), a whol-ly-owned correspondent lendingsubsidiary of mortgage outsourceservices provider Titan LendersCorporation, has hired Joel Veenstrato lead its sales team as nationalsales director.

n Scott Kepler has been named branchhead of AnnieMac Home Mortgage’sTampa, Fla. location.

n Residential Finance Corporation(RFC) has named senior industryexecutive Nick Hahn to the positionof chief financial officer.

n W.J. Bradley Mortgage Capital LLChas appointed industry veteranSteve Majerus as retail sales regionalmanager.

n MCT Trading Inc. (MCT) hasannounced that Kevin Miller hasjoined the company as a tradinganalyst. MCT has also announced

that is has recruited Anthony Iannias vice president of lender services.

n ICON Residential Lenders hasannounced that Matt Modugno willjoin the company as area sales man-ager of the San Diego, Imperial,Riverside and San Bernardino, Calif.regions. ICON has also announcedthat Dennis Kuncas has joined thecompany as senior vice president ofmortgage operations.

n Rouvaun Walker has been namedvice president of the CaliforniaWholesale Division at WCS LendingLLC.

n FirstClose has announced that it hasadded Dave Widmoyer to manageand grow its Midwest territory.

n Norcom Mortgage has announcedthe promotions of Ryan Kelly andJosh Gillooly to the positions of mar-keting manager and corporaterecruitment officer, respectively.Norcom has also announced theaddition of Jeremy Potter as chiefcompliance attorney.

n Elliott Eisenberg, former senior econ-omist for the National Association ofHome Builders (NAHB), has joined thepanel of advisors of Mortgage SuccessSource (MSS).


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“I spent several months researching differentcompanies and had all but given up when I heard about ACHL, this company doesn’tjust feel like home it IS home. Every time I need help I get it and more! And with and incredible branch opportunity it all sums up into 3 words: Product, Service,

and HOME!!”

Norman DuBois22 years in business

Saco, Maine

“ACHL’s has truly been a wonderful company to join. Response and turn timesare great. The communication and access

to anyone companywide all the way to the top is almost immediate. You are truly

part of a family at ACHL.”-

Mark Silverberg23 years in business

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Home Loans. Everyone was as happy as could be!!!”

Monique LaValette25 years in businessBayville, New Jersey

“I really like this organization. My only regret is that I didn’t find

you sooner!”

Jim Patterson9 years in business

Houston, Texas

“An employee of a previous lender recom-mended ACHL to me. After talking to

everyone at ACHL I knew it was the rightfit. They did everything possible to answermy questions and make sure that I could

open and run our branch our way.”-

Dante Miller13 years in business

Corpus Christi, Texas

“The best thing about ACHL is Underwriting and closing department

turn times. I have never had eithertake more than 24 hours.”

Brian Slodki14 years in business

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“I joined America’s Choice Home loans be-cause I felt like I was joining a family.

They just jumped through hoops to get meon board and opened.

They give me the tools needed to help merun and grow my business.”

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Give Cory Fowler, National Sales Manager atAmerica’s Choice Home Loans a call at

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Maximize Your Options toMinimize Your Surprises

By Sharon Bitz

The last few weeks have been something of a whirlwindfor those who broker loans to wholesale lenders. Wehave moved from major event to major event that havethe potential to impact the very nature of our business.From the US elections to the fiscal cliff drama to new reg-ulations impacting servicing and origination—both

Ability to Repay and LO Compensation, the last few months have beentumultuous. In such an environment it may seem like a good idea tosimplify operations, keep your head down and focus on what is “known”as opposed to what “could be.” Generally, this is a wise attitude in timeslike these, yet it could also be a major mistake if it causes mortgage bro-kers to “place too many eggs in too few baskets.”

Those who broker loans to wholesale lenders should seek to developclose, trust-based relationships with an elite group of lenders. The ques-tion may be: Should you simply decide to stick with existing relationshipsbecause it is the easiest course of action? There may be too many riskfactors if you have not aligned yourself with the correct partners. Amongthe prominent risk factors are regulatory changes (QM), regulatory audits(CFPB), geographic concentration (causing a lender to pull out of a spe-cific geographic area), and obviously capital constraints, etc.

What then should the prudent brokering firm do in this environment?Here are three steps that can help those who broker loans focus on fun-damentals and provide protection from the uncertainties present intoday’s economic and regulatory environment.

Cut existing relationships that aren’t workingfor business reasonsTake a careful look at your existing relationships and eliminate thosethat simply aren’t making the grade. Perhaps it’s service shortcomings,communication issues, limited product offerings, pricing or odd regula-tory interpretation. The point is that you must ensure that you are onlyworking with those lenders who are aligned with your needs, prioritiesand goals. Simply continuing a relationship because of its longevity isnot sufficient in today’s environment.

Examine the Leadership of Your LendersTimes like these require the leadership at lenders to be very adept atmanaging resources and managing change. The best way to ascertainhow the leadership at your lenders will fare in the future is to examinehow they have performed in the past. Who are the people in key man-agement and leadership roles? Where did they come from? What is theirreputation in the industry? Failure to validate the leadership capabili-ties of your lender partners can have negative consequences.

Demand Cutting Edge TechnologyMortgage lending is inherently a data-driven business. To successfully man-age mortgage data and to facilitate your need to focus on customer devel-opment and relationship building, you must work with lenders who pro-vide state-of-the-art technology. Are your current lender partners using upto date technology? Are they employing cloud-based systems that protectprivacy and security, yet simplify the process? Are they investing in newtechnologies or are they content to maintain legacy systems?

Since the whirlwind of change impacting the mortgage industryappears to have no end in sight, it is wise for those who broker loans tohave multiple options and committed, capable partners. Blindly accept-ing the status quo could result in unwelcome surprises.

Sharon Bitz is the National Head of Wholesale Lending for WCS Lending.WCS Lending is one of the largest privately-held mortgage banks in theUnited States and has been recognized as an INC 5000 honoree for thefourth consecutive year. The company, which is licensed in 49 states, hasoffices in Florida, New York, California, Michigan, Maryland, Delaware,Ohio and Hawaii and generates over $2 billion in loans annually. If youwould like to contact Sharon Bitz, she may be reached at 916-996-1620.

SPONSORED EDITORIALwww.wcswholesale.com

there is broad distribution of informa-tion exchanges. Failure to adequatelyaddress these risks can expose an insti-tution to enforcement actions and/orcivil lawsuits.

To the extent that a bank or non-bank uses social media to engage inlending, it must comply with applicablelaws and regulations as when it engagesin these activities through other media.

Laws and regulationsThe following laws and regulations maybe relevant to a financial institution’ssocial media activities. This list is notall-inclusive. Each financial institutionshould ensure that it periodically evalu-ates and controls its use of social mediato ensure compliance with all applica-ble federal, state, and local laws, regu-lations, and guidance.

Social media may be used to marketproducts and originate new accounts.When used to do either, a financialinstitution must take steps to ensurethat advertising, account origination,and document retention are performedin compliance with applicable con-sumer protection and compliance lawsand regulations. These include, but arenot limited to:

Fair Lending Laws, Equal CreditOpportunity Act (Regulation B), FairHousing Act A financial institution should ensurethat its use of social media does not vio-late fair lending laws.

n Equal Credit Opportunity Act2, asimplemented by Regulation B, pro-hibits creditors from making anyoral or written statement, in adver-tising or other marketing tech-niques, to applicants or prospectiveapplicants that would discourage ona prohibited basis a reasonable per-son from making or pursuing anapplication. However, a creditor mayaffirmatively solicit or encouragemembers of traditionally disadvan-taged groups to apply for credit,especially groups that might not nor-mally seek credit from that creditor.3

n Creditors must also observe the timeframes outlined under Regulation Bfor notifying applicants of the out-come of their applications orrequesting additional informationfor incomplete applications,whether those applications arereceived via social media or throughother channels.

n As with all prescreened solicitations,a creditor must preserve pre-screened solicitations disseminatedthrough social media, as well as theprescreening criteria, in accordancewith Regulation B.4

n When denying credit, a creditor mustprovide an adverse action noticedetailing the specific reasons for thedecision or notifying the applicant of

his or her right to request the specif-ic reasons for the decision.5 Thisrequirement applies whether theinformation used to deny creditcomes from social media or othersources.

n It is also important to note that cred-itors may not, with limited excep-tions, request certain information,such as information about an appli-cant’s race, color, religion, nationalorigin, or sex. Since social mediaplatforms may collect such informa-tion about participants in variousways, a creditor should ensure thatit is not requesting, collecting, orotherwise using such information inviolation of applicable fair lendinglaws.

n Particularly if the social media plat-form is maintained by a third partythat may request or require users toprovide personal information suchas age and/or sex or use data miningtechnology to obtain such informa-tion from social media sites, thecreditor should ensure that it doesnot itself improperly request, col-lect, or use such information or givethe appearance of doing so.

The Fair Housing Act (FHA)6 prohibitsdiscrimination based on race, color,national origin, religion, sex, familialstatus, or handicap in the sale andrental of housing, in mortgage lending,and in appraisals of residential realproperty. In addition, the FHA makes itunlawful to advertise or make anystatement that indicates a limitation orpreference based on race, color, nation-al origin, religion, sex, familial status,or handicap. This prohibition applies toall advertising media, including socialmedia sites. For example, if a financialinstitution engages in residential mort-gage lending and maintains a presenceon Facebook, the Equal HousingOpportunity logo must be displayed onits Facebook page, as applicable.7

Truth-in-Lending Act (Regulation Z)Any social media communication inwhich a creditor advertises credit prod-ucts must comply with Regulation Z’sadvertising provisions.

Regulation Z,8 the implementing reg-ulation of the Truth in Lending Act(TILA), broadly defines advertisementsas any commercial messages that pro-mote consumer credit, and the officialcommentary to Regulation Z states thatthe regulation’s advertising rules applyto advertisements delivered electroni-cally. In addition, Regulation Z isdesigned to promote the informed useof consumer credit by requiring disclo-sures about loan terms and costs. Thedisclosure requirements vary based onwhether the credit is open-end orclosed-end. Further, within those twobroad categories, additional specificrequirements apply to certain types of

social media continued from page 8

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Email [email protected] | Tel. (888) 819-7047

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loans such as private education loans,home secured loans, and credit cardaccounts.

n Regulation Z requires that advertise-ments relating to credit present cer-tain information in a clear and con-spicuous manner. It includes require-ments regarding the proper disclo-sure of the annual percentage rateand other loan features. If an adver-tisement for credit states specificcredit terms, it must state only thoseterms that actually are or will bearranged or offered by the creditor.

n For electronic advertisements, suchas those delivered via social media,Regulation Z permits providing therequired information on a table orschedule that is located on a differ-ent page from the main advertise-ment if that table or schedule isclear and conspicuous and theadvertisement clearly refers to thepage or location.

n Regulation Z requires that, for con-sumer loan applications taken elec-tronically, including via socialmedia, the financial institution mustprovide the consumer with allRegulation Z disclosures within therequired time frames.

Real Estate Settlement ProceduresAct (RESPA) RESPA9, through its implementingRegulation X, prohibits certain activitiesin connection with federally relatedmortgage loans. These prohibitionsinclude fee splitting, as well as giving oraccepting a fee, kickback, or thing ofvalue in exchange for referrals of settle-ment service business. RESPA also hasspecific timing requirements for certaindisclosures. These requirements applyto applications taken electronically,including via social media.

Fair Debt Collection Practices ActThe Fair Debt Collection Practices Act(FDCPA)10 restricts how debt collectors(generally defined as third parties col-lecting others’ debts and entities col-lecting debts on their own behalf if theyuse a different name) may collect debts.

The FDCPA generally prohibits debtcollectors from publicly disclosing thata consumer owes a debt. Using socialmedia to inappropriately contact con-sumers, or their families and friends,may violate the restrictions on contact-ing consumers imposed by the FDCPA.

Communicating via social media in amanner that discloses the existence of adebt or to harass or embarrass con-sumers about their debts (i.e., a debtcollector writing about a debt on aFacebook wall) or making false or mis-leading representations may violate theFDCPA.

Unfair, Deceptive or Abusive Acts orPractices (UDAAP)Section 5 of the Federal TradeCommission Act prohibits “unfair ordeceptive acts or practices in or affect-ing commerce.”11

Sections 1031 and 1036 of the Dodd-

Frank Wall Street Reform and ConsumerProtection Act12 prohibit unfair, decep-tive, or abusive acts or practices. An actor practice can be unfair, deceptive, orabusive despite technical compliancewith other laws. A financial institutionshould not engage in any advertising orother practice via social media thatcould be deemed “unfair,” “deceptive,”or “abusive.” As with other forms ofcommunication, a financial institutionshould ensure that information it com-municates on social media sites is accu-rate, consistent with other informationdelivered through electronic media,and not misleading.13

Payment SystemsIf social media is used to facilitate a

consumer’s use of payment systems, afinancial institution should keep inmind the laws, regulations, and indus-try rules regarding payments that mayapply, including those providing disclo-sure and other rights to consumers.

Under existing law, no additional dis-closure requirements apply simplybecause social media is involved (forinstance, providing a portal throughwhich consumers access their accountsat a financial institution). Rather, thefinancial institution should continue tobe aware of the existing laws, regula-tions, guidance, and industry rules thatapply to payment systems and evaluatewhich will apply.

These may include the ElectronicFund Transfer Act (Regulation E).

The Electronic Fund Transfer Act(EFTA)14 and its implementingRegulation E provide consumers with,among other things, protectionsregarding “electronic fund transfers”(EFT), defined broadly to include anytransfer of funds initiated through anelectronic terminal, telephone, com-puter, or magnetic tape for the purposeof debiting or crediting a consumer’saccount at a financial institution. Theseprotections include required disclo-sures and error resolution procedures.(Note: when a payment occurs via acheck-based transaction rather than anEFT, the transaction will be governed byapplicable industry rules15 and/or


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By Terry W. Clemans

The system used bythe American creditreporting industry toreport the history ofconsumer payments

to creditors to the national creditrepositories has a serious flaw, accord-ing to some members of the mortgageindustry. This flaw is the lack of a spe-cific code for short sale mortgage trans-actions. With the current mortgage cli-

mate of millions of short sale con-sumers needing properly documentedaccounts of their previous mortgageproblem so they can re-enter the hous-ing market, this problem is reachingepidemic proportions in some of thehardest hit regions of the country.There is speculation that this flawcould be holding back the recovery ofthe housing market, as many short sell-ers are prohibited from re-entering thehousing market for a longer period oftime than required by lenders.

Metro2 is the coding format used bythe national credit repositories and thecreditors to set the operating proce-dures for the data in the credit report-ing system. It was created by theConsumer Data Industry Association(CDIA), a trade association dominatedby the three credit repositories:TransUnion, Experian and Equifax.Anyone working with credit reportsmuch will quickly identify most of theMetro2 codes. In looking at a tradelinefor a consumers payment history shown

as an “R-1” for example; the “R” standsfor Revolving Accounts like credit cards,“I” for Installment, etc., and the num-ber portion representing the last pay-ment status. As in the “R-1” example,the “1” represents the account beingpaid as agreed, a “2” represents paid 30days late and higher numbers steadilyindicate later payments on up to thedreaded “9” rating, which indicates theaccount is in collection. While this is

Lack ofShort Sale

Code inCredit

ReportingSystem

CreatingHardshipfor Many

Consumers

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By Mason Grashot, CPA

Why do I need to have a surety bond?The short answer is “because THEY said so!” It’s thelaw.

What does a bond do, anyway?Surety bonds are similar to insurance in that they

offer protection from defined risks. One primary difference is whomthey protect. Bonds provide NO protection for the licensee (principal)who is required to purchase them. Instead, bonds protect the state reg-ulating department (obligee) who requires them to be purchased. The“defined risks” they protect against can be found in the bond form,state legislation or rules and regulations prescribed by the state regu-lator responsible for overseeing the licensees. These typically includefines and fees levied by the regulator as a result of actions (or inac-tions) of the licensee.

Another primary difference is that, unlike insurance where risk iscompletely transferred to the insurance carrier via the insurance policy,the indemnity (or hold-harmless) agreement between the principal andthe surety allows the surety carrier to be reimbursed by the principal forany claims it has to pay to the obligee under the surety bond providedon the principal’s behalf.

What value do surety bonds provide to the industry?Because the underwriting of surety bonds evaluates the character, capi-tal and capacity of the principal, they are often relied upon as part of theoverall qualification process to obtain (or maintain) a license with thestate regulator. Aside from the consideration that the regulator providesto the license application, that regulator gets a second opinion since thelicensee has also met the independent qualifications of the surety indus-try who has agreed to provide a bond on the licensee’s behalf.

Indirectly, the surety underwriting process functions as an additionalfilter to help ensure that only those individuals of a certain caliber areable to operate as a licensed professional. This certainly assists thosehigh-quality professionals to maintain the reputation of their industry byhelping guard against less scrupulous or more risky individuals and thewrong kind of attention that they inevitably attract.

Mason Grashot, CPA is president of The Bond Exchange, a national insur-ance agency focused on surety bonds with a unique specialty practice cen-tered on the mortgage profession. As the endorsed strategic partner ofNAMB—The Association of Mortgage Professionals, The Bond Exchangeservices thousands of surety bonds through programs designed specificallyfor the mortgage industry. For more information, call (501) 224-8895 orvisit www.thebondexchange.com.

SuretySimplified With

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Bonded With NAMBArticle 416 of the Uniform CommercialCode of the relevant state, as well as theExpedited Funds Availability Act, asimplemented by Regulation CC.17)

Bank Secrecy Act & Anti-MoneyLaundering Programs (BSA & AML)As required by the Bank Secrecy Act(BSA)18 and applicable regulations,19 finan-cial institutions and certain other entitiesmust have a compliance program thatincorporates training from operationalstaff to the board of directors. Amongother elements, the compliance programmust include appropriate internal con-trols to ensure effective risk managementand compliance with recordkeeping andreporting requirements under the BSA.Internal controls are the financial institu-tion’s policies, procedures, and processesdesigned to limit and control risks and toachieve compliance with the BSA. Thelevel of sophistication of the internal con-trols should be commensurate with thesize, structure, risks, and complexity ofthe financial institution.

At a minimum, internal controlsinclude but are not limited to:Implementing an effective customeridentification program; implementingrisk-based customer due diligence poli-cies, procedures, and processes; under-standing expected customer activity;monitoring for unusual or suspicioustransactions; and maintaining records ofelectronic funds transfers.

An institution’s BSA/AML programmust provide for the following minimumcomponents: a system of internal con-trols to ensure ongoing compliance;independent testing of BSA/AML compli-ance, a designated BSA compliance offi-cer responsible for managing compli-ance, and training for appropriate per-sonnel. These controls should apply to allcustomers, products and services, includ-ing customers engaging in electronicbanking (so-called “e-banking”) throughthe use of social media, and e-bankingproducts and services offered in the con-text of social media.

Financial institutions should also beaware of emerging areas of BSA/AML riskin the virtual world. For example, illicitactors are increasingly using Internetgames involving virtual economies,allowing gamers to cash out, as a way tolaunder money. Virtual world Internetgames and digital currencies present ahigher risk for money laundering and ter-rorist financing and should be monitoredaccordingly.

Major risksPrivacy, GLBA, and Data SecurityPrivacy rules have particular relevanceto social media when, for instance, abank or non-bank collects, or otherwisehas access to, information from orabout consumers.

Gramm-Leach-Bliley Act PrivacyRules and Data Security Guidelines20

Title V of the Gramm-Leach-Bliley Act

(GLBA) establishes requirements relat-ing to the privacy and security of con-sumer information.

Whenever a financial institution col-lects, or otherwise has access to, infor-mation from or about consumers, itshould evaluate whether these ruleswill apply. The rules have particular rel-evance to social media when, forinstance, a financial institution inte-grates social media components intocustomers’ online account experienceor takes applications via social mediaportals.

A financial institution using socialmedia should clearly disclose its privacypolicies as required under GLBA.

Even when there is no “consumer” or“customer” relationship triggering GLBArequirements, a financial institutionwill likely face reputation risk if itappears to be treating any consumerinformation carelessly or if it appears tobe less than transparent regarding theprivacy policies that apply on one ormore social media sites that the finan-cial institution uses.

CAN-SPAM Act and TelephoneConsumer ProtectionThe Controlling the Assault of Non-Solicited Pornography and MarketingAct of 2003 (CAN-SPAM Act)21 andTelephone Consumer Protection Act(TCPA)22 may be relevant if a financialinstitution sends unsolicited communi-cations to consumers via social media.The CAN-SPAM Act and TCPA, and theirimplementing rules,23 establish require-ments for sending unsolicited commer-cial messages (“spam”) and unsolicitedcommunications by telephone or shortmessage service (SMS) text message,respectively. These restrictions couldapply to communications via a socialmedia platform’s messaging feature.

Fair Credit Reporting ActThe Fair Credit Reporting Act (FCRA)24

contains restrictions and requirementsconcerning making solicitations usingeligibility information, responding todirect disputes, and collecting medicalinformation in connection with loaneligibility. The FCRA applies when socialmedia is used for these activities.

Reputation RiskReputation risk is the risk arising fromnegative public opinion. Activities thatresult in dissatisfied consumers and/ornegative publicity could harm the repu-tation and standing of the financial insti-tution, even if the financial institutionhas not violated any law. Privacy andtransparency issues, as well as other con-sumer protection concerns, arise in socialmedia environments. Therefore, a finan-cial institution engaged in social mediaactivities must be sensitive to, and prop-erly manage, the reputation risks thatarise from those activities.



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Licensed throughout the east coast

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Sponsored Editorial

By Laurie Spira

On Jan. 10, 2013, the Consumer Financial Protection Bureau(CFPB) published its long-anticipated Ability-to-Repay FinalRule. Under the provisions of the rule, effective Jan. 10, 2014,creditors will be required to make a reasonable, good faith

determination of a consumer’s ability to repay any consumer credit transac-tion secured by a dwelling (excluding an open-end credit plan, timeshareplan, reverse mortgage, or temporary loan). The rule provides four methodsof complying with the ability-to-repay requirement:n Making a general determination of ability to repay by evaluating eight

underwriting factors.n Originating a Qualified Mortgage (QM), which creates a “safe harbor” for

QMs that are not Higher-Priced Mortgage Loans (HPML) and a rebuttablepresumption of compliance for QMs that exceed the HPML thresholds.

n Originating a Rural Balloon Payment Qualified Mortgage, if the lender isa small creditor operating predominantly in rural or underserved areas,and if the loan is held in portfolio.

n Refinancing a “non-standard mortgage” into a “standard mortgage.”

Because of the protections provided by the safe harbor, it is expectedthat many lenders will decide to offer only loans that meet the definitionof a QM. A QM may not have the product features listed below:n Negative amortization, interest-only payments, balloon payments.n Loan term greater than 30 years.n “No documentation” feature, where the creditor does not verify income,

assets, or current debt obligations, including alimony and child support.n Points and fees exceeding three percent of the total loan amount, with

certain exclusions.

QMs must also meet certain underwriting criteria, as described below:n The monthly payment used to qualify the borrower must be calculated based

on the highest payment that will apply in the first five years of the loan.n The consumer must have a “back-end” debt ratio that is less than or

equal to 43 percent.

Alternatively, under temporary “special rules,” the loan may be treatedas a QM if it satisfies the criteria for regular periodic payments, has a max-imum 30-year term, maximum points and fees do not exceed three percentof the total loan amount, and is eligible for purchase or guarantee byFannie Mae or Freddie Mac under conservatorship or a limited-life regula-tory entity successor to either; insurance by HUD/FHA or the RHS, or a guar-antee by VA or the U.S. Department of Agriculture. These rules expire on theeffective date of a QM rule issued by these agencies, or Jan. 10, 2021,whichever comes first.

In addition, the final rule also implements the Dodd-Frank Act provisionslimiting prepayment penalties and establishes a requirement that creditorsretain evidence of compliance with the rule for three years after a loan cov-ered by the rule is consummated.

Immediately following the publication of the Ability-to-Repay rule, theCFPB published two additional rules, and within 10 days, had publishedfour more. The final rules total over 3,000 pages with effective dates rang-ing from June 1, 2013-Jan. 18, 2014. It’s been noted that the pages are dou-ble spaced, but even so, that’s a staggering amount of regulation for anyfinancial institution to read, digest and comply with. The beginning of thisso-called “Year of Implementation” is the time to identify the basic issuesassociated with compliance—ensuring a full understanding of the rulesand how they interrelate, and identifying any changes that might be need-ed to product offerings, pricing and fees. Careful analysis now will allowyour business to maintain … or perhaps even gain … momentum in 2014.

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

CFPB Publishes Ability-to-Repay Rule


Fraud and Brand IdentityFinancial institutions should be awarethat protecting their brand identity in asocial media context can be challenging.Risk may arise in many ways, such asthrough comments made by social mediausers, spoofs of institution communica-tions, and activities in which fraudstersmasquerade as the institution. Financialinstitutions should consider the use ofsocial media monitoring tools and tech-niques to identify heightened risk andrespond appropriately.

Financial institutions should haveappropriate policies in place to monitorand address in a timely manner thefraudulent use of the financial institu-tion’s brand, such as through phishing orspoofing attacks.

Third-Party Concerns25

Working with third parties to providesocial media services can expose financialinstitutions to substantial reputation risk.A bank or non-bank should regularlymonitor the information it places onsocial media sites. This monitoring is thedirect responsibility of the financial insti-tution, even when such functions may bedelegated to third parties. Even if a socialmedia site is owned and maintained by athird party, consumers using the financialinstitution’s part of that site may blamethe financial institution for problems thatoccur on that site, such as uses of theirpersonal information they did not expector changes to policies that are unclear.

The financial institution’s ability tocontrol content on a site owned or admin-istered by a third party and to changepolicies regarding information providedthrough the site may vary depending onthe particular site and the contractualarrangement with the third party. A finan-cial institution should thus weigh theseissues against the benefits of using a thirdparty to conduct social media activities.

Privacy ConcernsEven when a financial institution complieswith applicable privacy laws in its socialmedia activities, it should consider thepotential reaction by the public to any useof consumer information via social media.The financial institution should have pro-cedures to address risks from occurrencessuch as members of the public postingconfidential or sensitive information-forexample, account numbers-on the finan-cial institution’s social media page or site.

Consumer Complaints and InquiriesAlthough a financial institution can takeadvantage of the public nature of socialmedia to address customer complaintsand questions, reputation risks exist whenthe financial institution does not addressconsumer questions or complaints in atimely or appropriate manner.

Further, the participatory nature ofsocial media can expose a financial insti-tution to reputation risks that may occurwhen users post critical or inaccuratestatements. Compliance risk can also arise

when a customer uses social media in aneffort to initiate a dispute, such as anerror dispute under Regulation E, a billingerror under Regulation Z, or a direct dis-pute about information furnished to aconsumer institution should have moni-toring procedures in place to address thepotential for these statements or com-plaints to require further investigation.Some institutions have employed moni-toring software to identify any active dis-cussion of the institution on the Internet.

The bank or non-bank should alsoconsider whether, and how, to respond tocommunications disparaging the finan-cial institution on other parties’ socialmedia sites. To properly control theserisks, financial institutions should consid-er the feasibility of monitoring questionand complaint forums on social mediasites to ensure that such inquiries, com-plaints, or comments are addressed in atimely and appropriate manner.

Employee Use of Social Media SitesFinancial institutions should be awarethat employees’ communications viasocial media-even through employees’own personal social media accounts-maybe viewed by the public as reflecting thefinancial institution’s official policies ormay otherwise reflect poorly on the finan-cial institution, depending on the formand content of the communications.

Employee communications can alsosubject the financial institution to com-pliance risk as well as reputation risk.

Therefore, financial institutionsshould establish appropriate policies toaddress employee participation in socialmedia that implicates the financial insti-tution. The Agencies do not intend thisguidance to address any employmentlaw principles that may be relevant toemployee use of social media. Eachfinancial institution should evaluate therisks for itself and determine appropriatepolicies to adopt in light of those risks.

Operational RiskOperational risk is the risk of loss result-ing from inadequate or failed processes,people, or systems. The root cause can beeither internal or external events.26

Operational risk includes the risks posedby a financial institution’s use of infor-mation technology (IT), which encom-passes social media.

In order to identify, monitor, andmanage of IT-related risks, I would rec-ommend FFIEC’s Information TechnologyExamination Handbook,27 and also itsbooklets Outsourcing TechnologyServices28 and Information Security29 whenusing social media, and include socialmedia in existing risk assessment andmanagement programs.

Social media is one of several platformsvulnerable to account takeover and thedistribution of malware. A financial insti-tution should ensure that the controls itimplements to protect its systems and


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In this month’s issue of NationalMortgage Professional Magazine,we had a chance to speak with DonIannitti, president and chief execu-tive officer of DocMagic Inc. Don isan original. His company,Document Systems Inc., is a reflec-tion of his unique abilities, drives

and outlook on life. Whether it’s his state-of-the art, architectural award-winningheadquarters, or his unique magic-themedmarketing campaigns, Don, the companyhe created and the products he has devel-oped over the span of 25 years, stand outin a crowd of mortgage technologyproviders. The following is a reflection onthe history, accomplishments and futuregoals of this pioneering mortgage industryicon.

Tell me how Document Systems Inc.came to be.I was actually in college at the time I start-ed the company. That was back in 1987. Iwas a finance and computer methods inbusiness major. I was working for a com-pany that processed documentation atthe time. They were mainframe-based soit was very difficult to make any changes.I had been reading a book, In Search ofExcellence, I think it was. It talked aboutneat emerging technologies and whateffects those might have in the future. Irecall there being one particular emerg-ing potential business, which was therepackaging of data—the repackaging ofinformation. I remember thinking to

myself, “What a neat concept that wouldbe. I wonder how that will look when itfinally materializes.” I realized that I wasactually working for a company that wasreally doing that—but ineffectively. Iworked on a business plan, and devised acompany and what it would do, and wentout and found investors that wouldbelieve in me and provide me with themoney.

We would create a document packagein house, and we would buy forms, speed-type them and build a package. We had anetwork of couriers that worked for thecompany that would then deliver thosepackages. It was very southern Californiabased. Normally, if you dealt with a com-pany like ours, you would get your docu-ments in a day, possibly two. We intro-duced the concept of doing it same-day.We would get orders in the morning, andwe would then turn around and havethose orders delivered in the afternoon.That allowed us to really take control ofthe business, at least in California.

You pioneered the concept of remoteelectronic document delivery. How didthat come about?We had about a 1,000-square-foot

office—very small. We didn’t have anyplace to put the laser printer. So webought a laser printer, and we’re all,“Where are we going to put this thing?” Sowe put it in the front room, which was aways away. But the funny thing was—when we sent a form to it and it printed,and we’re all looking at each other like,“Wow, we could put this printer in some-one else’s office. It doesn’t have to be hereanymore.” I honestly think that was theday that the concept of remote electronicdelivery actually came to our minds.

You also developed one of the first mort-gage data auditing systems. Share with usits history.I think with almost our first or second setof documents, we developed the initialphase of the audit system. This is the basisand core of how we maintain integrity inthe data that we take from our clients andthe documents that we provide them.

We were never a garbage-in, garbage-out type of company. That was neversomething that we accepted as being agiven in our line of business. We alwaysmade a point to say, “No!” If a client triedto give us garbage. We would detect it andnot allow them to draw documents.

Tell us about your commitment to cus-tomer service.The most important thing that you can doas a service business is to listen to yourclients. Then take it a step further. It’s onething to listen … it’s another thing to beable to effectively respond. We try toalways anticipate needs before our clientsknow that they have them.

Every one of our products offers theability for a client to tell us what they want.Every one of our modules has an option onthe help menu that says, “Send us feed-back.” We get constant feedback. Thatfeedback goes directly to the director ofproduct development and to me. We’llimmediately assign a representative in thesupport department. At that point, we’llassess—is there an option to solve theproblem today that the client’s just notaware of? Or do we need to build some-thing? We don’t come out of the experi-ence thinking, “Okay, that’s another nicefeature to have,” and put it down to buildlater. We have no queue of those types offeatures. It immediately goes into thedevelopment queue.

How can lenders learn from your cus-tomer service example?Clients respond very well to technology. Ithink a lot of times borrowers are not asaware of the current status of the loan asthey should be. One of the products thatwe’re working on now is a smartphone orelectronic pad-based system that enableslenders to provide documents for signing,for capture. It creates a conduit—a verytight conduit, between the borrower andthe lender. It provides a very simple run-ning workflow of where we’re at relative tothe timeline that this loan is going to ulti-mately take. And it interfaces and leveragesthe data we know about in Doc Magic toaccomplish this.

You are a leading proponent of e-signatures.How are you leveraging that technology?All of our document packages now are e-signable in the sense that a client can pro-duce any type of package or documentand transmit it for electronic signature tothe borrower. You can have a pile of doc-uments, some can be e-signed, somerequire a notary, and some legitimatelyhave to have a wet signature. If you just

“Every company should be very clearlydevoted to something that they think sets

them apart, and they should becommitted to it and never stop being

concerned about it.”

mortgageprofessionalN M P

O F T H E M O N T H

Don Iannitti, President and CEODocMagic Inc.B Y D A V I D J . C O S T E R

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load them into the eSign system, it knowsautomatically which are which, andimmediately facilitates the process.

We also released what we call theFreeSign system. That’s where our clientsand anyone else can come to the Webpageand upload any PDF document that theywant, and tell us where they want it signed.No matter how many people need to sign it,they hit a button and instantly everyonegets electronic invitations, and we’re signingdocuments. We’re doing that for schools,hospitals, just every type of company youcan imagine. We’re getting a lot of tractionwith that. Our goal is to continue to buildtools and enhance that product so that wecan really help companies go paperlesscompletely—not just with a mortgagetransaction, but with everything.

Are you obsessed with speed?Our processing speeds are absolutely dra-matic. We can produce a 60-documentpackage in probably 1.7 seconds now,which is extremely fast. Our closest com-petitors produce a package like that in aminute. There’s just no comparison.

We’ll stop worrying about speed whenwe get that 60-document package pro-duced in less than a second. However, get-ting from 1.7 seconds to 0.7 seconds is amultimillion dollar endeavor. Every com-pany should be very clearly devoted tosomething that they think sets them apart,and they should be committed to it andnever stop being concerned about it. Tome, it’s always been speed, because thatspeed finds its way into every aspect ofwhat we do.What has been your greatest accomplish-ment in business?I think our greatest accomplishment hasbeen DocMagic. The product itself—I amalways and continually amazed at howfast it is. What it’s doing in 1.7 seconds isabsolutely a marvel. The eSign system—that’s our new focal point. It’s everythingto us at this point, and we are makingsure that it’s capable of accommodatingeverything it needs to.

You have many employees that havebeen with the firm for a long time. Howdo you accomplish that?What’s been important to me is makingsure that our number one asset, ouremployees—that they are always beingtaken care of. It’s the highest possible pri-ority for us to treat this group like a fami-

ly. Having high customer satisfaction is thenumber one priority. It’s a very simple con-cept. It makes it really easy for you to makesure that your employees are in alignmentwith that by the way that they handle cer-tain things, and the way that they handleclients. It makes it real simple for us tomake sure we have the right people.

What emerging trends or technologicalneeds are you excited about in theindustry?I think that what it’s about now is dataintegrity. It’s about auditing. It’s about QC.We need to make sure these files are solid.We need to make sure that the informa-tion that’s in them is confirmed and vali-dated. Re-keying of data—that’s going togo away. It’s not okay to re-enter data.The data degradation from moving fromone system to the other is not acceptableanymore. I think that at every step alongthat path, there needs to be an auditingengine of record that’s making sure thateverything is perfect. Our engine can beused and leveraged by our partners inthat way.

What do you want to make sure folks inthe industry know about DocumentSystems Inc.?First, we consider ourselves to be a solu-tion provider. What we enjoy most iswhen our partners and our clients cometo us and say, “We’ve got a problem.Here’s what we need to do. Is there any-thing you guys can do to help us out?”That makes our day.

Second, there’s a wealth of data inthis business, and there’s so much thatwe can do with it. We can ultimatelymake our clients more efficient at whatthey do. We’ve tried to demonstratethat anything that relates to the data ordocuments in any way, shape, orform—we take responsibility for that.We can provide a validation to anyonethat holds a DocMagic document. Wecan absolutely tell you precisely whatthe data set was. We can tell you whenthat document was created. We can tellyou who did it, where it went, where it’sbeen. That’s essential in the current andfuture mortgage industry.

David J. Coster is senior editor of NationalMortgage Professional Magazine. He maybe reached by phone at (919) 559-2171 ore-mail [email protected].

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United WholesaleMortgage Launches NewTool to Aid Brokers

United WholesaleMortgage (UWM)announced that itdesigned andlaunched a unique

dashboard-level reporting system forbrokers. Dubbed Account SuccessReport (ASR), the proprietary systemtracks and analyzes brokers’ loan quali-ty, efficiency and production. A month-ly report is produced containing keyinformation that gives brokers visibilityinto their performance and how theycan improve their status with UWM.

ASR’s functionality resides withinUWM’s broker portal, EASE (EasiestApplication System Ever), where it canbe accessed 24/7 by brokers and isupdated with new statistics on the firstof each month. ASR’s dashboard offersan easy-to-view snapshot of key per-formance indicators (KPIs) such as sub-mission to close percentage, volumeclosed in dollars, approved loan per-centage, average touches by underwrit-ers, FICO score average, LTV averageand more. Brokers are scored andassigned status beginning withDiamond being the top level followedby Platinum, Gold, Silver and Bronze.Each status accompanies different ben-efits to doing business with UWM.

“The idea behind the launch of ASR issimple: we want to provide our cus-tomer base with detailed informationon their success with UWM and the typeof business they are sending,” said MatIshbia, president of UWM. “We are pro-viding transparency into how UWMmeasures each account, enabling themto work on improving these metrics.Our ASR is more focused on their loanquality and efficiency with UWM, ratherthan production or other aspects.”

Mercury Network andClass Appraisal Partneron New AppraisalOffering

Class Appraisal and a la mode haveannounced the launch of a customizedMercuryDirect plugin that furtherenhances Class Appraisal’s connectionto a la mode’s Mercury Network toreduce appraisal turn times and ensurethe highest appraisal quality for Class’

lender clients. Class Appraisal’s newMercuryDirect plug-in will leverageMercury Network’s direct connection tothe desktop of the nation’s appraisersto streamline compliant appraisalordering and delivery, automate orderstatus updates, and to run Class’ cus-tomized review rules on reports pre-delivery. The comprehensive appraisalreview takes place on the appraiser’sdesktop, before the appraiser everdelivers the report to Class for the firsttime. Thousands of proprietary rules,based on Class expertise, applied busi-ness rules, investor requirements, cur-rent compliance guidelines, and more,provide the most effective qualityscreen and also cut down on the reworkrate which in turn speeds up final deliv-ery of a higher quality report to Classclients.

“This innovative plugin with MercuryNetwork, combined with our 91-hours-a-week accessibility for client support,translates to the industry’s best apprais-al management experience,” said MarkBackonen, CEO of Class Appraisals. “In2013, we will be launching even moretools based on our extensive experiencethat provide our clients the industry’sbest workflow tools for underwriters.”

“With this plug-in, Class Appraisalhas gone the extra mile in providing thehighest quality appraisals in the fastesttime to their clients”, said JenniferMiller, president of a la mode’sMortgage Solutions Division. “The plug-in gives Class distinct advantages, bothin streamlining their own operations,and in providing the highest quality col-lateral value review and due diligencedocumentation for their clients.”

360 Mortgage GroupUnveils New FHA and VAOfferings

360 Mortgage Grouphas announced thatit has expanded itsproduct portfolio by

offering two new refinance products–Veterans Affairs (VA) Interest RateReduction Refinance Loan Program andthe Federal Housing Administration(FHA) Non-Credit Qualifying StreamlineProduct.

The VA Interest Rate ReductionRefinance Loan Program is designed tohelp qualified veterans, reservists,active duty personnel, or eligible familymembers with VA home loans benefitfrom current historically low interest

rates with minimum requirements,while the FHA Non-Credit QualifyingStreamline Product will help individualswith FHA home loans take advantage oflow interest rates without an appraisalor income documentation.

“360 Mortgage is committed to part-nering with high quality mortgage bro-kers to help their clients refinance theirhomes on the most affordable termsavailable in the marketplace,” saidMark Greco, president and founder of360 Mortgage. “Our two new productofferings will allow even more home-owners to take advantage of current lowinterest rates and offer real solutions toborrowers, especially those that havebeen restricted from refinancing due tovarious eligibility requirements.”

The VA Interest Rate ReductionRefinance Loan Program (also known asVA IRRRL) will offer individuals with VAhome loans the opportunity to lowertheir interest rates and decrease theirmonthly mortgage payment.

The FHA Non-Credit QualifyingStreamline Product will offer individu-als with FHA home loans the opportuni-ty to secure government insured loansat a lower interest rate without a costlyappraisal and with less paperwork.

“We strongly believe both these pro-grams will contribute to overall recov-ery of the real estate market, as well aslocal and national economies,” saidGreco.

New PATHWAYTechnology From Verosto Provide Fannie MaeAppraisal Messages

Veros Real Es-tate Solutionshas announced

its PATHWAY solution is ready to deliverFannie Mae’s proprietary appraisal mes-sages when the GSE activates them onJan. 28th. The messages are part ofFannie Mae’s program to provide specif-ic feedback on appraisals submitted tothe Uniform Collateral Data Portal(UCDP), a GSE requirement prior to loansubmission that allows data checkingon valuations before full loan files arereceived. Messages are sent from FannieMae on data inconsistencies and otherappraisal quality issues on the system,intended to improve overall valuationreasonableness and quality of data forFannie Mae loans.

Fannie Mae has encouraged lendersto begin preparing for the new mes-sages by reviewing the AppraisalFindings Reports and ensuring theirtechnology vendor has plans to supportthe new messaging. Veros’ PATHWAYtechnology is ready now and availableto industry users in plenty of time tomeet the Jan. 28, 2013 activation date.

Veros designed PATHWAY as an idealsolution for entities with volumes toolarge for manual upload to UCDP’s webinterface, but too small to require anenterprise platform solution. PATHWAYassists correspondent lenders, AMCs andother technology providers in connect-ing to the portal with minimal technol-ogy integration. The solution allows for

seamless submission to UCDP, PDF con-version to the required XML format,submission of Uniform AppraisalDataset (UAD) and non-UAD reports, aUAD compliance quality check, and theability to preview and resolve potentialerrors prior to submission.

“Fannie Mae is to be commended fortaking yet another step toward datatransparency throughout the mortgagetransaction,” said David Rasmussen,senior vice president of operations forVeros. “Providing the lender with theinformation necessary to identify signif-icant data, policy or property issuestruly helps get down to the core con-cerns around data quality. We arepleased to announce PATHWAY is fullyequipped to allow the transmission ofthis information.”

CoreLogic Launches NewRMBS Bond AssessmentService

CoreLogic has announced the availabil-ity of CoreLogic Bond Tracker, an inno-vative bond assessment service for non-agency residential mortgage-backedsecurities (RMBS). The service offersgranular, dynamic, and automatedanalyses of security holdings andunderlying collateral. CoreLogic BondTracker will provide life-of-bond sur-veillance and aid investors, banks andother institutions in valuing and assess-ing the credit risk of mortgage securi-ties. CoreLogic Bond Tracker will incor-porate a wide range of risk factorsincluding property value changes andother market-impacting events.

Specifically, CoreLogic Bond Tracker:n Provides credit assessments of non-

agency RMBS across product type,vintage and tranche position, withcredit grades ranging in descendingorder from AAA through D.CoreLogic Bond Tracker can incorpo-rate the position at which the bondor tranche was purchased or markedwhen evaluating the likelihood ofinvestment loss.

n Includes a sensitivity score rangingfrom 1-5, assessing the likelihood ofcredit grade migration due to devia-tion of future performance fromprojected bond cash flows.

n Publishes cohort-level assessmentson approximately 23,000 non-agency bonds.

n Refreshes dynamically to reflect, asappropriate, factors affecting creditperformance, incorporating impactsbased on the CoreLogic HPI suite ofreal estate analytics.

n Employs the premier analyticengines of CoreLogic, including itsloan-level evaluation tool(RiskModel) and its structured-finance Bond Analytics platform toderive a probability-weighted out-come that the investment in a bondor tranche will incur a loss.“Today, investors are looking for

greater transparency into the qualityand risks of the collateral backing non-

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agency bonds, and issuers are lookingfor new ways to rebuild investor confi-dence. We believe CoreLogic BondTracker will appeal to both groups,”said Ben Graboske, senior vice presi-dent, Real Estate and Financial Servicesfor CoreLogic. “We’ve designedCoreLogic Bond Tracker to utilize ourdata and risk tools to provide informa-tion and surveillance that is objectiveand data based to augment what is cur-rently available.”

CoesterVMS IntroducesNew Flat-Fee Appraisals

CoesterVMS has implemented its flatfee model for residential appraisals.Under the flat fee model, all conven-tional appraisals are priced at $450while FHA appraisals are $475.Appraisal management companies(AMCs) generally utilize a tiered feestructure, whereby prices are deter-mined based on the property type orthe state in which the property is locat-ed. In addition to providing the con-venience of a consistent, reliable pric-ing structure, the company’s flat feemodel enables lenders to better complywith guidelines under the Real EstateSettlement Procedures Act (RESPA) con-cerning how loan costs are disclosed toborrowers.

“RESPA guidelines mandate new dis-closures to be sent to borrowers whenthe difference between quoted fees andactual fees is 10 percent or more,” saidBrian Coester, CEO of CoesterVMS. “Withtiered appraisal fee structures, theretends to be a lot of add-on fees, whichcan easily put the lender at risk of aRESPA violation. On the other hand,there’s nothing safer than a fixed fee.”

CoesterVMS implemented its flat feestructure after several months of suc-cessful testing. Previously, clientswould be required to submit a certainnumber of orders to qualify for the flatfee. As of Jan. 1, the flat fee becameavailable to all CoesterVMS clientsregardless of order volume. The changedoes not affect current CoesterVMSclients with negotiated contractualarrangements.

Carrington AddsStreamline FHA 203KLoans to Its Offerings

CarringtonM o r t g a g eServices LLC

has announced that it will offer theStreamline FHA 203K loan program,which allows for up to $35,000 in prop-erty repairs to be financed into theloan, through its retail and wholesalebusinesses. Carrington’s retail lendingdivision will now control the completeoperation cycle and related servicingfor all of its 203K loans, which werepreviously offered as a brokered prod-uct. Carrington’s wholesale lendingdivision will also add the 203K loanprogram to its portfolio of government-insured products as of April 1.

Intended for the purchase or refi-

nance of properties that require minorrepairs and upgrades, 203K loans areattractive to consumers as well as realestate agents who can benefit fromextending their reach into untappedmarkets of prospective buyers.Borrowers interested in purchasing dis-tressed properties, which accounted forbetween 20-25 percent of all home salesin 2012, may find the 203K loan anideal solution for these types of proper-ties that are often in less than move-incondition. For real estate professionals,having a single interface for gettingthese loans approved and funded canexpedite closings–creating an addedincentive to partner with a Carringtonloan officer in their market. From awholesale perspective, this initiative

presents opportunities for purchase-focused brokers to work directly withreal estate agents, consumers andinvestors throughout the front-end life-cycle of these loans, thereby maintain-ing involvement and increasing thepotential for repeat or referral business.

“We are pleased to offer FHA 203Kloans through our retail and wholesalebusinesses, and to bring all aspects ofthese transactions including underwrit-ing and closing timelines under ourcontrol,” said Carrington MortgageServices LLC’s Mortgage LendingDivision Executive Vice President RayBrousseau. “This initiative enables us tomore effectively serve our customers aswell as the brokers and realtors we part-ner with, allowing them to widen their

markets and approach their local busi-nesses with added confidence in whatthey have to offer.”

LenderLive and MortgageHarmony Partner on“HarmonyLoan” Product

M o r t g a g eH a r m o n yCorporation

has announced an alliance withLenderLive Network in an effort toenhance market awareness of theHarmonyLoan to financial institutionsand mortgage finance professionals.The HarmonyLoan is a consumer-initi-ated, interest rate-resetting mortgage


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new to market continued from page 37

with a patented recurring compensationstructure for loan officers. Through itsfive divisions, LenderLive seeks to offerorigination, conduit, document and set-tlement services and loan servicing tomore than 400 clients nationwide.

“We continually look for opportuni-ties to bring value to our customers,”said Rick Seehausen, CEO of LenderLiveNetwork. “We are very excited aboutthis opportunity.”

Borrowers who secure aHarmonyLoan will be able to takeadvantage of lower interest rates orextend the loan term without the has-sles and costs of refinancing. They canreset their rate as often as every 120days with a click of a button, assumingtheir payment history is solid.

Radian Introduces New MI App for Android Devices

Radian Guaranty Inc. has announcedthe availability of its mortgage insur-ance (MI) rate finder app, Radian Rates,for Android devices on Google Play. Thefirst of its kind in the MI industry,Radian Rates is a mobile version of thecompany’s existing online rate finderand offers lenders on-the-go access fora quick and reliable Radian MI rate.Just like the iPhone and iPad versionlaunched this past September, appusers can simply input loan criteria andthe app automatically calculates the MIrate for a variety of Radian products.Backed by the company’s publishedrates and guidelines, Radian Rates wasdesigned for users to check eligibilityand compare options to find the prod-uct that best fits their needs.

“We developed Radian Rates as anoth-er way to make it quicker and easier forour lending partners to do business withus,” said Brien McMahon, Radian’s chieffranchise officer and head of sales.“Based on the positive feedback fromour App Store release, we wanted toexpedite a version for Android to ensurewe were providing all of our customerswith the ability to access our rates in sec-onds on their smartphone, whereverthey are, to better accommodate theirbusy schedules.”

Clayton Holdings ExpandsIts MSR Offerings

Clayton Holdings LLC has announcedthat it is now offering a broad array ofservices designed to support the grow-ing volume of mortgage servicing rights(MSRs) transactions. Clayton is excitedto be able to assist the market in iden-tifying and understanding the risk inMSR trades that have become more fre-quent as a result of new regulationsand capital requirements. Clayton’s

MSR Transaction Services is alreadyworking with a number of banks andinvestors, including private equity andhedge fund buyers, as well as specialservicers to identify risks inherent inacquiring MSRs.

Specifically, the group will: Confirmthat originators, servicers and theirthird-party vendors are in compliancewith stated policies, guidelines, regula-tions, industry standards and best prac-tices; identify underlying collateral andborrower risk via lien searches, pay his-tory and collection comment reviews;perform escrow and advance fee recon-ciliation, compensatory fee exposureassessments, and ARM audits to limitliability from previous servicer errors;ensure a seamless MSR transfer by help-ing to evaluate and select an appropri-ate sub-servicer while validating criticaldata points during the transfer; andperform more extensive assessmentsupon request, including a full review ofcredit, compliance and valuations.

“Clayton has been providing consult-ing, loan review and surveillance servic-es to banks and investors for more than20 years,” said Tom Donatacci, execu-tive vice president of Clayton Holdings.“Our new MSR Transaction Servicebuilds on this experience and our deepbench strength in loan file reviewers todeliver a full array of offerings that willhelp both buyers and sellers efficientlyidentify the value and risks in the MSRdeals that are coming to market.”

Mortgage Returns UnveilsNew Customer RetentionAnalysis to Aid Lenders

Mortgage Returns has announced thelaunch of a new retention analysis toolfor lenders who need to understand andimprove their customer retention rates.Mortgage Returns can now analyze andreport on historical customer retentionrates for mortgage originators. Thisallows the company to compare reten-tion rates to industry averages and devel-op comprehensive marketing plansspecifically designed to achieve goals.

“Many lenders have no way to meas-ure their customer retention rates,” saidJim Blatt, CEO of Mortgage Returns. “I’m abeliever in Peter Drucker’s philosophy, ‘Ifyou can’t measure it, you can’t manage it.’Our new retention analysis tool will helplenders to first understand what their cus-tomer retention is and then give them themarketing strategies to improve it.”

Envoy Mortgage ExpandsIts FHA 203(k) Product

Envoy Mortgagehas expanded itsFHA 203(k) loanproduct offerings

to include a full 203(k) loan option,

which gives borrowers an unrestrictedwindow to cover the costs of renova-tion and repair on a home purchase—limited only by area FHA loan limitsthat vary from market to market. Therenovation and repair costs are rolledinto one FHA 203(k) mortgage.

Envoy already currently offers astreamlined 203(k) product, in whichborrowers can combine the purchaseprice of a home, plus up to $35,000for renovation and repair costs, into asingle mortgage transaction. The newfull 203(k) product gives borrowersthe option to devote more funds forrepair and renovations, which arerolled into the mortgage amount.

“The U.S. real estate market contin-ues to have a high inventory of dis-tressed properties, which includeforeclosures and REOs that are aresult of the economic downturn,”said Suzanne Schakett, senior vicepresident of builder products in EnvoyMortgage’s National Builder Division.“The full 203(k) loan is a construction-related product that essentially bene-fits everyone involved in real estatetoday.”

The full 203(k) FHA loan augmentsEnvoy Mortgage’s suite of productsthat fall under its National BuilderDivision umbrella. Through either thestreamline or full 203(k) loan product,

a borrower can purchase an existingproperty, roll in costs of renovationand repair into the final loan amount,close on the property “as is,” and thenbegin the repairs.

The 203(k) products are FHA-insured loans and borrowers can pur-chase properties under essentiallysimilar guidelines as the FHA 203(b),which allow most to qualify with a 3.5percent down payment, regardless ofthe costs for renovation and repair.FHA loan limits vary from market tomarket, reflecting the cost of housingin each market.

Your turnNational Mortgage ProfessionalMagazine invites you to submit anyinformation promoting new “niche”loan programs, new products or anyother announcement related to theintroduction of a new program, to theattention of:

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

E-mail:[email protected]

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


n Global DMS has announced that ithas recruited Jody Collup as vicepresident of marketing.

n Stonegate Mortgage Corporation hasannounced the hiring of Eric Scholtzas executive vice president of struc-tured finance.

n The Federal Deposit InsuranceCorporation (FDIC) has announcedthat Sandra L. Thompson, Director ofthe Division of Risk ManagementSupervision (RMS), has accepted theposition of Deputy Director ofHousing Mission and Goals at theFederal Housing Finance Agency(FHFA).

n Impac Mortgage has announced thatMike Casey and Matthew Dismorehave joined the company’sCorrespondent Lending Division.

n Affiliated Mortgage Company hasnamed Jason Beene as president ofits correspondent lending division.

n Genworth Financial Inc. hasannounced that Michael Derstinejoined the company as chief risk offi-cer (CRO) for its Genworth U.S.Mortgage Insurance (USMI) unit.

n Dan Carbeck has joined ValueXPress,where he will be responsible forcommercial loan originations in themid-western portion of the UnitedStates.

n LRES Corporation has named Paul

Abbamonto as chief operations offi-cer (COO).

n Robert D. Broeksmit has beennamed managing director ofTreliant Risk Advisors.

n Blueberry Systems LLC hasannounced Sharon Kenney as itsdirector of IT Governance andRichard Jones as its director of ITInfrastructure.

n Potomac Mortgage Group Inc. (PMG),has announced the hiring of SarahPichardo as vice president.

n Ben Purser has joined VericrestFinancial as chief risk officer.

Your turnNational Mortgage ProfessionalMagazine invites its readers to submitany information, events, passages, pro-motions, personal or professionaloccurrences that seem appropriateand/or other pertinent data to theattention of:

Heard on the Street/MortgageProfessionals to Watch column

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

[email protected]

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

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When did we forgetthat mortgagebrokers are the faceof each home loan?

www.FGMCwholesale.com (800) 296-2275

In our crazy world of mortgage securitization and lender portfolios, it’s

sometimes easy to forget that most homebuyers buy homes from people, not

logos. For decades, the mortgage broker has been the trusted advisor to

millions seeking the American Dream. FGMC hasn’t forgotten that, and

we’re providing our brokers the widest range of loan products and the most

efficient lending processes possible to ensure your clients are getting into

new homes ... and that you’ll be the one handing them the keys.

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By E. Robert Levy Esq.

Each year, we host the Regional Conference of MortgageBankers Associations in Atlantic City, N.J., and each year, it ismet with a great turnout and is a rousing success. First andforemost., I must give credit to the Planning Committee mem-bers for their dedication and perseverance, some of thesemembers have been with us the entire 30-years we have been

presenting this event and others for many years. Some of our members, who wemiss greatly including Jim Risko, Henry Senenfelder and Jim Leister have passedon, and some, including Pat Aritz and Sam Morelli, have moved away. Many ofour long-term members on the residential segment of the Conference are stillwith us, including Regina Lowrie, the first female president of the MBA; MarilynBrown Iannone, liaison for the MBA of NY and past president; Bill Raftery, pastpresident of the MBANJ; Ron Agasar, past president of the MBANJ; BonnieNachamie, treasurer of the New York Association of Mortgage Brokers; andJonathan Pinard, past president of the Empire State Mortgage BankersAssociation; as well as Marilyn Brown, Charlie Kauffman, Ron Shapiro and LarryLongua who have been with us for many years on the Commercial Committee.What these individuals created leaves us with a multitude of memories of greatconferences over the years and the excitement of more yet to come.

Each year, we focus on giving our attendees the kind of experience that theywill find extremely valuable for the operation of their businesses and their prof-itability. We provide general sessions and breakout sessions that hone in on thekey issues of the day and show attendees how they can deal with them effective-ly. These issues include regulatory and legislative activities on both a state andnational level. To accomplish this, we bring in top quality speakers for our gen-eral sessions and breakouts, as well as provide valuable networking time forattendees in our exhibit halls, cocktail receptions, at breakfast and during breaksin our sessions.

We are one of the only conferences that provide both a commercial and resi-dential segment, each of which is a major conference in itself so that one canattend either one or both, and at a reasonable price. Our special room rates atthe Taj Mahal (this year only $75 to be in the relatively new and high qualityChairman Tower) together with what registrants get for only one fee makes thisconference a truly great deal and a very affordable event. With breakfasts eachday, lunches (two during the commercial session, one at the residential session),great food at our four cocktail receptions (you don’t need dinner after one ofthese!) all for a single fee (and a terrific program as noted). Is there a better con-ference deal anywhere? We don’t think so and either do the many registrants whoreturn each year … a conference they won’t miss!

This year, we are devoting our residential program to getting our registrantsready for a new world of regulation for mortgage lenders and brokers. The ruleson QM (Ability-to-Repay), LO compensation, appraisals, etc. coming from theConsumer Financial Protection Bureau (CFPB) will change the landscape of theindustry to a significant degree. These rules consume thousands of pages in total(over 800 for QM, over 400 for LO compensation and so on). There is still much tobe desired in terms of a lack of clarity in the rules, and in some cases, commentsfrom the industry are still being elicited such as those dealing with the compen-sation of loan originators.

The week of March 11th will be very timely for our Conference in terms of anunderstanding of these new rules which, for the most part (a few exceptions) willbecome effective in January of 2014, giving implementation time for the industry.By the time of the Conference, there should be enough information about the rulesto provide attendees with an understanding and clarification of what they need todo in order to comply and how they can get ready for exams with the CFPB as wellas state examiners. All of this will be dealt with by our expert panelists and speak-ers, thus once again making our conference a don’t miss event!

Another great conference is coming … I look forward toseeing you there!

E. Robert Levy Esq. is executive director of the MortgageBankers Association of New Jersey. He may be reached byphone at (732) 596-1619 or e-mail [email protected].

Why is the Regional Conference of Mortgage Bankers Association

so Special?What has made it as one of the best conferences in the U.S. for 30 years?

Sponsored Editorial

safeguard customer information frommalicious software adequately addresssocial media usage. Financial institutions’incident response protocol regarding asecurity event, such as a data breach oraccount takeover, should include socialmedia, as appropriate.

Policy and ProceduresThe guidance offered by FFIEC is intendedto help financial institutions understandpotential consumer compliance and legalrisks, as well as related risks, such as repu-tation and operational risks associatedwith the use of social media, along withexpectations for managing those risks.Although this guidance does not imposeadditional obligations on banks and non-banks, as with any new process or productchannel, financial institutions must man-age potential risks associated with socialmedia usage and access.

With this in mind, we recommend thefollowing outline as the de minimis sec-tions for an Social Media and SocialNetworking Policy and Procedures, con-ceived as a Employee Manual to be provid-ed to and receipt thereof attested to by allaffected employees:

n Overview: Preamble and Purpose n Your Identity Online: Inside and

Outside Workplace n Creating Social Media Content:

Directives n Managing Social Media Content:

Permissions and Prohibitions n Fact Checking Your Posts: Accuracy n Correcting Errors Promptly: Timing and

Responses n Leaving Comments: Permissions,

Proprietary Information n Confidential and Privacy: Disclosure

Limitations n Potential Conflicts and Red Flags:

Responsibilities n Responding to a Negative Post: Prior

Approvals n Posting Recommendations for

Colleagues: Prior Approvals n Responding Directly to a Journalist:

Prior Approvals n Building Your Virtual Footprint and

Network: Restrictions

Each section of this manual, whereappropriate, must provide clear andunambiguous statements relating to direc-tives, company procedures, permissions,prohibitions, employee responsibilities,prior approval processes, restrictions, andinformative examples.

As noted previously, banks and non-banks are using social media as a tool togenerate new business and provide adynamic environment to interact withconsumers. As with any product chan-nel, financial institutions must managepotential risks to the financial institu-tion and consumers by ensuring thattheir risk management programs pro-vide appropriate oversight and controlto address the risks associated withsocial media.

Jonathan Foxx is president and manag-ing director of Lenders ComplianceGroup and Brokers Compliance Group,mortgage risk management firmsdevoted to providing regulatory com-pliance advice and counsel to the mort-gage industry. He may be contacted at(516) 442-3456, by e-mail [email protected], orvisit www.LendersComplianceGroup.comor www:BrokersComplianceGroup.com.

Footnotes1-Federal Financial Institutions Examination Council (FFIEC).Social Media: Consumer Compliance Risk ManagementGuidance, Notice - Request for Comment, FR 78/15 (1/23/13)2-15 U.S.C. 1601 et seq., 12 CFR pts. 202 and 10023-12 CFR pt. 1002, Comment 4(b)-24-12 CFR 1002.12(b)(7)5-12 CFR 1002.9(a)(2)6-42 U.S.C. 3601 et seq., 24 CFR pt. 100 (HUD)7-12 CFR 128.4, 338.3, 390.1458-15 U.S.C. 1601 et seq.; 12 CFR pts. 226 and 10269-12 U.S.C. 2607. See Interagency Guidance, Weblinking:Identifying Risks and Risk Management Techniques, (2003)http://www.occ.treas.gov/newsissuances/bulletins/2003/bul-letin-2003–15a.pdf10-15 U.S.C. 1692-169211-15 U.S.C. 4512-12 U.S.C. 5531, 553613-See FTC Guidance, including Guides Concerning the Use ofEndorsements and Testimonials in Advertising, athttp://www.ftc.gov/os/2009/10/091005revisedendorsement-guides.pdf14-15 U.S.C. 1693 et seq., 12 CFR pts 205 and 100515-See Operating Rules of the National Automated ClearingHouse Association (NACHA), available at http://www.achruleson-line.org/; Rules of the Electronic Check ClearinghouseOrganization (ECCHO), available at https://www.eccho.org/cc/rules/Rules%20Summary-Mar%202012.pdf16-UCC Art. 417-12 CFR pt. 22918-“Bank Secrecy Act” is the name that has come to be appliedto the Currency and Foreign Transactions Reporting Act (Titles Iand II of Public Law 91–508), its amendments, and the otherstatutes referring to the subject matter of that Act. Thesestatutes are codified at 12 U.S.C. 1829b, 1951–1959; 31 U.S.C.5311–5314, 5316–5332; and notes thereto19-Bank Secrecy Act regulations are found throughout 31 CFRChapter X. Also, the federal banking agencies require institu-tions under their supervision to establish and maintain a BSAcompliance program. See 12 CFR 21.21, 163.177 (OCC); 12 CFR208.63, 211.5(m), 211.24(j) (FRB); 12 CFR 326.8, 390.354 (FDIC);12 CFR 748.2 (NCUA). See also Treas. Dep’t Order 180–01 (Sept.26, 2002)20-15 U.S.C. 6801 et seq., 12 CFR pt. 1016 (CFPB) and 16 CFR pt.313 (FTC); Interagency Guidelines Establishing InformationSecurity Standards, 12 CFR pt. 30, app B (OCC); 12 CFR pt. 208,app. D-2 and pt. 225, app. F (FRB); 12 CFR pt. 364, app. B (FDIC);Safeguards Rule, 16 CFR pt. 314 (FTC)21-15 U.S.C. 7701 et seq22-47 U.S.C. 22723-16 CFR pt. 316 (FTC); 47 CFR pts. 64 and 68 (FCC)24-15 U.S.C. 1681–1681u25-12 U.S.C. 1813(u). Guidance from the Agencies addressingthird-party relationships is generally available on their respec-tive Web sites. See, e.g., CFPB Bulletin 2012–03, ServiceProviders (Apr. 13, 2012), available at http://files.consumerfi-nance.gov/f/201204_cfpb_bulletin_service-providers.pdf; FDICFIL 44–2208, Managing Third-Party Risk (June 6, 2008), avail-able at http://www.fdic.gov/news/news/finan-cial/2008/fil08044a.html; NCUA Letter 07-CU-13, EvaluatingThird Party Relationships (Dec. 2007), available athttp://www.ncua.gov/Resources/Documents/LCU2007-13.pdf; OCC Bulletin OCC 2001-47, Third-Party Relationships (Nov. 1, 2001), available athttp://www.occ.gov/news-issuances/bulletins/2001/bulletin-2001-47.html26-FFIEC IT Examination Handbook: Management booklet, 2–3(June 2004), available at http://ithandbook.ffiec.gov/ITBook-lets/FFIEC_ITBooklet_Management.pdf27-Available at http://ithandbook.ffiec.gov/itbooklets.aspx28-Available at http://ithandbook.ffiec.gov/ITBook-lets/FFIEC_ITBooklet_OutsourcingTechnologyServices.pdf29-Available at http://ithandbook.ffiec.gov/ITBook-lets/FFIEC_ITBook-let_InformationSecurity.pdf


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The rule also has exemptions from thesecond appraisal requirement to facili-tate loans in rural areas and othertransactions.

The rule is being issued by the Board ofGovernors of the Federal Reserve System,the Consumer Financial ProtectionBureau, the Federal Deposit InsuranceCorporation, the Federal Housing FinanceAgency, the National Credit UnionAdministration, and the Office of theComptroller of the Currency. The FederalRegister notice is attached. The rule willbecome effective on Jan. 18, 2014.

In response to public comments, theagencies intend to publish a supplemen-tal proposal to request additional com-ment on possible exemptions for “stream-lined” refinance programs and small dol-lar loans, as well as to seek clarification onwhether the rule should apply to loanssecured by existing manufactured homesand certain other property types.

FFIEC to Scrutinize SocialMedia Policies of Banksand Lenders

The FederalF i n a n c i a lInstitutions

Examination Council (FFIEC) has releasedproposed guidance on the applicability ofconsumer protection and compliancelaws, regulations and policies to activitiesconducted via social media by banks, sav-ings associations, and credit unions, aswell as non-bank entities supervised bythe Consumer Financial ProtectionBureau (CFPB) and state regulators.

The FFIEC is responding to requests forguidance in this area from various indus-try and consumer interests. The guid-ance is intended to help financial insti-tutions understand potential consumercompliance, legal, reputation, andoperational risks associated with theuse of social media, along with expec-tations for managing those risks.Although the guidance does not imposeadditional obligations on financialinstitutions, the FFIEC expects financialinstitutions to take steps to managepotential risks associated with socialmedia, as they would with any newprocess or product channel.

The FFIEC invites comments on anyaspect of the proposed guidance. It isspecifically seeking comments on the fol-lowing questions:n Are there other types of social media,

or ways in which financial institutionsare using social media, that are notincluded in the proposed guidance butthat should be included?

n Are there other consumer protectionlaws, regulations, policies or concernsthat may be implicated by financialinstitutions’ use of social media thatare not discussed in the proposed guid-ance but that should be discussed?

n Are there any technological or otherimpediments to financial institutions’compliance with applicable laws, reg-

ulations, and policies when usingsocial media of which the Agenciesshould be aware?

Harvard Study Finds Stateof Mortgage MarketplaceToday Will Impact theFuture of Housing

A new report from theHarvard Joint Centerfor Housing Studiesexamines lending pat-terns during the hous-

ing boom and current efforts to create a

new mortgage market, in the wake ofthe housing bust. The report, “GettingOn the Right Track: Improving Low-Income and Minority Access toMortgage Credit after the HousingBust,” explores how changes to thehousing finance system will affectfuture lending to lower-income andminority borrowers and communities,and what policies and programs will beneeded to promote sustainable home-ownership opportunities in these areasover time.

“Accomplishing these goals will notbe easy or quick,” says William Apgar,senior scholar at the Harvard JointCenter for Housing Studies, former FHACommissioner, and a primary author ofthe report. “Low-income and minority

communities were among the hardesthit by the mortgage market meltdown.Since policymakers have failed toaddress longstanding issues — includ-ing persistent racial and ethnic discrim-ination and growing inequality in thedistribution of income and wealth—these same households and neighbor-hoods may not fully benefit from theemerging housing recovery.“

Creating a responsible mortgagemarket, the report concludes, muststart by developing liquidity that pro-vides broad access to mortgage creditthat borrowers understand and havethe ability to repay. This means reduc-ing the government’s outsized presence


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Lead Generation and ConversionStrategies for Online Mortgage Marketers

By Scott Schang

Unlocking the secrets of online marketingcan either be a challenging and excitingjourney, or the most frustrating experi-ence of your marketing life. If you’re newto online mortgage marketing, my goalhere is to share my own mistakes andlearning curve to hopefully make yourpath to online lead generation a little lessbumpy. If you’re a seasoned online mort-gage marketer and you get just one goodidea to build on your current success, we’llcall that a win.

Web sites do not generate leadsWeb site vendors do not want to you toknow the truth about the actual rolethis tool plays in your online marketingstrategy. Simply having a Web site willnot generate leads. An effectivelydesigned Web site organizes informa-tion so that it is easily consumed byyour visitor.

The opportunity for lead generationoccurs when the information on your siteearns the trust of the visitor. Lead genera-tion is then accomplished, after trust isearned, and when you ask the visitor toeither contact you directly for more infor-mation, or you ask the visitor for permis-sion to contact them.

It all starts with empowering the con-sumer.

Empowering consumersThe very first thing that has to happenbefore you will ever convert your firstonline lead is to drive traffic to your site.There are many ways to drive traffic toyour site that range from free, to paidservices like pay-per-click. Once the con-sumer reaches your site, that’s where yourconversion strategy begins.

Understanding the motivation andmindset of an online consumer is the veryfirst step to designing conversion pointson your website that will result in youropportunity to close loans.

When it comes to making decisionsabout homebuying or refinancing, youmust take into consideration that con-sumer trust has been shaped by the yearsour industry was vilified by the main-stream media as the cause of housing cri-sis that many are still struggling to recoverfrom. Mortgage lenders have beenaccused of misinforming consumers at thevery least, straight up lying and purposelymisleading homeowners at the very worst.Needless to say, the collapse of the realestate and mortgage markets have putconsumers on high alert and has forevershaped the landscape of how we need tocommunicate with online consumers toearn their trust and their business.Empathy is the greatest tool you havewhen designing your lead generation

machine. The ability to putyourself in the consumer’sshoes is your key to success.

Think about your ownonline habits. Take amoment to examine howyou yourself use theInternet. How often do youtype questions into Google?If you are like most onlineconsumers, you’re doingresearch and trying to edu-cate yourself so you don’tmake a bad decision. Nowamplify that motivation byabout a hundred andyou’re on your way tostanding in an online mortgage con-sumer’s shoes.

Delivering relevant, accurate and easyto read answers to the questions that con-sumers are asking online will empowerthem to make more informed decisions.When you empower a consumer, theytrust the source, which in turn gives youthe opportunity to earn their business—Ifyou ask for it, and make it easy and safefor them to engage with you.

Lead capture strategiesYou’ve heard the saying that there’s morethan one way to skin a cat? While maybenot as politically correct as some may like,it is an accurate description of the numer-ous ways and opportunities you have tocapture the attention and information ofyour site’s visitors for the eventual conver-sion into a commission check.

The first step to maximizing conversionfrom your lead capture efforts is to under-stand that there is an opportunity to earna visitor’s trust even if they are not readyto buy or refinance right now.

There are three levels of commitmentthat any site visitor is prepared to make ifthey feel they have received value, or havebeen empowered by the information onyour site:

1. Get notified of new updatesAsking a Web site visitor if they would liketo be notified of updates or breaking newsas it occurs is a low commitment, long-term strategy for lead conversion.Sometimes this visitor will make a moremotivated commitment, but for the mostpart, this is your long-term list buildingstrategy that will pay off for months andyears to come. You will need a strategy fordelivering these updates to this lead

You can ask a visitor if they would liketo be notified every time new information

is posted on your site threedifferent ways.

n In post updates:Include an e-mail updateoption at the bottom ofevery post or page on yoursite.n Sidebar updates: In-clude a newsletter/updatesign up from in your site’ssidebar.n Pop-up updates: Stra-tegically timed pop-up asksreader if they would likeupdates. While thismethod makes many mar-

keters coil in disgust (I know I don’t likepop-ups), it is by far the most effectiveof all lead capture mechanisms iftimes properly.

2. Get more informationThere are a number of different strate-gies for offering to provide the readerwith more information about the topicof interest that led them to your site.This visitor may or may not be ready tobuy or refinance right now, all we knowat this point is that they trust youenough to ask for more informationbefore making a decision.

Here are just a few ideas for encourag-ing the visitor to get more informationabout a specific topic.

n Downloads: Offering in-depthresearch, statistics, education, blue-prints, tips and tricks available bydownload is an effective strategy forcapturing contact information. Theamount of information you ask formust be relative to the value of thedownload you are offering. If you findthat you have no takers, it could bethat your offer is not valuable enough,or you are asking for too much infor-mation in exchange for the download.

n Live chat: This is an advanced strategythat requires that someone is availableto respond quickly to the visitor’s ques-tions or comments. There are manyfree and paid methods for installing achat client on your Web site.

n Contact me: The easier you make it foryour website visitors to contact you,the greater chance you’ll have ofengaging in a conversation with thevisitor. Your phone number and emailaddress should be highly visible any-where the visitor is on your site. Thebest placement for your phone num-

“The ability to putyourself in the con-

sumer’s shoes is yourkey to success.”

Generating New Leads With Direct Mail: Back to the Basics

By Molly Greene

ber is in the upper right corner of yourheader or sidebar. I put my emailaddress and cell/text number in theauthor box on every blog post.

n Leave a comment–or ask a public com-ment: The comments section on yourblog posts is a great opportunity for thevisitor to semi-anonymously ask formore information in a safe environ-ment without having to speak to asalesperson.

n Ask a private question: Giving the read-er the ability to ask a private questionon your site that is e-mailed directly toyou is a very effective strategy for start-ing a conversation with your readers.

3. Apply now/pre-qualificationThis is your highly-motivated, empoweredconsumer that is ready to acquire financ-ing to purchase or refinance a home rightnow. There are also multiple opportuni-ties for asking your visitor if they are readyto buy now:

n Product/services pages and post: Anymortgage focused site should havepages and posts dedicated to the loanproducts, downpayment assistanceand special refinance programs offeredby your company. Inserting links intothese pages can be effective, even bet-ter is to place a lead capture formdirectly on the post or page.

n Custom sidebar calls to action: If youhave the ability to create different side-bars for different pages and post types,you can modify the call to action to bespecifically relevant to the content thevisitor is currently reading.

n Generic sidebar calls to action: If youhave only one sidebar that neverchanges, creating multiple calls toaction that lead to one lead captureform is a great strategy. For instance, Iuse “Buyer Assistance” and “ClosingCost Assistance” as two separate calls toaction in my sidebar. Both buttonslead to the same lead capture page. Iam basically asking the consumer thesame question, two different ways—the program they may qualify for canbe used for both downpayment or clos-ing cost assistance.

n Navigation bar calls to action: Whileless convenient and less effective, giv-ing the reader the ability to navigate toyour lead capture pages to get moreinformation or apply is always a goodidea.

n Home page calls to action: The homepage of your site is a great place to put

bold, easy to see and use calls to actionas part of your graphic navigationlaunch pad. A clean and easy to navi-gate home page is a very effective leadcapture strategy.

Optimizing your lead conversion strategyThe design and user experience on yoursite will ultimately be unique to you,your company and the depth of yourexperience. Different loan originatorsand companies specialize in differentproducts, niches and approaches toyour mortgage business.

Fine-tuning your online lead genera-tion system requires a lot of testing,experimenting, tweaking and time. Whileyou can purchase pre-designed sites, theuser experience must be carefully consid-ered and crafted to deliver the highestvalue to your visitor. If you are not get-ting the results you desire, carefullyexamine where your system is failing.

If you are getting traffic to your siteand you are not capturing leads, thereis a disconnect between your contentand your calls to action. You are eithernot asking for the sale in a way that isconvenient to the reader, or you areunable to earn the visitor’s trust oncethey are on your site.

If you are not happy with the qualityof the leads your are generating, youmight want to more closely examinethe message you are relaying, or theinformation you are capturing on thelead form.

Mastering online lead generation is ajourney, not a goal. It is a constantprocess of analysis and adjustment.Once you have the ability to put your-self in your Web site visitor’s shoes, andlearn to ask the right questions at theright time, you will enjoy a lead gener-ation machine that requires little main-tenance and produces unique, exclu-sive leads for years to come.

Hope this helps! Good luck on yourjourney.

Scott Schang is a branch manager atBroadview Mortgage’s Katella team inOrange, Calif. His approach to marketinghas been to develop niche opportunitieswithin specific demographics of onlinehomebuyers. Schang’s expertise includesWordPress, content marketing and onlinelead generation and conversion. He may bereached by phone at (714) 336-8286, [email protected] or visitwww.FindMyWayHome.com.

It’s a new year, you have a new budget,you’re ready to try new lead generationtechniques, and you’ve decided on directmail. Well, okay, so the concept of directmail as a lead generationtool has been around forev-er, but maybe you tried onemailer in the past and gotzip. Or maybe you paid yourdaughter to stuff envelopesand she tried to help bywriting, “I can get you agreat loan!” on the outsideof the envelope, and guesswhat? Dismal results.

Countless mortgage com-panies have attempted andfailed at direct mail cam-paigns because they didn’tknow a few basic insidersecrets, or they didn’t createprofessional-looking mailpieces, or they give gave uptoo soon. The good news isthat just as many have hadgreat success, and you can too. Sometimesthe simplest details will help you gain thebest results from any marketing effort, anddirect mail is no exception. This article willwalk you through the basics.

The benefits of direct mailn Enhanced potential response: With

mass advertising channels such as TV,print and radio, your message is wastedon consumers either not qualified ornot in the market for a mortgage—yetyou’re paying for it. Direct mail recipi-ents are targeted and more likely torespond to your offer. There is no wast-ed coverage.

n Super-targeted: Using credit-scoreddata, you select recipients, such ashomeowners in a specific geographicarea. With additional filters, you candetermine their credit score range andcurrent rate, weed out late or non-pay-ments, send to specific groups such asborrowers with adjustable-rate mort-gage (ARM), Veteran’s Affairs (VA) orFederal Housing Administration (FHA)loans, or filter for eligibility for a specif-ic loan type, such as reverse mortgages.

n A more personal message: Direct mailpieces and processes allow you toaddress prospects by name and offer amessage designed to impact your local-

ity and the needs of home-owners and homebuyers inyour market. You also havethe ability to include a free-bie or giveaway directly inyour piece.n Flexible and “test-able:”You can change the mes-sage and test which head-line, artwork and promo-tional offer pulls the bestresults, and you can try avariety of formats, frompostcards to letters tobrochures.n Measurable response:With a little pre-planning,you have the ability to veri-fy the success of every cam-paign and can more easilyascertain your return-on-

investment (ROI) based on calls to atoll-free tracking number, returnedpostcards, or specific views of a web-page URL included in your offer.

Targeting your direct mailcampaignPast clients are the absolute first priorityand a must as far as consistent contact.You’re losing money if you’re not keepingin touch and asking for referrals. Kick offyour direct mail campaign with this group,and consider mailing to them a couple oftimes a year, complementing your emailcampaigns.

If you’re new to the business and youdon’t have a significant closed client data-base, consider mailing a drip campaigntargeting potential business partners suchas real estate agents, financial plannersand attorneys. Keep RESPA requirementstop of mind, and don’t forget your ownneighborhood and/or sphere of interest.

Using a mortgage-specificmailing houseIf you have help or use a mailing house,

“The primary objec-tive of direct mail is to

generate phone callsand e-mails. A clear,concise message canproduce profitable

responses.”

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you won’t have to stuff envelopes, andyour volume can be larger. A number ofprinters/mail houses cater to the mortgageindustry. These vendors will help you selectcredit-scored data from the three creditagencies, which can be sorted to create theright list for your offer. They will also helpyou create an impactful design that is cus-tomized to your company, your area, theformat you choose, and the type of loan orborrower you want to attract. (Be sure toinclude all the required disclaimers in yourmail piece that must accompany the use ofcredit-scored data.)

Mailing frequency will depend on yourbudget. Whatever your schedule may be, ifyou’re considering a direct mail campaign,research your options, project and budgetyour costs, implement the program and

stick to a regular mailing schedule.

The content of your directmail campaignThe primary objective of direct mail is togenerate phone calls and e-mails. A clear,concise message can produce profitableresponses. Remember to use a consistenttheme, signature line and photo on allyour marketing to build recognition. Thisapplies equally to your Web site, directmail, print advertising, billboards and e-mail campaigns.

Choice of content is individual and canrun the gamut from holiday greetings,closing anniversary congratulatory letters,current rate information, localized marketinfo, financial tips, home loan processtutorials and new loan products. Whatever

you choose, your content must be of highvalue and appropriate to the targetedaudience.

Remember that the goal of each directmail piece you distribute is also to informor remind folks that you’re in the homeloan business, and pique recipients’ inter-est so they contact you. Always encourageresponses by including a “call to action,”such as “Call or e-mail me today for moreinformation!” Remember to print yourphone number in a large font and promi-nent position it so it’s easy to locate.

Consider including include a “P.S.” atthe bottom of the page with a call to actionas an insurance policy to reinforce yourmessage in case the reader skims to theend of the mailer. And don’t forget toinclude your Web site and e-mail addresson all direct mail pieces.

Seven valuable direct mail tips1. Have a plan. Direct mail marketing is a

commitment that will pay off overtime, and it works best to create a 12-month strategy before you send thefirst piece. Once you launch your pro-gram, consistency is everything. Keep inmind that one single mailer will proba-bly not get results, and don’t falter inyour commitment.

2. Craft your image carefully. Decide on amessage and image you want to projectlong before your mail is distributed.Your direct mail piece will representyou, so make a great first impressionand be sure every piece reflects yourestablished company brand.

3. Mix it up. Try different ideas indesign, content, packaging, offers,and calls to action. Your mail houseor printer may be able to show youwhat has and has not worked forothers. You can experiment with var-ious approaches until you get thedesired response. Keep in mind thatoffering to mail respondents freepertinent information and literaturecan encourage responses, so try it.

4. Don’t distribute generic letters. Make itpersonal by including the name of theoccupant in the piece. Addressing a let-ter to “Resident” or “Homeowner” willprobably earn your message a trip tothe trash can. Use quality paper.Studies indicate that you’ll get the bestresponse if envelopes are hand-addressed and stamped with a first-class stamp rather than metered mailor the bulk mail indicia.

5. Include a call to action. For your mail-

er to be most effective, you must pro-vide the recipient with specific instruc-tions about what you want them to doafter they read your message.Examples: “Call me today!” “Visit mywebsite and fill out an application!” or,“Return this completed postage-paidcard and I will contact you.” Don’t for-get to direct people to a website, blog,Facebook page, Twitter, or other socialmedia platform.

6. Use the headline to get the reader’sattention. There’s a fine line betweengenerating excitement and using toomuch hype, so avoid scammy, junkmail-type copy and over-worked phras-es that might put off the reader.

7. Say NO! to bad copywriting, poor gram-mar and shoddy proofing. Don’t allowyour direct mail marketing to go outwithout a thorough review to catch anyerrors. This is without a doubt one ofthe most important elements of yourentire campaign. Keep in mind thatyour name is on every piece that goesout and people will create a perceptionof you and your company when theysee them, so present yourself as a pro-fessional with every mailer. They don’tneed to be the slickest marketing col-lateral ever created, but they must lookprofessional and reflect and enhanceyour company’s branding. Every pieceyou send must be grammatically cor-rect and free of errors and typos–noexceptions!

The National Do-Not-Call Registryand stringent anti-spam legislationhave had a significant impact on ourindustry’s opportunity to freely pro-mote our services. The core methodsavailable to cultivate new business havebeen reduced to a basic few.Fortunately, direct mail is still a viablelead-generation approach that providesaccess to a large number of contacts ina short amount of time, and can also bea cost-effective way to reach past, cur-rent and potential customers. If youthought direct mail went out of favor,think again!

Molly Greene is a marketing specialist atGuaranteed Home Mortgage CompanyInc. Founded in 1992, Guaranteed is alicensed mortgage investment and bank-ing firm comprised of more than 300mortgage professionals lending in 23states. She may be reached by e-mail [email protected] or follow her blogat www.joinghmc.com/blog.

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generating new leads with direct mail continued from page 43

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The Customer Experience as aCompetitive AdvantageMany firms pay lip service to pleasing customers, but now it’s the law

By Steven J. Ramirez

Managing the customer experience meanssomething quite different today, in theage of Dodd-Frank, than it did even a fewyears ago. For some lenders, the customerexperience was a by-product of their nor-mal banking business. It never appearedon a balance sheet or a profit and lossstatement and so it wasn’t somethingmany financial institutions tried very hardto manage. The results, in hindsight, werepredictable.

Mortgage lenders today are among theprofessionals who consistently score at thevery bottom of the customer satisfactionscale, at least as measured by J.D. Power &Associates. Of course, that’s going to change.

Richard Cordray, director of theConsumer Financial Protection Bureau(CFPB), has, on numerous occasions,pointed out that his agency will be con-cerned with more than just the safety andsoundness of the institutions it oversees.Now, mortgage lenders will be heldaccountable for the experiences con-sumers walk away with after interactingwith them, regardless of whether theyreceived their loans or not.

In a post Dodd-Frank world, the cus-tomer experience has become a compli-ance issue, and that’s exactly how mostmortgage lenders will treat it. In theprocess, they’ll miss an incredible opportu-nity. By doing only what they must toremain in compliance, the standard modusoperandi of the compliant financial institu-tion, lenders will lose out on the opportu-nity to turn the customer experience into apowerful new marketing advantage.

Chasing the new referralIn the mortgage industry, referrals have tra-ditionally been associated with businessthat comes in from a partner, such as a realestate agent or financial advisor. Consumerreferrals have never accounted for a largepercentage of the typical lender’s business.The reason most commonly heard for thisis there simply is no customer loyalty in thisbusiness. It is closer to the truth to say con-sumers traditionally have not understoodthe mortgage industry well enough to knowwho to be loyal to.

What is clear is that lenders have notearned the trust that brings repeat busi-

ness or referral business from consumers.Who do consumers trust? Each other.

Ron Schott, an SEO expert for SearchEngine Watch, pointed to a recent SocialImpact Consumer Study from SociableLabs that found that 57 percent of shop-pers are more likely to buy after receivingopinions from friends. The same studypointed to Facebook as an increasinglytrusted source of consumer information,with 62 percent of online shoppers read-ing product-related comments from and75 percent of these shoppers continuingon to click through the retailer’s site.

New York public relations firmEdelman found that, in the online world,76 percent of consumers will recommendcompanies they trust to a friend or col-league. For the first time in history, thebusiness world has a network of nation-wide social channels that allow con-sumers to come together and recommendcompanies they trust to their networkconnections. And their connections areactually taking their advice.

Just as consumers look to online out-lets for recommendations on what TV tobuy or which cell phone has the best rat-ing, home loan borrowers shop online forrates before setting foot in the physicalbranch. All lenders have to do now is getsomeone to trust them.

Building consumer trust:The processA professional psychologist will likely saythat consumers do not really recommendbrands to each other, but rather experi-ences. It is akin to the truism that con-sumers are not actually swayed by the factsat issue, but rather the story that bringsthose facts to light. By improving theprocess so that it enhances the borrower’sexperience, lenders can provide customerswith a higher level of service they will beeager to share with others. This truly makescustomer experience a marketing issue, aswell as a compliance concern.

This is great news because federal regu-lators are already pushing the industry inthe direction of improving the borrower’sexperience. Unfortunately, most lenderswill make one or more of these criticalerrors when they attempt to get this done.

Mistake No. 1: Failing tosee the end-to-endexperience for your cus-tomers.Most organizations tend tocreate silos, which forceexecutives to view processeswithout the benefit of infor-mation relating to howthose actions are interrelat-ed across lines of business.That means their view of thecustomer is fragmented.

It is important to take aholistic view, evaluating thecustomer experience acrossall channels and touch-points to ensure a trueunderstanding of how cus-tomers view your business.Because there are so manyparties involved in the production of amortgage asset, the mortgage industry isnotorious for having a fragmented view ofthe customer’s overall experience. A mis-take made by one party can sour theentire process for the borrower.

Having someone involved in the trans-action that focuses on the borrower as thetransaction moves toward the closingtable is a great way to keep control of theoverall experience and build trust. With adesignated person available to call, a mis-take or misstep won’t be the cataclysmicevent it could be if the borrower had noone to reach out to for help.

Mistake No. 2: Treating all customersas equals.Many large organizations undertake cus-tomer research and collect mountains ofdata, but relatively few know who theirmost profitable (not largest) customersare. When this data is used, it is often usedto segment consumers into fairly homoge-nous groups, which are then targeted formarketing messages.

Like most things in life, the smaller por-tion of the lender’s customers will beresponsible for the more significant pro-portion of its profit, which means these arethe individuals the originator should targetfirst when focusing on improvements. Inthe past, most lenders have segmentedtheir pipelines by product type, leading toorganizations that are heavy in refinanceexpertise and under-developed for pur-chase money lending. This could be a sig-nificant problem for lenders in the future.

As lenders shift to take advantage ofthe trend toward purchase money lend-ing, it will be important to know which

borrowers are likely to bethe most profitable.Lenders already haveaccess to this informationand it will provide a handystarting point for their cus-tomer experience improve-ments.

Lenders should takecare not to make the mis-take that the larger loanamount leads to the moreprofitable customer. Evena first time homebuyer canmake a significant impacton the company’s bottomline if they begin to referthe company to other bor-rowers through socialmedia channels. By moni-toring social media,

lenders can engage dissatisfied customersto help transform negative sentiment intoa positive customer experience.

Mistake No. 3: Failing to invest enoughin employee training.In building a customer-centric companyculture, employee training brings to lifethe values of the brand and the tacticalcustomer experience that reflects thebrand. As opposed to differentiatingsolely on price or features, forward-thinking companies help employees—call center staff, sales and marketingteams, and senior executives—internal-ize corporate initiatives to improve thecustomer experience.

To increase the likelihood of successthrough a merger or simply launching anew product, employee training is vitalto ensuring that everyone is on boardwith a consistent vision for the cus-tomer experience.

The bottom line … improving customerexperience is good for business. In today’smortgage industry, customer experience isa compliance imperative, but it can also bethe key to a much stronger brand and apowerful marketing tool.

Steven J. Ramirez is CEO of Beyond the ArcInc., a customer experience and advancedanalytics firm that helps financial servicesclients identify opportunities to differenti-ate themselves in the marketplace. Thecompany’s social media data mining helpsclients improve their customer experienceacross products, channels, and touchpoints. He may be reached by e-mail [email protected].

“In a post-Dodd-Frank world, the

customer experiencehas become a

compliance issue, andthat’s exactly how

most mortgage lenderswill treat it.”

Growing your business in the mortgageand investment banking industry willmean that you are reaching out to apredominantly well-educated andsophisticated prospect. That meansthat your marketing must also besophisticated. It doesn’t mean it can’tbe creative or surprising, it just has tobe smart.

Here are 10 ways you can grow yourbusiness, either by accomplishingthese tasks yourself, or by calling on amarketing firm to assist you in imple-menting them.

1. Direct marketingCreate an e-mail list that makes sensefor your prospects, and update it on aregular basis. Contacting prospects ona regular basis translates into themthinking of you when they have arequirement. Consistency is a key tothis process, and while you certainlydon’t want to overwhelm people withe-mails, you do need to contact themmore than once or twice a year. Thecontent for these e-mails is in the sec-ond tip.

You will need to make a decision ifyou are going to send straight e-mails,or if you are going to send HTML mes-sages with graphics. We recommendgraphics, and most likely throughConstant Contact which tracks howmany are opened, allows people tounsubscribe and that you can tie inwith other programs in order to auto-matically add people to the list.

2. White papersAs a mortgage broker or investmentbanker, the fact is that you do know alot of information that your prospectswould be interested to know, as well.Preparing a white paper on a timelytopic will show your expertise and willmake you a valuable resource to yourcurrent clients, as well as to yourprospects.

Sending such a paper to your clientsand prospects will be seen as a verypositive item in their Inbox. Far fromannoying them, it will make them feel

that you value them. There are a hugenumber of topics you can choose frombased on your geography, producttypes, and most importantly changesin the capital markets.

3. Case studiesMuch like the white papers, case stud-ies make excellent content for yourcurrent clients and prospects. In fact,in cases where you can explain some-thing you did that created an easierprocess, better pricing, or overcomingchallenges will highlight why yourprospects would be well-advised towork with you. This type of content isagain exactly what smart people mayenjoy receiving in their emails. Ifnothing else, they will find this infor-mation interesting to see what types ofdeals are indeed getting financed andwhat their competitors are doing.

4. PublicityThe same contact you are preparingfor your direct marketing can be thebasis of publicity articles or vice-versa.If you are already doing publicity, youcan link to articles achieved in yourdirect mail.

If you are not currently doing pub-licity because you are not certain whatcontent to use there, you can utilizeyour content and target media whowould be interested in telling theirreaders about these subjects. You canoffer to be interviewed about the sametopics, or to prepare a specific versionof the information based on youralready devised content topics.

In addition, you can develop con-tent knowing that it will be useful inmore than one channel. When you aredeveloping a topic for direct mail con-tent, be certain you consider how topublicize that information. When youare developing content for publicity,think about whether the topic can bebroadened into a publicity pitch or anarticle for the online or offline media.

5. Speaking engagementsSome opportunities to speak at con-

ferences require a spon-sorship investment andsome do not, but ineither case, you aremore likely to be con-firmed as a speaker ifyou can bring a smarttopic to the event organ-izers. Those publicationsand associations whoput on conferences andseminars are busy withevery part of the event,and are only too pleasedto have someoneapproach them with apre-conceived ideaabout a topic they canspeak on that matchesthe target audience forthe event.

If you are speaking at an event, inaddition to bringing business cards,be certain that you have your publicrelations person with you to scheduleinterviews for you with any journal-ists who are attending.

Further, you can promote yourupcoming speaking engagements inyour direct marketing, both to attractprospects, but more importantly toshow that you are indeed a recognizedexpert in the field.

6. SEO and Web siteIf your Web site has become an ignoredonline brochure, you can revive it byadding the ability to sign up toreceive your white papers, by addinglinks to publicity achieved into yournews section, and/or by promotingyour speaking engagements.

Adding new content to your Website keeps the search engines interest-ed in your site and increasing theability for people to find you basedupon the fact that you are addingnew content. This method increaseswhat is known as your “organic”search.

You can also increase your organicsearch rankings through conductingan SEO program. This is a complexactivity requiring back linking toother sites, honing in on keywordsand utilizing them correctly, as wellas having the updated analytics toknow how the search parametershave changed and how your targetaudience is reacting to specific key-words.

We definitely recommend that

unless this is a specialtyof yours, you hire aprofessional firm toassist you with this por-tion of your marketing.In a rapidly-changingtechnological climate,this is not a tactic youare likely able to do in-house.

7. Paid searchIf you are inclined toinvest additional dollarsin your marketing pro-gram, you can alwaysuse paid search, whichis predominantly donethese days throughGoogle Adwords. The

sky is pretty much the limit on howmuch you can spend, but it is notterribly expensive to conduct a pro-gram that will help increase yourability to come up higher on specif-ic keywords.

8. Social mediaIt is true that everyone is on socialmedia, but you will be wise to deter-mine exactly where your clients are,and what their mindset is when theyare seeking information.

For a business-to-business market-ing program, it may be much wiser tospend your time and budget on aLinkedIn program than on Facebookor Pinterest.

The reason you won’t want to useevery social media tool available isthat each of them requires content,an understanding of the best way touse that particular tool, and a way topromote those sites you do choose tobe involved in so that you can attractattention.

If you are not already involved insocial media, you are best to selectone of the tools and build a platformfor participating in a very concen-trated effort. Begin by “listening” onthe site, which means monitoringand reading the site, to learn whatyour targets and your competitorsare saying.

Once you have a feel for that tool,you can devise a participation strate-gy that will make you a “popular”voice on the site, and will attract theattention of those you are targeting.Gaining attention will enhance yourreputation through the use of your

“Gaining attentionwill enhance your

reputation throughthe use of your smart

content, and willbuild awareness foryou and your firm.”

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Top 10 Tips to Grow Your Mortgage BusinessWhen your prospects are savvy businesspeople

By Judith Brower Fancher

smart content, and will build aware-ness for you and your firm.

9. Response mechanismsHow do you turn all this activity intonew clients? That must be part ofyour strategy. Certainly, some peoplewill see your direct marketing andcontact you, and certainly othersmay see a publicity article or hearyou speaking, and ask you for moreinformation.

However, in order to make this pro-gram most effective, you may want toconsider adding landing pages to yourWeb site (specific pages that link to yourdirect marketing or online publicity).The landing pages should have a call toaction, or an offer for more informationin order to do an email capture onthose who contact you so that you cancontinue marketing to them.

Indeed, you will find the marketingmost effective if you have automated,or at least pre-planned methodsthrough which to continue the conver-

sation with these newly interestedprospects.

10. Tying it all togetherThe greatest impact you can achieve isto determine your brand message andensure that it goes out in all your com-munications. By committing to a mar-keting program to grow your businessfor the future, you can anticipate thatthe same people who are reading youre-mails will be attending your speak-ing engagements, seeing your publici-ty, and looking at your Web site, whichthey may have found through keywordsearching.

The old rule of total of the partsbeing greater than the sum of eachvery much holds true in marketing.

Judith Brower is chief executive officerof Brower, Miller & Cole, a full-servicemarketing, public relations and adver-tising firm in Orange County, Calif. Shecan be reached by phone at (949) 955-7940 or e-mail jbwermillercole.com.

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The Four Elements of a Perfect Marketing Plan

By Joy Gendusa

Every business needs marketing inorder to grow, and mortgage profes-sionals are no exception. Investing ineffective marketing strategies growsyour business by attracting moreclients, building the loyalty of yourcurrent clients, and building yourcompany’s brand in general. Lookinginto marketing can be daunting forsome business owners, so let me showyou the four elements you should def-initely be implementing in order toput together the most complete mar-keting plan possible. Combining thesefour elements will bring your compa-ny the best marketing results.

Let’s look at each of these ele-ments …

1. Use postcard marketing as your go-to marketing avenueFirst and foremost, you have to getyour marketing message out to yourprospects using an effective marketingmethod. Postcard marketing is a time-

tested way to generate leads andexpand a company’s clientele. This isdone through the use of targeted mail-ing lists. For example, only sendingyour postcards to homeowners whohave a total household income of lessthan $50,000. Targeting specificgroups of prospects will generate thequality leads you can turn into loyalclients.

You can also use postcards to keepyour current clients choosing yourcompany for their mortgage serviceneeds. Marketing is about bolsteringevery aspect of your client base—bothprospective and current. In order tosteadily grow your business you needto use postcard marketing to achieveboth these goals.

2. Use mail tracking tostay ahead of the resultsyour marketing bringsSome postcard marketing companiesoffer a tracking service for their post-card mailings. This allows you to stay

ahead of the curve withyour marketing efforts.Your postcards WILL gen-erate leads for your com-pany, so you want tomake sure you are pre-pared to handle them.Mail tracking gives youthe opportunity to knowexactly when your post-cards will be inprospects’ mailboxes, soyou can prepare for theinflux of new leads.Timing is importanthere, because notpreparing and preparingtoo early can both bedrags on your marketing return oninvestment.

3. Use online follow-up tools to convert more leadsSo your postcards have beendesigned, sent out, and tracked rightinto your prospects’ mailboxes. Thatmeans you’re done, right? Not quite.In fact, it’s only just beginning. One ofthe most important elements of salesis follow-up. Your postcard marketingwill generate leads, but in order tokeep from slipping through your fin-gers you have to follow-up with them.There are many online resources forprospect follow-up, but the best one inmy experience is Google Remarketing.

Google Remarketing is an onlinetool that allows you to implementautomatic follow-up that is targeteddirectly for your online prospects.Google Remarketing tags any visitor toyour Web site, and can tell if they didor did not take the action step youdesired. You can choose to have itcheck if your prospects fill out yourcontact form, make an appointment,download a free report, or anythingelse that you want them to do. If theyleave your site without fulfilling therequirement, Google will show themtargeted ads based on that desiredaction step. It will do so until theyreturn to your site and take the stepyou designated. These ads are dis-played on any site the prospect visitswithin the Google Display Network.This network includes high traffic siteslike Dictionary.com, HGTV.com, andCNN.com. All of this happens auto-matically after you set it up, and youdon’t pay a cent until a prospect actu-

ally clicks on your ad.

4. Use responsetracking to con-tinuallyimprove yourresultsThe last element—calltracking—is a tool thatempowers you, the busi-ness owner, to be in fullcontrol of your market-ing. It gives you theresponse data you needto continually improveyour marketing resultswith each campaign. Thisdata is gathered through

the phone responses your postcardsgenerate. A routing phone number isused on your postcard, which for-wards calls to your office phone. Thisrouting number acts as a filter, track-ing your phone responses for eachcampaign. This lets you see how dif-ferent design or copywriting tweaksaffect your response. It also recordsyour phone calls, so you can qualitycheck the reception and sales process-es your prospects encounter uponcalling your company.

Key points:n Postcard marketing is a time-tested

method for generating leads.n Mail tracking helps you prepare for

the influx of new clients in a cost-efficient manner.

n Google Remarketing follows up withonline prospects that don’t respondright away.

n Phone response tracking empowersyou to continually improve yourmarketing results.

This advice is based on 15 years oftrial and error with my own postcardmarketing company. That is how I knowit is proven to work. Good luck!

Joy Gendusa is chief executive officer andfounder of PostcardMania. She beganPostcardMania in 1998 with nothing buta phone and a computer and zero invest-ment capital. By 2008, revenues reachednearly $19 million and the companynow employs more than 150 people,prints four million and mails two millionpostcards each week representing morethan 40,000 customers in over 350industries. For more information, call(800) 628-1804, ext. 342.

“Postcard marketingis a time-tested way to

generate leads andexpand a company’s

clientele.”

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New Ideas to Make Your Direct Mail Stand Out

By Jean LeBlanc

Are you looking to add more features toyour direct marketing, to stand out inthe mailbox, increase your conversions,or make tracking ROI easier? Here are afew ideas:

PURLs PURLs are “PersonalURLs” or landing pagesbuilt uniquely for each ofyour mail recipients. Allof your PURLs in onemailer will probably havethe same offer, but whenrecipients open their ownPURL, it’s unique forthem.

Let’s say you incorpo-rate PURLs into your VAIRRRLs mailer. Sgt. Jonesreceives your mailer andis intrigued by his PURL.So he visits his PURL,where he’s greeted byname and with personal-ized information on the new loan thathe’s seeking. It offers options such as“Call Now” or “Fill out the form at rightfor a more accurate rate quote.” You’recapturing additional data which canthen be fed to your salespeople to helpyou close more deals.

Personalized QR Codes Personalized QR Codes take PURLs onestep further: Instead of having a Webaddress to type in, it uses a QR Code cre-ated uniquely for each mail recipient.They simply scan the code and aretaken straight to their unique landingpage. For your prospects who havesmartphones, this is infinitely easier.Just remember, though, that not allyour recipients will have a smartphone,even today.

PIN Numbers You can also incorporate a unique PINNumber in your mailer for each recipi-ent. It’s done automatically during theprinting process, in conjunction withyour log-in to your leads database.When the mailer recipient calls in topursue the option of a new or refinance

loan, the LO simply asks for their PINNumber. The LO is able to pull up allthe info you have to-date on thisprospect, so that they don’t have torepeat steps getting their address, loanamount, type of loan, etc. It saves time

and makes your LO lookmore professional.

Toll-free tracking number Many printers will add atoll-free tracking numberon your mail piece. Datagathered from your track-ing number will capturetheir phone number, dayand time of day theycalled, and other addi-tional data you wanttracked. Often it will alsorecord the call for you, sothat you and your staffcan go back and listen tocalls for training refine-

ment purposes. These are particularlyuseful if you are testing a couple ofoffers before you commit to mailing toyour entire list. Let’s say you plan tomail an FHA streamline offer to a list of10,000, but you can’t decide whether tooffer a free appraisal or $500 off closingcosts (in your market, the cost is aboutthe same). Your printer can create twoversions of your mailer, each with aunique offer and a toll-free number,and mail 1,000 to one group and 1,000to a second group of 1,000, and thencheck your results. Which offer workedbetter?

Consider these added features, asthey not only make your offer moreattractive, but tracking results is easier,too!

Jean LeBlanc is director of marketing forGuaranteed Home Mortgage Company.For more marketing tips, download theeBook, 13 Ways to Juice Up YourMarketing in 2013, by going tojoinghmc.com and clicking on the eBookoffer midway down the page. She may bereached by phone at (914) 696-3400.

“Instead of having aWeb address to typein, it uses a QR Codecreated uniquely foreach mail recipient.”

Lead Generation Through Organic Searchand Search Engine Optimization

By Kat Hollowell & Steven Xavier Muldrow

As the cost of leads in themortgage space continuesto rise as well as the num-ber of times the leads arebeing sold, it quicklybecame obvious that thebest and most effective wayto generate leads would bethrough organic search andsearch engine optimization(SEO). After all, each day,three billion searches occuron Google alone, a 25 per-cent increase over 2010and a 250 percent increasefrom 2006. We are stillspending a chunk of ourbudget on traditional leadsources however we haveshifted our focus so thatthose leads can fill ourpipeline “right now” andorganic search can be builtout and eventually bring inthe majority of our leads.We have found that theleads generated throughour Web site have had ahigher conversion ratebecause those leads are notbeing contacted by multi-ple lenders and are trulyinterested in talking to ourcompany.

As we began down thepath of SEO, the first thingto decide on was a budget.This has to be thought oflike any other marketingspend. There is a brandingelement to it, however, youare really engaging in thisbecause you want to convert leads so youare spending money on lead acquisition.You have to decide if you are going to hiresomeone to join your team in-house or gowith an outside firm. We knew we wouldcontract this project out, so we met with afew firms specializing in SEO. We wanted acompany with a proven track record and alarge team devoted to different areas ofthe project because there are a lot of mov-ing pieces to SEO.

Once we had decided on the firm we

wanted to use, we workedwith them to create the“Cost of Not Ranking” whichshowed a ballpark of theleads that we could be gen-erating with SEO and whatthat would look like for ourprofitability. This documentwas provided to us from ourSEO firm, and I wouldrequest the same thing fromyours. You can also get a fewdifferent sample excelswhen you search “The Costof Not Ranking” on Google.We used this document toget the project signed off onas a company objective, itwas an easy sell.

You should understandthat even when contractingthis project out there is stillwork to be done withinyour company to get upand running. For example,you need to decide on thekeywords that you want tobe ranked for, in otherwords, what are your con-sumers searching for? Youmay also need to do somework to update the contenton your Web pages so thatyou can be found for thosekeywords. The firm youchoose should be able toput all these action itemstogether for you and helpyou along the way butknow you will need to carveout some time to workthrough it.

We have been working with our SEOcompany for three months now and weare starting to see the results. We havemoved from not ranking in most cases forour keywords, to ranking in the top 20 forsome of them. We aren’t going after easyterms like “Petaluma Mortgage” either, weare going after strong keywords like“California Mortgages” or “First-TimeHomebuyer” and other competitive key-words so we are extremely excited aboutthe results.

“As business continuesto move forward on a mobile platform,

social media continues to become

a larger part of everyday business and

lead generation.”

“To fully benefit from the use of

Twitter and Facebook,companies must

concentrate on threestages: Grow, Engage

and Monetize.”

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Social networking cancreate leads as well as further your relationshipswith your consumersAs business continues to move forward ona mobile platform, social media continuesto become a larger part of everyday busi-ness and lead generation. However, socialmedia platforms will only produce leadswhen they are used correctly. LinkedInseems to be the best platform for business-es to produce leads, simply because it’sdedicated strictly to professional network-ing. A study by Hubspot showed thatLinkedIn’s visitor-to-lead conversion was2.74 percent, nearly three times higherthan Facebook and Twitter. However, mul-tiple platforms can play essential roles in acompany’s marketing strategy.

LinkedInComplete Profile and Groups: It is important

to fill out your profile completely, makingsure that you are placing keywords through-out so that people searching your businessor industry will be able to find you quickly;be sure to include your Web sites so thatpotential leads can jump to your site effort-lessly. The biggest tip I can give you is to joingroups within your industry. This is wherenetworking will occur and where many ofyour leads will come from. Groups providean opportunity for discussion between peo-ple within your industry and people lookingfor reputable companies in your industry.These discussions allow for you to showyour expertise and the opportunity to con-nect with people and grow your network.The larger your network is on LinkedIn, thelarger the opportunity for more leads.

Facebook and TwitterGrow, Engage, Monetize: To fully benefitfrom the use of Twitter and Facebook,

companies must concentrate on threestages: Grow, Engage and Monetize. Inorder to create leads, you must firstinform the public who you are andwhat you do; this is a part of the growthstage and is where your concentrationshould be focused on growing your fol-lowing. The next stage is to engagethese new followers so that they want tointeract with the brand. Examples ofthis are the use pictures, questions,apps, games, giveaways, etc. Once thefollower becomes engaged and a rela-tionship starts to form between thecompany and the follower, you shouldpush users towards buying and becom-ing advocates for the company. Gettingfollowers to advertise for you is whatmakes social media such a powerfultool. And the amazing thing is that allthree stages are continuously workingtogether with no limit in sight.

No matter the platform you choose,it’s important to remember that thesesites are not magic; it takes time andeffort to gain the benefits these sitespossess. You need to monitor and eval-uate your strategy daily and mostimportantly stay consistent with thetiming of your posts/updates and theimage of your brand. Like anything inbusiness, it’s not easy, but when usedcorrectly, social media can assist yourcompany by leaps and bounds ahead ofthe competition.

Kat Hollowell is director of marketing atFirst California Mortgage Company. Shemay be reached by phone at (707) 796-7512or e-mail [email protected]. StevenXavier Muldrow is the social media coordi-nator at First Cal, and has an MBA in GlobalManagement. He may be reached by [email protected].

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By Andrew Liput

Risk managementis not a newconceptToday, more than ever,mortgage lenders and

their warehouse bank and investorpartners are focused on compliance,quality control (QC) and risk manage-ment. The reasons are very plain, lossesfrom defective loans, caused by poorunderwriting, fraud or negligence inorigination, and fraud and negligenceat the closing table, have caused unac-ceptable losses. These losses not onlyimpact their businesses, but the con-sumers they serve. As a result, federaland state regulators and GSEs, includ-ing the OCC, NCUA, FDIC, HUD-OIG,FHA, FNMA and the recently formedConsumer Financial Protection Bureau(CFPB) have begun implementing strin-gent consumer protection measuresaddressing not only loan quality, salestactics and compensation issues, butrisks connected to third party serviceproviders. Closing professionals, includ-ing attorneys, escrow agents, titleagents and notaries, handle mortgageproceeds and critical collateral securitydocuments, giving them significantauthority and power over the loanprocess. It also provides them withample opportunities to exploit theirposition in the loan closing transactionto commit fraud and otherwise servetheir self-interests.

In the past decade, significantprogress has been made within themortgage industry to address some, butnot all, of the pressure points that cancause fraud and hurt consumers. Greatstrides in technology and risk manage-ment tools have, for example, givenlenders the ability to verity borroweridentities, confirm property values, andevaluate credit risk. Lenders havefocused on quality control, and are nowexpanding the focus to “quality assur-ance.” These initiates are being toutedby the GSEs and regulators as the indus-try seeks to create a loan process that isquality conscious before a product is

sold in the secondary market. The onearea of the loan process that has seenlittle or no progress in risk manage-ment, quality control and quality assur-ance has been the closing process.

Why closing table riskmanagement has beenoverlookedIn the past, lenders have assumed therisk associated with the unregulatedand unsupervised nature of the closingprocess because losses from fraud at theclosing had historically been a smallpercentage of overall mortgage frauddamages. That is why most lendersfocused whatever spending they couldallocate to fraud deterrence on frontend fraud detection software, such associal security number verification,automated appraisal reviews and simi-lar products. According to the MortgageBankers Association (MBA), lendersspent approximately $1 billion on frauddeterrent software to use in the origina-tion and underwriting process in 2011.The amount of money spent to addressfraud and negligence at closing was notin the calculus.

The numbers can no longer beignored.

The FBI has allocated more agentsnationwide to investigating escrowfraud than any other white collar crime.In 2011 the FBI reported $11 billion inmortgage fraud losses from SuspiciousActivity Reports (SARs) filings, and for2012, the number is estimated to comein at $13 billion. The FBI estimates that15 percent of those losses are directlyattributable to escrow and closingfraud. These figures appear to be sup-ported by the Financial CrimesEnforcement Network (FINCen) July2012 study of SARS reports between2003-2011 which indicated that therehas been unacceptable growth in fraudlosses in the escrow and closing area,with a 20 percent increase in the mostrecent period. This means that therewill be at least $2 billion in reportedfraud losses from escrow and closingagents this year.

While fraud can take place in anypart of the loan process, lenders are

most at risk at the closing. Closingagents, who are responsible to disbursethe lender’s money, to supervise theexecution and delivery of the deed,note and mortgage instruments, aretraditionally subject to little or noscrutiny. Professional licensing, whileimportant as a barrier to entry into theprofession, is not risk management.There is not one license that covers allof the various actors who handle fundsand documents during a closing which,depending upon the state or region,includes lawyers, escrow agents, titleagents, lenders, closers and realtors.Furthermore the licensing process is notuniform, comprehensive and ongoing,nor is there a mechanism to combineand share data nationally for all mort-gage industry participants.

The current vetting by title under-writers and some banks is primarilystatic. It is not ongoing, it is not uni-form, it is generally focused on entities,and does not involve the sharing of datanor is that data maintained in a useraccessible database.

That leaves the closing protectionletter or insured closing letter as it issometimes called, which is a warrantyletter and not insurance, issued by titleunderwriters in some but not all states(New York being a glaring example). Theletter is issued with very little risk man-agement mainly because title under-writers have little or no relationshipbeyond the contract title producer whowrites their policies (and may work formore than one issuer). These producerstypically delegate closing functions tothird parties, independent contractorsor non-employee agents who are so farremoved from the underwriter that it isimpossible for them to evaluate the riskassociated with that person’s grant ofauthority at the closing table. There isalso the conflict of interest associatedwith underwriters who must considerall operational decisions in the contextof a sales driven environment. Lastly,underwriters have built an unfortunatereputation among lenders and otherclaimants who have sought to recoverunder a letter, finding the well-fundedinsurers ready, willing and able to liti-

gate rather than pay claims.Consequently lenders and warehousebanks universally deride the CPL as gen-erally “worthless.”

This volatile environment, facedwith regulatory pressures never seenbefore, have called out for a new solu-tion to an age old problem: How toidentify and manage the risk of closingagents in a manner that is independentfrom conflicts, comprehensive, uni-form, ongoing and offering shareddata?

Other models havealready succeededThe mortgage industry has been favor-able to innovation addressing third-party service provider risk in the past,and have readily embraced risk man-agement providers offering outsourcesolutions. These solutions demonstratethat when lenders are faced with regu-latory and loss pressures they will seekout and adopt third party solutions asan alternative to the cost and expenseof building internal processes on theirown.

For example, pressures to creategreater risk management surroundingappraisals resulted in the proliferationof appraisal management companies(AMCs). These entities manage appraisalrelationships, being responsible to veri-fy appraiser credentials and skills andoversee an independent property eval-uation process helping lenders meettheir regulatory obligations in this area.

When lenders began to experienceunacceptable losses from poor qualitybroker originations (TPOs), private com-panies emerged charging brokers a feeto conduct an independent risk assess-ment and then providing this data tolenders as a pre-contract screening tool.

Perhaps the most successful exampleof an industry developed response to aglaring risk management issue hasbeen the establishment of the NationalMortgage Licensing System (NMLS).Recognizing the deficiencies in a non-uniform approach to qualifying andlicensing mortgage originators, and the

TheLast

FrontierAddressing Closing Table Risk for

Warehouse Banks, Mortgage Lenders and Consumers

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lack of short sale code continued from page 28

just a portion of the many codes in thesystem designed to handle all of the var-ious scenarios possible in every aspect oflending covered by the American creditreporting system, as of today there is nospecific code for a mortgage transactionvia short sale.

Short sales are difficult to deal withdue to the complexity of the transaction,and are reported with a foreclosure sta-tus. Historically this worked, as a shortsale transaction was traditionally in con-junction with foreclosure activities. Intoday’s mortgage marketplace, especiallyin light of the Federal Housing FinanceAgency’s (FHFA—the government agencyregulating Fannie Mae and Freddie Mac)short sale policy statement of Nov. 1,2012, that allows homeowners to shortsale without ever being late on theirmortgage, the old system of reportingshort sales needs updating.

Some in the industry believe this is aproblem and are working on it; othersseem to believe that the status quo is thebest route and reporting short sales witha tie to a foreclosure is accurate.Considering the mortgage crisis we arestruggling to overcome, and the numbersof consumers who were put into extraor-dinary circumstances, I believe that thesystem needs to be carefully reviewedand altered as many consumers whoshort sell today are much better creditrisks that the pre housing crisis foreclo-sure consumers. It seems that others inthe industry have similar beliefs.

In a May 2011 report by StevenChaouki, a group vice president atTransUnion, titled “Life After Foreclosureand Hidden Opportunities,” he presentsa hypothesis that would indicate:

1. Defaulting on a mortgage causes tem-porary excess liquidity. This excess liq-uidity masks the true risk of the con-sumer as he goes through the foreclosureprocess, and 2. Certain consumers who defaulted on amortgage in the recent recession only didso because of the recession—they areotherwise good credit risks.

Another person who is very critical ofthe current system is Pam Marron ofBankers Mortgage who has spent thepast 24 years originating mortgages inthe Tampa, Fla. market. This is one of theregions devastated by the housing crisisand she sees this issue as “one of thegreatest problems facing the housingmarket in its struggle to rebound.” Inworking with Tampa area homeownerswho have been plagued with this report-ing problem over the past couple yearsshe has documented two major prob-lems for homeowners:

1. With no short sale specific code thereporting of a foreclosure status resultsin a denial of a mortgage in both FannieMae and Freddie Mac automated under-writing systems. This stalls past short sell-

ers from re-entering the housing market,even after the required timeframes forreentry after the short sale have passed.2. Many lenders are still telling underwa-ter homeowners that they must be delin-quent on the mortgage to get short saleapproval, contrary to the new FHFA shortsale policy. This enables the continuationof the current system of reporting shortsales as a foreclosure.

Since over the past couple years Pamhas had to deal with more short sales inthe Tampa market than mortgage origi-nators in most other parts of the country,she has identified two solutions to theproblem. One a quick term band aidetype approach to help consumers rightnow, then the long term fix that mayrequire government assistance to ulti-mately provide the correction needed ona systemwide basis.

The quick fix is to get the short salelender to provide a letter at closing to theunderwater homeowner that simplystates “this mortgage closed as a shortsale, not as a foreclosure. Any credit mark-ings reflective of a foreclosure should bedeleted.” This letter can be used by themortgage credit reporting agency to cor-rect the repository data to more accurate-ly reflect the short sale status.

The long term fix, and the one thatbrings much greater challenges, is thecreation of a specific short sale codeadded the Metro2 system so that thismanual step is no longer needed. Thiswould allow the lenders to properly trackthe short sellers in the automated under-writing systems. It would also set up theproper tracking to determine if the shortsellers created from the housing crisis area different credit risk than traditionalforeclosures so that this category of trans-actions can be properly evaluated fortheir true credit risks. That will requiresystem changes, analysis and those taketime when talking about systems as largeas those that operate the United Statescredit reporting industry.

One closing thought that has beenprovided by many mortgage originatorsrecently on how to help the mortgagemarket improve, for lenders that do notfollow the FHFA Short Sale policy effectiveNov. 1, 2012 be held accountable fortheir disregard of the policy. They reportto many consumers still being told thatthey must be delinquent on their loanto short sale. With the CFPB andCongress looking at the credit reportingindustry and the mortgage marketclosely, it’s possible that the forces tocreate these changes are in place andhelp may soon be on the way for theestimated 16 million still underwaterAmerican homeowners.

Terry W. Clemans is executive directorof the National Consumer ReportingAssociation (NCRA). He may be reachedat (630) 539-1525 or [email protected].

The Resource Registry is a directory of lenders (wholesaler or retail that

are recruiting), affiliated services and resources

that is seen by more than 191,181active Professionals.

MortgageProfessionalResourceRegistry

Call 516-409-5555, ext. 4to register your company.

See the National Mortgage Professional Magazine’sResource Registry on pages 56-59

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The name Tom Stanton first came tomy attention in the summer of 1996. Iwas preparing a talk for the MortgageBankers Association’s AnnualConvention in San Francisco that com-ing October. The assigned topic wasmortgage banking industry profitabili-ty. Five years earlier, Stanton had writ-ten a controversial book about therisks Fannie Mae, Freddie Mac and theother 12 government-sponsored enter-prises (GSEs) were (potentially) creatingfor taxpayers. In the book, State ofRisk: Will Government-SponsoredEnterprises be the Next Financial Crisis?,Stanton examined the structure of theGSEs and how they distorted the mort-gage finance market and created risk.Needless to say, State of Risk verymuch colored the presentation I madethat year.

Other than knowing that Stantonhad a connection to Johns HopkinsUniversity, where he remains a Fellowat the Center for AdvancedGovernmental Studies, I’d lost track ofhim for years. He reappeared in 2009as a senior staffer to the FinancialCrisis Inquiry Commission (FCIC). Hisfocus at the FCIC was on governance,organization, management and riskanalysis. In the course of his workthere, Stanton interviewed dozens ofCEOs, traders, government officialsand others about the causes of thefinancial crisis, and more specificallythe roles of management and gover-nance in the crisis. The crisis providedtesting-grounds for such an analysisbecause it revealed the winning andlosing firms.

In the aftermath of theCommission, which sadly missed aconcise conclusion of the chief causeof the crisis, Stanton assembled hisnotes and further explored the role ofgovernance, management, organiza-tion, risk and their bearing on the cri-sis. The product of his examination ofthe wreckage is, Why Some FirmsThrive While Others Fail: Governanceand Management Lessons From theCrisis.

The book’s thesis is that there was asignificant difference in the quality ofgovernance, organization and man-agement between firms that survivedthe financial crisis and those that did-n’t. To support and prove the point,Stanton focuses on four firms that sur-vived—Goldman Sachs, JPMorgan

Chase, TD Bank andWells Fargo—andeight firms that failed,including AIG, Bank ofAmerica, Citigroup,Countrywide, FannieMae, Freddie Mac,Lehman Brothers andWashington Mutual.Stanton then proceedsto examine how eachfirm sealed its fate, forbetter or worse.

What are the char-acteristics of success-ful firms that made itthrough the crisis andthe unsuccessful firms that failed orwere rescued out of necessity by thefederal government? This is the corefocus of Stanton’s research at the FCICand later for the book.

What we learn from the research—and not surprisingly, it’s quite scholar-ly—is that successful firms have muchin common, while unsuccessful firmsfail in a wide variety of ways. The com-monalities among the successful firmsincluded: discipline, a long term per-spective on their businesses, strongcommunication and information sys-tems, and maybe most importantly, aculture that extolled these attributes.For example, JPMorgan Chase had allof these attributes and combined themwith what Stanton described as a“fortress balance sheet.” This combina-tion saved the day for the bank.However, for Goldman, it was its elab-orate and sophisticated system ofchecks and balances between risk tak-ing and risk management along withthe aforementioned attributes thatmade the firm a survivor.

Firms that failed—or were rescuedbut caused great losses to the financialsystem—each had one or more majorweakness, often many, and few if anyof the four basic attributes. For exam-ple, for Countrywide it was its rapidgrowth and hunger for profits that didin the company despite its fabled stateof the art technology. For WaMu, fail-ure was largely due to its series of fast-paced acquisitions and its failure toput the entire company on a commonplatform, or operating system, alongwith few of the four core virtues.

All the failed companies also had, toone degree or another, managementsthat exhibited common but fundamen-

tal weaknesses. ForFannie Mae it was thepursuit of short termgrowth and profits,razor thin capital andhigh leverage and neg-lect of substantialinvestment in its infor-mation systems. ForWaMu it was a com-pensation program forthe chief risk officerthat connected it toproduction growth.

As suggested, acommon operatingplatform that connect-

ed the entire enterprise was essentialfor the successful. According toStanton, a firm’s capacity to manage itsoperations was impaired without sucha system since management couldn’thave a wide-angle lens from which toview and assess the firm’s aggregaterisk. JPMorgan Chase and Goldmanhad such systems and used them; AIG,Citi, Fannie and WaMu didn’t have acommon platform, and they paid theprice for not having them.Countrywide had such a platform, butits other weaknesses left it blind towhat the data was signaling.

What none of the failed firms had isthe paramount ingredient that Stantonfound in all of the successful firms,namely “constructive dialogue.” This isa combination of human and system-wide communications inside the firm.With a constructive dialogue every-thing is essentially linked togetherinternally—people and systems. This issimple and direct and it allows fore-warnings to be sounded in the day today operation of the firm. It’s an envi-ronment where close and continuouscommunication between systems andmanagers can offer a “head’s up” topotential problems, then address themhead on, before a black swan eventsurfaces to shipwreck the firm. Thiscapacity and foresight put the success-ful firms on the defensive long beforethe others saw the approaching storm.They saw the trouble first, not last.

Wells Fargo was cited as a firm thatoriginated mortgages across the prod-uct spectrum but carefully avoided theriskiest mortgage products, such asoption ARMs. Its managers’ aversion torisk saved the firm, Stanton observed.Countrywide, on the other hand, kept

right on digging, never finding a mort-gage product that was too risky toavoid. As a result, and as we all know,it collapsed, nearly bringing downBank of America in the process andinflicting billions of dollars of losses oninvestors.

To be successful, constructive dia-logue must be employed in the firmboth vertically and across businesslines. Stanton writes, “Successful firmscreated organizations and processesthat fostered a constructive dialoguebetween managers of revenue produc-ing units and risk officers, to helpensure that short-term returns did notresult in decisions that increased thefirm’s vulnerability to potential fail-ure.”

This dialogue is said to foster a con-structive discussion between businessunit managers and risk managers thatis encouraged and joined by the CEOand promulgated by the board ofdirectors. Constructive dialogue maybe best seen as the continuous solici-tation of feedback throughout theenterprise. It creates and promotes a“constructive tension” between profitcenters and risk officers, between theCEO and the board, and between theCEO and senior managers. At success-ful firms problems are uncoveredbecause management wants bad newsso it can be addressed and eliminated.By contrast, unsuccessful firms failedto recognize the errors of its way.

A pronounced example of this ten-sion was the “system of comptrollers”that Goldman employed to check itstraders risk appetites. Risk was quanti-fied and hedged to insulate the firmfrom harm. According to Stanton, con-structive dialogue was also the singlemost important improver of decisionmaking for the firm. “Feedback is thegift that keeps on giving”, he wrote.

Stanton says, “A distinguishing char-acteristic of unsuccessful firms wastheir pursuit of short-term growth andprofits without appropriate regard forthe risks neither involved nor con-structive dialogue with those con-cerned about risk.”

Examples of firms and CEOs whoavoided this necessary dialogue andpursued rapid growth in size and prof-itability were Angelo Mozilo atCountrywide and Leland Brendsel at

Book ReviewNational Mortgage Professional Magazine’s

“Why Some Firms Thrive While Others Fail: Governance and Management Lessons From the Crisis”

By Thomas H. Stanton (Oxford University Press 2012)B Y T O M L A M A L F A

nmp magazine’s book review continued from page 53

Freddie Mac. Mozilo apparently neverfound a mortgage product he couldn’tembrace, whereas Brendsel fired hischief credit officer, ostensibly prefer-ring to surround himself with yes menand women.

Sadly, Stanton avoids any broad dis-cussion of hubris though its undercur-rent permeates the entire book.Frequently, it’s the dominant butunspoken weight on the firms. Theabsence of this finding of overbearing-ness on the part of CEOs, combinedwith some minor but annoying repeti-tiveness is the book’s own very minorshortcoming.

Why Some Firms Thrive While OthersFail is a book that CEOs and risk man-agers should read and study to knowwhat to do and what not to do.However, it’s no fast, easy read. Thebook is quite technical, demandingmuch concentration from the reader.Reflecting its academic bent, itincludes an extensive 26-page roster ofnotes, hundreds of footnotes and 16pages of reference materials, many

from the FCIC’s investigation andheretofore unpublished. Stanton’saccess through the FCIC to people anddocuments provides much new pri-mary source materials for researchersto draw upon.

For all these reasons, it may be thebible of books on governance. Too badit wasn’t written six years earlier andmade mandatory reading for CEOs.

Tom LaMalfa is a 34-year veteran mort-gage-market analyst and researcher. Hehas done pioneering work in the areasof secondary markets, wholesale mort-gage banking, mortgage brokerages,financial benchmarking and GSEreform. Tom continues since 1977 to co-author an old-fashioned mail newslet-ter, The Holm Mortgage Finance Report.In the aftermath of the financial crisis,his focus is on Washington, D.C. and theregulatory burden it is imposing on con-sumers and lenders. His 21-year oldresearch firm, TSl Consulting, does sur-vey research. He may be reached by e-mail at [email protected].

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traffic sources, referring pages, key-words, etc. This allows you to confirmhow well you might be doing withorganic hits and SEO, marketing cam-paigns with partner sites or referralpartners, etc. You can make adjust-ments based off these detailed statisticsto improve traffic and new customers.

These are just a few of the unlimitedbenefits in the power of online market-ing, branding and exposure. The growthrate of online searches and traffic in ourindustry makes it clear what the futureof mortgage shopping and homebuyinglooks like. Don’t get lost in “cold” calls

and make people call you. Always focuson referrals, but set up an online mar-keting plan and presence to let yourbrand and reputation automaticallyresult in daily calls from new potentialclients without lifting a finger.

Andy W. Harris, CRMS is president andowner of Lake Oswego, Ore.-basedVantage Mortgage Group Inc. and2010-2011 president of the OregonAssociation of Mortgage Professionals.He may be reached by phone at (877)496-0431 or e-mail [email protected] or visitAndyHarrisMortgage.com.

the elite performer continued from page 4

failure to share data on bad MLOs, anon-profit created by an industry asso-ciation established a national databasefor the registration, evaluation and cre-dentialing of mortgage loan origina-tors. Initially offered in a handful ofstates in 2008, today every state partic-ipates in the NMLS program.

Thousands of lenders payfor risk tools todayIn order to assure the quality of theirloans, for themselves and for investorrepresentation and warranty agree-ments, lenders today universally uti-lize third-party fraud tools for whichthey pay-per-click fees during the loanmanufacturing process for every sin-gle loan.

Some of these tools include bor-rower identity checks through SocialSecurity Number verification, auto-mated property valuation verifica-tions, bank deposit verifications, cred-it checks, tax return verifications,flood zone verifications, automatedunderwriting for credit risk, and oth-ers. Each of these tools have becomeuniversally adopted and utilized ascritical loan process resources, andeach involves a separate fee (between$7-$25) charged to the lender.

To date, despite regulatory require-ments that lenders have something inplace to identify, manage and reportclosing agent risk, there is no nation-ally accepted service and source ofdata addressing closing agent riskavailable to lenders beyond what isoffered by a few new closing agentrisk management specialty firms. Eachof these firms approach the problemfrom the same perspective but withdifferent models. However what theindustry needs is a uniform approach,which is comprehensive and inde-pendent so as to be respected bybanks and consumers, and which canoffer appropriate tools at an afford-able cost.

The market is very largeand ripe for innovationThe MBA’s data reflects that the targetmarket is vast with nearly 8.5 millionresidential mortgage closings in 2012on $1.4 trillion in mortgage funding(down from a height of 12 million in2007), including those resulting fromnew and existing home purchases,second mortgages, refinances, homeequity loans, foreclosure sales andreverse mortgages. This large marketcan be divided into four distinctgroups of potential customers:

n Those who want closing agent verifi-cation for financial transaction secu-rity (i.e. warehouse banks, mortgagelenders, community banks, creditunions and possible GSEs like FHA,FHLMC, FNMA and HUD );

n Those who want the benefit of clos-

ing agent verification to enhancetheir credentials and attract business(i.e. real estate lawyers, notariespublic, realtors and real estate set-tlement companies),

n Those who want access to closingagent information to assist them inmaking decisions about whom tohire when they need representationat a real estate closing transaction(i.e., consumers), and

n Those who want a better insuranceproduct and relief from risk and loss-es (title insurers)

The U.S. Census Bureau reports thatthere are 74 million homeowners inthe country, of whom 34 million haveat least one mortgage, and 12 millionhave two or more mortgages.According to the MBA, homeownerstypically refinance their existing mort-gages at least once every five years.

Based on available data from theMBA, NCUA, ALTA, NNA, ABA, the U.S.Census Bureau and other industrysources, there are approximately18,000 mortgage lending entities(banks and non-bank lenders); 7,700credit unions, and 250,000 settlementagents (escrow and title agents, realestate attorneys and real estatenotaries) in the United States, as wellas a half dozen major underwritersthat dominate the title insuranceindustry.

Warehouse banks and lenders rep-resent the key segment of the industryto drive a new risk management pro-gram. They need a compliance tool tomeet regulatory pressure, they are fac-ing an aggressive audit environmentfrom state regulators and alsoinvestors that now re-underwrite eachloan before it is sold and they areexpected to protect consumers fromharm from third parties who may actas agents in the mortgage process. Asthe regulatory environment has solidi-fied, and the agencies and supervisorybodies have begun pressing lenders todemonstrate their commitment tomeet risk management expectations,we have seen a growth in communica-tions from banks seeking the pro-grams and services to assist them inthis regard.

Policymakers wantchange and consumerswant protectionThe author has had numerous meet-ings in Washington, D.C. with theCFPB, FDIC, OCC, NCUA and other poli-cy makers to introduce the author’svetting program and insurance con-cept, answer questions about industryrisk issues and consumer loss data,and establish personal relationshipswith key government figures. Duringthose meetings, the overall responsewas very positive and supportive ofindustry-led initiatives to address reg-

ulatory concerns about quality assur-ance and consumer protections.Consequently it is very likely that in2013 we will see broader acceptanceof escrow and closing fraud deterrencetools in the marketplace.

Since the CFPB’s third-party serviceprovider management announcement(which simply extended to non-bankentities rules in place for years appli-cable to supervised banks) was maderather recently in April 2012 and onlybegan to be widely circulated in sum-mer 2012, the full impact of this newcompliance requirement among mort-gage lenders has yet to be felt.

The next 12 months in the industrywill see incredible growth in the areaof closing agent risk management. It islikely to become an integral part ofmortgage lender quality assurance

programs as it move towards an indus-try utility, much like appraisal man-agement, broker management, andother mortgage quality and compli-ance tools.

Andrew Liput is president and CEO ofSecure Settlements Inc., a company hefounded after nearly 10 years studyingthe problem of escrow and closing fraudand the uninsured risks associated withmortgage closing professionals. In July2012 he was invited by the MBA toaddress the CFPB and Closing Agent Riskat the Fraud and Risk ManagementForum in Dallas. In December 2012 heprovided a formal opinion to theNational Association of InsuranceCommissioners Title Insurance TaskForce for its White Paper on Escrow andTitle Reform. He is the author of numer-

the last frontier continued from page 50

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and encouraging the return of privatemortgage capital. To ensure access tomortgage capital for low-wealth andlow-income borrowers and communi-ties, however, efforts must be made toensure that private capital attends tothese markets and to eliminate any ves-tiges of the discriminatory lendingpractices that played such a prominentrole in the buildup to the recent crisis.

“The pendulum on access to credithas swung too far in the direction ofhindering it,” says Eric S. Belsky, man-aging director of the Joint Center.“While it will take time–perhaps years–to reform all aspects of the housingfinance system that are in need of it,the path forward is coming into view.This report points the way toward animproved system that provides broadaccess, assures liquidity even in timesof crisis, reengages private capital, andstrengthens the federal role in anchor-ing the market while better protectingtaxpayers and serving American home-buyers and homeowners.”

Goldman Sachs andMorgan Stanley ReachAgreement With FederalReserve on ServicingPractices

Goldman Sachsand MorganStanley havereached agree-ments in principle

with the Federal Reserve Board to pay$557 million in cash payments and otherassistance to help mortgage borrowers.These agreements are similar to thoseannounced on Jan. 7, 2013, between 10mortgage servicing companies and theOffice of the Comptroller of the Currency(OCC) and the Federal Reserve Board.Like the other institutions, GoldmanSachs and Morgan Stanley were subjectto enforcement actions for deficientpractices in mortgage loan servicing andforeclosure processing.

The sum paid by Goldman Sachs andMorgan Stanley includes $232 millionin direct payments to eligible borrow-ers and $325 million in other assis-tance, such as loan modifications andforgiveness of deficiency judgments.More than 220,000 borrowers whosehomes were in foreclosure in 2009 and2010 with the former subsidiaries ofGoldman Sachs (Litton Loan ServicingLP) and Morgan Stanley (SaxonMortgage Services Inc.) will receive cashcompensation under the agreements inprinciple. Eligible borrowers are expect-ed to receive compensation rangingfrom hundreds of dollars up to$125,000, depending on the type ofpossible servicer error.

Previously, the OCC and the FederalReserve reached agreements withAurora, Bank of America, Citibank,JPMorgan Chase, MetLife Bank, PNC,Sovereign, SunTrust, U.S. Bank, and

Wells Fargo. With the addition ofGoldman Sachs and Morgan Stanley,more than 4 million borrowers willreceive a total of $3.5 billion in cashcompensation while an additional $5.5billion will be provided by the servicersfor mortgage assistance.

A payment agent will be appointedto administer payments to borrowerson behalf of the servicers. Eligible bor-rowers are expected to be contacted bythe payment agent by the end of Marchwith payment details. Borrowers willnot be required to execute a waiver ofany legal claims they may have againsttheir servicer as a condition for receiv-ing payment. In addition, the servicers’internal complaint process will remainavailable to borrowers.

The Federal Reserve continues towork to reach similar agreements inprinciple with other servicers that arenot yet parties to the agreements, butthat are also subject to enforcementactions for deficient practices in mort-gage loan servicing and foreclosure pro-cessing. Federal Reserve examiners arecontinuing to closely monitor the ser-vicers’ implementation of plansrequired by the enforcement actionspreviously issued against the servicersto correct the unsafe and unsoundmortgage servicing and foreclosurepractices.

Hammerhouse HiringSurvey Finds IndustryConsolidation WillAccelerate

Hammerhouse LLC has released itsannual outlook on the key hiring trendsthat will impact the mortgage industryin 2013. “2013 will see the mortgageindustry continue to evolve and the jobof originators continue to become moreprofessional,” said Drew Waterhouse,managing director of Hammerhouse.“The industry will continue to stabilizeand the companies that are properlystructured, with strong leaders, quality-focused, balanced production, techno-logically advanced, geographically ori-ented and financially strong, will find2013 to be the year they excel versustheir peers.”

While the advent of higher rates hasbeen forecasted for some time, alongwith the corresponding move awayfrom a refinance-transaction orienta-tion to a purchase-transaction orienta-tion, 2013 is the year for it to occur.While the Federal Reserve has pledgedto keep its Fed Funds rates low into2015 or until certain economic targetsare reached, they cannot control mar-ket rates. Based on an improving econ-omy, rates will rise meaningfully by theend of the year, and may keep anupward trajectory for years to come.Even if rates do not rise, the pool of

those willing and able to refinance willcontinue to grow smaller.

The impact of that change will beindustry-altering. Not only does thesource of business change but the busi-ness development strategy necessary toattract the new business must change.There will be fewer people and compa-nies needed in such an environment.

With less volume comes the need forless and more efficient resources to gen-erate production. There will be a con-solidation among independent mort-gage producers. Some will simply find ittoo difficult to maintain their inde-pendence in the new market environ-ment. Those that were too dependenton refinances will either merge or dis-appear. In addition to growth amongindependent retail mortgage bankerswill be continued growth in brokerageranks. The flexibility, freedom andfinancial benefits available for top pro-ducers will continue the move awayfrom big bank mortgage operations.

Originators with transferrable, bal-anced, referral-based books of businesswill be in high demand. There is simplyno better type of originator for a mort-gage company than one who has con-sistently produced at high levels; bothpurchase and refinance business,sourced from past-customers, realestate agents, builders and financialadvisors. Originators meeting this stan-dard will find that they have significantleverage with employers. One relatedtrend that will continue into 2013 isthat these highly-valued originators willfind their employers willing and eveneager to provide value-added benefits.Some of these benefits include work-lifebalance flexibility, administrative andmarketing support including peopleand technology and professional devel-opment and training.

While older, more experienced andproven originators are the hottest com-modity in the industry; a move torecruit and develop younger talent isunderway and will grow in 2013. One ofthe consequences of the housing sectorcollapse was a loss of younger and mid-career originators. Now, with the mar-ket preparing to move to a purchase-orientation, the need for younger origi-nators to provide the hustle needed tosucceed with real estate agents and totarget younger, first-time buyers is read-ily apparent. A related emerging trendis the beginning of “transition plan-ning” for older originators hoping tochart a path to retirement. Look forlenders to support the natural transi-tion of older, successful originators thatalso preserves the valuable books ofbusiness they have developed over theyears.

Nearly One-Third of All Americans Are Mortgage-Free

Nearly 21 millionAmericans (29.3percent of home-owners nation-wide) own their

homes outright, unencumbered by a

mortgage, according to a recent Zillowanalysis of mortgage data. Analyzing datathrough the third quarter of 2012, Zillowfound that 20.6 million homeownersnationwide own their homes free andclear of mortgage debt. Among thenation’s 30 largest metro areas includedin the study, Pittsburgh (38.6 percent),Tampa (33.2 percent), New York (29.7 per-cent), Cleveland (29.4 percent) and Miami(28.9 percent) had the highest percentageof free-and-clear homeowners.Washington, D.C. (15.5 percent), Atlanta(17.7 percent), Las Vegas (18.3 percent),Denver (18.5 percent) and Charlotte (20percent) had the lowest percentage.

A number of elements influence thepercentage of free-and-clear homeownersin a given area, including median homevalues. Zillow found that areas with lowerhome values generally have higher out-right homeownership rates, as smallerloan amounts are easier to pay back morequickly.

Demographic factors including the ageand credit rating of primary borrowersalso influence free-and-clear homeowner-ship rates. Zillow found that 65- to 74-year-olds are most likely to be free-and-clear (20.5 percent), followed by 74- to 84-year-olds (17.9 percent). This is attributedto the fact that the longer someone ownsa home, the longer they have to pay offtheir mortgage. Interestingly, when exam-ining free-and-clear ownership rates as apercentage of homeowners in various agegroups, Zillow found 34.5 percent of 20- to24-year-old homeowners are free of mort-gages.

Among homeowners who own theirhomes outright, 44 percent have a highVantageScore—representing their creditrating—between 800 and 900. Only 15.5percent of homeowners with the highestcredit rating of 900-990 are free-and-clear.

“So far we have used our unique dataon how much homeowners owe on theirhomes primarily to identify underwaterand delinquent groups of homeowners,”said Zillow Chief Economist Dr. StanHumphries. “But looking at those home-owners who are free-and-clear is impor-tant, too. Homeowners unencumbered bya mortgage may be more flexible thanindebted homeowners, and thereforemore apt or willing to list their homes orenter the market for a new property. Bydetermining where these homeownersare located, we can also gain insight intopotential inventory and demand in thoseareas, as well.”

Your turnNational Mortgage Professional Magazineinvites you to submit any information onregulatory changes, legislative updates,human interest stories or any other news-worthy items pertaining to the mortgageindustry to the attention of:

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

E-mail:[email protected]

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

Branch Manager

Bonds & Licensing

Finally - the freedom to originate!America's Choice gives you the tools you need so you can Originate,Close and Get Paid!

We work as hard as you to be America’s Choice for consumersneeding a home loan, and we work just as hard to be America’sChoice for top branch managers, loan originators and mortgageprofessionals.

Call Jonathan Fowler, Director of National Production at 713-821-9750to learn how you can have a better, more rewarding career.

America’s Choice Home Loanswww.achlonline.com

713-821-9750

Accounting and Audit

A full service CPA firm specializing in the needs of the mortgageindustry. Providing monthly bookkeeping services,FHA andfinancial statement audits , corporate tax preparation and con-tract CFO services. Contact us today to learn more.

Mark Wilson Certified Public Accountants9455 Ridgehaven Ct, Suite 101 • San Diego, CA 92123

619-649-0712www.markwilsoncpa.com

LOWEST-COST STATE MORTGAGE LICENSE BONDSSupport NAMB in supporting you!

Online surety bond applications, instant underwriting approval, andcredit card payments administered through The Bond Exchange -NAMB's exclusive partner provider for state license surety bonds.

The Bond Exchange is a national surety agency specializing in serv-icing mortgage license bonds for thousands of mortgage profession-als across the country.

Low prices and fantastic service. You really can have them both atthe same time!

The Bond Exchangewww.bondedwithnamb.org

(501) 224-8895

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Branch Manager

"WE HELP YOU GROW YOUR BRANCH AND SKYROCKETYOUR INCOME!"

• We fund your start-up costs• Corporate Recruiting Team that puts producers in your branch• Direct Connection with the branch managers who are crushing it• Proven "Marketing Maps" that will double your business• "Next Level Support" to help keep you growing• Get a BPS payback from our volume incentive, or build a margin

for yourself into your rate!• Full capability to control your loan officers' pricing.• Create, Customize and Optimize your branch's compensation plan.• Full Eagle Lender and In-House Underwriting, Closing and

Fundings• Currently looking for high-quality producers in: TX, CO, NC, SC,

NJ, OH, GA, AL, TN, FL, MS, LA, KY

Hometown Lenders(888) 606-8066

[email protected]

Appraisal Management Company

StreetLinks Lender Solutions provides an innovative andcomprehensive suite of valuation and service solutions used bylenders, servicers and appraisers nationwide to improve everydaybusiness operations.

StreetLinks industry-leading products include LenderPlus™ full-service appraisal management, LenderX™ lender-executedappraisal management software and SCORe™ appraisalreviews and a series of valuation analysis tools for services.Our commitment to quality and service, embodied by ourpartnership approach to clients and appraisers, continues toset us apart as the nation’s premier lending solutions partner.For more information, visit www.streetlinks.com.

StreetLinks Lender Solutions(800) 778-4920

[email protected]

Meadowbrook loan originators make 33% more money withMeadowbrook than with any other company they worked for.Enjoy the benefits of a low compare ratio, a lead management sys-tem with an endless supply of leads, A tier investors, and muchmore.

Meadowbrook is hiring Branch Managers and Loan Originators.We are licensed in NY, CT, PA, NJ, MD, FL, MA, NC, pending inSC, NH, and RI.

Meadowbrook is an FHA, Fannie Mae, Freddie Mac, and VAendorsed lender.

Meadowbrook Financial Mortgage Bankers1-888-MEADOW8 (632-3698)www.mortgagesalesjob.com

United States Appraisals combines nationwide coverage withpersonalized, world-class service. From fast turn-times torigorous quality assurance and delivery guarantees, we bringmuch needed confidence to the valuation process.

• Fast Turn Times – We guarantee it!• Underwriter-Ready reports – the first time!• 100% Compliance with all regulations and guidelines• Customary and Reasonable Fees and a weekly pay cycle• Cutting-Edge Technology provides real time reporting

and full integration for a seamless business process

Call us at (866) 562-0123 for a free consultation. Or visit www.UnitedStatesAppraisals.com to learn more.

United States AppraisalsWorld-Class Service. Nationwide Coverage.

Discover Confidence in Your Appraisal Partner!www.UnitedStatesAppraisals.com | (866) 562-0123

Call 516-409-5555, ext 4, to register your company.

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NMPNMPIf your ad was here, you

would be seen by 191,181Mortgage Professionals

looking for resources to helpthem in their business.

Branch Opportunities

Are you a mortgage origination professional?Are you exceptional?

Is your company?

Gateway Mortgage Group has immediate opportunities in 16states. Our origination teams enjoy:

• A local branch- and origination-centric model• The perfect balance of corporate support• Competitive compensation plans

And best of all, our entire platform is built with one thing in mind—helping local originators take their success to the next level.

Visit our careers page on LinkedIn. Follow us. Or call us at 888.360.3773.

And we will show you YOUR Gateway to a Great Way of Life™!

Gateway Mortgage Group, LLCis an equal opportunity employer. NMLS 7233HQ: 6910 E. 14th Street, Tulsa, OK 74112

Credit Reporting

Credit reports • Rapid rescore • Reissue • SupplementsIRS & Social verification • VOE / VOI • Title • Flood

Appraisals / BPO / AVM • Fraud alerts • Red Flag • LQIMOST AGGRESSIVE PRICING!

“A Full Service Lending Information Company”A/E: Jeremy “Judge” Honor

877-MFI- [email protected]

www.MfiCreditSolutions.com

Continuing Education

NMLS approved 20 hour Prelicensing EducationNMLS approved Continuing EducationLive Classroom Instruction, Web Delivery and Private EventsThe SAFE-Smart ExamCram, Powerfully Innovative Test Prep

Abacus Mortgage Training and EducationPO Box 780

Summerfield, NC 27358888-341-7767 • www.GetYourEd.com

The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance.

Pioneers in outsourcing solutions for mortgage compliance.

Our Compliance Team Will:

Leverage your existing employees.Improve your productivity.Collaborate on projects.Make the most of your current technology.Bring innovation to your company.Be a strong cultural fit.Free you to focus on your core competencies.Give you access to world-class expertise.Lower your total operational costs.

LENDERS COMPLIANCE GROUP167 West Hudson Street - Suite 200

Long Beach | NY | 11561 | (516) 442-3456www.LendersComplianceGroup.com

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Compliance Consultants

Coaching

Branch Recruitment

Immediate investment in your business. We pay licensing, initialmarketing, more. Next Day Pay™. Total support. Easy transition.Full suite in-house products. Mortgage banker & top-level broker28 states|20+ years|On Inc.500 list of fastest-growing companies

Guaranteed Home Mortgage Company, Inc.Headquarters: 108 Corporate Park Drive Ste. 301

White Plains, NY 10604(888) 329-GHMC | [email protected]

Continuing Education (Cont’d.)

Sign-on weekly at nmpmag.com/lykkenonlendingThe Lykken on Lending Radio Program

Division of Lenders Compliance Group, BCG is the first and onlymortgage risk management firm in the U.S. devoted to supporting

the unique compliance needs of residential mortgage brokers.

Leveling the Playing Field for Mortgage Brokers

Low Cost Monthly Membership Includes: • Free Weekly Hotline• Access to Subject Matter Experts• Policies and Procedures• Webinars

*Special Pricing*• Quality Control • Exam Readiness • Licensing • Legal Reviews

BROKERS COMPLIANCE GROUP167 West Hudson Street – Suite 200

Long Beach | NY | [email protected]

www.BrokersComplianceGroup.com

Branch Opportunities (Cont’d.)

It’s Time…to join one of the Top Mortgage Bankers as BranchManagers or Loan Officer NOW! Why? You Have Our Guarantee!

Our GuaranteeWe will not leave you stranded and alone on an island. Our

seasoned operational rollout team will ensure you a smooth tran-sition to our branch platform. Our RHF University will train every-one on your staff. We stand by our reputation of providing ongo-ing support and communication to every branch , every day.

You’re our #1 Priority! We are a Full-Service Banker, a DirectEndorsed FHA and Fannie Lender. We are a TRUE 48 hours inUnderwriting and Closing. We will close your loans on time.

We will give the best service to you and your clientsWe will give you full access to all marketing and development

services from loan origination to hiring to specialty products. Weare the Leader in marketing, technology and strategic businesspartnerships. We assist our Branch Managers in hiring, trainingand motivating their staff. We will help you build your team.

CALL NOW 866-319-4442 or EMAIL [email protected] orVISIT www.rhfbranch.com

Jeff Mifsud, a former FHA Direct Endorsed Underwriter trained byHUD and an FHA Originator for over 15 years, is publisher of TheFHA Originator, a monthly marketing newsletter which gives you…

• FHA guideline news to keep you updated• FHA Marketing tips and downloads that are easily customized• Personal development tips to help you develop your character• Full access to all previous FHA marketing downloads!

No contracts so sign up today and give yourself the tools to brandyourself as The FHA Expert in your marketplace.

Cost: Only $19.95 per month per physical office location.

Watch for our 8 Hour NMLS Continuing Education Course

Mortgage SeminarsMortgageSeminars.com

248-403-8181

Credit Plus, Inc., a leader in credit information services, is dedi-cated to providing mortgage professionals with an unsurpassedlevel of service and technology. We provide lenders and brokersthe best tools and support to close more loans faster and cheap-er. Offering the most innovative, reliable and robust credit report-ing platforms on the market, Credit Plus goes BEYOND BUN-DLEDTM by combining key products, such as credit reports, scor-ing tools, Undisclosed Debt Monitoring powered by Equifax, floodreports, title services, AVMs, Warranted AVMs, tax return verifica-tions and more, while providing stellar customer service.

Credit Plus, Inc.31550 Winterplace Parkway, Salisbury, MD 21804

800-258-3488www.creditplus.com

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If your ad was here, you would be seen by191,181 Mortgage Professionals looking for

resources to help them in their business.The Resource Registry is a directory of lenders (wholesaler or retail that are

recruiting), affiliated services and resources that is seen by more than191,181 active Professionals.

Call 516-409-5555 ext. 4 to register your company.

Recruitment

Marketing Services

8520 Macon Rd. Ste 2Cordova, TN 38018

[email protected] | 615-477-7118

Loan Origination Systems

Calyx Software, the #1 provider of mortgage solutions is dedicatedto offering reliable and affordable software that streamlines, inte-grates and optimizes the loan process. Find out how PointCentralcan streamline your business and create compliant processes today.

Calyx Software 800-362-2599

[email protected] www.calyxsoftware.com

Leads

TagQuest ................................................................888-817-8980CUSTOMIZE YOUR CAMPAIGNS! FHA - HARP - VA Leads,Loan Modification, Debt Consolidation, Direct Mail, Data List,Live Transfers, Internet Leads – tagquest.com

MCMF developed My Guide, a Premier Credit & FinancialEducation Magazine that you can customize with your LOGOand Ad Pages to feature your organization as well as provideyour borrowers a go-to-guide for credit and financial resources,empowering them to make the most informed financialdecisions.

This 16 page, full color, quarterly publication, provides financialliteracy tools in a concise, unbiased, easy to understand format.

My Guide is offered in traditional magazine print, as well as ournewest electronic flipbook version, bringing “flipping through amagazine” experience right to your desktop

Contact me today to learn more about this one of a kindopportunity!

Employment Services

Document Preparation

Document Preparation (SaaS)

Mortgage Loan Closing Document Preparation & Compliance ServicesFulfillment Services Including Pre-Funding Review & Post-ClosingInterfaces with Leading Loan Origination Software SystemsForeclosure – Loss Mitigation Services

Robertson | Anschutz800-343-7160

[email protected]/info.html

Mortgage Loan Closing Document Preparation & Compliance SoftwareLoan Documents and Compliance – Web-based/SaaS – Easy to UseIntuitive – Secure and Reliable – Integrates with Leading LOSFree Setup and Support – Extensive Compliance Audits

Docs on Demand800-343-7160

[email protected]

Direct Mail

TagQuest is a full service marketing firm created specifically forthe ever changing mortgage business. We have tested and provencampaigns for FHA -VA - HARP - CONVENTIONAL loan types.TagQuest knows what it takes to generate quality leads whetherthrough direct mail marketing, telemarketing, internet leads, datalists, tracking systems, or any combination thereof. TagQuest willbrand your company, prepare targeted marketing campaigns thatgenerate interest in your company, and most importantly, showyou how to turn sales leads into repeat customers.

TagQuestwww.myharpleads.com

TagQuest.com888-717-8980

Titan List and Mailing Services, Inc. is a direct marketing agencythat offers a complete range of advertising and design services.The firm specializes in data lists (mail/phone), printing, direct mail,graphic and website design as well as internet and SEO market-ing. Starting in 1998, the company has, since then employed high-ly skilled individuals who have considerable experience regardingmarketing trends. The company manages the complete in-housecampaign themselves including Design, Data Lists, Printing,Postage, and Mailing.

Titan List & Mailing Services, Inc.1020 NW 6th St Suite D, Deerfield Beach, FL. 33442

(800) 544-8060www.TitanLists.com

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Wholesale/Residential

CBC National Bank is one of the nation’s fastest growingwholesale lenders offering Conventional, FHA, VA, and USDA.The most important aspect of being a leader in today’s market isthe ability to build and maintain a meaningful relationship witheach customer. We understand that these meaningful relation-ships coupled with competitive pricing and efficient technologyare the pillars of today’s lending environment.

We are hiring Loan officers in the Southeast. GA, FL, AL, TN,NC,SC.

Contact Gabe Santiago our Corporate Recruiter at

[email protected] for further details.

Big Enough to MATTER…Small Enough to CARE

CBC National Bank3010 Royal Boulevard South, Ste. 230

Alpharetta, GA 30022888-486-4304

Wholesale Lenders

REMN has FHA, USDA, 203k, VA and Conventional solutions to fitthe needs of your customers. But, at REMN, our most valuableproduct is our people. The REMN Sales and Operations Teamsgive you - and your loans - the time and attention that youdeserve. Even better, at REMN, same-day approvals are guaran-teed.* You can rely on us to get the little, yet vital, things takencare of on time.

Interested in joining our Wholesale Division? Send your resume to

[email protected]

Real Estate Mortgage Network, Inc.www.remnwholesale.com

866-933-6342

UWM has a full set of mortgage products to meet all of yourlending needs with Conventional, FHA, USDA (RuralDevelopment), VA, Jumbo, HARP 2.0 and DU Refi Plus. WithUWM’s ELITE program, you will receive the most aggressiveconventional rates and pricing in the industry for your eliteborrowers! Discover Lending Made Easy with United WholesaleMortgage!

United Wholesale Mortgage800-981-8898

www.uwm.com

Wholesale/Correspondent Lenders

HomeBridge5 Park Plaza, 10th Floor

Irvine, CA 92614www.homebridgewholesale.com

Valuation Services

Veros Real Estate Solutions is a premier technology leader in the mort-gage industry and proven leader in enterprise risk management andcollateral valuation services. Veros combines the power of predictivetechnology and data analytics for advanced automated solutions.

Veros Real Estate Solutions2333 North Broadway, Suite 350 • Santa Ana, CA 92706

(866) 458-3767www.veros.com • @verosres (Twitter)

HomeBridge is a national wholesale lender offering bothconventional and government products. We are committed toproviding the highest value to our clients through competitivepricing, unique product offerings, superior customer service,and state-of-the-art technology.

Currently expanding and hiring experienced WholesaleAccount Executives nationwide.

Please send your resume to [email protected].

Building bridges to success, one loan at a time.

Wholesale/FHA

Icon Residential Lenders(888) 247-4207

www.iconwholesale.com

Icon Residential, a wholly owned subsidiary of Grand Bank N.A.,is one of the nation’s leading Conforming, FHA and VAwholesale lenders. Our strength, success and longevity isderived from delivering customers service that exceeds ourvalued business partners expectations. With deep industryknowledge, financial stability and innovative technology weprovide the solutions for our business partners to fund loanswhile avoiding risk.

• Direct Access to Underwriters• Competitive Pricing• Innovative Technology• Paperless Solution• Bank Funding

The Resource Registry is a directory of lenders

(wholesaler or retail that arerecruiting),

affiliated services and resourcesthat is seen by more than 191,181

active Professionals.

MortgageProfessionalResourceRegistry

Call 516-409-5555, ext. 4to register your company.

The Direct Path into the Reverse Mortgage Market.Ralph E. Rosynek, Jr. / Senior Vice-President

National Production Manager /HECM Direct Endorsement UnderwriterE-Mail: [email protected] / [email protected]

Office: 281.404.7970 / Cell: 708.774.1092 / EFax: 866.543.5420URL: www.rmsnav.com • www.RMPath.com

Whether you are an experienced reverse mortgage professionallooking to grow faster or a firm wanting to create a new productline, allow RMS’s production division RMPath to work with andalongside you to build a strategic path to success. We have:• Correspondent, Wholesale Lending And Aggregation Partnering• We Offer Exceptional Customer Service And Market - Leading

Pricing• Powerful, Secure, Scalable Loan Origination Systems • Proprietary State-Of-The-Art Technology Utilizing The RM

COMPASS Technology Platform• Customizable Production Strategies To Fit Your Needs• Rapid Execution And Exceptional Customer Service• Excellent Compliance And Regulatory Controls

FEBRUARY 2013Tuesday-Friday, February 19-22

Mortgage Bankers Association (MBA)2013 National Mortgage Servicing

Conference & ExpoGaylord Texan Hotel & Convention

Center1501 Gaylord TrailGrapevine, Texas

For more information, call (800) 793-6222 or visitwww.mortgagebankers.org.

Thursday-Saturday, February 21-23

Mortgage Bankers Association (MBA)National Short Sale and REO

Summit 2013Gaylord Texan Hotel & Convention Center1501 Gaylord TrailGrapevine, Texas


Tuesday-Friday, February 26-March 1

Property Records IndustryAssociation (PRIA) 2013 Winter

SymposiumWashington Marriott 1221 22nd Street NW

Washington, D.C.For more information,

call (919) 459-2081 or visitwww.pria.us.

MARCH 2013Tuesday, March 5

Florida Association of MortgageProfessionals (FAMP) Central Florida2013 Annual Chapter Trade Show

Altamonte Hilton350 South Northlake Boulevard

Altamonte Springs, Fla. For more information,

[email protected].

Wednesday-Saturday, March 6-9Mortgage Bankers Association (MBA)2013 Mid-Winter Housing Finance

ConferenceThe Ritz-Carlton Bachelor Gulch

130 Daybreak Ridge • Avon, Colo.For more information,

call (800) 793-6222 or visitwww.mortgagebankers.org.

Sunday-Tuesday, March 10-122013 NAMB Legislative &

Regulatory ConferenceHilton Garden Inn-Capitol

1225 First Street NEWashington, D.C.

For more information, call (972) 758-1151 or visit

www.namb.org.

Sunday-Thursday, March 10-142013 Regional Conference of

Mortgage Bankers Associations 30th Anniversary

Trump Taj Mahal Casino Resort1000 Boardwalk • Atlantic City, N.J.


www.mbanj.com.

Wednesday, March 13Florida Association of Mortgage

Professionals Broward Chapter 2013Annual Trade Show

“It’s Mardi Gras Time”Broward County Convention Center

1950 Eisenhower BoulevardFort Lauderdale, Fla.


www.browardfamp.org.

Wednesday, March 132013 Maryland Association ofMortgage Professionals Annual

ConferenceMaritime Institute

692 Maritime BoulevardLinthicum Heights, Md.For more information,

call (410) 752-6262 or visitwww.mdmtgpros.org.

To submit your entry for inclusion in the National Mortgage Professional

Calendar of Events, please e-mail the details of your event, along with

contact information, to [email protected].

Monday-Wednesday, March 25-27National Association of Hispanic

Real Estate Professionals (NAHREP)2013 Housing Policy & Hispanic

Lending ConferenceFour Seasons Hotel

2800 Pennsylvania Avenue NWWashington, D.C.

For more information, call (858) 622-9046 or visitwww.nahrep.org/dc2013.

APRIL 2013Sunday-Wednesday, April 14-17

2013 National Technology inMortgage Banking Conference

& ExpoWestin Diplomat

3555 South Ocean DriveHollywood, Fla.


Sunday-Wednesday, April 14-17Mortgage Bankers Association (MBA)

2013 National Fraud IssuesConference

Westin Diplomat3555 South Ocean Drive

Hollywood, Fla.For more information,


Thursday, April 18Illinois Association of Mortgage

Professionals (IAMP) 2013 SpringConference & Trade Show

Location to be determinedFor more information,

call (630) 916-7720 or visitwww.iamp.biz.

MAY 2013Sunday-Wednesday, May 5-8

Mortgage Bankers Association (MBA)2013 National Secondary Market

Conference & ExpoNew York Marriott Marquis

1535 BroadwayNew York, N.Y.


Thursday, May 9Maryland Mortgage Bankers

Association (MMBA) 2013 AnnualConference “Surviving & Thriving in

Today’s Mortgage Industry”Doubletree by Hilton Hotel

Columbia5485 Twin Knolls Road

Columbia, Md.For more information,

call (443) 989-8534 or visitwww.mdmba.org.

Sunday-Wednesday, May 19-22Mortgage Bankers Association (MBA)

2013 Commercial/MultifamilyServicing & Technology Conference

Arizona Biltmore2400 East Missouri Avenue

Phoenix, Ariz.For more information,


Sunday-Wednesday, May 19-22Mortgage Bankers Association (MBA)

2013 Legal Issues/RegulatoryCompliance Conference

Boca Raton Hotel501 East Camino Real

Boca Raton, Fla.For more information,


NATIONAL MORTGAGE PROFESSIONAL

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OHMP_FEB13

Documents

mark kistner

nabors board member

limes board member

vu board member

mcgeorge board member

fisher board member

mortgage fraud scheme

count of conspiracy