IAMB Newsletter August 2006pub

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IAMB Newsletter August 2006pub Powered By Docstoc
August 2006

WHAT HAS IAMB AND NAMB DONE FOR YOU LATELY? 1. IAMB has been working with IHFA to allow brokers to do business with them and it looks like we are going to get this done! In the next few months, IHFA is going to roll out programs that brokers can do. The only reason that we were able to work with them is because we have become a large enough organization that IHFA was finally willing to work with us. We have worked on the contract with them that brokers will sign ,we worked on the pricing that they will pay and programs that they will offer . This will help brokers be more competitive and will get us more business. If it were not for the efforts of the many past and present people at IAMB, we as a broker community would not have this chance to work with IHFA. 2. This last year we have gotten quarterly education started in all three major areas in the state. This training helps brokers learn about laws and regulations. It also allows new LO’s to get training that they need to succeed 3. NAMB was able to get an amendment added to the bill for HUD and has worked with HUD chairman to get a 75K bond instead of the audit opening up FHA and it’s programs to almost all brokers. Once again if it were not for NAMB this would not have happened. 4. NAMB has gotten the Labor Department to get us a letter that exempts brokers from having to pay over time to outside sales people (LO’s). This will save Idaho brokers thousands of dollars a year in over time pay and fines . A copy of this letter is on the NAMB web site for all members to use (see related article in this newsletter) 5. HUD is working closely with NAMB to change the GFE and T&L to one form that makes it easy for the borrower to understand and looks like the HUD statement that they get when the borrower closes the loan. Also they are working on HUD to make the YSP a fair playing field and not make us have to disclose it. This was after NAMB was able to protect the YSP for us a few years ago. 6. NAMB now has 3 professional designations CMP CRMC CMC . When you earn one or more of these designations it will give you more respect from those around you.

Sponsor the newsletter! Legislative Bulletin Join Us! President’s Message Continued US Department of Labor issues New Ruling Submission of Articles DECA W2/ 1099 is Still an Issue for Mortgage Brokers Golf Tournament IAMB Board, Officers and Directors / Calendar of Events

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Idaho Association of Mortgage Brokers

Sponsor the IAMB bi-monthly newsletter and receive a half page advertisement!
Newsletter sponsorship is $350. Sponsor’s receive a half page (7 1/2” x 5”) advertisement in the newsletter. Newsletter’s reach approximately 1,050 members, mortgage brokers and other industry related professionals. Please call the IAMB office at 321-9309 for a sponsorship form. Thank you GreenPoint Mortgage for sponsoring this newsletter!

Idaho Association of Mortgage Brokers

LEGISLATIVE BULLETIN ALERT House Passes the Expanding American Homeownership Act NAMB Succeeds: Bill Includes Bond Provision
Washington, D.C. – July 26, 2006– NAMB President Harry Dinham today applauded passage of the Expanding American Homeownership Act (H.R. 5121) stating that the bill would expand access to more affordable loans for traditionally underserved populations. H.R. 5121 includes important provisions to revamp annual audit requirements within the FHA loan program allowing more mortgage brokers to offer these loans to prospective home buyers. “The current FHA regulations require an extensive annual audit for any mortgage broker interested in offering FHA loan products,” said Dinham. “The compliance costs of hiring an accountant and reviewing financial records can be a significant burden for some brokerages. The result is that many brokers forgo the process and choose not to offer FHA loans that could benefit potential customers.” H.R. 5121 would allow mortgage brokers to acquire an annual bond in place of the audit requirements. This approach would ensure the FHA program is protected and addresses the cost concerns for many brokers. Dinham noted that mortgage brokers originate a vast majority of new home loans nationwide. By eliminating the economic barrier that keeps many of these brokers from participating in the FHA program, consumers will have more home-buying options. “Expanding access to FHA loans for first-time, minority and low-to-moderate income home buyers, will help these consumers avoid having to turn to alternatives in the non-prime market to realize the dream of homeownership.” According to Dinham, some industry critics have recently voiced their opposition to the bonding provisions in favor of the status quo. He said that while these groups may have good intentions, they are basing their position on flawed information that is certain to harm consumers in the long run. Streamlining FHA requirements is vital in the continued effort to improving home affordability and he encouraged the Senate to quickly consider and pass this important legislation. NAMB will continue its efforts to include the bond provision in any Senate legislation.

Join Us!
Membership into the Idaho Association of Mortgage Brokers includes membership into the National Association of Mortgage Brokers, benefiting you both personally and professionally. Because most mortgage brokerage firms are small, entrepreneurial businesses, IAMB/NAMB provides members with a collective voice on issues and offers services normally available only to larger firms. For more information on Idaho membership benefits visit and for national benefits, discount programs and more!

Check out our website at
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Idaho Association of Mortgage Brokers

PRESIDENT’S MESSAGE CONTINUED Problems that need tackling 1. Packaging - The big lenders are pushing for packaging (this is where they work with the service providers to keep total closing costs very low). This will hurt the brokers because we will not be able to compete with the big lenders or we will have to cut our fees to compensate for the lower fees that the big guys get. Also if we disclose a total cost up front and then change programs or lenders with different fees we will have to eat the difference! NAMB is fighting this and we hope will win. 2. ABA - The big builders are making it so they will not accept brokered loans, making the borrower use in house lenders or not buy the house from them. They are then not getting the borrower the best price or charging those more then if the borrower could go to a broker and get the same loan. NAMB is working with law makers to fix this problem 3. Predatory lending - This has reached the national scene and Congress is looking at this very closely. It looks like they will do something about it in the near future and we will need NAMB there to make sure that the blame gets put where it needs to be put and that they don’t pass a law that puts us out of business. 4. Did you know that when the credit reporting agencies get a request from a mortgage broker they are selling the info to led generators as a borrower that is ready to do a loan? This is then sold to the highest bidders and your borrower are marketed by several more loan companies? This is not right and NAMB is working on getting this stopped. 5. All other states around Idaho have testing for new LO’s to get a license. Does Idaho need to look at this? 6. Do we need to level the playing field and make all LO’s, whether they are employed by a bank or not, get the LO’s license? There are so many benefits that NAMB and IAMB has for you. They tackle a lot of the legal problems that we have that might put us out of business. They work on and are a force in keeping the name of broker in good stead and make sure that lawmakers know that a lot of the news that originators get are not brokers but lenders. This will ensure that we don’t get the blame and have the lawmakers say “what are we going to do about those brokers”. We have education online and brought to us in our cities, we have networking, we can be in competition and still help our fellow brokers out .Every month we have great updates through our publications and e-mails. We have great conventions that allow us to learn of new programs and product from the lenders and learn of new lenders that we might not have heard about other wise. What NAMB and IAMB needs from you We can’t do this without our current members and potential members. The more members the bigger voice we have. If you are serious about being an LO you need to join because every day there are things that threaten the broker industry. We need you to get involved and become active so that when there is a problem we have the grass roots to make our voice heard. Don’t just hope that your business will be here next year - take an active roll and make sure that you learn all you can to make sure it is here...IAMB and NAMB has the tool to help the broker become more professional. We need you to support the training meetings that we have in your areas so we can continue to offer them. Join IAMB, and once you are a member stay active – it is your business that will benefit! Jeff Avery, President Idaho Association of Mortgage Brokers
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Idaho Association of Mortgage Brokers

US Department of Labor Issues New Ruling
This spring, the US Department of Labor issued a new opinion regarding whether certain “sales force” mortgage loan officers qualify for the minimum wage and overtime exemption for an outside sales force. In short, the Department found that they do qualify as outside sales employees. Don’t get too excited if you think you can 1099 these people as independent contractors. This is not what the opinion states. These employees, described as loan officers who meet with customers to sell mortgage loan packages, who are responsible for originating their own sales by contacting prospective clients and developing and maintaining their referral sources. In addition, these “sales force” loan officers must spend a significant amount of time away from their employers place of business in performing their principal duty of selling a loan product, meaning that they meet with prospective clients at locations other than the employer’s office. This does not include anyone who perform their work mainly within the office. What does this exemption mean? It means that these employees are exempt from minimum wage and overtime requirements and can be paid on a straight commission basis. But it does also mean that they remain EMPLOYEES and cannot be considered independent contractors. A copy of this opinion is available on the both the NAMB and IAMB website. Please read it carefully and get the opinion from your tax consultant on how this issue applies to your business.

Submission of Articles IAMB invites your independent articles on issues affecting the mortgage industry. Please submit any articles to IAMB at We would be glad to give you or your company credit (IAMB reserves the right to edit any articles submitted).

This year IAMB participated in a national program promoted by NAMB to provide local scholarships under the DECA program. IAMB contributed $1,000 that went to a local Idaho student. IAMB has made the decision to participate in this program next year with another $1,000 donation towards a scholarship. Over the next year our DECA Committee, chaired by Kathy Smith, will be participating in the scholarship decisions that NAMB will be making for some lucky Idaho student. DECA/Delta Epsilon Chi is an international association of high school and college students studying marketing, management and entrepreneurship in business, finance, hospitality and marketing sales and service.

Idaho Association of Mortgage Brokers

W2/1099 Is Still an Issue for Mortgage Brokers
The age old question that never seems to go away – are LO’s employees or independent contractors? It raises its head again as the Department of Labor conducts audits of mortgage companies. IAMB became involved in this very question about two years ago and did extensive research into the federal and state rules. Our conclusion – LO’s need to be W2’ed and here is what we based our opinions on: Under federal law, an independent contractor must be fully independent and cannot be under the control or direction of those hiring him. The independent contractor not only is allowed to set own hours and fees, but they cannot be directed on HOW to do something by the company. They must have the ability for “independent judgment, discretion and latitude” in how they choose to complete the services you require. The Residential Mortgage Practices Act (RMPA) establishes tight control throughout the language of the law and does not allow for this flexibility.
⇒ ⇒ Federal law also requires that in order to qualify for independent contractor status, the contractor not only is able to

but MUST work for more than one company providing the service. The RMPA is clear that the L.O. can only work for one company.
⇒ The contractor has to be a legal, independent business meaning they just can’t be a person off the street who decides

to work for you. This means it is our responsibility to make sure (through contractual language) that they are a legal entity and meeting federal and state requirements.
⇒ Other requirements are the opportunity for profit and loss, investment of equipment to do their work, short term,

non-permanent relationships, all of which should not be a problem under the RMPA. IAMB has lots more information on this issue, including a DVD of the presentation by a tax attorney. Call our office at 208-321-9309 for more information.

Check us out at

Thanks to First Horizon for these great pics of some players at our annual golf tournament!

Idaho Association of Mortgage Brokers

IAMB Annual Golf Tournament
Thanks to our sponsors who made the IAMB golf tournament a possibility:
Aegis Wholesale Countyrwide Decision One Mortgage Fieldstone Mortgage First Horizon Flagstar Bank GreenPoint Mortgage Homecomings Financial Mortgage IT Mortgage Lenders Network National City New Century Own It Mortgage Suntrust Mortgage United Financial Mortgage Corp. Wells Fargo Home Mortgage This years golf tournament filled up a month before the deadline! We had 36 foursomes and the sponsors you see above. The money raised by selling golf balls sponsored by Countrywide and Mulligan sales was given to the Boys and Girls Club of Idaho for a total donation of $330!!

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President Vice President Jeff Avery Avery Financial Group, Inc. Chuck Anderson Northwest Mortgage Alison Gillespie Idaho Banking Mortgage Robert Hall Arrowhead Mortgage

Sharlene Acree Money Express Mortgage Bryan Booth National City Mortgage Nichole Browning Option One Steve Cox Park Place Mortgage National Director’s Jeff Avery - Avery Financial Group, Inc. Chuck Anderson - Northwest Mortgage Alternate National Director Robert Hall - Arrowhead Mortgage Northern Director Chuck Anderson - Northwest Mortgage Eastern Director Jeff Avery - Avery Financial Group, Inc. Western Regional Delegate Kathy Smith - Millenium Mortgage & Insurance, Inc. IAMB Committee’s Activities, Bylaws, Conference, Education, Finance, Golf, Legislative, Membership, Newsletter, Nominations. Tim Jelke Flagstar Bank Peggy Liles Countrywide Scott Wudarcki GreenPoint Mortgage

Vice President

Treasurer/ Secretary

Past President

Idaho Association of Mortgage Brokers Mailing Address: P.O. Box 7981, Boise, ID 83707 Physical Address: 5440 West Franklin, Ste 108, Boise, ID 83705 Phone: 208-321-9309 - Fax: 208-321-4819 Email: - Website:

September 7 & 8- IHFA Training October 27—Oktoberfest at Jackpot November 6, 7 & 8- Mortgage Fraud Course (info. coming soon) December 13—Holiday Party at the Rose Room in Boise March 14-15, 2007– Annual Conference at the Centre on the Grove


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