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					                                                               Vol. 127

Debunking Delusions About               Whose YSP is it Anyway,
Referral Sources                        New World Order
                                        The 2010 GFE for the broker
Broker Banker Presents:
Saving the Day

Do It Yourself Marketing
Good Idea?                               A Concept so simple, yet
                                       innovative, I can’t believe it’s
                                         never been done before.

Pass or Fail
What every mortgage broker
should know about safe act testing    Broker Banker of the Month:

“Dumbest” Mistakes #4
Listening to pretend experts and
getting distracted by the next         JOHNSTON
bright shiny object             

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                                                                                                                    D ESI GN I NG T H E B R OKER B A N K E R M A G A Z I N E S I N C E I T S B E G I N N I N G








A P PA R E L . . . A N D M O R E

                                             S I M P L I C I T Y   I N   D E S I G N

                  W W W. K AYA D E S I G N . C O M    |   805-495-8215      |   J O N @ K AYA D E S I G N . C O M

FEATURES                                           BROKER BANKER STAFF
                                                      Executive Publisher:           Ed Craine
5      WWW.SHOULDIREFI.COM                            Editor:                        Deborah Kaya
       Broker Bankers product of the Month            Staff Writer:                  Ed Craine
                                                      Staff Writer:                  Jennifer Hadley
9      DEBUNKING DELUSIONS ABOUT                      Design:                        Jon Kaya – Kaya Design
       REFERRAL SOURCES                               Production:                    Kaya Design
       By Ed Craine and Dr. Ivan Misner               Photography:                   Vinit Satyavrata

       SAVING THE DAy                              ARTICLES
       By Jennifer Hadley                             BROKER BANKER MAGAZINE welcomes editorial submissions.
                                                      Send your article ideas and letters to:
                                                      2645 Ocean Ave. #202, San Francisco, CA 94132
13     INDUSTRy SERVICE PROVIDERS                      fax us at: 415/406-2340
                                                      or e-mail to:

       ORDER: THE 2010 GFE FOR THE BROKER             2645 Ocean Ave. #202
       By Terri Buckman                               San Francisco, CA 94132
17     “DUMBEST” MISTAKE #4:                          415/406-2340 fax
       By Brian Sacks                       

       MARKETING – GOOD IDEA?                         To receive each issue of the BROKER BANKER MAGAZINE, simply
       By Weston Lyon                                 go to to subscribe. The annual subscription price is $59.00.

                                                   ADDRESS CHANGES
21     PASS OR FAIL: WHAT EVERy MORTGAGE           Address corrections can be made via fax, e-mail or regular mail.
       ACT TESTING                                 Editorial material appearing in BROKER BANKER MAGAZINE is
       By David Reinholtz                          an informational service to readers. Article contents are the opinions of the
                                                   authors, and not necessarily those of BROKER BANKER MAGAZINE.

                                                   Permission to reprint articles contained in BROKER BANKER
                                                   MAGAZINE must be requested in writing.
                             Ed Craine
                             Executive Publisher   BROKER BANKER MAGAZINE makes every effort to publish credible,
                                                   responsible advertisements and articles. Inclusion of product ads, articles or
                                                   announcements do not imply endorsement.

                                                   BROKER BANKER MAGAZINE is a registered trademark of BBMag
                                                   Enterprises, LLC.

                                                   Printed in the United States.
                                                   Not affiliated with any other trade publication.

3     BrokerBanker | Volume 127, 2010
                A Concept So Simple, Yet Innovative I Can’t Believe It’s Never Been Done Before.

                                                         By Jennifer Hadley

There is no doubt that the mortgage industry has its share          There’s an old saying that goes, “Give a man a fish, and you
of innovators, and I should know, as I’ve been writing about        can feed him for a day; but teach a man how to fish, and
them for years. From unique lead generation strategies,             you’ll feed him forever.” In keeping with these sage words
to creative marketing tactics, to the creation of products          of old, Johnston had no desire to purchase leads. “The
designed to make your job easier, more efficient, and of            margins on purchased leads are low. There is no exclusivity.
course, more financially successful; if there is                              Leads purchased through most companies that
one thing I’ve learned, it’s that mortgage                                           generate and sell leads are shot out to
professionals are remarkably creative. yet                                                multiple companies. Everyone then has
even though I know this to be true,                                                         to compete for the same deal, and it’s
every once in a while I come across                                                          a tough business. It’s also expensive,”
a new way of doing things that                                                               he adds. What Johnston recognized
absolutely captivates me. In this case                                                       he needed instead was a way to
I’m talking about www.shouldirefi.                                                           generate leads and compete on a
com, an advertising concept/membership that                                                 local level, as opposed to on a national
allows loan originators to exclusively market                                            level. “So, I started thinking about how
and advertise the web site www.shouldirefi.                                         I was going to reach new clients. I knew
com in their local area to generate their own                                    that most consumers were tired of the same
exclusive leads.                                                              old mortgage gimmicks, liked the convenience of
                                                                                 the internet, and wanted to work with a local
I’m fascinated by Should I for a                                           mortgage company that they could trust.”
couple of reasons. First, I can’t believe no                                         And that’s how the idea for Should I Refi.
one has thought of the concept before.                                               com was born.
Second, it’s potentially a huge marketing
tool, but it is far from too complicated                                           “Our message to consumers is direct and
to use. In fact, it seems so easy to use; I                                        simple; there are no gimmicks. Go to Should
decided there must be a “catch.” This led                                      I, fill out the free purchase or refinance
me to contact Pete Johnston, who runs a small                             questionnaire, and expect to hear from a local,
mortgage company in St. Paul, MN, and who is the creative             knowledgeable mortgage professional within 24 hours,”
mind behind Should I “I needed a way to tap into          Johnston explains.
customers outside of our sphere of referrals,” Johnston says.
No surprise there, in this market, I have yet to find a single      Continuing he says, “Should I is not a company
originator who hasn’t been wracking their brains for ways to        that is generating leads around the country and looking to
earn more business. Johnston is no different.                       sell those leads to our members, or to any company, for that
5    BrokerBanker | Volume 127, 2010

                         We work with our members to help them create
                         successful marketing and advertising campaigns
                        using the domain in order to
                             generate exclusive leads in their market.”

matter. We work with our members to help them create                                       range from pay by click ads on Facebook or Google Adwords
successful marketing and advertising campaigns using the                                   to radio or billboard advertising. Pay by click ads combined
domain in order to generate exclusive                                  with the domain Should I can be a very cost
leads in their market.” yes indeed, membership with Should                                 effective way to generate leads.” Personally though, Johnston
I guarantees that the member will be the only                                     has found great success in radio advertising, and I can see
loan agent or company allowed to market the web site in                                    why. The web site couldn’t possibly be any easier to remember.
their geographic region. Moreover, that member will be the                                 And a quick search online of the words “Should I Refi” brings
only company or individual receiving the leads generated by                                up the web site as the top listing on both yahoo! and Google.
Should I in their market.                                                         No wonder 70% of Johnston’s mortgage company’s business
                                                                                           comes directly from Should I leads. Clearly,
I appreciate that Johnston does not hesitate                                                                              he’s done an incredible job of branding and
to let me know that members will get out of                                                                    Vol. 127
                                                                                                               Vol. 126
                                                                                                                          marketing the site in his target market of the
the membership exactly what they put into it.                                                                             Twin Cities, which he knows others will be able
That is, he’s not going to do all of the work for                                                                         to do in their own geographic areas.
members. What he provides is the exclusive                                           Broker Banker of the Month:

right to use the catchy domain name in all                                              DON
                                                                                             By this point, I still haven’t been able to find a
                                                                                         A Concept so simple, yet
                                                                                       innovative, I can’t believe it’s
                                                                                         HighTechLending, Inc.

marketing and advertising efforts. Of course,                                                                             catch. Can this really be as simple as it seems?
                                                                                         never been done before.

                                                                                         D Banker U R R I E
                                                                                     BrokerO N Cof the Month:

                                                                                       Branching Out
once the customer visits                                          PETEProviding Brokers with
                                                                                                                          One company per market? All of the leads
                                                                                           a New Home To Thrive


and fills out the short, free questionnaire, the             AMERICA’S TRADE PUBLICATION FOR LOAN ORIGINATORS             generated in that market become exclusive leads
software used to run the web site immediately                                                                             for that company? I expect at this point that
recognizes the location of the customer and shoots the lead                                the catch must be in the cost of membership. After all, this
directly to the member. But, the member will have to be an                                 sounds too good to be true. But I’m dead wrong.
active participant in marketing and advertising the web site
in their market.                                                                           “Our pricing (which is derived from the total population of
                                                                                           an area, in combination with the average home value of that
“We’re not here to tell anyone to do anything differently.                                 area) ranges from $150 per month to several hundred per
We want members who use their own creative marketing                                       month for larger markets,” Johnston says. I certainly don’t
strategies. We want them to keep doing what they’re doing                                  need a calculator to deduce that in California for example, the
and tie in Should I or create new campaigns around                                monthly membership fee will pay for itself if even one loan
the concept.”                                                                              from Should I is closed. Unless of course, Should I
                                                                                  takes a huge cut from each transaction a loan officer
“There are many different forms of effective advertising that                              closes through the web site.
can be used to drive local traffic to the web site. Examples                                                                                                  Continued on Page 7

                                                                                                                                              Volume 127, 2010 | BrokerBanker    6

“Founder of Should I, Pete Johnston”

“We don’t want revenue sharing,” Johnston states simply. “Our      “you get what you give to this concept,” Johnston says. But he
members pay the same monthly fee whether they generate a           has reason to be confident that all members will get a great
ton of business or don’t do anything with the domain. That         deal out of their membership. All individuals or companies
is how I would want it to be if someone was selling this           who sign up with Should I have gone through an
concept to me.” But, what if a member is closing 10 leads          extensive approval process ensuring that they are, frankly, the
from Should I each month? Johnston’s company still        best loan officers and mortgage companies in the country.
doesn’t take a percentage. In fact, he tells me, Should I Refi.    Naturally, only those who are already using effective marketing
com was intentionally set up NOT to be a revenue sharing           and advertising campaigns can be counted as the biggest
service, unlike many of the other companies who sell leads.        and brightest in the industry. Basically, Johnston explains,
I’m stumped at this point. Since it’s not expensive, I assume      membership in this elite group of professionals merely adds to
members must have to agree to a lengthy term.                      your credibility and marketing reach.

Again I’m wrong. “We want people to be comfortable with            Although Should I is essentially an addition to a
their membership. Our marketing and advertising agreement          company’s marketing strategy, Johnston is doing his part to
has a 12 month term with a 60 day voluntary cancellation so        raise the visibility of Should I for members. “Each
our members are not locked into anything long term if they         month a portion of membership fees goes directly into a
decide that this is not a good fit for them,” Johnston tells me.   budget for Search Engine Optimization for the web site,”
But, I would be extremely surprised to hear that members           he says of his plan to keep Should I at the top of
didn’t generate more than one quality lead per month,” he adds.    search engine pages. Moreover, the more each member uses
                                                                   the web site in their marketing efforts, the higher the ranking
7     BrokerBanker | Volume 127, 2010

          Please visit
     to become a member
      contact Gregg Gianpetro,
      national sales manager, at
        888-788-REFI (7334)
              option 2
        for membership sales.

                                                                  Pete and Paul Johnston (Brothers and Co-founders of Should I

and recognition of as the go-to place         grow. Thank you.’ I’ll be happy.”
for local mortgage expertise grows. “What we’ll be able
to accomplish as a group will be much greater than most           From where I’m standing, something tells me that Johnston
companies can do on their own,” Johnston says.                    is going to have no shortage of people thanking him much
                                                                  sooner than he thinks.
And that’s exactly what Johnston wants. “There are 273
markets in the United States with a population of more            Pete Johnston is the founder of as well as a ten year
than 100,000. We are determined to create a well respected        veteran of the mortgage industry. His honesty and work ethic stemmed
brand, which will provide exceptional customer service and        from a stint at the United States Air Force Academy, and his creativity
mortgage advice to consumers in all markets of the country,”                                                 comes from a degree in Finance
he says. While he admits that in 5 years he’d ideally have a                                                 and Marketing. Pete is not only
membership base of 200 of the top mortgage companies and                                                     the owner of a small mortgage
individuals in the nation, and he has plans to add additional                                                company in St. Paul, he’s also
exclusive rights to other domain names he’s already purchased                                                an active originator. Contact
(which he says members will have first dibs on signing up for);                                              Pete at 888-788-REFI (7334)
for now, Johnston’s goals are simpler.                                                                       ext 3 or e-mail him at pete@
“I want my colleagues to be extremely glad that they signed                                                  Visit
up with Should I If a member comes up to me a                                                      up to sign up to become
year or two from now and says, ‘This really helped me                                                        a member.
                                                                                                           Volume 127, 2010 | BrokerBanker     8
      Debunking	Delusions	about	
       Referral	Sources                         By Ed Craine and Dr. Ivan Misner

We count on referral sources to keep us surviving when times       them on how to best sell your services.
are tough and to keep us thriving when things are stable
(which, fingers crossed, should be any day now). But just as       This doesn’t mean that you won’t ever receive referrals when
there is a lot of inaccurate information floating around just      you’re in the presence of a source or partner. Often times this
about any topic you can imagine, the delusions that we may         works out incredibly well. Certainly we’ve all been fortunate
have about referral sources need to be cleared up. Here then       enough to meet someone at a mixer, at the grocery store,
are three common delusions that many of us have about our          or wherever, and wind up with a hot lead. But never limit
referral sources and why it’s so important that we understand      your opportunity to linear marketing only. you simply can’t
the reality of working with referral partners.                     meet people quickly enough to sustain your business, not to
                                                                   mention close loans. Remember that networking is based on
1.	 Anytime	you	see	your	referral	partner,		                       leveraging the impact you can have on your target market. If
	 you	should	expect	a	referral.                                    you have sources and partners promoting and referring you
If part of your strategy to earn referral business mandates        when you’re not around, your results will be exponential as
that you must be in front of your referral partner to get that     opposed to linear.
lead, you’re limiting yourself in a big way. In fact, the only
way referrals will happen when you’re face to face with a          To that end, avoid turning every gathering into a quest for
referral source is if your strategy is dependent on you asking     referrals. If you ask for referrals from clients every time you
for the referral and getting it at the same time.                  talk with them or meet with them, you’re doing yourself a
                                                                   disservice in at least two ways. First, you’re training them to
By contrast, in a strong, mutually beneficial referral system      refer you when you’re there, but not when you’re elsewhere.
most of the referral process will happen when you’re no-           Second, you’re really just making withdrawals from your
where to be found. But don’t be alarmed; this is a good thing!     referral bank when you should be making deposits by finding
After all, you don’t want your symbiotic relationship with a       ways to help your partners in return.
referral partner to shut down just because you’re not within
arm’s reach of one another. On the contrary, you want your         2.	 Maximizing	your	potential	for		
referral partners constantly looking for opportunities to refer    	 referrals	means	you	should	bounce	from		
you. Just as you should be in the habit of recognizing good        	 one	networking	group	to	another.		
opportunities for them, you want them to be doing the same         In theory, this would seem to make sense, wouldn’t it? The
and persuading prospects on your behalf. Keep in mind that         more networking, the better? Well, that’s not necessarily
if your partners aren’t thinking of you unless you’re directly     the case. This is known as “scorched-earth” networking, and
in their face, you probably haven’t done a great job at training   it’s about as appealing to others as its name implies. The

9   BrokerBanker | Volume 127, 2010

                       Three	common	delusions	that	many	of	us	have	
                    about	our	referral	sources	and	why	it’s	so	important	
                      that	we	understand	the	reality	of	working	with	
                                     referral	partners.

scorched-earth networker essentially burns and pillages for       we know that. However, other referral sources are available
new business. He’s a hunter at mixers and events and always       that can be extraordinarily powerful as well. Just because your
far more interested in bagging the big sale than in building      clients are the most readily available sources, doesn’t mean that
relationships. In short, he does everything he shouldn’t do if    they are necessarily the best or steadiest sources of high-quality
he’s looking to earn referrals.                                   referrals. The best sources in the long run are likely to be the
                                                                  people you refer business to. When you help another build
The scorched-earth networker is eternally dissatisfied with       their business, you’re cultivating a long-term relationship with
the quantity and quality of the referrals he receives, so he      someone who will then have motivation to return the favor.
figures he better move on. He jumps from one networking
group to another, never taking the time to establish relation-    With a strong referral network, you can earn more qualified
ships, networks relentlessly with everyone he meets (often in-    referrals from one or two sources than from all your clients
appropriately), and expects referrals from others even though     combined. Why? Because these professionals are--by and
he has done nothing whatsoever to earn them.                      large--better salespeople than your clients. They know how to
                                                                  sell you, especially since you’ve taken the time to educate and
The scorched-earth networker doesn’t stay in one place            train them how to refer business to you.
long enough to build the kind of relationships necessary to
capitalize on networking opportunities. Successful network-       yes, you can expect to get referrals from a happy client, but
ers instead understand that in order to build mature, mutually    you’d better make darn sure the client is ecstatic with your
beneficial relationships, they must devote a lot of time and      services. This means you must keep your attention and your
effort to growing those relationships.                            motivations focused on your client’s needs when that is the
                                                                  purpose of the meeting. However, you can certainly ask for a
 “Time equals money,” right? This is particularly true when       follow up appointment to specifically discuss how they might
it comes to membership in a referral-networking group. The        be able to refer you to others.
longer you commit to building the relationships, the greater
the results you get.
                                                                  Ed Craine is the publisher of Broker Banker Magazine and the CEO of
3.	 Your	best	source	of	referrals		                               Smith Craine Finance, one of the nation’s leading mortgage brokerages in
	 is	your	clients.                                                2009, according to Goldline Research. Ed welcomes questions at ecraine@
People sometimes fall into this delusion because they’ve been or via phone at 415-406-2330.
trained to believe it and have never pursued any other source
of referrals. To put it another way, the only referrals they’ve   Called the “father of modern networking” by CNN, Dr. Ivan Misner is
ever received are from clients.                                   a New York Times bestselling author. He is the Founder & Chairman of
                                                                  BNI, the world’s largest business networking organization. His latest #1
Don’t get us wrong. Clients can be a good source of referrals;    bestseller, The 29% Solution can be viewed at
                                                                                                         Volume 127, 2010 | BrokerBanker     10

                               Saving The Day
                     How Joseph Perez Saved a Family Business, In Just Two Weeks

                                                                     By Jennifer Hadley

 Sometimes one of those loans comes along that you want to champion,            But the borrower did have a few things going for them. The LTV was
 because you just believe in the borrower so much. For Joseph Perez,            below 50%, which was helpful, and the amount of the loan was about
 CFO of Better Loans & Realty, a boutique hard moneylender, that’s              $250,000, so it wasn’t a huge loan by L.A. standards.
 exactly what happened. Recently a client came to Joseph’s company
 after being turned away from multiple lenders. The reason? In addition         In speaking with private investors Perez works with, it was determined
 to being on the brink of foreclosure, the property in question (a              that the property did have genuine equity. So with the help of title,
 commercial mixed use property in a less than desirable neighborhood in         escrow and the borrower working diligently to acquire updated payoffs,
 Los Angeles) had a whole slew of problems.                                     Better Loans & Realty was able to get everything lined up for funding.
                                                                                And then, just 1 day before the foreclosure sale date, the loan was
“The property was in foreclosure and scheduled to go to sale 14 days            funded and recorded, curing all liens on title and hence saving the
 from when we got the submission. The current lender decided to                    property from foreclosure.
 foreclose because there were back taxes on the property. The borrower
 had been trying to acquire financing for over 3 months, so they were                     “This was a loan that just made us feel good. It wasn’t a loan
 pretty skeptical that we could perform in just two weeks. We were                              that provided much yield, and it did require a lot of effort,
 their last and final hope,” says Perez.                                                          but we really believed in our client, and we’re so happy
                                                                                                   we were able to save their property and their family
 Moreover, the borrower had a 500 FICO, 15 separate judgments,                                      business.”
 and 4 tax liens on the property. There were also problems with
 title, causing some confusion as to who really owned the                                          Joseph Perez is the CFO of Better Loans & Realty
 property. But Perez wanted desperately to help. The mixed-                                          (, a company
 use property provided the family’s only source of income as                                           specializing in hard money lending for residential
 it housed their business, a car dealership, and a residential                                          and commercial properties throughout the entire
 apartment. Suffice to say that losing the property would have                                          state of CA. Contact Joseph at 818-553-3829
           been devastating for the family.                                                              Crystalline

 11   BrokerBanker | Volume 127, 2010

                                    Commercial Loan Exchange
The lenders in our Commercial Loan Exchange are all active commercial lenders who are broker friendly. We encourage you to contact them for your commercial lending needs.

Lone Oak Fund                                                 Stephan Kachani                                               Type:             Private Lender
                                                              E-mail:                               Min Loan: $250,000
                                                              Phone: 310-826-2888 x28                                       Max Loan: $10,000,000
                                                              Lone Oak Fund, LLC is a private mortgage fund larger than many banks that makes bridge loans typically
                                                              ranging from $250K to $10M on commercial property located throughout California. Interest from 8.9% to
                                                              9.9%; first trust deeds only; no prepayment penalties; funding within one week; minimal paperwork; creative
                                                              structuring; broker cooperation. Ask about special pricing arranged by Broker Banker Publisher Ed Craine.

Commercial Mortgage Corporation                               Leo Gluck                                                      Type:              Mortgage Banker
                                                              E-mail:                                  Min Loan:          $200,000
                                                              Phone: 800-538-5626 x3                                         Max Loan:          $3,000,000
                                                              “Helping mortgage brokers successfully fund small commercial loans since 1976. Stated
                                                              income loans and other niche products available. Call Leo for marketing tips.”

Beach Business                                                Timothy Fisher                                                 Type:              Bank
Bank                                                          E-mail:                          Min Loan:          Call
                                                              Phone: 818-957-8110                                            Max Loan:          Call

Blackburne &                                                  Michael Thurman                                                Type:              Private Money
Brown Mortgage                                                E-mail:                                 Min Loan:          Call
Company, Inc.                                                 Phone: 916-338-3232 x310                                       Max Loan:          Call

Bridgelock                                                    Brent Houston                                                  Type:              Private Money
Capital                                                       E-mail:                            Min Loan:          Call
                                                              Phone: 877-663-4268                                            Max Loan:          Call

Circle Bank                                                   Mark Sklonick                                                  Type:              Private Money
                                                              E-mail:                                  Min Loan:          Call
                                                              Phone: 415-893-9321                                            Max Loan:          Call
First California                                              Don Sonsma                                                     Type:              Bank
Bank                                                          E-mail:                                     Min Loan:          Call
                                                              Phone: 800-714-4106                                            Max Loan:          Call

Luther Burbank                                                Samuel Shummon                                                 Type:              Bank
Savings                                                       E-mail:                                 Min Loan:          Call
                                                              Phone: 415-257-3701                                            Max Loan:          Call

Redwood                                                       Lori Randich                                                   Type:              Private Money
Mortgage                                                      E-mail:                               Min Loan:          Call
                                                              Phone: 650-365-5341 x 218                                      Max Loan:          Call

Second Angel                                                  David Gruebele                                                 Type:              Private Money
Bancorp                                                       E-mail:                                     Min Loan:          Call
                                                              Phone: 916-863-7300                                            Max Loan:          Call

Sonoma Bank                                                   Jim Barnett                                                    Type:              Bank
                                                              E-mail:                                    Min Loan:          Call
                                                              Phone: 925-946-4270                                            Max Loan:          Call

                                                                                                                                  Volume 127, 2010 | BrokerBanker      12

                                       Industry Service Providers
             The businesses represented in this Industry Service Providers page are all broker friendly. We encourage you to contact them for your particular needs.

                                       Don’t see your Industry below? Call us at 415-406-2330 to add your Service to our growing list.
  Accounting Services
                                                      Other services that can be advertised in the “Industry Services Providers include:
                                            • Coaching • Efficiency Services • Insurance Services • Legal Services • Licensing Services • Processing
                                              Companies • SBA Loan Exchange • and more. Call 415-406-1210 to add your service to the list.
   Appraisal Services                                                      Stephen McClanskey                                     Need an Appraisal Report? If so, we
   Landmark Appraisals                                                     E-mail:                           can help. We cover most of Southern
                                                                           Phone: 949-981-0456                                    California.

                                                                           David Naciri                                           Value Express, the easiest and
   Value Express                                                           E-mail:                      quickest way to the value of any
                                                                           Phone: 888-835-3741                                    property.
 Branch Opportunities                                                      Marie Currie                      Need FHA? Want to lend in
   HighTechLending Inc.                                                    E-mail: multiple states? We’re focused on your
                                                                           Phone: 866-714-2040 x 2626        success.
    Client Retention
                                                                           Nickolas C. Jones               InTouch keeps you in touch with your
   In Touch                                                                E-mail: clients. Ask about our Broker Banker
                                                                           Phone: 408-458-4300 x 318       special.

                                                                           Jeffrey Pinkerton                                      Is your business refi-ready? Get ready                                                         E-mail: jeffrey                       with
                                                                           Phone: 678-488-5159                                    Ready. Set. Refi.
 Credit Repair Services
                                                                           Edward Jamison, Esq.                                   Start your own credit repair business
   Credit CRM                                                              Web:                                 and make $10k a month easy. Call to
                                                                           Phone: 877-256-8162                                    get your free brochure.
Credit Reporting Services
                                                                           Gordon G. Chin                                         Achieve higher FICO scores with our
   Cal Coast                                                               E-mail:                      Credit Scoring Tools. We are here 24
   Credit Reports                                                          Phone: 415-252-2888                                    hours a day to serve you.
                                                                           Claire Fennessey                           Buy Title Insurance Direct and Save
   ENTITLE                                                                 E-mail: your Borrowers Thousands in Closing
   DIRECT                                                                  Phone: 203-724-1140                        Costs! Now in 32 states and Growing.
   Loan Modifications
                                                                           Cameron Pannabecker                                    Let Our 30 years of Experience Pro-
   Mortgage Modification                                                   E-mail:                        vide Light to the End of your Home
   Center                                                                  Phone: 209-478-3200                                    Loan Tunnel.

                                                                           Jim Richman                                            Serving the clients of mortgage bro-
   Richman                                                                 E-mail:                            kers and attorneys across the nation
   & Associates                                                            Phone: 877-502-7283                                    for over 9 1/2 years.
Marketing & Advertising
                                                                           Jon Kaya                                               We specialize in corporate identity
   Kaya Design                                                             E-mail:                             branding including logos, ads, print
                                                                           Phone: 805-495-8215                                    colaterial, e-zines, and more.
    Notary Services
                                                                                                                                 Henry Davidson - Director
   Express Notary Service Inc.                                                                                                   E-mail:                                                                                                             Phone: 888.282.9747
    Web site Services                                                                                                             We design custom SEO compatible
                                                                           Jon Kaya
   Thinking2                                                               E-mail:                              websites that help you stand out from
                                                                           Phone: 805-495-8215                                    the competition.
   13    BrokerBanker | Volume 127, 2010

                                     Residential Loan Exchange
The lenders in our Residential Loan Exchange are all active residential lenders who are broker friendly. We encourage you to contact them for your residential lending needs.

Lone Oak Fund                                                   Stephan Kachani                                               Area:             California
                                                                E-mail:                               Type:             Private Money
                                                                Phone: 310-826-2888 x28
                                                                Lone Oak Fund, LLC is a private mortgage fund larger than many banks that makes bridge loans typically
                                                                ranging from $250K to $10M on commercial property located throughout California. Interest from 8.9% to
                                                                9.9%; first trust deeds only; no prepayment penalties; funding within one week; minimal paperwork; creative
                                                                structuring; broker cooperation. Ask about special pricing arranged by Broker Banker Publisher Ed Craine.

Bay Equity                                                      John Curtin          Phone: 415-699-4063                         Area:              8 Western States
                                                                                     E-mail:                      Type:              Conforming
                                                                Colin Field Phone: 949-202-5092
                                                Bay Equity is a Direct Lender in 8 Western States providing Mortgage Brokers a dependable
                                                funding solution in today’s turbulent mortgage environment. Our mission is to provide you with
                                                competitive pricing and unmatched customer service. Our experienced team is focused on what
                                                is important to you, which we believe, is PRICE & SERVICE! We have the ability to move
                                                quickly and give you answers in hours, rather than days.

CMG Mortgage                                                    Brian Cerruti      p: 707-338-3632                               Area:              No. California
                                                                E-mail:                                 Type:              Conf., FHA, VA

                                                                Brent Eckhardt     p: 831-566-0022                               Area:              No. California
                                                                E-mail:                                Type:              Conf., FHA, VA

                                                                Jeff Parry        p: 206-280-1500                                Area:              Seattle & Portland
                                                                E-mail:                                   Type:              Conf., FHA, VA

                                                                Todd Albrigo       p: 619-742-5460                               Area:              No. California
                                                                E-mail:                                 Type:              Conf., FHA, VA
Franklin American                                               Raoul Badde                                                      Area:              No. California
Mortgage Company                                                E-mail:                                       Type:              Conf., FHA, VA
                                                                Phone: 415-699-0980

MetLife                                                         Darren Siegrist                                                  Area:              No. California
Home                                                            E-mail:                           Type:              Conf., FHA, VA
Loans                                                           Phone: 818-575-2600

Mountain                                                                                                                         Area:              No. California
West                                                            Web:                                       Type:              Conf., FHA, VA

Paramount                                                       To find your rep., go to our web site                            Area:              No. California
Residential                                                     Web: www.prmglending                                             Type:              Conf., FHA, VA
Mortgage Group, Inc.

Reunion                                                         Marilyn Tsai                                                     Area:              No. California
Mortgage                                                        E-mail:                                Type:              Conf., FHA, VA
                                                                Phone: 415-265-2470

Titan                                                           Wendy Edwards                                                    Area:              No. California
Wholesale                                                       E-mail:                             Type:              Conf., FHA, VA
                                                                Phone: 775-852-6888 Ext. 225
                                                                                                                                     Volume 127, 2010 | BrokerBanker       14

Whose YSP Is It Anyway?
The 2010 GFE for the Broker
Let’s start by understanding what changed, and we’ll finish          uses the GFE as the shopping tool it was intended to be.
with some ideas of how to use the changes to your advantage.
In December, lenders credited 100% of ySP as a POC (paid             I suggest a couple of things here. First, since you will no
outside of closing) directly to the mortgage broker. The             longer credit the borrower on a brokered loan, as ySP now
broker then instructed the lender how much of the ySP they           gets credited directly to the borrower, it is time we moved
would like to “credit” the borrower. The broker retained their       away from terms like “zero point” loans or “no cost” loans.
compensation from the ySP. Today, with the new GFE, ySP              They were always misnomers anyway. More to the point, and
is handled quite differently. The only portion of ySP that           the pun is intended, you may corner yourself in using this ter-
passes directly to the broker now is the portion that they           minology. Look at any wholesale rate sheet. ySP only comes
have disclosed and included in their “origination fee” in box        in certain options and sometimes there are big anomalies
one of the new GFE. Any remaining ySP, if there is any, gets         between tiers. you will rarely have ySP that will exactly offset
credited directly to the borrower to offset other closing costs.     origination charges, which you would need for a “zero point”
This is the new world order. The ySP really belongs 100% to          loan. If you are suddenly short on available ySP, from the
the borrower. To participate in ySP, the broker must disclose        time you initially disclosed and the time you are ready to lock,
it as a part of their origination fee on the new GFE.                you may have to reduce your origination fee to affect the zero
                                                                     point loan. Many brokers have already realized this, hence
There is another option and that is to simply charge all             the large origination fee cushions. The same challenge exists
compensation as origination fee instead of ySP and let the           if you sell a “no cost” loan.
borrower get 100% of ySP directly as a credit. The latter
option works a little better with most LOS software and may          Since you have already disclosed your origination charges
save you some work around hassles. But this is not your best         and all other closing costs to the borrower, you may want to
option on a VA loan, due to origination fee constraints.             present them their “wholesale” price options. Rather than sell
Both methodologies are treated the same on the GFE, re-              a zero point loan, for example, you could assist your client in
quiring brokers to put the compensation they expect to make          selecting the rate that offers the best combination of monthly
(whether all origination fee, all ySP, or a combo of the two)        payment, and credit or discount cost that works for them.
as expressed in a dollar amount plus the lender fees in box          Explain to your customer that when they lock in they may
one. If the rate desired pays ySP, it is disclosed in its entirety   receive the ySP credit they see today--or it could be a little
in Box 2, as a credit to the borrower. But any way you dice          more or a little less--but it will be their choice, and they can
broker compensation, at the end of the day, 100% of the ySP          rest assured that on a brokered loan all ySP will be disclosed
gets credited to offset borrower costs on a brokered loan. It is     and credited against their closing costs. They are in the driver’s
worth saying it in yet another way:                                  seat. This is a subtle change in scripting, but it will save you
                                                                     from having to over disclose your origination fees, thereby
ySP = borrowers credit                                               making you look more competitive on your GFE. And, it will
Discount points = borrowers charge                                   certainly save you from kicking in your origination fee.

you cannot increase your origination charges except in very          Second, make sure you understand how to quote the fees of
narrowly defined circumstances, but you can reduce them. I           the companies you feature on your settlement services pro-
hear from many of you that you are quoting very high origi-          vider list accurately. Get a list of common title endorsements
nation charges so you can absorb fees you under disclosed or         your lenders request and get the fees for those as well. Make
inadvertently undisclosed. This strategy will work with clients      sure you don’t miss any transfer taxes. Have your escrow
that blindly trust you. But it will put you at a severe disad-       officer prepare an estimated HUD-1 for you before you pre-
vantage with a borrower that does not know you and actually          pare your GFE and ask them to include seller paid fees for
15    BrokerBanker | Volume 127, 2010

New World Order
By Terri Buckman

transfer taxes and title and escrow fees. Recently, several large   deductible. A mortgage broker could take all their compensa-
investors and HUD have confirmed that all title and settle-         tion in loan origination fee (not ySP) and then apply all the
ment fees, including those customarily paid by the seller in        borrower’s ySP credit against non-deductible closing costs
specific geographic areas, must be disclosed on the new GFE,        first.
unless required to be paid by the seller by state law or local
code. There are a few exceptions, preparation and recording of      As always, learning to adapt and understanding how best
grant deed and seller notary fees, for example. But if in doubt,    to present this new world order for your customer’s best
disclose, disclose, disclose.                                       advantage will elevate the true professionals from the rest.

Third, remember that ySP credited to the borrower from
the lender does count toward maximum interested party               Terri Buckman is the Vice President and Sales Manager of Affiliate
contribution, except for any portion credited to the broker as      Branching for Pinnacle Capital Mortgage. With more than 25 years of
compensation in line 801 of the new HUD-1. So, watch your           experience in the mortgage banking and brokering industries, Terri
seller’s and ySP credits. They can’t exceed the actual fees, and    welcomes questions at or via phone at
you can’t increase fees now to absorb excess credit. you will       925.822.5931.
have to re-lock at lower rate, re-disclose,
and redraw your closing docs. Last
minute credits to the buyer to cure is-
sues could postpone an otherwise timely
closing. Educate your realtor partners to
work closely with you on seller/broker

And last, bankers at present do not have
to disclose ySP on loans they fund
internally on their warehouse lines, nor
must they credit 100% of ySP to the
borrower. It is a little more, business
as usual, for bankers where ySP is
concerned. That said, a well-prepared
broker could use the new GFE to their
advantage by selling the benefits to the
borrower of full disclosure. The borrow-
er does not own the ySP on a banked
loan which means it is at the discretion
of the originator whether or not to
share ySP with the borrower.

Brokers could take things a step further
and show the borrower how they can
structure the transaction for better tax
advantages. Origination fees are tax
                                                                                                          Volume 127, 2009 | BrokerBanker   16
        “Dumbest” Mistakes #4:
            Listening To Pretend Experts and Getting Distracted by the Next Bright Shiny Object

By Brian Sacks

Moving along in our series of the                                                        It has always bothered me that many of these
dumbest mistakes loan officers can                                                       one-trick-pony “gurus” only have a few dated
make, we arrive at mistake #4, which                                                     tricks in their toolbox that they keep repeating
are really two mistakes wrapped into one.                                                   over and over again. So, I challenge you to ask
Doesn’t it seem like everywhere we turn                                                         of any educator charging you a fee for their
someone is trying to sell us the next                                                               knowledge if they are willing to put their
“magic pill?” This, despite the fact that in                                                          money where their mouth is. That is,
this market very few of us have the time                                                              are they willing to guarantee results?
or the hard-earned money to throw away                                                                If their tactics work as well as they
on more useless marketing or business                                                               claim they do, then they should have no
tactics! Instead, what we need is an edge that                                                   problem offering this.
works, and works now!
                                                                                             You deserve, and should demand the right
Please don’t misunderstand me. It’s been proven                                               to field test the information they provide, to
time and again that if you want to be successful                                              see if it really does work in today’s market.
in the origination industry, you must invest in                                               Unfortunately, much information for sale out
your education. But, you’ll notice I used the word                                            there may be purely theoretical or ideas that
“invest.” Worthwhile education truly is an investment                                        worked decades again but are now obsolete.
that will pay off for you, but there are a few important
considerations you’ll need to make first.
                                                                         I caution you specifically to steer clear of any expert who is only
To begin, you need to think about who you are listening to. Is your      selling you a template. There simply isn’t a one-size-fits-all magic
educator worthy of your respect? Are they qualified, and can they        template out there. Save your money. Moreover, wasting time
prove it? Next, you need to think about what you’re being taught.        listening to the wrong educator can cause you to lose focus, which
Will it really get you closer to your goals? Or will it set you off on   you need more than ever in today’s market. Unfortunately, once
another wild goose chase causing you to lose time, money, and            you go down the wrong path chasing after the next shiny object, it
worst yet, your focus?                                                   becomes more difficult to get back on track. So be diligent when
                                                                         researching the investment you’ll make in your education, and
Practical Guidelines:                                                    you’ll be able to avoid the mistake of listening to pretend experts
Be careful who you listen to. Heaven knows there are a ton of            and chasing shiny-but useless objects
“experts” and “gurus” in our industry. Many are have valuable            .
information to share, but many do not. They may have never even          Brian Sacks is the CEO of He has
originated a loan, or they did so very long ago. I know it’s not a       been an industry expert for over 24 years closing over 6000 loans
news flash, but the market has changed. What works during a refi-        totaling 1 BILLION Dollars. Brian has trained thousands of originators
boom doesn’t work during a “crash” and vice versa. The one thing         And company owners in North America sharing his “FORMULA” for
you can count on is the market being volatile.                           success that will allow you to close LESS loans, Make More Money,
                                                                         and Have a Life REGARDLESS OF MARKET CONDITIONS.
17   BrokerBanker | Volume 127, 2010

                                  Private Money Loan Exchange
The lenders in our Private Money Loan Exchange are all active private money lenders who are broker friendly. We encourage you to contact them for your private money lending needs.

Lone Oak Fund                                                      Stephan Kachani                                               Type:             Private Lender
                                                                   E-mail:                               Min Loan: $250,000
                                                                   Phone: 310-826-2888 x28                                       Max Loan: $10,000,000
                                                                   Lone Oak Fund, LLC is a private mortgage fund larger than many banks that makes bridge loans typically
                                                                   ranging from $250K to $10M on commercial property located throughout California. Interest from 8.9% to
                                                                   9.9%; first trust deeds only; no prepayment penalties; funding within one week; minimal paperwork; creative
                                                                   structuring; broker cooperation. Ask about special pricing arranged by Broker Banker Publisher Ed Craine.

Agricap                                                            Web:                                               Area:                California
                                                                   E-mail:                                     Type:                SFR & Commercial
                                                                   Phone: 213-542-5232                                                Amount:              $500k to $5MM

Blackburne &                                                       Michael Thurman                                                    Area:                California
Brown Mortgage                                                     E-mail:                                     Type:                SFR & Commercial
Company, Inc.                                                      Phone: 916-338-3232 x310                                           Amount:              $500k to $5MM

Bridgelock                                                         Brent Houston                                                      Area:                California
Capital                                                            E-mail:                                Type:                SFR & Commercial
                                                                   Phone: 877-663-4268                                                Amount:              $500k to $5MM

Brownstone                                                         Alex Nackoul                                                       Area:                California
Mortgage Capital                                                   Web:                                       Type:                SFR & Commercial
Corporation                                                        Phone: 1-800-547-1285                                              Amount:              $500k to $5MM

California                                                         Mike Christl                                                       Area:                California
Equity Lenders                                                     E-mail:                                  Type:                SFR & Commercial
Inc.                                                               Phone: 818-807-3866                                                Amount:              $500k to $5MM

Redwood                                                            Lori Randich                                                       Area:                California
Mortgage                                                           E-mail:                                   Type:                SFR & Commercial
                                                                   Phone: 650-365-5341 x218                                           Amount:              $500k to $5MM

Roza Real Estate                                                   Eva Roza                                                           Area:                Northern California
Loans                                                              E-mail:                                               Type:                1-4 NOO & Comm.
                                                                   Phone: 415-584-3000                                                Amount:              $200k to $1.5MM

Second Angel                                                       David Gruebele                                                     Area:                California
Bancorp                                                            E-mail:                                         Type:                SFR & Commercial
                                                                   Phone: 916-863-7300                                                Amount:              $200k to $5MM

                                                                              Your Listing Here

                                                                              Your Listing Here

                                                                              Your Listing Here

                                                                              Your Listing Here
                                                                                                                                        Volume 127, 2010 | BrokerBanker        18
By Weston Lyon

As a mortgage broker, you have a ‘to-do’ list a mile long. There      you to stay sharp and enhance your marketing skills in the pro-
are things that need to be done now, things that needed to be         cess. Marketing is the most important aspect of your business.
done yesterday, and things that need to be done as soon as            These skills are vital to your survival.
you can get to them. Being a mortgage broker is tough. That’s         Bad idea because… implementing marketing strate-
why getting help is essential. The question is: what do you get       gies can be time consuming. It takes time to write articles and
help with?                                                            copy for mailers, newsletters, brochures, etc. It takes time to
                                                                      make calls and send e-mails. It takes time to design an ad or
Do you get help with my important tasks like marketing, or do         webpage.
you get help with smaller but meaningful tasks like paper work?
The correct answer: YES. You need help with both if you want          Following Up:
to succeed. However, in this article, I’d like to focus exclusively   Good idea because… you’ll be able to connect better
on marketing. So let’s not waste any time in exploring whether        with your clients. You’ll know their response to your marketing
or not asking for help with your marketing efforts are a good         as well as their feedback, likes and dislikes. Knowing all this will
or a bad idea. We’ll do this by looking at the three stages of        help you market better to them and others in the future.
marketing: Planning, Implementing, Following Up.                      Bad idea because… you’ll be spending time with non-
                                                                      action takers instead of spending time to sell to the people who
Planning:                                                             have raised their hands and want your help. Follow up is crucial
Good idea because… you’ll have complete control                       to your business. However, it does take time away from the act
over the look and feel of your marketing. After all, you have the     of making money…selling.
vision; you’re the entrepreneur. Having complete control will
allow you to paint the picture you want.                              Verdict:
Bad idea because… you’ll have complete control.                       As you can see, there are pros and cons to doing your own
Having control isn’t the bad part; it’s being so controlling that     marketing. And this doesn’t even take into consideration other
you can’t see the forest through the trees, that’s bad. In other      important aspects of marketing such as automating, system-
words, you may become so controlling that you become blind to         atizing, or partnering. We’ll cover those in a later article. With
the possibilities and opportunities around you that will lead you     that said, the bottom line for today is: you need to be involved
to the success you desire.                                            in every aspect of your marketing, in one way or another. But,
                                                                      you need help to make your marketing easier, faster, and more
Implementing:                                                         productive.
Good idea because… you know the pulse of your
business and your industry. Marketing yourself will bring your        Weston Lyon is the author of 10 books & a passionate professional
energy and your passion to your business. No one can market           speaker. More of Weston Lyon’s articles and strategies can be found at
your business like you. No one! Plus, marketing yourself allows
19   BrokerBanker | Volume 127, 2010

                   Branch Opportunities Exchange
                   The Branch Opportunities Exchange members are all broker friendly. We encourage you to contact them for their services.

                                                                  Melissa Arntzen                                           Retail Banking and Branching
                                                                  E-mail:                           Company since 1996. 160+ branches.
Pacific Mortgage
                                                                  Phone: 916-960-0493                                       Banker/broker platform. your DBA ok.

                                                                  Jeff Miller                                               Topnotch business support, training,
Debt Zero                                                         Web site:                          and back-end processing for Debt
                                                                  Phone: 866-356-2755                                       Settlement. 

                                                                  Greg Frost                                                Great pricing. Fast U/W. On
Frost Mortgage
                                                                  E-mail:                                time closings. Mentoring. 100%
Lending Group
                                                                  Phone: 800-659-3767                                       net payout. $2 Billion monthly line.

                                                                  Dane Basham                                               FNMA and GNMA direct lender.
                                                                  Web site:                                 We provide leads. Grow with us.
Mortgage Group
                                                                  Phone: 888-544-0034 ext 222                               25 States.

                                                                  Marie Currie                      Excellent rates. Fast closings.
HighTechLending Inc.                                              E-mail: Paperless. Focused on your
                                                                  Phone: 866-714-2040 ext 2626      success.

                                                                  Amber Wiertalla                                           Turnkey. Keep your DBA. Keep
Pinnacle Capital
                                                                  E-mail:                            100% of profits. All products.
Mortgage Corporation
                                                                  Phone: 888-708-2707 ext 18286                             Western states.

                                                                  Rick Cossano                                              FNMA direct lender with retained servicing,
RPM Mortgage                                                      E-mail:                              FHA/VA, private AMC, 20 Day Purchase
                                                                  Phone: 925-997-8923                                       Guarantee, cutting-edge technology - Can Do.

                                                                  Linda Litt                                                Since 1993, we have been the industry
                                                                  E-mail:                        leader in branch opportunities.
Funding, LP
                                                                  Phone: 877-878-8989

                                                                   Your Listing Here

                                                                   Your Listing Here

                                                                   Your Listing Here

                                                                   Your Listing Here

                                                                   Your Listing Here

                                                                   Your Listing Here

                                                                                                                                 Volume 127, 2010 | BrokerBanker   20
          Pass                                                        or                              Fail
                                                                          What Every
                                                                      Mortgage Broker
                                                                   Should Know about
By David Reinholtz                                              SAFE Act Testing

Unless you’ve been selling real estate on Mars for the past few          system in place by either July 31, 2009 (for states whose legisla-
years, you’ve heard about the Secure and Fair Enforcement                tures meet annually) or July 31, 2010 (for states whose legislatures
for Mortgage Licensing Act of 2008 (called the SAFE Mortgage             meet biennially). For either of these deadlines, the U.S. Department
Licensing Act of 2008). The SAFE Act mandates increased federal          of Housing and Urban Development (HUD) offered to extend the
regulation of the mortgage lending industry, enhanced licensing          deadline if HUD determined that a state is making a good faith effort
requirements, and professional liability for mortgage loan originators   to establish a state licensing law that meets the minimum require-
(MLOs) who fail to comply. So, if digging your way out of the reces-     ments of the SAFE Act.
sion were not challenging enough, now you have additional federal
and state hurdles to clear.                                              By January 2010, 43 states, the District of Columbia, and Puerto
                                                                         Rico had adopted NMLS. But HUD recognizes that in many states
How did this happen? In response to the foreclosure epidemic and         individuals currently performing loan originations may not be able to
the global economic crisis that erupted in 2008, Congress passed         meet the educational, testing, and background check requirements
legislation to establish more government oversight of individual         by the time required regulations become effective. In addition, HUD is
mortgage loan originators, with the outcome of increased consumer        aware that some states already require licensure of loan originators.
protection. Primarily, the law set forth objectives for a Nationwide
Mortgage Licensing System (NMLS) for the residential mortgage            In those states that have adopted NMLS all individuals acting as a
industry. The SAFE Act requires that all residential mortgage loan       residential mortgage loan originator (RMLO) must create an account
originators must be either federally registered or state-licensed. A     in NMLS and have filed or file a Form MU42 through NMLS with
mortgage loan originator employed by a federally insured depository      the state regulatory agency. Filing deadlines depend on the type of
institution, credit union, or an owned and controlled subsidiary that    license required.
is federally supervised must be federally registered. All other mort-
gage loan originators, without exception, must be state licensed.        NMLS Requirements and Your Responsibilities
                                                                         What do you have to do? In addition to certain other requirements,
All state licensed and federally registered mortgage loan originators    all MLOs need to file a Form MU4 through NMLS with the their
must be registered with the NMLS, which is maintained by the Con-        state’s Division of Banking. The applicant, as a state-licensed loan
ference of State Bank Supervisors and the American Association of        originator, must furnish certain information to the NMLS including
Residential Mortgage Regulators.                                         fingerprints for a criminal background check and personal history
                                                                         and experience. Minimum standards for license issuance includes:
Striving for Uniformity among the 50 States                              •     Never having had a revocation of loan originator license
At the time of the law’s passage, state systems varied greatly. The      •     Never having had a felony conviction involving an act of fraud,
SAFE Act required the states to have a licensing and registration              dishonesty, or a breach of trust, or money laundering (no other
21   BrokerBanker | Volume 127, 2010

     types of felonies seven years prior to application)
•    Demonstration of financial responsibility
•    Completing pre-licensing education, reviewed and
     approved by the NMLS (at least 20 hours)
•    Passing a written test developed and administered
     by the NMLS (at least 75% correct answers out of minimum
     100 questions)
•    States must include a minimum net worth requirement or
     surety bond requirement for applicants, or have had the ap-
     plicant pay into a state fund.

The SAFE Mortgage Loan Originator Test                                       Broker Banker Magazine and Loan Officer
Some requirements (such as no felony conviction and no license
                                                                             School are joining together to bring you the
revocation) are straightforward: either you can comply or you can’t.
What’s bringing fear and trembling to the hearts of MLOs nationwide          SAFE Act information you need. Visit
is the SAFE Mortgage Loan Originator Test. All MLOs must pass
the test, which is comprised of two components: a state component
                                                                    to find out more
and a national component. MLOs must pass each component with                 about SAFE Act education and testing
a score of 75% or higher prior to renewal for 2011. The SAFE Act
exam covers topics including federal law and regulation, fair lending        requirements. Learn how Loan Officer School
issues, consumer protection, instruction on fraud, ethics, and the           can help you meet these requirements in a
nontraditional marketplace.
                                                                             variety of ways: live classes, on-line classes,
To date, industry sources place the failure rate at anywhere from
                                                                             test prep books, and more.
30% to a whopping 70% for first-time takers. As part of the SAFE
Act licensing requirements, the Act requires that all new mortgage
loan originator applicants must complete 20 hours of NMLS-
approved Pre-licensure Education (PE) and annual Continuing
Education (CE). You’d think that 20 hours of instruction should make
the test a breeze. Apparently, results depend upon the quality of the

So, take time to find the best mortgage industry education organiza-
tion you can. Companies who have stood the test of time and have
been educating MLOs for years (long before new regulation was in
place) are probably your best bet. There’s a reason they’ve been
around a long time…because they provide valuable training and
quality education programs so that when it’s your turn to take the
SAFE act test, you’ll be ready.

David Reinholtz possesses 25 years in the mortgage business as a top
produce and educator. He is an NMLS Specialist and on the Board of
Advisory for He is a prolific industry publication
writer and authored the 125-page national handbook “Navigating the
National Mortgage Licensing System: Your all-in-one guide to meet-
ing the requirements of the new NMLS for loan originators”. He has             For more information, visit us at:
published a national manual and a series of 50 state-specific study guides
for mortgage brokers.
                                                                                                      Volume 127, 2010 | BrokerBanker   22
                                                                            Broker Banker Magazine
                                                           PRSRT STD
                                                          U.S. POSTAGE      America’s Trade Publication
                                                                            for Loan Originators
                                                           Post Falls, ID   California Edition
                                                          PERMIT NO. 32     Volume 127, 2010

Commercial REO & Distressed Asset Conference
                 April 28,2010 8:30am-5:30pm

   The Fairmont Hotel • San Francisco, CA
    Our speakers are industry leading commercial practitioners who will tell you how to:
                           • Buy discounted commercial paper
                      • Buy commercial properties at deep discounts
                          • Renegotiate loans in your portfolio
                             • Negotiate workouts for clients
                      • Find money for the deals you are working on
                            • Value property in today's market
      • Develop realistic cash flow projections for today's challenging environment
                           • Sell distressed assets for top dollar
                               • Reposition distressed assets
                       • Work with Asset Managers and Receivers

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