Mortgage Professional - HUD's Usual Suspects: Mini-Eagles: I HATE Office 2007

January 21, 2010 - "News You Can Use"

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HUD's Mortgagee Review Board Terminates or Fines over 200 Lenders

What are lenders getting fined for?

Unlicensed employees doing loans (3/15)
Failure to report investigations or license surrender (2/15)
Failure to perform Quality Control Reviews (4/15)
Failure to file annual reports on time or at all (189)

4. Community Home Lending, Inc., Birmingham, AL [Docket No. 09-8041-MR]

Action: July 1, 2009, settlement agreement with Community Home Lending, Inc.'s (Community) requiring civil money penalty of $11,500 without admitting fault or liability.
Cause: Community violated third party origination restrictions by allowing non-employees to originate FHA-insured mortgages; allowed an employee to originate FHA-insured mortgages and simultaneously work in the fields of property management and real estate; failed to maintain a quality control (QC) plan conforming to all HUD/FHA requirements, including allowing its reviews
to be conducted by a loan officer; and failing to conduct QC reviews in 15 early default cases.

7. Great Country Mortgage Bankers, Corp., Coral Gables, FL [Docket No. 09-9618-MR]

Action: June 3, 2009, timmediately suspended Great Country Mortgage Bankers Corporation's (Great Country) FHA approval pending the outcome of a HUD review and any ensuing legal proceedings.
Cause: Great Country failed to implement a QC plan in compliance with HUD/FHA requirements by failing to conduct QC reviews on loans defaulting within six months of origination

10. Mortgage America Bankers, LLC, Kensington, MD [Docket No. 08-8072-MR]

Action: On September 18, 2009, the Board entered into a settlement agreement with Mortgage America Bankers' (Mortgage America) requiring the payment of a civil money penalty of $10,000 without admitting fault or liability.
Cause: The Board took this action based on the following violations of HUD/FHA requirements alleged by HUD: Mortgage America failed to implement and maintain an acceptable QC plan and was unable to provide QC reports for loans that closed in the years 2006 and 2007, indicating
a failure to conduct QC reviews.

15. World Alliance Financial Corporation (formerly Vertical Lend, Inc.), Melville, NY [Docket No. 07-7036-MR]

Action: On April 3, 2009, the Board entered into a settlement agreement with World Alliance Financial Corporation's (World Alliance) requiring the payment, without admitting fault or liability, of a civil money penalty in the amount of $13,000.
Cause: The Board took this action based on the following violations of HUD/FHA requirements alleged by HUD: World Alliance failed to implement and maintain a QC plan containing all required elements for the period April 2004 through September 2006. World Alliance also failed to include any FHA insured mortgages in its QC review sample for the period June 2006 to September 2006, despite World Alliance's origination of 320 FHA-insured mortgages during that time period.

In this issue:

HUD's Usual Suspects

Update on Mini-Eagle Problem

I HATE Office 2007

Are You PUSHING CLIENTS AWAY?

SAFE ACT Training - NMLS Approved

Loan Officer/Processor Training - Books, Manuals and on-line Training - 2009 Versions Now Available!

Production Managers - FREE Training Site for basic introductory information

Looking for Lending Policies and Procedures?Complete customizable templates

Red Flag ID Theft Program Required by 5/1/09

OnlineLO - Engage web customers to get them to apply online

MINI EAGLE - "Gone, Baby, Gone"

The stated termination of the mini eagle program has caused confusion and some loss as brokers who are late to the "I want to get FHA approved" party find that FHA's guidelines exclude them effective 1/1/10. The proposal was simple. The problem is that as of 1/21/10 HUD has yet to disseminate guidelines for the process, although the details are enunciated in the Federal Register. According to several of our clients, HUD continues to process applications received prior to 12/31/09.

Executive Summary

Mortgagees will be responsible for all correspondent (broker) activities; including meeting all HUD guidelines for originating, processing, auditing, personnel (as required under HFSH Act - SAFE Act licensing/disbarment) - and other guidelines - Quality control plans and reviews will still be required.
The Mortgagee must provide the Correspondent's (Broker') FHA identification number (if FHA-approved) or (2) legal name and tax identification number (non-FHA-approved).
NO TABLE FUNDING - underwrite/close in mortgagee name

"I HATE Office 2007"

We hear this ALL the time, because our templates are written in Office format. Many people have not gotten used to the new "intuitive interface" - meaning they have to guess where their favorite function keys might be. Plus, it's expensive. Every few years we like to remind people that there is an alternative. Depending on the version it might even be FREE!! Visit www.openoffice.org to download the shareware version SUN Microsystem's competitive product. It works GREAT.

Are You Pushing Your Customers Away? - The Rules of Engagement

Despite the amount of money mortgage companies, banks and credit unions spend on the development of web sites, many of these firms seem oblivious to any measure of effectiveness. If a customer fills out the "please contact me later" form on the company's site, that is considered a measure of effectiveness. But the reality is that only 7.3% of all applicants actually complete their mortgage application online. Which is too bad. Based on a 2007 survey by Deloitte, 61% of customers who had a positive web application experience highly recommended their lender. Compare that to only 41% of telephone customers.

The key is engagement. In the same way that the live loan originator wins a customer by developing rapport, the longer a customer stays with a web loan officer, the more likely he or she is to apply. In this context, if you were shopping for mortgage information, what would you do if the only information the site yielded was a set of interest rates, and a static form requesting personal information to be "pre-qualified"? In a survey of 910 mortgage or banking sites, following the "get more information" link resulted in a static application form (or a simple contact form) 903 times.

We know this about Web customers:

Web customers don't want to apply until they are ready to apply. Forcing a customer to provide a social security number will drive him or her away.

Web customers don't want to fill out a form and have someone get back to them.

Web customers resent being given rate information, and then being told that the information doesn't apply to them

Web customers would rather NOT talk to a loan originator. Unfortunately, this is their only alternative 99.4% of the time. UNLESS you have a tool for engagement.

Engaging a customer means answering the 5 questions every borrower asks:

What's the rate?

What's the payment?

How much can I afford?

What are the closing costs?

What types of loans are best for me?

Giving a borrower this information, without creating an obligation to apply, creates a web borrower who completes the application online within 24 hours (16% of visits), or returns at least 6 times and completes an application (61% of visits).

For a demonstration of a product that will do this for you, visit www.onlinelo.com and see the virtual loan originator.

QuickStart Quality Control Systems and Mortgage Training Programs

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Rockville, MD 20850

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