CREDIT CREDIT

AMERICA’S TRADE PUBLICATION FOR HOME LOAN ORIGINATORS

California Edition

Volume 122, 2009 $4.95 www.BrokerBanker.com

In This Issue of Broker Banker:

• Change Has Come... And KeepsComing and Coming and Coming.

• Broker Banker Product of the Month:The Credit DVD Series

• Cold Calling 101

• These Times… …Call for EverydayHeroes.

• One Step at a Time

BROKER BANKERBROKER BANKER

PRODUCT OF THE MONTHPRODUCT OF THE MONTH

CREDITDVD SERIESCREDIT

DVD SERIES

THETHE

2

True to our new administration’s word, change has come

(at least to the mortgage industry where it seems to keep

coming and coming and coming). From the tax credits for

first time homebuyers to incentives for lenders to

modify existing mortgages, this year has been

nothing short of a whirlwind with positive

changes slowly emerging.

Although it ’s still frus-

trating to qualify home-

owners for refinances and

obtaining purchase loans some-

times seems as easy as herding cats,

small, positive changes emerge each day

(even though you may have to search high and

low to find them!) For example, consumer spending

may be down, but consumer savings is way up. Fore-

closures may be up, but so are mortgage applications.

Home building may be down, but so are interest rates.

It’s a shame that these small, positive changes don’t get equal

coverage in the news as the gloom and doom headlines.

Certainly these changes are worthy of our notice and

worth sharing with our clients, our families, and

our friends. In fact, I happen to believe

that just as low morale and negative

attitudes are contagious, so is

optimism and an outlook that

things will continue to improve.

Change doesn’t happen overnight, but with

all of us working together, things can and will con-

tinue to change for the better.

Warm Regards,

Ed Craine

Change Has Come...

Letter from the Publisher

…And Keeps Coming and Coming and Coming.

Volume 122, 2009 | BrokerBanker

3 BrokerBanker | Volume 122, 2009

BrokerBanker

FEATURES

2 CHANGE HAS COME... AND KEEPS COMING AND COMING AND COMING.Editor’s Letter by Ed Craine

5 THE CREDIT DVD SERIES Broker Bankers product of the Month

9 COLD CALLING 101: A RETURN TO ONE OF THE FUNDAMENTALS OF LENDING PROVES LUCRATIVEBy Leo Gluck

13 THESE TIMES… CALL FOR EVERYDAY HEROES.By Cameron Pannabecker

15 COMMERCIAL LOAN EXCHANGE

16 RESIDENTIAL LOAN EXCHANGE

17 DON’T GET SHORT CHANGED! By: Leslie Petersen

19 ONE STEP AT A TIMEBy: Brenda Rhodes

21 INDUSTRY SERVICE PROVIDERS

22 PRIVATE MONEY LOAN EXCHANGE

BROKER BANKER STAFFExecutive Publisher: Ed CraineEditor: Deborah KayaStaff Writer: Ed CraineStaff Writer: Jennifer HadleyDesign: Jon Kaya – Kaya DesignProduction: Kaya DesignPhotography: Vinit Satyavrata

ARTICLESBROKER BANKER MAGAZINE welcomes editorial submissions.Send your article ideas and letters to: BROKER BANKER MAGAZINE2645 Ocean Ave. #202, San Francisco, CA 94132or fax us at: 415/406-2340 or email to: [email protected]

ADVERTISING AND EDITORIAL OFFICE2645 Ocean Ave. #202San Francisco, CA 94132415/406-1210415/406-2340 [email protected]://www.BrokerBanker.com

SUBSCRIPTIONSTo receive BROKER BANKER MAGAZINE each month, simply go tobrokerbanker.com to subscribe. The 12-month subscription price is $59.00.

ADDRESS CHANGESAddress corrections can be made via fax, email or regular mail.

Editorial material appearing in BROKER BANKER MAGAZINE is an informational service to readers. Article contents are the opinions of theauthors, and not necessarily those of BROKER BANKER MAGAZINE.

Permission to reprint articles contained in BROKER BANKER MAGAZINE must be requested in writing.

BROKER BANKER MAGAZINE makes every effort to publish credible,responsible advertisements. Inclusion of product ads or announcements donot imply endorsement.

BROKER BANKER MAGAZINE is a registered trademark ofBBMag Enterprises, LLC.

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

Ed CraineExecutive Publisher

that many loan originators were glad to see lower FICO® scores, as thatmeant a higher interest rate justifying steeper fees and substantial rebates.I was appalled. Very few cared about credit scores, and most were cer-tainly not interested in educating consumers or clientson how credit works and the long term ramifications anegative credit score can have,” he adds.

“The entire world of credit reporting and how scores are determined was a mystery to just about anyone I cameacross. What little information was available to consumersseemed only to help those in the credit repair industryearn money. There was virtually no information availableon how easy it can be for individuals to begin mendingtheir own credit scores. But, in order for them to do that,they had to first understand their scores and the scor-ing system. So, I had to start at square one,with education, and to me that begins withproviding accurate information,” he says.

It’s Only Fair: Providing Accurate In-

formation

“In order for the truth about FICO® scoring to be credible, not only to con-sumers but fellow mortgage and financecolleagues, credit counselors, and others,the information presented in The CreditDVD Series needed to be presented by arespected expert. I found that expertin Ginny Ferguson, a nationallyrenowned expert and educator oncredit. She exceeded my expecta-tions, presenting the subject mat-ter with simplicity, clarity, and aboveall, accuracy,” Nabil explains.

In order to release the DVDs, Nabil neededabsolute confirmation that all information pre-sented in The Credit DVD Series was 100%accurate. As luck would have it, he didn’thave to search for this confirmation. The

Inspiration can strike at anytime, in any place. This cliché couldn’t be anytruer for Nabil Captan, creator of The Credit DVD Series. His creation, ofwhat is now regarded as the most accurate DVD on FICO® scores available,was inspired by a late library book in 2005.

“A friend asked me to help his young daughter, a recent college graduate, geta loan for a condo. I pulled her credit report to find that she had a middleFICO® score of 519. She had no idea why her credit was so terrible as shealways paid her bills on time. And she, a college graduate, had no idea whata credit report or a credit score was. The culprit was right there on the creditreport. The city library had reported her as 90 days late on fees stemmingfrom the late return of library books. Although she had paid the $60 fees, thelibrary never reported her payment and continued to report multiple lates.”

Having explained to his new client why her FICO® was so low and deliver-ing the bad news that the low score would result in higher interest rates,Nabil’s client asked a simple but poignant question. “Why wasn’t I taughtthis in school?”

Nabil couldn’t come up with a single good reason why she hadn’t beentaught this. Moreover, he began to discover that she wasn’t alone. Few, itseemed, knew what a FICO® score was, much less know what their scorewas, and worse, they didn’t seem to care. But, what was most discouragingto Nabil was his discovery that what little educational information was avail-able was mostly inaccurate, not to mention out of date.

Fed Up with False Information:

“Once I decided to create The Credit DVD Series, I had my work cut out forme. I spent an entire year reading everything I could about credit scoring. Iattended more than 70 seminars and logged countless hours reviewing web-sites focused on credit scoring, credit reports, and credit repair. It all justadded to my frustration. The misinformation being reported by so-called ex-perts on how to ‘trick’ the system or how to have an item ‘permanentlydeleted’ from your credit report (for a substantial fee of course) was infuri-ating. While many of the books I read were good and many of the seminarswere informative, the amount of misinformation, if not altogether false infor-mation being taught, was staggering,” Nabil recounts.

“It wasn’t just that consumers didn’t understand credit scores or reports;many loan originators didn’t understand them either. Sadly, I even found

Broker Banker Presents Our Product of the Month:

How to build a perfect credit scoreThe Credit DVD Series

850

By Jennifer Hadley

BrokerBanker | Volume 122, 20095

Advanced were finalized only after months of edits, revisions, and updates. Butthe hard work was worth it, as Nabil’s final product is easily the most accurateDVD series available on credit reporting, scoring, and repairing credit. “TheCredit DVD was edited by the people who created the FICO® score. Can you

go any higher?” Nabil jokes of the accuracy of the series.

Fair Isaac is praising Nabil’s work as well. According toCraig Watts, “The Credit DVD Series is the best, most accurate, and detailed DVD on credit scoring, and its importance that we’ve ever seen. This is an entirely goodproduct, which only a creator who worked closely withFair Isaac to confirm accuracy could have created. Ihaven’t seen anything that comes close to the quality ofthis product.”

Barry Paperno, Consumer Operations Manager of Fair Isaac, secondsWatts’ sentiments. “The Credit DVD is right on the money, and Nabil has

top of the FICO® food chain, The Fair Isaac Corporation, called on him.Wasting no time, Nabil headed straight to The Fair Isaac Corporation’s offices in San Rafael, California, and asked if they would be willing to helpin the editing process.

“I am utterly grateful to the Fair Isaac Corporation for theirassistance with this series,” says Nabil, who was invited anumber of times to the San Rafael offices. “The team at FairIsaac essentially took a fine toothed comb and examinedeach and every word of the transcript of The Credit DVD tocheck for accuracy. Craig Watts, Public Relations Director,was invaluable to this project. He understood my unwaver-ing and relentless commitment to provide only accurate in-formation and helped make sure that every word that waspresented in the series was correct,” he adds.

The final results, The Credit DVD Fundamentals and The Credit DVD

AMERICA’S TRADE PUBLICATION FOR HOME LOAN ORIGINATORS

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Volume 122, 2009 | BrokerBanker 6


BrokerBanker

the greatest length to ensure accuracy.” In fact, the DVD is so accuratethat according to Paperno, Fair Isaac is actually using the DVD to trainits own employees.

The Simple Truth:

But with credit scoring and reporting being such a complex process, wouldthis DVD be able to explain the process simply? And, could this DVD explainit in terms that not only those involved in the credit, mortgage, and financialindustries could understand, but in terms that consumers could understandas well? Fortunately, yes.

Cathy Carr, a REALTOR® with the ERA Dream Team in Aliso Viejo, California, recommends The Credit DVD to all clients and friends, becauseshe can vouch for its effectiveness. “The DVD is presented in such easy tounderstand language that anyone can learn from it.”

In fact, Carr used it to mend a credit glitch on her own report, which she onlyfound after recommending the DVD to a client who was going through majorcredit issues. “I found two credit cards on my report that weren’t mine andaddresses on my report that I’d never lived at. I used the sample letters provided with the DVD and wrote dispute letters to all three agencies. It wasamazing. Within 30 days, I received a letter confirming the removal of theitems and an updated credit report.”

Similarly, Joan Wilson, Broker and Co-Owner of Regency Real Estate Brokersin Mission Viejo, California, is singing the praises of The Credit DVD. “I foundNabil’s DVD educational and entertaining. But, the biggest advantage of theDVD is that it is presented in language that anyone can understand. After watching this, I realized that learning how to manage your FICO score is likemaintaining good health. It’s important, but it’s not as hard as you might think.”

7

Making the Most of the Most Important Score:

In today’s difficult market, surely individuals’ FICO scores have never beenmore important. “During the sub-prime market, less than 10% of originatorsreally cared about educating clients on credit scores. Now, it is a differentstory, and our profession must be responsible again. If you aren’t a credit expert or at least willing to learn to help people to fix their credit, you should-n’t be in business,” Nabil says. Indeed, no one is immune from the recession,and maintaining good credit (including early detection of identity theft) will beparamount to a client’s ability to secure a mortgage loan, auto loan, businessloan, or even a personal loan.

“If you can help people to understand (and when necessary, fix) their creditby sharing this DVD, you will become a hero.” For Nabil, the whole project hasalways been about education, information that should be available to all. Tothat end, Nabil offers the DVDs at low prices: ($19.95 for the FundamentalsDVD and $24.95 for the combo, which includes the Advanced DVD). Furthermore, Banker Broker readers get an additional 10% discount whenordering online by simply using Banker Broker as the discount code. “Thereason behind the price reduction is to make this valuable and accurate information as widely available as possible and to make it reasonably afford-able for loan originators to give to their clients as a marketing and educa-tional tool,” Nabil says of the low-cost of the DVDs. Further proof that Nabil’smain focus is education? His website, www.creditdvd.com, offers a plethoraof free information, advice, downloadable brochures, and facts, in addition tothe DVDs and audio CDs for sale. “The new website is literally a goldmine ofaccurate information, available to anyone who wants it,” he continues.

Serving the Undeserved

Even after producing The Credit DVD Series and creating a full service credit website, Nabil was aware that an important community, the Latino

Pictured Left: Nabil Captan

Pictured Above:

Pictured Right:

community, was both underserved and often taken advantage of in mattersof credit. How could he help? He created the first ever credit scoring educa-tional DVD in Spanish, El DVD del Credito, which was also edited by Spanish speaking professionals at Fair Isaac. The result is impressive, withthe information presented by two well-known Spanish-speaking actors.Again, according to Barry Paperno at Fair Isaac, “The production value of theSpanish version of The Credit DVD is really fantastic. The content was reviewed in-house again at Fair Isaac, to ensure absolute accuracy.”

Time Life has picked The Credit DVD Series for nationwide market testing.“I don’t wish for any loan originator or a real estate professional to be sittingin front a client who has seenThe Credit DVD and he/she hasn’t!” Nabil adds.With small business associations, non-profit corporations, credit counselingservices, loan originators, REALTORS ®, and even Fair Isaac Corporationendorsing The Credit DVD Series, it’s clear that Nabil Captan’s stroke of inspiration was quite literally a stroke of genius. But thankfully, for origina-

tors and consumers alike, Nabil’s ingenious The Credit DVD Series helpsmake us all a whole lot smarter when it comes to our credit score.

Nabil Captan has been in the financial services industry for more than 30 years

and a mortgage broker for nearly 20 years. Nabil is a member of the advisory board

of the National Association of Hispanic Real Estate Professionals’ (NAHREP)

Orange County chapter. His next project, “Life After Bankruptcy”, is scheduled for

release in July of 2009. Nabil ’s vast knowledge of credit scores and his passion

for educating others make him a remarkable trainer and consultant as well as a

captivating speaker. During his seminars, Nabil presents the subject of credit scores

and credit reports with simplicity, clarity, and accuracy to consumers, educators,

credit counselors, lenders, and financial and real estate professionals. To contact

Nabil Captan about his program or to arrange a presentation, please contact him

directly at [email protected] .


Back in the early 1980’s, whenI got into the loan business,

there were essentially threeways to originate loans: mass

mailing campaigns, pounding thepavement (face to face origination) and

picking up the phone, more often than not, to callpeople we didn’t know. That is, we weren’t blessed

with the luxuries of email marketing or Internetleads. We met with our clients in person, we

picked up and delivered all docs on ourown, and a typical loan file was 2-3”

thick. Oh, and did I mention thatrates were above 15%?

Indeed, theway we did things inthe mortgage industry nearlythirty years ago now seems utterlyarchaic. But, as primitive as our earlier sys-tem of originating loans may seem now, Ilearned one of the most valuable lessons of my ca-reer during that time, the power of picking up the phone.

As a rookie in the business, I was required by my sales mentor (aseasoned, retired Merrill Lynch veteran) to make no less than 150 phonecalls each day. Naturally, after a few days, I was ready to throw in the towel.It was brutal! Unfortunately, I needed the two-month advance the companyhad given me, so I was stuck with this crummy position-or so I thought. How-ever, as it turns out, cold calling, albeit not altogether appealing at times,has pulled me through four mortgage cycles, keeping my pipeline full evenduring economic crises. This includes the most recent industry collapse,

which, as we all know too well, began in 2007.

As the subprime market collapsed, most of the bells and whistles marketingtechniques became obsolete. That is, they were not producing leads for me.With that and the fact that lenders were imploding on a near daily basis, I waspoised to have my pipeline dry up like the Sahara. Thankfully though, I knewI could rely on my 30 year old faithful method of producing leads, no matterwhat market conditions exist. Of course, cold calling isn’t the only way toprospect, but when the phone stops ringing and the leads start drying up, areturn to this method of earning business has never failed me. Moreover, thislead generation method requires little more than your time, a good list of po-tential names, and a good script. Here are the techniques I’ve used for yearswith great success:

1. Get over Your Fear of Rejection. The biggest hurdle to overcome when deciding to launch a

cold calling campaign is to get over your fear of rejec-tion. Nobody likes to be rejected, and I’m certainly

no exception. However, I’ve found that I’d muchrather deal with a little rejection than deal with

going broke. So, eventually you just learn todeal with it. Of course, it won’t hurt if youhave a mentor to support and train you ifyou’re a bit rusty.

Rejection is also easier to handle if you ex-pect to get a ton of “Noes!” But, keep in

Cold Cal l ing By Leo Gluck

10

BrokerBanker

Volume 122, 2009 | BrokerBanker

mind that you never know when the next call, after an adamant rejection, willbe a resounding “Yes!” coming complete with a healthy commission. So, ina way, each “No!” is really just taking you closer to the next “Yes!”

2. Decide on a Schedule.If you’ve made the decision to begin a cold calling campaign, make a sched-ule and stick to it. Set aside 1-2 hours each day, (I generally like 9-10 am orbetween 3-5pm). If you aren’t used to making continuous calls, it will takesome getting used to the idea that you’re solely dedicating that time to call-ing. However, soon enough you’ll fall into a routine, and the time you’ve setaside for calling will become just as much a part of your schedule as read-ing your morning emails.

3. Develop a Compelling Script.It’s crucial, when making calls, to be positive 100% of the time. Since this iseasier said than done, you’ll need to rely on a compelling script to help youconvey positivity. Your script should be short, to the point, and have hooksor catch phrases that will resonate. Words, like “need,” “free,” “save,” “in-credible rates,” etc., will help capture the attention of your prospect from theget-go (within the first 10 seconds of your call). Your script should be writ-ten to engage your prospect, ultimately turning the first few seconds of yourcall into a casual conversation, where no script is needed.

4. Set Goals.Set realistic goals for yourself to get started. During the first week, a realis-tic goal may be to talk to at least 10 people each day. You’ll undoubtedlyneed to make more calls than that, as you’ll stumble into disconnected num-bers, voicemails, or worse, the dreaded “gatekeeper” who screens the callsof your prospect. Don’t be discouraged if none of the ten are interested in anew loan. Keep in mind that even if the person you’ve reached is a “No!”,they may have referrals to friends or families who you can contact.

You can also set your goals by number of calls to make in a given time. Forexample, my daily target is to make between 20-30 calls in an hour. I cangenerally speak with 5-8 people during this hour and secure perhaps 1-2

leads. Two hours, then, would result in 2-4 leads. Personally, I strive for10-15 solid leads per week, but set your own goals at your comfort level.

5. Start Calling!When you’re ready to start calling, make sure to give yourself 10-15 minutesto look over your script, get organized, and review your list of names to call.Then, start calling. Remember your objectives: to either set up an in-personmeeting, or better yet, take an application over the phone.

6. Start Originating & Closing!When you originate your first loan over the phone (either having not done itfor a while or launching your first call campaign), give yourself a big con-grats. You’re on your way. But still, maintain reasonable expectations.Today, after 30 years of calling, I realistically find that I earn 10-15 “Yes!”leads each week. In reality, I am able to originate about 20% of those intoapps, and with this market and these guidelines, I find myself able to closeabout 50% of those or 3-4 loans of the original 10-15 leads. But even forthose loans that can’t be closed, I still do have valuable contact information,which I can add to my database for future calls, email, and mail campaigns.

So, don’t let the market get you down. If your lead generation strategiesaren’t panning out the way you want or need them to, it’s worthwhile to re-visit this old fashioned (but tried and true) method of generating new busi-ness. In thirty years, I’ve rarely found a cheaper, faster, or more productiveway to generate business. And, I wholeheartedly thank my mentor for show-ing me the ropes of this invaluable business practice years ago, because hecertainly wasn’t kidding when he told me that if I learned to fine-tune my coldcalling skills, I’d never starve in any market.

Leo Gluck is president of Commercial Mortgage

Corp. in San Mateo, California, working na-

tionwide in commercial wholesale and retail

since 1981. Gluck was past president and state

director of the San Francisco-Peninsula Cali-

fornia Association of Mortgage Brokers chap-

ter. He has trained and managed hundreds of

agents for more than 25 years in commercial

loans. He may be contacted at (800) 538-5626

or [email protected].

A Return to One of the Fundamentals of Lending

Proves Lucrative

Leo Gluck

101

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When I was a child, many decades ago, my friends and I would play a lotof games both in the street and in our yards. We played everything frombaseball and football to “army” and “cops and robbers”. During all of the

years we spent playing together, not once did one of us ever pretend tobe the anonymous second basemen for the White Sox, or a name-

less lineman from the Vikings, or even an unknown soldier. Whenit came to cops and robbers, we always argued over who

would get to play Dick Tracy or Sergeant Friday, andsurely nobody ever volunteered to be the “bad guy”.

Today, my grandson plays video games, board games,and much to my dismay, rarely plays out in the streetor the yard unless I take him out to throw a ball orFrisbee. However, one thing remains the same; heand his friends all still want to be the hero, or the

“good guy”. Instead of pretending to be MickeyMantle or Willie Mays, he dreams of being

Derek Jeter (hopefully without the steroids)or A-Rod. Similarly, instead of Dick Tracy,

they argue over who gets to be “Mr. In-credible”. When I ask my grandson or

his friends what they want to be whenthey grow up, they, like me and myfriends when we were young, stateplainly that they want to be Presi-dent, or a Yankee or Dodger, orthe game-winning quarterback forthe Patriots, etc. None of them as-pire to be ordinary. I suspect no-

body reading this article aspired toone day grow up and be “average”.

Well, I submit to you, to every memberof the mortgage, housing, and financial

services community, that now is ourchance to fulfill our childhood dreams. Now,

right now, these times call for heroes. This isno time for cowards or weak-kneed flakes.These times call for all of us to be heroes toour communities, our businesses, our pro-fession, our clients, and our families.

So, how do you become a hero in these


…Call for These Times…

By Cameron Pannabecker

times? It’s simple (not easy, but simple). Don’t quit. Don’t even think of quitting.Don’t cheat. Don’t even think of cheating. Don’t reduce your standards. Don’teven think of reducing your standards. Don’t accept failure. Don’t even considerfailure. Don’t be negative. Don’t even let those around you be negative.

How do you flesh this out? Here are five things to consider:• Find yourself feeling like there are no leaders left in your environment?

Then take it upon yourself to lead! Don’t waste time looking for othersto fill the shoes of former leaders; be the replacement. Others in youroffice will undoubtedly be looking not for perfection, but for progress,so lead them on the road to progress. Never been a leader before?Well, there’s no time like the present to start.

• Are the people around you bringing you down? This happens even inthe best of environments, when colleagues are speaking negatively.Try this: When somebody in your environment makes an “Eeyore”statement (as in the “we’re all going to die” donkey from Winnie thePooh), respond with something very simple, such as, “Do you wantme to agree with that comment?” This quickly but gently reminds thedoomsayer that anyone can find a problem or something to complainabout, but it takes a special person or people to create the solution.This should help keep the negativity in your office at bay, at least a bit

• Do you have a mentor? You need at least one person to whom you cansay anything, knowing it will go no further and knowing that you will geta completely frank and unvarnished response. If you don’t have some-one special that you can share fears and thoughts with, then you areprone to share them with anyone and everyone, for your good and notthe good of your community, company, team, or family. Guard yourwords; they are the keys to your future.

• Define yourself not by what you believe, but by what you do and bywhat you are willing to accept as a result of your beliefs. For example,in my office, we repeat a simple refrain to one another daily: “It’sWednesday (or Monday, Tuesday, etc.), and everything good is goingto happen today!” We do this as a “code” to remind each other, overand over again each day, that our words, actions, deeds and stan-dards are the result of our firm convictions.

• Our firm conviction is that we will only accept the best for and fromourselves each and every day. There is no allowance for quitting,cheating, lowering standards, etc. if we continually remind ourselvesthat our beliefs call for us to expect “everything good” (including thebest from ourselves and each other). Develop a code phrase, word, orexpression amongst yourselves to remind you that despite any circum-stances, your best and highest self is always an option.

• Be engaged and fully involved with those that you want to be heroes

to. The next time an opportunity to serve in your community is avail-able, volunteer. The next time someone in your company needs some-thing, sacrifice yourself for the common good. The next time a friendor family member asks you to do something with them, especially if itis an activity you do not enjoy, do it with great JOY. Don’t worry aboutbeing too tired, too busy, too this, or too that to take on something thatwill interlock you with another human being. You’ll have plenty of timeto sleep alone after you are dead. Get involved and make a difference.

To illustrate heroism on a professional scale, consider this story of RobertWilumstad, recently terminated CEO of AIG Insurance.

Wilumstad was hired in June of 2008 to help turn around the ailing insurancegiant. As you are undoubtedly aware, his efforts, no matter how heroic, weretoo little and too late. When the Feds stepped in to bail out the firm Mr.Wilumstad was given his walking papers.

Upon being terminated, Mr. Wilumstad was told that he would be receivinghis $22 million severance package, per the terms of his employment agree-ment. Mr. Wilumstad quietly declined. He believed that he had not donewhat he had been hired to do, and that he had not made the kind of differ-ence that deserved such a severance package, and without prompting fromanyone in D.C. or anywhere else, he simply said “No. Thank You.”.

Mr. Wilumstad is a hero. I bet he always wanted to be one as a child.

How about you? Are you ready to be a hero? Are you ready to do what is nec-essary to help one more person today? A good teacher once told me that theperson who speaks to the most people wins. A great teacher told me that hewho helps the most people wins. As for me, and my house, I think I’ll listento the great teacher, and try to be a hero to someone today.

Cameron Pannabecker has spent 32 years in the

mortgage business. With twenty-five years in

corporate life and the last seven in the local

broker community, Cameron enjoys his role as

a neighborhood lender. Cameron serves as the

immediate-past President of his local chapter

of CAMB and sits on the State Board of

Directors. Contact Cameron at:

[email protected]

or via phone at (209) 478-3200.

14Volume 122, 2009 | BrokerBanker

BrokerBanker

Cameron Pannabecker

Everyday Heroes.

Beach BusinessBank

Type: BankMin Loan: CallMax Loan: Call

Timothy FisherEmail: [email protected]: 818-957-8110

Blackburne & BrownMortgageCompany, Inc.

Type: Private MoneyMin Loan: CallMax Loan: Call

Michael ThurmanEmail: [email protected]: 916-338-3232 x310

BridgelockCapital


Brent HoustonEmail: [email protected]: 877-663-4268

Circle Bank Type: Private MoneyMin Loan: CallMax Loan: Call

Mark Sklonick Email: [email protected]: 415-893-9321

CommercialMortgageCorporation

Type: Mortgage BankMin Loan: CallMax Loan: Call

Leo GluckEmail: [email protected]: 800-538-5626 x3

First CaliforniaBank


Wanda Rapp Email: [email protected]: 818-638-5886

GreystoneMultiunit


Scott VisnapuuEmail: [email protected]: 415-244-5526

Luther BurbankSavings


Simon Richards Email: [email protected]: 415-526-4101

RedwoodMortgage


Casey Copeland Email: [email protected]: 650-454-7290

Second AngelBancorp


David Gruebele Email: [email protected]: 916-863-7300

Sonoma Bank Type: Private MoneyMin Loan: CallMax Loan: Call

Jim Barnett p. 925-946-4270Email: [email protected] Teeter p. 925-947-6700Email: [email protected]

WashingtonMutal Bank

Type: BankMin/Max Loan: Call

Jim WiegandtEmail: [email protected]: 916-825-5432

Commercial Loan ExchangeThe 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 Type: Private LenderMin Loan: $250,000Max Loan: $10,000,000

Stephan Kachani Email: [email protected]: 310-826-2888 x28Lone Oak Fund is a portfolio lender larger than many banks. Bridge loans from$250K to $10M on California property. Rates from 8.9%. No pre-paymentpenalties, appraisals, tax returns or junk fees. Minimal paperwork, creativestructuring, fund in a week. Broker co-op.


BrokerBanker

Bay Equity Area: CaliforniaType: Conf.

John Curtin Phone: 415-699-4063Email: [email protected]

CMG Mortgage Area: No. CaliforniaType: Conf., FHA, VAArea: Arizona & UtahType: Conf., FHA, VAArea: No. CaliforniaType: Conf., FHA, VAArea: Seattle & PortlandType: Conf., FHA, VAArea: So. CaliforniaType: Conf., FHA, VA

JoAnn Anderson p: 925-200-7022Email: [email protected] Buxton p: 602-388-7309Email: [email protected] Eckhardt p: 831-566-0022 Email: [email protected] Tomczak p: 925-719-4108Email: [email protected] Toohey p: 760-612-9051Email: [email protected]

Residential Loan Exchange BrokerBanker

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 Area: CaliforniaType: Private Money


Bay Equity is a Direct Lender in 8 Western States providing Mortgage Brokers a dependablefunding solution in today’s turbulent mortgage environment. Our mission is to provide youwith competitive pricing and unmatched customer service. Our experienced team is focused on what is important to you, which we believe, is PRICE & SERVICE! We havethe ability to move quickly and give you answers in hours, rather than days.

Paramount ResidentialMortgage Group, Inc.

Area: CaliforniaType: Conf., FHA, VA

To find your rep., go to our websiteWeb: www.prmglending

Titan Wholesale


Phil AugillonEmail: [email protected]: 415-308-1140

Titan Wholesale


Scott DavenportEmail: [email protected]: 916-730-9773

MetLifeHomeLoans


Darren SiegristEmail: [email protected]: 818-575-2600

ReunionMortgage


Amy LeeEmail: [email protected] Phone: 415-308-7812

Franklin AmericanMortgage Company


Raoul BaddeEmail: [email protected]: 415-699-0980

Eva Sharma Phone: 858-442-6328Email: [email protected]


And yes, even if you don’t love math –you cando it! Here’s how:

1. Responsibility: Take 100% responsibility for all calculations, in-

cluding the maximum loan amounts. It’s not fairto leave your processor responsible for anything

that affects your final commissions.

2. “With Appraisal”: This option only works if the value of the home is currentlyhigher than the home’s value when the existing FHA loan wasoriginated.

3. Loan Amount Worksheets: Use the worksheets recently provided by HUD to calculatethe loan amounts: HUD Maximum Mortgage Worksheet #3(without appraisal) or Worksheet #4 (with appraisal). Pay par-ticular attention to the following:

• Payoff: Until you get an exact payoff, use thecurrent balance plus 60 days

interest. As long as the borrower is current, up to 60 days interest may be included. (HUD MortgageeLetter 2008-40.) • MIP refund: This is onlyapplicable when the currentloan is less than 3 yearsold. Use the exact figurewhich comes from thecase number assignment.(Have your processor getthe case number immedi-ately, if not sooner).

• Allowable borrowerpaid closing costs & prepaid

expenses: You may only include costs that show directly

in the line items on the GFE as borrower-paid. This is hugelyimportant; see GFE next.

Be honest. How many times have your “FHA Streamline Refinance” borrowers arrived at the settlementtable only to be told that they are short of funds toclose, and you don’t even know how it happened!As you frantically attempt to save the deal, youmay end up cutting your precious commissions,or heaven forbid, lose the transaction entirely.

The problem lies in the calculations which areentirely unlike any other loan type. Minor changesand miscalculations can be disastrous. In the end,it’s all a numbers game and you muststay on top to win.

Don’t Get By: Leslie Petersen

BrokerBanker

4. Good Faith Estimate: HUD requires all settlement charges to be itemized individ-ually on the GFE, regardless of who pays. My recommenda-tions are:• Original GFE: Disclose all of the costs as borrower-paid

costs, because (a) you can’t include them in the loanamount otherwise; and (b) it’s easier to structure yourtransaction as shown in #6, below.

• New Escrow Account on GFE: Under-disclosure of the“prepaid expenses” messes up more transactions than any-thing else. As part of the prepaids, the new lender will al-ways collect for a brand new escrow account. Sure, theoriginal lender ultimately refunds the borrowers’ currentescrow balance but not until well after funding.

You must look at each loan individually. Computethe number of months to be held in escrow based on whatthe lender will need when the taxes or insurance becomedue. If property taxes are due in 2 months, for instance, 12months will likely be withheld at the closing table. If youquoted 3 months on the GFE – your deal may be dead!!

• If it’s not on the GFE, it cannot be included in the newloan; your GFE had better be pretty darned close!

5. House Payment at Closing: Whether required or not (it’s really not required by HUD),always tell the borrowers to bring a house payment at closing.It gives you more leeway with commissions, etc.

6. Commissions / Rate / YSP and Funds Needed at Closing: You are now ready to finalize your loan structuring. Use theupdated and corrected loan amount calculation worksheet:

1st Calculation • (Original principal balance if ‘w/o appraisal’

or Max LTV if ‘with appraisal’)2nd Calculation • Subtract Existing Lien• Subtract Borrower paid house

payment at closing • Add Commissions YOU needANSWER:

A positive answer shows the cash amount over and above thehouse payment that the borrower must bring to closing. If it’stoo much, your choices are:• Drop your commission.• Increase the rate; use the higher YSP/SRP to pay for

some or all of the borrower’s costs. (Before underwriting,you must redisclose the GFE showing item-by-itemwhich cost will be paid by whom. Also, complete a newmaximum mortgage worksheet.)

• Have the borrower bring the additional money to theclosing table.

• Consider whether a streamlined refinance “with” appraisalwill work.OR

• “Lend” the borrower up to the amount of escrow refundcoming back from the lender that is being paid off. Theloan can be formally written up on a promissory note, butit must be unsecured. Realize you will have to collect fromthe borrowers, and you don’t have the means to have theirescrow account “assigned” to you. This should be seen asa last resort, yet it may save your deal.

And there you have it! There is never an excuse to get to theclosing table without knowing the borrower’s costs to close.But there’s also never a reason to cut your commission or losethe transaction because you didn’t do your math!

Leslie Petersen has over 30 years experience in mortgage lending. She’s known for

her expertise in the rules and regulations of the business, and for showing Origina-

tors, Underwriters and Managers how to make the rules and changes work for

them. Find her recently revised FHA and VA

Streamlined Refinance Handbook at Mort-

gageTrainingTools.com. You can reach Leslie at

[email protected].

Leslie Petersen

Volume 122, 2009 | BrokerBanker 18

Short Changed!

= $__________

- $__________- $__________

+ $__________= $__________

How to Structure FHA Streamlined Refis without Shorting Your Commissions


us woke up one day to find that all of these changes had takenplace over night.

Similarly, although it seems that the mortgage meltdown happened almost instantaneously, it too took time. Rememberthat lenders, like New Century, failed in 2007-nearly two yearsago. While others continued to falter, it wasn’t until 2008 thatthe rate at which companies were closing their doors acceler-ated to a break-neck pace. The point is, as much as our mem-ory paints the image that these events happened instantly, inreality, there was a gradual build-up followed by a boom. Like-wise, there was a gradual unraveling, followed by a rapid bust.

Drawing the Parallels:

Now consider the changes that are slowly taking place in themortgage industry as we recover from the meltdown. Whileindividually, these may not seem significant; when you lookat them collectively, it’s easy to see that change and a turn-around is already underway. Here are just a few steps towardschange that have occurred recently.

In September of 2008, I was honored to be selected as theBroker Banker of the month for this magazine. For that arti-cle, I was interviewed in regards to my past experience in in-dustry turnarounds. Specifically, I suggested that the mortgageindustry would indeed turn around, though when it wouldhappen was anyone’s guess.

Well, I have to say that from where I’m standing, the mortgageindustry is definitely showing initial indications of turningaround. Yes, some may think that’s a laughable statement, (orworse, that I’ve lost my grip on reality altogether). But let meexplain.

Rome wasn’t built in a day, nor was the mortgage boom orconsequential bust. Consider that the boom earlier this decadedidn’t hit a fever pitch until about 2005, when home pricespeaked. But in the years prior to that, new and different loanoptions steadily became available. Lenders became increas-ingly generous in their underwriting guidelines, and sellingmortgages on the secondary market became as effortless astaking candy from a baby. But, this was still a process; none of

One Step at a By: Brenda Rhodes, CEO, InTouch Corporation

The Mortgage Industry Turnaround Has Begun

BrokerBanker

1. Homebuyer Incentives: President Obama’s sweeping economic stimulus package in-cludes an 8K-tax incentive for first time homebuyers or thosewho haven’t purchased a home in three years. The NationalAssociation of REALTORS® recently reported that this taxbreak alone should bring 300,000 buyers into the market.

2. Conforming Loan Limits Increase: When the increased loan limits of late 2008 went by the wayside at the end of the year, it seemed as though we’d takenone step forward, and two back. Fortunately though, as part ofthe American Recovery and Reinvestment Act, conformingloan limits in high cost areas have returned to their maximumlevels of $729,750. The security that a 30-year fixed loan provides to homebuyers and homeowners will undoubtedlyincrease home sales and has already shown to drive up refinance applications.

3. Lenders Have Reason To Modify: While loan modification programs have always been available,many lenders dragged their heels to prioritize these as a sig-nificant way to staunch the tide of foreclosures. Now however,as a result of the stimulus package, new incentives for lendersto modify loans have arisen. These include subsidizations fromthe government and a monetary incentive of $1,000 per mod-ified loan for all participating lenders.

There is an argument to be made that none of these indica-tors are strong enough to conclusively determine that theturnaround has begun. Of course, it’s still difficult to obtainapprovals. And guidelines still remain far stricter than in theboom that ended in 2007. But, when you take a step back frombeing completely immersed in the day-to-day struggles, thecomplete picture that is emerging is one of change. While itmay be slow going, the fact that practices and rules are now inplace to directly solve some of the industry’s many problems,it’s clear that the turnaround has begun.

But just as I said early last fall, the first thing we all needed todo was survive the downturn. Since we’ve managed to do that(even if it feels like we’ve just been hanging by a thread), wewill be rewarded for toughing it out. That’s because thebounce back of an industry slump is always enjoyed by the reduced numbers in the profession…. that’s you.

Brenda Rhodes is CEO of InTouch Corporation, a high touch CRM and mortgage

review appointment setting service company,

serving the needs of individual mortgage bro-

kers and the needs of large mortgage companies.

InTouch Corporation provides all clients with

access to recorded mortgage review appointment

setting calls. As a well known industry turn-

around expert, Brenda welcomes questions at:

0408-458-4300 or via email at

[email protected]

Brenda Rhodes


Time

Industry Service Providers


BrokerBanker

Accounting Services

Appraisal Services

Branch Opportunitites

Client Retention

Compliance

Credit Repair Services

Credit Reporting Services

Escrow & Title Services

Loan Modifications

Marketing & Advertising

Website Services

Value ExpressValue Express, the easiest andquickest way to the value of anyproperty.

David NaciriEmail: [email protected]: 888-835-3741

Landmark Appraisals

Need an Appraisal Report? If so,we can help. We cover most ofSouthern California.

Stephen McClanskeyEmail: [email protected]: 949-981-0456

HighTechLending Inc.

Need FHA? Want to lend in multiple states? We’re focused onyour success.

Marie CurrieEmail: [email protected]: 866-714-2040 x 2626

In Touch

InTouch keeps you in touch withyour clients. Mention this add andget $600 off!

Nickolas C. JonesEmail: [email protected]: 408-458-4300 x 318

MyRateTrack.comIs your business refi-ready? Getready with myRateTrack.com

Ready. Set. Refi.

Jeffrey PinkertonEmail: jeffrey @myratetrack.comPhone: 678-488-5159

Cal Coast Credit Reports

Achieve higher FICO scores withour Credit Scoring Tools. We arehere 24 hours a day to serve you.

Gordon G. ChinEmail: [email protected]: 415-252-2888

Credit CRM

Start your own credit repair busi-ness and make $10k a month easy.Call to get your free brochure.

Edward Jamison, Esq.Web: www.creditcrm.comPhone: 877-256-8162

Mortgage Modification Center

Let Our 30 Years of ExperienceProvide Light to the End of YourHome Loan Tunnel.

Cameron PannabeckerEmail: [email protected]: 209-478-3200

Richman & AssociatesServing the clients of mortgagebrokers and attorneys across thenation for over 9 1/2 years.

Jim RichmanEmail: [email protected]: 877-502-7283

Kaya Design

We specialize in corporate identitybranding including logos, ads,print colaterial, e-zines, and more.

Jon KayaEmail: [email protected]: 805-495-8215

Thinking2

We design custom SEO compatiblewebsites that help you stand outfrom the competition.

Jon KayaEmail: [email protected]: 805-495-8215

Your Listing Here

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 415-406-1210 to add your Service to our growing list.

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.

Your Listing Here

Blackburne & BrownMortgageCompany, Inc.

Area: CaliforniaType: SFR & CommercialAmount: $500k to $5MM

Michael ThurmanEmail: [email protected]: 916-338-3232 x310

BridgelockCapital


Brent HoustonEmail: [email protected]: 877-663-4268

BrownstoneMortgage CapitalCorporation


Alex NackoulWeb: www.brownstoneloans.comPhone: 1-800-547-1285

CaliforniaEquity LendersInc.


Mike Christl Email: [email protected]: 818-807-3866

RedwoodMortgage


Casey Copeland Email: [email protected]: 650-454-7290

Roza Real EstateLoans

Area: CaliforniaType: SFR & CommercialAmount: $500k to $1.5MM

Eva Roza Email: [email protected]: 415-584-3000

Agricap Area: CaliforniaType: SFR & CommercialAmount: $500k to $5MM

Web: www.agricap.comEmail: [email protected]: 213-542-5232

Private Money Loan Exchange BrokerBanker

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 Type: Private LenderMin Loan: $250,000Max Loan: $10,000,000


Your Listing Here

Your Listing Here

Your Listing Here

Your Listing Here

Second AngelBancorp


David Gruebele Email: [email protected]: 916-863-7300

Documents

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