Top of Mind Networks

12 Days Of Christmas – Mortgage Edition

December 18, 2009 by · Leave a Comment 

Confessions of a Contract Processor: Get around HVCC with DU Refi Plus!

November 18, 2009 by · Leave a Comment 

Mary’s True Confessions: Under Estimate and Over Deliver!

Would you like to get paid quicker?

Increase your pull-through knowing you’ve sold a deal that is going to close?

Structure your deals once and not have to make changes to loan amount once appraisal comes in?

You already know that the government has committed tons of money this year to lower mortgage rates.  Furthermore, through HARP the government has put together special lending programs to help more people qualify. So have you figured out how to use the system to help you?

If this sounds interesting, get out your pencil and start taking notes!  Here is one way to make it work for you.  When you run a credit report, take note if it is a Fannie Mae loan and if so, have your processor run the file thru DU to see if you can get an Appraisal Waiver with DU Refi Plus findings.

Since the middle part of the summer we are hearing that processors have been getting appraisal waivers for their brokers thus eliminating the fingernail pulling pain HVCC imparted back in May.  My customers each have their own processor or at least a lead processor that they work with daily.  When taking applications, we are now encouraging them to run findings up front in order to see if we can gain waivers eliminating the need for an appraisal altogether!

Here are some of the tricks of the trade: Under estimate the value BELOW the original purchase price…..lower it to the minimum possible LTV without obtaining a price hit.  Here are two actual examples:

Borrower A bought  a house in 2008 for $380K putting down 76K or 20% down.  The loan officer told the processor that the loan was going to a particular lender that had no pricing hit for 95%LTV on their DU Refi Plus program.  The processor ran the file with an expected value of $321K, slightly under the 95%LTV.  Bam!  Findings came back with an appraisal waiver!  That is the way to get a file going!!  No HERA disclosures were needed!  No HVCC appraisal to wait on!  Full file was processed the next day and sent to the lender…  the loan closed two weeks later and everyone got paid…quicker!  Again, under estimate and over deliver on quick turn times!

Feeling skeptical??  Check out borrower B:

Borrower bought house on the coast of South Carolina for 88OK six years ago.  He told the LO his house was worth a million plus.  The homeowner had a busy schedule traveling out of town routinely and didn’t know when he could accommodate the appraisal process.  The purpose of the loan was to pull cash out!  Seriously, his loan amount was $298,000 and he was pulling cash out to $365,000 and subordinating a $190,000 HELOC.  The processor ran the estimated value at $610,000 (just slightly under 60% LTV giving the broker extra compensation) and got an appraisal waiver!  If you’re not reading closely here are the variables: Cash out; subordinating a 2nd of $190K.  Oh, and by the way, the 2nd lender gave no grief on not having an appraisal for the subordination.  File closed quickly with no expensive, slow appraisal needed!

So work closely with your processor up front and have more success.  Keep your fingers crossed and try it!  You could get paid quicker and move solid deals forward!

Processor Clue of the Week:

This is not going to work for every deal and who knows what the “secret” criteria are, but it saves lot’s of time for everyone if it comes back with a waiver…..Worth a Shot!  processor/atlanta, ga.

Penny for Your Thoughts (Send us your question and we’ll give you our two cents!):

Chris in Norcross asks: when do originators in Georgia have to have completed their 20 hour licensing hours and pass the Federal and State test?

This is a very common question and here are the facts: To become or remain an originator in the state of Georgia, you must register with and provide to NMLS your proof of completion of the required 20 hour pre-licensing course as well as pass both the state and federal test by March 31st.  It is important to note that this is the drop dead date.  If you submit on time as an existing MLO, the state of Georgia will allow you to continue originating until approval is either issued or denied.  If you DO NOT submit by the March 31st deadline, you cannot originate during the wait period.  If you are a new MLO entering the industry, you may not originate until approval is issued.

Got any success stories or processing tips??  Send them my way, I would love to share with our readers!!

Confessions of a Contract Processor: Happy Vs. Crappy Dollars

July 20, 2009 by · Leave a Comment 

Mary’s True Confessions:

 There’s a game we play each week at my Rotary Club meeting called “Happy Dollar, Crappy Dollar”. The point of the game is to donate a dollar for each Happy or Crappy thing that happened to you over the past week.  I have to tell you, week after week, our club collects way more money for the good things that have happened than bad.  And when someone DOES donate toward the crappy, it is something not that serious and sometimes even comical.  For instance, one of our members donated a Crappy dollar for missing the easiest putt at his local putt putt tournament!

What if we had to donate Happy or Crappy dollars for everything that happened to us during our work week in the mortgage industry?  Sure, there is a lot of turmoil and change going on right now that makes it difficult to see the pot o’ gold at the end of the rainbow.  Are you one who looks on the bright side or do you participate and wallow in the fear?  One of my favorite books is Norman Vincent Peale’s “The Power of Positive Thinking”.  Peale believes that if you think positively, you set in motion positive forces which bring positive results to pass.  Positive thoughts create an atmosphere for the development of positive outcomes.

Now don’t get me wrong.  I’m not a goody- two- shoes, sticking my head in the sand to ignore the set backs that the new rules and regulations have posed on our industry.  But in the end, isn’t our jar better filled with dollars of appreciation for the hard earned, positive accomplishments made during our work week?  The “crappy” things that happen don’t deserve credit or our attention.  They are in the past and should remain so as we move closer to our next step towards success.

So, throw those happy dollars in a jar and expect the best…

Mary Eyler

This weeks Topic: HVCC

Industry Grapevine:  (contributor: Jennifer Williams, Processor, Quick Close Processing)

Rumor has it….An 18 month moratorium is coming for the HVCC regulation. Well, this is partially true and partially false.  On June 25th of this year, a Democrat from Mississippi introduced legislation to halt the HVCC mandates for a period of 18 months.  It was co-sponsored by a Republican from California and has been referred to the House Committee on Financial Services where it will be further dissected before it can even be brought to a vote.  It could also die in committee, never to see the light of a vote!

So, what does that mean for you-processing and originating as a broker or banker?  I think we all know the negative impact this legislation is having on our industry-disconnect between the market area and the appraiser due to proximity which is causing major cuts in value, appraisers we have worked so hard to build relationships with are now either forced out of business completely or must merge with a larger company and take a pay cut to continue to earn a living.

The consumer is not aware of the negative impact until they start the loan process.  First it takes longer just to get the appraisal ordered because of the multiple people it must go through before it is even assigned to the appraiser.  The fee is 20-30% higher in most cases.  Then it takes longer to get the report completed and back to the loan officer only to find out the value has come in so low it potentially ruins your deal.

Can a moratorium really fix these problems?  Only if the legislators work with the industry leaders to get it right on the second try.  There needs to be accountability by the AMC’s to make sure they are using appraisers who are “in tune” with a subject property and it’s market area.  There needs to be an acceptable alternative to an AMC in area’s that an AMC appraiser is not available.  What happens after the 18 months is up?  What if no workable solution has been determined?  Did we simply delay the inevitable?  And, are any lenders willing to buy the loans that were done without an HVCC appraisal? 

Stay tuned for more updates to this blog so we can all stay as informed as possible on what is happening!

Processor Clue of the Week: Dealing with HVCC has its internal headaches.  Now the borrowers are always billed up front; the customer is given no priority for scheduling; loan officers get lousy feedback on scheduling; poor service when appraisal conditions need to be met.  Lately, we’ve now noticed that the consumer (your customer) is becoming as frustrated as we’ve become.  Our processors found that when the customer is prepped on the front end about the potential appraisal delays and the potential for the value coming in conservative (conservative is the new  vocabulary word for ”low” in 2009) they are happier during the refinance process.  In contrast, we notice that when the Loan Officer doesn’t discuss the HVCC changes with his or her customer it causes anger and mistrust which results in a less than happy customer during the refinance process.  Honesty is the best policy!

A.E. Lowdown: My friend Sue Hamilton is an Account Executive with Advanced Lending Network.  She has a tip for making sure appraisal conditions are worked in a timely basis.  “It has become apparant that if conditions come back on an appraisal, some lenders are going after those conditions themselves, while others expect the loan officer/processor to obtain.  BE SURE to clarify with your lender the procedure they require.” Otherwise, you potentially waste valuable time two ways: chasing conditions that the lender is already taking care of OR assuming a lender is handling when really the ball was in your court all along.

Coming UP Next Blog:

Weekly Attitude Adjustment: (Send us your success stories and keep the positive momentum going!)


 Penny For Your Thoughts: (Send us your questions and we’ll give you our two cents!):

Overcoming Objections with Scott Evans: HVCC Edition

June 24, 2009 by · Leave a Comment 

Hi folks, it’s been another interesting month in the mortgage business.  Add to the underwriting delays, unexpected rate hikes and general frustrations of originating mortgages – HVCC has been an absolute nightmare.

When I saw the NAMB Call to Action, I took a few moments to document my personal HVCC experiences and sent out the following via email to my database.  I think it would be great if all of us did the same thing, because at the end of the day it’s the consumer who ends up losing out.

I am a mortgage broker in Atlanta Georgia. I have been in business for myself for 12 years now. I am writing to share some concerns about the implementation of HVCC that we have experienced since its implementation on May 1st. Let me highlight some of the larger issues:

1) The appraisals are taking significantly longer to be completed than when I could order my own. The consequence of this is that we can’t lock in our interest rates for the consumer until we have the report in our hand because a) we don’t know whether we would meet value and b) when we will actually receive the report (time frame). As you know the shorter the period we can lock the rate in, the better the rate we can obtain for the consumer. The worst part was that later in May when the interest rates spiked (literally overnight), many of our clients were not protected with interest rate locks and now may never be able to refinance.

2) The quality of the appraisers is a significant issue. We have had numerous complaints that the people are dressed inappropriately, take very little time to assess the house and are in general not professional. My understanding is that this stems from the fact that they are paid by the AMC’s, significantly less than what appraisers were being paid under the old system. Therefore, the good appraisers aren’t willing to work for that cheap, creating a system that breeds the retention of less experienced appraisers…or at a minimum, the good ones that really need the work; need to spend less time on each report to make similar money.

3) the most common complaint from real estate agents is that the appraisers don’t know the local area. They come from far and wide and in general have know idea about the neighborhoods, school districts and all the idiosyncrasies of the local area that affect value. Think about your own local neighborhood….if an appraiser came from 60 miles away, would they really be able to provide the best review of the comparable sales not knowing anything about your area???

4) The most frustrating thing for consumers is that they must pay upfront to “play the game”. Let take refinance transactions. Before HVCC, I would spend my own money (usually $25 per loan) to have my appraiser do what we call a “pencil search”. It would be a quick look at comparable sales to see if there was at least a chance of obtaining the value that we needed. They would either say, 1) won’t be an issue, 2) it is close to meeting value but I can’t say for sure or 3) there is no way we will be able to make value at this time. The benefit to the consumer by me providing this valuable service was that they at least knew whether it was worth spending the money on an appraisal. If it wasn’t going to meet value, why have them waste their money. If we weren’t sure, at least they knew it was a calculated risk. Under HVCC, it is like going to Las Vegas and sitting down to a craps table. You have know way to know what you’re going to get. In the last 45 days, I have had over 20 customers spend $300 – $400 for an appraisal, only to find out that it was useless.

5) If you feel like the appraiser made mistakes, the AMC’s will let you send in your concerns and they will have the appraiser revisit it. This is also a flawed system. Think about the average consumer. They don’t do this for a living so how are they supposed to come up with support to challenge an appraisal. Only if they happen to know a real estate agent that is a friend will they be able to produce any information that may be able to change the ultimate outcome. But because no one can talk to the appraiser directly, our limited experience with this is that the appraiser just works on justifying their position, not taking anything else into account. Think about it, what is the incentive for them to do anything but justify their original report. They don’t have to speak to anyone, so it is real easy to just list the reasons why the additional information wasn’t used and leave the report as is.

6) These reports were supposed to be “portable” according to Fannie Mae. Reality we have found is that they aren’t. I have 10 lenders we use as a mortgage broker. 3 of them will not accept appraisals that were not ordered through their AMC, the other 7 say they will. But here is the catch, the only way they will accept it is if we can provide a letter (on bank letterhead) saying that the appraisal was done in compliance with HVCC. We have yet to find a lender that will actually write a letter like this on letterhead. Even though all of the appraisal reports have disclosures that say they will, that apparently isn’t good enough. So once again, if we have to go in a different direction (and there are many good reasons why this may occur and be in my client’s best interest), the customer would be forced to pay for a 2nd appraisal and hope that that one still worked.

While I understand the intent of this new regulation, it is having and will continue to have, ongoing negative repercussions on consumers and home values in general. If we allow inexperienced appraisers with little local knowledge continue to providing these critical reports, there are far reaching consequences for the industry, consumers and the housing market in general. 

HVCC Podcast with NAMB President Marc Savitt

June 24, 2009 by · Leave a Comment 

Mortgage originators everywhere are up in arms about HVCC, and for good reason.  A couple weeks ago, I wrote an article at Lenderama about how NAMB President Marc Savitt has been fighting the good fight.

The next two entries I’m making here at the Top of Mind Blog will focus on educating not only mortgage/real estate professionals about the chaos HVCC has created, but perhaps more importantly how we can educate consumers on the subject.

Top of Mind Blog contributor (and Nashville-based loan originator) Tim Davis somehow caught up with NAMB President Marc Savitt between trips to Capitol Hill.  Not only would I encourage you to listen to Tim’s 50-minute interview, you ought to send it to your clients too.

1)  Marc Savitt discusses how HVCC is negatively impacting consumers.

2)  Later in the podcast, Tim Davis asks Marc what the future of mortgage brokers looks like.  I’ll let you hear for yourself what Mr. Savitt has to say.

Always Have a Contingency!

June 11, 2009 by · Leave a Comment 


A few years ago, when the market was red-hot, real estate agents were forced to present their contact in the strongest light possible. Often times this included “no contingency contracts“. Of course, this is not always the best thing to do, but that was the way the market was back then.

Today is different. Much different. But, unfortunately, a lot of agents are still operating as if the market is still 2005. It amazes me at how many contracts we are seeing in our loan files without financing contingencies! This is crazy! The year 2009 is much different than 2005. Not only have the credit and lending markets severely tightened up the availability of funds, but we also have had many regulatory changes. The largest and dumbest change affecting everyone in the industry is the new HVCC appraisal rules. Not only does it affect lenders, but it affects agents, buyers, and sellers.

The HVCC dictates a hands-off policy for lenders and brokers. Thus, we can no longer choose the best appraiser for the neighborhood, talk to the appraiser, or even discuss comps with the appraiser. Because of this ridiculous HVCC rule, we are seeing a lot of bad appraisals. And one of the worst results can be a lower value when the market actually still supports the higher value.

Just this week, I have seen the following deals blow up and need to be re-worked:

1. Refinance – original appraisal was $560,000. We had to order new appraisal under HVCC rules. New appraisal value, $450,000!

2. Purchase – Purchase price: $440,000. Appraisal value: $410,000 – after waiting 12 days, the appraisal finally came in one day before the proposed settlement date!

3. Purchase – Purchase Price: $280,000. Appraised value: $265,000.

Agents, please do not exclude financing contingencies. It does not matter what any lender tells you – we all have to work under the same rules for conventional loans (and some lenders are starting to require HVCC for FHA now too!). This is a reality that is affecting all of us everyday. This is a reality that will affect you too!

Under the new rules, it is imperative that you put the financing contingencies back into contracts. To not have a financing contingency is gross negligence in your implied duties of care  with your written agency contracts. Please remember to protect your client!

And while we are talking about this subject, please go here, and let your voice be heard!

It's Time to Really Fight HVCC – Please Pick Up the Phone Right Now

June 9, 2009 by · Leave a Comment 

NAMB published a critical call to action today in regards to HVCC.  It’s time for your voice to be heard.

Please read the full overview of action items NAMB is asking from you TODAY.

You can also visit the NAMB HVCC Resource Center.  We all need to chip in to overturn HVCC – it’s bad for our industry and it’s even worse for consumers who are cumulatively going to pay an additional $2.8 billion this year in increased appraisal fees due to HVCC.

Don’t leave it up to the other guy – he’s probably leaving it up to you.  Pick up the phone and call Freddie, Fannie, NY Atty. General Cuomo, even your local regulators.

Stop the HVCC!

June 5, 2009 by · Leave a Comment 

The Home Valuation Code of Conduct (HVCC) is now one month old and already wreaking havoc on the industry!  The HVCC was a knee-jerk reaction to curb abuses in the mortgage industry.  In typical political fashion, the focus was placed on the wrong area within the industry.  The falling home prices that almost everyone has been experiencing were not caused by fraudulent appraisals, coerced values, or appraisers chosen by mortgage companies!

The ease of obtaining money, lack of credit standards, and expectation of double digit rates of return are the reasons for the economy being where it is today!  Not the appraisals.  Greed has put us where we are.

We need YOUR help!  This is not just a call to action for the industry, this is also a call to action for anyone that wants, needs, or has a mortgage!  The HVCC is bad for the economy and will further erode the values of properties if it is left in place.

Why is the HVCC bad?

1. In a lot of areas in the country, appraisals are now costing the consumer more money!  Under the HVCC, specific rules have been created in order to ensure that appraisals will be randomly or independently assigned.  This has created a need for Appraisal Management Companies (AMC).  The AMC’s are charging a higher fee and paying appraisers less money in order to retain a portion of the fee for their “management” role.

2. Did your loan get denied? Now you have to pay for another appraisal for the new lender!  Sure, the HVCC allows for portability of appraisals.  But the lenders are not accepting them for fear of violating the rules of HVCC!

3. Qualified and experienced appraisers have been refusing to sign up with the AMCs and work for less money!  Often times, the fee that the AMC will pay an appraiser is up to half of their typical and customary fee.  Therefore, a lot of good, qualified, and experienced appraisers are not willing to sign up and work for less money.  (No, this is not a case of the appraisers being greedy. Appraisal fees have remained stagnant for close to 10 years.)

4. The appraisers that are willing to conduct appraisals for a smaller fee will either have less experience or have less desire and motivation to properly research the property!  This is not a slam on appraisers.  But, unless you live in a cookie-cutter suburban neighborhood where values are stable, the proper research and care in determining a value on your property may be compromised.  Inexperience and less pay can create inferior quality of work.  And this is even more important if you have a unique home or property that requires proper research.

5. When using AMC’s, the management company may not be choosing an appraiser that is familiar with the local neighborhood!  AMC’s are supposed to alternate the selection and assignment of appraisers.  Therefore, we may not be able to use the appraiser that is intimately familiar with your neighborhood because he is not “next on the list”.

6. There will be fewer appraisers entering the industry; and the ones that do enter, may have lower quality training as we can no longer count on them being trained by the high quality, experienced appraisers!  The appraisal industry is one of the few industries that still exists with an apprenticeship training program.  Under the old rules, an appraiser did not mind giving up 30-60% of their fee in order to teach the trade to an apprentice.  Under the HVCC, their pay has already been cut.  Therefore, appraisers are not willing to further cut their pay in order to teach the trade to someone new.

We need your help! We need to stop the HVCC!

Please go to this link and sign the petition.  Our voices must be heard before the economy suffers further erosion.

Help Me Help NAMB Help You

June 4, 2009 by · Leave a Comment 

Confused by the headline of this article?

I wrote an article on Lenderama this morning.  Please take a moment to read now:

An Unofficial NAMB Regulatory Update on HVCC – Oh, And A Call To Action For All Of Us NAMB Bashers.

In this article, I’m trying to show NAMB President Marc Savitt that if he’ll talk to us we’ll listen.  More so, we’ll get involved.  I don’t need to tell you what impact HVCC and HR 1728 will have on our industry.  The question becomes:  What can each of us do to help?

Would you please take a moment to add a comment on my Lenderama article?  I think Marc Savitt would love to hear that the time and energy he’s dedicating to our cause is being appreciated.

Had Enough of HVCC Yet? Here's What You Can Do To Fight Back.

May 29, 2009 by · Leave a Comment 

Two action steps, two minutes of your day:

1)  Dustin Brumley, an originator with Neighborhood Mortgage in Bellingham, WA built a petition here:

HVCC – We’ve Had Enough!

2)  NAMB is collecting data through a 1-question survey here:

NAMB HVCC Implementation Survey

Please do your part and take a few moments to act.  Thank you.