Get Your Message Across

There’s a lot of noise in the mortgage industry. So, in order to be effective you have to know how to get your message across. In the article “9 Ways to be a Positive Communicator” by Jon Gordon, he suggests:

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Shout Praise, Whisper Criticism – This phrase comes from the original Olympic Dream Team and Detroit Pistons coaches Chuck Daily and Brendan Suhr. They won NBA Championships and an Olympic Gold medal with a lot of talent and great communication. They gained the trust of their players and built winning teams by praising in public and constructively criticizing in private. Shouting praise means you recognize someone in front of their peers and whispering criticism means you coach them to get better. Both build better people and teams.

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Smile More – When you share a real smile it not only produces more serotonin in your brain but in the brain of the recipient of your smile. Just by smiling at someone you are giving him or her a dose of serotonin, an anti-depressant. Never underestimate the power of a smile. As a positive communicator you have the power to make someone feel better just by smiling.

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Don’t Complain – When you complain you lose power, effectiveness and credibility as a communicator and leader. Most of all complaining is toxic and sabotages you and your team. Complaining is like vomiting. Afterwards you feel better but everyone around you feels sick. I know it’s a gross analogy but you’ll never forget it.

Encourage – Truett Cathy said, “How do you know if a man or woman needs encouragement? If they are breathing.” We all need encouragement and positive communicators encourage and inspire others to do more and become more than they ever thought possible. Great communicators are great encouragers.

Spread Positive Gossip – Instead of sharing negative gossip, be the kind of communicator who spreads positive news about people. Don’t trash your competitors. Instead, talk about the strengths of your offering.

Sometimes You Have to Listen More and Talk Less – Positive communicators don’t just talk. They listen. They ask questions and really listen. Research shows that when people feel like they are seen and heard there is a moistening in the eyes and yet in 90% of our conversations there is no moistening in the eyes.

Welcome Feedback – Positive communicators also listen to and welcome ideas and suggestions on how they can improve. They don’t fear criticism. They welcome it knowing it makes them better. They send a clear signal to their team, customers, coaches, etc. that they are always willing to learn, improve and grow. Positive communicators say, “I’m open. Make me better. Let’s get better together.”

Celebrate Success – Instead of focusing on what went wrong each day, positive communicators focus on what went right. They celebrate their successes, even the small ones, knowing that small wins lead to big wins.

Give High Fives, Handshakes, Pats on the Back, Fist Bumps and Hugs When Appropriate – Positive communication isn’t just verbal. It’s also physical. Several studies have demonstrated the benefits of physical contact between doctors and patients, teachers and students and professional athletes. For example in one study the best NBA teams were also the touchiest (high fives, pats on the back, hugs). In a world where physical touch has become taboo because of misuse and abuse we must remember that it is a way we humans communicate naturally and is very powerful and beneficial when done appropriately with good intention. If you can master the art of getting your message across, you’ll be very successful.

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Analysis Shows The Extent Of Recovery Gains In The U.S. Housing Market

CoreLogic released a 10-year retrospect of the U.S. residential foreclosure crisis, “United States Residential Foreclosure Crisis: 10 Years Later.” The report examines the path of the residential foreclosure crisis beginning with the relatively healthy years early in the 2000s, through the peak of the crisis, to present day. The country has started to normalize, recording approximately 22,000 completed foreclosures a month. Completed foreclosures reflect the total number of homes lost to foreclosure.

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The foreclosure crisis began in some parts of the country as early as 2007 and later peaked nationwide in September 2010, with approximately 120,000 completed foreclosures occurring during that single month. Throughout the crisis years, CoreLogic monitored completed foreclosures, the foreclosure inventory and the serious delinquency rate. Many economists mark the beginning of the foreclosure crisis with the collapse of two Bear Stearns subprime funds in June 20071, with the crisis deepening as a result of the Lehman Brothers2 bankruptcy in September 2008. Since the beginning of 2007, there have been approximately 7.8 million completed foreclosures nationally. Beginning in Q2 2004 when homeownership rates peaked, there have been approximately 8.6 million homes lost to foreclosure.
TLI217-Chart One
At the end of 2016, the national foreclosure inventory, which reflects all homes in some stage of the foreclosure process, included approximately 336,000, or 0.9 percent, of all homes with a mortgage compared with 1.4 million homes, or 3.3 percent, at the peak of the residential foreclosure crisis in September 2010.

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“The country experienced a wild ride in the mortgage market between 2008 and 2012, with the foreclosure peak occurring in 2010,” said Dr. Frank Nothaft, chief economist for CoreLogic. “As we look back over 10 years of the foreclosure crisis, we cannot ignore the connection between jobs and homeownership. A healthy economy is driven by jobs coupled with consumer confidence that usually leads to homeownership.”
TLI217-Chart Two
During the housing crisis, CoreLogic also reported the number of mortgages in serious delinquency, defined as 90 days or more past due, including loans in foreclosure or REO. The delinquency rate (payments past due by 30, 60 or 90 days) continues to be a leading indicator of troubled markets. At the end of 2016, 1 million mortgages, or 2.6 percent of homes with a mortgage, were in serious delinquency, compared to the serious delinquency peak of 3.7 million mortgages, or 8.6 percent of homes with a mortgage, were in serious delinquency, in January 2010. In recent years, the decline in serious delinquencies has been geographically broad throughout the country with year-over-year decreases from December 2015 to December 2016 in 48 states and the District of Columbia.

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Gaps In Risk Management

In talking to financial institutions across the United States about Operational Risk Management, I am amazed at how many continue to state that they have it covered. When we talk about operational risk we are referring to Third-party Due Diligence, Business Continuity Programs, Incident Reporting, and Alert Notifications. Just tracking some of this information in an excel spreadsheet is no longer going to cut it with the auditors.

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In an article titled “FDIC Watchdog Highlights Gaps in Banks’ Vendor Contracts,” that appeared in ABA Daily Newsbytes written by Krista Shonk and Denyette DePierro, it states that “Few banks’ contracts with technology service providers (TSPs) provide sufficient detail about the providers’ business continuity and incident response capabilities and duties, according to a report issued yesterday by the FDIC’s independent inspector general. The report also found shortfalls in banks’ assessments of how providers could affect the banks’ own ability to plan for business continuity and incident response.”

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In response, “the FDIC said it would work with other Federal Financial Institution Examination Council agencies to update guidance on business continuity planning and incident response and that it would continue examinations and off-site monitoring of vendor management. Anecdotal reports from banks indicate that examiners are increasingly focusing on technology provider risk management. The report expressed concern that some banks ‘may not be sufficiently knowledgeable about or engaged in contract management.’”

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It is becoming increasingly more difficult for financial institutions to keep up with and maintain the proper compliance requirements on their own. If financial institutions want to be better prepared for their next audit they need to partner with companies that specialize in operational risk management.

The right operational risk management solution combines dynamic technology, in-depth expertise and best practices on one common platform to meet and exceed the constantly changing expectations of the regulators. An All-In-One Operational Risk Management Suite allows financial institutions to easily manage all areas of operational risk management under one platform. The all in one suite needs to be easy to use, role dependent and web based. The common platform eliminates double data entry saving valuable time and resources.

Third Party Due Diligence

Upload and store your institution’s information pertaining to locations, departments, people, vendor program, and policies. Upload and store all vendors to the system and track vendor static data. Assign different managers to the specific vendor to upload and track data.

Utilize the qualifying questionnaire to determine whether or not a particular vendor needs to proceed to the risk assessment. The risk assessment is a questionnaire categorized by FFIEC and due diligence questions which prioritizes your vendors into a high, medium, or low risk category determining the level of due diligence to perform on each individual vendor. Upload and store all relevant due diligence criteria. Log and track all conversations exchanged between user and vendor as well as an evaluate vendor performance using the vendor report card.

Business Continuity Programs

Conduct risk assessments for locations and/or vendors. Assign probability and impact ratings to individual threats to automatically generate the threat’s overall rating and define the details of impact with mitigation steps for particular threats. Create your BIA based on departments located within a specific location with details of processes, resources, and people. Includes the ability to set BIA review dates with reminder email notifications. Build your comprehensive plan utilizing data associated in the system with our predefined template. Test a particular section of your business continuity plan by selecting a team and testing their associated tasks.

Incident Reporting

Review an executive overview of most current incident status and completion progress. Create teams and associate prioritized tasks. Store your incident response and escalation policies and define customized values. Track and record the incident while it occurs defining specific details and assigning teams to handle the incident. Upload and store necessary external documentation. Create follow up reports and memos using our template questionnaire and log lessons learned.

The right operational risk management solution can help find gaps in your operational risk management plan and help mitigate risk moving forward by implementing best practices and advanced technology all on one common platform.

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A Lesson From Sears: Balancing Customer Satisfaction And Technology

A generation or two ago just about everyone owned a Craftsman tool purchased exclusively at retail behemoth, Sears, Roebuck and Company. The tools were rock solid and “guaranteed forever.” And if your first day of school was sometime in the 1970s, odds are you hit the playground during recess wearing some, at the time, very fashionable Toughskins. The pants were a conscious effort on the part of Sears to develop a garment that a kid couldn’t wreck. The pants were so “tough” that they were sold with a guarantee that kids would grow out of their Toughskins before the pants wore out. Tools “guaranteed forever” and clothes your kids outgrow before they wear out seem like a recipe for retail success. With that kind of value and commitment to customer satisfaction, why would consumers ever shop anywhere else?

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Recently, Sears, that anchor store for just about every American Mall built in the last few decades, sold the Craftsman brand in a desperate attempt to survive declining sales. Amazon is likely finishing them off after Walmart and Home Depot beat them up pretty good. It is also pretty damn near impossible to find a pair of Toughskins on any playground, but if you look you can find them in remarkably good condition on eBay.

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So what happened to Sears and what does it have to do with anything relating to mortgages?

If you think about it, Sears was the Amazon of the 20th century. In the 1890s, Richard Sears and Alvah Roebuck founded Sears, Roebuck and Company, publishing the first of its soon-to-be-famous catalogs. The company grew phenomenally by selling a range of merchandise at low prices to rural communities that had no other convenient access to retail outlets. Sound like Amazon in this century?

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But in the mid-1920s, new technology made Sears change course. Cars were making retail outlets in urban areas more accessible to consumers in the suburbs and rural communities. Sears tried to exploit this opportunity that technology was presenting, opening the first Sears retail store in Chicago in 1925. It was far more fun to drive to the store and get almost immediate satisfaction, than to flip through the hundreds of pages of a catalog, fill out a form, send a payment by mail and wait for the postman to deliver your goods what could be two or three weeks later. Sear’s retail store sales topped mail-order sales by the early 1930s. Over the next few decades the number of stores increased rapidly and Sears became America’s retailer.

Any kid that had a pair of Toughskins likely watched Dad scour the pages of the Sears catalog for that Craftsman tool before jumping in the station wagon and heading to the store. They, like their parents, their parent’s parents and maybe a generation before them didn’t realize they were living in a nexus, just waiting for technology to bring it all together. The paper catalog at the time was the best way to identify what was available at the Sears store. It weighed about seven pounds even with its micro-print, but its color images and the 800 phone number were the best technology had to offer. Sure, you could still mail order, but jumping in the car and driving to the local Sears store was the quickest means to an end. It met the consumers’ wants, needs and desires even if occasionally you did need to order and pick up in store a few days later.

But then, in this century, technology flipped things around and put it all together, changed some things and left other things pretty much the same. The Internet, electronic payment systems and second day free shipping made it more fun and convenient to shop online than to jump in the car. Catalog shopping was resurrected. With a swipe across a smart phone screen or the click of a mouse, all the material world has to offer is at your fingertips. It is so much easier to search and browse thousands of online catalog pages. Amazon exploited that technology and without the overhead of a brick and mortar retail store brought every convenience technology had to offer and lower prices to the market.

Lenders who have made a name offering value with a commitment to customer satisfaction are going to find consumers tempted by technology. Finding that balance, that Sears didn’t, will be critical to success. The obvious value an experienced loan originator brings to the transaction may not be enough to overcome conveniences technology has to offer.

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The Right Approach

As I talk to lenders across the country there is a deep desire to discuss all things digital. With the success of lenders like Rocket Mortgage, more and more lenders are looking to how they can move into the digital mortgage. This includes many lenders looking to digitally attracting new borrowers through marketing automation, email blasts and social media.

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These are all great channels to use to attract new borrowers but these should not entirely replace print as a tool for attracting new borrowers. The most powerful marketing automation campaigns strike the right balance between digital and print to gain the maximum exposure and results for lenders.

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Print Your On-Demand Campaigns with the Right Marketing Automation

The right marketing automation allows lenders to deliver custom campaigns that can be run quickly and easily on demand to any mix of contact databases: prospects, applicants, borrowers and partners. You’ll want to run a campaign whenever you spot a tactical sales opportunity – for example: a change in interest rates or other market conditions. On-demand campaigns are also an effective way of just staying in touch with your database – for example: making announcements about significant changes at your company.

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The right marketing automation empowers central marketing to set up campaigns for all or any subset of loan officers, choose the marketing activity and specify the target audience. The system then provides a range of execution options to satisfy all cultural and operational preferences:

>> Run the campaign from the corporate level

>> Run the campaign from the corporate level, but first allow loan officers to opt out

>> Set up individual campaigns for loan officers to run if and when they wish

>> Create an Instant Campaign and make it available for loan officers to run from their Home page

Participating loan officers are notified of the campaign details by system-generated e-mail and a follow-up report is provided containing each recipient’s contact details.

The right marketing automation solution delivers a comprehensive Collateral Catalogue that allows you to purchase essential promotional materials – quickly and easily – including business cards, letterhead, pads, brochures, card products, flyers, posters, booklets and catalogues. You’ll enjoy all the advantages of “print on-demand”. What’s more, unlike traditional print shops, a fully integrated marketing automation platform and print facility does not specify minimum quantities.

The Collateral Catalogue also provides tools for you to create/upload your very own collateral materials so that you can easily maintain a “look and feel” consistent with your brand strategy.

The right marketing automation solution delivers powerful marketing tools in the form of print and digital. The right combination attracts the greatest number of potential borrowers, highest ROI and consistency needed to prosper in today’s mortgage market.

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Technology Does Offer ROI

When used correctly, technology does pay off. For example, Alterra Home Loans, an independent mortgage bank headquartered in Nevada with offices in 12 states, has been able to sustain significant growth since implementing  Advantage Systems’ Accounting for Mortgage Bankers (AMB) software.

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Alterra Home Loans selected AMB as its accounting system in 2015 in order to eliminate manual processes and gain access to detailed loan-level reporting tools. Alterra Home Loans has leveraged AMB’s automated processes to eliminate time-consuming manual entries during the lender’s rapid growth.

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Alterra Home Loans is also taking advantage of Advantage Systems’ Commissions Calculation module in order to automate its commissions process, to provide loan officers with more timely and accurate commissions statements.

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“Alterra Home Loans is going through a period of explosive growth and we made the decision to implement AMB in order to eliminate manual processes,” said Yvonne Yacono, chief business officer at Alterra Home Loans.

“We understand lenders’ needs, and have developed our software to eliminate time-consuming processes and help achieve growth,” said Brian Lynch, president of Advantage Systems. “We constantly seek to enhance our software’s features in order to help lenders attain tomorrow’s goals today.”

AMB is a robust accounting system that was specifically designed for mortgage bankers. The solution brings real-time accounting data to users, both accounting and non-accounting staff, in a practical, useable format. Key features include the ability to view loan level data that displays profitability by loan, loan type, loan officer and branch.

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How Servicers Can View Insurance Claims As A Win-Win

Defaults on FHA-backed loans are anticipated to increase over the next several years, resulting in an increase in the number of properties that are sitting vacant. This means that maintenance costs for servicers and their third-party parnters will only continue to rise. So, how can servicers effectively limit their losses on FHA loans that go into default? And, how can they limit claims on these properties?

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The risk of defaults on FHA loans is very high, but servicers can mitigate losses by establishing strong quality control procedures throughout the default resolution process. Servicers lose millions of dollars every year for what would otherwise be reimburseable collection expenses due to lack of documentation, over-allowable charges, etc. Instead, servicers must begin compiling their FHA claims upfront, for instance, when a loan first becomes delinquent.

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When an advance has been made, transaction data and documents from the servicer must be immeditaly retrieved. The data can then be populated into the investor template and invoices stored in a secure, document management system. This way, the claim is built throughout the default resolution process, eliminating the “paper chase” and other errors that cause reconveyance issues and prevent the claim from being filed in a timely manner.

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Of course, for all of this to take place, servicers must first significantly improve their understanding of the hazard insurance claims and investor claims processes. Servicers need to recognize the inextricable linkage between hazard claims and investor claims. Rather than siloed processes, they should be viewed as components of a connected ecosystem called Collateral Loss Mitigation.

The goal of hazard claims processing is to recover funds to be used in the repair and remediation of the collateral so that it can be liquidated. All too often, servicers’ conveyance processes are held up by ineffective approaches to hazard claims, and vice-versa. Instead, by taking a consolidated, end-to-end view of these processes, the funds to complete repairs are quickly recovered, the rehabilitation work is accomplished in a timely manner, the relevant documentation for the investor claim is more easily compiled and overall operational efficiencies are realized.

One way that servicers can avoid substantial fixed cost investments in technology, variable costs of highly skilled claims personnel and the compliance responsibility associated with their infrastructure and claims-related activities, is by outsourcing their claims management processes. Furthermore, the outsourcer should always recover more insurance and investor proceeds for the servicer, while eliminating curtailments. In short, that’s a Win-Win.

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