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A Few Words On Exhibition Hall Goodies

I have a confession to make: I am not really a big fan of trade conventions. This is due to a combination of disliking the drudgery of travel, the impact of being in crowded environments and the indignity of being overcharged by nearly every vendor in and around the convention center.

But, perhaps, my least favorite aspect of the trade convention experience comes in the exhibition hall. This has nothing to do with the companies that set up booths in the hall – I have great respect for what they are bringing to the industry. My problem, however, is the promotional gifts they bring to their booths and what they push on the attendees.

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Getting the right promotional item as a convention giveaway is never the easiest thing, since there is a challenge to offer something that is relevant and practical. It would seem like a fairly simple concept, but too many companies botch it up.

The most ubiquitous item being offered is the lowly pen. I have an entire desk drawer full of pens picked up over the years from too many trade conventions that I have never used, and I assume that I am not the only one with such an unwanted collection. And considering how society has moved away from the pen-and-paper routine to handheld devices, I am surprised that anyone would spend money to push pens as a promotional item anymore.

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Of course, promotional items are designed to keep a corporate brand in front of existing and future clients. This may explain the glut of thick pens with company names and logos printed in what appears to be an expensive and tasteful manner – after all, you’ll always think of that company once you pick up the pen, right? Well, not really – I don’t know anyone who decided to start a new business relationship because of a logo on a pen that they carried home from a trade show.

T-shirts are also commonplace as exhibition hall giveaways, and equally as problematic. T-shirt giveaways almost always feature items with a one-size-fits-all garment (which, of course, never really fits anyone), and the quality of these t-shirts is rarely spectacular. I recall a friend of mine that used a promotional t-shirt from a well-known Fortune 500 company to wash and wax his automobile – he said the shirt was too tacky to wear in public. For myself, I have a crummy t-shirt from a major lender that I wear while gardening – the only ones that get to see me in the t-shirt are the bees that pollinate my rose garden.

Other exhibition hall giveaways that I can do without are golf balls (I don’t play, sorry), candy (just what the dentist and dietician warn me against), mousepads (I can only use one at a time and I already have one), yo-yos (I could never get the damn things to work), rubber balls (why?) and keychains (got one already, thanks).

To be frank, there is only one exhibition hall gift that I picked up that I truly cherished: a Mr. Potato Head doll. The connection between the gift and the vendor was clever – the company was based in Idaho and, of course, potatoes are that state’s cash crop. I still have Mr. Potato Head, and his presence in my home ensures that the five-year-old within me remains alive and happy.

But, ultimately, the best promotional gift that any company can give is the combination gift of professionalism, respect, sincerity and honesty. People will not remember your company if you give away pens or t-shirts or golf balls – and, to be honest, I had to look through my notes to be reminded who gave me Mr. Potato Head.

My advice: forget the pens, t-shirts and trinkets – just do a great job and build a strong corporate reputation. If you treat customers like royalty and you run an operation where your staff is loyal to the brand, then your company is giving the world a gift that everyone can appreciate.

About The Author

[author_bio]

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.

Holiday Gifts For The Housing Industry

Yes, it is that time of the year again. And once more, I get to play Santa and match the right gifts for those naughty and nice characters the impacted the mortgage and housing world. So, let’s see who will be received special gifts this season:

For Richard Cordray: A hearing exam. It would appear that the CFPB chief’s hearing is in terrible condition. After all, how else can one explain his chronic inability to listen to the growing chorus complaints from elected officials, the private sector, the media and even the CFPB Inspector General regarding the heavy-handed, sloppy and arrogant manner in which his agency is being run? Cordray, however, doesn’t need an eye exam – he had no trouble seeing American Banker’s harsh critique of the CFPB’s rickety consumer complaint database, to which he offered a very rare defense of his agency’s ineptitude.

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For Julian Castro: An executive position in the Hillary Clinton 2016 campaign. The HUD honcho happily jumped into partisan politics when he endorsed Hillary’s presidential bid at a televised rally design to attract Hispanic voters. Never mind that there is no precedent for an incumbent cabinet secretary rejecting Executive Branch neutrality in order to play favorites in the race for a party’s presidential nomination – and it is no secret that Castro has been biding his time at HUD before getting himself into national politics. Many pundits have already tapped him as Hillary’s running mate, playing up his youth and ethnic heritage while ignoring his accomplishment-free career. If Castro wants another Clinton in the White House, he should leave HUD full-time to work for it – and not just skip away from his office whenever the Clinton campaign beckons.

For Gretchen Morgenson: A scholarship for journalism school. The New York Times writer churned out an egregious December 7 article that relied on insinuation and sketchy commentators to smear MBA President and CEO David H. Stevens for allegedly working to destroy Fannie Mae and Freddie Mac. Morgenson’s work was astonishing for her utter ignorance on how federal housing policy is created – she repeatedly confused FHA and FHFA – and she seemed totally unaware that the big banks that supposedly use Stevens as their hatchet man in Washington have been moving away from the residential mortgage market due to Dodd-Frank regulatory burdens. With reporters like Morgenson, it is no wonder that people stopped reading and respecting the Times.

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Rep. Ed Royce: A Congressional Gold Medal. The California Republican achieved the impossible by creating a bipartisan effort to approve legislation that capped the compensation for the Fannie Mae and Freddie Mac chief executives. In that achievement, Royce hit the ultimate double-play: he got both sides of Congress to work together and he created GSE-related legislation that made it to the president’s desk.

President Obama: Nothing. Rather than hail Rep. Royce’s legislation as evidence of bipartisan cooperation and government finally doing something right, the president abruptly signed Royce’s bill without any fanfare or special announcement. Indeed, the White House buried the news of the presidential approval in a single sentence within a press release that was quietly released by the administration right before Washington departed for the Thanksgiving recess. For that sour action, the president doesn’t deserve a toy in his stocking.

Trey Garrison: A lucky horseshoe. One of the best business journalists has left the building – although he is now in another building. Garrison left the staff of HousingWire last month to start his own consulting business. I hope this lucky horseshoe bring him a surplus positive karma in 2016.

To the Progress in Lending readers: My deepest thanks. Yes, we made it through another year, and I am glad that you were here with me for the ride. Here’s wishing you the best for the holidays, and for a 2016 full of happiness and profits!

About The Author

[author_bio]

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.

What Gov. Mike Huckabee Got Right

website-pdf-download

new-PhilHHow little do the presidential candidates think about housing policy as a major issue? Well, recently there was a forum in New Hampshire designed to spotlight the presidential candidates’ views on housing issues. However, the leading contenders from both parties ignored the forum, with low-polling Martin O’Malley arriving as the sole Democrat on the stage along with a handful of C-list Republicans that are polling in the low single digits.

But one of the candidates on that forum was the surprise star of that event, if only because he displayed a sense of cogent commentary that has not been evident in this campaign: former Arkansas Governor Mike Huckabee, better known for his provocative comments on hot-button social issues like same-sex marriage and using Obamacare to pay for birth control pills, offered a wise insight on housing policy concerns.

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When asked why there has been so little national political attention and mainstream media focus on the lack of affordable housing options, Huckabee broke a taboo by noting the political and the media elite are among the nation’s wealthiest and have no clue on how the low- and middle-income Americans live. Indeed, Huckabee hit a bulls-eye here – especially when one considers how little political and media attention go into serious discussion of poverty or wage stagnation. To his credit, Huckabee connected the struggles faced by many Americans with the lack of serious economic vibrancy.

“Half the people renting in America spend 30 percent or more of their income on their housing costs,” Huckabee said. “Every time someone is marginalized in the economy it affects the rest of the economy.”

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Huckabee, who has been a strong critic of the Consumer Financial Protection Bureau and an advocate of a smaller federal government, called on taking the regulatory oversight of the financial services world out of Washington and returning it to those who “have a better understanding of what’s happening on the ground.” Translated, that means putting the responsibility with the states.

“We need to keep more of the regulation closer to the people being regulated,” he said. “I will always believe that the best government is the most local government that is humanly possible.”

This makes a great deal of sense, considering the multiple layers of regulations that burden companies trying to work with consumers. And maybe it is time to openly question why we need both federal and state regulatory oversight – one or the other makes more sense, rather than the weird mix of duplicate and contradictory rules coming from Washington and the statehouses.

Huckabee also mixed the all-but-ignored question of housing with the anything-but-ignored question of immigration reform.

“If a couple of hundred thousand people come to the United States, isn’t it going to be more difficult to find housing for the people we add?” he asked. “People who are in the country without food and shelter ought to be our highest priority in the country.”

Huckabee broke another taboo with that last statement: he contradicted the prevalent but rather silly idea that immigrants will magically increase the homeownership rate. Indeed, how is that going to happen – especially when we are talking about the millions of illegal immigrants who are lucky enough to have a roof over their head after working long hours for putrid low wages?

Sadly, Huckabee’s remarks were mostly ignored beyond the forum audience. And while his presidential candidacy is getting relatively little attention, his comments on housing affirm that there is at least one presidential candidate who can look beyond the zingers and sound bites and appreciate that there is a major problem that no one wants to acknowledge.

About The Author

[author_bio]

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.

Executive Spotlight: Jason Roth of ComplianceEase

Jason-RothToday, the spotlight is on technology and our guest expert is Jason Roth, chief technology officer at ComplianceEase.

Q: TRID has been in effect for nearly two months. What impact has it had on the current operations within the industry?

Jason Roth: TRID has certainly slowed things down as lenders ease into new procedures. The Mortgage Bankers Association’s Weekly Mortgage Applications Survey ending the week of October 2, 2015 showed a 25.5 percent jump in applications—implying that lenders tried to get in as many applications as possible under the pre-TRID forms and rules.

Our own data confirms this. Looking at a sample of more than 200,000 loans audited in ComplianceAnalyzer in October, there was clearly a gradual shift in volume towards TRID loans. In the first week after TRID was effective, only around 9 percent of loans audited were originated on TRID forms. That share increased to about 30 percent for the last week of October.

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By front-loading pre-TRID applications before the effective date, lenders have been able to limit the number of TRID loans that they have to work with and iron out any issues before the pipeline becomes mainly TRID loans.

Q: What do you see as the most pressing tech challenges facing the industry?

Jason Roth: If you look at TRID and the newly finalized HMDA rule, it seems the most pressing challenges facing our industry center around capturing and retaining data.

Under TRID, lenders must have complete records of every change to every fee charged on a mortgage, along with supporting reasons for the change and subsequent re-disclosure to the borrower. This creates two challenges. First, there are new pieces of data that need to be collected and retained, many of which were not mandatory for compliance under previous TILA and RESPA disclosure requirements.

While it is possible to implement manual workarounds to store the information on spreadsheets or hard-copy documents, it only works in low-volume situations. It does not scale well and could lead to delays that impact the borrower’s experience.

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Second, the data all must be easily reportable to regulators and investors. If records are scattered throughout different systems or even stored on paper or as imaged documents, it will be very expensive to demonstrate compliance with TRID.

In addition, the new HMDA rule will require significant amounts of new data to be collected and, of course, organized in a way that is easily reportable for regulatory purposes. Moreover, to prevent unpleasant surprises, lenders will need to be performing data analysis on an ongoing basis, and not just when March comes around each year. All of these regulatory changes add up to big changes and big data.

Q: There are endless news stories on the threat to cyber security. How severe is this threat, and how is the industry responding to it?

Jason Roth: Although information security issues seem to have recently emerged as a common topic of coverage in the national news, financial services institutions have been wrestling with security and data handling issues for much longer. Since 1999, the Gramm-Leach-Bliley Act has mandated that financial institutions of all shapes and sizes safeguard customer information. In addition, investors and government agencies have long required that banks and lenders maintain security policies and procedures for the security of sensitive information; and the CFPB has made it clear that financial institutions are responsible for their own policies and procedures as well as those of their technology vendors.

In order to protect themselves from being buried by security audits, many in the industry have looked to standardization of their procedures to provide evidence of their security controls. For example, our company opted to complete an audit under AICPA’s SOC2 standard and the controls stipulated by their Information Security trust principle. We’re also members of the Shared Assessments group, a consortium that develops standardized information collection templates to maintain evidence of security controls.

Since many banks and lenders use these templates, it has been helpful for us to organize our own policies around those standards and saves a lot of time when responding to inquiries. There are also some efforts within workgroups established by the Mortgage Bankers Association to develop some agreed-upon security standards for mortgage lenders.

Q: What do you see as the major tech trends for 2016?

Jason Roth: There are many new financial services companies, armed with newer technology and fewer legacy systems, looking to “disrupt” the industry. Although they still face significant regulatory barriers to operate legally as a financial services institution in the United States, these new types of lenders will eventually start to pose a real threat to traditional lenders.

We’re seeing startups, like SoFi, build successful mortgage and student lending businesses by investing in technology that focuses on streamlining communications, improving borrower interaction and making the lending process more transparent in order to serve the millennial generation. These are things that are difficult for traditional financial services companies to do because they’re using traditional LOSs that don’t provide the borrower with visibility. Complete reinvention for traditional lenders will come incrementally over several years with several iterations of new technology.

But in the near term, the focus will be on developing innovative technology to create a superior customer experience.

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.

What Mike Huckabee Got Right

How little do the presidential candidates think about housing policy as a major issue? Well, last month there was a forum in New Hampshire designed to spotlight the presidential candidates’ views on housing issues. However, the leading contenders from both parties ignored the forum, with low-polling Martin O’Malley arriving as the sole Democrat on the stage along with a handful of C-list Republicans that are polling in the low single digits.

But one of the candidates on that forum was the surprise star of that event, if only because he displayed a sense of cogent commentary that has not been evident in this campaign: former Arkansas Governor Mike Huckabee, better known for his provocative comments on hot-button social issues like same-sex marriage and using Obamacare to pay for birth control pills, offered a wise insight on housing policy concerns.

Featured Sponsors:

[huge_it_gallery id=”2″]

When asked why there has been so little national political attention and mainstream media focus on the lack of affordable housing options, Huckabee broke a taboo by noting the political and the media elite are among the nation’s wealthiest and have no clue on how the low- and middle-income Americans live. Indeed, Huckabee hit a bulls-eye here – especially when one considers how little political and media attention go into serious discussion of poverty or wage stagnation. To his credit, Huckabee connected the struggles faced by many Americans with the lack of serious economic vibrancy.

“Half the people renting in America spend 30 percent or more of their income on their housing costs,” Huckabee said. “Every time someone is marginalized in the economy it affects the rest of the economy.”

Featured Sponsors:

[huge_it_gallery id=”3″]

Huckabee, who has been a strong critic of the Consumer Financial Protection Bureau and an advocate of a smaller federal government, called on taking the regulatory oversight of the financial services world out of Washington and returning it to those who “have a better understanding of what’s happening on the ground.” Translated, that means putting the responsibility with the states.

“We need to keep more of the regulation closer to the people being regulated,” he said. “I will always believe that the best government is the most local government that is humanly possible.”

This makes a great deal of sense, considering the multiple layers of regulations that burden companies trying to work with consumers. And maybe it is time to openly question why we need both federal and state regulatory oversight – one or the other makes more sense, rather than the weird mix of duplicate and contradictory rules coming from Washington and the statehouses.

Huckabee also mixed the all-but-ignored question of housing with the anything-but-ignored question of immigration reform.

“If a couple of hundred thousand people come to the United States, isn’t it going to be more difficult to find housing for the people we add?” he asked. “People who are in the country without food and shelter ought to be our highest priority in the country.”

Huckabee broke another taboo with that last statement: he contradicted the prevalent but rather silly idea that immigrants will magically increase the homeownership rate. Indeed, how is that going to happen – especially when we are talking about the millions of illegal immigrants who are lucky enough to have a roof over their head after working long hours for putrid low wages?

Sadly, Huckabee’s remarks were mostly ignored beyond the forum audience. And while his presidential candidacy is getting relatively little attention, his comments on housing affirm that there is at least one presidential candidate who can look beyond the zingers and sound bites and appreciate that there is a major problem that no one wants to acknowledge.

About The Author

[author_bio]

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.

The Shadow Comfort Of Conspiracy Theories

I recently stumbled across an organization known as the Gold Anti-Trust Action Committee (GATA), which exists to “expose, oppose, and litigate against collusion to control the price and supply of gold and related financial instruments.” If you believe the GATA spin, this group has been successful in exposing “Western treasury and central bank efforts to intervene both openly and surreptitiously against a free market in gold.”

Uh huh? Yes, it is too easy to dismiss the idea that Janet Yellen is the 21st century answer to Auric Goldfinger on its own terms, but it doesn’t help when one considers the source of such stupidity.

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GATA was co-founded by one Chris Powell, the editor of a tiny Connecticut daily newspaper. Powell briefly made headlines two years ago when he insisted that the newspaper industry has gone into acute decline because “newspapers cannot sell themselves to households headed by single women who have several children by different fathers, survive on welfare stipends, can hardly speak or read English, move every few months to cheat their landlords, barely know what town they’re living in, and couldn’t afford a newspaper subscription even if they could read.”

Yes, that is an exact quote! Clearly, old sourpuss Powell is up to his clenched teeth in conspiracies.

Sadly, there are people who subscribe to the zany ideas that he is putting forward. Perhaps the most blatant financial conspiracy theory involves the decline and fall of the housing industry – and, with it, the U.S. economy – which has been explained via old-school scapegoating.

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Elizabeth Warren (yes, her again) made a name for herself insisting that the 2008 crash was the sole responsibility of lenders that conspired to go out of their way to foist problematic loans on stupid people that were incapable of understanding their borrower responsibilities. While Warren never bothered to explain the logic behind this – after all, the profit margin behind failed loans isn’t particularly muscular when compared to the harvest from well-performing loans – she successfully convinced too many people that there were no villains in the 2008 crash except for conniving mortgage originators.

Cut to today and Warren’s protégé, Richard Cordray, continues to push the conspiracy that mortgage lenders and servicers are going out of their way to bamboozle the American public. Even though the overwhelming majority of mortgage-related complaints filed with the Consumer Financial Protection Bureau’s controversial database are dismissed as being without merit, Cordray still insists that mortgage professionals are united in a conspiracy to ensure that consumers suffer and fail.

Why do characters like Powell, Warren and Cordray continue to get away with these antics? For starters, conspiracy theorists are shrewd enough to tap into the underlying distrust that many people have towards authority, taking the us-versus-them divide to unlikely conclusions. GATA embellishes the stereotype of secretive government agencies to a new depth, with tales of international collusion by the great powers over the planet’s gold supply. Warren and Cordray play the class warfare card by fabricating grand plans by supposedly deep-pocketed lenders to rob and swindle the humble working poor.

Conspiracy theorists also traffic in easy answers to questions that normally defy easy answers. Really, try to explain the international gold market or U.S. housing policies to a layman in 30 seconds. Then try to explain the hiccups and headaches of each sector in the same amount of time. Isn’t it easier to point at someone and declare that person to be at fault rather than try to present a fair yet expansive analysis that measures causes and effects?

Ultimately, conspiracies are guilty pleasures for some easy to amuse people. For this crowd, there is some silly fun in pretending that the world’s governments are secretly united in some grand gold control scheme. And on the housing conspiracies, the guilty pleasure of blaming supposedly wealthy lenders for ruining the economy can be a springboard for the expansion of suffocating restrictions and regulations that profit no one and, ultimately, create more harm than good. (Can you say “Dodd-Frank”?)

It would be lovely if we could just smirk and shrug off the aforementioned conspiracies as the harmless prattling of mischief makers. But as long as these conspiracy theorists continue to pollute the intellectual environment with their garbage, it becomes impossible to have an intelligent consideration of problems and the solutions they require.

About The Author

[author_bio]

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.

Richard Cordray And My Bichon Frise

I have a Bichon Frise named Joshua – he is a rescue dog that came into my life last year. He has plenty of things in his favor: he is very cute, incredibly photogenic, and a great chick magnet when I go walking in the park. But he has one thing that can be considered as a disadvantage: he doesn’t really listen when he gets a certain thought in his mind.

Joshua

For instance, Joshua has been told on more than one occasion that the laundry hamper is not a playground, but that doesn’t stop him from rolling in the dirty underwear and t-shirts. Nor is Joshua interested in being told that the toilet brush is not a chew toy. Indeed, on more than one occasion Joshua has been running through the house holding the toilet brush in his jaws as if he was cigar-chomping Groucho Marx romping about. And as for our warning about barking at the elderly man across the street, all I can say is that I am glad our senior neighbor either has an immense sense of humor or a poor sense of hearing – his mere presence in his front door gets Joshua growling and howling.

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I don’t know if Joshua has any canine relatives, but he has a two-legged brother running the Consumer Financial Protection Bureau (CFPB). And while Richard Cordray is nowhere near as cute as my Bichon Frise, he certainly shares Joshua’s stubborn habit of ignoring what is said to him.

Whether it comes to his refusal to admit the error of the CFPB’s so-called consumer complaint database – a digital mess that even the Federal Reserve’s Office of the Inspector General has criticized for numerous inaccuracies – or his failure to listen to the industry about putting a good-faith period into place following the implementation of the TRID changes or his fingers-in-the-ears/turning-of-his-back to documented problems on cost overruns surrounding the new CFPB headquarters and problems with discrimination in CFPB personnel procedures, Cordray is the rare Washington power figure that holds people in complete and utter contempt. He will not admit that his bureau is capable of making any error, nor will he concede that it is accountable to the American public.

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For example consider this exchange from a June 2014 Congressional hearing when Rep. Jeb Hensarling quizzed Cordray about the rising costs of the CFPB headquarters construction. “Let me just ask you about specific costs, they come from public documents that have been filed, and with taxpayer money—you do agree it’s taxpayer money that you are spending?” Hensarling said.

“I would say that I have children, too, and I care about the debt as you do, for the same reasons,”

Cordray said – a response to an earlier and unrelated remark made by Hensarling on how his

“I just asked, do you agree it’s taxpayer money?” Hensarling said.

“It is federal government money that comes from the Federal Reserve,” Cordray responded.

“Okay, so it’s difficult for you to say it’s taxpayer money?” Hensarling asked.

“I don’t know whether taxpayer is the right term or not,” Cordray replied. “It’s the money of Americans.”

Uh huh. Well, I can say that my stubborn little Bichon Frise has one trait that Cordray lacks, and that is humility. Consider the self-congratulatory tone that Cordray during a recent speech before the National Association of Realtors, when he claimed that the CFPB’s rules to “encourage common-sense, consumer-friendly business practices” were key to the current level of positive housing market achievements.

“In 2014, the first year of our new rules, mortgage originations for owner-occupied home purchases increased between four and five percent,” Cordray said. “The upward trend appears to have accelerated over the first half of this year. And while we saw minor consolidation in some parts of the mortgage market, there is no evidence of any mass exodus, as the doomsayers predicted. In fact, after adjusting for merger activity, the number of lenders that reported having originated mortgages showed an increase in 2014. And in particular, the number of community banks and credit unions that originated home-purchase mortgages last year was higher than the year before.”

Oh, we have a healthy and happy housing market thanks solely to the CFPB, right? Well, maybe there is one more bit of overlap my Bichon Frise and Cordray: my dog leaves his waste in the park and Cordray leaves them in his speeches.

About The Author

[author_bio]

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.

Executive Spotlight: Patrick F. Stone of Williston Financial Group

Pat-StoneThis week, the topic of conversation is technology and the Executive Spotlight shines on Patrick F. Stone, president and CEO of Williston Financial Group.

Q: Has technology improved the mortgage transaction process over the past five years? And on the flip side, has technology made things less efficient?

Patrick F. Stone: Yes, but we can still do a lot more. We’re still well behind many other industries when it comes to maximizing the benefits of technology.

Because we are such a segmented industry, it can be challenging to integrate or standardize all of the different technologies used today by Realtors, lenders, settlement agents and consumers. I suspect that it will take more than a little prodding to get us to that “cradle-to-grave” technology we’ve been talking about for years.

As to having a negative impact on technology, I don’t believe so at all. Technology is simply a tool. It will do as much or as little as the people using it allow it to do. If tech has made something less efficient, it’s probably because that business or person is using the wrong technology, or misusing it altogether.

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Ultimately, technology has allowed increased productivity in all segments of the process, so we have to judge it as a meaningful positive.

Q: Can the TRID-related changes to the industry improve the transaction process, or will it make things worse?

Patrick F. Stone: Although it will certainly cause some difficulty in the initial weeks, I do think TRID will compel our industry to at least start to break through the silos that cause inefficiency, redundancy and overall wasted effort.  It’s certainly going to force originators and settlement services firms to interact and collaborate more meaningfully and consistently. The initial emphasis on data exchange has already opened the door to significant conversations around integration and process improvement.

Perhaps the most important impact of TRID, which has received little or no notice, is the impact on the fall-out ratio. Nationally, it seems about 70% of all opened refinance orders close, and about 80% of all opened resale orders close. The Combined Disclosure and the timing and process involved will lower the fall out rate. Any additional benefit derived from technological integration should also positively impact the fall-out rate.

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If at the end of the day, TRID results in a reduction in half of the “fall out” rate, all participants in the process could see up to a 10% increase in overall revenue with only about a 3.5% increase in expense.

Q: How has the mortgage industry embraced mobile technology? Is it doing a good job on this front, especially in regard to improving the transaction process? 

Patrick F. Stone: No. For most participants, engaging in mobile and interactive technologies is still an opportunity, not a reality. There are few if any applications currently experiencing meaningful use, outside of property research and document execution being used by Realtors and consumers.

Most process technologies do not have any mobile applications, with only a handful of lenders and settlement agents experimenting with potential usage. WEST, a WFG subsidiary, is beta testing a mobile “consumer dashboard,” which will allow the buyer and seller to tract the status of their transaction on their smart phone, but outside of that, most mobile technology usage is still limited to the front end of the transaction.

Q: Of course, all technology is subject to cybersecurity concerns. How would you grade the industry’s response to cyber threats?

Patrick F. Stone: “A” for effort, but maybe a “C” for execution. Cybersecurity is a growing concern, but most people fail to realize that it is a dynamic threat – one that continues to evolve and grow, not a one- time “I have fixed the problem” type of challenge.

Those firms that believe they simply have to hit a certain threshold or target with their cybersecurity, or simply make a one-time upgrade of sorts, will be extremely vulnerable to future threats. It’s not enough to plug in a system or procedure and then walk away. Cybercriminals are always evolving; always improving their tools and methods. So, any business out there which believes it can simply plug in a security process and then ignore it will probably be in for a rude surprise down the road.

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.

The CFP-Who?

The folks at the Consumer Financial Protection Bureau (CFPB) are under the impression that they are saving the American people from the evils of the financial services industry. Unfortunately for the CFPB, it appears that the majority of Americans never heard of the agency.

Earlier this summer, Zogby Analytics and the U.S. Consumer Coalition conducted a poll to determine how Americans view the various federal regulatory agencies. Only 19 percent of those contacted for the poll admitted that they were familiar with the CFPB – which might be fairly depressing, especially when one considers that one-quarter of those polled were unfamiliar with the U.S. Department of the Treasury, roughly one-third were unfamiliar with the Federal Reserve and more than half were unfamiliar with the Securities and Exchange Commission. Perhaps the MBA should offer courses in geology, since a lot of people appear to be living under that proverbial rock.

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In any event, those that were familiar with the CFPB had a favorable view of the agency (31 percent, compared with 14 percent indicating unfavorable views – everyone else had no opinion one way or the other). But it appeared that many people had no clue what the CFPB was doing. Let me share this information from the poll’s published results:

“More Americans are doubtful that the CFPB can ‘protect credit card information and personal data … from hackers’ than believe it has the capability,” the poll report stated. “One in three disagreed (34 percent) and only 29 percent agreed. Nor were they confident that the agency is ‘safeguarding credit card data… and will do everything possible to prevent it from getting it into the wrong hands. One in three agreed (35 percent) while 26 percent disagreed – but the remainder (40 percent) was either not familiar or not sure … Only 8 percent said that the CFPB’s data collection is better than NSA’s reviewing of domestic phone and text records, 12 percent said it is worse, and 43 percent said it is about the same.”

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After all of these years, it is more than a little pathetic that so many people have no clue Richard Cordray and his mischief makers are actually doing. But that is not to say that they’ve been completely off the radar. Case in point: the CFPB’s Consumer Complaint Database, which is chock-a-block with endless ranting and raving from unhappy Americans that have a bone to pick with their lenders. There have been thousands of complaints posted in this online database, but there is a big problem: the vast majority of them are unsubstantiated.

All of the major financial services trade associations have complained about this thoroughly misleading attack on the integrity and reputations of private sector lenders. Steve O’Connor, the MBA’s senior vice president of public policy and industry relations, probably said it best in a recent letter to Cordray.

“In MBA’s view, because more than 80 percent of complaints do not require action beyond an explanation, posting these unsubstantiated complaint narratives will only mislead the consumers the CFPB is charged with protecting,” O’Connor wrote. “We therefore urge that complaints be verified before narratives are posted. At the very least, the CFPB should establish procedures to take down complaints not requiring action.”

To date, Cordray and his team have publicly ignored the complaints about their complaint database – much the way they ignore any complaints leveled against this agency (cost overruns on the new headquarters, racial and gender discrimination in personnel policies, refusing to extend a good faith period following the implementation of the TRID guidelines, etc.)

And while the American public is, mercifully, lucky that they never heard of this mismanaged agency, the financial services world has the misfortune has the misfortune to be stuck with this bunch and their bumbling.

About The Author

[author_bio]

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.

Executive Spotlight: Nick Grant of LRES

Nick-GrantThis week, the Executive Spotlight shines on the appraisal sector, and the expert in the spotlight is Nick Grant, the new senior vice president of sales at LRES.

Q: How would you categorize the state of today’s appraisal sector?

Nick Grant: Currently the appraisal sector is extremely busy around the country across all segments within the industry from lending to legal valuations. The good news is that due to the high volume of work, the appraisers are at full employment capacity. This high volume has put stress on the industry due to the shrinking number of available appraisers. More appraisers are leaving the profession than are joining it for several reasons.

The average age of an appraiser, according to several different studies, is in the upper 50’s, meaning that many are approaching retirement or are ramping down the amount of work they are willing to do on a monthly basis. With the favorable interest rates we have been experiencing this year, the lending industry has really been impacted by the fewer number of appraisers, the appraisal delivery time has been extended causing issues with closing escrows on time as well as interest rate locks expiring.

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The reasons for the shrinking number of appraisers is that there are many barriers to entry to becoming an appraiser that not many are willing to endure: (1) College degree; (2) Extensive appraisal-related college level coursework; (3) 2,500 required hours of apprenticeship as a trainee appraiser with few money-making opportunities; (4) Lack of appraisers willing to mentor a trainee for that time commitment (1.5 years); and (5) Lack of institutional training centers as in years past with in-house appraisal departments (banks, savings and loans).

The Appraisal Subcommittee (ASC) needs to look into the not-too-distant future and strategize about what needs to be done to attract new and younger talent to the industry and amend some of the requirements so that new talent can earn a living while in training. Most lenders will not accept an appraisal that has a trainee appraiser signing the report along with their licensed/certified mentor, another issue which prohibits proper training and experience credit.

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Q: In your professional opinion, what are the key elements to successful customer service?

Nick Grant: Establishing realistic expectations. Managing those expectations with efficient follow-up meetings and phone calls. Staying on top of change and being proactive, not reactive.

Q: What should a company in the mortgage industry look for when recruiting candidates for sales positions?

Nick Grant: Consider attributes outside of the industry: Service, ability to accept change, problem solving, ability to think outside of the box. I believe experience is important but I also think we should bring young people into our business and train them. These younger candidates have great IT skills that will serve us well into the future.

Q: What will be you top priorities in your new role at LRES?

Nick Grant: Build a total sales environment that includes all departments. I’m all about team selling. Our service and operations departments’ strength is enabling our sales team to develop realistic expectations. I’ll also incorporate a lender place/REO insurance strategy to bring new business as well as grow our relationship with our existing clients.

Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.