An Interview with Vanguard National Mortgage and Title CEO Michael Knight
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An Interview with Vanguard National Mortgage and Title CEO Michael Knight

May 31, 2004

At the Halfway Point: NAMB President Glances Back and Looks ForwardMichael SimonArmand Cosenza, National Association of Mortgage Brokers, HUD Proposed Rule,
Sometime after National
Association of Mortgage Brokers President Armand Cosenza Jr.
iterated the phrase level playing field for the first time during
our interview at the Long Island Marriott Hotel in Uniondale, N.Y.,
a woman who had been sitting nearby politely interrupted our
conversation. As the only area in the foyer where smoking was
permitted, she wanted to know if we could help her find an ashtray.
Apart from the three of us, the hotel was particularly empty, as we
sat at a yet-to-officially-open bar-me with a tape recorder and
steno book; him with a few scribbled notes for the afternoon's
conference call; and the woman with an unlit cigarette.
"I'm usually pretty good at these things," he said as he scoped
the area for an ashtray, even climbing the bar at one point for a
closer look. "I guess not today."
It's hard to believe that Armand wouldn't be good at finding
anything, even an ashtray. In his six-month term, he has had to
endure unyielding legislative pressure, reaching back as far as
July, just one month after he had taken office. It was then, when
the U.S. Department of Housing and
Urban Development issued its Proposed Rule regarding the Real
Estate Settlement Procedures Act, something that Armand and NAMB
had been supporting and lobbying for years, under the moniker of
comprehensive mortgage reform. However, the problem doesn't
necessarily lie with the effort, but rather in the execution,
returning to the same level playing field that he had begun
speaking about before being interrupted for an ashtray.
"HUD knew that they didn't have the authority to regulate
secondary market transactions, so all Mortgage Bankers were exempt.
That left the other half of the industryus. Mortgage Brokers
originate more than half of all the loans in America, and they try
to propose this most onerous rule on us ... Why would you legislate
99.5 percent of the people for a half-percent of the problem?"
Under Cosenza's term, the 99.5 percent of non-predatory brokers
in America have united in groundbreaking numbers. At last count,
nearly 50,000 letters had been received by HUD on NAMB's behalf,
and although some states seem to have issue with his "multifaceted
governmental plan of action," the membership has largely banded
together in record numbers, thanks to Armand's steady hand.
"There's so much fear. They're so afraid that if [the current
Proposed Rule] does come out, the playing field will be too uneven
to work out. At least 40-percent of brokers out there cannot get a
warehouse line in order to be exempt. If the lender-paid credit to
the borrower' re-characterization of yield spread premiums is
implemented, it'll be a trial attorney's dream. That's the
problemthe fear of the unknown."
But for the time being, what is known at NAMB, is that it's
business as usual. As part of Armand's 2003 plan of action, NAMB is
planning to "categorize and departmentalize all of these different
agendas which have taken a back seat since the Rule was
announcedwe're going to have people working on the Model State
Statute Initiative; we're going to have people working on predatory
lending issues. You need a license to be a manicurist, yet we still
have states without licensing requirements. It's absurd."
Licensing and continuing education aside, NAMB has quickly
become a force to be reckoned with, at a time when such a force is
desperately needed. "There's no doubt that we have taken giant
steps in the last three years. HUD called us to meet with them; we
have finally arrived at a different level, but it's an uphill
battle ..."
As Armand reaches for his notes, his cell phone rings. As if on
cue, it's Ohio Association of
Mortgage Brokers Lobbyist Rick Baird on the other end, whom
Armand promises to call back shortly.
"It never stops," says Cosenza. "Take our Web site [www.namb.org] for example. Here's a
perfect medium for information, and when I took over, it was
disgraceful. The headline was still, Joseph Falk Testifies Before
Senate Banking Committee' from six months prior. It's a benefit of
membership, and there were new members who weren't even listed in
our directory. We changed all that. Now, the biggest complaints I
receive are from non-members, asking why they're closed out from
accessing the site."
However, despite its strides, NAMB still has to confront the
issues at hand. If not handled properly, no amount of online
information will be able to save them.
"There are those at HUD who believe that we add no value to the
system, that all we do is enter the borrower's information, press a
button, get the answers, and charge a couple points. It's a case of
the squeaking wheel getting the grease. It's all they hear, and I
think Secretary Mel Martinez really believes that he can make a
difference. He has the right intentions, but the Rule was written
without industry input ... After all, we're the ones getting paid
to make these accurate, thoughtful and proactive decisions.
"My dream is to stand alongside HUD, once [the Rule] is
finalized, and say, It's a good, fair product for the industry that
we can live with.' Then, we can go back to the real problem of
predatory lending."
And with that, Armand Cosenza Jr., who was just hours away from
boarding his 115th flight of 2002, may have been filled of ideas
and hope, but for now, was off to rally his troops and prepare for
the second half of what has already been a challenging term.

Originations