TMP Lender Spotlight on American Brokers ConduitMortgagePress.comAmerican Brokers Conduit, ABC Advisor Seminar Series ABC's Elite Partner Program: Helping brokers build a more profitable business An interview with Robin Hawley of American Brokers Conduit Robin Hawley is a senior vice president of American Brokers Conduit (ABC), the wholesale division of American Home Mortgage Investment Corporation, a publicly held Real Estate Investment Trust (REIT) headquartered in Melville, N.Y. The Mortgage Press recently had the opportunity to sit down with Robin to get an overview of ABC's Elite Partner Program. For more information on ABC's Elite Partner Program or on ABC, visit www.abconduit.com. The Mortgage Press: At this time, why does ABC consider it important for brokers to become part of a preferred broker program? Robin Hawley: The residential mortgage lending market is more competitive than ever, and by qualifying for ABC's Elite Partner Program, mortgage brokers can gain significant operational and cost efficiencies. The benefits ... This program will not only shorten the loan process and result in a higher quality customer experience, but also help mortgage brokers increase their close rates and build a more profitable business. In addition, ABC believes it is important to recognize its best brokers who deliver quality business and consistent volume. These high-quality broker partners understand ABC's programs, processes and guidelines, and therefore, their loans can be processed, approved and closed more quickly. TMP: How does a broker qualify for ABC's Elite Partner Program? RH: ABC's Elite Partner Program is built on the foundation of quality. First, a mortgage broker needs to deliver high-quality loan packages that can be validated and closed to ABC's specific lending guidelines. This action optimizes the lending value chain by allowing a more rapid and cost-efficient loan process. In addition, we require minimum pull-through, percentage of loans to be approved on first underwrite, as well as other important quality measures such as early payoffs, early payment defaults and no fraud. TMP: What tangible benefits can a broker expect to receive from being part of ABC's Elite Partner Program? RH: Some of the benefits an Elite Partner receives include pricing benefits, priority underwriting and a plaque recognizing their designation as an Elite Partner. An Elite Partner also has access to ABC's senior management team via periodic roundtable or task force meetings. ABC respects the opinions of our brokers, and we reach out to them regularly for feedback. An intangible benefit to the broker results from the development of a comfort level with their lender. They do business with us regularly, know our products and guidelines, and enjoy the higher likelihood that their loans will be approved and closed without incident. Finally, we refer customers looking to refinance back to their originating broker for future financing. TMP: What is the profile of a mortgage broker who would benefit the most from being part of ABC's Elite Partner Program? RH: They are relationship driven and understand the importance of delivering high-quality service to drive their long-term success. In addition, they are focused on taking ancillary cost and inefficiencies out of the mortgage process, and are looking for wholesale lending partners with a shared vision and goals. We are also finding that these brokers are actively taking part in our training, both live at our nationwide Advisors Seminar Series, and on our Web site via our Advisor Center where they can access online and recorded training segments on demand. In addition, they are prime players who sell not only agency and alt-A loans, but who sell option ARMs and other niche portfolio type products. Most of all, they know how to do business with ABC, and submit high-quality, well packaged loans. TMP: How important is it for mortgage brokers to establish long-term relationships with key wholesale lenders by participating in a preferred broker program? RH: To continue to build their business, brokers need to look beyond production volume trends and begin to identify cost and time inefficiencies in their loan process to deliver excellent service to their originating sources. By building long-term relationships with a select group of high-quality wholesale partners, a systematic loan process can develop, addressing both time and cost inefficiencies that translate into quick turn times and higher closing rates. These improvements will result from a better understanding of the wholesale lenders' products and loan process, significantly reducing the length of the loan cycle. In addition, the mortgage business, and the real estate industry in general, is relationship driven. Products change quickly, underwriting guidelines vary just slightly from lender to lender, and knowing these nuances is often the difference between a submission that is approved and one that's rejected. Having a relationship with your lender means you know who to call and get answers from when you need them. It means you know the lenders' guidelines as well as they do, and as a result, your borrower receives the excellent level of service they deserve during the purchase of their most significant asset. TMP: To be successful, what should a broker look for in a wholesale lending partner? RH: We believe the answer should be based on how a wholesale partner can help a broker build a sustainable and more profitable business in a competitive market environment. The fact is that many brokers have been in the mortgage business less than five years and have never worked through the down-side of a cycle. Therefore, besides offering a preferred program, ABC offers its broker partners other important services and capabilities, such as flexible products that are competitively priced, lending solutions that meet both current and potential customers' needs, best-in-class service with experienced real-time inside professionals, user-friendly technology, online marketing capabilities, and an ongoing commitment to online and in-person educational opportunities. ABC also offers mortgage brokers the chance to interact at no cost with leading mortgage professionals such as Barry Habib and Jim McMahan through our Advisors Seminar Series. We believe the key word in doing business with our mortgage brokers is "partner" and the question we ask ourselves and our mortgage broker partners is: "How can we help you become successful?" TMP: Regarding product portfolios, your parent, American Home Mortgage, and ABC just introduced a few new products to the industry. Can you explain the benefits of these products? RH: Our new Power Fixed 5-Year ARM combines all of the payment options of the popular MTA option ARMs, with the stability of a fixed payment for the first five years. It appeals to a borrower who is uncomfortable with the monthly payment change currently associated with most option ARM products. Borrowers can still choose how they want to pay their loan each month, but the interest-only option and minimum payment option will be based on a fixed-rate during the first five years of the loan. Fifteen- and 30-year fixed amortization payments can also be made. While deferred interest may still result by making the minimum payment, until this product was available, most option ARM minimum payment or interest-only payment selections changed monthly. ABC's new Progressive Payment Saver is similar to a two to one buy-down, but with a new twist. It's an interest-only loan that provides the borrower with a two percent lower rate and payment the first year and one percent lower rate and payment the second year, funded by a three percent-financed discount that is added to the loan amount. The remainder of the term (third through 30th year) will remain level, but will continue to be based on interest-only for the remainder of the initial 10 years. Principle and interest payments are fully amortized over the remaining final 20 years of the loan. As the rate buy-down is financed, there is no out-of-pocket cost to the borrower and no possible negative amortization during the life of the loan. The borrower also qualifies at the first year bought down I/O rate so qualifying is simple. TMP: What are the mortgage broker's needs that have to be met in 2006 and beyond? RH: Besides product, I think the availability of training and marketing support is important. These are two components that can become very costly to a broker, and require resources that a small company may not have. Knowledge is power, and in an increasingly competitive market, those brokers who are professional and knowledgeable will appeal to consumers and origination partnerships like financial planners and realtors. During the first quarter, ABC introduced an online version of our successful nationwide educational forum, the ABC Advisor Seminar Series. These on-demand educational seminars are now available on ABC's Web site at the new Advisor Center, where mortgage brokers are able to participate and view top industry speakers as they provide original growth strategies. Brokers are also able to access live seminar archives, for viewing at their own convenience. In addition, the Advisor Center offers the opportunity to learn about new loan programs, product enhancements, and view scenarios illustrating how a particular product could help a client. ABC also recently launched an upgraded marketing Web engine on its Web site called Brokers Marketing Center. This custom-built application enables mortgage brokers to send communications, such as newsletters, by mail and automatic e-mail, all of which can be customized with their photo, logo and contact information. The Broker Marketing Center puts marketing firepower into the hands of every mortgage broker, allowing brokers to always stay in touch and establish a brand in the marketplace. TMP: How has the boom market of the past five years impacted the industry? RH: First of all, business came easily. The abundance of refinance business created a false sense of security for everyone in sales, especially for those loan officers who had never experienced a down market. Compensation levels were at an all-time high, and many loan officers are now struggling financially. Secondly, because of the influx in business, there was little time to train employees on the basics of sales or mortgage banking in general. Now that everyone has more time, it's essential to refocus the sales force on fundamental and strategic selling skills. At ABC, we offer the Advisor Seminar Series, a free half-day seminar about current products and sales tactics, hosted by nationally-known speakers. Our Advisor Series has been hugely successful. More than 10,000 brokers attended these nationwide training seminars. TMP: Are wholesale lenders putting too much emphasis on technology? RH: I am not sure that we have sold the true advantages of technology to the brokers very well. Imagine giving your borrower an approval at point-of-sale? Many times, brokers have to wait and see if a loan will be able to be done by one wholesaler or another. Will the deal need to be repriced or re-structured due to the lender having to pull new credit? If a broker could avoid those pitfalls by working with a lender that has the solution to those issues, wouldn't it be worth a lot? ABC encourages brokers to use technology to create an environment where time is money and we all win! If a broker runs DU or CDU (customized findings for jumbo and portfolio products), we will use their credit! No more re-structuring loans ... that's just one of the many advantages! TMP: As one of the fastest growing wholesale lenders in the country, what is ABC doing to continue the momentum? RH: In late 2005, the senior management team established its Vision for 2006 and Beyond. Everything we do at ABC supports that vision ... to be a top wholesale lender, to outperform our peer group, to increase market share, to be innovative in our product development, to engage our employees in the decisions we make, to incorporate critical functionality in our Web site, and to engage and treat our broker partners with respect, and expect the same in return. TMP: What makes ABC different from the other lenders you worked for? RH: ABC lives by its tagline, Your Partner in Success. While that tagline is part of our branding to our broker partners, it also applies to our own employees. We want to help our brokers be successful by allowing them to do business with us in a way that fits their needs, as opposed to telling them there is only one way, one system and one program. For example, we accept automated findings through FNMA, LP, eMagic, AU central, etc. Additionally we are embedded in Calyx Point, one of the most popular LOS engines used by mortgage brokers today. We're just a click away in a dropdown box! TMP: What are some of the initiatives that ABC is pursuing during this competitive marketplace of 2006? RH: In addition to our Elite Partner Program and ongoing product development to meet the ever-changing needs of the market, we are continuing to improve our Web site with the goal of having it be considered one of the best in the industry. Our CRM strategy will allow our account executives to focus on brokers who are the best fit for ABC and have the most potential for success with our company. TMP: What are your outside interests when you get away from the office? RH: I actually live in Pennsylvania and commute weekly to New York. I have always traveled in my management positions, so the arrangement is not unusual. On the weekends this summer, I have started to compete in rated hunter/jumper horse shows in the central Pennsylvania area. It's a sport that takes my mind off of mortgage banking and requires complete concentration on what you're doing! Aside from showing my thoroughbreds, I boat and ride jet skis with my husband. I've also been know to drive a NASCAR at Dover Downs and paraglide off mountains in France with my snow skis on. I believe in seizing an opportunity to try something new whenever I can!