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NAMB introduces Lending Integrity Seal of Approval: New tool helps consumers identify those meeting highest ethical lending standards

Jan 24, 2008

AllRegs rises out of the basement and lands in the front office: A look into the past with a glimpse towards the futureMortgagePress.comAllRegs, regulatory compliance, Fannie Mae guidelines, Freddie Mac guidelines, FHA guidelines, AllRegs Academy, LendingPatterns, HMDA data, Lender E-Source The AllRegs team of Jeffrey H. Hoerster, president and COO; Dan Thoms, senior vice president; Frank Preese, chief technology officer; and Glenn Ford, chairman and CEO Eagan, Minn.-based AllRegs, was founded in Glenn Fords household 10 years ago as an entrepreneurial endeavor to supply mortgage lenders with a convenient and comprehensive source of Fannie Mae, Freddie Mac and FHA guidelines. Since its inception, the company has steadily grown its revenue, customer base and services. Today, AllRegs supplies federal and state loan guidelines to more than half of the mortgage industrys lenders. In addition to being the exclusive publisher of Fannie Mae and Freddie Mac information, AllRegs has established relationships with many large companies, serving as their exclusive loan guideline publisher. AllRegs is run by an executive management team selected by Ford, now chairman and CEO, to cultivate and grow the organization. Jeffrey H. Hoerster serves as president and chief operating officer, overseeing the company and its long-term goals. Frank Preese serves as chief technology officer, providing AllRegs IT leadership. Dan Thoms is senior vice president, managing and overseeing strategic corporate initiatives, the sales and marketing divisions, and the new education division. The company has witnessed market downturns before, and has transitioned into a larger force providing mortgage industry professionals essential products and services, considered necessary or highly desired, to conduct business. The company has expanded from one main flagship product to more than 50 products and services. One new product, a comprehensive FHA training course, is specifically designed to help mortgage originators and lenders capture more business in a declining market. When we caught up with Glenn Ford and Dan Thoms, we confirmed AllRegs growth and success didnt suddenly arrive overnight. In addition to providing us with some colorful history, we wanted to learn about how some of their new products will help the industry. The Mortgage Press: Can you give us some history about the inception of AllRegs? Glenn Ford: In 1988, my wife and I came up with the basic idea of AllRegs and providing federal loan guidelines. I thought it was a viable idea and researched the number of lenders in the United States to determine if the market was large enough. Afterwards, I called 20 lenders in the Minneapolis-St. Paul area to determine whether the idea would actually translate into a purchase by a lender. All but one lender signaled they would want to purchase such a product. So, we bought an IBM-AT computer and taught ourselves to use it. Using BASIC programming language, my wife created a relational database, and I spent three months in my basement entering a five-foot high stack of manuals of Fannie Mae, Freddie Mac and FHA selling guides into the computer. As you can imagine, that task really improved my knowledge of the guidelines! Our first customer was Ralph Mozilo at Countrywidehe made the decision to purchase after only one discussion. We were producing the product on 5-¼-in. diskettes with hand-typed labels. We garnered 10 customers very quickly. In those days, it would take me all day to update information for those customers. We moved to 3-¼-in. floppy disks, then to a completely online, Internet-based model. TMP: What was the perception of AllRegs in the early days versus today? GF: In the old days, no one knew who we were, and we had to explain the product in detail for potential customers to understand exactly what we were selling. Today, we are fortunate to enjoy name recognition, and when people dont know what products we sell, at least theyve heard of us. One thing I have not mentioned is that selling our product in the early days was like pulling teeth. Our database of information required 20 megabytes of disk space, and back then, most computers only had 20 megabyte hard drives. Our product practically required a dedicated computer to run the program. When computers began using larger hard drives and processing speed increased, we experienced a spike in demand because businesses had an easier time handling our sizable databases. TMP: How has the technology and processes changed? GF: We started out by sending eight to 10 diskettes to customers, and if one of them was faulty, that required sending a completely new batch of disks for the customer to install. Updates were done monthly and could be problematic. Today, updates occur almost instantaneously, and we provide information in real-time. TMP: How did you keep up with federal guidelines when you werent affiliated with the government? GF: I would visit HUD on a regular basis and could wander around unobstructed because back then, there was less security in the building: You could just walk right into the building and wander the halls. Through my constant contact with personnel at HUD, I built strong relationships across departments that distributed content. Ultimately, I convinced them that it was in our mutual interest to distribute their information in electronic form to customers. HUD had astronomical distribution costs and was printing paper manuals that required constant up-keep by a customer. AllRegs was providing the same service, but in an electronic format. After educating HUD, they allowed AllRegs to distribute information on HUDs behalf, which reduced their costs and made it easier for customers to access the guidelines. Today, we work very closely with HUD and get changes in advance so that we can distribute information as soon as updates are announced. TMP: Can you describe how information is delivered to your customers? GF: When new information becomes available, the first thing we do is publish the information online. Then we send an e-mail, called an E-Alert, to subscribers wishing to get this type of information alerting them to the updates. Individuals opt-in to receive the information they are interested in. The headline of the e-mail describes the update, the body of the e-mail gives a synopsis of the change, and a link within the e-mail takes a subscribed user to the full text. TMP: AllRegs has a knack for solving problems within the industry. Do you recall solving any problems that benefited the industry? GF: An innovative solution we implemented involved managing the myriad of multiple updates that HUD was applying to their manuals. You never knew if what you were reading was the most updated material or had been superseded by new material. We put in a feature called related revisions that alerts readers to recent changes which has solved this problem. TMP: Can you elaborate on your management team? GF: After buying out my partner in 2004, my first task was to hire a professional manager to run the company. I knew that my forte was not managing people. I also knew that this task was the first step toward building a management team that could take AllRegs to the next level. I started at the top and hired Jeffrey Hoerster, a former customer, as president and chief operating officer. Jeff has 25 years of mortgage experience. Next, I wanted to strengthen our IT and product development group and hired Frank Preese as senior vice president and chief information officer. Frank spent 11 years as the chief technology officer for a public company, Plato Learning, providing IT leadership. Lastly, I needed a performer in the sales and marketing department to strategize future growth and increase sales. I hired Dan Thoms as senior vice president of sales and strategic initiatives. Dan formerly led the education and business development activities for the Mortgage Bankers Association. We leveraged our management team when we decided to add an educational division, AllRegs Academy. Both Dan and Frank have experience building and delivering educational services to consumers. TMP: Tell us about your new educational division, AllRegs Academy. Dan Thoms: We are unique in the educational space in that we can utilize the timely information that AllRegs delivers on a daily basis to our mortgage courses. No one else is able to wrap their education around Fannie Mae, Freddie Mac or FHA guidelines quite the way we can with our in-depth knowledge of current information. People dont want to be educated on old content. TMP: Among your mortgage industry course offerings, the Fraudulent Document Recognition Online Course stands out. Who is the course designed for and what is the training objective? DT: The course gives mortgage companies, banks, title and closing companies the tools needed to stop or prevent giving money or assets to someone isnt who they say they are. Students are taught what a drivers license, birth certificate, passport, Social Security card, etc., should look like, along with how to use any embedded security features present within those documents. TMP: The news has exposed some diverse, and sometimes unethical, procedures used by some mortgage lenders. Can AllRegs help the industry in this area? DT: We just completed our mortgage fraud conference in Las Vegas, conducted in conjunction with, which provided mortgage professionals with two full days of education to help them improve their operations. We also have a new tool called LendingPatterns that analyzes HMDA data in-depth. With this tool, lenders can identify activities taking place in the industry. For example, they can view spreads and determine how business is being conducted in the mortgage banking industry by geographic areas. TMP: If more than half of lenders use AllRegs, why isnt the other half using your services? GF:TMP Well, some lenders view the guideline and compliance information we provide as a luxury, when in fact its a necessity. In my opinion, time is money. One of our taglines is Fast reliable answers. Some lenders use the Internet to gather information for free; however, that tends to be a longer and non-standardized process versus ours. I think organizations sometimes forget the value of time and convenience. TMP: AllRegs recently acquired Lender E-Source. How has this acquisition benefited AllRegs? Do you anticipate any other acquisitions? GF: This acquisition provides information that is a perfect complement to fill out our library of information. The addition of the correspondent lenders, loan programs and underwriting guidelines fits nicely with our state and federal guidelines giving lenders a broader view of lending products such as loans sold in the secondary market. We do not anticipate any other acquisitions. TMP: What does AllRegs offer that will assist Mortgage Brokers in this slowing market? DT: We can help a Mortgage Broker pick up their business with our FHA origination training, giving them a new product to sell. FHA loans are becoming hot and we offer a comprehensive instructor-led online course designed to teach Mortgage Brokers how to immediately begin processing an FHA loan. We are also offering an underwriter-in-a-box concept that lets brokers see exactly what an underwriter sees in order to help them better match people with loans.
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