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HUD issues new mortgage rules to help consumers shop for lower cost home loans: New GFE to save borrowers nearly $700

National Mortgage Professional
Nov 12, 2008

Getting to know … NAMB 2008-2009 President Marc Savitt, CRMSEric C. PeckMarc Savitt, National Association of Mortgage Brokers, The Mortgage Center, mortgage broker, West Virginia Association of Mortgage Brokers "We want people to know that brokers are not what theyve been reading about in the newspapers for the past year-and-a-half. We are your friends; we are your neighbors. Were the ones who provide more options, choices and make competition possible. We are the ones who are there to help you." In June, Marc Savitt, CRMS of The Mortgage Center in Martinsburg, W. Va. became 35th president of the National Association of Mortgage Brokers. Marc wasn't always about mortgages and home financing. In the late 1970s and early 1980s, he owned a company that installed fire alarms in New Jersey. His workings with financing and the fire alarm business got the ball rolling on his mortgage career. After a friend got him involved in the mortgage business, Marc began working as a processor in New Jersey in the early 1980s, and eventually started The Mortgage Center in West Virginia. He chose West Virginia as a starting location due to a lack of competition in the area, because, as Marc states, "There were too many mortgage companies in Virginia, so I looked five miles in the other direction and there was nobody in West Virginia. The only competition I had were the banks, and we were blowing them away." The Mortgage Center has been ranked number one or two for the past 10-plus years as a top volume producer by the West Virginia Housing Development Fund and the United States Department of Agriculture's Guaranteed Loan Program. Fast-forward 23 years: Marc still owns and operates The Mortgage Center and takes the helm of NAMB as Mortgage Brokers face a daily barrage of attacks from consumer groups and the media. Marc's platform consists of many goals, one of them being the perception of the role of the Mortgage Broker in mainstream media. His communication efforts with the general public will be geared toward clearing up this problem and painting the exact picture of just who a Mortgage Broker is and what their role is in the home-buying process. Homebuyer education is another goal Marc has set for NAMB over the next year. As Marc will explain, through NAMB's grassroots network of state affiliates, association members will reach out to their local communities and provide financial literacy education. The pilot program is currently in the works and slated for a Fall 2008 release. We recently had a chance to chat with Marc and discuss the present and future of the Mortgage Broker industry, and his plans over the next year as NAMB's newest president. The Mortgage Press: How did you first become involved with NAMB? Marc Savitt: I first became involved as a member with a now-defunct mortgage association in the late 1980s, the American Institute of Mortgage Brokers. This organization just did not live up to my expectations. Around 2000-2001, Neill Fendly was president of NAMB and he approached our group of brokers in West Virginia about forming an NAMB state affiliate. We met with NAMB, and started the West Virginia Association of Mortgage Brokers. I served on the first WVAMB board of directors as treasurer. I eventually moved up to vice president and president of the association and handled the association's government affairs. For such a small state association, we did get quite a bit accomplished. There were a lot of issues, such as a licensing law; we removed all the anti-competitive issues from the law and inserted some good provisions for both the broker and consumer. One thing I will say about the state is that when our regulatory agency, the West Virginia Division of Banking, wants to do something legislatively, they now contact us to see how we feel about it. They are very receptive to our input and are a great group to deal with. Years later, South Dakota had a similar legislative issue presented that we faced in West Virginia. So I went there, brought our playbook from West Virginia and helped them solve their problems. TMP: Would you say that that is one of the many benefits that NAMB is able to provide to its state affiliates? MS:Absolutely. This is one of the many benefits of working with so many people nationwide. You work not only with the state leaders, but you have personal relationships with individual members too. We all face different issues from time to time, and by speaking with our peers nationwide, you find that they often encountered the same things you did. There are many levels of being a member of NAMB and camaraderie is one of them. Its not just having a drink after a long day at a conference. Its finding out what works, even in business. We have a lot of members struggling right now, and Ive shared some ideas that have worked for me. TMP: You just mentioned that a great deal of mortgage professionals are struggling. Over the next year as NAMB president, is it part of your platform to work with the state affiliates as they downsize and struggle in this market? What tactics are you going to employ? MS: We do understand their problem and what they are going through & being brokers ourselves. We've let them be independent, but NAMB is here when they need usif they have some issues. For example, we recently got a call from one of our affiliates, as they were having a problem with their Attorney General issuing an opinion letter. They called us on a Friday night and on Monday, we were already well on our way to having the problem fixed. This is an issue they couldn't solve on their own, so NAMB stepped in to help. It's bad enough right now with all the legislative and regulatory actions we are facing as an industry, but now it's compounded with business slowing. We try to find out what their problems are, analyze them and sometimes we will talk to members in other stateswe'll put out some type of e-mail to members in different states, perhaps the surrounding statesto find out if they've gone through a similar situation and what can be done to work together and help their neighbors. We all work together. TMP: Is correcting the media's perception of the broker high on your agenda? MS: Definitely. It's been high on my agenda even before I became president. I feel that when the mortgage meltdown occurred, there was a rush to judgment. There were a lot of fingers being pointed & and they were all being pointed in our direction. We're the smallest guys of the various distribution channels, so it was easiest to blame it on us. Mortgage Brokers got the blame for a lot of things that were clearly not our fault. It's not to say that we don't have some bad apples in our industry. We do, and hopefully a lot of them have disappeared, but I'm sure there are still some out there, and we are trying to do everything we can to weed them out. In 2007, NAMB asked the House Financial Services Committee to conduct a government study to determine the cause of this mortgage meltdown. And when that study came back, it was a Government Accountability Office (GAO) study, it indicated that Mortgage Brokers were a very small part of it. Keep in mind, Mortgage Brokers are not the ones who developed these products and programs. We don't set the guidelines for these programs or their parameters, and we don't approve or underwrite the loans. Others do. We simply sell the products. It's been said that blaming Mortgage Brokers for the mortgage meltdown is like blaming your local grocery store for lung cancer because they sell cigarettes. TMP: Were you disappointed that the media was unable to pick up on the positives to compensate for the negatives that were out there? MS: The way I see it, the mainstream media didn't want to highlight it because it would appear that maybe some of the reporting was inaccurate at the time. A lot of the reporting done by the mainstream media was not just on what legislators or others were saying & they were injecting their own personal views. Take, for example, some of the coverage on Congressional hearings on the mortgage industry. There was a woman who testified back in February of '07, who had clearly been victimized, as she claimed, by a California Mortgage Broker with Saxon Mortgage. Saxon Mortgage was a lender, not a Mortgage Broker. Several times, Sen. Chuck Schumer has referred to "the Mortgage Brokers of Ameriquest" & again, not a broker. The way we are being portrayed in the media is a huge problem, because they are substituting Mortgage Broker for loan officer. Perhaps they don't understand what a Mortgage Broker is. We've got an image problem. One of the planks in my platform is that we will do all we can to make people aware of who brokers are & not just brokers, but NAMB Mortgage Brokers. I think NAMB brokers are a step above the rest because we subscribe to a high code of ethics, adhere to best business practices, and educational and certification programs. Most importantly, now we have the Lending Integrity Seal of Approval. With our Lending Integrity Seal of Approval program, members have to go through a background investigation. So even if your state doesn't require it, NAMB will require it in order to be a member of NAMB. Through the use of the Seal, consumers will know that when they deal with a member of NAMB, theyre dealing with someone who has a clean record, is reputable and trustworthy. TMP: Do you feel that the recent signing of HR 3221, the American Housing and Foreclosure Prevention Act of 2008, has leveled the playing field in establishing a licensing and registration system for mortgage originators? MS: I think it's a tremendous accomplishment. The history of HR 3221 goes back to October of 2007 with Rep. Barney Frank's bill, HR 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007. HR 3915 started off as a Mortgage Broker/yield spread premium (YSP) bill that had a $1 million net worth requirement and $100,000 surety bond requirement for brokers. By the time the bill passed the House, we actually turned it into an all-originator, indirect compensation bill, with both the $1 million net worth requirement and $100,000 surety bond thrown out. So, to go from broker-only to all-originator, and not just YSP, but to all indirect compensation, was a major accomplishment. HR 3221 levels the playing field for consumers. TMP: What are you doing to increase NAMB's membership numbers and how are you reaching out to the membership to increase participation? MS: I've spoken to new NAMB Membership Committee Chair Olga Kucerak about a membership drive that is slated to launch this fall. What we plan to do is utilize many outlets to help us reach everyone who is a Mortgage Broker or originator. Unfortunately, a lot of individuals in this industry stay on the sidelines, thinking to themselves: "Well, I'm not going to send my money and I'm not going to become an NAMB member because they'll still get everything done and I'll benefit anyway." The problem is that's not going to work anymore because there are too many issues coming at us fast and furious on a regular basis, and we need the strength of numbers. Do we need your money? Absolutely. Do we need your participation on committees? Definitely. TMP: With the cost of everything on the rise and the number of originations on the decline, what words of hope do you have for a Mortgage Broker on the future of their industry? MS: I would tell them that they need to become involved in the association. At the state level and at the national level, every association member is feeling the same pain they are. Some are doing better than others and there's a reason for thatbecause theyve been in it a long time and they can provide some guidance. The more experienced members have already weathered market downturns. I personally have been through four of these downturns to date. I would help them with ideas and tools that I've used to not only stay in business, but to prosper in this industry. I would help them with education so that they could get through this down market and prepare for the next one thatll eventually come. One of the biggest problems that I've seen is that when times are good, people never think its going to endit always does. We have to show them ways they can still enjoy the benefits of the good times, but also how to prepare for the slow ones. You can't get that just by being on your own. TMP: Do you have any closing comments? MS: Most importantly, as NAMB president, my first responsibility is to protect my members from any onerous legislative or regulatory actions. That's my primary duty. In light of what's happening now, with all the foreclosures and delinquencies going on, I feel as though there's a real need for financial literacy to be taught in our nation's schools. Schools don't have the experience to teach it, they don't have the resources to teach it & this is where NAMB comes in. We are in every community in this country. We are developing a program, with the assistance of Ginny Ferguson, Rocke Andrews, Kate Crawford and others, where we are developing a 45-min. financial literacy program designed for students from the 10th grade and up. I have spoken to the Rev. Jesse Jackson about this initiative, and he wants to see a prototype. I also spoke to Rev. Jackson's Rainbow Coalition and many ministers came up to me and asked how they could become involved with this program. They want to have members come into their churches and communities to educate not only the current generation of homebuyers, but the next generation as well. There was a study that found that 33 percent of all high school seniors have a credit card. I was worried about my own kids on their college campuses being bombarded by credit card applications. This is going on in high schools now. The minute you turn 18, your name is sold and you get a credit card application. Students don't know the first thing about managing and keeping credit, and when not to apply or accept offers of credit. Many of them rely on their parents, yet approximately 68 percent of their parents said that their financial skills are anywhere from okay to horrible. We need to do a better job of educating those who will be borrowers, whether it's a car, house or whatever. I think this program is going to go a long way in doing that. Its good for the consumer, but its also good for the Mortgage Broker as well. We're going to train the individual brokers; they will be the ones going into the schools in their communities, so it will be exposure for the individual NAMB brokers and it will go a long way in helping NAMB's image. We want people to know that brokers are not what they've been reading about in the newspapers for the past year-and-a-half. We are your friends; we are your neighbors. We're the ones who provide more options, choices and make competition possible. We are the ones who are there to help you.
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