Enjoy access to a free NMLS renewal class when you attend an in-person event.
NAMB President’s Message: December 2014
Several weeks ago, I had the opportunity to speak at another state conference, for the Utah Association of Mortgage Professionals (UAMP). As I drove into Sandy, Utah, I was struck by the awesome beauty of the soaring snow-capped peaks directly behind the hotel where I was staying. I must admit it was a real change from leaving sunny south Florida and 85 degree weather.
The convention was held in the South Towne Regional Expo Center which was also hosting a Christmas show. When I drove into the parking lot, there were about 5,000 cars. I didn’t know about the Christmas event also being held, so I thought every mortgage originator in the Western United States was there. It turns out there were a lot of mortgage originators, nearly 800 registered for the event, plus exhibitors so a lot of those cars in the lot were at the show. The exhibit hall had more than 50 exhibitors and was packed. This is just another example of how hungry originators and their wholesale partners are for meetings like this.
I learned a lot, as I always do, at every convention. In business that is constantly changing, I find attending events like these keeps me on top of my game. It isn’t just what you learn though. I met a lot of new people and particularly enjoyed the wholesome atmosphere in this beautiful area. Next year, the event will be held in Park City, Utah, one the most exclusive resort areas in the world. I’m told they cut a deal with a gorgeous hotel for very reasonable room rates. It makes you want to go even if you live in another state.
Thanks for your support of NAMB—The Association of Mortgage Professionals and from me personally over the past year. It makes all of the work I do worthwhile. Have a blessed Christmas as we look forward to an exciting and prosperous new year!
Mortgage Brokers in Dubai Get Certified
By Rocke Andrews, CMC, CRMS
The first week of November, I had the opportunity to facilitate a class on the best practices of mortgage brokers in the country of Dubai. The Dubai Land Institute, which oversees real estate transactions in that nation, was putting on the first class to certify mortgage brokers having just recently begun the same for real estate agents. Dubai had a similar “crash” in real estate values in 2008 to what went on in many other countries. They are now in the process of attempting to prevent or mitigate the chances of a repeat.
As a result of the drop in values and resultant defaults the Central Bank has instituted maximum loan to values. For citizens of Dubai, maximum financing is 80 percent on their first mortgage and 65 percent on additional properties for properties up to about $1.4 million. Property values over that amount get their loan to values decreased by 10 percent. Non- citizens can borrow 75 percent on their first and 60 percent on a second property. New construction is available at a maximum of 50 percent financing. Additional requirements are a debt burden ratio of 50 percent and a maximum term of 25 years. The maximum age of a borrower at the time of the last payment is 70 years for citizens and 65 years for non-UAE (United Arab Emirates) nationals. In addition, maximum financing for UAE nationals is eight times their annual income, and seven times for non-nationals.
Presently, mortgage brokers are unlicensed, while lenders must be approved by the Central Bank of Dubai. There are about 20 approved lenders/banks and the brokers there provide the ability to know which bank’s available programs fit the needs of the prospective borrower the best. Brokers perform much the same as they did here before the advent of service release premiums and lender rebates. Brokers get paid primarily by the borrower, though some lenders/banks will deliver a premium of 0.5 percent to one percent to reputable brokers who have established a relationship and track record. There is no RESPA or equivalent regulation and premiums are based on supply and demand, and the ability to compete in the market. The broker’s primary competition is the banks retail sales force as well as other brokers.
Brokers earn their fee by being more knowledgeable and professional than the banks sales force, much as they did in the U.S. In Dubai, the borrower must get pre-approved before entering a contract and the brokers job is to get this done in a timely fashion, generally in two to five days. There are no contingency clauses and the buyer would lose their security deposit if unable to secure financing. In order for a mortgage to be enforceable it must be registered by the Dubai Land Institute which verifies the lender is approved by the Central Bank. There are no private or other unapproved lenders as the lien would be unenforceable. Brokers must learn the requirements of whichever banks have the most attractive products for the type of lending they are soliciting from their referral partners.
So as in the United States, brokers in Dubai are entrepreneurial. They get customers to pay a little more upfront to save time and money overall by getting the borrowers approved quickly at the right spot. Their knowledge of all of the bank’s lending saves the customers time in a applying to more than one spot, as well as knowing where to go to get the best terms for the transaction at hand. The country and the brokers see the value in certifying their profession and requested the NAMB certification as a means to show the public their qualifications. So if you are not NAMB certified now is a great time to pursue that goal and we will be offering some test preparation classes in the coming year to help brokers achieve their designations.
Rocke Andrews, CMC, CRMS of Lending Arizona LLC in Tucson, Ariz. is president-elect of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (520) 886-7283 or e-mail email@example.com.
What Real Estate Agents Want From Mortgage Originators
By John Councilman, CMC, CRMS
One of the sessions at the recent Utah Association of Mortgage Professionals (UAMP) Expo featured four top area real estate agents. The topic was based on how mortgage originators can work with real estate agents. The crowd listened closely as they learned what was important to each agent.
The first discussion revolved around how to get your foot in the door. The real estate agents pointed out that it is unrealistic to simply expect a top agent to throw aside a relationship that has been built of many years with their current funding sources. They stated that there are many ways to get your foot in the door and eventually get to work with top real estate agents. One way is to approach agents who are just starting out. They need excellent originators even more than the seasoned agents. Often, these new agents become superstars themselves. Find one of these new agents and sit some open houses with them. That is a lonely job were relationships are built. When top agents see you in the office and at closings, they will be more open to working with you.
All of the agents said their favorite mortgage originator was usually not someone who had paid for a Marketing Service Agreement to have a desk in the office. All four said that even mortgage companies owned by their shop did not receive the majority of their business. They believed there were ample opportunities for good originators to work in the office.
Universally, all of the agents said the most important attribute of an originator is whether the loan closes on time. This can be very difficult to achieve if you are attempting to provide financing for difficult borrowers. You need to set expectations realistically so you don’t promise a 30-day closing on a loan where you know there will be a lot of conditions. It is better to pass on a loan than to fail. Everyone on the panel had a very negative attitude for loans where the contract is expiring and everyone is under pressure to have to renegotiate an extension. They are rated, and when they refer someone to an originator who makes the client unhappy, it is black mark against them. Your performance is integrally tied to their reputation.
One agent said he liked news and information provided by a loan originator and eventually started doing business with him. Real estate shops need to train their agents about mortgages and loan programs. Be willing to hold training sessions for the manager or owner of the brokerage. It is a great opportunity to become the “expert” for those listening to you. There is nothing better than to have people call you because you are the expert resource.
Each agent said a good personality is important. They like to do business with people they like. Fortunately, not everyone has the same personality so there is room for the originator who is all business and the originator who is very social.
I asked the panel if they had a preference in doing business with a banker or a broker. Every one said they did business with both, but usually non-banks of all types. They said banks were better than in the past but still tended to have more rules that torpedoed deals or slowed things down.
Finally, I asked them if they thought it was important for their originator to stay up to date on laws, guidelines and loan programs. They said that was very important. I then asked if they has\d seen their favorite originators at the convention. They were a bit taken back but you could hear the wheels grinding. It’s pretty hard to be totally knowledgeable when you don’t attend NAMB and state functions.
As I talked to some originators in the audience after the session, they were unaware of the incredible speakers and tools available at NAMB National when they are only a few hours drive away. One had never heard of Greg Frost. NAMB is currently working on a turnkey package to hold training sessions at a realty office. NAMB is providing the tools and the camaraderie of other originators that will make even the best better. Be certain to take advantage of all of them.
John Councilman, CMC, CRMS of AMC Mortgage Corporation in Ft. Myers, Fla. is president of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (239) 267-2400 or e-mail firstname.lastname@example.org.
Finding Reason for the Season
By Fred Kreger, CMC
Given that it we are wrapping up the end of one year and heading into the beginning of a new year, I thought it would be appropriate to bring up the word “Gratitude” and What does it mean to be part of something greater and the responsibility that all of us have to give back to our industry?
Over the last couple of years, I have spoken to my state chapters in California and a few other state chapters about William Buckley’s book Gratitude. Buckley suggests that citizens of the U.S. ought to feel a debt of gratitude toward their country. A debt that can best be discharged by volunteer service of a charitable sort.
Buckley emphasizes, volunteering extends past providing service to the needy and discharging a social debt. National service leads to an enhanced sense of civic pride. The individuals who engage in volunteering will find their altruistic impulses aroused. They will learn about aspects of life that they would unlikely to encounter otherwise. They will even come to realize that there is more to life than self-indulgence. As you enter into this New Year, how will you choose to show gratitude? This industry has given great prosperity and I am asking that you give back this next year and beyond.
I will leave you with a great quote from Theodore Roosevelt from his speech “The Man in the Arena:” The credit belongs to the man who is actually in the arena … who spends himself in a worthy cause … so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”
Thank you all and Namaste
Fred Kreger, CMC is the branch manager at American Family Funding, a Division of American Pacific Mortgage. He is also a past statewide president of the California Association of Mortgage Professionals (CAMP) and currently is the vice president and Government Affairs vice chairman for NAMB—The Association of Mortgage Professionals. He may be reached by phone at (661) 505-4311 or e-mail email@example.com.
This article originally appeared in the December 2014 print edition of National Mortgage Professional Magazine.