 Don Currie: Branching OutProviding Brokers with a New Home to Thrive. A candid
conversation with CAMB/CAMP-Orange County President, and President of
HighTechLending, Don Currie on the State of Banking, Brokering, and Net
Branching in the new decade. With nearly 30 years in mortgage lending
and 45 retail branches, there are very few who could speak to the
future of our industry with more experience than Don Currie. “Mortgage Brokers are a very resilient group of entrepreneurs and adaptors to the industry. Can we survive? Very possibly but we don’t want to just survive, we want to thrive. Unfortunately the industry has stacked the cards against us that department. The contraction of wholesale lenders, private mortgage insurance companies, stringent compliance and now the limited ability to receive rebate or yield spread premiums have made it very difficult for the broker to prosper. Additionally, the reemergence of the FHA loan product and restrictive qualification to offer this product is a damaging blow. Brokers, by the basic virtue of their name, must have the ablity to offer all of the most popular products to serve their customers. Without the ability to access the FHA product, brokers have suffered. Many can’t or won’t provide expensive financial audits (cost $7–10K) showing a minimum of $63,000 net worth to be a mini-eagle. Q: What is the difference between a Mini-Eagle and a Full Eagle? “HUD states a Mini-Eagle can originate and process FHA loans. They must then broker the loan to a Full Eagle that can originate process, underwrite and fund the loans on their warehouse lines. HUD requires a $250,000 audited net worth to be a Full Eagle but it is virtually impossible to obtain a warehouse line as a start up these days. ” Q: You’re the President of HighTechLending; are you a FHA Full Eagle or a Mini-Eagle? “HighTechLending is a Direct Endorsed Full Eagle Mortgage Bank with multiple warehouse lines.” Q: I’ve heard that HUD may drop the requirements for brokers and raise the minimum net worth for the Bankers. Is that true? “This is under discussion but the government isn’t exactly expedient in putting new requirements in place, so we don’t know if this will actually become the law and it’s difficult to build a 2010 business model on a ‘maybe.’ That’s precisely why so many brokers have made the business decision to merge with a Full Eagle Mortgage Bank.” Q: Ok, so tell me more about HighTechLending and building a Net-Branch platform for brokers. “The term ‘Net Branch’ has some negative connotations due to past lenders literally renting their license to brokers for a fee. Thankfully that practice has also been purged from our industry. HUD has made it very clear on how we can do business in a compliant arena. Branches are completely integrated with our corporation and become Branch Partners.” Q: What do you mean by the Branch Partner becoming ‘completely integrated?’ “The Mortgage Broker becomes employed by HighTechLending, must be paid with a W-2, cannot work for another Real Estate related company and cannot conduct Real Estate transactions. Moreover, all branch expenses are paid by HighTechLending including rent, phones, etc.” Q: Logically there must be a lot of benefits to a Broker joining forces with a Mortgage Banker. What are they? “The benefits are numerous and powerful as you are no longer referred to as a ‘Broker’ but a ‘FHA Direct Endorsed Full Eagle Mortgage Bank.’ This carries a lot of weight with consumers and more importantly, with REALTORS®. REALTORS®, in most cases, will not accept an offer unless the borrower is backed and approved by a mortgage bank. Moreover, you are now partnered with a corporation that can offer all the ‘bells and whistles’ of a larger, more financially stable company. This integration includes access to state of the art technology, LOS, paperless process, group medical insurance, marketing, training, compliance, quality control and networking with other branches.” Q: Once a Broker becomes a branch are they allowed to continue to broker loans? “Yes, absolutely. We are a banker first, and a broker when necessary. As a mortgage broker myself for 14 years, I understand the necessity to provide a consumer with every loan product available today. The consumer always comes first and if HighTechLending cannot provide a specific product, we’ll broker to our network of wholesale lenders. However, over 80% of our loans are closed ‘in-house’ as our branches prefer to work with their staff and our efficient paperless loan process. They enjoy being on a first name basis with underwriters, document drawers and funders.” Q: It seems to be the best of both worlds. Where’s the catch or the cons of branching? “Many brokers tell me the most difficult transition is the feeling there will be loss of control and autonomy. This is understandable, but our branches almost immediately and unanimously recognize the benefit in maintaining compliance with the multitude of industry changes and retaining the freedom to do what they do best which is serve the consumer and produce.” Q: Tell me about this ‘Paperless Loan Process.’ Sounds pretty green to me, which is certainly enticing. “Green is good. The amount of trees lost to the mortgage industry would make Paul Bunyan shed a tear. Equally important, you must close the loan in a timely fashion and with the paperless loan process we excel in that department. Using the words in ‘FHA’ and ‘Paperless Loan’ in the same sentence is a bit of an oxymoron, but we make it work quite successfully. In the past the paper package was carried from one department to the next. I call this the horizontal process, old fashioned and terribly inefficient. On the contrary, the web based paperless process allows people and departments to work the file simultaneously in a vertical fashion. While the package is being processed, underwriters, document drawers and funders can also work the package. These individuals can view the file from any geographic location and the results are a dramatic improvement in customer service and turn times. But there are more advantages too, such as: • Branches and Consumers get to keep all original documents and disclosures. • Loan packages and conditions are no longer sent overnight and possibly lost. • The cost of Transbox/Fed-ex delivery is eliminated. • Paper loan packages are no longer carried throughout the departments. • Multiple Departments can work the file simultaneously from multiple locations. • No special equipment needed. A good fax machine or scanner will do the job. Q: You’re not the only company with this business model, what makes you different? “What makes us different? Our company motto has always been ‘what you promise at the kitchen table you must deliver to the closing table.’ You need all the current technology tools at your disposal to make this happen. Point of sale automated approvals and rate lock protection so you can accurately disclose and than quickly close with the efficient paperless loan process. One day all Mortgage Brokers and Bankers with do business this way. We offer these tools today.” Q: When branch a wants to grow their business do you offer marketing support? “Marketing is the name of the game and HighTechLending has a robust marketing department free of change to our branches. Your customers must know who you are, what you offer, and where to contact you. Our marketing department offers drip marketing to previous customers, e-blasting, voice broadcasting, direct mail and radio spots. We specialize in REALTOR® marketing so you can become the “In-House” lender utilizing the Marketing Service Agreement (MSA).” Q: How long does it take for a Broker to merge with HighTechLending and become a FHA Full Eagle Mortgage Bank? Are there any net worth requirements or qualifications? “The process only takes approximately thirty days. There are no net worth requirements, but we require a full back ground check, training in FHA/Compliance and your organization must be committed to producing quality loans. We hold ourselves to the highest ethical standards, and insist that all of our branches are committed to this as well.” Q: So, what’s in your crystal ball for 2010? What advice can you offer Broker Banker Readers? “You don’t need a crystal ball to know our industry is cyclical! We just got our hat handed to us in grand fashion and now we are at the bottom of a cycle. Call me an optimist, but it is time to rebuild and prosper once again. Advice? I was late to my nephews little league game so I walked up to the kid on deck and asked the score. He said with a smile on his face, ‘we’re down 12 to nothing.’ I remarked ‘you don’t seem too upset about that.’ He replied, ‘Why would I be upset, we haven’t even got up to bat yet!’ The moral of my story is no matter what your personal score is now or in the recent past, join a great team (mortgage banker/broker) grab the best bat (FHA), play ethically and swing for the fence in 2010.” Don Currie has served as a mortgage professional for 28 years, along with being a national speaker and published author. Currie is also the President of HighTechLending, Inc., a retail mortgage bank specializing in FHA Financing with 45 branches. In 2009 Currie was appointed President of CAMB/CAMP – OC. In a previous life, Don served as Senior Vice President, National Director of Sales for IMPAC LENDING GROUP from 1999 to 2006, where he increased wholesale production from 200 million in 1999 to 2.4 billion in 2005. Contact Don at 949-468-2611 begin_of_the_skype_highlighting 949-468-2611 end_of_the_skype_highlighting or via email at Don@HighTechLending.com. Visit www.HighTechLending.net (Branch Partners) or www.HighTechLending.com (Consumers). |
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