FLORIDA ASSOCIATION OF MORTGAGE PROFESSIONALS
BY DARRICK MENEKEN
Florida has posted the nation’s worst rate of mortgage fraud four-straight years, according to
the LexisNexis Mortgage Asset Research Institute (MARI). The Florida Association of Mortgage
Professionals (FAMP) will discuss that subject when it celebrates its 50th anniversary July 7 to
10 at its annual convention and trade show. We asked outgoing FAMP President Valerie Saunders about the fraud report and more.
Why do you think Florida has the country’s highest fraud rate?
It’s hard to pinpoint why. If you look at the top- 10 list from the MARI report, three of the sand
states — Florida, California and Arizona — that experienced high property-value growth and
subsequently large value drops are in it. Between the high rate of foreclosures and appraisal
issues, there are a lot of contributing factors. The controls the Home Valuation Code of Conduct
placed on the appraisal process don’t hinder mortgage fraud based off appraisals.
What’s the solution to the overall fraud problem?
I have always felt that education is key to solving many of the mortgage
industry’s problems. Whether that’s originator education or consumer
education, an individual’s ability to be aware of what’s happening
around them is vital.
Florida, Page 16
You served as FAMP president — usually a one-year term — for
18 months. How would you summarize your time at the helm?
For lack of a better word, it’s been very interesting. Florida has gone
through a severe economic downturn and implemented the minimum
standards of the Secure and Fair Enforcement for Mortgage Licensing
Act. FAMP made great strides in facilitating the ability of mortgage brokers to transition to
the state-licensed loan-originator license, which begins this October.
Since the downturn began, FAMP membership has dropped. How would you
characterize the group’s strength?
We have about 1,700 members. Our average is about 2,500. Our numbers could have decreased much worse. I think we’ve reacted to the situation as best as we could. We’ve taken
the needs of Florida’s mortgage professionals into consideration and showed people the value
Aside from licensing laws and fraud concerns, what’s the biggest issue in the
Florida market right now?
Property values. They’re a hindrance to a lot of people who would like to take advantage of
low interest rates but can’t. The other problem we have — and I don’t think we’re any different than other parts of the country — is the current underwriting standards. Higher minimum credit scores, appraisal issues, longer underwriting-turnaround times and the loss of
private-mortgage-insurance channels have all come together to create frustration among
Darrick Meneken is an associate editor at Scotsman Guide. Reach him at (800) 297-6061 or email@example.com.
… in August’s Scotsman Guide
Discussing the latest in mortgage •
Who holds the key to stopping •
strategic defaults? You.
Tips for developing an origination •
How peachy is Georgia’s real •
… and much more.
Online? Check out current and past editions of
Scotsman Guide at scotsmanguide.com.
Expand to securities
Mortgage brokers looking to offer alternative loan solutions can enter the
realm of securities-based lending. A
secure route to obtain funds for almost
any purpose, securities-based lending allows borrowers to pledge stocks,
bonds, mutual funds or Treasury bills as
collateral for personal or business loans.
Mortgage brokers can earn commissions
as large as 5 points, and the loans often
close in less than two weeks.
This past May 24, the Federal Housing Finance Agency
(FHFA), which oversees Fannie Mae and Freddie Mac,
accelerated the process of Fannie’s Collateral Data
Delivery program ( sctsm.in/4101) by announcing that
both agencies will require loan information to be submitted electronically in the near future.
The new Uniform Mortgage Data Program (UMDP) basically expands the delivery system built for Fannie and
will handle incoming files for Fannie and Freddie — and
not just appraisals. According to the FHFA’s fact sheet
( sctsm.in/UMDP), all appraisal data for 2011 loans
must be delivered to Fannie and Freddie electronically
after April 1, while digital delivery is required for all
loans delivered to them as of Sept. 1, 2011.
Fortunately the UMDP won’t require you or appraisers
to do many things differently. Most loan-origination-software packages already can deliver information
compatible with Mortgage Industry Standards Maintenance Organization formats.
What you can expect, however, are issues from your
funding sources if everything isn’t consistent from one
end of the loan file to the other. If fields don’t agree between the application and the closing documents, the
UMDP could find discrepancies. This could cause problems for your wholesale lenders and ultimately, for you.
The scrutiny starts with appraisals. Fannie originally was
ready to roll out its data-delivery initiative this month.
It would have required appraisals to be submitted electronically at least 24 hours before loan delivery, which
would give Fannie time to inspect valuations for problems, run them against various databases and reject
loans before purchase, if necessary, to avoid buybacks.
The system is now set to accept appraisals in October,
but the important mandatory dates are mostly moved
to next year in a phased rollout. In ’ 11, we will see prepurchase reviews not only of appraisal data but also
overall loan-file elements, which then will be subject to
analysis that should reveal problems before Fannie and
Freddie accept delivery.
Even if these changes cause origination problems at
the outset, they likely are good for the industry on the
whole. Fannie and Freddie not only are the main investors at the moment, but they also set baselines; ultimately, other investors will adopt what they enact. The
UMDP injects unprecedented transparency and vision
into the loan process, and this is precisely what the investment community needs to become interested in
mortgage securities again.
Having these investors return could lead to greater flexibility and expanded programs — even if having to ensure loan files’ pinpoint accuracy.
Griff Straw is president of Solidifi U.S., a leading technology-enabled appraisal-management company and provider of col-lateral-risk-management and data-analytic services. He writes a
monthly column on valuation issues for Scotsman Guide. Straw
is a 30-year mortgage banker, a former Freddie Mac technology
executive and a Mortgage Bankers Association Master Faculty
member. Reach him at firstname.lastname@example.org or (703) 496-7579.