with Ted Tozer
BY JENNIFER E. GARRETT
Jennifer E. Garrett is senior associate editor at Scotsman Guide. Reach her at (800) 297-6061 or firstname.lastname@example.org.
FEATURED TOP ORIGINATOR
Michael Bischof, Biltmore Financial Bancorp Inc.
(now part of Guaranteed Rate Inc.)
No. 28 Top Dollar Volume (2010)
BY RANDALL WOODS
The economy continued to stagnate in 2010, but Michael Bischof had a good
year, with 408 loans closed and $134.4 million in volume.
Bischof’s refinance volume, representing about 80 percent of his business, reached
$107.5 million in 2010 — helping him crack the Top 25 list in terms of refi volume (No. 23).
While the purchase market has rebounded somewhat, refis remained an “uncomfortably
high percentage” of his business this past year, a trend he expects to continue next year.
Part of Bischof’s 2012 strategy is to emphasize a more holistic approach to mortgage planning,
he says. “Our goal is to add value by acting more as a financial adviser, crossing over from the
asset side of the balance sheet and looking at the liability side as well.”
Although he’d like to see a better balance between purchases and refis, Bischof is happy to
have a steady stable of clients who he has nurtured over his 20-year career. “In spite of the
economy, this continues to be a relationship business,” he adds. “I think a lot of originators
lose sight of that.”
View Scotsman Guide’s Top Originators 2010 rankings at scotsmanguide.com/ Top2010. For more information on the
upcoming Top Originators 2011 rankings, visit scotsmanguide.com/TOlist.
By Richard Smith
LOOKING BACK TO PORTEND WHAT 2012 WILL BRING
This past year brought significant legislative and regulatory changes to the mortgage industry. Perhaps the
most significant change in 2011 was the Federal Reserve Board’s loan-officer-compensation rule.
The goal of this and many of the new rules we face is
to protect consumers against predatory lending practice. These changes have resulted in limited loan-officer-pricing flexibility, however — a net loss to the
The coming year may present even greater regulatory
First, government-sponsored-enterprise (GSE) reform
potentially will change home lending at a fundamental
level. This past February, the Obama administration laid
out its broad agenda for housing goals and GSE reform
with a report to congress, “Reforming America’s Housing Finance Market.” Among the goals of this reform is a
stated commitment to affordable rental housing.
That’s not a bad thing in itself, but I think the importance
in our economy of a robust housing market — meaning
homeownership — has been shown in recent months.
We must remember that the GSE model has provided
a strong and innovative housing market for decades.
changes needed to remove the incentive for excess
risk need not involve massive and dangerous reforms.
A second issue with potentially serious impact is the
yet-to-be-finalized definition of qualified residential
mortgages (QRMs). Proposed QRM guidelines will exempt lenders and originators from the proposed 5 percent risk-retention requirement.
Many of the QRM requirements are reasonable, but
some would severely restrict consumer access, such as
minimum periods for late payments or judgments and
tight debt-to-income requirements. The most harmful
QRM standard may be the requirement for a 20 percent
downpayment for a home purchase and other low loan-to-value limits.
Related to the proposed QRM standards is the 5 percent
risk-retention proposal — aka the requirement that lenders and originators have a certain amount of “skin in the
game.” The requirement for 5 percent risk retention at various levels of origination would severely limit consumer
access to loans and could drastically increase costs.
Loan originators make loans that meet lender-prepared
guidelines. They are not responsible for future defaults,
only for providing loans that meet lender guidelines. The
better solution to the areas that QRM and risk-retention
proposals are intended to address is proper underwriting and to return the GSEs to their original mandate.
These three issues can impact the mortgage-lending
industry and housing market adversely in the coming
year. Brokers and originators would be wise to stay up-to-date with what’s happening and to follow what industry organizations, such as the National Association
of Independent Housing Professionals, are doing to
fight the implementation of more harmful regulations.
Richard Smith is a loan originator with Stearns Lending.
He has originated residential mortgages in Tennessee and
Georgia since 1994. Smith writes a monthly column on legislative and regulatory issues for Scotsman Guide. Reach him
at (423) 280-0345 or email@example.com.
Visit richardsmithhomeloans.com for more information.