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February 2007

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Wednesday, February 21, 2007 - SML Department - Examiner Support Letters

We all hate the idea of being audited.  It's scary!

However, when you do get audited by the SMLD, you want the best auditor you can hope for.  You hope that you can get someone who is experienced, knowledgable, experienced, well trained, and professional, right? 

The Savings & Mortgage Lending Department needs your help to make that happen.  They have had an extremely high turnover rate, which is mostly attributed to their inability to compensate their auditors at levels that are comparable to their federal counterparts.   This doesn't even begin to compare them to the income potential available in the private sector.  These auditors are typically paid almost 30% less than federal auditors and nearly half of what the private sector pays.

How can you help the Department retain experienced, high quality, professional auditors to come into your office?

Write a letter to the legislators expressing your concerns about the need for pay increases for these examiner positions so they can attract and retain high quality personnel.

They need as many letters as possible to meet a deadline for a hearing Friday morning. 

t doesn't have to be a novel....
BUT IT MUST BE DONE BY THURSDAY AT 5 PM.

The letter can be an email to smlinfo@sml.state.tx.us or faxed to 512-475-1360.

Please be sure to include your name, license number, and all contact information.  It can be addressed "To Whom It May Concern:"
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Monday, February 19, 2007 - Texas Disclosures and Point 5.4

By Rachel McNamara

FIRST LET ME SAY....Do not skim over this post!  There are some really crucial compliance details here!!!

I hope that by now, those of you who are living in the Calyx Point winter wonderland have received your update to version 5.4 from 5.3a. If you have not, you need to contact them about your subscription status.

Aside from the upgrades that they are more than happy to tell you about, I just wanted to make sure that you are using the correct forms since there are some very specific disclosures here in Texas that we have yet to see in Point, though I have requested it.

My advice is not to rely solely on the software for your compliance.  This is a trap that I see many mortgage brokers fall into in the compliance consulting work that I do.

I tell the clients that I work for that they should not rely on the lenders or on the software for their compliance.  Lenders are watching out for their own compliance and only very lightly monitor yours.  I also see forms change and it takes a while for the software to catch up to the current forms.  Be aware!

The best way to be aware is to stay current with your continuing education and also read the blog posts here.  We are constantly updating our courses and blog site to give you the best and most current information. 

Alliance Academy wants you to SUCCEED!

Okay, so here's what you need to know! 


Texas Mortgage Broker Disclosure
  • First, it should not allow "Company" to be an option because the state does not license companies.  It only licenses individuals under the Texas Mortgage Broker License Act.  Allowing this to be an option encourages people to be out of compliance, but for now, Point is still allowing it.  The two options should be Mortgage Broker or Loan Officer. 
  • GLITCH:  Only the use of "Loan Officer" will work for inserting the name of the licensed individual!  If you check Company OR Mortgage Broker, it puts the company name in on the disclosure instead of the individual.  It didn't work in 5.3 either.
  • SOLUTION:  Always check loan officer and make sure that your Master File Templates are saved that way too.
Texas Homestead Cash Out Disclosure a.k.a.  "The 12 Day Letter"
  • This is still not included in point, but you can download it here in English and Spanish.
Texas Multiple Roles Disclosure
  • Again, this is still not included in point, but you can download it here for you to use, as needed.
Texas Pre-qualification/Pre-approval Letters
  • The generic prequalification letter that is available in Point WILL NOT meet the guidelines of what is required by the state.  Please make sure you are using the correct format.
Texas High Cost Loans - Here are the definitions and requires the specific disclosure of Texas High Cost Loans.
  • Not that everyone out there is doing high cost loans, but surely a refresher might be good.  Might want to just have them handy in case you ever come across the need for the document.
  • Here is the disclosure in English and Spanish.
P.S.  Don't forget to use the Conversation Log.  It's so easy to cut and paste an email right into the software.  Take advantage of it!  This is a big topic in the SML audits.  Start a new habit or refresh an old one today!!!
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Saturday, February 10, 2007 - 2006 Texas Annual Reports - EARLY DEADLINE THIS YEAR!

Just a friendly reminder that reports are due a little early this year. 
They are due on February 28th!!!
Don't miss this important and co$tly deadline!

Each mortgage broker is required by law (Section 156.213 of the Mortgage Broker License Act) to file an annual report with the Texas Department of Savings and Mortgage Lending. This report must include loan and other information regarding you, the mortgage broker, and all loan officers you sponsor. Each mortgage broker is required to complete this report even if no loan activity occurred during the calendar year. This report must be received by the department no later than February 28 for the proceeding calendar year's production activity.

Failure to complete and file this report within the designated time period will serve as a basis for disciplinary action including, but not limited to, the assessment of administrative penalties and possible suspension of the mortgage broker's license.


Here's what you'll need to to prepare the report:

What data will you need to access the report?

  1. Mortgage Broker License Number
  2. Your Pin number, which is the first six numbers of your social security number without a dash.  For example, if your social security number is 123-45-6789, enter 123456)
  3. List of your current loan officers, their license numbers, and branch offices
  4. Breakdown of your total loan production
    1. First Liens Only
    2. 1-4 Family Residential Only
    3. Categorized:  Quantity and Loan Amounts
      1. FHA
      2. VA
      3. Conventional - FNMA/FHLMC Conforming
      4. Conventional - Non-Conforming or Jumbo
      5. Other Loans relating to first lien 1-4 family residential (Hard Money, etc.)
      6. Texas High Cost Loans
The report can be filed online, just like last year by going to the SML website.  You will log in with the information listed in item 2 above.

Then it will take you to a screen where you will confirm the following records of the department:

  1. Company Information
  2. Sponsored Loan Officers
  3. Active Branch Offices
  4. Loan Production Details
    1. List the number and total dollar amount of first lien 1-4 family residential home loans originated (and closed) in Texas or secured by Texas property during calendar year in the following categories of loans.
    2. Include the loans originated and closed by you as a licensed mortgage broker and all the licensed loan officers that you sponsor.
    3. If your company employs more than one mortgage broker, each broker must file a separate report including information about the loan officers he or she sponsors.
    4. Do not use total company origination information unless you are the only licensed mortgage broker in the company.
    5. Show only total loan information for yourself and the loan officers you sponsor.
    6. If you had no loan origination activity during the calendar year you are reporting, enter "0" in the box.
    7. Do not break data out by originator.
    8. Include in your totals the actual loan amount, not just earned fees from the loan.
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Saturday, February 3, 2007 - Generation Y versus the Baby Boomers

Can't we all just get along?

As this new generation enters the workforce, they present quite a challenge when trying to interface with the Baby Boomers who are their co-workers and bosses.  Baby Boomers are defined by demographers as being born between 1946 to 1964, while Gen X is from 1965 to 1980 and Generation Y comes in from 1981 to 1999.

Let's take a look at the generational differences in communication between Gen Y and the Boomers.  It's important to understand these differences to better interface with peers and customers in day to day mortgage originations.

What are some of the biggest differences?

COMMUNICATION:
 Gen Y is very focused on written communication and they were pretty much raised on the internet. (IM, email, text messaging, etc.)  These folks never really had to leave their room to have a social life and frequently use slang in emails, such as Y instead of "why," 4 instead of "for."  Conversely, Boomers think that written communication, including emails, should be more formal.  The Gen Y’ers haven't been in the workplace long enough to understand that emails in the work place should not be slang.

Additionally, Generation Y, as a whole, does not speak as well.  Writing and speaking are very different.  Writing skills are more formalized because you have time to think through what you are saying.  Their verbal skills, however, are very rusty because they have yet to learn those verbal and non-verbal cues, that only come from on the job experience.

TECHNOLOGY:
Gen Y is really good with technology, which can be brought into the workplace.  Gen Y quickly figures out a program just by trying it and boomers have to read the manuals. Not as much money has to be spent training on technology as in years past.  They can also teach boomers how to use the technology.  Boomers can really take advantage of this opportunity.

ATTIRE:
Gen Y is at a disadvantage here due to the advent of the "casual" workplace.  They are getting really mixed signals.  The truth of the matter is that every generation has relaxed the standards from those of the generations before them.  Unfortunately, torn jeans that cost $100, even though they were really expensive, does not make them appropriate for the workplace because it does not set the impression that you are worthy of earning the respect and trust of coworkers and customers.  Other bad examples are bare midriff, tank tops, baggy jeans, no belt, extreme piercings, tattoos, etc.  These all are fine for play time, but not okay in the workplace.  Additionally, the rules of attire are completely dependent on your audience.  You have to really ask yourself, who is your audience?  Heck, even from city to city, the dress codes change.  This is really a growth area for the younger generation.

EARNING RESPECT:
Generation Y is a self-assured generation, as they were raised that way by Boomers.  They were taught to have lots of confidence and pride in themselves.  The difference here is that Baby Boomers had to work hard earn that respect. 

WORK-LIFE BALANCE:
Is Generation Y going to be any more successful at the work/life balance?   Doubt it.  Business hasn’t gotten less busy and is making more demands.  Fortunately or unfortunately, the technology has allowed multi-tasking, such as checking emails, text messaging, etc. in the evenings really easy.  Since they are watching TV, they don’t really think that they are working, but I think in the long run they’ll realize that they are working more than the Baby Boomers did.

In the next 10 years, what is the workforce going to be like? 
Technology is going to take us light years away beyond places we can imagine.  Boomers will be largely retired and the Gen Y'ers will be well into their worklife.  The communication via technology will be well installed.

Hopefully, the Gen Y'ers will learn that face-to-face communication, or even phone calls, will have much more impact and are much more productive than emailing and IMing back and forth.


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