Author: Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
bon-jovi-who-says-you cant-go home
Mortgage Industry Trends

And the Hits Just Keep On Comin’

Michael Vitali / April 5, 2016

More good news on the housing front! Freddie Mac’s March 2016 Housing Outlook states that 2016 will be a banner year for housing. They forecast the best year in housing starts, home prices and home sales since 2006. Rock on housing… This prediction is based on continued low-interest rates, increasing job growth and a gradual increase in the housing supply.…

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Lenders-bullish-mortgage-Market
Mortgage Industry Trends

Lenders Bullish on Mortgage Market

Michael Vitali / April 4, 2016

A recent Lender One survey found that many mortgage lenders are expressing confidence in the current housing market. About 62% of the lenders surveyed are expecting that mortgage lending for home purchases will increase by about 11% on average in 2016. That’s good news on the purchase front – but what about refi’s? In another study, the American Enterprise Institute…

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Trid-indemnifications
Mortgage Industry Trends

TRID Indems Anyone?

Michael Vitali / April 1, 2016

Maybe secondary market investors and correspondent lenders can take a page out of Fannie’s and Freddie’s rep and warrants book. These agencies are not delaying the purchase, holding up funding or denying the purchase of loans originated and closed under the new TRID rules. They buy the loans originated by lenders for sale and delivery to them; either whole loan…

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It’s not unusual for Mortgage Lenders to openly recruit their competitors best loan originators. It’s not unusual for the most productive originators to get the best offers to move. Unfortunately, it is also not unusual for these originators to try, anyway they can, to move their pipeline of business from one company to another when they make a move. Sometimes, they are incented to do so. Guaranteed Rate, based in Chicago, which offers the “World’s First Digital Mortgage”, found out the hard way that bringing on new high powered originators that try to bring along their pipelines and customers could be trouble. This is considered “corporate espionage,” according to an Orange County Superior court jury who awarded Mount Olympus Mortgage Company, of Irvine, CA., who lost some originators to Guaranteed, more than $25 million dollars for lost (stolen) business. (Pipelines). When I first started in the mortgage business, a long time ago, it was almost unheard of for a Mortgage Banker to steal a loan originator from a local competitor. These lenders worked together to serve their communities and their employees. In fact, when an originator applied for a position with another company the owners would call each other to find out why the employee would leave. There was a gentlemen’s agreement not to raid each other’s shop as they knew that would only lead to trouble. Things have changed. In the ongoing drive to grow companies and increase originations, lenders have come up with a myriad of ways to attract the best originators from each other. In reality, benefits only come when an originator makes a change to a company that will provide them with better support, better products and/or better pricing. If not, why make the move? It is usually to make more money. No one can fault anyone for that. As long as it is all done above board. As in sports, if one team can offer a player a better contract and/or playing conditions, who can blame them for leaving. The difference is that players don’t steal the fans or the box office receipts. The ongoing argument among lenders and LOs is “who owns the customers in the pipeline?” The answer seems simple. Once a consumer makes an application with a lender that consumer becomes the customer of that lender. The loan originator is an employee of that lender who facilitated that transaction. Everyone doesn’t agree… A new lender can make arrangements to compensate the existing lender by buying out the pipeline or make arrangements with their new LO to compensate them in some way for what they leave behind. However, according to the courts, the new company cannot conspire with the LO to “steal” the business from the old company. That just ain’t right. Many lenders are seeking to increase business in 2016. They plan to do so by bringing on additional originators; either as in-house employees or as “net” branch operations. Either way is fine as long as you understand and play by the rules. The Orange County court has set down some guidelines. You had better pay close attention this ruling. This goes for the LOs as well. If a company is willing to break the rules to bring you on board, they are probably also willing to do so when making loans and paying future compensation. Either can hurt an LO both in reputation and income. Is it worth it in the long run? Lenders need to take care as well. Just because an originator is successful at one company is no guarantee they will be so at a new company. A successful originator is not a guaranteed lock as a successful net branch operation. There’s a lot more to operating a profitable branch than just originating new loans. So, when making a change, both sides need to do their homework. If either party wants to color outside the lines, it may be best to stay away. Fairness, honesty and transparency are key ingredients to any successful relationship. When you start off on the wrong foot, you’re bound to stumble and fall. Do things right; because that’s the right thing to do.
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Whose Pipeline Is It Anyway?

Michael Vitali / March 31, 2016

It’s not unusual for Mortgage Lenders to openly recruit their competitors best loan originators. It’s not unusual for the most productive originators to get the best offers to move. Unfortunately, it is also not unusual for these originators to try, by any method they can, to move their pipeline of business from one company to another when they make a…

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Trid-Slips
Mortgage Loan Acquisition

Investors Too Picky with TRIDSlips

Michael Vitali / March 25, 2016

According to Fitch Rating, investors may be a little too picky when it comes to denying loan purchases because of a TRID document not being prepared exactly per the new rules (TRIDSlips). The amount of data required to appear on each new disclosure, coupled with the requirements for how it should be reported, creates some major challenges for a lender.…

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interest-Rates-up-down
Mortgage Industry Trends

Rates: Here We Go Again

Michael Vitali / March 24, 2016

If you attended the recent Conference of Regional MBAs in Atlantic City, you heard Barry Habib, President of MBS Highway, talk about why he believes we may see another surge in refinances if/when the Fed raises short-term rates (Rates). Barry made a similar prediction last year of decreasing rates and was correct. We did see loan rates drop when the…

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