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New Penn and Massachusetts Realtor Join Forces

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new-penn-conway-financial-services-joint-ventureNew Penn Financial, a large successful independent mortgage lender, based in the Philadelphia area, announced a joint venture with a Massachusetts Realtor. New Penn will join forces with Jack Conway, Realtor, to create Conway Financial Services.

Conway Financial will operate as a traditional independent mortgage banker, created to provide mortgage financing to Conway’s home buyers and to those seeking to refinance in their market area.

This is not the first such partnership, and most likely won’t be the last. It is yet another marriage of Realtor and Mortgage Lender to create a mortgage lending offspring to hopefully capture financing from one of the partners real estate sales.

These types of arrangements are springing up since CFPB put the kibosh on most MSA’s, which were previously used by some lenders to capture business.

CFPB believes that such arrangements may be a sham to cover the payment of referral fees for business between Realtors and lenders.

So now, these new arrangements come along. Are they what are best for the lender, Realtor, and the consumer? Will the Real Estate agents be pressured to use the new mortgage company?

They can’t be compensated for client referrals. What about the integrity of the transaction when the Real Estate companies primary income is derived from sales commissions, not mortgage financing? Will corners be cut to approve buyers? I sure hope not.

To protect itself, New Penn will likely have a strong quality assurance plan to monitor the activity and loans processed through the new entity, Conway Financial Services.

CFPB may be watching these new relationships very closely. They don’t want to get off on the wrong foot.

It looks as though this may be the wave of the future. Lenders and large Realtors joining forces to create localized mortgage lending companies to capture more of the Realtor’s business.

If done right, both entities may benefit. But, is it best for the consumer and how will this ultimately affect our industry?

Michael Vitali

About the 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.
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Michael Vitali

About 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.
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