Mortgage Marketing

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The following is an article relating to the telemarketing industry including products and services in our business areas.

by Broderick Perkins
www.realtytime.com

Laser-beam like focus on the malfunctioning mortgage system is beginning to rid it of its malignancies, but mortgage borrowers will always have to cover their own assets.

Tougher mortgage disclosure rules are afoot, state laws are beating back predatory lenders, technology is giving consumers a clearer picture of costs and hundreds of class action suits have riveted the mortgage industry's attention.

Honesty, however, remains the best policy and the industry likely will never weed out all practitioners who choose to be less than upfront about mortgages.

"You cannot legislate morality. The framework is there, the hands that input the data are the breakdown. Trying to legislate the cleanup is the same as expecting all auto drivers to obey the speed limit. It comes down to the individual and the communication between the originator and their client," said Michael Ryan, CEO of San Jose, CA-based Flat Fee Funding.

It's ultimately the consumers job to see to it that they get what they pay for and that means learning to find a trustworthy broker, lender or other mortgage-savvy professional to help guide them through the mortgage maze.

To that end, the federal government and the mortgage industry, along with technology have begun to give consumers a hand up.

U.S. Housing and Urban Development Department secretary Mel Martinez has stepped up regulatory enforcement and has pledged federal reforms for the 1974 Real Estate Settlement Procedures Act (RESPA), the federal law designed to protect consumers against undisclosed mortgage costs, fees levied when no services are rendered and kick-backs. Proposed reforms should be available this spring.

The Federal Reserve amended Regulation Z, The Truth In Lending Act to protect more consumers from predatory lending.

"RESPA and Regulation Z do not fully protect (or inform) consumers. Both are good and commendable efforts, but they frequently do more to confuse than to enlighten," said George Remsberg, a loan officer with First Horizon Home Loans in Los Altos, CA.

"Most people we know in the mortgage business refer to the "Truth-In-Lending" form, designed in accordance with RESPA, as the "Confusion-in-Lending" form. The wording of this disclosure is opaque, convoluted, and even self-contradicting. This disclosure is interesting, but unreliable in terms of informing the borrower," Remsberg said.

The U.S. Treasury recently outlined voluntary "best practices" to reign in predatory lending and to lend some uniformity to state laws designed to combat the practice. The practices would be enforceable by the Federal Trade Commission and help serve as a benchmark for both consumers and lenders by providing education or counseling and some sort of certification as proof that the lender or broker adhered to the practices.

The mortgage industry is also pitching in.

Consumer education and counseling is a cornerstone of the Mortgage Bankers Association of America's (MBAA) legislative agenda for 2002.

Both the MBAA and the National Association of Mortgage Brokers (NAMB) are instrumental in drafting new, more timely disclosure forms that could add real value to the "Good Faith Estimate" of loan costs lenders must provide within three days of accepting a loan application.

Freddie Mac recently announced so-called "modifiable mortgages" which would allow borrowers to reduce their interest rate and monthly playment without the hassle or expense of a refinance. The special mortgages come with other industry proposals designed to reduce the costly paperwork predatory lenders also use to hide ceceit. "It is a problem in the industry that consumers are just lost in the large pile of documents they see for the first time at closing," said Scott Cooley, chief strategy office of Pleasanton, CA-based Ellie Mae, an online mortgage solutions company.

And to that end, technology is lending a hand.

CitiMortgage, Fannie Mae, E-Loan and others are participating in a new program built on mortgage technology called "eMortgage Axis," a process developed by BridgeSpan, a Mountain View, CA-based technology and settlement service provider for the mortgage industry. "Consumers will become more educated and have the ability to read the documents without the presure to quickly sign while everyone is waiting around the closing table," said Cooley, also founder of Ellie Mae subsidiary Countour Software, a mortgage software developer.

Lenders who sign up for eMortgage Axis digitize the loan process and password protect it for access online. Online, consumers can pull up their loan-in-progress at anytime and avoid last-minute fee surprises. The early access to costs and fees gives consumers time to negotiate loan costs and request loan modifications. BridgeSpan says the technology can cut loan funding costs by as much as $700.

"I think the problem now is that lenders initially disclose a generic set of fee estimates. At that time, they may not know which title, appraisal and other vendors they are going to use. Also they may not have their vendor fees loaded into their database. So as the transaction gets closer to closing and as these fees get defined the estimate starts changing," said Warren Myer, CEO OF Myers Internet, Inc. a San Jose, CA-based Web site and services builder for mortgage originators.

"I do believe the idea of giving clients access to their fees through this process is very helpful. However, it does not solve the actual problem -- which is that the customers are not being guaranteed these fees at the time of application," he added.

That, apparently, is the consumer's tough job -- getting at the real truth in lending, finding someone to trust. Relatives, friends, neighbors, co-workers and other trustworthy individuals who recently enjoyed a satisfactory loan closing can often refer prospective mortgage borrowers to a trusted professional.

"One group that can assist in watch dogging the mortgage process is the real estate community," said Jim Paulson, a real estate agent with RE/MAX West in Boise, ID.

"I have personnally called serveral lenders to the table when they were gouging my clients and then got them to a different lender at better rates. I require my lenders to guarantee their costs on the good faith estimate so that if there is any discrepency, it will be paid by the lender," Paulson said.

Other real estate salespeople agree.

"As a Realtor, I should be assisting my clients in understanding their loan papers. I always go over their closing costs with them and contact the lender directly if anything looks 'fishy'. I do this as a normal part of my escrow, and I also offer this service, free of charge, to clients who are refinancing. I firmly believe that we Realtors should be willing to share our expertise with the general public and this is simply one way to do so," said Ida Abelson, a broker at Brickyard Realty in Port Richmond, CA.

For refinancings and other loans where real estate agents typically are not in the mix, there is a growing cottage industry of specialty mortage brokers, counselors, advisors, planners and others who either promise early written disclosure of all fees or provide counseling services and hold mortgage brorrowers' hands through the loan process.

Consumers can also tap community and social service agencies as well as consumer advocacy groups for unbiased mortgage assistance.

Here's a list to help get you started.

• With the theme "They Didn't Tell Me I Could Lose My Home," the American Association of Retired People have begun a campaign against predatory lending and other practices often aimed at older consumers. The non-profit group offers a host of related referral services.
  
  
• The Association of Community Organizations For Reform Now (ACORN), offers referrals to mortgage counseling services offered by community groups and social organizations; 739 8th Street SE, Washington, DC 20003; (202) 547-2500; natacorndc@acorn.org.
  
  
• Roger Harrington, Mortgage Advisory, offers a fee-based counseling service; 5661 Otter View Trail, White Bear Township, MN 55110; (651) 426-7374; roger@rogerharrington.com.
  
  
• Jeff Arndt, Mortgage Exam, offers a fee based counseling service; P.O. Box 103, Lakeland, MN 55043; mortgageexam@jaaminc.com.
  
  
• Marie McDonnell, The Mortgage Counselor, offers a fee-based counseling service; P.O. Box 2067, Orleans, MA 02653; (508) 255-8829.
  
  
• National Association of Mortgage Planners (NAMP) is a group of mortgage brokers promising full and early disclosure of all costs; Bob Chaplin, 3001 LBJ Freeway, Suite 110, Dallas, TX 75234; (800) 724-2004; borrowerinfo@namp.org.
  
  
• Jack Guttentag, Upfront Mortgage Brokers, is a group of mortgage brokers promising full and early disclosure of all costs; 640 Lee Road, Wayne, PA 19087; (484) 595-2041; jguttentag@mtgprofessor.com.

Mortgage Software Application

Database Systems Corp. has developed a mortgage software application for mortgage qualification and prospect lead tracking. This application is completely integrated with our phone systems which can perform both inbound and outbound mortgage marketing campaigns. Our mortgage processing application was developed using TELEMATION, our award winning contact management software application toolkit. This CRM software tool is ideally suited for processing mortgage loans and managing customer information. This CRM application is employed in a wide variety of organizations including contact centers, help desks, customer service centers, service bureaus, reservation centers and corporate call centers.

Our mortgage marketing software has extensive computer telephony features and is fully integrated with our marketing autodialer and phone system. TELEMATION operates on Linux, Unix or Windows servers. Mortgage applications can be quickly tailored to your mortgage business using the robost features found in our mortgage software toolkit. Mortgage companies such as Chase Manhattan Mortgage Corporation have relied upon TELEMATION to handle their mortgage processing requirements.

To view how other businesses and organizations are using this mortgage software application, please visit our Mortgage Application web page.

Contact DSC to learn more about our mortgage software applications and phone systems.