Thank You Members & Friends

By Chris Holbert
President, CMLA

Ouch. 2007 was a tough year for the real estate finance industry and, frankly, it’s nice to see it fading in the rearview mirror of history. Rising foreclosures, decreased capital, adversarial reporting, aggressive legislation, broad regulatory change, company closures, and numerous layoffs marked the 51st year in CMLA history. Yet, despite all of those negatives, members and friends of this association continued to give faithfully to our industry and this association. If iron sharpens iron, if grace be best measured in the toughest of times, then we have reason to give thanks for those who stood the test of 2007 and who continue to represent the “greatest system of community investment ever to exist.”

When I look to the vast pool of talented people who volunteer time to CMLA, Shannon VanSickler, CML, is the first person I think of who deserves our thanks and recognition. Shannon enthusiastically served as chairperson of our State Legislative Committee during 2007. In doing so, she unknowingly walked into the most challenging legislative session this association has ever experienced. Throughout a “perfect storm” of bad press, determined legislators, and a stunned industry, Shannon remained positive and kept her team focused on reviewing legislation and advocating for change. During the 2007 Convention in Vail, Jim Lewis, former chairman, recognized Shannon’s efforts with the Aksel Nielsen Award for outstanding committee work. While it might be easy to complain about the outcome of the 2007 Colorado legislative session, I would encourage you to offer a kind word of thanks to Shannon for her efforts on our behalf. Thank you, Shannon!

Within CMLA, we are blessed to have examples of great leadership such as Mr. Nielsen, who served as Chairman of the Mortgage Bankers Association [of America] in 1949, and who helped establish this association in 1956. We honor current leaders in his name, which prompts us to consider how future CMLA members and friends will view our leaders of today. Who will lead CMLA in five or ten years? Will your son, daughter, or grandchild rise to that challenge in the year 2056 when CMLA celebrates its 100th anniversary? To that end, I offer my thanks to Julie Piepho, CMB, CML, for her efforts to develop and implement the Future Mortgage Leaders of Colorado training program. Today, seven students are participating in the yearlong program, which has been designed to equip our leaders of tomorrow. Future Leader students recently participated in a “Legislative Day” at the Colorado Capitol during which they met with legislators; Erin Toll, Director, Colorado Division of Real Estate; and participated in classes on government and effective advocacy. Students are currently participating in a competition to select one Future Leader to join the CMLA leadership team in April for our annual lobbying trip to Washington, DC. Thank you, Julie, for the tremendous effort you have given to think strategically and implement this exciting new program at CMLA!

One of the great results of the Future Leaders program is that students also participated in the CMLA Legislator Outreach Program, which was implemented to foster new and better relationships between CMLA members and their respective state legislators. It has been rewarding to hear testimonials from CMLA members who took time to meet with their state Representative and State Senator just to get to know them, not to ask for their support or opposition on a particular issue. Building personal relationships with legislators is something at which our friends in the real estate sales industry have excelled over the years – and which we have neglected to our detriment. Ask a state legislator to name three Realtors™ who live in their district and all 100 of them could probably do it. Ask them to name three mortgage providers and most would stumble. More recently, however, state legislators have stopped me in the halls of the Capitol to express their thanks for CMLA members, their constituents, taking time to meet with them outside the legislative session – just to get to know each other. Legislators are increasingly aware of CMLA and their constituents who work in the mortgage industry. That awareness is powerful, effective, and can’t be bought. For that, we owe a debt of thanks to Tom Kimball, CML, who serves as chairperson of the CMLA Legislator Outreach Committee.

We also owe our thanks to members such as Norah Honodel, a Future Leader student, who took time to meet with Representative Frank McNulty of Highlands Ranch; Kathi Cramer from AIG/United Guaranty, who met with her State Senator, Ken Gordon and her State Representative, Andrew Romanoff, who serves as Speaker of the Colorado House of Representatives; and to Jay Garten, Secretary/Treasurer of CMLA, who has reached out to his State Representative, Amy Stephens of Colorado Springs. Thank you to everyone who participated in the Legislator Outreach Program. Your work has already made a difference!



Another bright spot in the CMLA family can be found in the Southern Chapter, where Jon Paukovich and Lonnie Burkholder, chapter officers, have encouraged membership and participation, despite the challenges we have faced over the past year. Nearly 100 people attended the January chapter luncheon, which featured Gary Kujawski from Title America, who spoke about new law, which affects the Colorado foreclosure process. Jon and Lonnie are staying in contact with members and friends throughout southeast Colorado to keep them informed and engaged. Thank you Jon and Lonnie!

Probably the best measure of the health of our industry occurs during the first week of January each year. That’s when CMLA hosts the annual Mortgage Lending Fair, which took place on Friday, January 4, 2008. Over 1,800 people attended the event, which offered a much-needed opportunity for members and friends to see who’s still standing and consider business opportunities for 2008. Thank you to all 1,800 attendees and the ninety-one exhibitors who made the event a success! It is interesting to interact with so many people in one day, to see and hear varying perspectives on the industry. A memorable conversation occurred late in the afternoon when an attendee asked me where all the other exhibits were located. In 2007 there were some 240 exhibitors spread out between two hotels. In 2008, there were 91 exhibitors on one floor of one hotel. We talked a while and shared various names of companies that were in the 2007 show that no longer exist. Ultimately, a revelation occurred that, for the most part, those who were still standing were in the show. It is what it is and if you’re going to stay in this business, then you need to make the best of it at every opportunity. That’s what I see in the leadership, members, and friends of CMLA. That’s why I’m thankful for you.

Share your thoughts and suggestions about CMLA with Stacey Harding, CML, CMPS, Chairman of the Board at chairman@cmla.com or Chris Holbert, President at pres@cmla.com.

Thank you Mortgage Lending Fair Sponsors and Exhibitors!

Thank you sponsors!

Thank you Exhibitors!
Access Financial Group, LLC.	M & T Bank - Mortgage Division
Advantage Credit Inc, of Colorado	MGIC
AIG United Guaranty	Moncor Mortgage Bank
American National Bank	Montegra Capital Resources
American Sterling Bank	Mortgage Insurance Agency, Ltd.
Armbrust Real Estate Institute	Mortgage Solutions of Colorado
Assurity Financial Services, LLC	Motivity Solutions
Bankers Insurance Services	Myers Internet
Bear Sterns Residential Mortgage	National 1 Source
BoostMyScore.Net	National City Mortgage
Building Champions	NCO Credit Services
Business Loan Express	Northsight, Inc.
Chase	Oxley & Goldburn Insurance, Inc.
Chevy Chase Bank	Peak 360, Inc.
Citi	Plaza Home Mortgage
Citi Residential Lending	PMI Mortgage Insurance Co.
Citi Residential Lending	ProLender Solutions
Commercial Funding Corp	Pueblo Bank and Trust
Commerical Capital	Rush Appraisals
Commerical Capital	Seattle Funding Group
eMagic	Sierra Pacific Mortgage
Equifirst	Silver Hill Financial
Fairview Commercial Lending	SourceMedia
Fidelity Home Mortgage Corporation	Southwest Securities, FSB
Fifth Third Mortgage	Spectrum Funding Corporation
First American Heritage Title	Stanford and Feuerborn
First Heritage Capital	Stewart Title of Denver
First Horizon Wholesale	SunTrust Mortgage Inc.
First Integrity Title Agency, LLC	Taylor, Bean and Whitaker Mortgage Corp
Flagstar Bank	Texas Capital Bank
Franklin American Mortgage Company	The iEmergent Group
GB Mortgage	Thornburg Mortgage
Hillside Software, Inc.	U.S. Bank Consumer Finance
Home Savings of America	U.S. Bank Home Mortgage
Homecomings Financial	Unique Mortgage Solutions
Interbay Funding	Universal Lending Corporation
Interbay Funding	UPS Capital
Kroll Factual Data	Vertice
Land Title	Wachovia
Liberty Savings Bank	Wells Fargo Home Loans
LIME Financial Services, Ltd.	WestAmerica Mortgage
Loanbright.com	Wilmington Finance, Inc.

Going “Green” All Over Again!

By David Andrews, CML, CMPS

I was visiting with a new Realtor partner and discussing different loan programs when she asked if we did “green” mortgages. I smiled and promptly responded, “Of course we do! We got rid of all our loan originators who were emitting harmful gases into the air when meeting with clients, and now all of our loan documents are prepared from 100% recycled garbage!” (That’s a whole other story!)

All joking aside, I mentioned to her that in 1994 I was one of the first loan originators to do an Energy Efficient Mortgage, EEM, in the state of Colorado. I suppose we could now call it the “Green” Mortgage to be politically and environmentally correct.

Fannie Mae embraced the EEM in 1994, as did FHA and VA, but in my opinion, didn’t really do a lot to help train underwriters on the use of the EEM. Whenever I did one, I had to break out the seller servicer guide (there wasn’t much of an online Allregs in 1994) and educate them about how to underwrite the program, and that yes, we could finance a higher loan amount taking into consideration the cost and savings the energy improvements would provide for the homeowner, and yes the buyer was allowed to have a higher debt to income ratio because of the monthly savings it would provide.

The program allows for a homebuyer or seller to have an energy audit and rating from a certified energy auditor on a home, referred to as the E-Star rating, and determine from the audit what energy improvements would have the largest impact on improving the overall energy efficiency of a home. The auditors I have had experience with did a “blower door” test of the home to see where the house is leaking air, then rely on qualified contractors to give accurate estimates of what it would cost for each energy improvement. These improvements would include: better insulation in the ceiling, walls and floors, more efficient heating and cooling systems, hot water heaters, windows, window coverings, duct sealing and any other modifications that would make the home more “green”.

The installed cost of improvements over a weighted life of measures and discount rate, then calculated the monthly energy savings in the home, expected annual savings and the Present Value of Energy Savings. This Present Value of Energy Savings would vary depending on what improvements the homebuyer would make. This information is given to the appraiser and the appraiser adds that present value to appraised value of the home. We can make the loan on that indicated value even if the actual purchase price was less, allowing the homebuyer to finance a portion of the home energy improvements right along with the purchase transaction. An escrow for the energy improvements is set up at closing and 60 days are allowed to complete the improvements.

So why aren’t there more “green” mortgages? In my experience, most contracts to purchase a home aren’t written with enough time to allow for the home energy audit and contractors to provide accurate numbers to complete an E-Star rating. Secondly, most Realtors aren’t educated about the process and therefore don’t inform the seller or prospective homebuyer that the home could be energy rated and a portion of the costs be financed. Finally, most lenders aren’t educated about the process and underwriting of EEM’s to then educate Realtors and homeowners about the program.

If we really want to do “green” mortgages, we need to take the responsibility to educate Realtors who list homes for sale, and have them encourage sellers to get an energy audit on their home with different options for the Present Value of Energy Savings. If the seller doesn’t perform the improvements, a prospective buyer would at least have the information available to quickly decide if they want to include the energy improvements into their financing when they purchase the home.

So yes, we all can do “green” mortgages. Will we?

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February 2008