Here - California Mortgage Bankers Association
Transcription
Here - California Mortgage Bankers Association
financing real estate. investing in relationships. Bel Air, CA: $7,800,000 Berkeley, CA: $4,500,000 North Hollywood, CA: $1,575,000 Sonoma, CA: $1,865,000 San Francisco, CA: $5,500,000 Mill Valley, CA: $1,160,000 Multifamily Lending $750K to $10MM 30 year term/30 year amortization 3, 5, 7, and 10 year fixed rates Step-down prepayment Purchase or refinance Early rate lock Up to 75% LTV Multifamily, mobile home parks, mixed-use commercial Commercial Financing $1MM - $50MM 3 – 25 year fixed rate terms Non-recourse loans available Forward commitments considered Early rate lock Office, industrial, retail and other select product types considered Subject to loan approval. Programs and rates subject to change without notice. Southern California 949-453-5060 Oakland 510-457-2247 Income Property Finance INTERVESTCREF.com In This Issue… SPRING 2016 CHAIRMAN’S CORNER………………………………………… 6 EXECUTIVE DIRECTOR’S LETTER………………………… 7 LEGISLATIVE REPORT………………………………………… 8 MEDIA & MARKETING………………………………………… 11 COVER STORY……………………………………………………… 12 ROUNDTABLE……………………………………………………… 14 WHO’S WHO………………………………………………………… 16 FEATURED RESIDENTIAL……………………………………… 18 FEATURED COMMERCIAL…………………………………… 19 LATEST COMMERCIAL DEALS……………………………… 20 RESIDENTIAL……………………………………………………… 24 California Mortgage Finance News is published by the California MBA four COMMERCIAL……………………………………………………… 28 times each year: Spring, Summer, Fall, and Winter. 2016 CONFERENCES & EVENTS…………………………… 31 EDITOR: Dustin Hobbs NEW MEMBERS…………………………………………………… 32 PUBLISHER/LAYOUT: Wolfe Design Marketing PHOTO GALLERIES……………………………………………… 49 California MBA ROAD TRIP………………………………………………………… 54 555 Capitol Mall, Suite 440 Sacramento, CA 95814 PHONE: FAX: (916) 446-7100 (916) 446-7105 EMAIL: [email protected] CALIFORNIA MORTGAGE FINANCE NEWS SP R IN www.CMBA.com G 16 20 5 CHAIRMAN’S CORNER Advocacy: It’s Why We’re Different ADVOCACY—IT’S WHY WE ARE DIFFERENT by KEVIN RANDLES, Mortgage banking is a wide, complex put those approaches in question. In 2008, Alameda Unified School District CBRE Capital Markets, industry, and many of us belong to a variety required many owners of commercial California MBA of business and industry groups such as properties to pay a different and higher parcel Chairman BOMA, NAIOP, LAMA/BAMA. I hold several tax than homeowners and small businesses membership cards myself because they had to pay. Four years later, a three-judge deliver quality networking and education panel of the First Circuit of the Court of opportunities. But when it comes to advocacy, Appeals invalidated this new tax. SB 1021 the California Mortgage Bankers Association is aimed to overturn that decision by allowing my voice—and yours—in Sacramento. school districts to create a special tax targeting Our legislators toss around plenty of regulation ideas on nearly every aspect of commercial properties. The ins and outs needed a bottle of aspirin banking annually, so it takes a full-time, to navigate: The new tax could be imposed dedicated insider to protect your daily on a per parcel basis, according to the square interests. You can be assured that California footage of a parcel or the square footage of MBA is on the floor, in the chambers, the improvements and according to the parcel’s offices, the hallways, even the mailroom when use. Multiple parcels of real property could that’s what it takes to represent our mortgage, also be treated as one parcel for purposes finance and banking industries. of the special tax, where the parcels are But words aren’t proof. So here are two major wins California MBA has accomplished contiguous, under common ownership, and constitute one economic unit. in recent years to promote a free flow In English: bad news. of affordable capital to the housing and School districts currently can create commercial real estate markets: special taxes, but they must be uniform, so this bill would have changed that definition—a SB1021—LOCAL PARCEL TAXES IMPACTING nightmare of unfair playing levels for COMMERCIAL PROPERTIES commercial properties, and an incentive to State law mandates that parcel taxes drive business enterprise from the state. be levied equally on all property owners in The California MBA opposed SB 1021 a school district, regardless of parcel size or and led efforts to educate why SB 1021 is bad number of living units. Some school districts policy. It died in the Assembly Revenue and have sought creative approaches to raise Taxation Committee. additional revenue from larger commercial SP parcels, but a recent Court of Appeals ruling RI N G 16 20 6 CALIFORNIA MORTGAGE FINANCE NEWS …Chairman’s Corner continued on page 30 EXECUTIVE DIRECTOR’S LETTER New Year, New Goals SUSAN MILAZZO, California MBA Executive Director L ast year at this time I shared some These, in addition to our monthly compliance exciting plans for 2015 and I’m webinars, are offered complimentary to pleased to say we achieved huge anyone in the mortgage industry. Participants accomplishments in the last twelve months! We added two new educational have an opportunity to ask questions and engage in dialogue with speakers during the opportunities to our annual webinar series. webinars. Also, starting in 2016, we will be Our Legal Services quarterly webinars focus on providing recordings of the webinars to our a wide range of litigation trends that are facing members through the “members only” section our industry. The most recent presentation of our website. covered California’s Tender Rule, Single Point In 2015 we also enjoyed the launch of of Contact, Restrictions and Limitations on our Residential Executive Forum as well as Demurrers and Amended Pleadings and the a significant expansion of our Commercial Telephone Consumer Protection Act. While Executive Forum. These events are both a major focus for the residential lending aimed to provide dialogue with the owners, industry continues to lie with federal and managers of mortgage companies with their state regulators, it is vital that you stay abreast peers as they hear from experts on a wide of litigation trends that affect the mortgage variety of industry topics. The Commercial industry. The second webinar series we added Executive Forum also provides a property tour has been the Mortgage Technology and of unique commercial spaces in the great state Marketing Committee or MTAM. The focus of California! of these sessions is geared toward supporting We continue to hone and enhance each the development and dissemination of new of these programs for 2016 so please make a technologies, marketing strategies, and other resolution to join us in the New Year. related industry improvements. Presentations In order to get a deeper understanding have addressed Driving Your Business to the of how our current membership benefits Next Level with “Big Data” and also how to are being utilized and determine what new capture that $1 trillion market of Millennials! programs we can develop to maximize the The California MBA is extremely fortunate value for membership in the California MBA, to have nationally recognized speakers within we will be conducting a membership survey our membership that are willing to share in 2016. Please be on the lookout for this their expertise to educate the industry. We information and take a few minutes to respond are constantly targeting ways to provide the so that your feedback can be considered as we mortgage industry with top-notch information develop new plans for the future. and analysis in an ever-changing market. …Executive Director Letter continued on page 32 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN by G 16 20 7 LEGISLATIVE REPORT Slow Start to 2016, But Ballot Measures Loom California MBA C Legislative Counsel year, a $1 billion hole in funding for the state’s November ballot that is expected to be full health care program for the poor and finding of initiatives, many of which will mirror bills funding for billions of dollars of needed road introduced in the Legislature. Those ballot repairs. The Legislature adjourned last year measures may make it harder to win approval without reaching agreements on those issues by the Legislature of similar bills because even though the Governor called for special lawmakers may defer to the electorate to legislative sessions to focus on them. Reaching avoid making the more difficult policy choices. a resolution has been difficult because any Voters could face a host of ballot initiatives agreement would likely entail higher taxes or including; increasing the minimum wage, fees, which Republicans and some Democrats legalizing marijuana, amending Proposition have been reluctant to enact, especially when 13 by increasing taxes on properties valued state revenues continue to surge. at $3 million or more to fund poverty by PAT ZENZOLA, KP Public Affairs, alifornia lawmakers reconvened the 30 years with funds provided by Proposition second half of the Legislature’s two- 63, the “millionaires’ tax” for mental health year session on January 4th. They services approved by voters in 2004. face two major unresolved issues from last In addition to transportation and health Adding to the political mix this year is a programs, a continuation of the Proposition care funding, Democrats are expect to push 30 taxes of 2012 on upper income earners for several other major policy proposals, that was supposed to be temporary, banning including legislation to reduce gun violence the one-time use of plastic bags, new gun and to tackle homelessness. Senate leadership control measures and state bonds for school has already announced there will be a package construction. of gun control bills covering issues such as As of the writing of this article in January, new screening requirements for buyers of very few new bills for 2016 have been ammunition to determine whether they are introduced, but 1500 or more new bills will qualified to possess guns. They have also likely be introduced by the February 19th proposed spending $2 billion to rebuild deadline for this year. Listed below are updates or rehabilitate permanent housing for the on several measures that would directly impact mentally ill living in the streets and for those the membership of the Californian Mortgage who otherwise find themselves homeless. The Bankers Association. proposal calls for the state to issue $2 billion SP in bonds, which would be repaid over 20 to RI N G 16 20 8 CALIFORNIA MORTGAGE FINANCE NEWS …Legislative Report continued on page 33 855-539-4910 | www.angeloakms.com MORE OPTIONS... To Expand Your Product Offering and Grow Your Business Looking at Sub-Prime Mortgages in a New Way Your Wholesale/Mini-Correspondent Mortgage Lender · 1 Day out of foreclosure/short sale/BK · Up to 90% CLTV · Up to 50% DTI · Credit scores as low as 500 · Mortgage lates last 12 months OK · Non-warrantable condos OK · 100% gift funds allowed · Bank statement program · Loans up to $2 million · Foreign National up to 75% LTV · No max. properties financed · Asset depletion available · No pre-pay penalty · No lender points charged INTERESTED IN JOINING OUR FAST-GROWING AND DYNAMIC TEAM? SEND AN EMAIL TO [email protected] Currently serving: AL, AZ, CA, CO, DC, DE, FL, GA, IA, IL, IN, KY, LA, MD, MI, MN, NC, OH, OR, SC, TN, TX, VA, WI Visit our website for a quick quote and to submit a pre-qual. © Angel Oak Mortgage Solutions LLC NMLS #1160240, Corporate office, 3060 Peachtree Road NW, Suite 500B, Atlanta, GA 30305. Loans in Texas offered through Angel Oak Home Loans LLC, NMLS #685842.This communication is sent only by Angel Oak Mortgage Solutions LLC and is not intended to imply that any of our loan products will be offered by or in conjunction with HUD, FHA, VA, the U.S. government or any federal, state or local governmental body. This is a business-to-business communication and is intended for licensed mortgage professionals only and is not intended to be distributed to the consumer or the general public. Angel Oak Mortgage Solutions LLC is an Equal Opportunity Employer and does not discriminate against individuals on the basis of race, gender, color, religion, national origin, age, disability, veteran status or other classification protected by law. 10-27-15 ANR Our Mortgage Advisors matter. We believe you can be highly successful by helping clients achieve a satisfying financial future. 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For more information, visit www.joinopesadvisors.com or contact us at [email protected] Opes Advisors is licensed by the CA Department of Business Oversight under the California Residential Mortgage Lending Act, License #4150089, CA Bureau of Real Estate 01458652, loans will be made pursuant to the Residential Mortgage Lending Act, CO Registration Regulated by the Division of Real Estate, Idaho MBL8530, Montana Mortgage Lender License #235584, Oregon ML4902, Washington CL1178435, Wyoming #2667 and NMLS 235584. Equal Housing Opportunity Lender. Opes Advisors is a registered investment advisor with the Securities and Exchange Commission (SEC). © 2016 Opes Advisors, Inc. All rights reserved. MEDIA & MARKETING Make Your Social Media Voice Authentically Yours by DUSTIN HOBBS, Communications W ith the advent and mass adoption of • You’re playing with fire! Be careful with social media networks, businesses trends. have gained the ability to do • If you miss the trend, don’t try and play Director, something they never could before. In addition catch-up—look forward and be ready to California MBA to the personal connection and face-to-face catch the next wave instead. Nobody communication that is a necessity for any wants to show up to the party wearing successful organization, businesses can now last year’s fashions, and your company interact directly and continuously with massive cannot afford to be slow or sloppy with numbers of customers (and potential customers) trends. For example, 2015 seems to be located anywhere in the world. Even better, the year that the “emoji” jumped the businesses can use social networking to break shark. While having a unique icon for down the walls that separate business from your company that was used in social personal, and begin to build connections that marketing was hip and fresh in 2014, the don’t depend on coupons or gimmicks. They bandwagon got a little full last year. can build a solid brand that delivers value to • Make sure that the trend or fad will consumers before they even ready to become provide value to you and your customer. customers. However, social media is truly the Again, many companies seemed to marketer’s double-edged sword. While it has create their emoji without any thought the power to cut through barriers, it also has the to its usage. A notable exception is power to instantly destroy what has been built. Domino’s emoji, which customers can If used improperly, savvy Millennials and other use to order a pizza. If you can’t explain social media users will tune out and miss your in a sentence or two why you are message entirely. One element that is perhaps employing a new trend, then you might more critical than anything else to social media want to reconsider. usage is the ability to discover and maintain • Ask yourself if being “cool” and an authentic voice throughout all platforms. “trendy” is really part of your brand in Social media users are much more likely to the first place? If your brand’s voice is look favorably upon a company that’s honest, speaking to “stability” or “confidence” straightforward, and seems comfortable in its or “integrity,” then be careful with the own skin. Here are a few tips to make sure you latest fad on Facebook or Twitter. Make can have a conversation with your audience and sure it’s still authentic to your brand. not be seen as a crass marketer no better than a …Media & Marketing continued on page 35 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN cheap pop-up ad: G 16 20 11 COVER STORY Is BRANCH ACQUISITION the RIGHT STRATEGY for Your Firm? by SANDEE MCCREADY, Director of Marketing, Alight Mortgage Lending W hat an interesting time to be in the mortgage lending business. 2015 was a banner year for the mortgage industry with stories of lenders beating their own projections rampant industry-wide. And given today’s global economic pressure, volatile financial markets and the current low inflation rate, even as the Fed contemplates further rate hikes it’s likely interest rates will stay comfortably low for a while. But rising compliance costs and increased competition coupled with concerns of regulatory scrutiny (and potential cash-depleting fines) has the industry in a state of flux. Some independent mortgage bankers are considering monetizing and selling their companies while others plan to capitalize on this volatility by expanding their businesses. If growing your firm is your plan, it’s likely you are considering purchasing new branches as a way of quickly expanding your business. But growing a mortgage lending business through branch acquisition is not for every firm and certainly not for the faint of heart—the right acquisition can bring more loan originations and increased profitability, the wrong one can quickly and irreparably drain cash reserves. If your firm is like most, chances are that evaluating new branches is a timeconsuming, laborious and cumbersome process done by key members of the management team via Excel templates. Typically, the pro forma is high level and—since you’re relying on past performance indicators or estimates provided by current staff (most times with little detail or background)—numbers often don’t line SP …Cover Story continued on page 13 RI N G 16 20 12 CALIFORNIA MORTGAGE FINANCE NEWS Cover Story continued from page 12… up with metrics and targets for your own operating assumptions to facilitate comprehensive evaluation existing branches, making the metrics form best and worst cases. Worst and timely decision-making: difficult, if not impossible, to overlay case, is this something you would • Pre-acquisition multi-scenario with your own operating metrics. regret doing? Best case, is this of planning and forecasting, with Furthermore, once the pro marginal value or a home run? and without incorporation of the forma is in place you’re evaluating 2. Evaluate the corporate enterprise the new branch in isolation. There with and without the branch. is no easy way to take that branch Does the branch meet acquisition with your own margin and information, roll it into the enterprise targets (payback period and ROI, operating expense metrics to and measure the ripple effect across for instance) and performance assess whether corporate branch your organization to assess whether targets (net value add) set for targets and goals will be met the acquisition will benefit (or drain) corporate branches? Does the • Side by side comparisons of with financial and human resources. And, acquisition benefit the company and without scenarios, and the more often than not, you’re evaluating as a whole or will it provide only ability to tweak assumptions and only one scenario—no best or worst incremental improvement? see updates flow through the case, no what ifs, and no ability to compare with and without scenarios. Post-acquisition analysis can be target branch • Target branch projections run 3. Review and evaluate corporate organization results with and without the • Best and worst case scenarios run branch…after acquisition. As soon from multiple perspectives problematic as well. It’s often difficult to as a branch becomes part of the compare actuals against the projections company, actuals are likely being expectations saved for quick and made during the initial evaluation, recorded to the general ledger, easy post-acquisition comparison resulting in little or no insight into but given the constraints of the to actuals ROI or whether the branch is meeting Excel template methodology, payback targets 60, 90 or 120 days the process of taking those actuals vs. projections, with and after acquisition. With no visibility into actuals, extracting them, and without the recently-acquired branch performance, you risk losing converting them back into the pro branch branch managers and staff you paid forma format is extremely time- dearly to recruit, or may continue to consuming, and many firms simply fund branches that aren’t performing. don’t do it. to grow their business, costs—and capital outlay—can add up very quickly, pressuring liquidity requirements and threatening profitability. But in order to know whether acquiring a branch is the best use of your cash, management must have the ability to: 1. Look at and run multiple scenarios based on information provided by branch staff, and evaluate those scenarios from multiple perspectives, overlaying your • Post-acquisition evaluation of • Evaluation of actual numbers in real time • The ability to easily and quickly To effectively evaluate the impact of a new branch on the corporate enterprise, mortgage banking firms evaluate branch manager performance vs. projections Branch acquisition is a smart need to be able to identify the growth strategy for many firms, financial ripple effects across the entire especially in today’s marketplace of enterprise, measure the cash impact continued low interest rates. With and consider whether a commitment the right tools, branch evaluation, to the capital outlay is warranted… acquisition, onboarding and assessment both before and after acquisition. can be accomplished smoothly and If your firm is contemplating with full visibility, allowing you to act expansion, it’s critical that your on changing market dynamics quickly, methodologies and applications both before acquisition and after. incorporate these key capabilities to CALIFORNIA MORTGAGE FINANCE NEWS SP R IN For firms adding multiple branches • Pro forma evaluation data and G 16 20 13 ROUNDTABLE Appraisal Challenges EDITOR’S NOTE—This is the latest in a series dealing with the issues facing the real estate finance industry. Each issue we touch on a different topic, asking CMBA’s experts for their thoughts on the issue at hand. In this issue of CMFN, we ask three industry players about some of the challenges in today’s appraisal market. Dave Statham is Chief Appraiser/Executive Vice President with Got Appraisals in San Ramon; Jon Tallinger, Vice President, Sales & Marketing at Class Appraisals, headquartered in Birmingham, MI; and Scott Pickell is Chief Appraiser at LRES, an appraisal and REO management firm located in Orange, CA. The views and opinions expressed are solely those of the authors. Q: HOW WILL THE APPRAISAL more of the appraisal fee. This is akin to MANAGEMENT COMPANIES, AND the trainee appraiser making minimum ULTIMATELY THE ENTIRE MORTGAGE wage or less. BANKING INDUSTRY, DEAL WITH THE ATTRITION OF APPRAISERS? Statham: According to a June 30, 2015 • A bachelor’s degree. At last check, the average public college tuition is over 62% of appraisers are over the age of 50, while $9,000 annually or $36,000 for 4 years. only 13% of appraisers are under the age of This doesn’t include housing, meals, books 36. A miniscule 1% of appraisers are under the or school supplies. Many lenders require that appraisals be completed by a “certified appraiser”. In order to become a certified residential appraiser in California, the following is required: • 200 hours of appraisal education at a cost of about $2,000. • 2,500 hours of appraisal experience. At least 2,000 of these hours require a certified appraiser to supervise your work. It can be very challenging to find a supervisory appraiser willing to train an appraiser. For those lucky enough to find a supervisor, most will find that the supervisor will take upwards of 70% or RI N G 16 20 14 above comments on minimum wage. study by the Appraisal Institute, a whopping age of 26. SP • 2.5 years of appraisal experience. See CALIFORNIA MORTGAGE FINANCE NEWS A helpful benchmark to show how many new appraisers are entering the industry is the number of current trainee appraisers. When a new residential appraiser enters the profession, they will usually begin by getting their appraisal trainee license. In California alone, the number of trainee appraisers has dropped by over 80% over the past seven years. This drop is not surprising given the time and expense that is required in order to become a self-sufficient certified appraiser. At last check there were only 586 trainee appraisers out of a total of 11,091 active …Roundtable Article continued on page 37 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN 1901 Camino Vida Roble, Suite 115, Carlsbad, CA 92008 ● (877) 654-6824 www.thecompliancegroup.net G 16 20 15 WHO’S WHO AMERICAN PACIFIC MORTGAGE EVENTS TEAM MICHELLE DOYLE The Compliance Group, Inc., (TCG), a mortgage compliance and quality control services provider, has announced the hiring of Michelle Doyle as its new Director of Quality Control. Based in Carlsbad, California, TCG American Pacific Mortgage (APM) various Business Planning sessions would like to recognize their newly that help guide APM’s originators focuses on the compliance success created Events Team whose main to establish financial, production of its clients, assisting financial focus is to create, plan and execute and personal goals. The Team has institutions in mitigating risk and on all aspects of APM’s production the ability to make sound decisions losses with its proprietary, patent- events. The team consists of Denise fast and work in a high paced, pending technology, and its core Derner, Director of Integration, Teri high pressure environment. Their business solutions of compliance, Bergthold, Marketing and Events contributions are an important key to quality control, and licensing. Manager, and Samantha Gallagher, the success of the entire company. As Director of Quality Control, Events Coordinator. They have been Doyle will be responsible for an integral part in building brand overseeing TCG’s quality control recognition and creating recruiting reviews on behalf of clients and and retention opportunities for directing the firm’s QC service efforts. APM. The Team’s ability to ensure She brings more than two decades of each production event is executed experience in mortgage underwriting, as creatively as possible while quality control, risk mitigation and maintaining a scrappy mindset for compliance to her new role at TCG. fiscal prudence is unprecedented! Having an Events Team has been a differentiator in the business as APM is 100% focused on making their Branch Managers and Originators look good! The Events Team was involved in over 50 events throughout this past year with many of them involving over 250+ attendees. Events include biannual Sales Summits held throughout the Western United States along with If you would like to submit an employee to be recognized in an upcoming issue, email SP [email protected] for more information. RI N G 16 20 16 CALIFORNIA MORTGAGE FINANCE NEWS …continued on page 17 WHO’S WHO CARL FORMATO II Carl Formato II joins National General KIMBALL, TIREY & ST. JOHN LLP— CALVIN CLEMENTS & CYNTHIA STELZER practice groups within the firm, including Fair Housing, the Business Real Estate Group and Collections. Lender Services Prior to joining the firm, Mr. as Senior Vice Clements worked as a Deputy Legal President, Client Affairs Secretary in the Office of Development, with Governor Gray Davis where he 18 years of sales and management primarily worked on criminal justice experience. Prior to joining the The law firm of Kimball, Tirey & St. matters within the State. He also organization, Carl was Vice President, John LLP is pleased to announce its worked as a sole practitioner assisting Mortgage Business Development at newest partners—Cynthia Stelzer and clients in criminal, family and personal CoreLogic. His previous experience Calvin Clements. injury matters. Before entering law, also includes sales, business Ms. Stelzer has been a practicing he worked as a commercial property development and management roles attorney since 2003. She joined the manager in Southern California and at Washington Mutual. firm’s Business Real Estate Group in draws upon that experience to better 2006 and brought with her extensive assist clients. “Carl’s experience in the mortgage servicing space, combined with his litigation knowledge. As the Business proven track record of relationship Real Estate Group’s newest partner, building, high energy level and track she represents commercial landlords, record of sales growth, makes him a property managers, business owners strong asset for our organization and and real estate investors in business for our marketplace,” said Thomas and complex real estate issues. Since McCarthy, Senior Vice President and joining the Business Real Estate has been hired Sales Executive Officer, National Group, Ms. Stelzer has handled as Director of General Lender Services. thousands of matters involving Marketing for Alight SANDEE MCCREADY Sandee McCready commercial disputes. Her clientele Mortgage Lending. consists of the top commercial She has extensive brokerage and management experience as a writer, researcher, and companies nationwide. Ms. Stelzer analyst spanning multiple industries, regularly attends networking events in including financial services, retail, order to attract new clients. In addition and more. Sandee is a licensed real to being an attorney, Ms. Stelzer is a estate agent and is a graduate of the licensed broker and realtor and uses University of California Davis. this expertise to grow her practice. Calvin Clements joined the firm in 2005 as the Managing Attorney of the Sacramento office. Since that time, he has been involved in approximately 2,500 hearings and trials for the firm. In addition to working as a trial attorney, CALIFORNIA MORTGAGE FINANCE NEWS SP R IN Mr. Clements has also assisted various G 16 20 17 FEATURED RESIDENTIAL How Well Do the New Rules Protect Lenders, Consumers, and Appraisers? by MARLENE MINITE CHAKER, President, AAA-AMC T he role of the Appraisal Management borrower and the interests of lenders and their Company (AMC) was originally created partner AMCs. Within the purchase transaction to stand as a protective firewall process, there is a potential disconnect between lenders and appraisers. It was between lenders and AMCs that the Uniform instituted to prevent any type of influence Standards of Professional Appraisal Practice on appraisers when completing their market (USPAP) and the new Appraiser Independence evaluation on a property. AMC’s have existed Rules (AIR) under the Home Valuation Code of since the 1960’s but not in the numbers they Conduce (HVCC). On one hand, regulators have do today; of course, business volumes have created more distance between lender and grown over that time period. In the depth appraiser to ensure an unbiased and accurate of the recent housing market crash, new report. However, because the purchase price guidelines were put in place in order to further of the home is included in the appraisal report, separate any parties with financial interest in this means the appraiser will be aware of that a mortgage loan from the appraisal process. price. Despite their independence, I’ve found Today, AMC’s are legally required to work that when appraisal reports on purchase relentlessly with lenders and appraisers to transactions are completed, the appraiser will maintain compliance on appraisal orders, and often appraise the home in the exact amount lenders have new responsibilities for third- as stated on the purchase price. Since it is party vendors. This means appraisers have to truly the free market that “sets” the price stay on top of the report and ensure quality for a home, it makes sense for the home to control is maintained in order to deliver an appraise at or near that price as well. However, accurate and bias-free report. The housing when that appraisal does not equal the sale market has improved significantly for a variety price, I fear many borrowers are in for a rude of reasons since these new rules and guidelines awakening at closing. For example, let’s say the have been put into effect, and now the lenders, purchase price is stated to be at $242K but the brokers, loan officers or anyone involved from appraised value of the home is, in fact, $2–5K profiting from a loan, have had their influence above or below that price. That really isn’t a reduced in the appraisal process. dramatic difference; however, it concerns me Despite all of the safeguards that have been put in place, I think there is more we can that for many appraisers who do not list the property exactly as the listing price, lenders or do, both to protect the expectations of the SP …Featured Residential continued on page 41 RI N G 16 20 18 CALIFORNIA MORTGAGE FINANCE NEWS FEATURED COMMERCIAL Rental Apartments in Demand Multifamily Solutions S few years. This has occurred in most metro in the Consumer Price Index, rent was up 3 FRANK E. areas around the country and can be seen in percent during 2015, compared with virtually no NOTHAFT, nationwide data. The National Multifamily inflation in the rest of the index. And the Census Senior Vice President Housing Council conducts a quarterly survey Bureau has reported that rental vacancy rates are and Chief Economist, of apartment building managers and owners at their lowest levels since the 1980s. CoreLogic and asks them whether the rental apartment JAY HARRIS, Senior Director- trong household demand for rental rents have risen and vacancy rates have come homes has led to apartment rents rising down. These survey results are consistent with and vacancy rates falling during the last broad market data too. For example, as measured Developers have responded to these market has ‘tightened’ or not in metros they economic forces by increasing construction follow. As depicted in Exhibit 1, for nearly every of new rental apartments (see Exhibit 2). quarter over the last five years, rental apartment New building has ramped up after the Great conditions have gotten ‘tighter’, meaning that …Featured Commercial continued on page 42 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN by G 16 20 19 Latest Commercial Deals Newmark Arranging $65M for CHP Headquarters in Sacramento Newmark Realty Capital, Inc. has The recently renovated property arranged $65,000,000 in permanent is leased to the State of California and financing for a 284,000 square serves as the headquarters for the foot, single tenant office complex California Highway Patrol. “Newmark located in Sacramento, CA. George has closed approximately $2.0 billion Mitsanas, Fritz Grim, and Armen of Federal and State leased buildings. Hadjimanoukian, arranged the non- We were able to create a unique recourse, fixed-rate, term loan with and secure loan structure which met one of Newmark’s correspondent life both borrower and lender’s financing insurance company lenders. requirements”, said Grim. Redwood Mortgage Closes $14M Loan on Concord Retail Repositioning and CMBS Maturity funding en route to an expected $100 traditional sources,” said CEO Michael million capital deployment in the Burwell. “We specialize in opportunity- next 12 months. The transaction was capital in real estate lending, where arranged by Lori Randich, VP-Loan borrowers have a particular need or Origination for the firm. challenge that typical lenders often The funding will facilitate an can’t accommodate.” improvement program for the property including new facades and other Redwood Mortgage, a family- upgrades. The transaction also helped owned private lender founded in meet a timeline commitment of a 1978, recently announced the closing maturing CMBS loan on the property. “Active local real estate of $14 million refinance of a fully- SP leased multi-tenant retail property in owners and investors are capturing a Concord, CA high-traffic shopping opportunities throughout California, center, part of an increasing number and Redwood Mortgage provides of loans Redwood Mortgage is more flexible and nimble capital versus …continued on page 21 RI N G 16 20 20 CALIFORNIA MORTGAGE FINANCE NEWS Latest Commercial Deals HFF Closes Sale of 5-Property West Los Angeles Office Portfolio in Culver City. All of the properties have easy access to the I-10 (Santa Monica Freeway) and the I-405 (San Diego Freeway) and are about 15 minutes from the Los Angeles Holliday Fenoglio Fowler, L.P. (HFF) undisclosed amount free and clear International Airport and the Santa of debt. Monica Airport. The 91-percent-leased, recently- The HFF investment sales team announced today that it has closed the renovated portfolio consists of representing the seller was led by sale of a five-property, approximately Beverly Atrium at 350 South Beverly senior managing directors Ryan 350,000-square-foot office portfolio in Drive in Beverly Hills; 2730 Wilshire Gallagher and Todd Tydlaska and West Los Angeles, California. Boulevard in Santa Monica; 1950 director Andrew Harper. HFF represented the seller in Sawtelle Boulevard and 11075 Santa the transaction. Jade Enterprises Monica Boulevard in Los Angeles; and purchased the portfolio for an Bristol Plaza at 6167 Bristol Parkway CBRE Capital Markets Secures $47 Million in Financing for The New Californian in Berkeley, CA panoramic views of San Francisco atop it’s resort-style roof deck. The property performs extremely well financing on behalf of local developer and investor, Hudson McDonald, transportation (BART, bus lines, and 2010. Metropolitan Life Insurance $47 million in non-recourse financing for The New Californian, a mixed-use development with 148 apartment units and 15,700 square feet of retail space in Berkeley, California. John Nelson, Michael Walker and Erik Franksof CBRE’s San Francisco, California, office arranged the Company provided the 10-year, nonrecourse, fixed-rate loan with very approximately three blocks from The “The New Californian is one University of California, Berkeley. In of the most attractive multifamily addition to UC Berkeley, the property properties in the city of Berkeley,” said Mr. Walker. “The property offers convenient access to shopping via the amenities including bike storage and private parking, and one of the best Located at 1988 Martin Luther King Jr. Way, The New Californian is favorable terms. ground floor Trader Joe’s, numerous I-80/I-580).” is walking distance to the downtown area, which offers residents easy access to restaurants, shops and the Downtown Berkeley BART station. …continued on page 22 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN Structured Finance team has secured along with its proximity to UC Berkeley and various methods of who originally built the project in CBRE Capital Markets’ Debt & given the quality of construction, G 16 20 21 Latest Commercial Deals NorthMarq Capital’s Los Angeles office arranges $4.2 million refinance of Laguna Palms in Elk Grove, CA Blake Melstrom, vice president of NorthMarq Capital’s Los Angeles office arranged the $4.2 million refinance of Laguna Palms, a 23,869 sq. ft. retail property located at 9105 Bruceville Road in Elk Grove, California. The located at the subject consisted of transaction was structured with a 15- local “mom and pop” businesses,” year term and 25-year amortization said Melstrom. “Although there was a schedule. NorthMarq arranged potential for significant tenant rollover financing for the borrower through its during the first two years of the loan correspondent relationship with a life term, the lender offered a 15-year insurance company. The property’s fixed rate, nonrecourse loan.” major tenants include US Post Office and Goodwill. “The subject is shadow-anchored by Target, but most of the tenants Special Thanks to our 2016 President’s Council Sponsors www.CMGFI.com Affinity Program www.bankersInsuranceService.com Your Continued Support for California’s Real Estate Finance Industry is Greatly Appreciated! SP RI N G 16 20 22 CALIFORNIA MORTGAGE FINANCE NEWS Download the California MBA Mobile Events App and Maximize Your Conference Experience! CALIFORNIA MORTGAGE FINANCE NEWS SP R IN Use the QR code above or search “CMBA Events” in the Apple or Google App Store G 16 20 23 RESIDENTIAL New Statute Provides Mandatory Requirements For Demurrers and Amendments Following Sustained Demurrers1 by CHRISTINE E. HOWSON, W ith the virtual tidal wave of when a pleading (most often a Complaint) is lawsuits since 2008 seeking successfully challenged by a Demurrer. to challenge foreclosure The new requirements and limitations set Senior Litigation proceedings, it cannot reasonably be denied forth in Section 430.41 apply in connection Attorney, The Wolf Firm, that the Courts have been on the receiving with all Demurrers filed in civil actions in A Law Corporation end of vastly larger numbers of Demurrers. California state courts except: (1) in proceedings 2 The filing of Demurrers by lenders, servicers for unlawful detainer, forcible entry or forcible and foreclosure trustees to borrowers’ detainer, or (2) actions in which a party not Complaints seeking to stop, stall or challenge represented by counsel is incarcerated. foreclosure proceedings or alleging defects in the origination of their loans, is oftentimes the MANDATORY MEET AND CONFER first line of defense in such cases. Unlike other REQUIREMENT, AND DECLARATION TO types of cases where Demurrers frequently ACCOMPANY DEMURRER have little impact on the ultimate outcome of the case, in mortgage lending cases Demurrers statute concern the requirement that the often result the dismissal of the case, or at demurring party and the party that filed the least severely limit the number of issues and objectionable pleading must meet and confer causes of action to be litigated. in person or by telephone at least five (5) In an effort to calm the waters and reduce purpose of the meet and confer requirement added to the California Code of Civil Procedure is to determine whether an agreement can and became effective January 1, 2016. Section be reached that would resolve the objections 430.41 imposes a number of new mandatory (challenges) to the pleading that would be requirements in connection with the filing raised in the Demurrer. lesser impact, Section 430.41 also limits the number of post-Demurrer amendments RI N G 16 20 24 days before filing a demurrer. The statutory the number of Demurrers, Section 430.41 was of Demurrers. Furthermore, although with SP The most notable provisions in the new CALIFORNIA MORTGAGE FINANCE NEWS Section 403.41(a)(1) specifies the meet and confer obligations of the demurring …Demurrers continued on page 43 RESIDENTIAL No rest for the Weary (for Mortgage Lenders, that is…) JOSEPH LYNYAK, III, Partner, Dorsey & Whitney, LLP challenges presented by TRID, CMBA A leveled against the CFPB when it has provided members cannot take their foot off interpretative assistance. First, the CFPB will the compliance gas pedal. This is because our typically respond to inquiries by telephone, “friends” at the CFPB have announced their but has taken the position that no advice can examination priorities for 2016—which will be relied upon by the inquiring party. This continue to focus on significant compliance reluctance to provide any degree of advice that obligations for regulations the CFPB has can be relied upon places lenders in a constant adopted in the past two years. cycle of jeopardy. fter struggling for the last year with the Several valid complaints have been Unfortunately, many of the announced Second, despite having taken literally years compliance concerns implicate very difficult of discussions, the CFPB has refused to adopt a corporate decisions made by mortgage lenders temporary safe harbor for TRID violations that are that have attempted in good faith to achieve a identified. While Director Cordray has graciously reasonable degree of compliance—but absent agreed initially to “go easy” on compliance useful guidance from the CFPB—which has examinations for TRID compliance, the refusal almost uniformly refused to provide clear bright- of the CFGPB to address the industry’s very real line advice to the mortgage industry. implementation concerns leave open the door Besides the risk that the CFPB might directly examine you, a practical result of the CFPB’s examination agenda is the “trickle- to future lawsuits and has exacerbated buyback liability by secondary market purchasers. The reality of the current state of the KBYO down” regulatory effect—meaning that scheme is that significant emphasis currently California regulators may also focus on the same must be placed on post-closing quality control compliance obligations identified by the CFPB. to identify errors and to consider remedial Here is a short list of issues to review: alternatives, including consideration of borrower adjustments and secondary market repurchase TRID Implementation and Know Before You Owe demands. Moreover, because TRID is extremely (“KBYO”) Disclosures. transaction specific, it has increased the There continues to be numerous sensitivity of the KBYO disclosures to even unanswered questions regarding TRID minor changes in the terms of a loan program, implementation, ranging from permissible which means that proper management of error correction notices, redisclosure to programmatic changes to ensure the inclusion computational issues and LOS vendor concerns. …Weary continued on page 45 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN by G 16 20 25 Your Trusted Advocate “Highest Possible Peer Review Rating In Legal Ability and Ethical Standards” ---- Martindale-Hubbell Legal Directory All Aspects of Mortgage Banking and Servicing Representation n n n n n n n n Real Estate and Consumer Financial Services Litigation Defense of Lenders and Servicers Against Claims of Wrongful Foreclosure, Predatory Lending, and Unfair Competition Financial Fraud Recovery and Repurchase Disputes Title and Title Insurance Coverage Claims and Litigation Officers’ and Directors’ Liability and Professional Errors and Omissions Claims and Litigation Business and Commercial Lending Transactions and Lawsuits Creditor Representation in Bankruptcy Consumer Credit, Licensing, and State and Federal Regulatory Compliance Advice and Litigation Michael R. Pfeifer, Esq. Managing Partner (714) 703-9300 [email protected] www.Pfeiferlaw.com Pfeifer & de la Mora, LLP n 765 The City Drive South n Suite 380 n Orange, CA. 92868 RESIDENTIAL FFIEC Issues Updated IT Management Examination Handbook With Cybersecurity Risk Assessment Tools by MELISSA RICHARDS, A s the CFPB issues deep and highly technical rules for how residential mortgages are to be disclosed, Esq., CMB, Chief originated, serviced and reported on to Legal & Risk Officer regulatory agencies, the mortgage industry has HOLLIE LYSENG, invested a substantial amount of its capital in JD/MBA Candidate, IT Management Systems comprising advances laws and regulations so deep and technical that CMG Financial in technology, automation systems and data compliance cannot be assured without reliance security in order to operate in this Dodd-Frank on technology and data analytics; data integrity Act environment. and security; financial privacy; consumer-facing In November, 2015, the FFIEC joined the CFPB in highlighting the central importance of IT Management Systems for all sizes and transactional transparency; and UDAAP risk brought about by human discretion. The FFIEC’s Handbook comes in two parts. types of financial institutions by publishing The first part addresses IT Governance and its updated Information Technology “Enterprise Architecture.” Enterprise architecture Examination Handbook (Handbook), followed is the process that begins with the business need by its introduction of a new Cybersecurity and ends with an IT solution, creating closer Risk Assessment Tool with Guides for both partnership (integration) between business management and users (Assessment Tool). Last channels and IT management. Within that updated in June 2004, the Handbook provides framework, the Handbook calls for IT support much needed features reflecting the elevated and oversight to come from the institution’s role of IT Management in today’s challenging governing Board or Executive Management post-Dodd-Frank Act regulatory environment, team. It also calls for elevation of one or two as well as the increasing threat of cyber attacks executive management officials from IT–Chief on financial services industries. Information/Technology Officer and a new rank, Together, these FFIEC guides reflect the the Chief Information Security Officer (CISO). changing focal points for regulatory examiners …FFIEC continued on page 46 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN for the foreseeable future—consumer protection G 16 20 27 COMMERCIAL Market Value in Adaptive Re-use Projects MAI, FRICS, President I into creative office. “So please appraise the for the proposed use? Has a market & CEO, Curtis- property…and we need it in two weeks.” study been performed to measure by DAVID ROSENTHAL, Rosenthal, Inc. t seems like a simple request. The allowing greater density and lower parking borrower is purchasing an industrial requirements than new construction. building and they plan to renovate it A simple request, but not always such a 2. Market Study—Is there market demand market demand and analyze current and simple execution. The ease of completing this projected market supply? What level of appraisal assignment depends on whether market pricing is supported based on the borrower and the lender have done their an analysis of demand and supply in the homework. Here is a primer on the questions current market? How long will it take to ask and the due diligence that should be to absorb the re-configured space? If completed before an appraiser is engaged. no market study has been done, is the 1. Entitlements—Is the proposed use of appraiser expected to do that as part of the property allowable under the current their appraisal in order to support the zoning? If so, is it allowed by-right, or economics of the proposed use? This can does it need discretionary approval such result in a significantly more expensive and as a Conditional Use Permit? If it is not time consuming appraisal if the appraiser currently allowed, then what steps must needs to include a market study in the be taken in order to achieve entitlements Scope of Work for their appraisal. to build the proposed use? Does the 3. Development Cost Pro Forma—Has City support this type of re-use of the the developer prepared their own property? How long will it take to get construction cost pro forma? If so, is entitlements? What will it cost? Are it based on their own expertise or on there neighborhood groups that might third-party contractor estimates? Does oppose the proposed use? If so, what is the cost pro forma provide for all hard the likelihood of getting them to approve and soft costs, including all carrying costs the use? How long will that take? In throughout the project? Do the cost some jurisdictions, adaptive re-use is estimates appear reasonable? Do they encouraged. For example, the City of Los consider current trends in material costs? Angeles has an adaptive re-use ordinance Have they secured a guaranteed maximum that provides incentives for property SP owners in adaptive re-use projects by RI N G 16 20 28 CALIFORNIA MORTGAGE FINANCE NEWS …Re-use Projects continued on page 47 COMMERCIAL California Public Policy Concerns In Drafting Contracts Peeler & Garrett, LLP T by sophisticated parties, may not be enforceable obligated to pay rent for the full ten-year BRIAN L. HOLMAN, if a court determines that such provisions violate term of the Lease because the co-tenancy Partner, Musick, California public policy. In Grand Prospect Partners, provisions authorizing rent abatement Peeler & Garrett, LLP L.P. vs. Ross Dress for Less Inc., 232 Cal. App. 4th and termination were unconscionable or 1332 (2015), the Court determined that certain alternately constituted an unreasonable co-tenancy provisions in a Commercial Retail penalty. The trial court had agreed with Shopping Center Lease were unconscionable, both contentions, finding Ross liable for constituted an unreasonable penalty, and thus $672,100.00 in unpaid rent and $3,100,000.00 were not binding on the landlord. Similarly, in in other damages caused by the termination. California Bank and Trust vs. DelPonti, 232 Cal. The Court of Appeal upheld the trial court’s App. 4th 162 (2014), the Court determined finding as to Ross’s liability for unpaid rent, that a guarantor’s waiver of certain defenses finding that the rent abatement constituted an in a commercial guaranty of a commercial loan unreasonable penalty, but determined that the violated public policy and was unenforceable. lease termination provisions were enforceable. ROBERT M. ZELLER, Partner, Musick, wo recent cases underscore the terminated the lease after the twelve-month proposition that certain California cure period expired. contract provisions, even if negotiated In Grand Prospect, Ross Dress for Less The landlord claimed that Ross was The Court of Appeal modified the judgment Inc. had negotiated a co-tenancy provision to delete the $3,100,000.00 award for other that provided that Ross’s obligation to open a damages. In analyzing the lease, the Court store and pay rent in the shopping center was noted that the parties were “sophisticated conditioned on Mervyn’s operating a store in and experienced” and that “Grand Prospect’s the shopping center on the commencement decision to approach Ross first, about renting date of the Lease; further, the Lease granted the space, was a free and unpressured choice.” Ross the option to terminate if Mervyn’s Grand Prospect, 232 Cal. App. 4th at 1337. ceased operations and was not replaced by an The Court noted that as a general rule, “a acceptable retailer within twelve months. The contractual provision is an unenforceable opening co-tenancy provision was not satisfied penalty under California law if the value of because Mervyn’s filed for bankruptcy and the property forfeited under the provision closed its doors in 2008. As authorized by the bears no reasonable relationship to the range lease, Ross took possession of the space but never opened for business, never paid rent and …Drafting Contracts continued on page 48 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN by G 16 20 29 Chairman’s Corner continued from page 6… AB 244—DECEASED BORROWER & SUCCESSOR IN INTEREST—HBOR That’s a big change for such a small insertion. AB 244 would introduce a By definition, HBOR’s “foreclosure rules to successors in interest once prevention alternative” for distressed a servicer confirms the successor California Homeowner Bill of Rights borrowers, a fundamental principle of in interest’s identity and ownership (HBOR). In a nutshell, it would have its existence, means a first lien loan interest in the property, 2) adopt rules extended the rights and benefits modification or another available loss for how a mortgage servicer confirms of the HBOR to successors in mitigation option. So that makes a a successor in interest’s status, and interest, including consideration for loan modification an amendment to 3) ensure that to the extent the a foreclosure prevention alternative, the original mortgage. Successors in mortgage servicing rules apply to providing a single point of contact interest who were not a party to the successors in interest that the rules and access to a private right of original mortgage contract but wished apply with respect to all successors action, with draconian penalties. to become the borrower would be in interest who acquire an ownership The bill applied to any successor granted an opportunity under AB 244 interest in a transfer protected from in interest who was a personal to seek a modification of the mortgage acceleration and foreclosure. representative, a spouse, a joint they weren’t a part of. In reality, if a tenant, a trustee or beneficiary. successor in interest is defined as the 244. The bill was set for a hearing in borrower, as AB 244 did, and wants a the Assembly Committee on Banking foreclosure prevention alternative, it and Finance, but facing strong becomes a new loan to a new person opposition, which included efforts rather than a modification of the from the California MBA and its original mortgage contract for the members, the author requested it be original borrower. pulled from the hearing agenda. JOIN And California lawmakers aren’t mba.org/maa pulse, tinkering with this topic, looking means we are part of a fast-moving for improvements. discussion that you’ll either be a part of or a victim of. Those are the stakes. The staff and the board of extensively on this issue at the directors of the California Mortgage federal level. In July 2014, it issued Bankers Association take pride in a clarifying rule saying, essentially, representing its member partners. that a successor can be added to We’re there to provide legislators a mortgage without triggering the with a deep understanding of ability-to-pay rule if the successor the finance industry and ensure satisfies a two-part test: 1) previously regulation proposed at the state acquired property (i.e. trust or divorce) capitol does not interfere with the and 2) agrees to take on the debt efficient flow of capital to consumers. obligation. The CFPB’s next step Thank you for your continued support was to release pending regulations through membership! for public comment that would amend the national mortgage serving standards found in the RESPA and RI N As you can see, representing the industry before the Legislature Protection Bureau (CFPB) has acted The LARGER the group. The LOUDER the voice.℠ The California MBA opposed AB the only ones with their finger on this The Consumer Financial G 16 20 30 1) apply all of the mortgage servicing “successor in interest” clause in the MAKE A DIFFERENCE! SP TILA. These amendments propose to CALIFORNIA MORTGAGE FINANCE NEWS Mark your calendars now! Save the Date for our 2016 Conference and Events! HOSTED BY MARCH 10, 2016 San Diego After Hours Offices of TCV, San Diego, CA 44th Annual Western Secondary Market Conference (continued) GOLD SILVER MARCH 16, 2016 Compliance Workshop Marriott Orange County, Irvine, CA California MBA Legislative Day Citizen Hotel, Sacramento, CA Register now at www.CMBA.com! For a full list of all of our sponsors, go to www.CMBA.com! SPONSORED BY BuckleySandler, LLP National Mortgage Insurance Corp. (National MI) DropIn, Inc. Newmark Realty Capital, Inc. Got Appraisals Property Sciences Guild Mortgage Company Quicken Loans Incal Associates Severson & Werson JULY 25–27, 2016 44th Annual Western Secondary Market Conference Westin St. Francis Hotel, San Francisco, CA Register now at www.CMBA.com! For a full list of all of our sponsors, go to www.CMBA.com! PLATINUM BRONZE Citadel Servicing Corp., Comerica Bank, The StoneHill Group, Inc. APRIL 4, 2016 Alight, Inc. AUGUST 14–16, 2016 21st Annual Western States Loan Servicing Conference Westin San Diego Gaslamp Quarter, San Diego, CA Register now at www.CMBA.com! For a full list of all of our sponsors, go to www.CMBA.com! PLATINUM TITANIUM GOLD SILVER Asset Valuation & Marketing, Inc., NCP Solutions, SWBC (Southwest Business Corporation), TCV (Transcontinental Valuations) SEPTEMBER 7-9, 2016 19th Annual Western States CREF Conference Wynn Las Vegas, Las Vegas, NV Register now at www.CMBA.com! For a full list of all of our sponsors, go to www.CMBA.com! PLATINUM GOLD TITANIUM CALIFORNIA MORTGAGE FINANCE NEWS SP R IN G 16 20 31 Welcome to the California MBA family! NEW MEMBERS BANC HOME LOANS FREEDOM MORTGAGE MORRISON & FOERSTER, LLP Residential Mortgage Banker Residential Mortgage Banker Industry Professional Advisor Irvine, CA Mount Laurel, NJ San Francisco, CA BB&T CORRESPONDENT LENDING GLOBAL LENDERS, INC. SCHEER LAW GROUP, LLP Residential Mortgage Banker Commercial/Multi-family Mortgage Industry Professional Advisor Norcross, GA Banker San Rafael, CA San Diego, CA BOHM WILDISH, LLP STERLING CLAIMS MANAGEMENT, Industry Professional Advisor HUNT MORTGAGE GROUP INC. Costa Mesa, CA Commercial/Multi-family Mortgage Industry Professional Advisor Banker San Diego, CA DUANE MORRIS, LLC Irvine, CA Industry Professional Advisor San Francisco, CA Chairman’s Corner continued from page 7… Well it is an election year and the respective Chairs for each of the industry’s most valuable regional there is no escape from politics! In our major conferences. The Western conferences and certainly hope that 2016 we are also offering you more Secondary Market Conference you join us in 2016. opportunities to be involved with (July 25–27) will be Chaired by Bill our political action committee as Lowman, President, American Pacific we’ll start off the year with a big we prepare for the 2016 election Mortgage. Our Western States thank you to Chris George for CMG cycle. The funds raised for our PAC Loan Servicing Conference (August Financial’s continued support through are used to support candidates who 14–16) will be co-chaired once the President’s Council; thank you for understand the value that a healthy again by Don Curtis, Senior Vice rejoining in 2016! real estate finance market brings to President, Business Solutions, OSC/ the state’s overall economy. If you Breckenridge Insurance Group and are interested in joining the efforts to Wes Iseley, Senior Managing Director strengthen our political involvement at Carrington Mortgage Services. And by helping organize PAC fundraising our signature commercial mortgage events and appeals, please contact me event, the Western States Commercial ([email protected]) and I’ll share with Real Estate Finance Conference you what we are planning for this year. (September 7–9) will be chaired All of the planning committees SP by Ryan Chapman, Vice President for our annual conferences are kicking Capital Markets at Walker & Dunlop. into gear and I’d like to announce We are pleased to present some of RI N INDUSTRY NEWS MEMBERSHIP CONFERENCE INFO RESOURCES And Much More! Visit us on the web @ G 16 20 32 Finally and with sincere gratitude CALIFORNIA MORTGAGE FINANCE NEWS www.cmba.com Legislative Report continued from page 8… SB 602—CALIFORNIA opposition in the Assembly, SB 602 seek a modification of the mortgage EARTHQUAKE AUTHORITY did not pass prior to the Legislature they weren’t a part of. Ultimately, if SEISMIC SAFETY RETROFIT adjourning in 2015, but it is eligible to a successor in interest is defined as FINANCING SUPER LIENS be voted on in 2016. the borrower, as is done in AB 244, SB 602 would allow the and desires a foreclosure prevention California Earthquake Authority AB 244—DECEASED BORROWER & alternative, it’s really a new loan to a (CEA) to offer seismic strengthening SUCCESSOR IN INTEREST—HBOR new person rather than a modification retrofits and the financing for those AB 244 would have included of the original mortgage contract for retrofits. Under the proposal, the a “Successor in Interest” under CEA would be given super-priority the definition of borrower for lien status and repayment of the the purposes of the California Protection Bureau (CFPB) has acted loan is accomplished through a tax Homeowner Bill of Rights (HBOR). extensively on this issue at the assessment itemized within the The bill extended the rights and Federal level. It issued implementation borrower’s local property tax billing. benefits of the HBOR to successors guidance in October of 2013 Because repayment is treated as a in interest, including consideration for for lenders to maintain policies tax assessment, the lien associated a foreclosure prevention alternative, and procedures to identify and with the improvement is granted providing a single point of contact communicate with the successor super-priority status. These methods and access to a private right of action in interest of a deceased borrower. of finance, sometimes referred with draconian penalties. The bill The CFPB issued a clarifying rule in to as Property Assessed Clean applies to any successor in interest July 2014 saying, essentially, that a Energy (PACE) loans, have received natural person who is a personal successor can be added to a mortgage considerable attention by the Federal representative, a spouse, a joint without triggering Ability-to-Pay Rule Housing Finance Agency (FHFA), tenant, or a trustee or beneficiary. if successor satisfies a two-part test: 1) the regulator for the government The California MBA opposes AB 244. previously acquired property (i.e., trust sponsored entities (GSEs). While SB The bill was set for a January hearing or divorce); and 2) agrees to take on 602 relates to seismic strengthening in the Assembly Committee on the debt obligation. Further, the CFPB improvements and not clean energy, Banking and Finance but facing strong has released pending regulations for the methodology for funding the opposition, the author requested it be public comment that would amend the seismic strengthening improvement pulled from the hearing agenda. national mortgage serving standards is identical. A letter from the FHFA A fundamental principle of the original borrower. The Consumer Financial found in the RESPA and TILA. These expressed concerns with the bill the HBOR is the consideration of amendments propose to: 1) apply all and compared the products that foreclosure prevention alternatives for of the mortgage servicing rules to would result to the PACE program. distressed borrowers. By definition, successors in interest once a servicer The California MBA has an oppose “foreclosure prevention alternative” confirms the successor in interest’s unless amended position on SB 602 means a first lien loan modification identity and ownership interest and is working with other housing or another available loss mitigation in the property; 2) adopt rules for related industry groups in an effort to option. As such, a loan modification how a mortgage servicer confirms remove the super lien priority status is an amendment to the original a successor in interest’s status; and for the CEA seismic strengthening mortgage. Successors in interest 3) ensure that to the extent the improvement loans described in the wishing to become the borrower, mortgage servicing rules apply to bill and instead allow for a lien that who were not a party to the original successors in interest that the rules has the force, effect, and priority mortgage contract, would be granted of a judgment lien. Facing strong an opportunity under AB 244 to …Legislative Report continued on page 34 Legislative Report continued from page 33… apply with respect to all successors will include language similar to the at re-writing or updating the entire in interest who acquire an ownership language in AB 99. CFLL because it covers such a broad interest in a transfer protected from acceleration and foreclosure. AB 99—FORGIVEN MORTGAGE group of financial products and types AB 268—CALIFORNIA FINANCE of lenders. As an example, the bill was LENDERS LAW—CONSUMER amended early in 2016 to require a LOANS 48 month examination schedule for DEBT AND BORROWER STATE TAX RELIEF Under the California Finance Lenders Law (CFLL) there are that the Chair is reviewing is moving restrictive interest rate and fee caps real estate lending out of the CFLL so AB 99 because it would have for consumer loans of less than a bona that only the Residential Mortgage extended important state tax relief to fide principal amount of $2,500. AB Lending Act would cover real property borrowers, in conformity with federal 268 originally would have repealed secured loans/licensees. Other issues law, who are not required to report those consumer loan provisions and of interest to mortgage lenders the amount of debt forgiven by a instead required the commissioner include expanding size and types of lender resulting from a negotiated to establish an installment loan loans covered by interest rate and fee short sale or principal reduction. By rate review process for licensees caps and redefining the statutory term extending the sunset date for this that intend to offer unsecured full “bona fide principal amount.” tax relief to January 1, 2015, AB 99 amortizing installment loans of a would have eliminated a significant minimum principal amount upon impediment for homeowners seeking origination of at least $300 and a viable alternatives to foreclosure maximum principal amount of $2,500. during these tough economic The current statutory interest rate and times. When debt is forgiven by fee restrictions make it difficult for a lender as part of an agreement CFLL licensees to offer these types of with a borrower using the short sale small loans to consumers. The California MBA supported process or a principal reduction, the SP Save the Date for our 2016 Conference Season! The author of AB 268, who is also borrower should not be penalized Chair of the Assembly Committee on on their state income taxes. Many Banking and Finance, made the bill a borrowers, who faced foreclosure two-year bill, which means it did not last year and successfully negotiated move in 2015 but can be brought a loan modification, may well find up again in 2016. The author has themselves once again unable to expressed a desire to update/revamp make their mortgage payment if the CFLL, with a focus on expanding they are saddled with a tax burden the ability of licensees to offer small resulting from forgiven debt. AB 99 loans to consumers in need while passed out of the Legislature but was still providing consumer protections vetoed by the Governor along with for credit challenged borrowers. He several other bills offering tax credits. held a series of meetings on this topic In vetoing these bills he referenced that we attended and plans to have a the prospect of over $1 billion in cuts legislative proposal on the topic that for next year’s state budget. It is likely will be amended into AB 268. Even that a new bill on forgiven mortgage though the effort is focused on small debt will be introduced in 2016 that loans, it is also clear that he is looking RI N G 16 20 34 CFLL licensees. One of the concepts CALIFORNIA MORTGAGE FINANCE NEWS Annual Legislative Day April 4, 2016 | Sheraton Grand | Sacramento 44th Annual Western Secondary Market Conference July 25-27, 2016 | Westin St. Francis San Francisco 21st Annual Western States Loan Servicing Conf. August 14-16, 2016 | Westin Gaslamp San Diego 19th Annual Western States CREF Conference September 7-9, 2016 | Wynn Las Vegas Annual Legal Issues Conference December TBA | Costa Mesa www.CMBA.com/Events Media & Marketing continued from page 11… Connection is a two-way street—be your employees in their accessible! environment. • Frankly, there is no reason Speaking about employees— to have a presence on any EMPOWER them to drive your social media platforms if you brand’s voice! aren’t committed to having a • Nothing sucks the fun out of conversation with other users. a social media platform more Search Engine Watch reports than reading something that that more than 70% of Twitter looks like it was drafted by users expect a response from an outside PR firm, picked a brand they interact with. Of apart by a dozen executives, those, 65% expect a response approved by attorneys, and within 2 hours; 86% expect a posted with no context. Utilize same-day response. Don’t miss your employees to speak the opportunity to provide your brand’s message in their your future customer helpful own voice. Find those who (remember that content is understand your company and king in social media—you must encourage them to be your provide value!) information brand ambassador within their that earns their trust and builds own social networks. loyalty, and helps make you the • • PEAK FINANCE COMPANY IS EXPANDING ITS CORPORATE FOOTPRINT • voice must be broad and be future. carried by more than just the Pull back the curtain—nothing company’s official Twitter makes you more authentic or Instagram account. By than allowing your audience having employees affirm your to get a behind-the-scenes message and contribute to the look at your company. This conversation themselves, you’ll can be a powerful way you put reach more people without a human face on your brand. having to spend all of your Today’s consumer doesn’t precious time on social media. they want to know that the company they do business with cares about their employees, their customers, and their community. Here’s a chance to show your “fun” side without sacrificing your integrity—take We look forward to exploring possible M&A opportunities with you. Your brand’s authentic go-to brand for advice in the just want the lowest price— We have the Capital, Leadership and Experience to move ahead. Join us as we continue to grow. While building and executing a successful social media presence is indeed a challenging journey, in many ways it should be natural and unforced. Don’t over-complicate things—be authentic and real with your customers and they will reward you. CALL TODAY 818-206-2352 OR CONTACT US AT [email protected] a group photo with employees enjoying each other at an event. Be transparent: post a short video (think raw, not professionally edited) featuring www.peakfinanceco.com www.peakcorp.com CalBRE 01765521 NMLS ID 252640 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN • G 16 20 35 Market knowledge, experience and financial strength. 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CIBC Capital Markets is a trademark brand name under which different legal entities provide different services under this umbrella brand. Products and/or services offered through CIBC Capital Markets include products and/or services offered by the Canadian Imperial Bank of Commerce, the parent bank of CIBC World Markets Inc. and various other subsidiaries of the Canadian Imperial Bank of Commerce. CIBC World Markets Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. CIBC World Markets Corp. is a member of the Financial Industry Regulatory Authority. CIBC Capital Markets and the CIBC Cube Design are trademarks of CIBC, used under license by CIBC World Markets Inc. SP CIBC Capital Markets and the CIBC Cube Design are trademarks of CIBC, used under license by CIBC World Markets Inc. RI N G 16 20 36 CALIFORNIA MORTGAGE FINANCE NEWS Roundtable continued from page 14… appraisers in California. As the older Valuation Advocacy Association building stronger partnerships segment of appraisers retire there is (REVAA) who lobby for positive with the appraisers that they work not enough new blood to replenish change for the industry. REVAA with. Inevitably, appraisers will find the system. monitors public policy and serves as themselves in a “buyer’s market” an important resource to federal and for their services, and the clients relationships with appraisers in the state regulators and policymakers, that treat them well and pay them industry will be a core competency and issues such as creating solutions fairly will be rewarded with strong that AMC’s must develop and regarding the attrition of appraisers partnerships that allow to offer enhance. Those relationships are are top agenda items. excellent service levels regardless of Pickell: Developing strong strengthened by showing respect Tallinger: There is no doubt the shrinking appraiser population. to the appraiser for their expertise, that the shrinking population of by paying the appraisers quickly for appraisers will have an impact on the Q: HOW HAS THE completed files, by involving them mortgage banking industry. It’s very IMPLEMENTATION OF TRID in forums or seminars at appraiser surprising that there has not been EFFECTED THE “REASONABLE related events. These types of actions more discussion industry wide about AND CUSTOMARY” FEES PAID will ensure that those appraisers who the lack of new blood coming into the TO APPRAISERS ON A NATIONAL continue in the business want to work appraisal field. If the situation remains LEVEL? with the respective AMC. Until there status quo for the next couple of years Tallinger: TRID has been a is an influx of new appraisers in the there will be a steady trickle down that polarizing topic throughout the industry however, the lending industry will begin to affect lenders, originators, mortgage industry because it has will potentially be impacted on the AMC’s, and inevitably borrowers. affected different types of service delivery of appraisals once a critical Just based on the principles providers in different ways. Many mass is met of appraisers leaving of supply and demand, the cost of lenders and originators have seen the industry. Being a company that appraisals will begin to increase and their loan pipeline slow down develops these strong relationships the turnaround time for appraisals significantly because TRID has and attracts those remaining will be extended. Logically, appraisers affected so many different aspects appraisers will be a competitive will choose to work with the lenders of their operations. TRID packaged advantage as well as being a lender and AMCs that are paying the highest in so many changes that had to be who utilizes this type of an AMC. wages and are the easiest to work with. implemented at the same time that AMCs offer newer appraisers the The attrition of appraisers could it’s been difficult for many lenders opportunity to do assignments which also lead to lenders to rely more to proceed with “business as usual” are not generally available to the typical heavily on alternative valuation because so many resources had to be independent fee appraiser. These products to help make their risk based allocated to comply with TRID. There assignments include… Quality Control lending decisions. If an undersupply are certainly some lenders who were work, non-lending appraisal related of quality appraisers results in able to weather the storm of TRID work (comparing appraisal reports extended turn times, lenders could with minimal effect on their day to on the same property and identifying seek out valuation tools that may not day operations. deficiencies or discrepancies between be as comprehensive as traditional the reports; assisting more experienced appraisals, but offer what they standpoint, the implementation of appraisal staff with expert witness/ deem to be satisfactory valuation TRID has actually simplified our litigation work). information in a timely manner. operations and has been a welcome trade associations like the Real Estate Forward thinking AMCs and lenders will likely try to focus on …Roundtable Article continued on page 38 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN Also, AMCs can join non-profit Speaking from an AMC G 16 20 37 Roundtable continued from page 37… change. TRID has in essence forced AMC margins may be higher for some type of knowledge, or knowing where AMCs to get it right the first time. appraisals, however, there are many to get the answer, is invaluable. We have encouraged our clients to appraisals where the AMC loses money. The independent appraisers look adopt the new County-by-County In the time before TRID, AMCs for answers on how to deal with pricing model that we have developed could go back to the originator problems from their AMC in those to comply with TRID guidelines. and ask for a higher fee if the local instances where the appraiser may not Under this model, not only are appraisers deemed that the fee should have dealt with this type of problem. appraisers being paid fairly based on be higher. Now in the TRID era AMCs Mutual respect is gained when an what is customary and reasonable can only go back to the lender if there AMC can offer sound advice based for their market, but borrowers are is a “change of circumstance”. on similar situations from the past or, also being charged fairly based on We have found that TRID has what appraisals cost in their specific generally not impacted customary and can get advice from other very market. The borrower in a densely reasonable fees paid to appraisers. experienced appraisers. populated suburban area is no longer In fact most appraisers are unaware being asked to pay a higher fee to of TRID since it does not affect their among peers is the best way to help offset the cost for the high priced fee or change how an appraisal is learn and unfortunately with many appraisal that is ordered in a difficult to be completed. TRID has affected large institutions dissolving their in rural market in their same state. We AMCs much more than appraisers. If house appraisal departments, that decided that it was important that appraisers in a particular geographic knowledge is not disseminated as our borrowers were being charged area command a higher fee, they will easily as it once was, then shared fairly based on what it costs to get an be paid accordingly regardless of the over and over. Social media does help appraisal completed in their market. appraisal fee paid by the borrower. with sharing information, but the Not based on an inflated statewide The reason for the higher fee may be appraisers must go to those sites and fee that penalizes the average due to the assignment being complex take the time to participate in Q&A borrower to compensate for higher or it could simply be a supply and forums. Most don’t have that luxury priced appraisals in more difficult/ demand issue that exists because the of time. One on one training and complex markets. subject property is located in an area discussions are truly the best form of where there is a lack of appraisers and training that can be offered. Statham: We have listened to many folks on the origination side a great deal of real estate activity. that are less than thrilled about the Also, what about a scholarship challenges that TRID has brought Q: HOW CAN APPRAISAL FIRMS Or a social media campaign? about. While many agree that TRID ENCOURAGE MILLENNIALS Appraisal Firms have a challenge generally benefits the borrower from TO CONSIDER JOINING THE in the industry in that many lenders a transparency standpoint, it has also INDUSTRY?” will not accept appraisals completed Pickell: AMCs should have by trainee appraisers, even if a appraisal fees which partially offsets appraisers on staff to offer peer certified appraiser, as supervisory the benefit. assistance to those appraisers which appraiser, signs the report and may have questions on how to deal inspected both the subject property of TRID, many AMCs raised fees to with a challenging situation. AMC’s and the comparables. Currently, a compensate for the inability to go back absolutely need to have experienced trainee must complete at minimum to the originator with a higher fee once appraisers on staff to offer assistance 2500 hours of mentorship before the appraisal fee has been disclosed on challenging issues that come up to the borrower. This means that daily. Having individuals with that With the October 2015 onset RI N G 16 20 38 Knowledge being shared program? led to somewhat higher standard SP through relationships in the industry, CALIFORNIA MORTGAGE FINANCE NEWS …Roundtable Article continued on page 39 Roundtable continued from page 38… being allowed to become fully licensed or certified and that person but within the next 5–10 years it will. Statham: This is a question that it is today and continue to watch the number of appraisers decline, must hold a college degree. The we have asked ourselves over and appraisal fees increase, and the time regulatory environment needs to over again. We have spoken with it takes to close loans extended due analyze some of these requirements many of our peers in the industry, and to the additional workload of the to make the industry more attractive. this really comes down to recruiting, remaining appraisers. In addition, the lending industry Tallinger: This is a difficult training and acceptance. As an and regulatory environment will need appraisal management company, Got question to answer. The barrier to to come together to accept appraisals Appraisals has been taking a proactive entry into the appraisal industry completed by newer individuals to approach. We have been working to right now is very high. To become a the industry (trainees) with proper develop a training program to bring Certified Appraiser in the State of supervision. As more and more new appraisers into the industry. Michigan right now the requirements individuals leave the industry due to The next step is working with our include: completion of 200 hours retirement, health, or other reasons, lender clients to get them to accept of appraisal classes, obtaining the principle of supply and demand appraisals that are completed by 2,500 hours of supervised appraisal will eventually kick in and appraisal these appraisers with the oversight of experience with a Certified Appraiser fees will rise across the industry. certified appraisers. (must be completed over a course This will more than likely prompt This process will add new of at least 24 months,) having an the younger generations to view the appraisers to the industry and give Associate degree or higher, and appraisal industry as attractive and the proper motivation by allowing passing a state appraisal exam. begin to infiltrate it. Right now, the them to make a living as their challenge for an individual entering experience grows. In addition, the stringent than what is required to the industry is finding an appraiser formal training program will ensure become a licensed loan originator, willing to train and mentor and to pay the new appraisers are receiving an account executive for a wholesale that trainee appraiser money during the proper guidance, training and lender, or a licensed real estate that mentorship period. AMC’s could experience. Due to the numerous agent. All of which can offer a higher be a solution to this if they have layers of quality control from the income opportunity/ceiling than that clients willing to accept appraisal supervisory appraiser, AMC and the of a Certified Appraiser with far less reports completed by trainees. The lender’s underwriting process, there training and experience. large institutions which in the past is no elevated risk by accepting these had excellent appraisal departments appraisals. If anything there will be may be far easier for most people with appraiser training are gone. Many an even more stringent review at the to obtain an Associate’s degree or a of the appraisers working today were appraisal firm’s level. Bachelor’s degree in a field that offers products of those programs and there These requirements are far more We also want to go back Logic would also dictate that it good pay and stability, without having has been a vacuum in this area for the to the response on the first to spend an additional two years past 20+ years. Appraisal firms are question. Removing the college apprenticing to become an appraiser. typically smaller organizations without degree component from the list of the financial resources to develop a requirements to become an appraiser appraisal licensing laws have created full training program, but they may would help entice those who are a stacked deck those who hope to train an individual occasionally. The interested in a solid career, without attract fresh blood into the industry. lack of attraction to the younger the time and expense associated with That being said, there are very good generation in the industry will soon be a 4-year degree. Or as an industry, felt. It has not hit critical mass just yet we can keep everything the way that It is clear that the current CALIFORNIA MORTGAGE FINANCE NEWS SP R IN …Roundtable Article continued on page 40 G 16 20 39 Roundtable continued from page 39… opportunities now and in the near future for appraisers to build a solid, sustainable business that lets them work for themselves and earn a nice Focus. Foresight. Follow Through. living financially. Appraisal firms and AMCs would be wise to use the recent attrition of appraisers as a selling point to help attract millennials to consider joining the appraisal industry. Because there is a high demand for appraisers it is likely that new appraisers coming into the industry will face less competition for USFN and its member firms have been committed to elevating the industry standard for education and have been driving advocacy, collaboration and advancement within the default servicing industry for more than 25 years. With USFN as a constant guide and trusted partner, representing you in all 50 states, member firms are committed to delivering meaningful and measurable results for their clients every step of the way. . assignments and will have solid job security because they will constantly be in demand. Expect more. Demand the Best. Choose USFN. Subscribe to CALIFORNIA MBA’S official YOUTUBE CHANNEL (800) 635-6128 Loan Management & Servicing Seminar March 16-17 The Westin Galleria Dallas Dallas, TX SP RI N G 16 20 40 20603 USFN Ad CMBA Jan 2016 r1.indd 1 CALIFORNIA MORTGAGE FINANCE NEWS www.usfn.org Loan Management & Servicing Seminar June 8-10 Omni Charlotte Hotel Charlotte, NC Legal Issues in Mortgage Servicing Seminar July 7-8 Omni Chicago Hotel Chicago, IL 2/4/16 1:56 PM and get the latest video updates on breaking news, conference information, and membership product updates. Featured Residential continued from page 18… brokers will return the report to the appraisers and still serve both lender appraiser to look it over again and and borrower? While I don’t have a complete rebuttals, and make revisions specific solution, I think our industry on reported adjustments. is going to need to readdress the If the appraised value is indeed Market Shifts into High Gear as Independent Mortgage Bankers Rev Up Volume MORTGAGE FINANCE Summer 2015 Commercial Deals Make for Busy 2015 WHICH MARKETS WILL SOAR? appraisal relationship in the coming IN THIS ISSUE years to make sure that a) lenders more than just a wrench in the process. get an accurate and unbiased report In most cases, a typical mortgage firm on the property they are lending on, will lend based on the appraised (lower) and b) AMC’s and their appraiser value. Therefore, the difference in sales partners need the independence to price and appraised value will now provide quality service. I’m hoping this mean that the borrower will need to can serve as a starting point for our come in with the extra funds to close industry to begin discussing a problem the loan. For example, let’s say that the that needs to be addressed. Networking. Education. Connection. From the Beginning FROM THE EXECUTIVE DIRECTOR Top Trends to Look for in Commercial Lending in 2015 Vi sit THIS ISSSUE COMMERCIAL NEWS of the main reasons I’m a member in low. Since the loan has already been of the California MBA, and why I approved at 85%, and assuming the encourage folks in our industry to seller refuses to negotiate and sell join and be active in their mortgage for lower, the borrower now needs banking trade associations. It does us to pay the extra difference in value no good to grumble in private; only by and sales price. In this way the system constructively working together and can punish the borrower needlessly advocating for our companies through and puts the appraiser in an awkward partner groups like the California MBA position. As one of the many AMCs can we move forward and serve the that takes pride in following all the next generation of homeowners. the target value on purchase contracts and are asked to revisit the report and make changes, many will feel second-guessed and sense some level of pressure to hit that price. On the other hand, in such situations, I’m sure Have you updated your Membership Directory listing? lenders feel pressure to elevate the One of the benefits of your LTV to meet the updated valuation. California MBA membership While the new rules and guidelines are is inclusion in our online a major improvement, I believe change Membership Directory! is necessary. Like you, I’m sure that you Make sure your company’s agree that the system, as is, needs to be reformed. So what can be done? How can Have a new employee or have a star you’d like to highlight? www.CMBA.com price but the appraisal report comes know that when appraisers are given rniamba.com alifo w.c ww at A publication of us Coming May 2015! Contact [email protected] for editorial and advertising opportunities! Having this conversation is one rules of compliance and guidelines, I SEE PAGE 10 NEWS lower than the sale price, this can be loan was approved at 85% of the sales Great Opportunities Available in CMFN! Commercial members! Submit your latest deal for publication (FREE exposure!) Make yourself a subject matter expert by authoring an article! Contact Dustin Hobbs at [email protected] for more details! info is up to date! Email [email protected] for more information! CALIFORNIA MORTGAGE FINANCE NEWS SP R IN we protect the independence of G 16 20 41 Host a networking event at your office in 2016! Featured Commercial continued from page 19… Recession trough, and rental apartment California rental properties are less starts in 2015 were at the highest likely to default on their lease terms level since 1986. And while some and have a growing ability to pay rent. new buildings come with additional Both measures steadily improved over amenities, the typical apartment under the past three years. construction today is about 1,100 Get in front of potential customers and business partners! We take care of the marketing for you! Contact Carol Danaher at [email protected] for more details! Lease risk model data from square feet per unit—about the same CoreLogic shows that California size as in 1999 when measurement applicant lease scores have rapidly data were first compiled. improved: from an average applicant Even though vacancy rates are score of 329 in 2013 to 425 in 2015. the lowest in a generation, it’s natural A growing lease score suggests a to wonder whether there are enough greater likelihood to meet lease terms tenants to rent the increased supply without default. Combining bureau and of new apartments. Absorption data, lease-predictive non-bureau consumer which measure the occupancy rate of data, the company’s proprietary, newly completed apartments, indicate statistically validated lease risk score that demand has been sufficient to represents a substantial improvement lease the new units relatively quickly over scorecard models and “rules (see Exhibit 3). Three- and 6-month of thumb”—“old-school” screening absorption rates are at their highest methods that used to be rental levels in a decade. In fact, for rental housing providers’ primary methods of apartments completed during the measuring applicant lease default risk. second quarter of 2015, nearly two- Income per lease, as stated by thirds were rented within three months. the applicant, grew similarly over the The high level of new starts last same period among California rental year means that 2016 will have an applicants—from $6,307 per month even larger number of new apartment in 2013 to $8,307 per month income completions. In some local markets, in 2015. This growth reflects multiple the new supply has already alleviated factors, including more applicants tight conditions, leading to slower taking a roommate or applying with rent growth and greater availability a co-signor, as well as higher stated of apartments. More metros will income per person. experience rent moderation and vacancy California rental traffic rise in 2016, and competition for quality demonstrates an uncommon tenants among building managers will seasonality. In most markets around the intensify. While national data will likely country, the best-qualified applicants show relatively low vacancy rates and tend to apply in the busiest rental rent growth that’s faster than inflation, season—between April and September. some metro markets will begin to see In contrast, the end of the year marks ‘looser’ conditions. the time when the best-qualified rental applicants apply in California. For APPLICANT TRAFFIC IMPROVES SP Increasingly, applicants to RI N G 16 20 42 CALIFORNIA MORTGAGE FINANCE NEWS …Featured Commercial continued on page 43 Featured Commercial continued from page 42… Demurrers continued from page 24… three straight years, the fourth quarter is being challenged. The demurring of the new statute pertaining the meet party is required to: (1) “identify and confer process in connection with all causes of action it believes are Demurrers, Section 430.41 lacks any subject to demurrer” and (2) “identify mechanism to hold the parties or their with legal support the basis of the attorneys accountable for failing to deficiencies.” The party whose comply in good faith with the meet pleading is challenged must “provide and confer process. In fact, subdivision legal support for its position that (a)(4) of Section 430.41 states that the pleading is legally sufficient” “[a]ny determination that the meet and or identify how the pleading can confer process was insufficient shall be amended to cure the legal not be grounds to overrule or sustain insufficiency. Then, after the parties a demurrer.” Nonetheless, failing to file meet and confer, if an amended any Declaration regarding the outcome pleading is filed, the responding of the meet and confer process will party is required to meet and confer likely now result in Demurrers being again before filing a Demurrer to the overruled or taken off-calendar and amended pleading. not considered or, at the very least, average incomes and applicant scores among California rental applicants. MULTIFAMILY ORIGINATIONS The improving rental market conditions and low mortgage rate environment since the Great Recession has aided a rebound in lending on multifamily properties to record volumes. The resurgence in lending has been driven by property sales, refinance and new mezzanine debt placed on existing properties, and by permanent financing secured by newly completed structures. As an example of this increase, the company’s CommercialTrends data show that multifamily originations in California reached a new peak during 2015, with more dollars lent than in any preceding year. According to CommercialTrends data from CoreLogic, roughly 90 percent of the lending on multifamily properties occurs in the eight largest metropolitan areas in California, and just over one-half in the combined Los Angeles-AnaheimRiverside metropolitan areas (see Exhibit 4). Loan sizes vary substantially within and across areas, with many well below $1 million in size and some above $10 million. While it varies by metro area, approximately one-half of the dollar volume of loans originated during 2015 were $5 million or more in amount. With new completions coming on the market in 2016 and low mortgage rates supporting refinance, lending volumes may remain at similar levels in the coming year. Despite the mandatory language Alternatively, if as a result of continued until the demurring party the meet and confer process no complies with the statute. agreement is reached as to all of the objections to the pleading, a AUTOMATIC 30-DAY EXTENSION declaration by the demurring party OF TIME TO RESPOND IF, IN regarding the outcome of the meet GOOD FAITH, DEMURRING PARTY and confer process is required to UNABLE TO TIMELY MEET AND be filed at the time of the filing of CONFER the Demurrer. Section 430.41(a) If in good faith the parties are (3) specifies that the declaration is not able to meet and confer at least required to state either: five (5) days prior to the date the 1. The means by which the responsive pleading is due, Section demurring party met and 430.41 allows for the filing an initial conferred with the party who filed declaration by the demurring party the pleading subject to demurrer, prior to the date the responsive and that the parties did not pleading is due. The timely filing of reach an agreement resolving the that declaration invokes an automatic objections raised in the demurrer; 30-day extension of time for the or demurring party to respond. Section 2. That the party who filed the 430.41(a)(2) requires that this pleading subject to demurrer declaration state under penalty of failed to respond to the meet and perjury that: (1) a good faith attempt confer request of the demurring to meet and confer was made; and (2) party or otherwise failed to meet and confer in good faith. …Demurrers continued on page 44 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN marked the period with the highest party, and the party who’s pleading G 16 20 43 Demurrers continued from page 43… explain the reasons why the parties challenged pleading can be amended the courts. As a result, the drive could not meet and confer. The after a Demurrer is sustained. behind the new statute is to reduce statute also specifies that the 30-day Pursuant to Section 430.41(e), the number of Demurrers, and extension of time begins to run from the challenged pleading cannot be at the same time limit (albeit less the date the responsive pleading was amended more than three (3) times restrictively) the number of times previously due, and no default of the after the sustaining of a Demurrer; a pleading can be amended after a demurring party may not be taken however, the statute also provides a Demurrer is sustained. However, during the period of the automatic number of exceptions to this Three whether the positive results the 30-day extension. Lastly, the statute Amendment Rule. Those exceptions statute is intended to create will provides that “[a]ny further extensions are: (1) where the amendment is made ultimately outweigh its negatives shall be obtained by court order upon without leave of court pursuant to (i.e., more upfront costs and delays in a showing of good cause.” C.C.P 472 “provided the amendment bringing Demurrers, disputes as to the is made before a demurrer to the statute’s meaning and requirements, THE STATUTE’S “USE IT OR LOSE original complaint or cross-complaint and inconsistent interpretations and IT” PROVISION is made”; (2) where an offer is made to applications of it, etc.) will remain to the trial court of additional facts that be seen. If a Demurrer is sustained to a prior version of a pleading, the same can be pleaded which show “there demurring party may not assert as is a reasonable possibility the defect a few exceptions, Section 430.41 a ground for a Demurrer to a later can be cured to state a cause of will affect anyone filing Demurrers. version, any ground that could have action”; and (3) Section 430.41 does For the most part gone are the days been raised in that party’s earlier not pertain to amended pleadings or of simply planning the grounds for Demurrer. Since the standard set forth Demurrers after the case is at issue. a Demurrer less than five (5) days in Section 403.41(b) is whether the before it is due, and is also not hard grounds for the subsequent Demurrer COURT MAY ORDER A to imagine that a sharp rise in the could have been raised by demurrer “CONFERENCE OF THE PARTIES” filing of Motions For Judgment on the to the earlier version of the pleading WHEN DEMURRER SUSTAINED Pleadings will be seen. after that party’s earlier Demurrer was The new statute also allows the sustained, any portions of the prior Court to order a conference of the pleadings which are re-plead should parties after the Court sustains a be closely examined to determine if Demurrer. If such a conference is a Demurrer can be asserted as to any ordered by the Court, no amended later versions of the pleading. This Complaint or Cross-Complaint, or substantial limitation on the grounds Demurrer to an Amended Complaint for subsequent Demurrers was a or Cross-Complaint, may be filed until significant concern of opponents to after the conference. Furthermore, this new law. when such a conference is ordered, the time for the filing of a Demurrer to LIMITATIONS ON THE NUMBER the amended pleading does not begin OF AMENDMENTS TO THE until the conference is concluded. CHALLENGED PLEADING AFTER A DEMURRER IS SUSTAINED FINAL THOUGHTS The new statute provides a SP limit on the number of times the RI N Sponsors of this new law argued that Demurrers were clogging G 16 20 44 What is known is that, with only CALIFORNIA MORTGAGE FINANCE NEWS 1 2 This article is expanded from one that was published in the USFN e-Update (Nov./ Dec. 2015 Ed.). Similar in many respects to Motions to Dismiss challenging a pleading filed in federal court, Demurrers filed in California state court cases challenge the pleading of the Complaint (or Cross-Complaint or Answer). Weary continued from page 25… of any such changes in the KBYO disclosures is a requisite. Ability to Repay. Marketing Services Agreements. It does appear to be somewhat Candidly, this is a disaster. The CFPB surprising that the ability to repay or has telegraphed to the industry: (a) “ATR” rule is a continuing source of marketing service agreements (“MSAs) concern to the CFPB—due in no small are per se illegal (cutting through the which business decisions have created measure to the easy by which mortgage PC language the CFPB has been using); difficulties than when determining lenders can comply with their ATR (b) mortgage lenders need to review and negotiating loan originator (LO) obligations, such as by running a loan and likely undo MSAs; and (c) there compensation. Traditional paradigms applicant through the Fannie Mae or theoretically may be a way to structure for both in-house and third party Freddie Mac underwriting engines, etc. an acceptable MSA, but the CFPB has LO Compensation. There is probably no other area in compensation have had to be revised, From a compliance perspective, a categorically refused to tell us how. including compensation for producing lender may want to confirm that a loan managers and wholesale (i.e., loan file contains support that an originated to MSAs is contrary to the specific broker) LO compensation schemes. loan meets one of the several alternative authorization in Section 8 of RESPA, ways of complying with the ATR as well as decades of guidance issued that compensation agreements for all rule. While slightly more complicated by HUD addressing how a lender could personnel that directly “face” a loan procedures are necessary for loan properly construct an MSA. applicant will be closely reviewed and that does not qualify as being eligible compared to computations include on for purchase by the GSEs, supportive TRID disclosures. procedures would appear to address this in a clearly demonstrable manner. Until this issue is resolved (there is litigation challenging the CFPB’s …Weary continued on page 46 CALIFORNIA MORTGAGE FINANCE NEWS SP R IN Mortgage lenders should assume The CFPB’s legal position in regard G 16 20 45 Weary continued from page 45… FFIEC continued from page 27… legal interpretation on this issue, The CISO is an Enterprise Risk Manager comprehensive, providing institution extreme caution in regard to MSAs is who is independent from IT operations management with a “repeatable and called for, including consulting with management, responsible for overseeing measurable process to inform of counsel to address existing MSAs and and reporting directly to the institution’s [cybersecurity preparedness and risks]. MSAs being negotiated. governing Board or Executive “ Once explained, that process is Management team information condensed into a useable rubric form Son of TRID. In addition to all of the foregoing, concerning security risks across the institution. With this collaboration of Assessment Tool also comes in two you should also be aware that at the end business and IT, the Handbook aims parts. The first part is “Inherent of last year the CFPB adopted wholesale to promote technology advances in Risk Profile”—a measurement of amendments to Regulation C, most of the delivery of financial products and institutional risk in the following which will become effective in January services with greater security and areas: technology and connection of 2018. While the start date for the transparency to the consumer. types, delivery channels, online/ The FFIEC Handbook then new reporting requirements appears to transitions to the subject of building services, organizational compliance priority, anecdotal evidence and administering an effective IT Risk characteristics, and external threats. indicates that modifying a lender’s LOS Management (ITRM) structure that may approach the complexity needed to effectively evolves with advances Maturity,” is designed to assist implement TRID. in technology and analytics, along management in the measurement of with effective means of defending risk levels and corresponding controls. changes necessary for TRID and against cyber attacks. The Handbook The risk levels range from Baseline Regulation C at the same time, the identifies each component of an (lowest) to Innovative (highest). With CFPB has imposed enormous (and effective ITRM structure and is risk levels come five (5) Domains unnecessary) additional compliance prescriptive in how to build and to aid institutions in determining costs on an already over-burdened implement one. To be effective, whether behaviors, practices and mortgage industry. the ITRM structure must include processes can support Cybersecurity a comprehensive Information Preparedness. They are: cyber risk Security program, a formal Project management and oversight, threat Management process, an enterprise- intelligence and collaboration, leveled against the CFPB, staff has wide Business Continuity Planning cybersecurity controls, external indicated an expanded willingness function, and an effective Internal dependency management, and cyber to have substantive discussions with Audit program and process for timely incident management and resilience. a view towards addressing industry reporting of risk assessment and concerns regarding practical, operational system weaknesses. An Optimistic Final Note. Despite many of the complaints To address the growing threat compliance concerns. What is emerging The second part, “Cybersecurity Together, these new FFIEC publications aim to support technology innovation in our industry, is a process whereby the CFPB will meet of cybersecurity attacks against protect our customer’s nonpublic to explore defects in its regulations, and financial institutions, the FFIEC financial and loan transaction data consider issuing guidance to mortgage supplemented its updated Handbook from unauthorized access, and provide lenders that will be useful. with the release of its Cybersecurity additional needed resources for Assessment Tool with Management industry to function in full compliance meantime, compliance folks—you have and Users Guides [www.ffiec.gov/ with the ever technical CFPB rules long-term job security… cyberassessmenttool.htm]. The and reporting requirements. We can only hope. In the Guides are highly prescriptive and RI N G 16 20 46 mobile products and technology be far enough off not to consider it a Sadly, by not announcing the SP Like the Handbook, the Cyber- CALIFORNIA MORTGAGE FINANCE NEWS Re-use Projects continued from page 28… cost (G-Max) contract from property? Does it meet all four consideration of future their chosen contractor? How tests of Highest and Best Us: Is trending. do the projected costs compare it Physically Possible? Is it Legally with national cost estimating Permissible? Is it Financially current value of the property services like Marshall & Swift? Feasible? Is it the Maximally in its current physical and If there is a discrepancy, which Productive Use, and thus the economic condition. In is more accurate? Why? Does Highest and Best Use of the adaptive re-use projects, the developer have sufficient property? Typically, Market Value this valuation will require a experience with building projects appraisals consider the property thorough Highest and Best like the one proposed, to allow at its Highest and Best Use. If Use analysis that compares them to have a real understanding that is not to be the case, then it the valuation of the property of the costs involved? should be clearly spelled out in based on its current use the Scope of Work. and occupancy prior to the 4. Development Timeline—Has the developer provided a credible 6. Market Value Estimates—Since a. Market Value As Is. This is the proposed change of use, timeline for all phases of the adaptive re-use projects involve with the residual value of development of the project? entitlement, construction and the property subject to the Is the projection for finalizing absorption, banking underwriting proposed adaptive re-use. entitlements realistic? Does the standards and regulatory projected construction timeline guidelines typically require the include provisions for unexpected following estimates of Market conditions such as bad weather, Value in an appraisal: projects requires thorough due labor shortages, or delays in a. Prospective Market Value diligence on the part of the developer, CONCLUSION Valuation of adaptive re-use delivery of materials? Are there upon Stabilization. This is the lender and the appraiser. A provisions for contractor penalties a future value estimate, as well-conceived project will be if the contracted timeframe is of the projected date of supported by professional third party exceeded? Does the developer completion of construction reports that address key issues such have a well supported projection and achievement of stabilized as: entitlements, market demand for absorption of the project after occupancy. Depending and supply, development costs, completion of construction? What on the length of time development timeline and highest market-based support is provided between the current date and best use. These factors must be for the projection of absorption? and the prospective date, considered and analyzed in order Hopefully this is addressed in a this valuation may require to develop credible estimates of professionally prepared market considering the applicability Market Value as of the required points study that was provided to the of future trending of income, in time for prudent underwriting. lender. If not, then the appraiser expenses and cap rates. Cooperation and good communication will have to do their own market a. Prospective Market Value between lenders, developers and study in order to support their upon Completion. This is appraisers can make this an efficient absorption projection and as also a future value estimate, and productive process resulting in a noted above, this can be time- as of the projected date of well-supported appraisal. consuming and costly. completion of construction, but prior to achievement proposed development represent of stabilized occupancy. the Highest and Best Use of the This may also require CALIFORNIA MORTGAGE FINANCE NEWS SP R IN 5. Highest & Best Use—Does the G 16 20 47 Drafting Contracts continued from page 29… of harm anticipated to be caused if Mervyn’s not being opened on the a deficiency following foreclosure, the provision is not satisfied.” Id. at Lease commencement date, such that while Advent, the contractor, sued the 1338. The trial court had found, and there was no reasonable relationship developer and the Bank for restitution the court of appeal agreed, that the between zero dollars of anticipated for the amounts it paid out of pocket. rent abatement provision constituted harm and the forfeiture of $39,500.00 The Court awarded judgment in favor an unreasonable penalty by findings in rent per month.” Id. As to the lease of Advent on its causes of action. The of fact that “Ross did not anticipate termination provision, the Court of Court further found the Bank had it would suffer any damages for Appeal noted that California courts breached the loan contract, which have adopted a specific rule that resulted in exonerating the guarantors, when a commercial lease contains a and awarded attorneys’ fees to clause allowing termination upon the Advent and the guarantors. The Bank occurrence of contingencies that are appealed the judgments based on agreed upon by sophisticated parties provisions in the Loan Agreement that and have no relation to any act or provided that the guarantors waived default of the parties, no forfeiture “all their defenses under the guaranty results from the exercise of the agreements.” California Bank & Trust, determination provision. Id. at 1367. 232 Cal. App. 4th at 218–19. The In the California Bank & Trust Court noted that, under Civil Code The California MBA is coming to YOU in 2016! Just a few of the companies we visited (and highlighted in the magazine) last year: Dykema Gossett Total Lender Solutions TCV (Transcontinental Valuations) Property Sciences The Compliance Group Comergence Flagstar Bank AAA-AMC Vitek Mortgage Group LendingQB Citadel Servicing Corp. Black Knight Financial Services Green & Hall Impac Mortgage Holdings, Inc. Ellie Mae Peak Corporate Network Geraci Law Firm Essent Guaranty, Inc. Bay Equity Home Loans OrangeGrid Boston National Title (BNT) Company of California Texas Capital Bank MCT Western Alliance Bank DataVerify Michigan Mutual EdgeMac CleanFund Sindeo Alight And more! SP Get on our 2016 calendar! Email Carol Danaher at [email protected] for more info! RI N case, the borrower had obtained §2856, the guarantor could waive a construction loan from Vineyard rights of subrogation, reimbursement, Bank to develop a 70-unit town indemnification and contribution, and home project, with guarantees from any rights and defenses by reason Thomas DelPonti and David Wood, of an election of remedies by the principals of the borrower. However, creditor, or any rights the guarantor when Phase I of the development was might have because the principal’s nearly complete, the Bank stopped obligation is secured by real estate. funding payment draws, thereby The Court determined that a blanket preventing completion and sale of the waiver of “all” defenses would not Phase I units, which in turn caused include equitable defenses, such as the borrower to default on the loan. unclean hands, which would allow the The Bank reached an agreement with lender to profit by its own fraudulent the borrower requiring the contractor, conduct. The Court also noted that the Advent, Inc., to finish Phase I so that waiver did not include waiver of the the units could be sold at auction and lender’s duty of continuous good faith promising to pay the subcontractors if and fair dealing. they discounted their bills and released their liens. The contractor paid the artful drafting of a contract, even subcontractors from its own pocket to between sophisticated parties, keep the project lien-free so that the contractual provisions may not be auction could proceed. However, the enforced if the court determines Bank foreclosed against the borrower that such contract provisions violate and then sued both the borrower and California public policy. guarantors under various theories for G 16 20 48 In summary, notwithstanding CALIFORNIA MORTGAGE FINANCE NEWS California MBA After Hours H P December 3, 2015, Offices of California MBA O TO GA L LE R Y In what has become an annual tradition, the California MBA hosted our year-end networking event at the Sacramento offices, bringing in folks from the area and throughout the state. Keys to a successful networking event: a relaxed environment, The California MBA provided refreshments to industry pros delicious refreshments, and friends old and new! looking to relax after a busy day. Meet the staff! From left: Devon Keefe, Conference Manager; Carol Danaher, Membership Development Director; Inez Lane, Office Manager; Susan Milazzo, Executive Director; CALIFORNIA MORTGAGE FINANCE NEWS SP R IN Dustin Hobbs, Communications Director. G 16 20 49 Y ER L L GA O T PH O California MBA Legal Issues Conference December 7, 2015, Costa Mesa, CA Our all-star legislative/regulatory panel consisted of (from left): Jon Jaffe, K&L Gates, LLP; Ken Markison, Mortgage Bankers Association; Jobe Danganan, Sindeo; Michael Pfeifer, Pfeifer & DeLaMora, LLP; Pat Zenzola, KP Public Affairs; Melissa Special thanks to our conference chairman, Michael Pfeifer, Richards, CMG Financial; and Don Lampe, Morrison & Forester. California MBA General Counsel, Pfeifer & DeLaMora, LLP After lunch the focus shifted to quality assurance strategies. Thanks to the conference’s sponsors and exhibitors, including Leading the discussion were some of the top minds in the industry. Smarsh! From left: David Green, The StoneHill Group, Inc.; Annemaria Allen, The Compliance Group, Inc.; Janet Crawford, U.S. Department of HUD; Julie Manson, Plaza Home Mortgage; Catherine Zimmerman, Fannie Mae; and Cynthia Hamilton, New American Funding. One of the highlights of the conference was hearing directly from state and national regulators, including Calvin Hagins, Deputy Assistant Director for Originations, Consumer Financial SP Protection Bureau (CFPB). RI N G 16 20 50 CALIFORNIA MORTGAGE FINANCE NEWS San Francisco After Hours H P January 21, 2016, Offices of Alight, Inc. O TO GA L LE R Y Our first networking event of the new year was held at the Thanks to Jared Huff, Managing Director, for hosting the event offices of Alight, Inc. in San Francisco. Thanks so much to our and for his support! In addition to our hosts at Alight, the event was sponsored by The event gave California MBA Executive Director an CMG Financial and Bankers Insurance Service. opportunity to speak at length with local industry pros. CALIFORNIA MORTGAGE FINANCE NEWS SP R IN fabulous hosts! G 16 20 51 Rancho Santa Fe After Hours Y ER L L GA O T PH O February 3, 2016, Rancho Santa Fe Golf Club (hosted by Residential Wholesale Mortgage, Inc.) In the first of back-to-back networking events in Southern The evening was perfect for relaxing conversation, catching up California, Residential Wholesale Mortgage, Inc. hosted the with old friends, and enjoying the scenery in Rancho Santa Fe. California MBA at the beautiful Rancho Santa Fe Golf Club. The San Diego-area event was a huge success, with over 60 Bringing together industry professionals from throughout people joining the group! Southern California, including 2 participants in the California MBA Future Leaders Program (Class of ‘15): Marlene Chaker Minite and Andrew Boylan! SP RI N G 16 20 52 CALIFORNIA MORTGAGE FINANCE NEWS North LA After Hours H P February 4, 2016, Offices of First Rate Financial Group O TO GA L LE R Y Our next event was held in North Los Angeles at the Westlake Warm smiles and laughter as local industry pros gather to catch Village offices of First Rate Financial Group. Thanks to our up with old friends and stir up new business opportunities. sponsors for a great event! California MBA Executive Director Susan Milazzo with 2008- Would your California MBA-member company like to host or 2009 Chairman Robert Satnick, Golden Empire Mortgage. sponsor our next event? Contact Carol Danaher, Membership CALIFORNIA MORTGAGE FINANCE NEWS SP R IN Development Director, at [email protected] for more information. G 16 20 53 Building Stronger Relationships Next, Susan stopped off at the offices of Newbridge Capital & Trust, and met with Adam Silverman, President, Residential Mortgage. NewBridge Capital & Trust and its subsidiaries provides mortgage, trust, and specialty lending opportunities to their clients. For more, call (213) 688-3406, or go to www.nbcaptrust.com. In Costa Mesa, Susan met with reps with Dart Appraisal, a nationwide independent Appraisal Management Company (AMC) established in 1993. Thanks to Suzanne Guille for her time and support! To find out more, go to www.DartAppraisal.com or call (888) 327-8123. “We can’t do our job serving our members, unless we get to know them in their own environment first.” — SUSAN MILAZZO, California MBA Executive Director In San Francisco, Susan met with the team at Allen Matkins, a California-based law firm specializing in real estate, litigation, labor, tax, and business law, with more than 200 attorneys in four major metropolitan areas of California: Los Angeles, Orange County, San Francisco and San Diego. Thanks to Steve Lieske and the firm for their support! For more information, contact the San Francisco offices at (415) 837-1515 or go to www.AllenMatkins.com. SP RI N G 16 20 54 CALIFORNIA MORTGAGE FINANCE NEWS Building Stronger Relationships In early 2016, Susan traveled to Orange County to visit with the In Westlake Village, Susan met with Glenda Klein, CFO at First team at First American Mortgage Solutions, which provides a host Rate Financial Group, a residential mortgage banker. The group of products and services: real estate data and analytics, mortgage recently hosted one of our always-popular regional networking fraud and verification, regulatory compliance, property valuation events. For more, call (818) 707-4131 or go to www.frfgp.com. and collateral risk, quality control, lender fulfillment services, title and settlement, default services. From left: Jeff Moyer, Chief Product and Strategy Officer, Susan Milazzo, Paul Harris, SVP and Jeff Flory, SVP, Risk and Compliance Solutions. For more info, go to www.firstam.com/mortgagesolutions or call (800) 525-3633. Finally, Susan and California MBA Board Member Bill Lowman (President, American Pacific Mortgage) met with execs at Sterling Claims Management. The company provides a fulltime board member and industry veteran. Scott currently operates Incal Assocates, an industry advisory firm. To find out more, call (310) 470-0770 or email [email protected]. service, customizable hazard claims management solution to servicers, lenders and GSE’s solely. Thanks to Principals Jami Sherr and Jonny Borok for their time and support! To find out more, go to www.SterlingClaimsManagement.com or call their San Diego offices at (619) 363-9001. CALIFORNIA MORTGAGE FINANCE NEWS SP R IN In Los Angeles, Susan stopped by to see Scott Whittle, long- G 16 20 55