Jan. 27: Notes on the Eagles & lending, credit scoring news, and the brawl about BRAWL

From Louisiana Jay Brinkmann sends, “I thought I would pass on a story as a lead generation idea for lenders in the Philadelphia area. The last time the Eagles made the Super Bowl, I received a call from a reporter asking about borrowers who were doing 30-year, cash out refis to buy travel/ticket packages for the game. They wanted to know if it made sense to take out a 30-year loan to attend a football game. I gave my usual nonresponsive response, but when I read the story, I saw that one of the borrowers gave the best answer. It was something like, ‘The Eagles only make the Super Bowl once every 30 years, so of course if makes sense to take out a 30-year loan.’ Maybe they should have taken out a 15-year loan.”

“Rob, a while back Alaska Airlines and Central Washington University signed an agreement to establish a pilot development program. It provides a stipend to students pursuing an aviation career. This program is designed to recruit new students into CWU’s Professional Pilot program and provide students with an opportunity to fly as a First Officer/Pilot with Horizon Air. Have you heard of any colleges offering something, like a series of courses or university designation, similar for residential mortgage lending?” No.

Developments in credit score thinking & processing

The regulator that oversees Freddie and Fannie are accepting input on using something other than Fair Isaac’s entrenched model. Barrett Burns, President and CEO of VantageScore Solutions, LLC, observes, “FICO’s position, naturally, is that by introducing credit scoring competition is tantamount to a race to the bottom and has, apparently, influenced the FHFA of that. We view it as a race to the top. That is because no lender takes our word for it, or FICO’s word for it, on our respective claims of predictive performance. Lenders test heavily (predictive performance and discriminatory testing) to see if the models being proposed are more predictive than what they are using before they make a switch.

“They cannot afford to make a mistake or take a risk that a newly implemented model would perform worse than the incumbent model being used (i.e. higher losses), they can’t risk taking on discrimination risk or regulatory examination risk (safety and soundness and / or fair lending exams).  So, neither FICO nor we would propose lesser performing models. They would never pass the intensive lender testing. We perform intensive discrimination testing before we release a new model to conform with ECOA, Reg B, OCC model governance etc. I have no doubt that FICO does too. Neither us can afford to put lenders at risk in their regulatory exams.


The ultimate scoring standard is established by the users of models, not by VantageScore or FICO. Put another way, if a new model performs better that the incumbent model then they convert. If not, then they don’t implement.


“Our proposal to the Enterprises and the FHFA all along has been what is the #3 option in the RFI: Let lenders have the option of choosing VantageScore or FICO (versus the mandated 04 models of FICO now) and make a commitment to use that model for a period of time to avoid score shopping and to avoid desperate impact. All these safeguards have been carefully presented to the FHFA and the Enterprises.


“So, our ask is simply to let lenders chose. If they want to stay with the incumbent, that’s fine. Competition always benefits consumers, investors and lenders whereas monopolies do not.


“Our recent announcement focuses on our new market adoption numbers and how heavily used our scores are used in lending processes (except mortgage). Lenders switch models only if they perform better.” Thank you, Barrett!

Planet Home Lending’s Dona DeZube attended NEXT and wired this note from Dallas. “Chances are your firm has turned away quite a few folks who couldn’t prequalify for a purchase loan due to thin or poor credit, even though they had enough income to qualify. One-third of all Americans have credit scores lower than 620, and 45 million adults are either credit invisible or un-scorable, said Elizabeth Karwowski, CEO of GCH360 (Get Credit Healthy). Speaking at NEXT, the women’s mortgage technology conference in Dallas, Karwowski explained how GCH360 helps lenders recapture loans that fall out of the pipeline due to credit issues. Loan officers can refer borrowers to GCH360 directly from their LOS or CRM. There’s an option to do a live telephone handoff or a referral to the GCH portal. Either way, a credit coach works with the borrower to remediate or establish credit. The LO can track the customer’s progress and gets an alert when the borrower reaches credit qualification thresholds.

“Increasing the certainty a customer won’t be turned down a second time (at least for credit issues) certainly helps lenders doing prequalification. It could also play well in retention lending, where having an alternative route for current customers who want to refinance, but can’t credit qualify, could help protect customer satisfaction.” Thank you, Dona.


There is a row occurring between two camps on the subject, reminding us how challenging it is to keep the broker community aligned. To refresh your memory, an initiative was launched to try and recruit mortgage brokers to stop doing business with certain wholesale lenders that have both wholesale and retail divisions. This commentary has been posting both sides of the wrangling, on December 16 and January 6. Dave Savage, CEO of the Mortgage Coach, scribed, “This is a great conversation about who owns the client also as it’s a sad truth that most loan officers and lenders don’t maintain relationships with borrowers after they close the loan and it costs loan officers and lenders a fortune.

“That said, I’m seeing a trend and lots success stories of top producers who are implementing systems to consistently do Annual Mortgage Reviews so they can continue to bring value to past clients and close more loans in the process. I interviewed hundreds of loan officers last year, and one of the top priorities for top producers is that they finally realize they need to deliver service like Annual Mortgage Reviews. I posted a LinkedIn article this week making a case for why the Annual Mortgage Review should be every loan officer’s #1 priority in 2018. In this article, I break down 7 compelling reasons and I even share actual success stories and interviews with top-producing loan officers who are among the best in the business on why they are making AMRs a top priority and how they’re doing it. CLICK to read this article.

“I’m excited about 2018 and the next few years for loan officers who start focusing on the value they bring to past clients. For loan officers who remain transactional, this business is going to get more difficult and less profitable. It’s going to get harder for them to compete as our industry goes through this digital transformation and as the lender-borrower relationship is redefined. Loan officers who deliver the best educational experience and who deliver Annual Mortgage Reviews are going to win biggest.”

John Stevens NAMB (the National Association of Mortgage Brokers/Professionals) broadcast a note to the sponsors, exhibitors, and speakers of its upcoming conference. “The entire mission and purpose of ‘BRAWL’ is to organize a group boycott by mortgage brokers of certain lenders that the BRAWL organizers refer to as ‘whole-tail lenders’ or ‘whole-tailers.’”

By one BRAWL organizer’s own admission in a November 1, 2017 PRNewswire article, ‘[they] are speaking up now, and urging brokers to avoid doing business with whole-tailers…’ This same article also included an excerpt from BRAWL’s open letter, which read in relevant part, ‘Let’s pledge to partner only with true wholesale lenders until the whole-tailers put an end to their selfish and greedy ways.’

“Organizing group boycotts and concerted efforts to refuse dealing with certain industry participants is a violation of Federal Antitrust Law. NAMB, as a national non-profit trade association, has long maintained a strict Policy of compliance with all Federal and State Antitrust Laws. NAMB’s complete Antitrust Policy is available.

“NAMB will not become involved in competitive business decisions of its individual members. NAMB Members, however, cannot make agreements as to whether they will or will not enter into contracts with certain investors, wholesalers or customers, and no NAMB event may be used for attempting, encouraging, recruiting support for, or facilitating such agreements.

“Members and conference attendees are free and encouraged to consult with each other and discuss general business trends; best practices in sales, marketing, or other legitimate business matters; changing market conditions; technological innovations and the like. However, because the very mission and purpose of BRAWL is to organize a group boycott, which is a clear violation of Federal Antitrust Law, and discussion of boycotts at NAMB-sponsored meetings or events can implicate and involve NAMB in extensive and expensive antitrust challenges and litigation, the NAMB Board of Directors has determined that at all NAMB-sponsored meetings or events we will not permit any mention or discussion of BRAWL, promotion of BRAWL or its mission, recruitment of conference attendees to “join” or support BRAWL, promotion of any BRAWL scorecard or other BRAWL designation of any company as ‘good’ or ‘bad,’ etc., or any other speech or conduct that NAMB believes, in its sole discretion, is in violation of the Association’s Antitrust Policy.

If anyone is found to be engaging in conversations or conduct that violates NAMB’s Antitrust Policy, you will be asked to stop the conversation or conduct immediately; your speaking session may be interrupted or ended early; and/or you may be ejected from the trade show floor or the entire conference, without refund of any amount paid for sponsorship, registration or otherwise.”

In response, Anthony Casa, President of New Jersey’s Garden State Home Loans, sent out a retort. “This letter exposes NAMB for what it has become: a puppet of the lenders. It is not transparent with its members and cannot be trusted by mortgage brokers…While NAMB is correct that certain organizing of group boycotts and anti-competitive behavior can be a violation of Federal Antitrust Law, what it misses completely is that neither of those circumstances apply here. To say otherwise would be a tortured interpretation of Federal Antitrust Law.

“What is even more concerning, is the nature of the letter from NAMB’s President, John Stevens and the position NAMB has decided to take on this issue. It demonstrates that NAMB either does not understand BRAWL’s cause or, more importantly, is turning its back on the very members of which it purports to support…BRAWL is not about boycotting lenders. It is about bringing transparency and disclosure of lenders practices to the mortgage broker community. We are in communication with the same wholesale lenders that betrayed our trust and repurposed our past customers for their own benefit. We are proactively working with those lenders on improving their wholesale platforms to support and protect mortgage brokers moving forward. Read Anthony’s complete letter here, as well as his petition at Change.org for the resignation or firing of John G Stevens as President of NAMB.

(Please excuse any delays in communication this week, as I am doing volunteer work in an orphanage with a group organized by Forever Changed.)

(Thank you to Hugh K. for this one told by a lady golfer.)

While golfing, I took a quick turn to avoid hitting a chuck hole, and accidentally overturned my golf cart near the base of a tree on the fringe of the cart path, and severely banged my head.

A very beautiful, attractive, golfer, who lived on the edge of the golf course, heard the noise, and ran out of his villa and shouted, “Are you okay?”

As I looked up, I noticed he was wearing only a tank top and short shorts which showed off his muscular legs.

“I’m okay, I think,” I replied as I pulled myself out from under the twisted cart.

He said, ” Follow me to my villa so I can clean and bandage that nasty scrape on your head, then you can rest a while, and I’ll help you upright the cart later.”

“That’s nice of you,” I answered, but I don’t think my husband will like me doing that!”

“Oh, come now, I am an orthopedic surgeon,” he insisted. “I need to see if you have any more scrapes and then treat them properly.”

Well, he was really handsome, and very persuasive, and being sort of shaken and weak, I agreed, but repeated, “I’m sure my husband won’t like this.”

We walked to his place just 100 yards away, and after a couple of Scotch and waters and the bandaging, I thanked him and said, “I feel a lot better, but I know my husband is going to be really upset, so I’d better go now.”

“Don’t be silly!” he said with a smile and a sly wink. “Stay for a while. He won’t know anything, and by the way, where is he?”

I replied, “Still under the cart, I guess.”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Servicing: All It’s Cracked Up to Be?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.


(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. Currently there are over 300 mortgage professionals looking for operations, secondary and management roles. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2018 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Rob Chrisman