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Jillayne Schlicke is the Executive Director of the National Association of Mortgage Fiduciaries and CEO of CE Forward, Inc.

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There Are 11 Responses So Far. »

1. 

   Comment by Rita Green on 10 August 2008:

   I am glad that A+ Mortgage is being penalized for their bad deeds. People in this industry should be honest as yuo are impacting peoples livelihood.

   I disagree with the FHA stipulation that loan originators must be a W2 employee as this causes a decrease in FHA business from 1099 LO’s. Also, as long as the mortgage broker reviews the file to assure specified guidelines are met no harm will be done to the client.
2. 

   Comment by Stephanie Grosely on 4 September 2008:

   It’s no wonder HUD audited A+, their fees were outrageous! I can’t even imagine charging a borrower a discount, origination fee AND broker fee on top of receiving a YSP from the lender. It’s those types of lending practices that make it hard for everyone else, deceptive. Also unbelievable that A+ thinks thought they could justify charging those fees.

   The first step a manager at A+ would need to take is to monitor their pipeline, where their loans are coming from and how the borrowers are being charged. Are they benefitting from a discount situation? Or being charged add’l fees on top of a discount, and why? Someone needed to take charge.
3. 

   Comment by Kevin Haynes on 8 September 2008:

   The fees that were charged are crazy and inexcusable. One would need to figure just who the LO’s are at A+. Then have a review of the application process making sure the costs & fees are disclosed properly on the GFE and the mortgage broker agreement is completed.

   Some of the blame here needs to go to the wholesale lenders. You are telling me they were not aware of the these escessive fees being charged? It wouldn’t take an Einstein for someone preparing final documents to figure this out.
4. 

   Comment by Tamara Voshell on 20 September 2008:

   If I were oversee the LOs in this company, the first thing would be to have them make a choice - do FHA and become W2′d or not do FHA and continue as a 1099′d LO (I agree with Rita that I think the requirement to be W2′d is stupid. It is not in the best interest of the client. In our town, the best LO’s work for companies that either only use 1099′d LOs or they are not FHA approved.)

   I would also have a fee sheet that must be filled out showing every penny, it would be reviewed prior to closing and the HUD would need to match it or those fees would not be charged unless there were documentation in the file showing the reason for the fees with a disclosure signed by the borrower that they were aware and approved of the fees. Everything would be reviewed prior to close.
5. 

   Comment by Michael Belisle on 3 November 2008:

   The disclosure of fees as discounts while still earning Yeild Spread is a blatant lie to the borrowers. Obviusly the lo’s where taking advantage of the situtations.
6. 

   Comment by Jeff Rafuse on 4 November 2008:

   I would probably have a hard time accepting a position to manage the LOs at A+ Mortgage, since it sounds like they have severe moral issues from the top down, and I wouldn’t want to affiliate myseflt with that type of company, BUT, for the sake of the argument, if I was hired to oversee the loan officers, the first step would be suspend origination of all FHA loans and then convert the staff to W-2 employees, so that we could continue to originate FHA loans. Secondly, the fee structure would need to be reworked as well, with only acceptable fees allowed to be charged. Thirdly, I would begin re-training of all the loan officers regarding compliance and ethics. Also, I would do individual audits on each loan officer as well. While the management ultimately bears the responsibility for promoting and allowing those practices to go on, I am sure if that is the culture they promoted there would also be a lot of unsavory practices by some of the individual LO’s that could put the company at risk again, even if they are trying to clean up their act.
7. 

   Comment by John Mayfield on 5 November 2008:

   Wow! A+ needs a compliance department.
   If I were to manage the LO’s at A+, I would first start by making sure they were all W-2 employees as required by law. They would need to determine whether they would want to work for A+ exclusively or work elswhere. You can not work for two financial institutions at the same time.
   Then create a compliance department and view all files before they close. I think it would be great to make sure every customer has been fully disclosed.
   This would protect the company and the loan officer as well.
   It would be tedious but worthwhile for everyone involved.
8. 

   Comment by Sandi Paradiso on 7 November 2008:

   And you wonder why we’re in the mess we are. I would start by having 1 1099 LO and the rest W2 employee, have a set pay scale and have it posted at each desk, train them in ethics. I would assign someone to look over all and every loan that is wrote and approve it. That person would report to me and I would meet once a month with them to go over everyones work.
9. 

   Comment by Denise Swafford on 10 November 2008:

   1. Immediate compliance audit of all files originated and still open within the last 30 days.
   2. Obtain a complete listing of all lo’s currently employed by A+
   3. Obtain evidence of current licensing of all LO’s and resume to establish education level and employment history.
   4. Mandatory compliance class every week with testing to insure loan officer are clear on what the compliance requirements are per law.
   5. All loan officers to sign addendum to employment contract addressing penalties for failure to follow compliance law and company policy - official company policy form to be provided and reveiwed will all employees.
   6. Implement a performance improvement plan to address consistant violators and either improve the understanding or terminate.
10. 

    Comment by Sarah Batson on 11 November 2008:

    As I have found within the last 6 months or so, a significant portion of my business is FHA, so that approval is very important to me to have acquired and to maintain. For me, compliance heavily outweighs the temptation to attempt to find loopholes or ways around the guidelines.

    I am glad that A+ has beeen exposed and reprimanded. We can now reference this case in order to broaden our knowledge base on the issue and laws regarding it. Although there are aspects of the legislation that I disagree with, for instance having W-2 requirement, the parties involved have now been further encouraged to become educated about the product, the clients who this is most beneficial for and the importance of educating them, and complying with the legislation in order to maintain the ability to do these loans that are proving to be of great value to many of us in the times that our industry is in.
11. 

    Comment by Catherine Rawlins on 17 November 2008:

    I remember being approached a couple of years ago by A+ mortgage as a possible recruit to their program. Their organizational structure was very much like Amway with the top management earning cuts of LO’s commissions. There was no incentive to offer products that were good for the consumer…

    So, I wouldn’t consider working as a manager for them until their corporate structure was revamped. They should hire Denise Swafford. She’s got the right answers for action and it is exactly what I would recommend too.

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