Transitioning Your Business to FHA

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Transitioning Your Business to FHA

• Alice Alvey David Lykken

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Agenda

• Corporate Goals And Culture
• Front Line Operations
• Secondary Market Execution
• Servicing
• Quality Control

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Why FHA Why Now?

• Here are reasons some want to transition their
  business to doing FHA
• What is your reason for making the transition?
• Is the stated reason the real objective?
• Or are there unspoken reasons?
• Examine your true motives!

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Corporate Goals And Objectives

• Are your Goals and Objectives aligned?
• What level of control do you want?
• What level of risk is desired in secondary and in
  underwriting?
• Does desired control match up with the risk
  tolerance?
• What level of expertise can you manage and
  create?
• Which products will be offered?

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FHA Expertise
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Appropriate Capitalization

• Can you meet Ginnie Mae requirements?
• If not how do I get there?
• Dont succumb to self imposed limitations!
• Two types of capital
• At risk for operations
• Leverage capital
• Raising capitalyour options
• OPM (Other Peoples Money)
• Subordinated debt

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Ginnie Mae Advantages

• Pricing control
• Revenue
• Servicing and customer retention
• Credit policies
• Underwrite true to FHA

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Ginnie Mae Challenges

• Generating the volume
• Risk/reward balance of credit decision control
• Risk/reward balance of pricing control
• Servicing reporting requirements

Click
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Sales

• Origination transition issues
• Changes in the line of questioning during the
  loan application
• Path of least resistance syndrome
• Realtor and market perceptions

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Underwriting/Credit Risk Issues

• Credit Overlays
• Non traditional credit
• Credit score floor
• Property types
• Second review
• Solving the inconsistency
• Monitor Refer loans in detail beyond typical
  AUS and LOS reports

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Post Closing Through Delivery

• Proper error tracking
• Technology saves money!
• Impact on compare ratio
• Case binder ready when received in post closing
• Keep delivery and insuring paths independent

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Secondary Execution

• Loan sale strategies
• Correspondent
• Whole loan/AOT
• Securities
• Fannie Mae/Freddie Mac
• Ginnie Mae

Have an exit strategy when the loan is
uninsurable!
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Servicing

• Sub servicing as a jumping off point
• Want to service the loan in house?
• Investor remittance and MIP
• Loss mitigation/Special forbearance, Repayment
  Plans, Collection techniques
• Default reporting Claim processing
• Credit Watch
• Hope For Homeowners program changes being
  discussed

Better Help
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Quality Control

• Neighborhood Watch
• Actual implementation of a quality control plan
• Response to audits
• Appraisals!!!

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Thank You

• Dave Lykken
• Managing Partner
• President
• Mortgage Strategies
• O [phone] x101
• C [phone]

• Alice Alvey
• President
• Mortgage U, Inc.
• O [phone]
• C(248) 941.1939

www.MortgageBankingSolutions.com
www.mortgage-u.com