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26 | TH E M R EP O RT FEATURE products for non-warrantable condo or for borrowers with a recent bankruptcy are two ways to "loosen up" your product mix. Of course, no one is advocating abandoning sound credit risk analysis procedures, but as we've seen, an overabundance of cau- tion can be equally as damaging as a lack thereof. In regards to policies and procedures, your Home Mortgage Disclosure Act (HMDA) data is a great place to start to determine if your P&Ps are unintention- ally excluding minority bor- rowers. By combing through your own data and comparing it against your peers, you are essentially conducting the same kind of investigative work that the Consumer Financial Protection Bureau and the Department of Justice use to assess potential Fair Lending violations. This analysis not only puts you one step ahead of regulators, but it also provides you the opportu - nity to ensure your practices are as inclusionary as possible. After all, no one benefits by excluding qualified borrowers. Second, be inclusive in regards to language. Mortgage documents can be confusing for even native English speakers, and given that this is one of the most important financial transactions a person can undertake, it's important that they have a clear understanding of what they are signing. In ad - dition, have translation resources available to ensure verbal com- munication remains clear and consistent as well. Along these same lines, give your marketing a quick once-over to ensure the images and mes- saging you've selected are equally as inclusive. People want to see people who look like themselves. It creates an unspoken sense of trust and makes them feel as though they will be welcome. Creating barriers to credit access, intentionally or other- wise, simply doesn't make good business sense. In the industry's zeal to protect itself after the so-called subprime fallout, there was a market overcorrection to the side of caution. Now that we are beginning to see the negative effects of that overcorrection, it is up to the industry to adopt the appropriate measures to correct the overcorrection and provide mortgage credit access to all. JEFF BODE is owner and CEO of Addison, Texas-based lender Mid America Mortgage, Inc. He can be reached at jeff.bode@midameri - camortgage.com. Hope for a Home: Section 184 Lending and Native American Mortgage Programs By Brett Robinson S ection 184 is a home loan guarantee program of- fered by the Office of Na- tive American Programs (ONAP), a subgroup of HUD's Public and Indian Housing. It is distinctive in that it is one of the only mortgage programs designated specifically for a subsection of the U.S. minority population, and as such, the pro - gram has some unique aspects as compared to other niche mortgage products. For example, in addition to fee simple lending, the program allows for loans to be made on Tribal Trust (reservation) proper - ties under a leasehold agreement with the Tribe. To qualify, applicants must be an enrolled member of a federally recognized tribe. This process varies by tribe, and a full list of federally recognized tribes can be found on the U.S. Department of the Interior's website. In addition, the underwriting process for these mortgages is not credit score-driven. An appli - cant's credit history is important, and lenders must follow HUD's guidelines regarding eligibility. However, the underwriting pro - cess is largely manual, and given the difficulties many of these applicants face in obtaining credit, lenders may also take into account alternative forms of credit to build an applicant's credit profile. Many purchase applicants are also first-time homebuyers, so there is an education process that must happen with these borrow - ers. As rare as financially literacy is in the general population, it can be even scarcer among the Native American population, and Section 184 lenders should be prepared to take on an advisory role with these borrowers. In addition to mortgages for purchase, this program also does a fair amount of construction and rehabilitation loans, as many of the properties on tribal lands are in sub-standard condition or may not even exist. Also of note is the fact that all title activities for Trust land loans are conducted through the Bureau of Indian Affairs (BIA), rather than a private title com - pany, as the BIA holds the Trustee responsibility for the Tribe. In addition to originating Section 184 loans, 1st Tribal also serves as correspondent lender for this program, and as a whole, these loans perform quite well, long-term. The company's port - folio did suffer a bit during the meltdown, but it wasn't out of proportion with what the indus- try experienced overall. Outreach to this group can be difficult, as many are unaware that the program exists. In our experience, social media, Facebook in particular, has been very effec - tive in reaching this audience. Furthermore, many lenders who want to add this program to their mix can find underwriting and closing/post-closing to be a challenge as well and will outsource these functions to an established Section 184 lender. Lenders who do want to get into Section 184 lending must be approved to originate loans by the Federal Housing Administration, the U.S. Department of Veterans Affairs, or the U.S. Department of Agriculture, even though these entities are not directly associated with the program. There is also an approval process from HUD/ ONAP, and lenders must undergo training under the supervision of a sponsoring lender. Not all states are eligible for the Section 184 program, and in some states, only select coun - ties qualify. For more informa- tion on this program, contact Michael Thorpe, loan guarantee specialist with HUD's Office of Native American Programs at michael.t.thorpe@hud.gov. BRETT ROBINSON Is managing director of Section 184 lender 1st Tribal Lending, a subsidiary of Addison, Texas-based Mid America Mortgage. He can be reached at brett. robinson@1tribal.com. 3MReport.indd