Non-Profit Mortgage Brokers Have Begun Their “Secret” Attack on the Mortgage Industry

The era of the non-profit mortgage broker has begun and it looks like the non-profit armies are rounding up the troops for battle.

I know, I know, for profit loan officers and brokers are saying, “Yeah, right! They can’t do what we can do? They are not has smart as we are and how can they help anyone get a mortgage without having a 745 Beemer, Prada shoes and charging 4 points a loan?

Well, let me tell you something, non-profits can sell loans just like any for profit and I am sure that the client will not have to worry about being baited and switched, undisclosed kick backs, 3 year hard pre-pays and down right fraud.

I will be following this closely because I feel it is a definite viable alternative to the decade of mortgage decadence, greed and fraud that was perpetuated by the lending industry. Personally, I feel that there are some legitimate economic reasons for non-profit/government intervention in the mortgage markets and we don’t have to look far to see what the for profit lending industry has done to our economy and housing market thus far.

The Neighborhood Works Organization (NWO) has started a new mortgage broker pilot program in which they are developing 25 chartered NWO’s to become non-profit mortgage brokers. They are looking for a “consultant” to help them bring this operation full force ahead. So, any out of work mortgage brokers out there, you may want to check this opportunity out.

Some non-profits like the Washington State Housing Fiance Commission have set up a special traing program for loan officers and brokers who want to be able to receive referrals from government sponsored loan programs.

The Neighborhood Assistance Corporation of America (“NACA”) is aggressively hiring mortgage consultants . Check out their website.

Mortgage Consultant

SALARY RANGE: 45,000-65,000+ Annual Compensation
CONTACT: hr@naca.com
BENEFITS: Excellent single/family health and dental PPO, 80% employer contribution, 401K & more.
LOCATION: CINCINNATI – CINCINNATI, OH (null)

POSITION SUMMARY:
The Housing Counselor/Consultant is responsible for providing comprehensive housing counseling services to the Members. The Housing Consultant works with Members to assist them through the home buying process and to overcome the roadblocks that would prevent them from purchasing a home. The Housing Consultant provides individual counseling from the initial intake to the mortgage closing including counseling regarding: credit, budget, mortgage qualification, property search and inspection, mortgage processing, and closing. They make decisions appropriate to the particular case, follow up with problem resolution, and take action to facilitate successful completion of the task(s). The Housing Consultant is in fact underwriting the mortgage and must make individualized judgment’s of Members cased based on NACA’s policies and procedures. The services performed by the Housing Consultant are a key component of NACA’s business, and of crucial importance to the organization and must administer the program to ensure the success of NACA and the continuous commitment of the funding sources.

COMPENSATION:
NACA is the only job in the mortgage industry that allows you to provide low and moderate income borrowers with an incredible mortgage and to make a considerable income without engaging in sub-prime practices. The compensation at NACA is based on our own ‘Results Compensation Program- ‘NRCP’. The NRCP would begin after the first three months of employment during which the compensation is straight salary in order to allow for training and the development of a pipeline. The structure of the NRCP Program is results based (i.e. number of loans closed) with a draw providing a minimum cash flow. But it is very different from other commission-based plans used by for-profit mortgage brokers and lenders:

1. NACA offers one single product which is the Best Mortgage in America with no down payment, no closing costs, no fees, and a below market interest rate-NACA provides the lowest fixed interest rate for all mortgage applicants whether a prime or sub-prime borrower;
2. Compensation is paid at a fixed amount regardless of the loan amount or any other terms. Thus NACA staff do not have to balance their own interest against that of the borrower since they do not have to charge front-end and back-end points (i.e. yield spreads) to earn their commission;
3. The NRCP provides a minimum of pay: For pay periods without loan closings, NACA provides an advance to be repaid from future closings;
4. NACA staff are not required to generate leads since the interest in the NACA Mortgage and active participation already exists;
5. Housing Consultants counsel borrowers in the office and focus on getting them Qualified;
6. NACA Qualification is a ‘Character-Based Lending’ and not a risk-based pricing. NACA approves their members based on their overall circumstances and not on rigid criteria.
7. NACA staff have at their disposal a state-of-the-art computer hardware and software (‘NACA Lynx’) which makes for a fast, efficient and paperless mortgage qualification, processing and underwriting;

NACA has huge numbers of people accessing the program. These participants are extremely good leads that could not be generated through traditional sources. A NACA Housing Consultant is expected to close five to ten per month and earn $45,000 to $65,000+.

It’s not like the $100k plus years that most mortgage professionals experienced in the past. But hey, it beats working at Countrywide!

I suspect much more news to be coming out of the non-profit mortgage broker camp for some time to come and I expect many for-profits will be filing their 501 (c)  3′s  with the IRS in the coming months.


Posted in Mortgage News | 23 Comments

23 Responses to “Non-Profit Mortgage Brokers Have Begun Their “Secret” Attack on the Mortgage Industry”

  1. Joe says:

    how do i get my mortgage company involved? let’s see on average 5 to 10 loans means i will be getting paid $500 to $1,000 per client on your payscale and i have unlimited leads. you guy’s take care of all compliance send out all discolsures. pay for all my computer support and the 1,000 other things that go into originating a loan. i’m in, sounds to good to be true. where is naca getting there money from? why can’t i get the same programs? if we had those programs at our disposal i could probably service the customers at a 20% discount. compared to a non profit. give us the same playing feild and will run over these places like a bunch of savages.

  2. David says:

    Article says …”The Housing Consultant provides individual counseling from the initial intake to the mortgage closing including counseling regarding: credit, budget, mortgage qualification, property search and inspection, mortgage processing, and closing….”

    Read as:
    - Credit Counseler
    - Budget / Life Style Counseler
    - Realtor
    - Loan Officer
    - Processor
    - Underwriter
    - Closer / Funder

    7 jobs for $45k-65K a year.
    Think I’ll stay For-Profit.
    Thanks for offering.

  3. paul says:

    NACA does great work but everyone should then be able to get a loan from them…no income limits or zip codes limits …now that would be fair!!! The program should be made available to every american!!!

    What’s next ..buy a car direct from Toyota…good bye dealer!

  4. C A Jones says:

    I hope the newer ones do better than NACA. NACA has a very long history of bad news for lenders – and their consumers. Check out some of the legal investigations into their ‘non profit’. They fund themselves by scamming, I mean shaking down, I mean ‘asking’ big lenders for ‘donations’ (instead of lawsuits to tie them up in court). Some of their own ‘loan officers’ have some choice words. Might ask some of their customers how well they perform too.

  5. Jason says:

    In response to CAJones: I am a NACA Housing Consultant. Yes, we are a “bulldog” not for profit. We do not “scam”. We advocate for our members. People that have been taken advantage of, lied to, and flat out scammed by traditional mortgage brokers, have found salvation at NACA. Yes, we have members that complain about the NACA way. Mostly people that do not have the patience to get a loan base on affordability. That is what NACA does. Comprehensive budget counseling, credit counseling, and neighborhood stabilization are the NACA bullet points. I have plenty of members that will give you positive feedback as well as our housing counselors. Yes, we have growing pains, and yes it might take longer than a traditional broker, but we have the lowest default rate in the industry since we absolutely will not put a member in a home that they can not afford and are not ready for. I look forward to any response and or constructive criticism.

  6. JacMac says:

    Jason: “I look forward to any response and or constructive criticism.”

    Hey Jason, how about some support?

    “We absolutely will not put a member in a home that they can not afford and are not ready for.” ~ Jason

    Amen! An organization with some integrity!

  7. CTAN says:

    Let me get this straight, a “mortgage consultant” gets paid 55K……for working with say 75 borrowers a year. And this is non-profit? Let’s do some quick math here 75 borrowers x 200k per loan (average?) is 15 million dollars in volume…now I’m a wholesale AE for an FHA lender and I get, lets say 10 basis points on volume, so for that same 15 million I would only get paid 15k…not 55k. Does that make my company a non profit company? I suppose the big cheese at NACA are Franciscan monks who has taken a vow of poverty? Don’t make me laugh.

    This is really a great idea though. I could open a broker shop called…
    “non-profit loans R US” and do just one product (FHA Loans) I will offer the same below market rate to every borrower (exactly .125% less than Chase Bank) I will charge no points, I will charge no fees and according to the rates today I will make exactly $3,746 on every two-hundred thousand dollar deal whilst paying my “mortgage consultant” 500 bucks for every one they close. I will not commit loan fraud; I will not put a borrower into a loan they cannot afford (That’s FHA’s rule not mine actually) and I will require my borrowers to attend a home affordability/ budgeting class…. Oh yea and I will become filthy rich selling really great loans to all the well intentioned idiots out there that cant seem to understand that if I fund in my company’s name and with my company’s money (borrowed money) then I don’t have to disclose the YSP and it looks as if I’m doing the loan for free…..what a deal!!!

    Holy crap some people really are stupid, its no wonder there are so many crooks in the mortgage industry.

    CTAN

  8. Anonymous says:

    Non-Profit Mortgage Brokers …..

    .. snip ..
    Well, let me tell you something, non-profits can sell loans just like any for profit and I am sure that the client will not have to worry about being baited and switched, undisclosed kick backs, 3 year hard pre-pays and down right fraud.
    .. …

  9. paul says:

    CTAN

    Welcome back, good to hear from you. I agree with you !!!

  10. Al says:

    This is confusing me a bit. Overall it sounds good, but….

    1) These guys are still payed by commission instead of a salary, so it is in their best interest to process as many loans as possible. There is an incentive to take shortcuts on the consulting (too time consuming) and to encourage the borrowers to sign even if it’s not in their best interest. I have no reason to believe at this time the corporate culture encourages this, but the potential is there. Admittedly it is better than the private sector pay structure, but I’d still prefer to see a straight salary.

    2) How do they stay in business? Even non-profits have to generate revenue to cover salaries (or commissions), infrastructure costs, IT (NACA Lynx sounds expensive), etc. Are they getting government funding? If not, the borrower is paying somehow. I don’t have a problem with a borrower paying for the service they’re receiving but it makes me nervous that it is being so well hidden.

    I looked around the net for answers to my number 2 question and couldn’t find it. If anyone knows, please post. I’m not against NACA as they seem a better option than conventional lending for the most part, but when something seems to good to be true….

  11. Chris says:

    Al,

    No it’s not better than the private sector for the L.O. There is also a draw component attached to the salary if you don’t perform up to specs. If you don’t perform you get switched to an $8hr. per diem. And on that draw, you owe that money when your commission final shows up.

    Read CTAN explanation again. It’s right there. They are making alot of money. Expenses are being covered. The L.O. is taking the short because in essence they are only data entry clerks.

  12. paul says:

    Hi Chris,

    Hope all is well ! I see you are a broker in NJ and have worked at WAMU. Did you know J . Regan …wholesale rep?

  13. Chris says:

    Paul

    Different Chris. I use to work at Aegis Retail years ago. I’m a broker in Louisiana. What in the hell happened to the Pats?

  14. paul says:

    A big can of Giant whoopass !!!

  15. stevejoee says:

    Everyone knew there was a problem coming with the way sub-prime $ was being handed out left and right. The non-profits are not just that. They are paid with kickbacks in the the form of grants from the banks through Fannie. Very few LO’s make much more than the esteemed “counselors”. Brokers maybe, but they are the ones that have to manage the LO’s.

    Consumer Credit Counseling was established in the 1950′s I think by Sears and Wards to help people manage their credit purchases, and be a collection arm (in a different dress.) Fast forward to more recent times, this foreclosure (loss mitigation) trend has been coming in a big way since late 2006, not just last week, and a slew of the CCC imitators have been lining up for the last 3 years just for this occasion. Talk to the owner of USLM. He has been in the loss mitigation arena for over 20 years. The Non-profits profit well in both sides of the mortgage/foreclosure arena.

    Would the big banks like to blame the LO? Sure. Better to have those guys working inside the bank getting $8 per hour. Would the same bank like to restrict brokers out there? Yup. Part of this has occurred because the sharing of information has become very easy with the internet. Many “broker” type entities have gone by the wayside.

    Any rational fiduciary agent will provide good service, within the regulation of the law. Probably cuz if they do a good job …the client might give a referral. Does it mean the non-profit will provide better service…i sincerely doubt it. That counselor won’t be able to have a life until he pushes some loans…. gee…he might not even get to see how much his boss is making….

  16. GATORBAIT says:

    salery plus annual compensation? sounds like commission to me.

    non-profit simply they are required to spend the money they make or get as donations/grants and as some have said above – tend to request “donations”. I have worked with many non-profits and they have there place and have a nice ring to the public. make no mistake a bad apple non-profit can be just as bad for the industry as a bad apple traditional broker.
    Almost all the credit debt negotiation agencies are non-profit….i once performed a loan for an owner of one of these not for profits…his income (i mean compensation) sure supprised me.
    non-profits are typically required to take any excess (profit) money and funnel it back into the organization for programs, expenses, and oh yea compensation. it is a good concept but we need to understand it is simply the up front concept packaged well. part of the job of brokers is to consult with the client and discuss affordability and suggest programs for the benefit of the client..just because the bad apples were not doing this and the regulators were not regulating does not mean deceptive practices were the standard amongst any and all brokers.

    i am for any entity that will consult, work for the financial benefit of the client and disclose their fee for their service they provide…no matter the rate or terms. does this entity disclose what the lender pays them for the deal?

    the concept is interesting and has a place in the mortgage lending universe however it should not be a tool meant to replace the value and service traditional brokers also provide.

  17. john says:

    995-hope? more like 995-joke. Just more bullshit from Bush and as usual it never works.

  18. iggie says:

    Jason -
    most lenders are now raising min. scores for FHA whereas before scores never mattered – do you think that NACA will begin to look at scores ever? thanks …

    javi

  19. Mark says:

    NACA is not a scam! They get they’re funds from BofA and Citibank so they loan out their money not other lenders funds. Because of this they can use their own guidelines. They are more interested in putting someone into a home they can afford then their credit score.
    NACA’s problem is that they are so overwhelmed that they take way too long to get a basic loan done. Even an A+ borrower can do a NACA loan but it could take 6 months or more to get approved (I have experienced this). The lack of communication and loan agents with too many files can make it a very stressful and aggrevating loan program. For the best borrowers still plan 6-9 months for approval. If purchasing they tend to put the Loan Modifications and Foreclosure Prevention clients ahead of buyers.
    If getting started with them…GOOD LUCK!!

  20. Dave says:

    I have been reading the comments posted here and it follows the same pattern any other web site collects in their comment section from those willing to rail against a new idea and methodology. Particularly since it may have different rules and puts high money earning so-called “professionals” out of work, or technically in a pay scale commensurate with their performance and skills. The mortgage industry has created its own monster with the debacle in the market. Their lack of self-regulation and policing led to the nonsense we have in the mortgage markets today. What we need are more sensible and rational approaches to finding and qualifying borrowers whose resources match the property they are trying to purchase. The insanity of no-doc loans, falsifying loan applications, zero-interest loans and directing buyers into balloon loans the lenders knew the buyers could not support has created the mess we now have. Now that someone has come along with a reasonable pay scale and methodology or doing business, the “fat-cat” mortgage brokers and their employees are mad because their scams have been revealed and the market is correcting a long overdue practice of screwing the buyers. No not all loan officers took advantage, but the majority did and they deserve to suffer tremendously for what they have done to this country and its citizens. When they were riding high they were heroes and pillars of the community. Now that they have been exposed I hope all that took advantage now reap the rewards of their excesses and all starve!

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  22. blaski says:

    any one works for NACA in Boston?i would like to know the culture there cause i am interrested in applying there. thanks

  23. Ron Borg says:

    Truth be told, if lenders took the time to work with prospective homeowners the way NACA does, there would never have been a housing and debt crisis.

    As a long time mortgage broker, I have always said that traditional mortgage underwriting is flawed. Why is gross income used rather than net? Why does a single person have the same debt ratios as a family of 10? All for the sake of being “politically correct”? It’s absurd.

    Let’s face it – most non-profits are set up to do some good and to pay their executives well. It wood work for me since I am the CEO but my well paid (and deservedly so) experienced and talented loan officers would fly the coop. And then I would have to hire less experienced, less talented loan officers to assist our borrowers. Now sure, systems can be put in place and if strict guidelines are followed, most borrowers might fair well. Come to think of it… it wouldn’t be much different than applying for a mortgage at a local bank!