New Fed Mortgage, a retail lender licensed to do business in all New England states except Vermont, will acquire Commonwealth Mortgage LLC early in 2019. Commonwealth Mortgage is a direct to consumer or internet lender.

The acquisition means New Fed will have a direct to consumer channel in states where it doesn’t have a retail presence, and it can expand into additional states, including Virginia, Illinois, Maryland and Pennsylvania.  Also, New Fed will be hiring additional staff to coordinate the internet mortgage division.

[caption id="attachment_8627" align="alignright" width="204"] Brian Damico[/caption]

“The acquisition will allow us to grow the company further and serve other markets in more states as well as to integrate and build out [Commonwealth's] existing platform of mortgage loan servicing which will create stronger relationships with our borrowers in the future,” said Brian Damico, president of New Fed.

Commonwealth has funded billions of mortgage loans since opening in 2000 and has expanded to a multi-state platform. It originates Fannie Mae, Department of Veteran Affairs, Federal Housing Authority and department of Agriculture Loans.

New Fed experienced rapid growth in 2018 adding on 25 new employees to its team along with the addition of two new retail branch locations.  “Over the past year we have built our infrastructure and have been looking for opportunities for growth, said Damico. “Our vision for growth has been through retail branches in New England and to open a consumer direct channel outside of New England.  The acquisition of Commonwealth enables us to do that while expanding our lending footprint. We are now more versatile with our current infrastructure and more importantly we have the right people in place.”

New Fed has specialized in residential retail mortgage lending since 2001 and is licensed in seven states with team of 65 employees. New Fed offers in house underwriting for conventional, jumbo, FHA, VA, USDA, portfolio lending and state-housing programs.  Products available include first-time home-buyer programs with little zero down, pick your own term traditional fixed-rate programs, adjustable-rate-mortgage programs, construction loans and 203K renovation loans.

Edward Sypher Jr., former CFO of mortgage lender Vanguard Funding, was sentenced to 18 months’ imprisonment to be followed by three years’ supervised release. Sypher pleaded guilty in February to conspiring to commit wire and bank fraud in connection with the diversion of warehouse loans Long Island-based Vanguard had obtained to fund home mortgages and to refinancing mortgages.

Sypher was also ordered to pay $22,150.45 in forfeiture. Sandra Feuerstein, U.S. District Judge, imposed the sentence, and the court will set the amount of restitution in the future.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Maria T. Vullo, Superintendent, New York State Department of Financial Services (DFS), announced the sentence.

“Edward Sypher Jr. has been punished for deceiving his banking partners in order to divert millions of dollars to his own benefit and that of other Vanguard executives,” said United States Attorney Richard Donoghue. “This office, working hand-in-hand with our law enforcement partners, will continue to vigorously investigate and prosecute business executives who choose to commit fraud as a means of getting ahead at the expense of the businesses and residents of our district.”

Vanguard was a 33-branch, mortgage lending institution licensed in California, Connecticut, Florida, Georgia, Maryland, Massachusetts, North Carolina, New Jersey, New York, Pennsylvania and Washington. Between August 2015 and March 2017, Sypher and his co-conspirators at Vanguard engaged in a multi-million-dollar fraud scheme by falsely representing that the loan proceeds would fund or refinance mortgages for clients. Instead, Sypher and his co-conspirators diverted the funds to pay personal expenses and compensation, and to pay off loans they had previously obtained through fraudulent loan applications.

“When fraudsters treat investors like their own personal ATMs, using funds invested in good faith to line their own pockets, pay for personal expenses, and repay other fraudulent loans, confidence in the integrity of our financial systems suffers,” said William Sweeney, assistant-director-in-charge for the FBI.

On December 10, 2018, Matthew Voss, Vanguard’s former chief operating officer, was sentenced to 24 months’ imprisonment for his role in the scheme.

By Brian Sacks

We all want to close more loans, make more money and still have time to enjoy life, right?

So, I want to share a very quick way for you to do exactly that.

What I am about to share with you will sound very simple and that is probably why very few originators ever actually do this.

If you want to earn more money there are only three ways to achieve that goal

1. Ask Your company to raise the basis points you earn on each loan
   This is not likely to happen given the compression going on in our industry. Truthfully, during this time of the year, when many originators are being recruited actively, you need to make sure that, if you do make a switch, the company you are switching to has the ability to stay in business long term. You know the old saying, if its sounds too good to be true ... it probably is.

2. Work harder

This might be a solution for a small minority of originators, but only you know who you are right? The truth of course is that most of us probably work too hard already. But let's remember what we wanted as I laid it out in the beginning of the article.

We all want to close more loans, make more money, and enjoy life.

Many originators could not work any harder than they currently do so that is not a long term solution. Plus, working harder is in conflict with enjoying life, right?

One quick lesson here before we go any further.

Be careful what you wish for. 

3. Close the same amount of loans but make more money

Yeah, I know what you are thinking, and we could still get overage too but that isn't our reality and it is not the strategy I want to share with you.

First, an Exercise OK?

Go Back to all of the loans you closed in 2018
Write down the total number of loans you closed____________
Write down the total dollar volume______________________
Write down who you referred the deals to you or the tactic that generated it______________

Ready?
Seriously, stop reading right now, and do the exercise or the advice is useless! Print it out if you have to.

If you did the exercise than you now have some vital information you can use to quickly make more money, work less and enjoy life.

The quickest way to immediately earn more income is to increase your average loan amount so you can close the same amount of loans and work fewer hours:

--You now know how many loans you closed.
--You know who gave you those loans.
--You know what your average loan size was because we are going to increase it.

I just did this for 2018, and my average was much higher than in 2017 because I made the effort to do this exercise. The result was that I made more money closing the same amount of loans.

The other thing you will find doing this exercise is that certain agents doing larger purchases while others focus on grants and other lower first-time buyers. Now that you know this you should of course put more effort into cultivating more relationships with those agents and others like them.

Please don't misunderstand this. If you have a great relationship with an agent who occasionally does a smaller grant or first-time buyer loan that is fine. I am talking about agents who solely focus on smaller purchases.

So there you have it, and I would love your thoughts and feedback.

About the Author
Brian Sacks, a recognized mortgage expert with Homebridge Financial Services Inc., has closed more than $1 billion in loans and 5, 890 mortgage transactions. He is the author of " 48 Proven Ways to Close More Loans In Next 30 Days ... Regardless of Rates and the Real-Estate Market." You can learn more at http://48waysbook.com.

Brian Damico, President and CEO of New Fed Mortgage in Danvers, Mass., was going to be a financial advisor, but was offered the opportunity to run a new, six-person mortgage company in 2000. He accepted the position, but the employees never materialized. That meant he had to learn the business from scratch. But Damico did have a background in residential and commercial real estate, so he knew the business, just not mortgages. Today New Fed Mortgage originates $25 million of loans each month and does retail business in all the New England states, except Vermont as well as New Jersey and Florida.

The Mortgage Leader spoke with Damico about his decision to expand his organization, the types of people he prefers to recruit and an acquisition he's in the process of making.

What type of loans do you specialize in?

Everybody has the same products. Conventional we have really strong rates. We offer Federal Housing Administration, Department of Veteran Affairs of Agriculture and Department loans. We do all of these as products in-house, so we have underwriters that will approve them. Back in the day we would have had to send those out and wait a week or two. But now we control the whole process.

Why have you chosen now to expand New Fed?

Through the years, I never felt we were ready for growth. At one point we had a lot of loan officers, but it was before licenses [were required], and it was a different world. To really put your best foot forward and go for growth, I felt we needed all of the programs to be a full-fledged lender. And we have had all the programs for the last two years, so now we are ready to grow. We made sure we had the right people, in the right places.

How many people have you hired over the past year?

We’ve hired 25 people over the past 12 months, though 17 of them were hired in the last six months. Also, we have grown to six branches, from four, and we are looking to add more branches. It gets our footprint a little larger and we can recruit people where the branches are located and keep trying to build more volume in each branch.

What types of people do you look for when you are recruiting?

Culture is everything. I’ve hired big producers in the past. The question is are they all about themselves? Over time, I’ve gotten good at identifying people where there is a fit. While I wouldn’t automatically say, “No to someone that’s never been in the mortgage business, I love the idea that experienced people bring a book of business and clientele. It makes it easy to grow. It’s a people business, so we always try to recruit the best operations and sales people that we can.

What’s next for the organization?

We plan to open an Internet, or direct to consumer channel. To do that, we are in the middle of purchasing another mortgage company that does business in Illinois, Virginia, Maryland and Pennsylvania. This way the channel does not compete with New Fed’s retail branches. We are hiring staff to run that business.