The report titled "What Employee Financial Stress Is Costing Your Company, And How You Can Stop It Now!" details five ways that EFS is negatively affecting both the company and its employees. These include reduced employee productivity and increased incidents of workplace accidents, health-related issues, employee turnover and HR department distractions.

More specifically, the report found that at least 25 percent of employees are affected. The report found nearly 20 hours per month, per employee is how much time a financially stressed employee spends distracted by their personal difficulty. Employees may spend time taking calls from creditors, arranging debt consolidation loans, worrying about how bills are going to be paid and more. This costs nearly $7,000 per employee, per year in lost productivity, according to the report.

Other issues include workplace accidents, resulting into 60 percent to 80 percent of on-the-job accidents are stress related; health and welfare issues, which resulted in 75 percent to 90 percent of all doctor visits being stress related; 40 percent of employee turnover was related to stress; and human resources deparment distractions.

"All companies, both big and small, are facing this problem, and the sooner they take some simple steps to address the problem, the sooner they can improve employee productivity, satisfaction and reduce costs," said Ned Lenhart, president of Financial Literacy Partners. "We now live in a time where even dual income households are experiencing greater financial stress than ever before. I see this a lot because despite the increased incomes, employees and their families have a serious lack of quality information on how to soundly manage their finances."
(Back To Top)

That’s because incoming Mortgage Bankers Association Chairman Regina Lowrie, CMB, earned her designation this week in a ceremony at MBA headquarters. She managed to complete the requirements in three months, despite her expanding role as MBA Chairman-Elect and as president and managing partner of her company, Gateway Funding Diversified Mortgage Co. in Horsham, Pa.

Lowrie said it was important for her to attain the CMB, not only on a personal basis, but for the industry as well.

“Getting the CMB is something that I had wanted to do my entire career,” Lowrie said. “Most of the reasons were professional. In the 11 years since I started my company, the business came first. The responsibilities were such that I always said, ‘I’ll put if off until next year.’ Now, I wish I’d done it sooner. It wasn’t that daunting.”

Lowrie worked with a mentor, SuSheila Dhillon, CMB, AMP, of The Monticello Group in Annapolis, Md. “I would study on the train back from D.C. to Philadelphia,” Lowrie said. “On the way down I would go over my testimony in the Ney-Kanjorski bill, and on the way back I would study for my CMB. SuSheila was wonderful. She was always there for me—in the evening, on weekends, even during her vacation. She was so supportive and built my confidence.”

Lowrie said it was important for her to come into the MBA chairmanship (in October) with the CMB designation. “I wanted to be able to talk about it to mortgage professionals—how important the designation is, just as it was important for me to talk about the importance of MORPAC when I was its chair,” she said.

The CMB designation carries clout outside the industry as well, she said. "I think it sends a strong message  in our industry. It speaks of the quality of the individual representing our organization,” she said. “We are the voice of the real estate finance industry. When we’re asked to testify on the Hill or represent our industry in the public it sends a powerful message to the industry, to policymakers and regulator.”

Lowrie encouraged all mortgage professionals to pursue the CMB designation. “Anyone who has seven years or more in the industry should go for it,” she said. “Much of the material are things you already know—things that you do on a daily basis. The material brings it down to a level where it serves as a refresher. So I would encourage every one to pursue this.”

So, if the CEO of a major mortgage company and an incoming MBA chairman can balance work, volunteer activities and home life to obtain the CMB, what’s your excuse? For more information about the CMB designation, go to the CampusMBA Web site, http://www.campusmba.org, or call (800) 348-8653.
(Back To Top)

In late May, MBA representatives traveled to Egypt to better understand the course and curriculum needs of banks, mortgage companies and the Egyptian Mortgage Finance Authority, an agency within the Egyptian Ministry of Investment.

Based on initial review, CampusMBA recommended the target audience receive training on a variety of topics, including mortgage origination, underwriting, processing and servicing. In addition, it is recommended that professionals be trained to increase awareness among Egyptian citizens of the mortgage process and the importance of homeownership.

"The absence of a mortgage financing system has put the pursuit of home ownership out of reach for many Egyptian consumers," said Allen Decker, USAID chief of party for the EFS Project. "As the leader in mortgage finance education, CampusMBA is an expert resource for providing training materials for professionals in the Egyptian mortgage system."

"A robust mortgage finance system is a vital foundation for a successful and strong economy. That is why MBA is committed to sharing our industry expertise and best practices with our colleagues in Egypt," said Jonathan Kempner, president and CEOof MBA. "Investing in Egyptian communities through the mortgage system not only benefits that country's citizens, but the international community as a whole."
(Back To Top)

KeyBank said the program, designed for investors who want to diversify their investment portfolios through the purchase of commercial and multi-unit residential properties, targets office, retail, multi-family, mobile-home park, self-storage, warehouse, industrial and mixed-use property types. The firm plans to originate $500 million in loans during the next 18 months through the program, with loan sizes ranging from $500,000 to $5 million.

Findings in a report last year by Deloitte & Touche LLP and Rosen Consulting Group showed that commercial real estate, once considered an "alternative" investment by some asset managers, has undergone a "sea change." The report said the growth in popularity for direct real estate investment “follows on the heels of fundamental changes the industry has experienced since the early 1990s.”

"Based on the feedback we received from our sales professionals across the country, there was significant demand for commercial real estate loans in this size range," said Rob Nall, senior vice president and director of Key Commercial Mortgage Direct.

KeyBank Real Estate Capital is sponsoring the program and underwrites all the loans.
(Back To Top)

Lancaster Pollard secured $5.3 million federally insured loan for The Meadows, a 150-unit subsidized senior apartment near Cincinnati. The refinancing will pay for fire safety upgrades, exterior brickwork repairs for future building stability and reserves to be set aside for future improvements.

The Meadows was originally constructed in 1980 using a HUD Section 202 loan. It had been unable to refinance under previous HUD guidelines. But thanks to a revision in the underwriting requirements through HUD Notice 04-21—a revision supported by the Mortgage Bankers Association—enabled The Meadows to refinance and determine how much it needed to borrow.

“This transaction represents a perfect example of the intent of the FHA program changes,” said Scott Moore, president of Lancaster Pollard. “The new lower interest rate and extended term of the refinance provide more than $650,000 for building improvements with no impact to affordable rents the tenants enjoy.”

MBA Chairman Michael Petrie, CMB, said the new guidelines should open up more transactions such as with The Meadows. “We believe this is one of the first refinancings to close using the new underwriting modifications approved by HUD at MBA’s urging,” Petrie said. “The new HUD guidelines will assist lenders as they provide affordable housing for seniors and invest in their communities.”

HUD confirmed that The Meadows was the first such loan to occur since the modifications occurred.

“We were able to provide for repairs and upgrades to a facility that provides for lower-income individuals,” said Ray Kingsbury, vice president of community services for Life Sphere, which owns The Meadows. “I think the repairs would have gotten more expensive, and honestly, in these days and times, I don’t know where else the money would come from.”

Lancaster Pollard also recently completed the first debt issue package backed by the Federal Housing Administration’s Sec. 242 Mortgage Insurance in Ohio.

Bucyrus Community Hospital in north central Ohio will use its $26 million debt offering to replace its operating room, relocate its heliport, expand its oncology department and add new food areas and nearly 50,000 square feet of space–key renovations for a hospital depended on by a community of about 25,000, allowing the 25-bed hospital to modernize and providing small Ohio hospitals with a local model for using federal programs to access otherwise scarce funding. 

This is the first time the program has been used in Ohio since its inception nearly 40 years ago.
(Back To Top)

"Education keeps mortgage professionals up to date on the latest developments in the industry and helps us serve our customers better," said Larry Gilmore, AMP, chair of MBA's Diversity Task Force and vice president of government of housing and industry relations for Option One Mortgage Corp. "The Path to Diversity scholarships provide opportunities for these industry professionals to extend their knowledge and enhance their careers, while ensuring that the industry meets the needs of the diverse communities we serve."

The Path to Diversity program continues through a sponsorship provided by the Research Institute for Housing America (RIHA), a trust fund subsidiary of MBA. The following companies have also provided scholarship funds: Irwin Mortgage, Option One Mortgage, SunTrust Mortgage and Wells Fargo Home Mortgage.Companies can participate in the Path to Diversity program by enrolling as a participating company or by sponsoring 10 or more scholarships. Additionally, member firms providing internships to qualified college students are eligible to receive free distance-learning courses for each intern through CampusMBA.

To date, 147 scholarships have been awarded since the program's inception in 2001. 

Visit http://www.mortgagebankers.org/pathtodiversity to download the scholarship application. For more information, contact Joanna Truitt at (202) 557-2835 or jtruitt@mortgagebankers.org.
(Back To Top)

In response to student feedback, CampusMBA created instructor-led Web-based courses designed for individuals who want to benefit from the assistance and expertise of a seasoned professional and teacher, with the convenience of taking the course online. Instructors facilitate and provide individual responses to homework assignments and discussion board questions. Students are expected to participate in all activities and assignments throughout the course, as well as pass a final exam.

"Traditionally, students taking online courses offered by CampusMBA were able to complete the coursework at their own pace and had access to an industry expert when they had questions," said Dan Thoms, vice president of education at MBA. "The instructor-led courses provide students with more structure and classroom interaction while continuing the ease and accessibility offered by online courses."

Each course will be taught by a subject matter expert, who is often a Certified Mortgage Banker (CMB), the highest designation in the mortgage industry. The first set of instructor-led courses focuses on government housing programs, such as FHA and VA.

CampusMBA is also offering two instructor-led CMB designation preparation courses to help CMB candidates prepare for the written exam required to achieve their designation. Led by CMB designees, the Residential and Commercial CMB prep courses will be held at least twice a year. Upcoming courses include:

Fall 2005
VA Fundamentals - August 22
Commercial CMB Online Prep Course - Date to be determined

Spring 2006
Residential CMB Online Prep Course - Date to be determined

For more information on instructor-led courses or CampusMBA, please visit www.campusmba.org or call 800-348-8653.
(Back To Top)

TRIA, which passed in 2002 in the wake of the September 11, 2001 terrorist attacks on New York and Washington, D.C., provides a federal backstop to terrorism insurance. But it is set to expire at the end of this year. The Treasury Department issued a report on June 30 recommending extension of TRIA, but not without substantial changes to the act that would require the private markets to assume a greater burden of the risk.

Among those testifying before the House Financial Services subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises was James Maurin, who spoke on behalf of the Coalition to Insure Against Terrorism, of which the Mortgage Bankers Association is a member. Maurin, founder and principal of Louisiana-based Stirling Properties, told the subcommittee that extension of TRIA was necessary, as businesses and the insurance industry have not matured enough to handle the economic risks on their own.

“CIAT has strongly and consistently urged Congress to keep a terrorism insurance program in place for one overriding reason: the private insurance markets cannot and are not yet able to take on the job on their own,” Maurin said. “We know this because, as policyholders–the consumers of insurance–when the current program expires, so does our coverage. We know our coverage expires because more and more of our insurers tell us so every day, in the form of exclusionary notices and coverages that extend only to the end of this year.”

Maurin noted that if the private insurance market was capable of dealing with this issue, it would be preparing to do so now. “Unfortunately, we see no evidence of that occurring. As a result, the crisis that Congress and the Administration dealt with in 2002 looms again and requires immediate legislative action,” he said. “As policyholders, our members have already been subject to a variety of ‘popup exclusions’ and ‘sunset clauses’ and other restrictions which the insurance industry has begun to impose on renewal of policies running through December 31, 2005. These exclusions are in anticipation of a possible disappearance of the TRIA backstop. Worse, these exclusions take effect even if TRIA is renewed or replaced, but the changes to it reduce the backstop protection to insurers. These gaps, or potential gaps, in coverage will begin to have an effect on construction lending and debt ratings the later in the year that we go without a replacement program being in place.”

Bipartisan legislation to extend TRIA was introduced in the Senate in February by Senate Banking Committee members Robert Bennett, R-Utah, and Christopher Dodd, D-Conn. The bill, S.467, has the support of most of the members of the committee, and would reauthorize TRIA for two years beyond the current expiration date of December 31, as well as establish a commission to recommend a long-term solution to the terrorism risk problem. A similar bill in the House, H.R. 1153, was introduced in April by Rep. Steven Israel, D-N.Y.

Israel said “the clock is winding down” on building consensus on a TRIA extension, noting that Congress is about to go on a month-long recess in August. “We don’t get two strikes on this issue,” he said. “If we don’t act, we will profoundly disappoint our businesses back home.”

Israel noted that H.R. 1153 “is an imperfect bill, but it is important that we pass it. We need ensure that whatever is passed in the remaining weeks we have here focuses on a short-term extension and a long-term solution.”

Other House Democrats expressed support for extending TRIA. Rep. Gary Ackerman, D-N.Y., said “This Congress has no greater domestic obligation. Failure to extend TRIA now would take us back to the highly uncertain economic environment that was in place before 9/11. Failure to extend the short-term extension makes no sense at all. Unfortunately, we have seen with the attacks in London this month that the danger is still out there.”

House Republicans, however, indicated wariness of extending TRIA in its current form. House Financial Services Committee Chairman Michael Oxley, R-Ohio, said he supported the findings of the Treasury Department report, which, among other things, asserted that continuation of the program in its current form would likely hinder the further development of the private insurance market. Treasury Secretary John Snow told Congress earlier this month that the Bush Administration would support an extension of TRIA, so long as the “event size” that triggers coverage increased to $500 million, and deductibles and co-payments increased.

(MBA submitted statements for the record at those hearings, urging Congress to extend TRIA.)

Howard Mills, superintendent of insurance with the New York State Insurance Department, told the subcommittee that it is impossible to “model” a terrorist attack, and that it is “impossible” to price terrorism insurance without a federal guarantee.

“As vividly demonstrated by the recent cowardly attacks in London and Egypt, the terrorist threat has in no way subsided and continues to be an immediate and significant risk to our nation’s physical and economic well-being,” Mills said. “Reminders of this threat are omnipresent in our daily lives as evidenced by barricaded office buildings in urban centers, the necessity to search the bags of entrants to our mass transit systems, the increasing presence of security personnel on our streets, and news headlines about another bomb explosion or evacuation somewhere grabbing our attention. Just as the terrorism threat has not subsided, our response to this threat, both physical and economic, cannot be allowed to diminish or abate.”

Mills added that “given the vital role that TRIA has played in ensuring the affordability and availability of terrorism insurance in the market, and by extension the overall US economy, we cannot and should not lower our economic preparedness by allowing TRIA to expire without an appropriate federal backstop being in place on January 1, 2006.”

Maurin said CIAT “did not share the Treasury Report's confidence that the TRIA’s expiration would likely lead to only a ‘short-lived adjustment in coverage and pricing.’ On the contrary, we can only repeat our concern that the American economy is already being adversely affected by the anticipated year-end expiration of TRIA. If we want to avoid a repeat of the near-paralysis of major construction and interruption of other business activity which we experienced in 2001-2002 before TRIA was in place, then Congress needs to act well in advance of year-end.”

Maurin also noted that his conversations with potential institutional investors indicated that many are beginning to take a “wait and see” approach to commercial real estate investment, especially on properties or projects where obtaining full terrorism coverage would be in doubt in a degraded market.

“This wet blanket on capital creation will slow down new development, economic growth and job creation,” Maurin said. “The uncertainty surrounding the future of federal terrorism insurance is impacting business today and growth for years to come. I cannot put a project together in six months; my lead time is 3-4 years at a minimum, but I need to have terrorism insurance in place before I buy the land and start rezoning, permitting or negotiating with tenants. The markets need certainty and the effects of this debate and the length it extends could impact the economy years out.”

J. Robert Hunter, director of insurance with the Consumer Federation of America, took a different view, asserting that the insurance industry needs to “wean the insurance industry and large commercial policyholders from taxpayer subsidies” under the current setup of TRIA.

“Not surprisingly, insurers and the real estate industry have encouraged lawmakers in both houses of Congress to extend TRIA in much the same form it is in now, and even expand it to cover group life insurance losses,” Hunter said. “These interests receive significant financial benefits from a program that provides expensive reinsurance coverage at no charge. If consumers received free, taxpayer funded auto insurance, there would likely be a clamor for Congress to extend that program as well.”

TRIA, Hunter said, has “achieved its temporary objectives and that, given the robust economy, TRIA’s expiration or extension would have little impact.”

But Maurin noted that policyholders have been pleased with the success of TRIA and the terrorism insurance program it instituted. “With virtually no cost to the taxpayer, the terrorism insurance program has worked largely as intended,” he said. “It put the economy back on track after 9/11 and restarted the stalled construction industry putting some 300,000 people back to work. Since then it has allowed businesses across America to continue operating and growing, saving countless jobs in the process.”

Although there are still some gaps in coverage, TRIA has made terrorism insurance broadly available to all businesses that want and need this vital coverage, Maurin said.

“[While] the TRIA insurance program was intended to be a temporary measure to ‘backstop’ the market until the private insurance markets could fully assess and price the risk. Unfortunately, the situation the Nation is in today does not make that possible,” Maurin said.  “Our most senior government officials tell us that the threat of terrorism remains undiminished. Our Nation has had a great deal of success at dealing with and deterring terrorist threats over the past three years. Paradoxically, that success makes it impossible for the government, the insurance industry, or insurance policyholders like CIAT members to determine where, when, or with what frequency future terrorist attacks might occur.”

“The risk of further catastrophic terror attacks appears to be as acute as before,” Maurin continued. “The recent attacks on our closest ally Britain remind us all of what may happen here. Planning the day before for the day after an attack should be viewed as equally important to efforts to protect ourselves against such an attack.”
(Back To Top)