KTS Message

We are pleased to announce the relocation and expansion of our main office to 111 Washington Street Plainville, MA effective July 5th. Our new office is conveniently located on Route 1, minutes from routes 95, 295 and 495, and 10 minutes from Providence.

Rest assured that the level of quality, personalized service afforded to you will be enhanced by our expansion. We would like to this opportunity to express our appreciation for your continued support and look forward to serving you from our new location.

Very Truly Yours,


Jason S. Kane

P.S. Thank you to all of the contestants who entered the previous newsletter's trivia contest. Congratulations to Mark Lebkuchner of Schaefer Mortgage and Seth Belcher of Bay Mortgage Services for winning movie passes to the Showcase Cinema. Mark and Seth answered correctly to last months trivia question:

In the movie, "Planes, Trains, and Automobiles" Steve Martin spent the Thanksgiving weekend trying to get home. Where was home?

Correct Answer: Chicago

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What You Don't Know Can Bankrupt Your Company

DNC Law

WASHINGTON, D.C. -- If you’re one of those mortgage originators who thinks the Do Not Call (DNC) laws don’t apply to you because you’re not making cold calls or you’re only buying “scrubbed” leads, the FCC says you’d better listen up.
The federal government formally established the Do Not Call registry in December 2002 and launched it in June 2003 with joint enforcement from the Federal Trade Commission (FTC) and Federal Communications Commission (FCC). Yes, the laws were originally enacted to curb those annoying dinnertime calls from your typical telemarketer; but the reality is these laws apply to all U.S. companies that make sales transactions over the telephone – including mortgage companies.

Beverly Hills compliance attorney Barry Kaye has been closely following this issue “The DNC laws are having a sweeping effect across the mortgage industry. The legislation essentially changes the way mortgage companies must conduct business. What’s alarming is that many originators don’t have a clue or are simply not that interested”, says Kaye.

Given the fact that 40% of DNC citations issued by the FCC were to mortgage companies, many companies are taking a gamble. And the stakes are high. The fine for non-compliance is $11,000.00 per call. Just ask Dynasty Mortgage how quickly that can add up. Dynasty was recently issued a forfeiture notice for $770,000.00. You’d think a judgment of this size would get people reacting. Well, so did I.

The sad truth is that almost all the mortgage companies I’ve spoken with who asked not to be mentioned in this article think the laws don’t really affect them because they are aren’t making cold calls or they buy “scrubbed” leads. The FCC says they’re wrong and they aren’t playing games.

“The FCC website is very clear regarding the DNC laws. We’ve sent out a message and our enforcement is vigorous,” notes FCC Director, Office Media Relations, David Fiske.

Any outbound call that you make to someone whom you do not have an established and direct business relationship with - to a realtor referral or past client referral, to a person on a list you purchased – must first be run against the DNC registry.

“The fact that a realtor gave your card to their client and told them you’ll be calling does not keep you compliant. If you think otherwise, you’re wrong. You’re just totally wrong,” says Kaye.

“You need to first get a SAN and run every call – including realtor referrals – against the DNC registry at least once every 31 days. You’ve got to have a written compliance policy in place and train your employees. You also need to have a system in place that documents all calls made, proof of established clients and consumer inquires, and an internal real-time do not call list.”

If that sound like a lot, it is. Small to mid-sized companies are clearly at a disadvantage. Membership organizations like the National Association of Mortgage Bankers and the National Association of Mortgage Brokers have yet to provide an easy to access road map on what members can do to stay compliant like the National Association of Realtors has done for its members on their website.

Rather than relying on membership organizations for guidance, Kaye says to consider an outsourced call compliance solution that takes care of everything for you..

“You’re on your own right now. And until this issue is really brought to the forefront, chances are we’ll see many more Dynasty Mortgages in the future”.

- Excerpt from Originator Times -

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Home Prices Rise 12.5%

Average house prices increased at a 12.5% annual rate from the first quarter of 2004 through the first quarter of 2005, according to the Office of Federal Housing Enterprise Oversight. House price appreciation has been in double digits for the past four quarters and it hit a record annual rate of 13.4% in the third quarter of 2004, before slowing to 11.8 % in the fourth quarter.

"The House Price Index shows the rise in house prices continues at an extremely strong pace and raises the potential for declines in some areas later on," said OFHEO chief economist Patrick Lawler. The highest annual price appreciation occurred in Nevada (31.2%), California (25.4%) and Hawaii (24.4%). The lowest annual price appreciation occurred in Texas (3.77%) Indiana (4.09%) and Oklahoma (4.11).

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RI & MA News

Local News

Rhode Island

In Rhode Island, subprime loans accounted for 14 percent of all mortgages in 2003, putting the state first in the nation for high-rate mortgages.

Rhode Island Housing is using a $238,000 federal grant to launch a consumer education campaign, providing no-cost legal and real estate advice to home buyers as well as to homeowners interested in debt consolidation or refinancing.

Additionally, the first of several meetings and hearings was held recently by a Special Legislative Commission to Study Predatory Mortgage Lending Practices, but it remains uncertain how state lawmakers will handle the matter.
Massachusetts

Beginning on July 1 in Massachusetts, real estate agents representing buyers who select a house listed by their firm can provide their clients with a consent form allowing them to use an in-house agent for representation.

The present law requires agents to inform buyers of the possible conflicts of interest in the event that the buyer and seller are represented by the same firm. Buyers can seek representation elsewhere; but if they stay, the agent must remain neutral during negotiations. According to David Drinkwater of the Massachusetts Association of REALTORS®, "A consumer can make a conscious decision to choose to work with a particular individual in the firm, and that agent can help from start to finish and be their representative."

However, the Massachusetts Association of Buyers Agents points to a conflict of interest when the same company attempts to simultaneously get the lowest possible for the buyer and the highest price for the seller. "It's the same reason we don't allow law firms to represent both sides of a divorce," explains group spokeswoman Casey Crane. Charles Rounds, a professor at Suffolk University Law School, anticipates numerous lawsuits tied to the regulation.

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