The One Resource Your Real Estate Brokerage Might Be Missing

Hands_Holding_String_of_LightsBookkeeping, recruiting, marketing, budgeting … the list of demands on a managing broker or office manager is long and varied.  From budgeting software to interior design, real estate brokerages rely on tools, resources, and consultants to get the job done efficiently and effectively.  While it may or may not be immediately apparent, a relationship with an IDFPR-approved real estate school can go a long way to help with compliance and recruiting.  When selecting a school to support your office success, make sure it has the following resources.

  • Customer Service Team – You need a school with a team of individuals dedicated to helping your agents.  A good customer service team is not only knowledgeable about the school’s courses, but can answer questions about initial licensing and the licensing renewal processes.   
  • Designated Contact – Sometimes, managing brokers and managers have questions or concerns with company compliance.  Organizing continuing education for the office or questions about the licensing process during an acquisition, for example, are very common issues that a school can assist with.  Having a designated contact who can help you address these issues can be an invaluable resource during stressful times.
  • Helpful Resources – Understanding the needs of a real estate business should be important to the school.  Tools to help you recruit new agents and maintain the ones you have should be available from the school you choose.

If you have any questions about how Real Estate Institute can help, visit our Contact Us page or call Tanya Rinsky, Director of Strategic Client Relationships, at (847) 423-5006.

Mortgage Lending Gets Personal

Hello, friends!  It’s been a while since I’ve posted to this blog, but I hope to be a more frequent communicator over the next few months as exciting things happen in the Mortgage Education Division for 2012 – starting with the NMLS approval of a brand-new CE class/webinar.  When that approval is in, we’ll be sure to share all of the details, as I’m looking forward to spending time with all of you again!

 CFPB and ECOA News Coming Soon

I fully planned for this post to cover the CFPB’s recent bulletin putting our industry on notice that fair lending (specifically ECOA) is going to continue to take center stage in examinations and with enforcement actions.  However, due to some recent experiences, I’ve decided to put that off until next week.  Today, if you’ll allow me, I’d like to reflect on the more personal side of our business.

 When the Going Gets Tough

As many of you know, aside from my course development and instruction career at Real Estate Institute, I maintain an active origination business; mainly because I need more stress in my day-to-day life.  I’m currently involved in one of “those loans,” full of roadblocks, detours and unforeseen underwriting conditions. (Yes, even those of us who teach the business for a living have them occasionally.)  This loan has required me to go back to the borrower and their employer(s) multiple times to get everything in order, have conversations of varying levels of pleasantry with attorneys and real estate agents, and generally has left me wishing I would have pursued a career in something less stressful, such as manual defusing of nuclear weapons.  Although I’d be the happiest MLO in the world if I never ran across another loan like this, it has given me cause for reflection, and that’s never a bad thing.

 When we get one of these Tales From the Crypt files, it’s tempting to play possum, letting calls go to voicemail, putting off emailing and otherwise becoming an invisible person.  It’s only natural to want to delay unpleasant news, both to save us from dealing with an uncomfortable phone call and the client from angst.  In doing so, we’re forgetting a key element – that there is another person on the other end of the transaction with real emotions who is often literally staring at the phone waiting for a call from us.  Think of your life as a teenager when you were first navigating the complex world of personal relationships.  Remember how it felt the first time you got a call from someone you were interested in?  EUPHORIA!!  Now… remember how it felt the first time you didn’t get a call from someone you had been seeing and were really into.  “Devastating” doesn’t even begin to address the range of emotions.  “Why isn’t this person calling?  What doesn’t this person want me to know?  WHAT’S GOING ON?!?!?!?!”  Well, that’s the mortgage business in a nutshell.  It’s easy to deal with the files that have one underwriting condition – heck, anyone could do that.  It’s how we deal with the surprises, the roadblocks, the bumps and the sinkholes that define who we are as originators, who we are as people and why we deserve to be paid well for what we do.  Remember, bad news isn’t like good scotch – it doesn’t get better with age.  Those of you who master the art of communication in both good times and bad and are able to manage expectations of everyone in the transaction will truly set yourselves apart from your competition.  It’s not easy, but the most rewarding things in life never are.

 Pause for One of the Good Guys

In closing, I’d like to take a moment to ask all of you to keep one of the good guys in our industry in your thoughts and prayers.  Dustin Hughes, President of Northwest Mortgage Advisors in Portland, Oregon, has been an industry leader since the mid-1990s and an inspiration to many, many people in our business.  I’ve only had the pleasure of meeting Dustin twice, but I was simply amazed both times by his character, energy and love of life, and I personally know many, many others who have been positively influenced by this amazing person.  As some of you may know, Dustin is battling Stage 4 glioblastoma (brain cancer), and the battle is getting tougher.  I’m a firm believer in the power of positive energy, and I’m sure that Dustin and his family could use as much as they can get at the moment.  Dustin is chronicling his battle with this disease (and continuing to inspire people) on his blog at, and you can also find information and lend support on the Facebook group “Hughes’ Troop.”

IDFPR Releases Transition Application and Renewal Questions and Answers

This week, the Illinois Department of Financial and Professional Regulation (IDFPR) posted frequently asked questions to help all real estate licensees complete the transition and renewal process.  There is also important information about what will appear on the “License Look Up” webpage on the IDFPR website after the transition deadline.  Although all salesperson and broker licenses expire on April 30, 2012, your license will continue to show “active” while the IDFPR finishes processing the transition/renewal applications.  This may take up to 30 days.  Click here to view the IDFPR FAQs.

Real Estate Institute also has comprehensive transition and continuing education frequently asked questions.  To view our transition FAQs, click here.  To view our continuing education FAQs, click here.

Why Can’t I Pay My License Transition Fee Online?

Good question! Every day, hundreds of Illinois real estate licensees call to ask us about this. The IDFPR created different application and payment processes for the two transition options: Proficiency Exam and Transition Education. 

Transition by Proficiency Exam
Licensees who transitioned with the Proficiency Exam are allowed to submit their payment online because the state was automatically sent their results. As a reminder, this state-based exam is no longer available.  The last date to take the exam was March 15.

Transition by Transition Education and Exam
For the 30 and 45 credit-hour transition courses, the IDFPR does not accept online applications and payments.  Why, you ask?  Schools are not permitted to report transition course completions directly to the IDFPR.  Instead, students are responsible for providing proof of their course completion to the state.  This means you must mail a paper transition/renewal application with your fee and course certificate of completion. 

If you wish to mail the application to the IDFPR immediately, you may visit our website to print a copy of the required license transition application:

Additional instructions with answers to frequently asked questions about the license transition and renewal process are available here:

Have You Completed All 3 Steps to Transition Your Real Estate License?

If you are an Illinois real estate salesperson transitioning to the new broker license, make sure you complete ALL three simple steps, or you will lose your license on May 1.

  1. ENROLL. If you have not done so already, immediately sign up for the 30-credit-hour transition course.  This course can be completed by self-study. (You are exempt from CE for this renewal period.)
  2. TEST. Schedule your proctored exam. Spaces are filling up fast.
  3. SUBMIT.  You must submit your transition and renewal application, including fees and certificate to the IDFPR.  It must be postmarked by April 30.

Remember, there is no “late transition.” If you miss the deadline, you will no longer be able to earn referrals or commissions and will need to start the licensing process all over again.  That means having to complete a 90-credit-hour broker pre-license program.  Don’t pass up transitioning to broker status. Luckily, you still have a few more weeks.  There’s still time!

Upcoming Deadline for New Brokers to Complete Post-License Requirement

New Illinois real estate brokers licensed between May 1, 2011 and January 31, 2012 must complete a state-approved post-license course by April 30, 2012.  Continuing education is not required during the first renewal period.

Post-license is a two-part course. You must first complete the 15-credit-hour Post-License Topics course (self-study or live). Upon completion of the Topics course, you must attend a 15-hour Applied Real Estate Principles course.  This must be a live interactive class or webinar.

Course topics include:

  • Working with buyers and sellers
  • Foreclosures
  • Advertising regulations
  • Agent safety
  • Laws related to disclosures and real estate practices

Time is running out to complete this state requirement before the deadline.  If you have questions, please call the Real Estate Institute.

Attention, Brokers! Are You Sure You Need to Renew Your License Now?

You may have received a Broker renewal application from the Illinois Department of Financial and Professional Regulation (IDFPR).  DO NOT SEND IN THIS APPLICATION if you are a Broker who plans to transition to the new Managing Broker license.  Managing Brokers do not renew their license until next year (April 30, 2013).  However, your deadline for transitioning to the new Managing Broker license remains April 30, 2012.  Make sure your transition application and fee are postmarked no later than April 30. 

If you are a Broker and do not transition to Managing Broker, you must complete the 12-credit-hour continuing education requirement and submit the renewal application and fee by April 30, 2012. By renewing as a broker, you will also lose your right to manage other licensees or sponsor your own license.

If you are unsure about your remaining requirements, please call the Real Estate Institute. You’ll speak with trained experts who have access to extensive resources.  We’ll review your license status and help you stay on the right track.


This morning, HUD released mortgagee letter 12-04, formally announcing the MIP changes discussed in our last blog post.  There is one addition that I need to tell you about, and it only deals with FHA STREAMLINE REFINANCES.


If you are originating a streamline refinance and paying off an existing FHA loan that was endorsed for insurance on or prior to May 31, 2009, the UFMIP on the new loan will decrease to 0.01% of the new base loan amount, and the annual MIP (paid monthly) will decrease to 0.55%.  Some industry groups have already lodged an inquiry with HUD as to why the May 31, 2009, date was chosen.  If we get an answer to that question, I’ll be sure to let you know. 

Additionally, the effective date for the increases to the up-front and annual MIP that was discussed in our last blog post has been changed.  The first increase for all loans will now be effective with case numbers assigned on or after APRIL 9, 2012, and the additional increase for high-balance FHA loans will now be effective with case numbers assigned on or after JUNE 11, 2012.

Let’s get the word out!  Pick up the phones, close some loans, and (as always) happy originating!

IMPORTANT – Upcoming FHA MIP and Underwriting Changes

MIP Changes

In order to continue stabilizing the mutual mortgage insurance fund, and due to requirements in the payroll tax extension bill passed at the end of 2011, HUD has announced the following MIP increases for forward mortgages:

Effective with case numbers assigned on or after APRIL 1, 2012:

1)      The up-front mortgage insurance premium will increase from 1.00% to 1.75%, regardless of loan term

2)      The annual premium will increase by 0.10% for all loans.  A summary of the new premiums is below:

Loan terms greater than 15 years Loan terms of 15 years or less
LTV > 95%:    currently 1.15%   NEW: 1.25% LTV > 90%:     currently 0.50%  NEW: 0.60%
LTV </= 95%: currently 1.10%  NEW: 1.20% LTV </= 90%: currently 0.25%  NEW: 0.35%

3)      Additionally, the annual MIP will increase by an additional 0.25% for loans over $625,500 effective with case numbers assigned on or after JUNE 1, 2012.

Underwriting Changes

On March 1, 2012, HUD published mortgagee letter 2012-3 (dated February 28th), containing some significant underwriting changes regarding self-employed borrowers, disputed credit accounts and identity-of-interest (non-arms length) transactions.  A copy of the mortgagee letter can be found here.  The underwriting changes detailed in this letter are effective with case numbers assigned on or after APRIL 1, 2012, so plan accordingly.  As usual, these updates do not apply to non-credit qualifying streamline refinances or HECM (reverse) mortgages. 

Friendly reminder: FHA requires mortgagees to have an active loan application for both the borrower and property before requesting a case number (see Mortgagee Letter 2011-10).


1)      Self-employed borrowers MUST show a year-to-date P&L (Profit-and-Loss) and Balance Sheet if more than one calendar quarter has elapsed since the filing of the most recent tax return (annual or fiscal-year).  This requirement applies regardless if the loan is AUS-approved or not.

2)      If the income used to qualify the borrower exceeds the average of the previous two years’ tax returns, an audited P&L or a signed quarterly tax return obtained from the IRS must also be provided.  Again, this applies regardless of AUS decision.


1)      Disputed accounts will no longer trigger an automatic review by an underwriter if BOTH of the following requirements are satisfied:

     a.   The outstanding balance of all disputed accounts is less than $1,000
     b.   Two years have elapsed since the date of last activity listed on the credit report for all disputed accounts

2)      If the aggregate dollar amount of disputed accounts exceeds $1,000, all of the disputed accounts must be resolved.  In other words, the accounts must be paid in full at or before closing or a payment agreement must be in effect on the account(s) and the borrower must show that three months of payments on the payment agreement(s) has been made in a timely manner.

3)      Disputed accounts resulting from identity theft or fraudulent or unauthorized use of credit cards can be excluded from the $1,000 limit if the borrower provides documentation of the circumstances (a police report, for example). The lender must also include documentation that the account(s) in question are verified as not the borrower’s debt in the final case file.

4)      If the aggregate total of collection accounts exceeds $1,000, ALL collection accounts must be resolved (paid in full or a payment agreement established with a minimum of three months of timely payments).  If the total of collection accounts is less than $1,000, they are not required to be resolved/paid.

5)      FHA continues to require all judgments to be satisfied or an acceptable payment agreement established (with 3 months of on-time payments) before a loan can be insured.


The  definition of “family member” has been expanded to include brothers, sisters, step-brothers, step-sisters, uncles and aunts.

Deadline Approaches for Illinois Real Estate Proficiency Exam

If you plan to take the proficiency exam (state-based transition test), make sure you schedule your test NOW.  All students enrolled for the proficiency exam must test by March 15, 2012.  There are no extensions to this IDFPR deadline!

Exams must be taken at approved real estate pre-license schools.  Test times are limited, so contact your school immediately to schedule your exam.  Real Estate Institute has opened additional test times to accommodate our students.

Real Estate Institute is also offering students additional time and testing convenience to meet the state license transition requirements.  Real Estate Institute students who are currently enrolled for the proficiency exam may transfer their registration to our ALL-in-ONE transition education program. This gives our students an extra 45 days! We will apply the full cost of their previous enrollment with our school toward the cost of this more flexible transition solution.  If you are a Real Estate Institute student who would like to take advantage of this exclusive offer, please contact us at 800-995-1700.