Largest Mortgage - Real Estate Partnership in Georgia History (2026)

Two similar Cultures Aligned

www.southeastmortgage.com Phone: 770-279-0222

2 or 33 - Put the odds in your favor

If you had to choose a TEAM to compete with that would give you the best chance to win and share in the rewards of success, what is your logical choice.

Choices (Click for Definition)
A.    2   LLC Members
B.         Family Owned Business
C.  33   Shareholders that Share a Common Vision

If it were a basketball game, who would probably win?
If it were a dodge ball game, who would probably win?
If it were a baseball game, who would probably win?
When you have to compete in the Mortgage Industry?

Employee ownership has its benefits.  It is hard to compete with a large team that possesses a diverse skill set that has a passion to be the best.

Can you join the LLC?  NO
Can you join the Family?  NO
If there is no path to ownership or being a part of ownership, what does that say about the value placed on your contribution to the LLC or somebody's family.  Are you really part of the TEAM? 

Choose you, Choose your Family, Choose

www.southeastmortgage.com

Headline: Realtors Can Be Registered & Not Licensed

The headline is shocking and luckily fiction today; however,  it is a Hidden Reality in the Mortgage Industry today and most Realtors and Clients do not know.

What if a large Hedge Fund decided to enter the Real Estate Business and found a loophole to only Register Realtors exempt from State licensing.  Imagine they only have to pay Registered Realtors 1/3 what a Licensed Realtors make pocketing the difference.  Registered Realtors are not required to comply with Continuing Education, or State Regulation?

Trades (Realtors, Mortgage Lenders, Attorneys, Appraisers, Etc.) should support and insist on working with State Licensed Professionals who have met State Standards of Education, Credit, and Ethics.  Would you use an unlicensed Architect, Attorney, Doctor, Electrician, Plumber, Teacher, Appraiser, etc.  I certainly would not!

Does anyone ask if their Mortgage Originator is State Licensed?  That should be one of the first questions for a Realtor before referring a client and a client before applying with a Mortgage Originator. Just check if they are licensed at http://www.nmlsconsumeraccess.org/ .  Registered Mortgage Originators do not have a GAR or DBF for client complaint resolution.  Clients and Realtors can only file a complaint with their employer which is a Bank.

Southeast Mortgage works with Licensed Attorneys, Appraisers, and Realtors.  Support the integrity of State Licensing and only work with Licensed Mortgage Originators.  Protect the integrity of the Real Estate Industry and ensure we do not see another 2008-2009.  Everyone knows what and who caused it.

770-279-0222
www.southeastmortgage.com 

ART in Mortgage Industy - by Cal Haupt

Have you ever seen an ART Class where all the participants paint a subject from the same perspective and look over at each other to see how others are doing? 

Over the weekend, I was
reminded how important organically adapting a company to the market yields a major advantage and return. 

ART is a diverse range of executive activities creating a tangible expression of the executive’s technical skill intended to be appreciated by the shareholders and community analyst. 

Being able to see the beauty in the Mortgage Industry and its opportunity is a unique skill needed to see a path to incremental success over varying market conditions.  Most in the Mortgage Industry listens to the same paid service view of the market and act upon that data.  As a result, everyone is following the same path and by definition, if you are all doing the same thing an average result is the certain outcome.

The client and secondary market is a zero-sum game.  The client will always get a market rate and the secondary market will hedge and arbitrage that rate to an acceptable return without impact to the client.  How a company functions and the perspective they have of this known universe is what quantifies the rewards.

When I meet someone who follows Southeast Mortgage they always want to quantify us by volume.  I always respond that we track Revenue which is your ability “ART” to convert volume to revenue.  Revenue to Net Income is easy with a grasp on GOGS and Operating Expense.  I have combined 14 companies into Southeast Mortgage over the years and the net margins I observed left a lot of opportunity on the table.  Southeast Mortgage shared a unique perspective with the owners that yielded a significantly greater return for them from the same volume.  Given any volume of production has a theoretical maximum rate of return most only capture ¼ of what is available because that is all they see is available on others canvases.  I call it wasting opportunity.

If I could offer one suggestion to those that participate in the Mortgage Industry, it would be to keep an open mind to a better path.  If you can accomplish your goal 3x faster, don’t discount the opportunity just because the other canvases have the same picture resulting from pack mediocrity and shared expectation.  Traveling the same path always yields the same result.  Take a new educated perspective and create beautiful ART.

Cal Haupt
Chairman and Chief Executive Officer
Southeast Mortgage of Georgia, Inc.
770-279-0222
www.southeastmortgage.com

“BREAKTHROUGH” Stock Issuance Program - Southeast Mortgage

Top 10  Southeast Mortgage Originators are issued Common Stock “BREAKTHROUGH” Incentive Program

“Our MLO’s and Operations Specialists are key members of our Team and create equity for shareholders.  As a result, Southeast Mortgage of Georgia, Inc., SEM, believes in sharing the wealth created with its employees.  Today, our 34 shareholders are originators and operations specialists.”  Cal Haupt, Chairman and CEO

In a surprise announcement at the Annual Christmas Party at the Ritz Carlton Atlanta on 12/14/2016, Southeast Mortgage of Georgia, Inc. announced their top 10 originators and issued each of them a common stock* grant valued on 12/7/2016 at $149,780.  In addition, 9 Operations employees were issued stock for exceptional execution of SEM's Service Goals.

Each year going forward, the top originators and operations specialists at SEM will be awarded shares (ownership) in Southeast Mortgage.

“SEM is now owned by 34 shareholders and shares ownership with employees that facilitate the growth of our company.  Unlike the many Mortgage Company LLCs with a few partners, SEM, a Georgia Corporation, has always had a core belief that everyone who contributes significant value to the company should share in the wealth it creates.  This is a unique opportunity for the best of the best MLOs and Operations Professionals to share in the equity they help create.  To my knowledge, this is a first in our industry and the right thing to do!” Cal Haupt, Chairman and CEO

 

www.southeastmortgage.com

770-279-0222

* subject to certain conditions

Southeast Mortgage 2016 Mission Statement

Southeast Mortgage 2016 Mission Statement

Southeast Mortgage is dedicated to providing Clients COMPETENT advice and AWESOME Service via Licensed Mortgage Originators and a “We Can” Operations TEAM.

Southeast Mortgage has re-aligned its methodology to adapt to industry changes and capitalize on critical paths and learning identified through objective analysis.  The result is a highly accurate efficient decision and verification process that expedites a file to the closing queue.

“I am a Georgia Tech grad, so I am an engineer at heart that also understands finance, sales theory, and production management.  The enhancements for 2016 are simply amazing.  Our MLOs will have a competitive advantage to leverage organic growth from our client’s life cycle and win more Builder and Realtor relationships through smarter underwriting and fantastic communication.  2016 will be a year to remember”  Cal Haupt, Chairman and CEO. 

 

www.southeastmortgage.com

Behind the Mortgage Rate Curtain - by Cal Haupt

For the past twenty plus years I have stated Mortgage Rates are what they are and are set by the market.  There is only a market rate.  I.E. If you want to buy AT&T stock, there is one market for the public and the price is set by supply, demand, and valuation and sold by SEC licensed agents.  This holds true for Mortgage Rates except valuation is a little more complicated.  Focusing on client needs and matching the correct product to those needs is the path to organic revenue and a stability for Mortgage Loan Originators, MLOs, and Mortgage Companies.

Only Mortgage Lenders with access to secondary markets can provide true adjustments to market rates via dislocations in hedge activities.  This only lowers rates IF it is not reserved for the unfavorable consequence of the dislocation assuming the market moves to a less favorable level.

I constantly see rate focused MLOs moving from company to company.  The reason they cannot build a career is they are teased with lower unsustainable rates and then move when the company returns rates to sustainable levels.  Brokers and Correspondents cannot take advantage of secondary market dislocation so when they lower rates, the offsetting revenue has to come from somewhere or expenses must be lowered which can reduce MLO service needed for referrals.  In some cases, unsustainable rates are obtained from Wholesalers that sell servicing over and over and over which angers clients and potentially risks their credit rating if they cannot keep up with where their payment should go.

Mortgage Rates are set by the market and if a rate advertised is lower than market the company probably did not account properly and will not be able to balance the equation over time.  Time is not a friend to unsustainable low rate strategies.  Look at history and the names that used this strategy and are no longer in existence.  This is the primary reason companies fail over time or when the economy enters challenging periods.

My advice to MLOs and Clients is to work with the highest certified lender you can find.  The same logic applies to buying stock from an SEC licensed agent, choose a Licensed Mortgage Originator.  The higher the certification, the better access to efficient market rates due to the reduction of hands in the pot and benefits derived from hedging activities. 

This is the hierarchy of Mortgage Providers:

#1 Highest Certification - Direct Lender - Secondary Broker Dealer, Fannie & Freddie Seller Servicer (GSEs), with FHA
Direct Lender with full access to secondary markets and can trade between the GSEs- Can Service Production - Southeast Mortgage of Georgia, Inc., operates in this category of certification

#2 Direct Lender - Fannie & Freddie Seller Servicer
Access to GSEs and considered a direct lender that can service production

#3 Fannie or Freddie Seller
Access to GSEs BUT not qualified or approved to service and will sell servicing rights
#4 Correspondent
Works on behalf of another Direct Lender.  Usually has small warehouse lines and servicing can be re-sold for higher yield by wholesalers 
#5 Broker (very few of these after 2009)
Middle person in the transaction - Works to put a consumer together with a Direct Lender.  Consumer pays the extra cost of the middle person even if the rate appears lower.  Servicing can be sold several times to account for the extra hand in the transaction.

Note: Banks (state-chartered, national banks, or federal thrift/savings banks) can operate in any of the categories above.  Most Georgia Community Banks engage as a correspondent or Fannie / Freddie variation.  Being an FDIC insured institution or Georgia State Bank only exempts their Loan Originators from Federal and State Licensing.  At Banks consumers work with Registered MLOs.  At Non-Bank Mortgage Companies consumers work with Licensed Mortgage Originators as set forth by the 2008 SAFE Act.  Click to learn more about the 2008 SAFE Act passed by our Government.

How can consumers or MLOs find the daily Mortgage Market Rate?  You have to average the daily par rate of Direct Lenders in your geographic area (50 mile circumference) with a sample size of at least 5.  Southeast Mortgage does this daily to keep our Referral partners and clients informed.

Cal Haupt
Chairman and Chief Executive Officer
Southeast Mortgage of Georgia, Inc.
770-279-0222
www.southeastmortgage.com

Visit Us 

Who we are Conversation - Cal Haupt, Jan Shell, Kathy Gyselinck, and JD Crowe

www.southeastmortgage.com
770-279-0222

Qualified Mortgage (QM) - Lender Responsibility and Definition

Residential Mortgage Lenders primary purpose is to provide consumer loans secured by single family housing to facilitate acquisition for a consumer purpose.  Consumer purpose is housing the primary borrower, co-borrower, and or family.  Residential Mortgage Lenders have due care responsibility to ensure applicants can afford the loan for the term of the loan and it fits the applicants purpose.
 
Commercial Purpose loans secured by residential zoned property (Rental Properties, Industrial, and general purpose) should be handled by a small business lender that is tasked to originate this type of credit facility.
 

IMO: Just because a Residential Non-Qualified Mortgage product is offered for a residential consumer purposes is not a justification for a licensed or registered residential mortgage professional to sell it.  Licensed Mortgage Loan Originators (NMLS and State License Compliant Mortgage Loan Originators) and Registered Bank Mortgage Employees (Bank Employees whose job is to Originate Mortgages and is not Licensed) should be a fiduciary for the consumer and ensure they recommend the right product.  Mortgage product recommendations should only be made after understanding the client's needs through an interview process and ensuring the client can afford the loan today and for the term of the loan.  In the future all Bank and Non-Bank Mortgage Professionals will be licensed to the same standard which will ensure all consumers have consistent protection when shopping for their mortgage.
This trust and due care is the key to referrals and the key to longevity in this business. 
 

In its simplest form, Qualified Mortgages (QM) meet the following requirements:
> A loan that meets the requirements of GSEs, FHA, VA, or USDA and can be sold in the primary secondary market
> Consumer has a documented and verified ability to repay
 

Starting January 10, 2014, you must assess the borrower’s ability to repay all term residential mortgage loans. All QMs are presumed to comply with this requirement. As described below, a loan that meets the product feature requirements can be a QM under any of three main categories:

 

 

Mandatory product feature requirements for all QMs

1. Points and fees must be less than or equal to 3% of the loan amount (amounts less than $100k, higher % thresholds are allowed);
2. No negative amortization, interest-only, or balloon loans that increase risk (BUT NOTE: balloon loans originated until January 10, 2016 that meet the other product features are QMs if originated and held in portfolio by small creditors);
3. Maximum loan term is less than or = 30 years. 

Three main categories (CFPB Definition) 
1. General definition of QMs

Any loan that meets the product feature requirements with a debt-to-income ratio of 43% or less is a QM

2. "GSE-eligible" category of QMs

 

Any loan that meets the product feature requirements and is eligible for purchase, guarantee, or insurance by a GSE, FHA, VA, or USDA is QM regardless of the debt-to-income ratio (this QM category applies for GSE loans as long as the GSEs are in FHFA conservatorship and for federal agency loans until an agency issues its own QM rules, or January 10, 2021, whichever occurs first).

 

3. Small creditor category of QMs  

 

If you have less than $2B in assets and originate 500 or fewer first mortgages per year, loans you make and hold in portfolio are QMs as long as you have considered and verified a borrower’s debt-to-income ratio (though no specific DTI limit applies).

I truly hope our industry learned from the last recession that mortgages are a cornerstone of the US economy.  We make a difference every day and should govern the products we offer consumers with due care at the fore front.  Today we are seeing a similar trend to 2006 - 2009 when the industry evolved product features to target a broader category of borrower to increase origination volume.  I believe there are some products that are needed for borrowers that are not currently participating in today's mortgage market; however, we need to ensure industry risk remains low.   

Cal Haupt
Chairman and CEO
Southeast Mortgage of Georgia, Inc.
770-279-0222
www.southeastmortgage.com

Lust vs. Love by Cal Haupt

In society the terms Lust and love are sometimes confused as being the same thing.  Lust is a personal inclination or longing with little basis for the future.  Love is the unselfish loyal and benevolent concern for the good of another.

The two are confused; however, have very different meanings.  The one most important difference in the terms is longevity.  Lust never lasts; however, Love survives the test of time because it is built on more than shallow cues or flash.

You might wonder why a financial expert would write about Lust and Love?

The reason is simple.  Every day I see mortgage professionals and consumers making life decisions based on Lust rather than Love.

Both mortgage professionals and consumers should make choices based on their fit versus an artificial inclination built on a sales pitch, fancy dinner, etc. and look deeper to the core of a long term fit.  Both mortgage professionals and consumers tend to make decisions about where they work or get important financial products to support their family based cues that are not aligned with core need or sustainability.  Love has a higher duty of care in the selection process.

Although you may Lust, always look deeper to find a company that truly puts its mortgage professionals first and its clients in the product that fits them the best.  The best choice may not have the bling but it will be there when the going gets tough.  There is a reason family gathers in tough times and everyone is your buddy during good times.  A key distinction between Lust and Love.

When I was about 5 years old in a small southern town, my two best friends at the time, the Tyson brothers, were smitten by the Sear’s Screamer Bicycle and were promised one for Christmas.  Needless to say, their enthusiasm and Lust transferred to my subconscious quickly.  As a result, I only had one item on my letter to Santa that year and dropped the appropriate hints to my parents to ensure success.  After all, everyone in my world "at that time my world was three houses in either direction due to Mother Law" wanted a Sears Screamer, it was so flashy, and I want to fit in with me best friends.

 

Sears Screamer (Left) Schwinn Apple Krate (Right)

On Christmas morning a woke up to the laughter of the Tysons riding their shiny new Sears Screamers in front my bedroom window.  I could not wait to run into the den to get mine.  As I slid into the den, my world ended as some red bicycle was sitting near the tree in place of my dream bike.  I yelled, how could you do this to me…..   I am ruined…. Etc.  Obviously my parents looked at me in disbelief.  Since I would not come out of the house, the Tysons came to my house around noon wondering why I was not riding with them.

I hung my head in shame and explained what happened to me that morning.  As good friends do, they rubbed in the fact their bikes where Sears Screamers and I just had to settle for what I got.  Peer pressure and the “green eyed monster affect” were in full force.

My mother and father tried to explain why I got a Schwinn Apple Krate over the Sears bike.  Due to Love, they only had concern for my well being and not social pressures.  Better quality, shock absorbers, better gears, reputation of the manufacturer etc.  They were providing me with the quality over fad speech and all I heard was blah blah blah due to the pre-programmed peer pressure already in place.  After all, I was 5.  How could they know more than me and the Tysons.

I came to grips with my fate and reluctantly headed out Christmas afternoon to ride my new bicycle.

During the next six months, I noticed my bike was a little faster and handled better than the Tyson’s Screamer.  I noticed they stopped more for repairs and after about seven months their bikes were rusting leaned against their house.  My Apple Krate retained it’s just like new qualities and became my steed for neighborhood adventures.

I rode that bike for another 6 years and then used the frame for a motocross jumping bike for another 3 years.  The best bike I ever had and I loved that bike due to the unbiased benevolent concern my parents had for my well being.  The lust for a Sears Screamer faded in short order as quality and fit came into focus.  Due to Love my needs were met with the best fit and the Lust I had for that in vogue shiny bike faded faster than the screamer’s paint job. 

I have told this story to my sales teams for as long as I remember.  In 2000, my Senior Officers at Southeast Mortgage presented me with another chance at childhood.  My own Schwinn Orange Krate Bicycle. 

 

Ride to Live

They could not find an Apple Krate; however, it was the best most thoughtful gift a person could get from friends.

 

Cal Haupt

Chief Executive Officer

Southeast Mortgage of Georgia, Inc.

www.southeastmortgage.com

770-279-0222

Safe Harbor for Mortgage Loan Originators Career? – Licensed vs. Registered MLO

Would you get mortgage advice from a disc jockey with a nice conference room?  Can you tell the difference?     

Mortgages are an important Consumer Product and meeting educational certifications along with passing the national NMLS with state content exam is the safeguard a consumer deserves supported by laws passed by your government. 

With 80% of the pre 2009 mortgage service providers out of the mortgage industry, the value of a Mortgage Loan Originator’s, MLO’s, career is at an all-time high and its continuation depends on choices made today.

As the yield curve begins to hold trend in a northerly direction, our industry is entering a phase of the recovery cycle similar to the 2001 – 2005 surge without the unsustainable high risk products.  The products that will be sold are primarily QRM or “Standard Loans” provided by the GSEs, “Fannie, Freddie & Ginnie (Conforming, FHA, & VA)”.  MLOs will need to be close to the source of these products which is the Seller / Servicers approved by these entities.  As you move away from the GSE source as a correspondent, local bank registered MLO, or broker; service, accessibility, and pricing suffer.  Do you get a better price buying an apple direct from an apple farmer or Publix?  Same concept and principle in the mortgage industry and both are commodities.

The mortgage service providers in this cycle will primarily be two types:

Ø  Banks that employ Registered Mortgage Originators and cannot sponsor a Licensed Mortgage Originator

AND

Ø  Non-Bank Mortgage Lenders that employ only Licensed Mortgage Originators.  Non-Bank participants can be a broker, correspondent, or a vertically integrated GSE Seller / Servicer.  All specialize in mortgage products and employ Licensed Mortgage Originators according to the S.A.F.E. Act, Dodd Frank Act and State banking agency requirements.

MLOs in our industry have to make choices today to secure their career as our industry evolves.  As everyone knows, if anything is certain its change in the Mortgage Industry.

Understanding the truth about earning a higher certification as a Licensed Mortgage Originator versus being a Registered Bank Mortgage Originator is critical to a good choice.  Avoid the fear tactics and miscommunication and focus on the facts that dispel the myths.

The Truth

·        Based on prior history of other products requiring a license to sell, regulators will require banks to license all Registered Loan Originators.  Banks have similar experience with Mutual Fund Sales (Series 6/63) and Consumer Loan Insurance.  Both had a period of adjustment and both eventually required all sales people selling the products to be licensed by FINRA (formerly the NASD) and the Insurance Commissioner respectively.  Neither of those caused a recession, Mortgages did?  Either through reserves or direct intervention, Banks will license all MLOs at some point.

·        Non-Bank Mortgage Lender’s like Southeast Mortgage (SEM), have higher mortgage certifications than many Banks.

·        Get licensed today and remove uncertainty before time runs out.  It will.

·        Non-Bank Mortgage Companies pay MLOs more than Banks.  Same work why not receive higher pay?  Why? Because registered originators allow it and inertia has them.

·        Since Non-Bank Mortgage Companies specialize in one product, service is superior and faster.

·        Name your shareholders at a Bank?  Are you a member of the LLC?  Do you really know who you work for?  Build a career and trust your shareholders and hopefully they work alongside you.

 

Dispel the Myths

·        Don’t succumb to fear tactics.  Becoming a Licensed Mortgage Originator is a straight forward process.  Would you buy stock from an unlicensed stock broker?  Would you seek retirement advice from a Disc Jockey that appears to talk the talk?  Your family deserves the certainty of licensing as set forth by Congress.

·        Don’t talk yourself into believing Bank comparable training is the same thing as studying and passing the national NMLS with state content exam.  Ask any Bank Registered MLO that has passed the test if there is a difference.

·        The Georgia Department of Banking and Finance is very cooperative and will discuss issues to help you through the process.  They respond promptly and will answer your questions.  It is important to follow the rules during the licensing process.

·        For Realtors and Builder’s service and speed matters.

·        If you have a license, you will welcome change.  If you are unable to be licensed, you know the deficiencies and can make a plan to correct them before it’s too late.

Becoming a Licensed Mortgage Originator removes the inherent risk of Banks switching to employing only licensed MLOs.  Protect your career and your family’s income by earning your MLO License and enjoy the next 5 years without concern.

www.southeastmortgage.com
Southeast Mortgage of Georgia, Inc.
3496 Club Drive, Lawrenceville, Georgia 30044
Phone: (770) 279-0222
Georgia Residental Mortgage Licensee #6578
NMLS #103956

Over Time must be paid to Mortgage Originators - DOL - Time Tracking Required

Historically Mortgage Loan Officers (MLO), Mortgage Processors, Closers, and Sales Assistants positions were classified as exempt (no overtime) under Part 541.200 Administrative exemption. These positions were reclassified as non-exempt (time tracking and payment of overtime required) by the U.S. Department of Labor, DOL. 

Under the current regulations as interpreted by the DOL, all MLO job classifications are non-exempt and their employer is required to track hours worked on a weekly basis and pay overtime. 

With a two year look back on hours worked and Plaintiff attorney fees paid by Employer, the liability can be staggering.  All Employers of MLOs are required and the burden of proof is on the Employer to track MLO hours worked including overtime.  The Plaintiff's Attorney, employee's attorney, can file in Federal Court as a class which includes all current and ex-employees in the settlement unless they opt out.  Employers rarely prevail these cases. 

DOL Determination: Mortgage Loan Officer Job Classification is Non-Exempt

 

Sales activity conducted via internet, email, phone, and fax is no longer incidental to, but is the primary way business is conducted. As a result, all MLO positions are non-exempt.  To satisfy the exempt test, MLOs have to meet with clients at their client’s home at least 80% of their work time.  MLOs will still be able to work both in and out of offices on an at will basis, but will be required to record hours worked on a weekly basis.

Employees who fall under non-exempt classifications are entitled to a guaranteed minimum wage of $7.25 per hour, http://www.dol.gov/whd/minimumwage.htm for every hour worked between 1 and 40 in a work week and are entitled to overtime pay at a rate not less than one and one-half times their regular rates of pay after 40 hours of work in a workweek.  Regular rates of pay are calculated based upon weekly earnings including commissions.  All compensation must be paid on a W2 basis.

 

Under the current regulations as interpreted by the DOL, all Mortgage Loan Officer job classifications are non-exempt and are required to use time tracking systems to report hours worked on a weekly basis.

 

Cal Haupt, CEO, Southeast Mortgage of Georgia, Inc.

 

www.southeastmortgage.com