A Message From the Author


I am excited to offer this book to mortgage lenders who are considering implementing a mandatory program, or simply wondering what the day-to-day management will be like.  My goal in writing this book is to help secondary marketing and executive level management understand the true scope of what it means to take on this initiative.  I’m excited to offer you this simple, clear explanation of the day-to-day decisions and activities.  Mandatory execution is rewarding in profits and operational advantages; and, with the right foundation and knowledge, managing the process is simple and predictable.

When I got into the mortgage business, I learned secondary marketing worked for a company that had been using mandatory execution for 20 years before I arrived on the scene.  Because my first experience was in a mandatory environment, I assumed all mortgage bankers operated this way.  But, as I became more involved in the industry and met more and more mortgage bankers, I learned that a lot of bankers, who should use a hedging program, don’t.  Many asked me to outline our program to them but eventually expressed that they either did not understand it, or had heard too many horror stories on the street.

I believe one reason people are skeptical or fearful is because it sounds easy when I describe it.  Intuition tells us that something so important shouldn’t be so easy, but the same disciplined, educated approach to originating loans applies to executing mandatory sales.  Smart mortgage bankers will have little trouble implementing it safely once the basics are attended to.  You’ll also have the support and resources of some very smart people with your warehouse bank, risk management advisory company, and investors, to help you along the way.  It really is that easy.

I went on to run the secondary marketing department and shipping and post-closing departments for another 10 years (and wearing a few other hats along the way) before I began my consulting practice. The mandatory execution process has always been a competitive advantage, and I’ve never felt that a best efforts execution model would have served us better.

In Demystifying Mandatory, I outline a safe and predictable hedging program and show you exactly what the mandatory execution process looks like.  I’ll explain the mechanics, outline what you need to consider in starting a hedging program and provide guidance on how you need to prepare.  At the end of the book, I’ll provide a checklist to help you evaluate your readiness and keep you on track as you implement a hedging program.

This book is aimed at helping mortgage banking professionals and board members who are considering a hedging program but have questions about the day-to-day activities and putting all the pieces together.  Once you begin the process, this book is a valuable reference to keep you on track.  It is also a useful textbook for new members of a secondary marketing team seeking to learn about how hedging works.

Jennifer Fortier, CMB