Mortgage Banker Magazine November 2022

REGULATORY CORNER

FREDDIE MAC MULTIFAMILY

LOAN

PURCHASE CAP FOR 2023 IS $75 BILLION

Freddie Mac Multifamily’s loan purchase cap for 2023 will be $75 billion. The cap is set by the Federal Housing Finance Agency (FHFA) based on projections for the size of the multifamily debt origination market. Freddie Mac has also received from FHFA updated criteria for its “mission-driven” business, which includes loans for affordable housing and underserved market segments.

“The loan purchase cap and new mission-driven requirements will shape how we approach the multifamily market in the year ahead,” said Kevin Palmer, head of Multifamily for Freddie Mac. “As always, our goal is to be a consistent source of liquidity with a keen focus on supporting affordable multifamily housing. FHFA has again set strong mission requirements that set a clear North Star for our business.”

FHFA defines its mission-driven requirements in Appendix A of its Scorecard. For 2023, 50% of loans purchases must be mission driven. Mission-driven is defined as loan purchases that support:

• Targeted Affordable Housing properties where all or a portion of the units are income or rent-restricted as a result of a regulatory agreement or a recorded use restriction

• Workforce Housing properties where units are subject to either rent or income restrictions that are codified in loan agreements

• Other affordable units where rents are affordable to tenants at various income thresholds but are not subject to tenant income or rent restrictions

• Properties located in rural areas as defined by the Duty to Serve regulation

• Manufactured Housing Communities that receive credit under the Duty to Serve regulation, which requires tenant pad lease protections

• Energy- or water-efficiency improvements for units affordable at or below 80% of area median income

The caps for 2022 and 2021 were $78 billion and $70 billion, respectively.

FANNIE MAE’S ACCESS PROGRAM CELEBRATES 30 YEARS OF SUPPORTING DIVERSITY IN CAPITAL MARKETS

In 1992, Fannie Mae launched a pioneering effort to expand the involvement of minority- and women-owned broker-dealer firms in our business.

In the following years, the Access Program has enabled a generation of diverse broker-dealers to grow and thrive. Now three decades old, Access has become one of Fannie Mae’s top accomplishments.

The Access Program includes 20 firms owned by women, Black, Latino or Hispanic, and servicedisabled veterans. It is a core part of Fannie Mae’s commitment to diversity, equity, and economic inclusion. Access also complements our ongoing efforts to build a diverse workforce, support diverse suppliers and vendors, and bring diversity to our industry.

Access member firms transact in Fannie Mae debt securities, Mortgage-Backed Securities (MBS), and Credit Risk Transfer (CRT) securities. In addition, Fannie Mae has included ACCESS firms in more than 350 syndicated transactions and numerous other fixed-income trades. These diverse firms collectively have expanded our investor base in every product they have participated in over time.

In the program’s early years, Access firms supported the sale of Fannie Mae’s debt products, and in the past decade, they have expanded to additionally support the sale of Connecticut Avenues Securities (CAS) as well as Guaranteed Multifamily Structures (Fannie Mae GeMSTM). More recently, the firms participated in offering select HomeReady pools to investors, backed by Fannie Mae’s flagship affordable product for first-time homebuyers.

The broker-dealers in the program consistently strive to enhance the value that they provide their investor clients, their issuer clients, and their communities, and Fannie Mae is committed to contributing to that effort.

By design, the Access Program helps these diverse firms build their franchises. By providing a comprehensive suite of Fannie Mae products Access firms transact in, we enable them to support their investors, build their businesses, and give back to their communities. And, through the partnership, Access member firms share new ideas about managing our products and programs. These ideas can enable them to increase their distribution of our securities in the capital markets.

STAFF

Vincent M. Valvo

CEO, PUBLISHER, EDITOR-IN-CHIEF

Beverly Bolnick

ASSOCIATE PUBLISHER

Christine Stuart

EDITORIAL DIRECTOR

David Krechevsky

EDITOR

Keith Griffin

SENIOR EDITOR

Mike Savino

HEAD OF MULTIMEDIA

Katie Jensen, Steven Goode, Douglas Page, Sarah Wolak

STAFF WRITERS

Rob Chrisman, Nir Bashan, Thomas Wade, Curtis Wood, Joe Camerieri, Matthew Falloretta

CONTRIBUTING WRITERS

Alison Valvo

DIRECTOR OF STRATEGIC GROWTH

Julie Carmichael

PROJECT MANAGER

Meghan Hogan DESIGN MANAGER

Christopher Wallace, Stacy Murray GRAPHIC DESIGN MANAGERS

Navindra Persaud

DIRECTOR OF EVENTS

William Valvo UX DESIGN DIRECTOR

Andrew Berman

HEAD OF CUSTOMER OUTREACH AND ENGAGEMENT

Tigi Kuttamperoor, Matthew Mullins, Angelo Scalise MULTIMEDIA SPECIALISTS

Melissa Pianin

MARKETING & EVENTS ASSOCIATE Kristie Woods-Lindig ONLINE ENGAGEMENT SPECIALIST

Lydia Griffin

MARKETING INTERN

Ben Slayton

FOUNDING PUBLISHER

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CFPB Needs To Establish Clear And Consistent Standards

MBA PRESIDENT DETAILS ORGANIZATION’S REGULATORY BATTLES AT ANNUAL MEETING

By BOB BROEKSMIT, PRESIDENT AND CEO, MORTGAGE BANKERS ASSOCIATION

The following is an excerpt of prepared remarks Bob Broeksmit, CMB, Mortgage Bankers Association president and CEO, delivered at MBA’s 2022 Annual Convention & Expo.

The MBA is … focused outward, to create a broader environment that works in your favor.

One of the biggest examples is our roundthe-clock and round-the-country advocacy. We all know that when times are tough, bad policies have a habit of rearing their ugly head. We’re talking about laws and regulations that raise your costs instead of lowering them. At the MBA, we refuse to let that happen, which is why we’re fighting on so many fronts.

For the past year and a half, we’ve held the line on harmful tax hikes in Washington, D.C.

When Congress was debating the “Build

establish clear and consistent standards. That means providing the opportunity for notice and comment when enacting rules. And it never means circumventing the rulemaking process.

Market oversight works best when regulators provide consistent guidance to all market participants via notice and comment rulemaking, interpretive rules, and guidance that reflect stakeholder input, and applying them prospectively and providing the market appropriate runways for compliance.

That approach allows MBA to educate the bureau on the potential impact of their rules, just as we did on their request for information on fees that mortgage originators and servicers charge their customers. It allowed us to tell the bureau that these types of fees

CALIFORNIA BATTLES, TOO

Washington isn’t the only place where dangerous policies are on the docket. The same is true in many states. Once again, the MBA is on the job, and our advocacy is getting results.

There’s no better proof than California. Everyone knows that what starts in the Golden State rarely stops there. It quickly spreads to like-minded states, and even to the federal government. That’s why we’ve fought so hard to stop harmful ideas from becoming reality.

This year alone, we’ve achieved two big California victories.

First, in partnership with the California MBA, we led the charge against a bill that would have created a costly and complex new foreclosure system. After months of hard work, and after mobilizing hundreds of MBA members to speak out, the sponsor withdrew the bill. It’s now dead for the foreseeable future.

Back Better Act,” we worked with key lawmakers, on both sides of the aisle, to stop the worst proposals. It worked-- those tax hikes never saw the light of day.

In fact, when Congress passed the socalled Inflation Reduction Act in August, it reflected our work and your needs. The final legislation didn’t include a host of dangerous tax hikes. And it preserved the existing taxation regime for mortgage servicing rights.

We’re equally focused on stopping regulatory overreach.

The main threat we see is coming from the Consumer Finance Protection Bureau (CFPB), where the single director can act as judge, jury, and executioner, all in one.

When it comes to the bureau, the bottom line is this: Americans need the CFPB to

are clearly disclosed in advance, reasonable, and reflect services actually performed.

Unfortunately, the bureau isn’t always abiding by this commonsense system. It’s sometimes announcing new legal obligations without formal process or deliberation. It’s also enforcing novel and untested legal theories, making it very difficult for firms to understand their legal obligations. The CFPB’s actions exact a high cost on markets and, ultimately, consumers.

Now is no time to make you hire more lawyers to try to understand what the bureau is doing. You need relief, and you need certainty. That’s the path to lower costs–and we’re making sure the CFPB knows it. We will work with the bureau and others to ensure they understand the need for clear rules and lower costs to consumers.

The second victory is even more important. For much of the past year, the California legislature has been moving to impose Community Reinvestment Act (CRA) requirements on non-banks. But we made sure that won’t happen. I’m pleased to report that the bill has been amended-- and expanding the CRA is off the table.

These are the kind of wins you need right now, and not just in California. From coast to coast, we’re fighting dangerous policies, including CRA expansion, rent control, and many others. We’ll hold the line in state capitals, the same as we do in our nation’s capital!

Whatever issue we engage on, and wherever we engage on it, your partnership is essential. That’s why we give you so many opportunities for collaborative progress.

BOB BROEKSMIT

Produced

Using NFTs in Real EstateWhat’s Real & What’s Not

IT’S AN ISSUE THAT MIGHT NEED LEGISLATIVE REMEDY TO WORK

By JUSTIN LISCHAK EARLEY , CONTRIBUTOR , MORTGAGE BANKER MAGAZINE

The application of nonfungible tokens (NFTs) and the tokenization of digital and physical assets continue to garner attention across industries, businesses, and governments, while prompting excitement among early adopters, and also confusion among many consumers. Both the interest and the confusion are warranted, as the technology has the potential to enhance the process of exchanging assets, but it remains widely misunderstood.

While NFTs of digital assets (like digital art) tend to receive the most attention, NFTs and tokenization are increasingly discussed as a mechanism to convey ownership of real estate – both ownership of an entire property and fractional ownership of a property – and to enhance the real estate transaction process. In fact, there have been a handful of examples of property supposedly being auctioned off as a NFT.

Startups focused on the application of tokenization and NFTs in real estate are beginning to attract early-stage investor interest in real estate circles by touting the possibility that NFTs can reduce friction in ordinary real estate transactions. First American is a leading innovator and is focused on creating a faster, cheaper, and easier transaction experience for all real estate market participants. Justin Lischak Earley, chief innovation underwriter at First American Title, shared his view of the promise and challenges posed by the use of tokenization and NFTs in real estate transactions.

corporate law, and a little bit of tech.

First, real estate title law in the U.S. does not work the way that many people believe it does. An American real estate title typically isn’t a single piece of paper that can simply be pulled from government files and digitized. Instead, in most of the U.S., deriving title to a piece of real estate (let’s call it “Greenacre”) is a research and reasoning process: someone has to read through a bunch of documents in county government offices, and reach a judgment-call conclusion about title to Greenacre. There generally is no “golden record” you can just pull out that will tell you all you need to know about Greenacre.

certainly not, unless you have the same signet ring and wax used to make the original. NFTs are kind of like that, but in a digital context rather than a physical one. In this sense, a NFT can be “digitally unique.”

But just because a NFT is unique, that doesn’t mean that it “represents” Greenacre in a legal sense. Owning a NFT about Greenacre is not the same as owning Greenacre, just like owning a photograph of Greenacre is not the same as owning Greenacre. Figuring out who owns Greenacre involves paging through records in a county land records office—a NFT has nothing to do with that. Some legal scholars call this the “tethering” problem: there is nothing in current U.S. law that “tethers” Greenacre to the NFT.

OK, but haven’t tokenization and NFTs been used in real estate transactions already?

Sort of, but in a different sense than most people think. When you look closely at what we’ve seen, those transactions didn’t directly involve buying Greenacre. Rather, they involved buying something else that in turn owned Greenacre. This sounds like a technicality,

The short answer is maybe, but only in a quite limited and fairly complex way. For the longer answer, you’ll need a little bit of real estate law, a little bit of

Now, the tech piece. You can think of a NFT as being like a digital piece of paper that’s really hard to replicate. Imagine an old-fashioned piece of parchment with a waxseal, signet-ring impression on it. Can you copy the text on that piece of parchment? Sure. But can you replicate the wax seal on it? Almost

Can you transfer U.S. real estate using a NFT?

Justin Lischak Earley

but it’s a distinction that makes a difference.

Real estate practitioners sometimes talk about having a “vehicle” that holds title to real estate. Let’s put it in automotive terms. Imagine a pickup truck with some cargo in the bed. The cargo isn’t for sale by itself, but you can buy the truck and get the cargo along with it.

In the instances we’ve seen where real estate was purportedly “tokenized,” Greenacre was placed into a title-holding legal vehicle, and somebody bought the vehicle as a way to indirectly buy Greenacre. The “vehicle” is often a limited liability company (LLC), and the cargo in the bed is the real estate. So, in those transactions, the NFT is meant to represent ownership of the LLC, not Greenacre.

So what’s wrong with that?

Buying and selling interests in LLCs (and similar legal vehicles) that hold title to physical real estate has been around in commercial real estate for years. Using NFTs to represent the ownership of an LLC is new. Here’s where the corporate law I mentioned comes in: you can argue that using a NFT to represent ownership of an LLC is just fine under the way LLC law works, and you can also argue that it’s not.

But regardless of who’s right about that debate, the “NFT an LLC” approach doesn’t actually make transferring real estate faster, cheaper, or easier. In fact, for most people, that approach would make it harder, slower, and more expensive.

REAL ESTATE TRANSFERS IN THE U.S. ARE A STATE-LAW ISSUE, SO WHATEVER LEGAL CHANGES MIGHT HAPPEN WOULD HAVE TO BE ADOPTED BY EACH STATE, ONE BY ONE.

How so?

Well, using legal vehicles to hold real estate titles is sophisticated. There are rules and requirements for setting up and maintaining an LLC. There’s paperwork to file. You have to know what you’re doing, or you need to hire others who do. So that takes time from you, or money to hire knowledgeable people like lawyers or accountants. And LLCs have setup costs and annual maintenance costs that you have to pay. There can also be tax-planning, estate-planning, and other legal complexities that pop up when holding real estate title in an LLC.

Some of these minutiae could make it hard to get an ordinary residential mortgage.

That’s why using LLCs to hold title is generally a commercial real estate thing. The LLC setup and maintenance costs are part of running that business, and typically there are a lot of lawyers and accountants already involved in the business anyway.

Now, there are some wealthy individuals who use LLCs to hold title to their residences because the time and cost involved is worth it for them. But they have the funds to hire lawyers and accountants to deal with the complexity. Most ordinary consumers don’t.

How would real estate law need to change to support direct tokenization of real estate?

Well, a new law would have to address the “tethering” problem. That might sound simple, but it opens up a lot of issues. It’s not clear that tethering real estate to NFTs would be better for ordinary consumers.

For example, NFT transactions are usually irreversible, and there are plenty of strange stories about NFTs being stolen. Deed fraud is already a significant problem today, but at least in the current legal system, a forged deed generally conveys no title and is void. With typical NFTs, once it’s transferred, it’s gone— whether the transfer was authorized or not. How would a NFT-based land title system handle that challenge without fundamentally changing the irreversible certainty that is touted as an advantage of NFTs?

Another big challenge is that title to Greenacre is more than just “who owns it,” and more than just “right now.” There are lots of other real estate interests that can affect Greenacre, both at the time of tokenization and in the future: things like homeowners’ association covenants or power

line easements, for example. Without getting too technical about the way U.S. real estate law works, those things that affect Greenacre are stored and kept up to date in the county land records. Capturing that stuff in a NFT without creating a “dual entry” problem—where some things live in the county land records and other things are part of the NFT—would be an immense lift.

And even beyond that, real estate transfers in the U.S. are a statelaw issue, so whatever legal changes might happen would have to be adopted by each state, one by one. Getting all of those states on the same page would be daunting.

You sound like a real downer on NFTs. I’m not anti-NFT. I’m just not sold on this use of NFTs. Can you indirectly transfer a property as a token by putting that property into an LLC holding vehicle and tokenizing the ownership of the LLC? Maybe. But that does not make the average, bread-and-butter residential real estate transaction faster, cheaper, or easier.

The technology behind tokenization and NFTs is fascinating. But the real benefit of technology is when it creates a superior experience for the end-user. Right now, I just don’t think that NFTs do that for the average person who is buying or selling the average house.

If NFTs won’t make things faster, cheaper, and easier, what will?

The existing land title system isn’t perfect. There’s plenty of friction to be wrung out of the process. We’re doing some exciting things at First American to tackle that problem. Our Digital Title Group is working on providing accurate title information to our customers much faster. We are investing heavily in Endpoint®, IgniteRE™, and ClarityFirst® to digitize the residential and commercial closing process. And the Underwriting Innovation team that I lead is developing new tools that will help our underwriters make coverage decisions faster and easier. We believe these investments are the best way to create faster, cheaper, and easier real estate transactions here in the U.S.

As Paul Ford recently wrote in Wired, blowing up longstanding systems that people rely upon doesn’t necessarily make things better. That’s not the kind of disruption we need. Rather, I agree with Mike DelPrete’s view: “Disruption is going to come from a company that offers a superior experience at a superior price.” That’s exactly what we’re doing at First American.

Justin Lischak Earley is chief innovation underwriter at First American Title.

Targeted Pricing Changes Could Be ‘Marginal’

FORMER U.S. HOUSING OFFICIAL EXPECTS LITTLE IMPACT FROM NEW FHFA POLICY

By DOUG PAGE , STAFF MORTGAGE , MORTGAGE BANKER MAGAZINE

Aformer U.S. housing official says the Federal Housing Finance Agency’s new policy eliminating upfront fees for certain first-time homebuyers, low-income mortgage borrowers and those from underserved communities will have “marginal” impact.

While David Stevens, a former U.S. assistant secretary of housing in President Barack Obama’s administration, approves of the FHFA’s new policy, he’s not optimistic, given the recent surge in home prices and mortgage rates, it will do much good.

It “will be marginal,” Stevens said, describing the policy’s impact on the group it’s supposed to help, which includes firsttime homebuyers, low-income mortgage borrowers and those from underserved communities, especially minorities.

“We have just too many other impediments,” Stevens said, describing the current housing market. “The rise in interest rates alone priced out so many potential homebuyers.”

Despite his assessment, he said the announcement by FHFA Director Sandra Thompson, made in Nashville, Tenn., at a recent Mortgage Bankers Association meeting, mirrors her views about minority homeownership.

“It really reflects Director Thompson’s mission that she has vocally promoted since she took (her current) role,” he said. “She has been very public about wanting to expand home ownership opportunities, particularly for African Americans and Latinos.”

“I think (the policy change) is a good thing because ultimately those fees get passed along to the consumer and it determines

how much (of a mortgage) someone is able to qualify for because it affects their mortgage payment,” said mortgage broker Shawn Williams, president of College Park, Md.-based Fortis Mortgage. “I haven’t put my finger on how much of an impact it will have given interest rates, but it is going to make houses more affordable for minorities and low-income borrowers seeking to buy.”

“FHFA is eliminating upfront fees for certain first-time homebuyers, low-income borrowers, and underserved communities to promote sustainable and equitable access to affordable housing,” Thompson said at the MBA event. “[This] announcement will result in savings for approximately 1 in 5 borrowers for the Enterprises’ recent mortgage acquisitions.”

DAVID A. STRAITE

STAGNANT RATES

Thompson said the FHFA will work with Fannie Mae and Freddie Mac, the two GSEs it oversees, on when the new fee reductions will go into effect.

Stevens also said that what made Thompson’s announcement unique was she was “acting without pressure from the White House, which has also been very vocal on wanting to” expand minority homeownership.

Across ethnicities, Stevens said, homeownership rates haven’t changed that much.

Information from the National Association of Realtors seems to confirm that, showing that while the homeownership rate for Blacks increased in 2020 to 43.3%, it’s lower than it was 10 years ago. In the same time frame, the homeownership rate among whites, Asian Americans and Hispanic Americans increased to 72.1%, 61.7% and 51.1% respectively.

Overall, the homeownership rate among all Americans is 65.5%.

In its announcement, the FHFA said it’s doing away with upfront fees for the following:

• First-time homebuyers at or below 100% of area median income (AMI) in most of the United States and below 120% of AMI (Area Median Income) in high-cost areas.

• HomeReady and Home Possible loans (Fannie Mae and Freddie Mac’s flagship affordable mortgage programs).

• As well as fees on the Enterprises’ HFA Advantage and HFA Preferred loans; and

• Single-family loans supporting the Duty to Serve program.

The FHFA says its new fees for cash-out refinance loans will begin on Feb. 1, 2023.

In making the policy change, the FHFA said, “the pricing changes build upon the upfront fee increases for second home loans and high

balance loans announced earlier this year. The FHFA will continue to review and update the pricing framework to meet the objectives set in the 2022 Scorecard to support core mission borrowers, while fostering capital accumulation, achieving commercially viable returns, and ensuring a level playing field for all sellers.”

KEY ADVANTAGES

Stevens says one of the key advantages to the new policy is that it will eliminate the GSEs’ loan level price adjusters, or LPAs.

“They’re risked-based pricing fees based on a borrower’s credit score,” he said, suggesting that by reviewing Fannie Mae’s LLPA grid it’s possible to find out “how expensive it can get to get a mortgage.”

“If you’re only putting 5% down,” Stevens continued, “there’s an additional 3.5% fee attached to the mortgage.”

As a result, he says, mortgages from the

Federal Housing Authority (FHA) often have “a lower rate for low down payment borrowers because they don’t have these risk-based pricing fees. You pay the same fee whether you have an 850 FICO score and you’re putting down 50% or if you have a 620 FICO score and only putting down 3%.”

Part of the problem that first-time homebuyers suffer from has to do with the fact that they’re first-time homebuyers, Stevens said.

“Most first-time homebuyers have lower credit scores,” he said. “They’re less experienced with credit. They’re younger and, so, they haven’t had the time to establish a strong credit history like older generations and, so, the combination of lower credit scores and low down payments make the GSE loans very expensive.”

‘THE COMBINATION OF LOWER CREDIT SCORES AND LOW DOWN PAYMENTS MAKE THE GSE LOANS VERY EXPENSIVE.’

Creativity Found In The Oddest Place

FLAGSTAR’S MORTGAGETECH ACCELERATOR PROGRAM HAS ITS ROOTS IN MAJOR LEAGUE BASEBALL

By DOUG PAGE, STAFF WRITER, MORTGAGE BANKER MAGAZINE

Billy Beane was famous in baseball for taking a collection of undervalued players into the playoffs. His secret was datadriven decisions at a time when “trust your guts” was the preferred management style in professional sports. Beane’s story would be captured in the book and movie, “Moneyball.”

So, it’s not entirely surprising to hear competition theories would be appealing to Lee Smith, mortgage president for Troy, Mich.-based Flagstar Bank. Much like Beane, Smith has to fight better-funded competitors for a share of the mortgage business.

“This is our ‘Moneyball’ concept,” Smith

said, describing the bank’s “MortgageTech Accelerator” program, which it employs to discover new and up-and-coming fintechs. “It’s how we stay competitive because we don’t have $12 billion sitting around like JPMorgan Chase.”

In other words, despite being one of the country’s top lenders, no one would mistake Flagstar for being the industry’s version of the New York Yankees, a dominating team with a history of dropping big bucks to pick up star players.

“Moneyball,” said Smith, Flagstar’s president of mortgage, showed “how we can think outside the box and more creatively differentiate ourselves.” With the fintech industry growing sizably, there’s advice suggesting lenders and fintechs are better off teaming up – than working against each other.

Flagstar’s MortgageTech Accelerator program follows that wisdom and brings something precious to the table, say some of the fintech executives who completed the program: The opportunity to work with a long-established brick and mortar bank, which turns itself into a laboratory for the fintechs to test their assumptions and see if their business stands a chance of succeeding.

Not only does Flagstar make its executives available to provide sales and marketing advice, but it also gives the participating fintechs access to its finance department so each one can get a sense of its business’s ROI.

“It’s an opportunity to meet young, up-and-coming fintechs focused on the mortgage origination and servicing space,” Smith said, adding that many of those

participating in the program are early-stage companies financed by friends’ and family money.

“It allows them to bring their energy and technical expertise, and we can bring our knowledge of compliance and risk, our customer base, and gives them a testing environment and help from a business point of view,” he said. “We bring the best of both organizations together to help each other and, ultimately, it becomes a win-win for everyone.”

AN EDGE

Started in 2019, the accelerator program has Flagstar and the fintechs working together for about 90 days, Smith says.

The ones selected are working on breakthroughs in all facets of the mortgage business, including origination, servicing and compliance as well as activities performed under the Community Reinvestment Act (CRA), Flagstar spokesperson Susan Bergensen says.

LEE SMITH FLAGSTAR MORTGAGE PRESIDENT

To be selected, she said, Flagstar considers each fintech’s “progress in product development, prospects for growth and potential for CRA impact.”

“Because Flagstar is a bank, I think (the fintechs’ work has) given us an edge in helping the fintechs better understand CRA rules, and their technology has added quality to our processes,” said Smith, adding that while they don’t own an equity stake in any of the fintechs that completed the program, they’ve entered into vender agreements with “several” of them. He declined to say which ones they were.

BE A SOLUTION

Arecent graduate of the program, Todd Mobraten, CEO of Dallas-based Orangegrid, which consolidates software applications and information for mortgage servicers, described it as invaluable because Flagstar is also a top mortgage servicer, managing over $340 billion in home loans.

“When Flagstar put up the mortgage accelerator program, the idea is not just to see if they want to use you as a solution to their problems,” he said. “The key is to prove you can be a solution.

“They partner with you to help show you how to penetrate the (banking and servicing)

market deeper and quicker and size it up, too. It’s not typical that a bank that size is going to partner with you and help you with a product like this. So, when an opportunity like that knocks on your door, you don’t want to let it go,” he added.

Catalina Kaiyoorawongs, founder and CEO of Ann Arbor, Mich.-based LoanSense, which helps consumers reduce their monthly college loan bills so they can qualify for a mortgage, echoed Mobraten’s sentiments, saying the program gave her team “insight into the way leaders thought about our product and pricing but also how they made technology purchase decisions. Plus, we were able to work closely with an executive sponsor who championed our success.”

NEW MARKETS

As Smith sees it, the fintechs in the program show the bank new marketing opportunities and ways to work with low- to moderate-income consumers, which is critical under CRA rules.

“They typically have solutions that can help certain borrower demographics,” he said. “They create opportunities for increased lending to low- to moderateincome borrowers, and we welcome this.”

One of them is Naples, Fla.-based CredEvolv, a credit repair platform, which recently completed Flagstar’s MortgageTech program. Jeff Walker, its CEO, says his company helps consumers who could very well be forgotten: Those turned down for a mortgage.

His company, which was started in

TODD MOBRATTEN, ORANGSERV

February 2021, is a “tech platform that sits between mortgage lenders and U.S. Housing and Urban Development-approved counselors that help lenders’ mortgage loan applicants that are not credit-qualified turn into qualified applicants,” he said.

From information he’s seen, these consumers number more than 8 million annually and banks can fulfill their obligations to CRA by assisting them.

“They had their credit pulled for mortgage inquiries but did not secure a mortgage in the 12 months following, the inquiry,” he said.

The CredEvolv platform is unique, Walker says, because once a lender knows their prospective borrower won’t be approved for a mortgage, they’re able to connect them with a HUD-approved credit counselor. Currently, 40HUD approved counselors are working with the CredEvolv platform and, he says, they have the capacity to serve 12,000 consumers each month.

And how big is this financial opportunity across the domestic banking industry to the solve the credit problems of these consumers?

“We’ve vetted this a couple of different ways working with the GSEs to kind of help us think through the declination rates that are out there,” Walker said. “We think it’s a $1 trillion annual opportunity in terms of mortgage UPB.” (Unpaid Principal Balance, money that hasn’t been remitted to the lender).

In other words, a trillion dollars is left on the table if these consumers don’t turn into mortgage borrowers, he says.

What was the inspiration for CredEvolv?

While working at Fannie Mae, Walker saw an organization that was determined to serve underserved communities (by turning

“WHEN FLAGSTAR PUT UP THE MORTGAGE ACCELERATOR PROGRAM, THE IDEA IS NOT JUST TO SEE IF THEY WANT TO USE YOU AS A SOLUTION TO THEIR PROBLEMS. THE KEY IS TO PROVE YOU CAN BE A SOLUTION.”

JEFF WALKER CredEvolv CEO

them into homeowners), but he also witnessed its “inability to take those very aspirational objectives and drive them to execution with a lender.”

CredEvolv, started two years ago, was created “with a very specific purpose to accomplish what I think of as a triple bottom line for the (banking) industry,” Walker said. “We wanted to support all of the efforts on affordable housing and minority homeownership, which tie in very much to what lenders are looking for and what regulators want and investors expect.

MILLENNIALS & LOANSENSE

If necessity is the mother of invention, then LoanSense CEO Catalina Kaiyoorawongs, 36, might very well be an example of the kind of consumer her

fintech seeks to serve.

In a promotional video about her fintech, she issues a clarion call to her fellow millennials, especially the 17 million who, she says, are in their prime homebuying years, for building wealth, saying, “Too many people in our generation are overwhelmed by student loan debt and feel like there’s no light at the end of the tunnel.

“No different than you, I invested in my education, and that was the script we were told, right? To get a good education and you’ll be set forever. I paid my bill. But I didn’t know the impact of that student loan burden when it came to buying a home,” she added. “One day my mom showed me a foreclosed house that was for short-sale, just a short five minutes from my apartment. The mortgage would

have been less than my rent.

“It sounds like a no-brainer, right? Despite my income level, which wasn’t so high – it was average – but I had a stellar credit score. I didn’t think I was going to be turned down for a mortgage. But guess what? I was turned down by multiple lenders.”

She’s addressing a large audience: There are more than 72 million millennials, making them the largest generation alive since 2019. But they’re also one of the most indebted ones.

Nearly 3.5 million millennials (born between 1981 and 1996) carry, on average, more than $38,000 in college student loan debt. In comparison, there are nearly 1.7 million in Gen X carrying, on average, $45,000 in college student loan debt while, on average, nearly 2 million members of

Generation Z carry just over $17,000 in college student loan debt.

“Our generation is the first generation to be really hammered by student loan debt,” Kaiyoorawongs said. “The cost of college has risen so much in the last 10 to 15 years and states are funding education less and, as a result, putting it on the back of the student to take out more and more loans and, of course, that impacts your DTI.

“If we want to enable homeownership for people in their 20s and early 30s, then we need to solve this problem,” she added.

LOAN FORGIVENESS HELP

Her platform, around since 2019, helps qualify prospective homebuyers for student loan forgiveness programs throughout the federal government, she says.

“They connect their student loan accounts, and we basically act as a ‘Turbo Tax’ for student loans and roll all the paperwork through the U.S. Department of Education.

“Let’s say (a prospective borrower’s monthly college payment) was $700 and the government says, based on their income, you can actually afford $300,” Kaiyoorawongs said. “We get that change in payment and now they’ve changed their DTI.

“That additional $400 can go to improved purchase power,” she added.

LoanSense is testing their system with Flagstar, Kaiyoorawongs says, adding that they plan to sell subscriptions to their platform to other mortgage lenders.

They’ve assisted more than 4,000 potential mortgage applicants with reducing their monthly payments on their college loans, she says, and they’re working with more than 100 loan officers.

MORTGAGE SERVICING WITH ORANGEGRID.COM

“Most banks have these systems of record, where they fold in all the loan data,” he said. “And these systems of record are very large data systems but they’re very flat, meaning they don’t have a lot of automation.

“They’re secure and, thus, they have to depend on people to understand the business rules of regulation, how to action them, how to pass something from one department to the next, like from collections to loss mitigation, and that makes it very difficult,” he added.

COSTLY PROBLEMS

If the bank doesn’t handle a loan’s problems by following the regulations, Mobraten says, there could be serious consequences: A bank outside of compliance is, potentially, a very costly situation for the financial institution.

“Things typically get very lost and ugly when you don’t have good efficiencies around these complex processes that are riddled with rules,” he said.

This is where Orangegrid comes in, he says. Their platform specializes in workflow process improvement and more automation of these processes in the mortgage servicing industry.

“We’ve created an architecture that allows us to bring in data from the system of record and start to apply what we call tracks, like specific process layers,” Mobraten said. “So, we will bring all this loan data, property data and borrower data and the system will create a track based off of that data and that track might be loss mitigation, which is what Flagstar is focused on right now.”

MOBRATEN ORANGEGRID CEO

Abank’s day-to-day business of fulfilling customer requests isn’t that difficult, says Todd Mobraten, CEO of Orangegrid. But that changes once it enters into mortgage servicing, especially if there’s a problem.

“It becomes complex once the loan becomes delinquent, and the borrower can no longer make a payment,” he said.

The heavy regulation around servicing mortgages, he says, is cumbersome.

A platform like Orangegrid’s, he says, makes for a system that’s more efficient because it’s less reliant on people.

Orangegrid, around since 2014, works with 14 mortgage lenders in the country, says Mobraten. They include two of the country’s top five banks and two of the country’s top five mortgage servicers. He declined to identify them.

“What we’re doing is helping banks retain the borrower. They do not want the borrower to be lost due to a foreclosure,” he said. “Nobody wins when that happens. The consumer doesn’t win. The bank doesn’t win. The American economy doesn’t win.”

TODD

CATALINA KAIYOORAWONGS LOANSENSE CEO

Flagstar Bank headquarters located in Troy, Michigan

Things That Have Never Happened Before Happen All the Time

By JOSHUA ROSENBERG, FEDERAL RESERVE OF NEW YORK

By integrating risk management into plans, decisions, and actions, we can succeed over a wider range of possible futures, not just the future we expect (or hope for).

Risk management is mainly a way to stop bad things from happening. Of course, risk management should help us reduce the frequency and size of negative events and then recover more quickly and effectively when negative events occur.

But, risk management, in my view, should also help the right things happen by giving us tools to work more effectively. Innovation is an essential tool to manage risks, because not changing can be riskier than changing.

Risk management could be misinterpreted as an attempt to create a contingency plan for every possible thing that could go wrong. It is important to prepare by scanning the horizon, exploring the range of possible futures, and understanding how those futures could help or impair desired outcomes. We do want to invest in effective responses to key scenarios.

However, no organization has the resources to prepare for all possibilities. And, no matter how creative we are, we still can't imagine every one of them anyway. As it is said, "Things that have never happened before happen all the time." So, effective

risk management is more than planning. It is creating the capacity to adapt to and recover from unexpected shocks, which is what we often mean when we talk about resilience. To me, successful risk management is as much about culture as it is about structure. My version of the saying "culture eats strategy for breakfast" is: "culture eats structure for breakfast."

Risk Management

During the Pandemic

Our business continuity planning and testing helped us navigate the early days of the pandemic, but this event was far more extreme than anything we had practiced, and we learned many lessons. I highly recommend a recent paper by the

Consultative Group on Risk Management that brings together insights from central bank experiences managing business continuity risks during the pandemic.

At the New York Fed, as we were changing where and how we worked, the pandemic's impacts spread to the economy and financial markets. In response to these conditions, the Federal Reserve System used our threelines-of-defense risk model to build strong risk management into facility operations.

The first line of defense, the facilities teams, were responsible for understanding and managing their risks. The second line –my group (the Risk Group), the Compliance Function, and others – was responsible for independent assessment and oversight of

BY INTEGRATING RISK MANAGEMENT INTO PLANS, DECISIONS, AND ACTIONS, WE CAN SUCCEED OVER A WIDER RANGE OF POSSIBLE FUTURES, NOT JUST THE FUTURE WE EXPECT (OR HOPE FOR).

GOOD RISK MANAGEMENT GUARANTEES SUCCESS OVER VARIOUS FUTURES

JOSHUA ROSENBERG

The following is an excerpt of remarks were delivered to the Central Bank of Nigeria’s Second National Risk Management Conference.

those risks. And, the third line – our Internal Audit Group – was responsible for fully independent assurance.

In our guardian role, we identify material risk issues and make sure that risks are understood, communicated, and addressed. We provide the stakeholders who are ultimately responsible for organizational success with a clear picture of the Bank's risk profile. In our expert role, we provide independent risk assessments, actionable risk insights, standards, and tools to help businesses manage risks. And, in our advisor role, we develop viable ideas and practical options to improve processes, controls, and business outcomes.

We also redesigned our risk management toolkit to see and address risks in real-time. We started by working with the facilities teams to identify and triage the most significant risks. We partnered with experts across the Bank to cover the spectrum of financial and non-financial risks.

Once the facilities were operating, we created facility risk registers to further identify risks, prioritize responses, and track mitigation. We also looked for thematic risks across facilities that we could address in common ways. For several facilities, we more deeply analyzed end-to-end processes to further strengthen controls.

Because of our experiences during the Global Financial Crisis, we knew that facilities themselves and their risks had a lifecycle from design, to stand up, to steady state operation, and finally to wind down and closure. So, this helped us better anticipate and manage the risks of the pandemic crisis facilities.

During the pandemic, we've adapted to a fast-changing, uncertain environment. We've seen how risk management has helped us respond effectively, used lessons learned to improve our approaches, and identified areas where we want to further develop our capabilities.

Building and Strengthening Organizational Resilience

Since then, we have continued to focus on how risk management can help us strengthen operational resilience, which "is the ability to deliver operations, including critical operations and core business lines, through a disruption from any hazard. It is the outcome of effective operational risk management combined with sufficient financial and operational resources to prepare, adapt, withstand, and recover from disruptions."

A foundational component of resilience is that an organization can operate as a

coordinated system in order to successfully adapt to changes in the environment. What does that take? Let's reframe the core components of operational risk – people, process, and technology – using a resilience lens.

People are resilient when they are ready and able to adapt to change by adjusting priorities, replanning, and refocusing activities and resources. Resilient staff work with shared purpose across organizational siloes, operate effectively in environments of uncertainty and ambiguity and are empowered to develop creative and innovative solutions.

Processes are resilient when they are robust to changing internal and external conditions, including issues with suppliers, inputs, processing, outputs, and customers. Resilient processes provide clear signals of their operating state, have the right level of automation, and continue to function under stress.

Technology systems are resilient when they are flexible, robust, and able to be recovered rapidly.

And then the overall organization is resilient when these three components –people, process, and technology – work together effectively. Resilient processes and technology should support the ability of the staff to successfully manage in normal times and during disruptions.

What are some concrete steps to strengthen resilience? In terms of processes, an important first step is to identify the processes that are critical to achieving organizational objectives. Gains are often found through simplification and automation of manual processes, especially when combined with performance metrics and risk metrics that provide real-time measures of process health.

For technology, modernizing technology and software development processes can be a key area of

focus. One goal is to create a fast, robust, and secure software development lifecycle that stays current by design (perhaps enabled through the agile development methodology and cloud platforms). And, approaches like red-teaming, threat hunting, and external benchmarking can provide insight into cyber resilience strengths and areas to improve.17

On the people side, does the current organizational culture help people successfully adapt to rapidly changing environment? Do staff have the skills that are needed to achieve organizational objectives today and in the future? These are important questions to explore and potential priority areas to address if there are mismatches.

We Will Be Surprised

I'd like to wrap up with a bit of realism followed by optimism. Here's the realism: while we might prefer never to be surprised, we will be. The optimism is: effective risk management can help us be less surprised and respond better when we are. And, a strong risk management ecosystem will be self-sustaining because it generates demonstrable value – that is, practical and timely solutions to material problems –to help our organizations succeed in all environments.

Joshua Rosenberg is executive vice president and chief risk officer, for the Federal Reserve Bank of New York. The views expressed are his own and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System.

RESILIENT PROCESSES AND TECHNOLOGY SHOULD SUPPORT THE ABILITY OF THE STAFF TO SUCCESSFULLY MANAGE IN NORMAL TIMES AND DURING DISRUPTIONS.

By DANIEL THOMPSON, CONTRIBUTOR, MORTGAGE BANKER MAGAZINE

The COVID-19 pandemic’s disruption of labor markets was massive, but it had only a modest impact on peoples’ retirement timing, according to recently released data from the U.S. Census Bureau’s 2021 Survey of Income and Program Participation (SIPP).

The SIPP collected data on respondents’ labor force status in 2020, the first year of the pandemic. These data show modest pandemic-related effects on retirement.

The share of respondents ages 55-70 who said they were retired dipped slightly from January to December that year.

When asked how the pandemic affected the timing of their retirement, 2.9% of adults ages 55-70 employed in January 2020 said they retired early or planned to retire early due to the pandemic, while 2.3% said they either delayed or planned to delay retirement for the same reason.

Retirement trends were remarkably stable during a period of upheaval in the labor market overall.

Because of workplace shutdowns and demand shifts during the pandemic, unemployment increased from 3.5% in February 2020 to a peak of 14.7% in April 2020. Given the pandemic’s differential health effects by age, many speculated that the pandemic would also lead to mass retirement.

RETIREMENT PATTERNS

The 2021 SIPP asked respondents about their employment and labor force participation during the previous calendar year — 2020. In contrast to other household surveys (which either collect annual data or whose sample composition varies throughout the year), SIPP collects monthly information about

the same sample for the entire year.

The share of respondents ages 55-70 who reported retirement as their reason for not holding a job fell modestly from 29.4% in January to 28.2% by December.

There was no discernible change from January through the first several months of the pandemic.

AGE, HEALTH, RETIREMENT

After the pandemic began, the Census Bureau added new questions to the 2021 SIPP that asked respondents how the pandemic affected them.

One question asked respondents ages 55 and older specifically how the coronavirus pandemic affected their retirement timing, or for those respondents who had not yet retired, their expected retirement timing. According to these reports, the changes were modest.

Among those employed in January 2020, the impact differed by age. Adults 62-65 years old reported the most changes, with 4.6% saying they had retired early or planned to retire early and 2.9% saying they had delayed or planned to delay their retirement.

SIPP asked respondents to rate their health on a five-point scale: excellent, very good, good, fair and poor. Changes to retirement timing in response to COVID-19 varied by the health rating respondents reported.

Those reporting poor health skewed toward early retirement: 5.6% reported that they had retired early or planned to retire early due to COVID-19 and 0.6% reported that they had delayed or planned to delay retirement.

Retirement timing differences for other values of self-reported health were not statistically significant.

RETIREMENT TIMING BY INDUSTRY

The pandemic had a major impact on jobs that require face-to-face interaction or cannot be performed remotely. It also contributed to considerable supply and demand shifts that affected employment patterns.

Did COVID-19’s impact on retirement timing affect people in some industries more than others? Again, changes were modest.

Given the relatively small age group examined and the fact that some industries employ relatively few older people, it was necessary to collapse industry categories to a greater extent in this than in many other Census Bureau data products. Respondents can report multiple jobs in SIPP; the figure uses the first reported job for January 2020.

AMONG THE FINDINGS:

• Workers in education jobs more often retired or planned to retire earlier (4.3%) rather than delayed or planned to delay retirement (2.1%).

• Workers in hospitality and other services were also more likely to move up than delay their retirement: 3.6% reported they had retired early or planned to retire early, while 1.7% reported they had delayed or planned to delay retirement.

Differences between early and delayed retirement were not statistically significant for other industry groups.

EARNINGS AND RETIREMENT TIMING

Retirement responses to the COVID-19 pandemic varied somewhat by earnings, based on monthly earnings from wages, salary, tips and self-employment in January 2020. SIPP respondents who earned the least were more likely to say that they moved up their retirement or planned retirement than that they delayed retirement.

Among the first quintile (the lowest earners), 3.4% said they planned to retire early compared to 1.8% who said they would delay retiring. In the second quintile, the difference was 3.7% and 0.9%, respectively.

Differences among higher earners (the third, fourth and fifth quintile) were not statistically significant.

ABOUT SIPP AND ITS COVID CONTENT

The COVID-19 retirement questions were added late in the development of the 2021 SIPP survey and therefore did not undergo as rigorous development and testing as other SIPP content. However, question nonresponse rates and field notes from interviewers suggest less than half a percent of unweighted respondents were confused by the questions or did not know how to respond.

Other Census Bureau research has documented that survey response rates and other aspects of data collection were affected by the COVID-19 pandemic. However, the pandemic’s effects appear to have been strongest during surveys conducted in spring 2020. The 2021 SIPP was conducted in spring 2021 and asked respondents about their experiences during the previous calendar year.

The Survey of Income and Program Participation is a nationally representative, longitudinal survey administered by the Census Bureau that provides comprehensive information on the dynamics of income, employment, household composition and government program participation.

The SIPP webpage and the SIPP Technical Documentation webpage provide more information about SIPP data quality and technical documentation. The estimates presented here are subject to sampling and nonsampling error.

Daniel Thompson is a survey statistician in the Census Bureau’s Program Participation and Income Transfers Branch.

THE PANDEMIC HAD A MAJOR IMPACT ON JOBS THAT REQUIRE FACE-TOFACE INTERACTION OR COULD NOT BE PERFORMED REMOTELY.

Vesta Announces Truework Integration To Streamline Verifications

Vesta, the next generation loan origination system Wednesday announced an integration with Truework, an income verification platform. Built directly into the lender workflow, the Truework API allows for instant access to millions of income and employment records. Lenders of all sizes can now take advantage of Truework’s verifications for any applicant directly from the Vesta LOS, without ever disrupting their workflow.

The company said as lenders pursue true end-toend digital automation, the need for streamlining the time to close, converting borrowers faster, and reducing operational costs becomes more critical. With Vesta’s no-code workflow and decisioning engine, lenders can configure their business logic directly within the web based application, without needing to use developer resources. The system’s open, cloud-native APIs unlock easy integrations to platforms like Truework, giving lenders the ability to integrate all their verification needs into one single solution.

“As we speak with today’s financial institutions about their challenges and opportunities, we continue to hear that income verification is one of the biggest pain points in origination. Our partnership with Truework is bringing a mission critical step of the process to the digital age, allowing for end-to-end streamlined verifications directly from the LOS,” said Mike Yu, Vesta CEO.

“We’re excited to partner with Vesta, who shares our passion for innovation and commitment to the customer, to bring first-class income and employment verification to their next-generation LOS. We want Truework to be a frictionless option for all of our mortgage customers, and this partnership brings us one step closer to that goal,” said Ryan Sandler, Truework Founder & CEO.

verification product currently covers over 85% of the U.S. workforce with over 12,800 unique integrations.

“With the addition of insurance verification to Truv’s product suite, we are able to further automate the mortgage … loan approval process while reducing risk for these lenders,” said Truv’s Co-Founder & CEO Kirill Klokov. “We’re looking forward to partnering with mortgage … lenders to help them approve more loans faster through the combination of income, employment, and insurance verification.”

better navigate market shifts. The latest version of the platform includes a new Home Mortgage Disclosure Act (HMDA) reporting tool and comes on the heels of $1 million in pre-seed funding.

In the normal course of business, mortgage companies create an enormous amount of new data that includes origination metrics, employee information, corporate data about earnings, investors and capital markets, and more. But most of this data resides in disparate systems and formats, including images and video, making it difficult to access, analyze and distribute across an organization without significant capital and human investment.

Using its cloud-based advanced analytics platform, Gallus connects directly with a mortgage company’s disparate internal systems and databases and turns data into insights for managers and C-Suite executives. The company’s technology brings data into a computable environment and delivers relevant, quantitative insights so real estate finance firms make better decisions.

Blue Sage, Paradatec Team To Increase Correspondent Efficiency

The maker of a mortgage-origination lending system and a provider of document processing technology for mortgage & real estate transactions have teamed up to improve turn times for correspondent lending.

Englewood Cliffs, N.J.-based Blue Sage Solutions LLC, developers of the Core Seller Portal — a browser-based, end-to-end mortgage origination lending system — said it recently integrated its system with Paradatec Inc., a Wilmington, Del.based provider of document processing technology.

As a result, the companies said, sellers can easily upload loan documents through Blue Sage’s Core Seller Portal and process them through AI-Cloud, Paradatec’s automated document indexing and data extraction solution, which uses machine-learning tools and pre-trained libraries to extract over 8,500 data points from over 850 documents to eliminate re-keying of data and manual indexing tasks.

The upgraded Gallus platform includes a beta version of a new HMDA tool to deliver competitive intelligence at the user’s fingertips. The Gallus HMDA tool allows users to pull insights on the total market, specific geographies, products, and peer lenders. Unlike other HMDA reporting methods that use static data sources and are difficult to read and understand, the new tool delivers insights in seconds with vivid detail at a level that does not exist in the market currently.

Truv Announces Insurance Verification Product Truv, an income and employment verification provider, announced it expanded its product suite to include insurance verification. Truv’s new product provides further progress on their vision to help organizations unlock the power of consumerpermissioned data.

With Truv’s new insurance verification product, mortgage lenders can instantly verify 90% of U.S. insurance policy holders in less than 60 seconds. Lenders can now embed the Truv Connect Bridge into their loan onboarding flow where applicants will be able to login directly to an insurance provider. After a connection is successfully established, mortgage lenders receive over 100 different data fields from the insurance provider including current coverages, deductibles, and premiums.

Truv adds this new insurance verification product to its already robust income and employment verification product to continue their mission of unlocking data silos for lenders to underwrite with confidence. Truv’s income and employment

Paradatec’s engine then returns indexed documents and data to the Blue Sage platform, where automated workflows perform missing document checks and data audits and notify intake staff of any data exceptions for manual review, the companies said. The data is then accessible via integrations for third-party compliance and due diligence reviews — eliminating manual work typically associated with these tasks, they said.

Planet Home Lending, a Top 10 correspondent lender based in Meriden, Conn., said it found the combined tools helped improve the customer experience while reducing costs and approval turntimes.

Optimal Blue Introduces CompassEdge Optimal Blue, a division of Black Knight Inc., on Wednesday announced the release of CompassEdge — a hedging and loan-trading platform that it says is the first of its kind in the capital markets sector.

The CompassEdge platform combines the company’s CompassPoint, Optimal Blue Secondary Services, and Resitrader solutions to support the needs of originators, regardless of range, size, or type, the company said. It merges and builds upon the strengths of each preceding solution to offer “world-class analytics, ease-of-use, and true best execution in one, unified platform,” it said.

Optimal Blue President Scott Happ said the announcement “marks an unprecedented step forward for capital markets participants, as we introduce our much-anticipated CompassEdge platform. Our existing hedging and loan-trading solutions are already unrivaled in the industry, and with CompassEdge we’ve created a unified platform that’s even greater than the sum of its parts.”

He added, “With a simple login, any credentialed member of an organization can access the comprehensive hedging and trading tools, data, and analytics they need — from a single, user-friendly source.”

Describing it as a first for the industry, Optimal Blue said CompassEdge integrates pipeline risk management tools and analytics with loan sale and mortgage servicing rights (MSR) valuation functionality.

Gallus Insights Upgrades Its Analytics Platform Gallus Insights, a Chicago-based provider of proprietary technology that helps lenders and servicers make better decisions using internal and external data, has released an upgraded version of its cloud-based analytics platform to help clients

MORTGAGE BANKING LAWYERS

These attorneys are universally recognized by their peers as setting the highest standard for the legal profession, excelling in all fields — knowledge, analytical ability, judgment, communication, and ethics.

Scott L. Luna Partner

sluna@ravdocs.com 469-730-4607

Scott Luna’s practice is focused on real estate law with an emphasis on mortgage document preparation and land title issues. Scott managed a successful multistate highvolume title and document preparation business for over 20 years before joining RAV and is recognized throughout the real estate legal community for his expertise. As a past President of the Oklahoma Land Title Association, Scott’s ongoing involvement in the industry adds to his wealth of title-related knowledge. Scott received his Juris Doctor degree from the University of Tulsa College of Law in 1991 after receiving his Bachelor of Science degree from Texas A&M University. Scott is currently licensed in Texas, Oklahoma, Missouri, Minnesota, Nebraska, and Kentucky.

Mitchel H. Kider Managing Partner

kider@thewbkfirm.com 202-557-3511

Mitch Kider is the Chairman and Managing Partner of Weiner Brodsky Kider PC, a national law firm specializing in the representation of financial institutions, residential homebuilders, and real estate settlement service providers. Mitch represents banks, mortgage companies, homebuilders, credit card issuers, and other financial service companies in a broad range of litigation and regulatory and compliance matters. He defends clients in investigations and enforcement actions before the Consumer Financial Protection Bureau, Department of Housing and Urban Development, Department of Justice, Department of Veterans Affairs, Federal Trade Commission, Fannie Mae, Freddie Mac, Ginnie Mae, and various state and local regulatory authorities and Attorneys General offices.

In addition, Mitch acts as outside general counsel to smaller companies and special regulatory and litigation counsel to Fortune 500 companies.

Gregory S. Graham

Co-Managing

Partner

ggraham@bmandg.com 972-353-4174

Black, Mann & Graham CoManaging Partner Gregory S. Graham has practiced in the areas of real estate, litigation, and bankruptcy law since 1989, and is currently licensed in Texas and admitted to practice before the United States District Courts for the Northern and Eastern Districts of Texas. Mr. Graham is also currently licensed to practice law in Georgia and has been since 2017. He received his Juris Doctor degree from Southern Methodist University School of Law in 1989 after receiving a Bachelor of Arts cum laude from UT Dallas.

Mr. Graham’s affiliations include the Dallas MBA, where he previously served as a Director & Chairperson of the Legislative Committee; DFW Mortgage Brokers Association, where he previously served as Legal Counsel; MBA; NAMB; Texas AMB prior to its closure; and Texas MBA.

James W. Brody, Esq. Mortgage Banking Practice Group Chair jbrody@johnstonthomas.com 415-246-3995

James Brody actively manages all the complex mortgage banking litigation, mitigation, and compliance matters for Johnston Thomas. Mr. Brody’s experience centers on those legal issues that arise during loan originations, loan purchase sales, loan securitizations, foreclosures, bankruptcy, and repurchase & indemnification claims. He received his B.A. in International Relations from Drake University and received his J.D., with a certified concentration in Advocacy, from the University of the Pacific, McGeorge School of Law. He was a recipient of the American Jurisprudence BancroftWhitney Award. He is licensed to practice law in California and has been admitted to practice in front of the United States District Courts for the Central, Eastern, Northern, and Southern Districts of California. In addition, Mr. Brody has served as lead litigation counsel for numerous mortgage banking and commercial related disputes venued in both state and federal courts, in a direct capacity or on a pro hac vice basis, in AZ, CA, FL, MD, MI, MN, MO, OR, NJ, NY, PA, TN, and TX.

Green Attorney marty.green@ mortgagelaw.com 214-691-4488 ext 203

Marty Green leads the Dallas office of Polunsky Beitel Green, one of the country's top residential mortgage law firms. Mr. Green is an accomplished attorney with more than 20 years of experience in the legal, banking and financial services industries. He is the former Executive Vice President and General Counsel for Dallas’ CTX Mortgage Co. and previously worked with the Baker Botts law firm in Dallas as Special Counsel. In his role as leader of the firm’s Dallas office, Mr. Green advises clients on the latest rules and regulations covering residential lending, in addition to building on Polunsky Beitel Green’s long tradition of delivering loan closing documents with speed and accuracy. Mr. Green is admitted to practice before all Texas state and federal district courts in addition to the U.S. Court of Appeals for the Fifth Circuit. An honors graduate of the University of Texas School of Law, he earned his undergraduate degree at Southern Utah University. Texas Monthly has selected him as a Super Lawyer multiple years.

Marty

NON-QM LENDER RESOURCE GUIDE

WAREHOUSE LENDING RESOURCE GUIDE

Arc Home LLC Mount Laurel, NJ

Multi-channel mortgage leader with exceptional service and comprehensive mortgage solutions.

When it comes to choosing your lending partner, there are many things to consider. Our products set the standard in the industry for innovation. Since that innovation is in our DNA, we will always be on the cutting edge of what matters most to you and your borrowers. At Arc Home, our priority is to provide the best customer experience from registration to closing, and we continue to invest in that philosophy every day.

business.archomellc.com (844) 851-3600 sales@archomeloans.com

LICENSED IN: AL, AK, AZ, AR, CA, CO, CT, DC, DE, FL, GA, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY

Carrington Wholesale Dallas, TX

The Carrington Advantage Series is a full suite of Non-QM Loan solutions that “Delivers More” for you and your borrowers. Ideal for borrowers, like the self-employed, that don’t fit Agency or Government Qualified Mortgage standards based on credit quality, property type, documentation type, income documentation, or other borrower situations.

• FICOs 550+

• Primary wage earners FICO

• DTIs up to 50%

• Bank Statements (personal or business) accepted

• We don’t require disputed tradelines to be removed

With the Carrington Investor Advantage (DCR)

• DCR down to .75

• First-time investors are ok

• Only 48 months seasoning for major credit events

• 1x30x12 mortgage history ok (866) 453-2400 carringtonwholesale.com

LICENSED IN: 47 States (excluding NH, MA & ND.)

FirstFunding, Inc. Dallas, TX

Offers warehouse lines to correspondent lenders, community banks, credit unions, and secondary-market investors.

*Ease of use (Support staff, technology an other tools to support mortgage bankers)

FirstFunding’s FlexClose Funding program allows our clients to fund outside the Fed wire restrictions. Same day and afterhours funding. Browser-based proprietary platform, customized reporting tools, and a dedicated customer service team.

Conventional Conforming, Jumbo, FHA, VA, USDA, Non-QM

(214) 8217800 firstfundingusa.com

LICENSED IN: CT, DC, DE, FL, GA, IL, MD, MA, NH, NJ, NY, NC, OH, PA, RI, SC, TN, TX, VA

APPRAISER & AMC RESOURCE GUIDE

Clear Capital Reno, NV

Clear Capital is a national real estate valuation technology company with a simple purpose: build confidence in real estate decisions to strengthen communities and improve lives. Our commitment to excellence is embodied by nearly 800 team members and has remained steadfast since our first order in 2001.

clearcapital.com

LICENSED IN: AL, AK, AZ, AR, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY

PRIVATE LENDER RESOURCE GUIDE

Alpha Tech Lending West Hempstead, NY

DSCR Rental NO DOC Loans

Alpha Tech Lending is a trusted direct lender, with over a combined 30 years of experience in the private lending sector. We offer a variety of loan programs for non-owneroccupied residences that are customizable to suit your real estate investment needs. From fix and flips, long term rental, new construction, commercial bridge, and more. We lend to both new and experienced real estate professionals throughout the country. We value long term relationships built on trust. Our brokers are protected.

alphatechlending.com (888) 276-6565 info@alphatechlending.com

LICENSED IN: CT, DC, DE, FL, GA, IL, MD, MA, NH, NJ, NY, NC, OH, PA, RI, SC, TN, TX, VA

Stratton Equities Pine Brook, NJ

Stratton Equities is the leading Nationwide Direct Hard Money & NON-QM Lender that specializes in fast and flexible lending processes. Our Hard Money and Direct Private Money loan programs support the following investment projects:

• Fix and Flip

• Soft Money Loans

• Cash Out — Refinance

• Fixed Commercial Loans

• Commercial Bridge Loans

• Bridge Loans

• Stated Income/ No-Income Verification Loans

• Rental Loans

• Foreclosure Bailout Loan

• NO-DOC

• Blanket Loans

• Fixed Rental Programs

• Multi-Family Loan

No Upfront fees! No Junk Fees! No Tax Returns!

strattonequities.com (800) 962-6613 info@strattonequities.com

LICENSED IN: All States except for: AK, ND, NV, SD, UT

Our commercial banking team can help you map the cash moving in, through and out of your business with next-level know-how. So, no matter which way it moves, you can be sure it’s moving you forward.