Oct/Nov 2019 Issue by HousingWire

HOUSINGWIRE MAGAZINE ❱ OCTOBER/NOVEMBER 2019

TECH TRENDSETTERS 50 Industry professionals driving the tech innovations of housing.

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WHOLESALE LENDERS Find out what sets these 10 wholesale lenders apart. HOUSINGWIRE MAGAZINE ❱ OCTOBER/NOVEMBER 2019

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DISCOVER WHY INDEPENDENT MORTGAGE EXPERTS LOVE BEING A MEMBER OF I love the AIME community of independent mortgage brokers, because we all work together towards the same goal and that helps my team become the best in the business.

AIME consistently provides valuable content, in addition to hosting fantastic events that are great for learning best practices to improve and grow my business. Also, the events are a wonderful opportunity to network with some of the most well-known names in the industry.

AIME is the most influential and critically important organization any independent mortgage broker can be part of.

I love that AIME connects me with experts & industry peers around the country who help me become the best that I can be.

AIME provides a strong community for the little guys! Now our voice is being heard as a collective group.

BECOME A MEMBER TODAY! MEMBERSHIP IS FREE. VISIT AIMEGROUP.COM TO LEARN MORE.

Introducing HousingWireâ&#x20AC;&#x2122;s first ever Tech Trendsetters.

Each year we recognize companyâ&#x20AC;&#x2122;s doing amazing innovation in the technology space, but this year for the first time we are looking at the people behind the tech. These are the innovators of the mortgage industry, bringing greater accuracy, efficiency and a better experience to the mortgage and housing industries.

Flip to page 44 to meet HousingWireâ&#x20AC;&#x2122;s first Tech Trendsetters.

HOUSINGWIRE OCT/NOV 2019 EDITORIAL

CONTENT SOLUTIONS

MANAGING EDITOR Ben Lane

MANAGING EDITOR Sarah Wheeler

EDITOR Jessica Guerin

DIGITAL CONTENT STRATEGIST Alyssa Stringer

REAL ESTATE EDITOR Kathleen Howley ONLINE EDITOR Maleesa Smith

ASSOCIATE CONTENT EDITOR Jessica Davis

PUMPKIN SPICE THE LEAVES have yet to fall and we’re still sweating it out under the scorching Texas heat, but fall is here. Although I couldn’t care less about pumpkin spiced lattes, I’m sure I’ll visit a pumpkin patch or two to entertain the kids. But, the fall activity that has me excited is the approaching wave of events. First, we’re heading to Las Vegas for AIME Fuse. Next, we’re heading down to Austin for MBA Annual.

ASSOCIATE EDITOR Kelsey Ramírez

CREATIVE

REPORTERS Alcynna Lloyd Julia Falcon

GRAPHIC DESIGN Traci Cortez

CONTRIBUTORS Kiran Vattem, Rohit Gupta, Sumant Sridharan

A few short weeks later we’ll be in San Francisco for NAR’s 2019 Realtors Conference & Expo. Life as a housing publisher is complete! Our cover story this issue is by Managing Editor Ben Lane. This feature analyzes one of the most important themes in mortgage and real estate: Who will be the Amazon of housing?

SALES

CORPORATE

NATIONAL SALES DIRECTOR Jennifer Watson Laws jlaws@HousingWire.com

PRESIDENT AND CEO Clayton Collins

CHIEF REVENUE OFFICER Diego Sanchez CALIFORNIA MARKETING MANAGER Christi Lingard Caren Karris clingard@HousingWire.com MARKETING CENTRAL COORDINATOR Mark Adams Katie Galbraith madams@HousingWire.com CLIENT SUCCESS SOUTHEAST MANAGER Tamara Wren Haley Hess twren@HousingWire.com AD OPERATIONS GREAT LAKES COORDINATOR Lorena Leggett Matthew Stafford lleggett@HousingWire.com CLIENT SUCCESS COORDINATOR Talia Quigley

Also, Associate Editor Kelsey Ramirez shares her viewpoints on the non-QM market on page 34. We discussed this topic in episode 14 of the Housing News podcast — a conversation that left us hungry for more perspective. With the HW team busy at conferences and launching podcasts, I volunteered to write the editor’s note for this issue. Don’t worry, no more writing from me in this issue. Passing the pen back to the journalists. P.S. By the time you read this, we’ve likely launched an entirely new HousingWire.com! We hope you are as excited as we are!

CONTROLLER Michelle Monroe

Clayton Collins CEO @ClaytonACollins Subscriptions are available for $149 for one year. A subscription includes the print magazine and online access to the digital magazine. Canada and foreign are only eligible to purchase the “Digital Only” subscription plan at $149 for one year. Visit www.housingwire.com/subscribe for more information. The information contained within should not be construed as a recommendation for any course of action regarding legal, financial or accounting matters. All written materials are disseminated with the understanding that the publisher is not engaged in rendering legal advice or other professional services. HW Media does not guarantee the accuracy of information provided, and is not liable for any damages, losses or other detriment that may result from the use of these materials.

Tweets From The Streets .@DHSgov, @fema and our law enforcement family extend our condolences to our friends and partners in the Bahamas. We stand resolved in our shared mission of assisting the victims of one of the strongest hurricanes ever recorded.

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by @DHSMcAleenan

HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 7

OCT./NOV. ‘19 OCTOBER / NOVEMBER 2019

AMAZON OF HOUSING Zillow, Redfin, Opendoor (and maybe Amazon itself) are battling for the future. By: Ben Lane

TRENDSETTERS

AFFORDABILITY

THE FUTURE

WHOLESALE

50 technology experts innovating the housing and mortgage industries.

The role housing finance can—and should—play in expanding homeownership.

After 100 years, which real estate agents will survive the next century?

Find out what sets these 10 wholesale lenders apart from the rest.

By: HW Staff

By: Rohit Gupta

By: Sumant Sridharan

By: HW Content Solutions

HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 9

CONTENTS OCTOBER / NOVEMBER 2019

THE LINEUP 14 PEOPLE MOVERS Cloudvirga promoted Daniel Sogorka from chief revenue officer to CEO. 16 EVENT CALENDAR The National Association of Realtors Conference and Expo is the largest annual event for real estate professionals. 17

ON THE SHELF

Talking to Strangers: What We Should Know About People We Don’t Know.

Digital Mortgage

18 HOT SEAT HousingWire sat down with Austin Niemiec, Quicken Loans executive vice president. 20 EXPERT COUNSEL Black, Mann & Graham explains how the firm is helping lenders operate under Texas’ laws. 22 A LIST A new study shows the top places in the U.S. where Millennials are moving.

THE LINEUP

VIEWPOINTS

26 HOT OR NOT

32 DIGITAL MORTGAGE

The average credit score of borrowers who refinanced mortgages rose to a six-year high.

Building out the rest of the consumer mortgage experience: A work in progress.

28 DISPATCH

34 NON-QM

Anthony Casa clears up intentions in terms of his AIME messaging.

Mortgage market not open to risky borrowers, lenders need to take on more risk.

24 TAKE 5

30 DISPATCH

Blend’s Devon Yang provides an inside look at his life by answering five questions.

Airbnb hosts use passive income for more investment. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 11

CONTENTS OCTOBER / NOVEMBER 2019

BACK DEPARTMENT 86 RENTWIRE It will be another banner year in multifamily as low rates spur investment.

Another banner year for multifamily

92 LENDINGLIFE FHFA flip-flops, won’t blacklist VantageScore as FICO alternative for Fannie and Freddie.. 96 OPENHOUSE Startups transforming the real estate industry as they aim for frictionless transactions. 100 INSIDE BASEBALL Appraisals may soon not be required on certain home sales of $400,000 and under. 104 KUDOS

108 Q&A 1

National Association of Realtors partners with Food Recovery Network.

Evolve offers outsourcing solutions that help lenders scale in the midst of rising volume. 110 Q&A 2

110

Radian’s expertise in managing mortgage risk creates unique opportunities for clients. 112 KNOWLEDGE CENTER SimpleNexus explains how to thrive in any market. The key? Paying attention to customers. 114 KNOWLEDGE CENTER MTG Services explores if subservicing is the right solution for loan servicing.

112 Thrive in compressed margin market

114 In-house subservicing

116 COMPANIES/PEOPLE INDEX 118 PARTING SHOT HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 13

Daniel Sogorka Cloudvirga

14 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

FLEMING

SHUMAKE CORNELIUS

WILLIAMS NOTARAS

ortgage Quality Management a nd Re s e a rc h app oi nte d Stephen Sherman as its new chief operating officer. Sherman has 30 years of experience with mortgage servicing, secondary marketing, warehouse lending, commercial real estate sales, corporate consulting and REO management services. Before joining MQMR, Sherman founded Sherman Consulting and also co-founded Blueprint Asset Management. OpenClose appointed Allen Pollack as the vice president of product innovation. Before joining OpenClose, Pollack was the director of product management, retail banking and channels at Fiserv. Reverse Mortgage Funding welcomed two new team members: Tim Griffin and Jaimee Scott as account executives. Griffin has previous experience assisting brokers as a lender support and account manager, while Scott previously served as a wholesale account executive at Live Well Financial. Experian Mortgage named Susan Allen as head of product. Allen has 25

ALLEN WEBSTER

Cloudvirga promoted Daniel Sogorka from chief revenue officer to CEO. Before joining Cloudvirga, Sogorka was the president of EXOS Technologies and executive vice president of Servicelink. He was also a division president at Black Knight.

years of experience in mortgage data and analytics, property valuation and risk management. Prior to joining Experian Mortgage, Allen was senior vice president of product management at CoreLogic. Before that, she was a senior vice president and chief collateral officer at JPMorgan Chase and held a similar collateral risk position at General Motors Acceptance Corporation. Walker & Dunlop hired Sean Williams as a senior vice president and managing director of its investment sales team. Prior to joining Walker & Dunlop, Williams served CBRE’s Tampa multi-housing group as its senior vice president. Additionally, he was the director of real estate investments at Camden Property Trust. Waterstone Mortgage Corporation promoted Chris Fleming to senior vice president of national sales. In 2009, Fleming joined the company as a branch manager, but was later appointed to the position of area manager in 2013. Prior to joining the company, Fleming held roles at several mortgage companies including Express One Mortgage Corporation and

AmPro Mortgage Corporation. Calyx appointed Robert Shumake as the company’s new national sales consultant. Shumake has nearly 20 years of sales experience in the banking, mortgage banking and financial technology industries. Prior to joining Calyx’s team, Shumake was an account executive at eOriginal and also served ClosingCorp as its vice president of national sales. Aaron Webster was named the chief risk officer at SoFi. Prior to joining SoFi, Webster led Global Regulatory Analytics at Citigroup, serving them as a chief risk officer for their U.S. retail bank and mortgage business. Additionally, Webster served Toyota Financial Services for 10 years before Citigroup in senior risk management and operational roles, serving as managing director for risk management and data science for the company's United States and Americas Region business. ATTOM Data Solutions appointed Martha Notaras to its board of directors. Prior to her appointment at ATTOM, Notaras ran corporate development for the business data and analytics division of the Daily Mail and General Trust. Notaras has also spent time in investment banking at Merrill Lynch and commercial banking at Credit Suisse. Williston Financial Group appointed Linda Vo, Melanie Cornelius and Monique Winston as vice presidents of business development for the company’s enterprise solutions division. Prior to joining the team, Vo was the director of business development at Movement Mortgage, Cornelius served SLK Global Solutions as the vice president of business development and Winston was the CEO of Optima Lender Services.

WE BELIEVE IN BUILDING COMMUNITIES When everyone chips in, we all win. Communities thrive when we all do our part to make what’s great, even greater. The real estate finance industry is doing its part by ensuring the continued strength of the nation’s residential and commercial real estate markets. We believe our strength lies in the communities we serve. TO LEARN MORE ABOUT MBA’s MEDIA CAMPAIGN, VISIT MBA.ORG/BELIEVE

EVENT CALENDAR

2019 REALTORS CONFERENCE AND EXPO NOVEMBER 8-11, 2019 Host: National Association of Realtors Location: Moscone Center, San Francisco, California Cost: $200 - $550 On the agenda: The Realtors Conference and Expo is the largest annual event for real estate professionals. There are over 100 education sessions to learn about strategies and solutions for clients’ needs. It has the industry’s largest trade show, with over 400 exhibitors. This year’s theme is: Imagine the Possibilities. realtor.org

SAN FRANCISCO The NAR conference will take place in San Francisco’s South of Market neighborhood, known locally as SoMa. Nearby museums include the San Francisco Museum of Modern Art, the Asian Art Museum, and the Museum of Ice Cream. There are also several breweries close to the center, including Black Hammer Brewing and the 21st Amendment Brewery.

MBA ACCOUNTING AND FINANCIAL MANAGEMENT CONFERENCE NOVEMBER 19-21, 2019 Host: Mortgage Bankers Association Location: Marriott Marquis San Diego Marina, San Diego, California Cost: $1,195 - $2,790 On the agenda: MBA's Accounting & Financial Management Conference brings together authorities in real estate finance to share critical business intelligence and insights. Attendees include C-suite executives, tax and accounting managers, financial analysts, auditors and CPAs. The event provides the opportunity to learn proven approaches to address evolving accounting, regulatory and financial management challenges. In addition, it offers the opportunity to earn 16 credits to meet annual CPA licensing requirements. mba.org 16 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

SAN DIEGO The MBA conference takes place in San Diego’s Marina district, a fun spot where you can rent a boat, take a stroll in the Embarcadero Marina Park, or get some local flavor at restaurants like Buster’s Beach House. If you’re into big guns, you can visit the USS Midway, now a floating museum. It was the largest ship in the world when it was commissioned in 1945 and it was the first U.S. aircraft carrier too big to transit the Panama Canal.

ON THE SHELF Talking to Strangers: What We Should Know About People We Don’t Know BY MALCOLM GLADWELL LITTLE, BROWN AND COMPANY

Malcolm Gladwell explores what happens when people make assumptions about others without meeting them. By revisiting history, psychology and infamous legal cases, Gladwell gives a provoking look at the strategies humans use to understand strangers. Many of those tools and strategies, he argues, are wrong and can lead to horrible circumstances. To unpack this, Gladwell writes of the deceptions of Bernie Madoff, the trial of Amanda Knox, the suicide of Sylvia Plath, the Jerry Sandusky pedophilia scandal at Penn State University and more.

Permanent Record BY EDWARD SNOWDEN METROPOLITAN BOOKS

The world will finally get a direct look from Edward Snowden’s perspective. It has been six years since the former Central Intelligence Agency employee leaked National Security Agency documents which revealed the U.S. government’s plans for mass surveillance. In his memoir, Snowden shares what motivated his choice to expose a system he helped build. “Permanent Record” spans Snowden’s entire life from his childhood not far from the nation’s capital to his work with the CIA, and the consequent journey into exile.

HOTSEAT

SPONSORED CONTENT

Values govern how we treat each other and our clients, and keep us grounded and focused. At Black, Mann & Graham, we will: • Conduct ourselves with integrity and trust. •M aintain a customer focus – every customer, every contact. •D emonstrate a caring attitude for our clients and for each other. • I nsist on teamwork and honest communication. • Treat one another with respect. • Improve continuously. Living our charge to “improve continuously,” we set a goal of becoming the “Disney of Doc Prep” earlier this year. Like Disney, we started by defining our purpose – that intangible goal bigger than merely preparing documents. For us, our purpose is to partner with our clients to make the American Dream a reality. To achieve that purpose, we have to set quality standards much like Disney. For our firm, that means being prompt, personable and precise. HW: What kind of resources do you offer — not just to clients, but to anybody in the mortgage industry? TB: We believing strongly in sharing our knowledge with clients to help them better serve their customers. Our firm is known for this practice, and we offer training through videos, presentations, and our Clients and Friends Memos that recap and interpret issues, policies and regulations that affect us all, whether at the state or federal level. In addition, we speak regularly at mortgage functions. Our library is really one-stop shopping for a wealth of information found on our website’s Resources tab. We have recently completed production on eight new videos to be released soon on a variety of important topics such as Texas Survey Requirements, Correction Instruments, and Renovation Loans to name a few. Further, you can find us on social media – LinkedIn and Facebook – where we post best practices, industry news, profiles on our team members, and our work to support important causes and missions in the communities we serve.

Since we have a national reach we donâ&#x20AC;&#x2122;t have the bandwidth to manage some 600 feeds - ListHub takes care of all of that for us. Plus, ListHub provides a normalized data feed so all the fields are consistent and we donâ&#x20AC;&#x2122;t have to worry about any of that. ListHub is the gasoline that fuels everything. Kevin Bilberry | CEO/Founder of Keyboom! / Listing Booster

Managing a complex data pipeline?

Have countless contracts?

Or hundreds of technical implementations?

 THE 

A-LIST HERE’S WHERE MILLENNIALS ARE MOVING Study shows younger homebuyers are moving West and South 4

COLUMBIA, SC

DALLAS, TX

Moved In: 12,838 Moved Out: 6,284 Net Migration: 6,554

Moved In: 43,159 Moved Out: 32,788 Net Migration: 10,371

NORFOLK, VA Moved In: 18,998 Moved Out: 13,568 Net Migration: 5,430

PORTLAND, OR 2.

SEATTLE, WA Moved In: 33,989 Moved Out: 25,982 Net Migration: 8,007

22 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

Moved In: 25,405 Moved Out: 18,819 Net Migration: 6,586

Although the anticipated wave of Millennial homebuyers was expected to crash, 45% of homebuyers come from this generation. A study from SmartAsset found that most Millennials are moving west and south. Here are the top five cities Millennials are moving to.

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Devon Yang Blend Engineering Group Manager Devon Yang is an engineering group manager at Blend. Yang and his team of 15 build, enhance and monitor the fintech’s offerings so that it can process more than $1 billion in mortgage applications every day. At just 30-years-old, Yang helps propel the $40 trillion consumer lending industry into the digital age through partnerships with banks, lenders and other technology providers. Below, Yang provides an inside look at his life by answering five questions:

1. In high school I was…known for wiring a computer into my car. The “carputer” had a touchscreen that took the place of the head unit. 2. My most useful tech tool is…Google. Being able to get the answer to anything instantly is a superpower that generations before couldn’t even fathom. 3. I don't ever worry about…the past. It’s nothing you can change and the best thing you can do is learn from it and make the best decisions in the future.

24 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

4. My last vacation was…to Mexico where I recently got engaged! 5. My biggest learning opportunity was…joining Blend in 2012. Being in a startup environment where you can fail at any moment forces you to be scrappy and wear many hats. This really broke down the notion that roles had specific responsibilities and allowed me to focus on doing what was best for the company.

Hot SIZZLE? Not FIZZLE? 1 1 WHY THE

WHY THE

FICO SCORES



The average credit score of borrowers who refinanced mortgages in July with loans backed by Fannie Mae and Freddie Mac rose to a six-year high, according to an Ellie Mae report. The score was 750, up from 742 in June. The average FICO score of people getting purchase mortgages backed by Fannie Mae and Freddie Mac was 754. That matched the average rate of the prior two months that was the highest since mid2017, according to Black Knight data. Looking at all mortgage borrowers, the average FICO score was 731, matching the prior month's almost three-year high.





RECESSION FEARS Increasing anxieties over a recession could be the cause of the next recession, according to Analyticom President Dan Geller, developer of the theory of money anxiety. In July 2019, the Money Anxiety Index was flat at 44, the same as June, but slightly higher than May’s 42.7 points. While these figures are relatively low and don’t point to an immediate recession, Geller explained that the constant hype about a recession could increase the level of money anxiety. Geller’s theory explains that an increase in money anxiety can lower consumer confidence and cause a recession by reducing consumer consumption by just 5%.

26 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

Even as Millennials enter the homebuying market, many Baby Boomers indicate they plan to stay in their homes throughout their retirements, according to a new study from PropertyShark. The study showed that almost a third of adults over the age of 45 say they struggle with the cost of housing and a third also say they don’t plan on ever fully retiring. Beyond that, the study showed that more than half of Baby Boomers (56% to be exact) said they want to age in place and stay in the home they're in now.



POOL PREMIUM In the summertime the living is easy, especially if you own a swimming pool in your backyard. According to a recent LendingTree study, America’s pool owning homeowners are enjoying a 54% premium thanks to their backyard oases. According to the company’s data, the median home with a pool is valued at $469,187, while the median home without a pool is valued at $305,152. That’s a difference of about $164,000. Their findings reveal that although 10% of American homes have a pool, the ratio is the largest in the West.

BABY BOOMERS RELOCATING

CONSTRUCTION The rate at which new housing is being built in this country has not recovered since the housing crisis, and it looks like that trend may be sticking around for a while. New housing start rates are expected to remain below historical averages through 2022, or later, according to new research from Zillow. The average seasonally adjusted annual rate of new single-family housing starts since 1959 was more than one million, but since 2007, the rate has not reached that level. Since the Great Recession, home values have recovered, Zillow said, but construction has not kept up.

HURRICANE PREPARATIONS Hurricane season is in its peak, yet one in four homeowners say they have made no preparations. In fact, the majority of homeowners underestimate the cost of hurricane-related damage. Hurricane season runs from June to November, but the peak months are August to October. Now, in the middle of the season, many homeowners remain unprepared. In the riskiest costal states, 77% of homeowners felt prepared for the 2019 hurricane season, however a full 48% also revealed they had not yet started preparing for the season.

Clients

Compliance

Experience

Inspections

Quality

Vendor Network

Property Preservation

Team

Audit

Technology

REO Maintenance

Continuous Process Improvement

Property Registration

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Are You Connected? We Are. We stay connected so that you always receive the highest level of quality services.

PROPERTY INSPECTIONS • PROPERTY PRESERVATION REO PROPERTY MAINTENANCE • PROPERTY REGISTRATIONS HOA & UTILITY SERVICES • STEEL SECURITY SERVICES 813.387.1100 • MCS360.com

By Anthony Casa

AIME | SPONSORED CONTENT

Nothing personal against retail loan originators What's important is what's best for consumers

ompetition in the mortgage business has cranked up several notches in the past several months, between the wholesale channel and the retail channel; between independent mortgage brokers and mortgage bankers. From my position as the leader of the industry’s most proactive and supportive advocacy group for mortgage brokers, Association of Independent Mortgage Experts (AIME), it’s exciting to see mortgage brokers continue to grow a louder voice and make massive gains — both in consumer awareness and market share. There is also a heightened sense of pride and camaraderie that exists amongst mortgage brokers, as the channel is no longer shyly working from the shadows, but rather, it is loudly beating its chest and shouting so that the entire country understands why it’s making a major comeback. Battle lines between mortgage brokers and mortgage bankers have been clearly drawn, and while I undoubtedly have something to do with that, there’s a big misconception that I want to clear up, in terms of my intentions with AIME messaging. For the record, I have nothing against retail loan originators. As people, and as professionals, retail loan originators are the exact same as mortgage brokers — they are people working hard to succeed at an important job, providing great service to their clients, in the hopes of building a great career for themselves and providing for their families. We’re all human. When I speak out against the retail channel, my intention is just that — to attack the retail business model. I strongly believe the independent mortgage channel is more than the best option

28 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

for consumers — it’s the best option for loan originators, as well. I think the retail mortgage banking model is broken and quickly fading, as giant banks and retail lenders concern themselves more with profit margin than with client service. In order to achieve their desired profit margins, and to offset the hefty price tags associated with overhead and advertising costs, giant banks and retail lenders are increasing their margins in a major way — and it’s negatively impacting the earning potential of all those hard-working mortgage bankers. Sure, many retail loan originators do very well — but they’d perform even better as independent mortgage brokers. Right now, the heat has really been turned up on retail mortgage lenders because of market contraction and the rapid growth of the mortgage broker channel — more pressure than at any point in the last decade — which has led to retail loan originators producing lower loan volume. To offset those shortcomings, these retail lenders increase their margins to cover their fixed costs, which ultimately widens the disparity between the interest rates that consumers can get from brokers vs. bankers. While that’s a big positive for mortgage brokers and a negative for retail loan originators, I’m not celebrating — because it’s not necessarily good for consumers, either. At the end of the day, consumers deserve the very best rates. It’s not retail loan originators’ fault that they can’t provide the best rates, it’s the fault of the giant companies they work for. Right now, the mortgage broker channel is stronger than ever, fulfillment is the best in the industry, pricing is as competitive as possible and now, with the launch of ARIVE, technology is also an advantage for mortgage brokers. Of course, everyone has the right to do whatever they want. Some people are more comfortable with the sense of stability that comes from working for a giant bank, while others aspire for the sense of freedom, control and access that comes from working at — or owning — an independent mortgage brokerage. There’s nothing wrong with either decision. At the end of the day, the obligation is to act in the best interest of consumers and, in my mind, that’s a lot easier as an independent mortgage broker.

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Hosts use passive income for more investment Airbnb hosts generate an average of $20K a year in profits

raig Curelop, a financial analyst at BiggerPockets, Inc., started hosting guests through Airbnb two years ago when he bought a duplex close to his office in downtown Denver. He began by offering the top unit to guests and then eventually included the bottom unit when he realized how much money he could earn — income that more than paid for his rent at another property. “Being a host has helped me pay off student loans and helped me purchase the property I now have, as well as a second property,” Curelop said. “I haven’t paid living expenses in two years, which has let me purchase assets that provide a passive income.” Helping consumers to create wealth through real estate investment is the overarching vision of BiggerPockets, an educational networking site, and hosting short-term guests is part of the company’s “house-hacking” strategy for gaining financial freedom. Airbnb is a perfect vehicle for that strategy, allowing consumers to grow their income with minimal effort so they can continue in their own professional and personal pursuits while Airbnb manages everything from advertising to tech support. The streamlined Airbnb hosting process is one reason the company has attracted so many people to its platform: there are more than 650,000 hosts worldwide, with more than 2 million people

30 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

staying in Airbnb rentals on any given night. Although a host’s income varies depending on the amount they charge per night and the number of nights they have guests, Airbnb estimates that a host listing a two-bedroom apartment can earn an average expected profit of $20,619 in one year. That’s passive income that doesn’t entail trading hours for dollars, or require a large investment up front. Instead, that’s money that can cover costs related to rent or a mortgage on a primary residence or an investment property. In fact, taking the average monthly rent on a two-bedroom apartment in some major U.S. cities, SmartAsset determined that Airbnb hosts could cover more than 70% of rent using the average occupancy rate and room rate for their cities. In some cities — including San Diego, Dallas, Chicago and Philadelphia — hosts could earn more than 90% of the average rent using that average formula. When Priceonomics analyzed income data from tens of thousands of loan applications in 2018, they calculated that the average Airbnb host makes more than $924 per month, although some made much more, stretching to $10,000 a month. Once hosts discover the benefits of hosting, they often expand their inventory of listed rooms or homes. A 2017article in Inc. profiled superhosts earning at least $100,000 a year by welcoming guests to multiple homes. Beyond the money itself, Airbnb host income is now recognized by several financial institutions in their income calculations and can help hosts refinance mortgage loans. Quicken Loans, Better. com and Citizens Bank all offer refinance programs that take host income into account, making it easier for hosts to pull from equity from their homes or get a lower interest rate. One of the things financially savvy investors appreciate about Airbnb hosting is that it represents a great income opportunity with more upside potential and less effort than traditional hosting. Airbnb takes care of listing the property, advertises availability, provides guest profiles, enables communication and arranges for safe, upfront payments. It also mitigates the risk of damage to a host’s property with liability coverage of $1 million. Airbnb hosts are using the passive income from welcoming guests to pay off student loans, pay down mortgage balances, refinance for better terms, buy additional properties, pay for retirement and spend more time doing what they love. For Curelop, being an Airbnb host has set him up for financial success, with benefits that aren’t just material. “My favorite part of being an Airbnb host is actually meeting traveling guests from all around the world. I’ve made some friends that I’m still in touch with by being their Airbnb host. My plan is to do this as long as I can,” Curelop said.

SHINING THE LIGHT ON

NON-QM L E N DI N G

Millions of potential borrowers are locked out of today’s conventional mortgage market. Deephaven Mortgage is shining the light on Non-QM lending by providing products specifically designed to address the needs of millions of borrowers who are unable to obtain a traditional mortgage. In return, this allows originators to expand their business by reaching out to a broader group of borrowers. Help shine the light on Non-QM for your potential borrowers. Contact us by visiting www.deephavenmortgage.com and selecting either Correspondent or Wholesale. We look forward to you getting in touch with us today! Deephaven Mortgage® LLC. All rights reserved. This material is intended solely for the use of licensed mortgage professionals. Distribution to consumers is strictly prohibited. Program and rates are subject to change without notice. Not available in all states. Terms subject to qualification. For more information on Deephaven’s state licensing, visit the NMLS Consumer Access webpage at http:// nmlsconsumeraccess.org/. NMLS #958425

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By Kiran Vattem

Building out the rest of the consumer mortgage experience: A work in progress Next phase of digital mortgage will begin post credit decision

The mortgage process is getting faster, less burdensome and more digital – but only up to a point. To date most of the innovation and investment has been focused on the front-end of the origination process: the steps necessary to collect the information and documents to qualify and make a credit decision. Once that milestone has been reached, much of the rest of the consumer experience remains decidedly analogy and manual. The valuation and closing processes, for example, are still done primarily by phone, text or email. And after the loan closes, the interaction between customer and servicer often is, for the most part, limited to monthly snail mail statements. The next phase of the consumer mortgage experience will focus on downstream gaps in the process and removing painpoints and friction for consumers and lenders. Our industry will have entered this next phase when we’re able to solve for both the consumer experience and 32 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

operational efficiencies across the entire mortgage continuum. WHERE WE ARE NOW Many observers believe that the race to build a digital mortgage officially began on Super Bowl Sunday 2016, when televi-

sion commercials told consumers that they could have a “rocket-fast” mortgage experience. Since then, experts estimate $10 billion or more has been spent, primarily on front-end point of sales technology, and a new group of fintech players has sprung up to help banks and lenders offer a digital mortgage experience. To date, real strides have been made in making the application process more convenient for consumers and more efficient for lenders. A recent study by the Boston Consulting Group said that new front-end technology is improving lender productivity, customer satisfaction and cutting an average eight days off the mortgage process. But the digital mortgage is far from complete. And in terms of customer experience, only early stages of what is conceivably a 30-year customer relationship, have been addressed so far. The next phase of the digital mortgage will begin post credit decision and add

Kiran Vattem is the executive vice president and chief digital and technology officer for ServiceLink. He directly oversees the company’s overall technology and product strategy/roadmap, software architecture and development and managing the EXOS Technologies division.

convenience and self-service to the interactions between the consumer and the lender, and the lender’s vendors, that occur later on the origination process and continue over the life of the loan. The experience should be omni-channel: that is, consistent whether it’s through digital or at a retail channel during origination or a mobile device or call center during servicing. MIND THE GAPS When you think about it, the two parties that matter most in a mortgage transaction are the consumer, who wants a home, and an investor, who wants a safe, compliant asset with an attractive yield. To originate and service that mortgage, however, you need dozens of parties working behind the scenes, and this creates complexity and friction. All the consumer really cares about is the home or the refinance loan, not what it takes to make it. Unless, that is, the process becomes too burdensome or frustrating. Historically, consumers were willing to put up with the hassles of getting a mortgage, because that was the only game in town. The concept of a seamless, digital mortgage experience—and its promise of being simple, fast and easy—raised consumer expectations. And it has particularly resonated with the next generation of home buyers: Millennials. Today, thanks to digital front-end technology, the beginning of the mortgage process lives up to that promise. Need a $400,000 mortgage? Apply online or on your mobile device and get a preliminary credit decisions instantly and full pre-approval in as little as 15 minutes. But that’s only part of the consumer journey. It’s also only part of the information needed to complete the loan. Is the property valuable enough to support the loan? Are there any legal or ownership issues that would cloud the transaction? To answer these questions, the lender/customer engagement becomes decidedly “old school.” The lender assigns an order to an appraisal management company. The AMC picks an appraiser, who then begins

the process of connecting with a real estate agent and/or a homeowner in a purchase transaction or just the homeowner/ consumer in a refinance. Typically, this involves a fair amount of phone tag, and can add days, even weeks, to the final loan decision. Similarly, if there are liens or judgements against a property, there’s no easy way to put these judgements in front of the homeowner. As a result, the process of clearing them often takes days, when, in some instances, it could have been resolved in minutes. Because of the multiple parties and calendars, scheduling a closing can also be a chokepoint that slows down the mortgage process and creates needless inconvenience for buyers and sellers. Finally, as the internet of things continues to evolve, consumers are expecting that they can use their smart phones, tablets and voice assistants to better manage their lives and their finances. But, when it comes to what is often the biggest investment in their lives – their home—getting answers about their mortgage status, payments, taxes, etc., still requires phone calls, often with long hold-times, to servicers. And why can’t they push a button on their phone or ask Alexa to make that mortgage payment in a secure manner? For the moment, consumers are willing to accept these gaps. But they are also seeing how other industries are using technology to radically simplify the purchase experience, even for high-ticket items. Want a $124,000 Tesla? Go online, customize your car, order it, finance it and have it delivered to your home within three weeks. Or pick one from inventory and get it in four days. From the consumer’s perspective, this is a truly seamlessly painless process. GETTING TO THE NEXT PHASE Meeting heightened consumer expectations, particularly from Millennials, will be one of the big drivers behind the next phase of the digital mortgage. But the need to take time and cost out of the origination and servicing processes will be another.

For a large lender being able to consistently originate and close a loan in 15 days, versus say 45, would produce significant savings. At the same time, shorter origination cycles would also produce customer satisfaction gains. Based on what we’re hearing from clients, the tipping point today between a happy applicant and an unhappy one seems to be 30 days from start to close. Hit 29 days and the satisfaction scores are high, but as soon as the 30-day mark is reached, satisfaction levels fall precipitously. Some large lenders are on record as saying they will soon be able to do 10-day, and even 8-day, start-to-finish mortgages. When that happens, it will then become the new target that the rest of the industry will have to hit. One of the ways the industry will get there is via plug-and-play scheduling technology for appraisals and closings that can cut days off of the loan cycle time. Similarly, servicers know to the penny the cost of each call to a call center, and how many of these calls could be avoided if the customer could self-serve. They also know how frustrating the current communication options are for consumers, and how this experience can motive, or de-motivate, a consumer’s decision to refinance with an investor. How quickly will our industry get to this next phase? The early adopters, so far, tend to be private, nonbank lenders that are aggressively building out their origination capabilities, along with some top banks, and sub-servicers that are focused on the borrower experience. There is also growing interest from fintech providers looking to offer more downstream solutions to their bank clients. How quickly large banks will adopt these technologies varies from institution to institution and whether they are approaching these projects as part of their digital mortgage strategy or their overall enterprise digital transformation. But these projects are in every IT queue, and are moving up quickly. When they’re done, the digital mortgage—and its promise to simplify home buying experience for consumers—will be complete. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 33

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By Kelsey Ramírez

Mortgage market not open to risky borrowers (despite what some say) Why lenders actually need to take on more risk

Mortgage lenders are increasingly entering the non-qualified mortgage market, but does this mean we are going back to the old subprime days? Let me give you the short answer: no. The Wall Street Journal recently published an article titled: Mortgage market reopens to risky borrowers. It says that the strict lending requirements that were put in place after the financial crisis are starting to erode. The author makes the argument that risky mortgages are making a comeback under a new name: non-QM. WHERE HE’S RIGHT The author has some good points. First off – what is non-QM? These are mort34 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

gages that don’t comply with post-crisis standards set by the Consumer Financial Protection Bureau. Non-QM mortgages can’t be sold to Fannie Mae, Freddie Mac, or any other government agency, but are instead either sold to investors or kept on as portfolio loans. The author makes the point that nonQM loans are rising in popularity, and he’s right. Recently, Citigroup Global Markets Realty announced it is entering the nonQM space by issuing its first non-QM mortgage backed security.

Back in 2018, DBRS predicted that a comeback for non-QM mortgage loans would be near. The company explained increasing home prices and the shortage of housing inventory, alongside rising interest rates, will result in more lenders expanding their loan offerings to include products outside the QM space, according to the DBRS’ U.S. Residential Mortgage Review and 2018 Outlook. Last year at the Mortgage Bankers Association Secondary Marketing conference, a major talking point was the growing appetite for non-QM loans. It’s a tough market, and the easy loans where borrowers neatly line up with Qualified Mortgage standards are harder and harder to find.

Kelsey Ramírez is an Associate Editor at HousingWire. In this role she spearheads the production of HW Magazine. Ramírez is a journalism graduate of the University of Texas at Arlington. She previously covered issues such as homelessness and domestic violence.

The WSJ article points out that borrowers took out $45 billion in non-QM lending in 2018, the highest amount since 2008, and is on track to surpass that in 2019, according to data from Inside Mortgage Finance. WHERE HE’S WRONG But while all that may be true – non-QM is certainly the buzz of the industry right now, his conclusions on the increased activity are not. Non-QM is not the subprime of the past, and in fact many experts warn again this kind of thinking. “Non-QM is not what we saw leading up to the crisis,” said Michael Brenning, chief production officer at Deep Haven Mortgage, at MBA Secondary in 2018. “These are clean, super-prime borrowers with one little thing about their profile. You will find the weighted average FICO is more than 700, all ATR compliant.” In an article in HousingWire Magazine’s June issue, Managing Editor Ben Lane explained that one major difference between today’s non-QM loans and the subprime of the past is that these new loans are not backed by mortgage giants Fannie Mae and Freddie Mac. In a LinkedIn article, Raymond James Head of Whole Loan Trading John Toohig explained that many mortgages fall under the non-QM category simply because they are different than traditional QM mortgages, not because they are “subprime.” “I had a great conversation with an originator last week as he lambasted the market and its prejudice to pricing his loans,” Toohig wrote. “His particular program was more of a mid-tier credit, heavy equity / down payment, but self-employed (think lesser documentation) borrower on jumbo loan balances. These are generally very wealthy borrowers that have been locked out of the current mortgage market.” And another example: “JPM has now completed their first nonQM deal,” he wrote of JPMorgan Chase. “A great example of non-QM loans not being confused with non-prime. A 770 FICO, with nearly 30% equity down, but what

makes these loans non-QM? ‘Most of the loans were classified as non-QM because they were underwritten using tax transcripts rather than signed tax returns.’” Another expert explained that if you took the time to look at the non-QM of today, you would see it is very different from the past subprime lending. “If you take the time to analytically look at Non-QM loan characteristics today, including in most cases, meeting ATR requirements,” First Guaranty Mortgage CEO Aaron Samples said. “In conjunction with the diligence requirements associated with today’s securitization market.” “We are a long way from past loans described in this article,” Samples said, referring to the WSJ article. “With the probable expiration of the GSE Patch the mortgage markets will look much different in years to come. We need to learn from the past but continue to look forward.” In MBA Secondary’s session on housing finance solutions for the future, Gary Acosta, National Association of Hispanic Real Estate Professionals co-founder and CEO, pointed out that, “approximately 78% of new households being formed nationwide are from diverse communities. They tend to have slightly different experiences and behavioral habits when it comes to managing finances.” “They may have thinner credit files, need low down payments, pool resources among families and multi-generations to make that first home accessible,” Acosta said. “Given the frequently weaker credit profiles of non-QM borrowers, some market participants have equated them to pre-crisis Alt-A or subprime mortgages,” DBRS’ analysts said in a recent report. “However, DBRS deems the credit quality of non-QM securitizations issued to date to be considerably improved from pre-crisis standards based on three key factors: ATR rules, tighter underwriting and independent appraisal process, and robust loan attributes.” And even government officials are keeping an eye on the matter, but say they have not seen unsustainable borrowing.

“We have not seen unsustainable borrowing, financial booms, or other excesses of the sort that occurred at times during the Great Moderation, and I continue to judge overall financial stability risks to be moderate,” Federal Reserve Chair Jerome Powell said at the Federal Reserve symposium entitled Challenges for Monetary Policy. “But we remain vigilant.” ASSESSING THE RISK In order to truly see how the market compares to the subprime of the past, you can’t measure the volume of non-QM originations. Instead, you have to assess the current risk appetite of the market. Even with this increase in non-QM activity, it is nowhere near pre-crisis levels. The Monthly Chartbook July 2019 from Urban Institute shows mortgage credit availability increased from 5.75% in the fourth quarter of 2018 to 5.95% in the first quarter of 2019 due to an increase in risk taken in the portfolio and private-label securities channel. And while this is the highest level it has been since 2013, it is down significantly from pre-crisis years, showing lenders still have plenty of room to increase their risk. Since 2013, product risk has fluctuated below 0.6% and borrower risk remains around 2%. In fact, Urban Institute explained that credit remains tight, and the average FICO score remains high compared to pre-crisis levels. “Access to credit remains tight, especially for lower FICO borrowers,” the Urban Institute explained in its report. “The median FICO for current purchase loans is about 36 points higher than the pre-crisis level of around 700.” “The 10th percentile, which represents the lower bound of creditworthiness to qualify for a mortgage, rose slightly to 644 in April 2019, compared to low-600s pre-bubble,” the report continued. “Higher FICO scores serve as a strong compensating factor.” While mortgage lending is getting riskier, it is not the subprime lending of the past. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 35

By: Ben Lane

36 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 37

Zillow launches Zillow Offers and Zillow Home Loans

The story of Amazon

is as widely known as it is apocryphal at this point. The online monolith started from modest beginnings, with Jeff Bezos and a handful of others running the company out of a garage in its early stages. The company started small, simply selling books online, with Bezos and team personally packaging up customers’ orders and taking them to the post office themselves. Eventually, the company grew, but even in Bezos’ wildest dreams, he couldn’t have conjured up what the company would become: one of the businesses that has changed the face of the world economy over the last few decades. And now, despite the complaints about how Amazon is run (the company’s treatment of its workers and drivers, the amount of taxes the company pays compared to its size and revenue and numerous other issues), the company is one of the few that are synonymous with their industry. When one thinks of online shopping, they think of Amazon. Put simply, Amazon reshaped the entire retail landscape, changing how people shop, what they expect of their retailers and what they expect of other companies they deal with. It came from nowhere and now it’s resting comfortably at the top of the mountain while everyone else

“Put simply, Amazon reshaped the entire retail landscape, changing how people shop, what they expect of their retailers and what they expect of other companies they deal with.”

38 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

Opendoor acquires Open Listings and launches Opendoor Home Loans

scrambles for whatever is left over. But Amazon didn’t invent online shopping, retail, video streaming, music streaming or any of the other business segments that the company is into now. What it did do is take what others had done, improve upon it by a dizzying degree, and market it brilliantly. The company’s dominance has inevitably led to questions of what’s the next company to so thoroughly disrupt an industry that it reshapes the way that industry works. “Who will be the Amazon of ______________?” It’s a question that’s been bandied about in housing circles for years: Who will be the Amazon of housing? Is there a company out there that has the capability to disrupt housing to the same level that Amazon did retail? Is there a company that can become so dominant in housing that it could put some seemingly indestructible company entirely out of business? Well, some are certainly trying. In fact, there seems to be a race to see which company becomes the first to be the first true one-stop shop (an Amazon experience, if you will) for buying and selling a house, the company that enables a buyer (or seller) to buy (or sell) their home with the ease of buying a new pair of headphones on Amazon. Search, like, click, buy. That’s the goal, for headphones, and for houses, or so it seems. And why is that? Blame Amazon (and other monoliths). Amazon, along with companies like Apple and Google, have changed and are changing what people expect of the companies they deal with across every industry. Companies like Amazon make things simpler for customers because that’s what customers want. And that builds up an expectation from customers that things are supposed to be that simple everywhere. Then, companies are forced to make things simpler because customers now think that’s par for the course. Basically, it’s a symbiotic relationship between companies and consumers wherein companies making things more simple for customers leads to customers wanting things to be that simple across the board, which then leads to companies needing to make things simpler to keep up with the competitors and satisfy their customers. Where do you think the phrase “Push button. Get mortgage.” came from? Quicken Loans sensed that shift in customer behavior and expectation, built a mortgage experience around it, and marketed the hell out of it. And while Quicken Loans’ Rocket Mortgage has had a tremendous impact on the company’s mortgage business,

Redfin expands RedfinNow

even Quicken Loans isn’t trying to position itself as a onestop shop…yet. Meanwhile, companies like Zillow, Redfin, Opendoor, loanDepot and others are all fighting to be the one that brings the entire home shopping experience to customers in cohesive and continuous journey where the customer gets everything they need, from finding the house, touring the house, selecting the house, financing the house, to closing on the house, all in the same place and all with the same company. Of all the companies moving towards the one-stop shop model, Zillow might be the most interesting one. It was just over four years ago that then-Zillow CEO Spencer Rascoff made the company’s mission clear, stating that Zillow was a media company, not a real estate company. “We sell ads, not houses,” Rascoff said in 2015. “We’re all about providing consumers with access to information and then connecting them with local professionals. And we do a great job of giving those local professional high-quality lead, they’ll covert those leads to at a high rate and then want more media impressions from us. So we’re not actually in the transaction, we’re in the media business.” But that all changed last year when Zillow joined the burgeoning iBuyer market and began actually buying and selling houses. Through its “Zillow Offers” program, Zillow buys a home directly from a seller, makes the “necessary repairs and updates” and lists the home “as quickly as possible.” And the company has big plans for its direct buying business. The company said earlier this year that it plans to buy as many 5,000 homes per month within three to five years. But Zillow didn’t stop there. Last year, Zillow announced that it was getting into the mortgage business by buying Mortgage Lenders of America. At the time, Zillow said the acquisition of Mortgage Lenders of America would allow the company to “streamline and shorten the home-buying process for consumers who purchase homes through Zillow Offers.” The company later rebranded Mortgage Lenders of America to carry the Zillow name, officially launching Zillow Home Loans earlier this year. And while the company touts Zillow Home Loans as a way to ease the home buying process for those buying a home directly from Zillow, the company also states that anyone who wants to can obtain a mortgage through

loanDepot introduces mellohome

Zillow Home Loans, assuming they’re approved, of course. And Zillow has big plans for its mortgage business too, claiming that its goal is to originate 3,000 mortgages per month. If that happens, that’d likely make Zillow not as big as the big banks, Quicken Loans, and the like, but still substantial. With room to grow. Add it all up and theoretically, a homebuyer can now find their next house on Zillow, buy it through Zillow, and get their financing through Zillow too. Opendoor seems to have a similar mission, although the company started from a different place. Instead of starting out in the real estate listings space before expanding into other parts of the transaction as Zillow did, Opendoor started out as an iBuyer before expanding. Opendoor launched as a direct buyer in 2014, starting out initially in Dallas-Fort Worth and Phoenix before expanding to Las Vegas, Atlanta and other cities. Last year, the company announced that it is taking its platform nationwide and plans to be operating in 50 cities by the end of 2020.

HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 39

“Moving into a new home should be one of the most delightful and memorable moments in life, yet the closing process gets in the way.” -Opendoor co-founder and CEO Eric Wu

But Opendoor wasn’t content with just being an iBuyer. The company, which has been raising money hand over fist for the last several years and was recently valued at nearly $4 billion, quietly expanded into mortgages and title a few years ago, and is also connecting home sellers directly with homebuilders to facilitate an all-in-one home selling and newly built home buying process, which it calls a “trade in.” Beyond that, Opendoor made a big move last year when it acquired Open Listings, a tech-focused real estate site that offers homebuyers a 50% refund on the fees their real estate agent would have received. Open Listings launched in California in 2015, expanded into Seattle in 2017, and operates in several other markets as well. Open Listings allows consumers to find, tour, and buy homes through its platform. Real estate agents only come into the process when it’s time to make an offer on the home. Therefore, the company can offer a rebate on the buying agent commission. With the acquisition, Opendoor is able to buy a home directly from a seller, then help that seller find a new home (whether it’s a newly built home or an existing one), offer them a mortgage, and close on the sales through its own title operations. When it announced the acquisition, Opendoor said that it planned to expand the real estate site’s services into all of the markets where Opendoor operates and plans to operate in the future. “By integrating Open Listings with Opendoor’s mortgage, title and home services, the company will make it as easy to buy, sell or trade-in a home as it is to hail a ride, book a flight, or shop online,” the company claimed. And in just the last few months, Opendoor launched massive expansions of both its mortgage and title businesses, aiming to ramp up those additional business segments and deepen its relationship with its customers. In late August, Opendoor launched its own mortgage company, called Opendoor Home Loans. When the company first expanded into mortgages in 2017, Opendoor said that it would be lending to people who sell their house to the company to help them purchase their new house. But with this expansion, Opendoor said that its mortgage business will not be limited to people who want to buy homes from Opendoor. According to the company, anyone who wants to buy a home can use Opendoor as 40 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

their mortgage lender. The company rolled out this expanded mortgage operation in Arizona and Texas, and plans to expand it nationwide. Just a few weeks later, Opendoor acquired OS National, a national title and escrow company, in a bid to expand its title and closing operations. “Moving into a new home should be one of the most delightful and memorable moments in life, yet the closing process gets in the way,” said Eric Wu, Opendoor co-founder and CEO. “Our goal with this acquisition is to make title and escrow feel less like a barrier in the home purchase process and more of a welcome mat at the front door of your dream home.” Now, with the Open Listings platform fully integrated in Opendoor, which allows any buyer to self-tour any MLSlisted home using Opendoor’s app, Opendoor can now take a homebuyer all the way from finding the house, to touring the house, to buying the house, to financing the house, to closing on the house. And if the buyer already owns a home and wants to buy a new one, they can sell their old home to Opendoor too. Now that’s a one-stop shop. The issue with Opendoor will be scaling its various businesses and building appropriate infrastructure in each of its markets to support those business lines. So far, the company has been smart about how it has expanded, moving into new markets slowly. And as stated before, it seems the company raises hundreds of millions in new capital ever few months, so financial backing doesn’t appear to be an issue. And as long as Opendoor doesn’t get too far out in front of its skis, the company has a real chance to become a dominant force in housing. Redfin, meanwhile, is building a very similar business model to Opendoor, although Redfin started as a real estate brokerage, so it has the real estate agent structure already built in to its platform. Redfin also had built-in title operations, but the company launched and expanded both mortgage lending and iBuying businesses in the last few years. Redfin expanded into mortgages in 2017, starting out small in Texas only, in the Austin, Dallas, Houston and San Antonio markets. Over the last few years, Redfin expanded its mortgage business to more than a dozen states, and is now mortgages in Florida, Maryland, Tennessee, Georgia, Illinois, Minnesota, North Carolina, Ohio, Pennsylvania, Texas,

Virginia, Washington, D.C. and Colorado, with more states due to be added soon. Redfin also touts fully digital mortgage closings that allow the company’s borrowers to sign their loan documents from any device with a camera and high speed internet connection. The company’s fully digital closing is conducted through Redfin’s title insurance and settlement services provider, Title Forward. Redfin also expanded into direct homebuying in 2017, beating Zillow to the punch by a year. Redfin began testing its direct buying program in the first quarter of 2017, which it calls “Redfin Now,” but did not make the program public until later that year. According to Redfin, it considered Redfin Now an experiment, starting the program in the Inland Empire region of Southern California in January 2017, before expanding to San Diego in June 2017. Redfin then announced in August 2018 that it is “deepening its investment” in its direct buying program and is planning a “long-term” expansion of the program beyond its first few markets. loanDepot also appeared to have plans to become the mythic one-stop housing shop, even bringing on former Keller Williams CEO Chris Heller to serve as CEO of mellohome, loanDepot’s attempt to build a platform for “buying, financing, and improving homes.” Mellohome was born from mello, loanDepot’s proprietary digital lending platform. The company later expanded mello to become mellohome, which connects borrowers with real estate agents and home improvement providers. loanDepot also later rolled out comprehensive digital mortgage technology under the mello umbrella. Those moves all appeared to be made to position loanDepot as an all-encompassing housing entity, but that push appeared to hit a snag when Heller left loanDepot earlier this year to serve as the chief real estate officer at OJO Labs, a real estate technology startup whose flagship product is an AI-based conversational assistant that is currently being used in the real estate industry. It should be noted that both Heller and loanDepot have connections to OJO. Two years ago, loanDepot reached an agreement with OJO Labs to act as the mortgage provider of OJO. The company’s claimed that OJO’s artificial intelligence technology combined with loanDepot’s digital lending platform would allow homebuyers to access real estate and mortgage information, help them get pre-qualified and guide them through an entirely digital, mobile-first experience. loanDepot took another hit when the company’s chief technology officer, Dominick Marchetti, left the company earlier this year. In his role, Marchetti oversaw the development of much

of loanDepot’s mello program. But Marchetti left loanDepot for Guaranteed Rate, where he is tasked with leading the company’s “product innovation agenda.” One interesting facet of Marchetti going to Guaranteed Rate is the mortgage potential created by a recently announced partnership between Amazon itself and Realogy, the largest U.S. residential real estate brokerage. The partnership, called TurnKey, matches potential homebuyers with real estate agents and offers up to $5,000 of Amazon products and assistance as a “Move-In Benefit” for using the service to find their real estate agent from among the Realogy brands, which include Better Homes and Gardens Real Estate, Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA and Sotheby’s International Realty. The partnership could prove to a massive windfall for Realogy’s real estate agents, and for Guaranteed Rate, because Guaranteed Rate and Realogy are partners in a joint venture called Guaranteed Rate Affinity that markets mortgages across the Realogy real estate companies. And what is helping to power TurnKey on the Realogy side? OJO Labs, which recently partnered with Realogy to create a virtual assistant for real estate agents. So, instead of loanDepot being the one to build the all-encompassing platform, maybe it will be Guaranteed Rate. Or maybe it will turn out that Amazon itself will be the Amazon of housing. For years, there have been rumors that Amazon wants to get into the real estate, housing, and mortgage business. Last year, HousingWire reported that Amazon was looking to hire a head of a new mortgage division that would have seen the company perhaps become a mortgage lender itself. At other points, the company briefly rolled out a “Find a real estate agent” page, perhaps a precursor to the Realogy deal. There were even rumors a few years ago that Amazon was trying to buy loanDepot outright as its entre into mortgages. That didn’t happen, at least not yet. So perhaps Amazon is using this Realogy deal as a trial balloon to test the housing landscape for viability. Or perhaps Amazon is quietly building a mortgage lending operation. Picture it now: Amazon Prime Home Loans, with exclusive discounts for Prime members. Either way, Amazon has certainly been looking at housing and mortgage lending for quite a while. Only time will tell if Amazon itself becomes the Amazon of housing. But if Amazon doesn’t (or doesn’t want to), there are clearly several others jockeying for that title. Whether any of them get there remains to be seen. But it certainly won’t be for lack of trying. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 41

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It’s our immense pleasure to introduce HousingWire’s inaugural list of Tech Trendsetters, the master minds behind the technology driving the housing and mortgage industries. This award highlights the most impactful and innovative technology leaders serving the housing economy. Each year, HousingWire recognizes the top 100 technology companies in the housing finance space. But now, we are doing more. We are recognizing the experts behind the technology. The people who drive the innovation. The executives making an impact. Flip through to meet HousingWire’s first ever Tech Trendsetters. 44 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

Gary Beasley, Roofstock Bryan Bellacosa, ServiceLink John Berkowitz, OJO Labs Erik Bernhardsson, Better.com Amy Broman, Notarize

Mike Cagney, Figure Technologies Brent Chandler, FormFree Eric Connors, Ellie Mae Andy Crisenbery, Black Knight Benjamin Duke, Richey May

Shaimaa Elk, Sagent Lending Technologies Sean Faries, Land Gorilla Marty Frame, WEST Steve Gaenzler, Radian Brodie Gay, Unison

Ernie Graham, Homebot Garth Graham, STRATMOR Group Jason Griffin, Bungalo Michael Hammond, NexLevel Advisors Lucas Hansen, Qualia

Matt Hansen, SimpleNexus Stacy Hoover, Reali Clement Ifrim, Quantarium Alpana Kapoor, Ellie Mae Travis Kniffen, Roostify

Rick Lang, Freddie Mac Gregg Lehman, Fiserv Jane Mason, Clarifire Tim Mayopoulos, Blend Jeremy McCarty, Valligent Technologies

Nick McDonald, Floify Chris McEntee, Intercontinental Exchange Lou Mintzer, Homesnap Simon Moir, eOriginal Jim Perry, UWM

Vinita Ranade, Tavant Technologies Phil Rasori, Mortgage Capital Trading Sharon Reichhardt, ARMCO Scot Rose, Class Valuation Tracy Stephan, Fannie Mae

Dan Studeny, Amrock Ike Suri, FundingShield Todd Teta, ATTOM Data Solutions Rick Triola, NotaryCam Drew Uher, HomeLight

Steve Viarengo, Capsilon John Vong, ComplianceEase Brian Walerius, Total Expert Briana Whelan, Snapdocs Suha Beidas Zehl, Guidance Residential HOUSINGWIRE â?ą OCTOBER/NOVEMBER 2019 45

Gary Beasley

Erik Bernhardsson

CO-FOUNDER AND CEO, ROOFSTOCK

CO-FOUNDER AND CHIEF TECHNOLOGY OFFICER, BETTER.COM

Gary Beasley set out to transform how people can invest in real estate by co-founding Roofstock, a platform that invites a new type of investor into the space by treating investments like stock portfolios. As CEO, Beasley has brought institutional-level tech, underwriting and operations to the single-family rental space, which he felt lacked accessibility and transparency. To make Beasley’s vision come to life, Roofstock employs technology to break down geographic barriers to real estate investing, enabling participants to invest in a property from thousands of miles away by providing them with access to research, analytics and insights to keep them informed. For example, Roofstock’s proprietary software uses Census data to rate neighborhoods based on an algorithm assessment area-specific risks and benefits. Under Beasley’s leadership, Roofstock eclipsed $1.5 billion in transaction volume within three years of its launch and is poised for continued growth.

As the co-founder of Better. com, Erik Bernhardsson is largely responsible for the company’s innovation and technology. Through Bernhardsson’s leadership, Better.com has funded nearly $4 billion in loans and is currently producing $350 million a month in loans. In his position as chief technology officer, Bernhardsson has built a loan origination system that replaces the commissioned loan officer with an automated system, therefore making the mortgage process faster, cheaper and more transparent for borrowers. Thanks to the technology Bernhardsson and his team have created, borrowers can now get rates in seconds and a pre-approval in three minutes through the company’s website. Additionally, the proprietary technology Bernhardsson has helped create now allows Better.com to close mortgages 50% quicker than the industry average of 42 days.

Bryan Bellacosa FVP OF PRODUCT MANAGEMENT AND INFORMATION TECHNOLOGY, SERVICELINK

As first vice president of product management and information technology, Bryan Bellacosa is the principal architect of a new customer-facing, cloud-based technology platform: EXOS One Marketplace. The new platform provides servicers with a new level of visibility into all aspects of the default process and delivers a seamless method for servicers to efficiently manage their assets. During his more than 18-year career at ServiceLink, Bellacosa has played a pivotal role in a number of major technology initiatives, including the first single platform supporting nationwide, end-to-end foreclosure and default title/close processing; the redesign of the ServiceLink Auction platform; and the build-out of proprietary default title technologies. In his current role, Bellacosa leads a team of 50 software engineers, business analysts and quality assurance professionals that support the company’s default services line of business.

John Berkowitz CEO, OJO LABS

John Berkowitz is leading a major transformation within the real estate industry as CEO of OJO Labs, which uses patented AI technology to conduct text conversations with consumers at scale, serving as a powerful digital assistant for homebuyers and sellers. His mission is to empower people to make better decisions through the fusion of machine and human intelligence. With a vision to develop a product that adds value to consumer’s lives and enables industry professionals to build better relationships with clients, Berkowitz launched OJO Labs in 2015, and has since grown the company to over 340 employees, secured enterprise partnerships with the largest brokerages bringing OJO to multiple markets across the U.S. and Canada and obtained $70 million in funding to date. Berkowitz has been instrumental in building OJO’s widely-recognized organization and culture. 46 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

Amy Broman SENIOR SOLUTIONS ENGINEER, NOTARIZE

Notarize would not be where it is, leading the digital mortgage revolution, without the contributions of Amy Broman. As senior solutions engineer, Broman is responsible for all integrations and digital document delivery at Notarize, helping lenders and title agents produce a more automated, customer-driven workflow. Broman helped build a technology integration with MERS that allows for automatic, registered, eNote generation. Beyond that, Broman works closely with MERS, MISMO, and others to meet standards and drive innovation in the digital mortgage space. Thanks to Broman’s leadership, Notarize also launched an integration with Resware, helping title agents eliminate tasks, increase efficiency, and have greater quality control of their closings. Broman also acts as a mentor to the team internally and is a regular thought-leader and speaker on how lenders can go digital.

Mike Cagney

Andy Crisenbery

CO-FOUNDER AND CEO, FIGURE TECHNOLOGIES

SENIOR VICE PRESIDENT OF ELENDING SOLUTIONS, BLACK KNIGHT

Founded just last year and already in full production with a custom-built blockchain platform called Provenance, Figure is originating over $80 million in home equity lines of credit per month. Mike Cagney is the co-founder and visionary of both Figure, a consumer finance company, and Provenance, production blockchain for the finance industry. Over $300 trillion moves through global financial markets each year, incurring hundreds of billions of dollars in audit, custody, trustee, reconciliation and administrative costs each year. Many of the markets suffer from significant friction, lack of transparency and limited liquidity. Provenance will dramatically reduce costs, improve liquidity, reduce risk and open new financial markets. Cagney truly blazed the trail by launching the first large, stable and powerful blockchain platform that is already transacting hundreds of millions of dollars of housing loans and proving out the benefits to the finance industry.

Andy Crisenber y oversees the company’s digital lending efforts. Crisenbery played a crucial role in developing Black Knight’s digital closing solution, Expedite Close. He helped simplify the lending process into a seamless digital experience. By integrating Expedite Close for digital closings, Crisenbery helped decrease the time it takes to originate a loan. With Crisenbery’s guidance, Black Knight integrated “Best Way Rules” into Expedite Close workflows that create efficiencies and reduce challenges by taking on much of the complexity and decisions involved with all forms of closings, including eClosings. By systematically analyzing closing documents, these rules leverage client-defined rules, settlement agent processes, jurisdiction requirements, consumer preferences and investor requirements. As a result, Expedite Close can automatically determine the best way to close any given loan.

Brent Chandler FOUNDER AND CEO, FORMFREE

As the visionary that first brought electronic asset verification to mortgage lending, Brent Chandler is one of few who can say he has truly transformed the way lenders do business. While he started by founding FormFree in his basement, Chandler now leads five-time HW Tech 100 honoree FormFree into its 11th year of operations. Chandler created Passport, the all-in-one verification app that helps financial institutions determine borrower’s Ability to Pay. Within seconds, Passport collects, analyzes and certifies the identity, assets, income and employment data lenders need for safer and smarter lending decisions. FormFree accepted more than 1.5 million AccountChek Asset Report orders from lenders and verified more than $1 trillion in borrower assets since its launch. Chandler’s reputation for pushing industry innovation has made him an ongoing contributor to Fannie Mae and Freddie Mac’s innovation panels.

Eric Connors SENIOR VICE PRESIDENT OF PRODUCT MANAGEMENT, ELLIE MAE

Eric Connors has a proven history of leading innovation in a data driven sector such as the mortgage industry. As the senior vice president of product management at Ellie Mae, Connors spearheads product development and management to meet the diverse needs of its customers. In recent months, Ellie Mae unveiled its Encompass NG Lending Platform and its Connect suite of solutions. These products are designed to help lenders close loans faster and reduce the cost of origination, while leveraging data and automation to deliver the true digital experience. Connor has been responsible for driving the product strategy in support of these solutions and has been instrumental in helping Ellie Mae achieve its North Star of automation. Since launching Encompass Consumer Connect, lenders are now experiencing over 70% conversion rates, which are driving more applications into the pipeline.

Benjamin Duke E X E C U T I V E D IRE C T O R O F B USIN E S S INTELLIGENCE AND PLANNING, RICHEY MAY

Earlier this year, Richey May boosted its tech offerings by acquiring Amata Solutions, a provider of planning and business intelligence tools for mortgage lenders. As part of the deal, Benjamin Duke, Amata Solutions’ founder, assumed the role of executive director of business intelligence and planning with Richey May Technology Solutions. Richey May saw the value in Duke’s solutions and brought him on board to help the firm’s clients grow smarter and faster. Duke developed planning, forecasting and business intelligence tools that empower lenders to make more confident, strategic business decisions based on real-time data. The tools he developed can be applied to all areas of the mortgage business and can be integrated across a mortgage lender’s platforms, including their customer relationship management software, loan origination system and general ledger software. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 47

Shaimaa Elk

Steve Gaenzler

EXECUTIVE VICE PRESIDENT AND CIO, SAGENT LENDING TECHNOLOGIES

SENIOR VICE PRESIDENT OF DATA AND ANALYTICS, RADIAN

Under Shaimaa Elk’s leadership, Sagent Lending Technologies has delivered innovative solutions that are intuitive, easy to use, fully configurable to adapt to a lender’s business and desired workflow and provide a great experience to borrowers, delivering real-time information at their fingertips. Elk continues to look to future innovations centered on how humans interact with data and money movement to meet their unique lifestyles, and ways to leverage consumer services such as Apple Pay and integrated Alexa loan management. Elk is responsible for managing all elements of technology development and implementation for Sagent Lending technologies and spearheads digital transformation and human-centric design. Sagent Lending Technologies’ human-centric approach benefits clients by offering a superior, intuitive web interface that improves productivity, lowers servicing costs, mitigates risk and improves borrower engagement with its digital self-service offering and access to data in real-time.

Steve Gaenzler spent 25 years at the intersection of technology and the business of housing. As senior vice president of data and analytics at Radian, Gaenzler aims to disrupt the property valuations and real estate markets through the use of machine learning and artificial intelligence. Through his work at Radian, Gaenzler continues to share the value and importance of data in developing models and analytics to improve the housing industry for the company’s clients and their customers. He is developing tools for the next generation of automated valuation, researching ways to augment tasks of valuation experts, and servicing customers to create the engine for analytics. Internally, Gaenzler is helping transition Radian into an industrial fintech where data-drives its internal decisions. He is constantly challenging teams to search out new technologies that will empower customers.

Sean Faries CEO, LAND GORILLA

Sean Faries has led the vision and implementation of new software developments such as a digitized lien waiver and title update process, integrated legally-binding e-signatures, a templated document creation tool and automated project management. His greatest strength is his ability to listen to the challenges and needs of diverse stakeholders in the construction lending process and identify new, innovative technology solutions that streamline formerly time-consuming and often frustrating processes. Land Gorilla’s technology allows more lenders to participate with construction lending as they reduce construction non-completion, monitor contractor performance, proactively manage potential portfolio risks and radically improve the borrower and builder experience. Stakeholders stay connected around milestones, draw requests, change orders and payments, with the appropriate level of visibility into the loan.

Marty Frame CHIEF OPERATING OFFICER, WEST

Marty Frame played a key role in helping Williston Financial Group build a better real estate transaction for the housing industry. Through the company’s WEST division, Frame oversees a company-wide initiative to centralize key components of the mortgage lifecycle by integrating appraisals, vendor management and real estate services. Since 2018, Frame helped the company build out a transaction management platform that enables lenders to significantly reduce closing times, while making closing transactions more secure. The platform integrates with LOS platforms, so lenders can identify relevant, practical and effective strategies for improving their businesses. Studies conducted by WFG indicate that WEST’s technology platform has reduced the licensing fees lenders pay for various products and services by an average of 57%, while also reducing application to closing times by 17 days or more. 48 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

Brodie Gay VICE PRESIDENT OF RESEARCH, UNISON

Brodie Gay has been at the center of building Unison’s data-driven approach. Gay is credited with spearheading multiple programs in the last year that have improved Unison’s vetting and investing process, ultimately enabling the company to invest in more homes, reduce homeowner portfolio risk and yield greater returns for fund investors. Since joining Unison three years ago, Gay’s role has been split between conducting research and developing software that the company can use to engage with investors and households. He worked closely with a colleague to develop Greenlight, a quantitative investment tool that automatically identifies which homes in the U.S. can be potential Unison customers according to predetermined criteria and those that are ineligible. The tool is continuously trained against the 350 million individual transactions of the over 100 million homes in America.

Ernie Graham

Michael Hammond

CEO, HOMEBOT

FOUNDER AND PRESIDENT, NEXLEVEL ADVISORS

Ernie Graham is a life-long technology entrepreneur that has been a leader at multiple startups and public companies. In 2015, he co-founded Homebot with the goal of revolutionizing the way loan officers and real estate agents grow their business by empowering consumers to build wealth with the largest asset they will ever own, their home. By using Homebot as a tool to stay in touch with their clients and give them actionable and valuable home finance information, lenders and agents have arrived at a new era of how business is done. Companies like Guild Mortgage, Caliber and CMG are all reaping the benefits of Homebot as each have experienced dozens of new transactions from their past borrowers, and personalized outreach to nurture and retain relationships. With millions of homeowners already on the platform, and monthly averages of 75% open rates, Homebot is quickly entering and dominating the lender marketing space.

While many in the housing industry have been focused on driving innovation within their own company, but Michael Hammond played an integral role in helping companies bring solutions to housing clients. Besides strategically helping numerous mortgage technology companies bring innovation to market, Hammond helped NexLevel Advisors mortgage technology clients win more than 34 industry awards and recognition including ensuring they were published more than 100 times in leading industry publications, securing more than 20 speaking engagements, significantly increasing sales volumes and helping grow their social media presence and engagement by more than 200% in the last 12 months alone. Hammond is only one of 60 individuals to earn the prestigious Certified Mortgage Technologist designation, presented by the Mortgage Bankers Association.

Garth Graham SENIOR PARTNER, STRATMOR GROUP

Garth Graham was one of the founders of mortgage.com. Graham looked to give life to his vision that a digital mortgage experience could make the process better, faster and more transparent for the consumer. Now, Graham holds more than 25 years of experience in the mortgage industry, ranging from Fortune 500 companies to successful startups. Since joining STRATMOR in 2012, Graham has advised more than 175 mortgage companies, including many of the top lenders in the country, on developing successful IT strategies and investments. He was a co-creator of MortgageSAT, a borrower feedback analysis program that gives lenders the control, visibility and context needed to manage and improve the borrower’s experience. In addition, Graham is also a much-sought-after speaker at national conventions and an author on mortgage technology trends.

Jason Griffin CHIEF TECHNOLOGY OFFICER, BUNGALO

As chief technology officer, Jason Griffin leads the development of technology to bring the entire home buying experience under one umbrella. Griffin and his team use technology to bring Bungalo’s vision to life. The company’s technology enables buyers and their real estate agents to move through every step of the home buying process — searching, touring, financing, making an offer and closing on a home – entirely online. The company’s software allows buyers who are pre-approved for financing to submit a digital offer in just minutes through the company’s site. With this offer submission experience, all homes are sold on a first-come-first-served basis and never go above listing price. Griffin also recently led the development and launch of the Bungalo app, which lets buyers and their real estate agents search listings, and instantly tour any Bungalo home anytime between 8 a.m. and 8 p.m., with just the click of a button.

Lucas Hansen CO-FOUNDER AND CHIEF TECHNOLOGY OFFICER, QUALIA

Lucas Hanson helped build a company that has transformed a disconnected, inefficient real estate closing process to a simple, user-friendly experience with a platform that now processes over 10% of all US real estate transactions. Hansen spearheaded several initiatives including Qualia’s first of its kind two-way integration with Ellie Mae’s Encompass digital mortgage solution. This integration is the mortgage industry’s first 2WI with a title, escrow and closing software. He also oversaw E-signing by Qualia, the only title, escrow and closing software with a builtin electronic signature. Finally, Hansen engineered and oversaw the implementation of Notary by Qualia, a platform feature that provides title and escrow agents with easy-to-use notary services from Qualia’s nationwide network of verified professional notaries knowledgeable of the real estate closing process. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 49

Matt Hansen

Alpana Kapoor

FOUNDER AND CEO, SIMPLENEXUS

SENIOR DIRECTOR OF ENGINEERING, ELLIE MAE

In 2014, the mortgage industry was still acclimating to its shift from paper-based processes to web-based origination tools designed for the desktop when SimpleNexus founder and CEO Matt Hansen launched SimpleNexus with a vision of moving the home loan experience to the devices with which borrowers, real estate agents and loan originators are most intimately connected: their phones. In a 2016 study, SimpleNexus was able to show that loan applications passing through the platform close 20% faster than the industry average. In another study, 800 loan originators who had recently switched to SimpleNexus increased their real estate agent connections by an average of 300%, with some LOs increasing Realtor connections by as much as 2,000%. Most recently in July of 2019, SimpleNexus announced the availability of an application program interface and webhooks that empower mortgage lenders to establish real-time data syncing between SimpleNexus and non-integrated third-party systems.

Ellie Mae calls Alpana K ap o or t he “ le ad i ng woman” behind the company’s Encompass digital lending platform, its solution that currently processes 30% of the total residential mortgages in the U.S. Kapoor led the delivery of several compliance updates like CFPB and HMDA in the last year alone. In addition to that, Kapoor also helped achieve an additional 15% to 20% performance improvements on Encompass key performance indicator in the last year. Kapoor’s achievements also helped double the number of active Encompass users in the last four years to 200,000. Through Encompass, Kapoor and her team helped Ellie Mae’s customers save an average of $970 per loan and close loans seven days faster than average, equating to an average of 697% return on investment over a five-year period. Kapoor also helped grow Ellie Mae’s market share from 34% to 38% over the past few years.

Stacy Hoover HEAD OF PRODUCT, REALI

As Reali’s first head of product, Stacy Hoover leads product innovation for Reali, a flat-fee real estate technology brokerage that also recently expanded into mortgages. Hoover helped launch Reali’s updated scalable model that can be quickly launched in new real estate markets. Hoover also led the expansion of mobile offerings with the AI-Powered Price Predictor tool within the Reali app. The PricePredictor reduces the amount of guesswork required to determine a home’s ultimate selling price and shows buyers the estimated probability of what a home will sell for at a range of bids. Hoover also helped lead the acquisition of online direct mortgage lender Lenda, adding mortgage services to Reali’s product offerings. Hoover also developed key partnerships with companies like Hippo Insurance, Lemonade, and Modus to offer additional services to save Reali customers thousands of dollars in escrow and insurance fees.

Clement Ifrim FOUNDER AND CEO, QUANTARIUM

Clement Ifrim is an artificial intelligence visionary who has built Quantarium into a real force in applying AI to real estate. Ifrim is an extraordinary thinker, strategist and leader in the housing market. Before AI became a buzzword, he assembled a team of world-class scientists and data experts and coupled them with economists, housing experts, and mathematicians to develop the QVM, Quantarium’s proprietary automated valuation model. Stemming from this award-winning work, Ifrim lead the efforts to build the Quantarium analytics platform and prediction-models, based natively on AI. Contributing unmatched scale and speed, Quantarium has helped more than 100 customers in various parts of the housing ecosystem make real decisions in truncated time-frames as opposed to offering rear-view mirror analytics that sacrifice accuracy, coverage, or both. 50 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

Travis Kniffen DIRECTOR OF BUSINESS DEVELOPMENT, ROOSTIFY

Travis Kniffen is working with the company’s team and partners to re-imagine the mortgage process to deliver a streamlined, end-to-end digital experience. The key area where Kniffen drives innovation is with Roostify’s overall API strategy. For Roostify, partnerships and integrations are paramount to be able to deliver powerful functionality within the platform. Kniffen has driven technological innovations at Roostify to deliver a superior seamless digital mortgage experience for lenders, loan officers, and their customers. Roostify lender partners also have a broad range of technologies they work with, whether proprietary or off the shelf. Therefore, for Roostify to be able to connect to a rapidly growing list of technology partners, the digital lending platform must be able to scale quickly, and the work Kniffen spearheaded in the past 12 months has set Roostify up for exactly that.

Rick Lang

Tim Mayopoulos

SINGLE-FAMILY VICE PRESIDENT OF LOAN ADVISOR STRATEGY AND INTEGRATION, FREDDIE MAC

PRESIDENT, BLEND

In his role as single-family vice president, Rick Lang leads the strategic direction and industry integration efforts for Freddie Mac’s Loan Advisor platform of tools and services. Lang’s colleagues call him a unique influencer and driver of transformational change in the industry and say his impressive track record throughout his over five-year tenure at Freddie Mac demonstrates his commitment to deliver innovative client-centric solutions that result in a faster, less costly origination process. Since the launch of Loan Advisor in 2016, Lang has been the driving force behind the successful development and launch of several new enhancements which were created specifically to support the business objectives and digital strategies of Freddie Mac’s clients and help build their businesses. Lang engages directly with clients to understand the people, processes and technology, since he knows from experience that all three are critical to successful innovation.

A veteran in the financial services industry, Tim Mayopoulos served as president and CEO of Fannie Mae for more than six years before joining Blend in 2019 as president. At Fannie Mae, Mayopoulos brought tech and innovation to its forefront, making mortgage lending faster, safer and more transparent. At Blend, Mayopoulos has helped propel the $40 trillion consumer lending industry into the digital age through partnerships with leading financial institutions, including Wells Fargo and US Bank, lenders and other technology providers. Thanks to Mayopoulos’ guidance, Blend lenders can enable their customers to apply for a mortgage in as little at 10 minutes. Blend hopes to create a reality in which homebuyers can be approved for and secure a mortgage in just one tap. Mayopoulos’ support of a more data-driven ecosystem will help make this vision a reality.

Gregg Lehman SENIOR PRODUCT MANAGER, FISERV

Gregg Lehman’s colleagues call him a lending visionary. Known for his skills in strategic planning, innovative product design and process improvement, Lehman is working to revolutionize mortgage lending by designing automation and process improvement solutions with a focus in loan fulfillment, loan origination and life-of-loan productivity. Lehman has designed and managed the development of a variety of enterprise content management and business process automation solutions for financial institutions for the past 20 years. He has almost 15 years of experience designing paperless lending solutions for the largest mortgage lenders and servicers in North America. Lehman was instrumental in the design and launch of LoanComplete, a life-of-loan solution to automate and standardize audit reviews, improve loan quality and simplify compliance checks that was launched in 2015.

Jane Mason FOUNDER AND CEO, CLARIFIRE

Jane Mason is CEO and founder of Clarifire, a technology company that offers Software-as-a-Service applications that automate complex workflows. Since 2000, Mason and her team have stayed ahead of market evolution by paying close attention to industry operational impediments. Mason has also watched where technology falls short in addressing housing industry issues. This focus has led to a production-ready, feature-rich automated workflow application that supports end-to-end business process automation. As the mortgage industry has continued to evolve and servicers have struggled to meet technical innovation standards, Mason and her team have sustained their commitment to modernization. As one example, they created CLARIFIRE COMMUNITY to help clients become compliant with regulations issued by the Consumer Financial Protection Bureau.

Jeremy McCarty CEO, VALLIGENT TECHNOLOGIES

Jeremy McCarty has developed several significant technologies for the valuations industry. These include: the 4-Hour Desktop Appraisal in 2012, the 48-hour Drive-by Appraisal in 2016 and within the past 12 months, a full interior inspection appraisal that can be completed in as little as one hour. Unlike traditional form-filling software, Valligent’s technologies enable a data-driven approach to appraisals that’s in sync with emerging AI-machine learning developments. Since the appraisal is typically one of the most time-consuming factors in the mortgage process, McCarty’s contributions to shortening the time it takes to complete an appraisal have significantly expedited mortgage turn times, reduced costs, and improved closing ratios. Valligent products include a mobile video app and appointment scheduling, which helps position borrowers in the modern, digital age. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 51

Nick McDonald

Simon Moir

ENGINEER, FLOIFY

CHIEF PRODUCT OFFICER, EORIGINAL

Filling the role of engineer on an elite and agile team of Boulder, Colorado-based software developers, Nick McDonald has proven to be a major contributor to Floify’s success since the company’s inception in 2013. Having supported the development of more than three dozen integrations with third-party solutions that lenders already know and love, including credit reporting, VOE/VOA/VOI, eSignature and document storage providers, McDonald’s efforts have helped Floify’s customers drive performance via a comprehensive mortgage origination solution that further simplifies the lending process. As a result of McDonald’s contributions to Floify, lenders who use their point-of-sale system to originate loans have reported getting to clear-to-close an average of 7.5 days faster as well as a significant improvement in their communication between borrowers, real estate agents and other mortgage stakeholders. These performance improvements help lenders reduce overhead and reduce workload.

As the chief product officer at eOriginal, Simon Moir is responsible for product vision, strategy, design and delivery across all industries eOriginal serves. Moir provided technology for Fannie Mae, Quicken and Wells Fargo. Moir joined eOriginal three years ago as senior vice president and general manager of digital mortgage. In that capacity, he was responsible for the successful development and execution of eOriginal’s mortgage growth strategy, including the product roadmap, business development, sales and solution delivery. Moir continues to expand eOriginal’s digital mortgage capabilities and ensure the success of digital adoption across the industry. He established an integration partner program allowing other industry leading technology platforms, in particular LOS and DocPrep solutions, to provide out-of-the-box integrations to eOriginal for their clients.

Chris McEntee PRESIDENT OF ICE MORTGAGE SERVICES, INTERCONTINENTAL EXCHANGE

Since Intercontinental Exchange first started considered entering the residential mortgage industry, Chris McEntee provided the vision for the business. As president of ICE Mortgage Services, his mission is to make the mortgage production process easier and more transparent for all industry stakeholders. In three short years, McEntee spearheaded ICE’s acquisitions of MERSCORP and Simplifile, which are playing a critical role in ICE’s goal to digitally transform the residential mortgage market. MERSCORP has two platforms that provide infrastructure for the transition to a paperless mortgage market: the MERS System and the MERS eRegistry. The acquisition of Simplifile, an electronic recording services provider in the mortgage industry, gave ICE access to large mortgage networks, connecting originators, settlement agents, servicers and counties. McEntee is now integrating the teams into the ICE culture and infrastructure.

Lou Mintzer CHIEF PRODUCT OFFICER, HOMESNAP

Lou Mintzer is responsible for the design, execution and product roadmap for one of the top-rated agent and consumer home search platform. His influence on Homesnap starts with the kernel of the product idea and extends through every step of the implementation, coding, design and marketing of end result. Under Mintzer’s leadership, the Homesnap platform launched: automated Facebook/ Instagram ads for agents, automated Waze ads for agents, automated Google ads for agents, automated “Story” ad units on Facebook and Instagram and automated Google My Business listings for agents. Homesnap can ingest new inventory and advertising formats in perpetuity to stay ahead of the innovation curve. It also has a location-based agent safety timer, which gives agents protection when they meet clients at unfamiliar locations, and a newsfeed providing agents and their clients with real-time information. 52 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

Jim Perry SENIOR VICE PRESIDENT OF APPLICATION DEVELOPMENT, UWM

When you have the fastest and most innovative IT team in the mortgage industry, you need leaders who have a deep understanding of the business. Jim Perry’s wealth of experience in mortgages and information technology make him uniquely suited to drive UWM’s IT team forward in all facets. Perry leads nearly 400 team members who are all laser-focused on delivering cutting-edge partnership tools for mortgage brokers. Perry has overseen the development of innovative proprietary tools that have been difference-makers for mortgage brokers. Some of these include UClose 2.0, a revolutionary tool that gives mortgage brokers complete control over the closing process and enables on-the-spot closings and one-Click AUS, brokers instantly get a side-by-side comparison of DU and LP with one click, giving the entire picture and allowing brokers to choose the best terms for their borrowers.

Vinita Ranade

Scot Rose

SENIOR PRODUCT MANAGER, TAVANT TECHNOLOGIES

CHIEF INNOVATION OFFICER, CLASS VALUATION

With 15 years of consumer lending experience, Tavant Senior Product Manager Vinita Ranade is recognized as a trusted partner and technologist in the consumer lending industry. Throughout her career, Ranade has led teams to build advanced solutions for mortgage lenders spanning loan origination, processing and servicing. Ranade’s domain expertise along with her technical and engineering abilities is leading to efficient and innovative software development within the housing industry. In her current position as the senior product manager for Tavant’s flagship point of sale solution, Tavant Velox, FinXperience, Ranade is modernizing the lending industry by bringing increased loan production efficiency through customer self-service and digitization of business processes. Through FinXperience, she has enabled a Top 5 national lender to grow their business from zero to $4 billion dollars in loans funded within 12 months from launch.

As a valuation industry expert, Scot Rose is focused on using technology to streamline the appraisal process for everyone involved. With nearly two decades of industry experience, Rose has made it his mission to educate all industry stakeholders on the future of valuation modernization. Rose’s end game is the industry game-changer 24hour appraisals. Since joining Class Valuation in 2018, Rose has worked to bring in technological resources that will help the company achieve its vision. In his position as chief innovation officer, Rose helped the company integrate original software such as INvision and INvision Go. Additionally, Rose has aided Class Valuation in identifying impediments to valuation modernization and deconstructed those roadblocks to implement new technology that will position the company as a leader in the valuation space for years to come.

Phil Rasori CHIEF OPERATING OFFICER, MORTGAGE CAPITAL TRADING

For the last six years, Phil Rasori focused on building and implementing cloud-based secondary marketing software that has proven to automate numerous manual functions for lenders and investors. Rasori spent his mortgage career helping lenders leverage secondary marketing hedging strategies. Officially launched in 2019, Rasori recently spearheaded the development of Trade Auction Manager, a browser-based software module that enables an efficient bidding and digital trading process for TBA mortgage-backed securities. TAM changed the game for MCT’s lender clients. Metrics support a drastic reduction in outbound calls by 44%, savings of about three basis points on every TBA trade, a 13% increase in employee productivity, increased speed and a significantly better overall TBA trading process than what the industry was used to for so many years, which is now fully digitized trading.

Sharon Reichhardt VICE PRESIDENT OF CLIENT SUCCESS, ARMCO

In her role as vice president of client success for ARMCO, Sharon Reichhardt leads the client success division, which uses problem solving and education-based methodology to ease clients’ use of the company’s ACES platform. The client success team uses a direct, hands-on approach focused on listening to clients, observing their work activities and understanding their unique footprint and target goals. Beyond that, the team guide implementations and perform professional service engagements, assuring each client is maximizing usage of the ACES platform. In her role with ARMCO, Reichhardt created the client-focused policies, procedures and protocol that assure clients receive the knowledge and skills they need, not merely that the company can complete the sale. Reichhardt also masterminded Fraud Case Manager, a first of its kind technology that ARMCO launched in 2018.

Tracy Stephan VICE PRESIDENT OF ENTERPRISE INNOVATION, FANNIE MAE

When Tracy Stephan was asked to define a process at Fannie Mae to help address housing issues in a radical new way, she established a team to research, test and apply emerging technologies, collaborating with startups and fintech companies outside of the housing industry. Stephan pivots quickly, rejects ideas that don’t match strategic goals, and pairs good ideas with disciplined execution to turn validated concepts into business outcomes. Examples of her team’s success this year include the launch of a public data and application programming interface platform, The Exchange, Ask Poli, an artificial intelligence and natural language search tool and The Pitch, an internal crowd-sourcing platform for employees to submit and vote on ideas and receive funding and support to scale the best ones. Stephan’s efforts helped embed a structured process for innovation. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 53

Dan Studeny

Rick Triola

VICE PRESIDENT OF PRODUCT STRATEGY, AMROCK

CEO, NOTARYCAM

As Amrock’s vice president of product strategy, Dan Studeny this year worked to move technology team members temporarily into production roles so they could gain deeper insight into what processes could be automated. Thanks to this initiative, the team has begun working on tech innovations to automate certain functions to increase efficiencies. He pushed similar projects with robotics process automation, the implementation of chatbots for signing agents to answer questions about closings and more. Studeny also pushed for a way to automate the scheduling for appraisals. He sought out and nurtured the relationship with a third-party texting platform, negotiated the contracts and facilitated the relationship between Amrock and the company providing the auto-scheduler. Now, clients have visibility into an appraiser’s schedule and can select open time slots, greatly improved the experience for both appraisers and homeowners.

As founder and CEO of NotaryCam, Rick Triola brought remote online notarization and remote online closing technology to the housing industry. He founded NotaryCam in 2012, and completed the first mortgage ROC in 2014. Triola devoted the last six years to advancing nationwide RON legalization. As of July 1st, nine states allow RON, with three more states coming on board this year and another nine in 2020. Many of these states have simply opted to adopt the Revised Uniform Law on Notarial Acts developed by the Uniform Law Commission – an effort in which Triola was heavily involved. His commitment to excellence in both system functionality and customer service has earned NotaryCam a 99.8% customer satisfaction rating. From the start, Rick has followed the mantra of “Customer First.” To achieve that, each NotaryCam notary goes through the NotaryCam Academy.

Ike Suri CHAIRMAN AND CEO, FUNDINGSHIELD

An investor and enterprise builder, Ike Suri can form a vision, design a plan and implement, execute and deliver successful solutions for clients and consumers in technology and tech related industries. Suri developed and deployed innovative products that help mortgage lenders and borrowers protect themselves at a loan-level basis using real-time live data. Under his leadership, FundingShield has successfully prevented wire fraud impact and losses to its clients on over $500 billion of mortgage closings. Suri is keen on formulating strategic partnerships that deliver cohesive and collaborative results for a better customer experience. His extensive relationship network spans the globe due to his vast experience in running multi-national firms. Suri keeps his focus on driving innovative solutions, executing the plan and growing the firm’s client base by ensuring its clients receive user-centric solutions that add to their bottom line.

Todd Teta CHIEF PRODUCT AND TECHNOLOGY OFFICER, ATTOM DATA SOLUTIONS

As the chief product and technology officer for ATTOM Data Solutions, Todd Teta is responsible for product development and tech innovation. Under Teta’s leadership, ATTOM has created ATTOM DaaS. This solution allows businesses to efficiently leverage the power of property data without the process of building data management capabilities in-house. In the DaaS solution, the customer does not have to download and load data files, rather, the customer simply accesses the database directly in the cloud. DaaS is a publishing system at heart, not just a delivery method as data published via DaaS is updated daily. Teta’s team also manages the rigorous data management process involving more than 20 steps validates, which standardizes and enhances the data collected by ATTOM and assigns each property record with a persistent, unique ID which the company calls the ATTOM ID. 54 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

Drew Uher FOUNDER AND CEO, HOMELIGHT

As the founder and CEO of HomeLight, Drew Uher listed over $10 billion in homes and increased revenue growth by 4300% in four years. Over the past year, Uher has realized and led to fruition the launch of HomeLight Simple Sale. Simple Sale provides agents with the ability to tap into the company’s network of iBuyers to offer their clients a competitive option to the traditional home sale process. Since launch, Uher has grown HomeLight from just a few employees to over 170 with offices in San Francisco, Scottsdale, Brooklyn and Seattle. And just recently, under Drew’s direction, HomeLight acquired Eave, a digital mortgage company that was built from the ground up to provide an exceptional service to buyers. Eave’s integration with HomeLight has created HomeLight Home Loans. Uher plans to launch several additional technologically innovative products before 2019 is out.

Steve Viarengo

Briana Whelan

SENIOR VICE PRESIDENT OF DIGITAL MORTGAGE SOLUTIONS, CAPSILON

DIRECTOR OF PRODUCT, SNAPDOCS

Steve Viarengo is the driving force behind the development of technology solutions that help mortgage lenders and servicers automate their businesses with trusted data. Most recently, Viarengo led the development of Capsilon Digital Underwriter, a no-touch underwriting solution that helps lenders dramatically improve mortgage underwriting and make quick, informed mortgage lending decisions. Viarengo was also instrumental in the launch of Capsilon IQ and a suite of apps that capture and perfect mortgage data from any source, eliminating manual data entry and comparison. Thanks to Viarengo’s efforts, Capsilon saved its customers an estimated 5.6 million people hours collectively in 2018 through the use of Capsilon IQ, which automates many people-intensive processes, enabling employees to do work aligned with their skills – stepping in where judgment is needed. This technology enables Capsilon customers to see significant productivity gains while scaling quickly as volume fluctuates.

Briana Whalen embraces her role and works with lenders and settlement to understand their needs. Whalen is spearheading the company’s effort to unify its two products to create an interconnected ecosystem of lenders, settlement, signing services and signing agents. Whalen helped develop Snapdocs’ digital closing platform, providing lenders with a practical path for moving to hybrid closings and eClosings. By leveraging advanced automation and AI, Whalen also enables lenders to offer digital closings without having to take on additional manual work. Whalen also thinks about what consumers would want in a closing experience, enabling borrowers to preview their loan documents and eSign prior to the in-person closing appointment. By empowering lenders to give their borrowers a digital closing experience, hour-long closings become as short as 10 minutes.

John Vong EXECUTIVE CHAIRMAN, COMPLIANCEEASE

John Vong is the visionary co-founder of ComplianceEase. John has built his entire career by spotting market trends before anyone else and then developing technology to address those trends. Throughout the past year, he has spearheaded a number of critical technology projects at ComplianceEase, including the development and launch of DecisionMonitor, a tool that leverages artificial intelligence to help lenders identify and resolve common compliance issues quickly—reducing Compliance Department backlogs and expenses and delivering fair and consistent resolutions, while accelerating loan decision-making. With the expansion of home equity lending, Vong oversaw the addition of home equity audit functionality to ComplianceAnalyzer, making it the first and only compliance system that lets lenders using state licensing originate home equity lines of credit that comply with all state laws.

Brian Walerius CHIEF TECHNOLOGY OFFICER, TOTAL EXPERT

Brian Walerius played a key role in the company’s growth over the last several years. Walerius joined Total Expert in 2015. Since then, Walerius has helped the company power marketing and growth for almost 15% of the U.S. mortgage market. In the last 12 months alone, Total Expert has made significant progress for lenders/bankers and their customers, all under Walerius’ technology leadership. Specifically, the company integrated with other technology providers, including Blend, Cloudvirga, Mortgage Coach and Sales Boomerang to fill gaps in the customer journey, make relevant offers around key life events in real-time, and analyze/optimize sales and marketing return on investment. The company also deployed the first generation of Journey Creator, an intelligent marketing automation that personalizes and humanizes customer engagement at scale, helping turn leads into customers – and retaining customers for life.

Suha Beidas Zehl CHIEF INFORMATION OFFICER, GUIDANCE RESIDENTIAL

Suha Beidas Zehl played a transformative role in the home finance industry by creating opportunities that previously didn’t exist for American Muslim homebuyers. Beidas Zehl led the transformation of what can be a cumbersome process into a digital experience. Through her leadership, Zehl’s team created a full, end-to-end, point-of-sale platform that is now used by the company’s entire sales team. This platform is used to complete applications, run GSE automated underwriting, accurately price and lock files, order and track appraisals, generate TRID-compliant initial disclosures, distribute automated notifications and SMS texts, and store all documents digitally. As a result, the company’s customers can now realize a dream that was once out of reach, and also have access to some of the most innovative and customer-friendly technology in the industry on their journey to homeownership. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 55

THE ROLE HOUSING FINANCE CAN—AND SHOULD—PLAY IN EXPANDING HOMEOWNERSHIP Changing demographics should drive homeownership By: Rohit Gupta

56 HOUSINGWIRE ❱ OCTOBER.NOVEMBER 2019

HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 57

YOU DON’T have to look far to find articles on changing attitudes toward homeownership. Whether it’s the latest sound bite on Millennial shopping habits or the coming age wave of Boomers looking to downsize, there’s no shortage of stories that suggest that attitudes toward the American Dream of owning a home are changing. If you look beyond the anecdotal, though, you’ll find data and demographics that tell a much different story—one that reaffirms that the dream of homeownership is alive and well, but could be made a little easier to attain. Supporting this dream takes the work of multiple sectors, like lenders, mortgage insurers, real estate agents, public policymakers, builders and financial technology companies, to name a few. Of those sectors, the housing finance industry plays a unique and powerful role—and as the world around us continues to evolve, we should work together as an industry and as part of the greater housing sector, to protect and advance the dream of homeownership for more people.

IS THE DREAM STILL ALIVE? Say what you will about the boomerang generation. The U.S. is clearly on a path for growth in family households, which should drive homeownership. When you look at the demographics, the fastest growing age group after Baby Boomers is 25 to 39, growing by 7% between 2013 and 2017, according to the 2018 Census Bureau Population Estimates. That translates to population growth of 4 million and 8 million each during that period, while populations decreased during the same period in other age groups. This is significant because the most important age groups to watch for homeownership trends over the next five years will be 25 to 39 and 40 to 45. Historically-speaking, it’s at this point in the average lifecycle when people get married and have children, which typically also means moving out of rental housing and buying homes. Despite the pervasive narratives, the data on homeownership rates bears this out. While the split between renting and owning for the under 35 age group is 2:1, 35% homeownership rate, that ratio nearly inverts to 2:3 (60% homeownership rate) in the neighboring demographic of 35 and 44 as noted in the 2019 Census Bureau Housing Vacancy Survey. Said another way, one of the only two growing age groups in the population is at a turning point in their lives and moving rapidly into homeownership. Beyond population shifts and homeownership rates, we also see additional evidence that the dream of homeownership is still alive in the growth and resiliency of the first-time homebuyer market. Between 2014 and 2018, the number of home sales to firsttime homebuyers grew by around 40% and accounted for most of the growth in sales in the entire housing market. In fact, the current housing cycle is largely defined by the surge in first-time homebuyers with 2.1 million single-family homes going to first-time homebuyers in 2018, a 15% increase above the historical average.

WHY THE DOUBTS?

“While the first-time homebuyer market is sizeable and the population of potential first-time homebuyers is large, there also is an emerging delay in the age at which many people buy their first home.” 58 HOUSINGWIRE ❱ OCTOBER.NOVEMBER 2019

The numbers tell us that the dream of homeownership is very much alive and well, but today’s prospective homebuyers do face challenges unique to our place in history. While the first-time homebuyer market is sizeable and the population of potential first-time homebuyers is large, there also is an emerging delay in the age at which many people buy their first home. The percent of households with homeowners under the age of 45 is 10 points lower compared to the 1999 to 2001 period. So, while the narrative that Millennials are not interested in homeownership is not supported by data, it appears to contain a grain of truth that a noticeable proportion are not able to attain homeownership or

HOMEOWNERSHIP POTENTIAL FOR

MILLENNIALS THE NUMBER OF 25-39 YR OLDS INCREASED 7%, OR 4 MILLION FROM 2013 TO 2017.

RENTING

VS.

HOWEOWNERSHIP

The ratio renters to homebuyers for 25 to 39 year olds is 2:3.

2018

This makes total population growth about 57 million for that time.

2014 7%

40% GROWTH

2014

By the end of 2018, the national student loan balance increased to $1.46 trillion. 1.4 billion in student loan debt in 2006, up to 1.2 trillion in student loan debt in 2014.

2018

From 2014 to 2018, the number of home sales to first-time homebuyers grew by around 40%. This represents an increase from about 1.5 million in 2014 to about 2 million in 2018.

2.1 million single-family homes

$1.46 TRILLION The typical Millennial today has student loan debt of $41,200, and across the U.S. student loan debt totals $1.46 trillion.

sold to first-time homebuyers in 2018, a 15% increase above the historical average. The historical average of homes sold to first time buyers is about 1.8 million. HOUSINGWIRE â?ą OCTOBER/NOVEMBER 2019 59

are delaying the decision to buy a home. A popular culprit in this avoidance or delay is high levels of student debt. In the early 2000s, the national student loan balance was relatively low at just $250 billion. By the end of 2018, when the last of the Millennials entered college, the national student loan balance had increased to $1.46 trillion, meaning that Millennials—and a core part of that growing homebuying population—are carrying most of the student loans in the economy today. According to the 2017 Student Loan Debt and Housing Report, the typical Millennial today has student loan debt of $41,200. Even if they can reconcile the idea of taking on even more debt with good financial planning, it may be difficult to even qualify for a mortgage. The same report has estimated that student debt has delayed homeownership by between three and seven years. Another factor driving that delay—and one that causes ripples through the process—may be a lack of supply, especially for the moderately priced homes that are most attractive to first-time homebuyers. The number of new homes sold at a price below $300,000, a price point considered affordable to many first-time homebuyers, is essentially unchanged at 265,000 units a year between 2013 and 2018. In that same time, demand from potential first-time homebuyers has grown by 44%, meaning that the housing market must absorb more than 630,000 first-time homebuyers annually. This lack of supply has resulted in home price growth that far exceeds income growth. Accordng to the Federal Housing Finance Agency, home values have grown by close to 50% since the end of 2011. Over the same period, private sector hourly wages have grown by less than 20%. So, a larger proportion of a homebuyer’s income would go toward their mortgage payment, creating an even more intimidating investment that leaves 60 HOUSINGWIRE ❱ OCTOBER.NOVEMBER 2019

less discretionary income available.

HOW THE HOUSING INDUSTRY CAN HELP

“The typical Millennial today has student loan debt of $41,200. Even if they can reconcile the idea of taking on even more debt with good financial planning, it may be difficult to even qualify for a mortgage.” -2017 Student Loan Debt and Housing Report

The desire to pursue homeownership is there, but so are the challenges. The good news is that the challenges are far from insurmountable. As noted earlier, it will take all industry sectors working together to address factors like the lack of available housing below $300k and student debt levels, but the housing finance industry has a pivotal role to play. Between educating, advocating, and facilitating, there are several responsible ways that our industry can help turn a dream into a reality for more potential homebuyers. • Don’t believe the hype. The misconception that a borrower must have a 20% down payment in order to purchase a home persists. Mortgages with less than 20% down financed close to 2.5 million home purchases in 2018 and accounted for 80% of all home sales to first-time homebuyers. Despite statistics like that, 68% of renters cited saving for a down payment as an obstacle to homeownership in a 2017 survey by the Urban Institute. Additionally, 39% of renters believe that more than 20% is needed for a down payment, and many renters are unaware of low-down payment programs. As hard as the housing finance industry works to remove barriers to homeownership by enabling low down payment mortgages, we also should work to ensure that more potential homeowners know that those options exist. • K nowing is half the battle. If we can overcome the down payment knowledge gap, the housing finance industry already has at the ready homebuyer education programs that inform the spectrum of considerations from “Am I ready to buy a home?” to “What’s the best type of mortgage for me?” to “How do I properly maintain my new home?” Where we can do better is to find ways to bring these types of programs out ahead of the traditional purchase process. A few of these programs currently exist outside of

the purchase process, but the majority are offered by mortgage insurers, lenders and Housing Finance Agencies. While these providers offer their programs at no charge, they also require a borrower to a) commit to the purchase process, and b) provide personal information in order to link their completion of the course to their loan. To help broaden access to homeownership, the housing industry should find ways to give more potential homebuyers access to these programs before they commit to the purchase process. This less committed experience could reach a broader audience of potential buyers that might be curious, but not curious enough to engage a lender or provide their personal information. • Keep up with the times. After the housing crisis, underwriting standards were understandably tightened. While relaxing those standards may not be the right answer, our industry should take care to account for the changes in employment models that have emerged with the gig economy. Traditional credit underwriting guidelines and verification sources work well for borrowers who hold your standard W-2 jobs, but they don’t work well for those who may supplement those jobs with earnings from non W-2 jobs such as TaskRabbit, Uber or Upwork. Whether it’s the gig economy or whatever the next income or savings trend may be, we have a responsibility to account for these trends in our standard underwrite and ensure the same opportunities that exist for traditional borrowers, also exist for those who put together the same home investment capacity through different avenues. • Serve traditionally underserved communities. Black and Hispanic homeownership rates continue to decline post-crisis. To put that in perspective, the gap between black and white homeownership rates is currently wider than it was in 1968, when the Fair Housing Act was passed. We must dig deep to understand the root causes of this alarming trend and work together to make sure that we truly do serve all home ready borrowers. For example, black families rent at a higher rate than white families—and there’s good evidence to show that rental pay history is a strong indicator for whether a borrower will pay back a mortgage. Even though it has the potential to benefit all parties involved, it’s rarely considered as part of the underwriting process. • Use the tools we have. Keeping the dream of homeownership alive for more people means taking on more risk. It’s simple math, more loans=more risk, even if you take quality out of the equation. Lenders have options to help balance that risk, but within those options, there are clear choices that favor broader access to homeownership. Low down payment options abound between FHA and VA loans, as well as GSE lending programs like Fannie Mae’s HomeReady and Freddie Mac’s HomePossible, which are designed to help more underserved populations

get into homes. Private mortgage insurance is another option to broaden access while limiting risk. Available for conventional mortgages, private MI provides access and flexibility for borrowers in the form of free education programs, an array of premium options, loss mitigation programs, and, perhaps most importantly to affordability, the ability of the borrower to request cancellation of MI coverage once the loan balance reaches 80% of its original value. It seems our industry is acknowledging these benefits as the use of private mortgage insurance outpaced FHA loans for the first time in 2018 and has continued in the lead position since. It also should be noted that using private capital to support the housing finance system helps to protect taxpayers in a down cycle. Win-win. • Keep our own house in order. Post-crisis safeguards like the Dodd-Frank Wall Street Reform and Consumer Protection Act got it right by outlawing predatory lending practices and requiring that mortgage lenders assess a borrower’s ability to repay their loan. With the QM Patch now set to expire in early 2021, our industry needs to ensure that the regulations continue to balance the need for borrowers to have access to credit and strong consumer protections with strong assurances that buyers are truly positioned to invest in a home. While there’s room to debate the role of debt-to-income ratios in determining borrower eligibility, we need to ensure that we maintain our focus on broadening access to homeownership in a future-focused and responsible manner.

TO SUM THINGS UP While the dream of homeownership is very much alive in today’s world, it is not without its challenges. Broadening access responsibly requires products that meet borrowers’ needs, advocacy to make sure borrowers are aware of the options available to them, sufficient supply, homebuyer education, and legislative and regulatory policy—and the housing finance community certainly can’t solve all of those issues on our own. We’re not powerless, though. Better yet, many of the tools we need to help more families realize the dream of homeownership are already in place and just need to be applied more intentionally. ABOUT THE AUTHOR: Rohit Gupta is the President and CEO for Genworth’s U.S. Mortgage Insurance Business. Passionate about helping more people responsibly achieve and maintain the dream of homeownership, Rohit works with lenders, regulators, and policy leaders to advocate for the value of mortgage insurance to a sustainable housing finance system. The statements provided in this article are the opinions of Rohit Gupta and do not reflect the views of Genworth or its management. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 61

62 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

100 years

around for

Real estate agents have been

who will survive the next century?

Tech startups tout big plans for market takeover By: Sumant Sridharan

HOUSINGWIRE â?ą OCTOBER/NOVEMBER 2019 63

100 YEARS AGO, the U.S. passed its first law regulating real estate licensing and the agent profession officially came to be. At this notable milestone for real estate agents, their future is under attack. Tech startups tout big plans for a market takeover. Real estate companies with new-fangled platforms and business models joke about the agent’s extinction. The doubters are loud and in many cases well-funded. However, it’s nothing that real estate agents haven’t heard before. To be clear, not every agent will have a seat at the table forever. The next century will usher in new technology, increasing consumer demands and housing market ups and downs. Those agents who thrive will swim with the shifting tide rather than against it. They’ll be the honest Abes, at your service and tech-equipped, ready to help a client regardless of their personal motivation to “get the listing” or cash in on a commission to pay the bills. But to understand the future of the agent, let’s first hop in the DeLorean and go back in time.

How “real estate agent” became an actual job The real estate agent profession didn’t form out of thin air. According to a report from the California Department of Real Estate, urbanization made negotiations over property and land between strangers more complex at the turn of the 20th century. This created the need for an objective and knowledgeable intermediary to guide the public through the basics of a real estate transaction and help shake out a fair deal. Around 1900, brokers started showing houses for sale. At that point, though, there were no licensing requirements and the business turned into a complete free for all. The competition in a disorganized environment bred questionable business practices and a consequential lack of trust. This led to the first attempt at establishing real estate licensing law in 1917—which promptly failed in the courts. Finally, in 1919, the Supreme Court upheld the Real Estate Act, first adopted by California and later in some form by the remaining 50 states. (The requirement for 64 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

a written examination didn’t crop up until 1923.)

Real estate agents then and now Fast forward to 2019. The latest research shows 90% of consumers still use an agent to buy and sell their homes even as doomsday analysts predicted their extinction through the decades. Although the real estate industry evolved with the advent of online home listings, virtual walkthroughs and iBuying, the fundamental role of the agent is the same now as it was in the 1900s: help people navigate what’s often the largest financial transaction of a lifetime.

Industry saturation One thing industry leaders can agree on, however, is that the real estate arena is too crowded. The Association of Real Estate License Law Officials estimates there are 2 million active real estate licensees in the U.S. The National Association of Realtors, the largest trade organization in the country, reports having 1,383,010 Realtor members as of July 2019. For comparison’s sake the insurance industry counts 1.1 million brokers and service employees, while there are 1.35 million lawyers and 1.1 million doctors in the U.S. The barrier of entry to the agent profession remains low, which encourages people of all experience levels to give the gig a try. If you’re over 18, complete any pre-license education required by your state, and pass a written exam, you’re in business. Making a living as an agent is more difficult. Agents work on commission and have to generate their own clients. Despite the prevailing image of the luxury agent who drives a fancy car on TV, agents make on average $47,910 a year, according to PayScale. Although the profession has survived the test of time, the industry agrees that the concentrated pack of agents jockeying for business will thin out moving forward as lower-producing agents drop out of the mix and technology changes the game. Agents face increasing pressure to show value and adapt to the changing needs of consumers if they want to find success in the next century. Say you ran into an all-star agent 50 years

from now and asked them, “What’s your secret?” They’d no doubt talk to you about how they:

Save their clients time and hassles Today it’s commonplace for both Mom and Dad to juggle work and home life. According to the most recent data available from the Pew Research Center, the number of dual-income households with kids under the age of 18 in the U.S. has risen from 47% in 1980 to 66% in 2015, while more than half of parents both work full time. Data from the Labor Department shows that one-third of Americans work at least 45 hours a week while 9.7 million clock more than 60. Americans will always come up short on time, so agents who prove their ability to boost efficiencies and offer flexibility to clients will provide enormous value.

Imagine the agent who: l H osts virtual showings from the office so that buyers can rule out unsuitable properties faster and sellers only see serious buyers book a tour. l C onnects clients with an AI chatbot that matches them with available properties based on their preferences, narrowing down their list of “maybes.” l D itches the combination lock box and embraces self-guided tour technology akin to Rently or ShowMojo, which have become popular self-guided showing tools in the rental space. This could open up a property’s showings hours, accommodate more buyers, and secure an offer on a house faster. l M anages paperwork with digital closing and escrow tools and sets up the client with video notarization software so they can skip the trip to the bank. l U ses blockchain-enabled smart contracts to encrypt sensitive client information. l Accepts cryptocurrency on current listings.

Although the profession has survived the test of time, the industry agrees that the concentrated pack of agents jockeying for business will thin out moving forward as lower-producing agents drop out of the mix and technology changes the game.”

As technology solutions mature and go mainstream, successful agents will lean into the Ritz Carlton white glove service and know when to let tech step in and do what they can do faster and better. Take agent Ryan Lidholm, an agent of just HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 65

three years who’s already climbed to the top 1% of his market. For one of his listings this year, he handled the home’s cosmetic repairs, took amazing drone photos of the land, and sold his clients’ Missouri home in eight days. All the while, these clients roamed the U.S. in an RV. Email updates were all the sellers wanted and Lidholm kept them posted while he coordinated every step. Agents who take ownership of the deal and give clients’ hours back in their day aren’t going anywhere.

Integrate online and offline marketing In 2013, marketing professionals surveyed by Adobe said they believed that marketing had “changed more in the past two years than the previous 50.” Five years later and the pace of innovation hasn’t slowed. Marketers have hundreds of channels to choose from. Big platforms roll out new algorithm changes, designs, and features every day. In 2019 alone, Google+ sunsetted, the video-sharing app TikTok reported 500 million users and Facebook restricted ad targeting for housing and credit ads. Real estate agents who can’t keep up with the changes or fail to leverage these powerful platforms for their clients’ business won’t make the cut. They’ll need to use video to capture a condo’s best views, or use Facebook Live to give virtual house tours. Early adopters who aren’t afraid to tackle emerging platforms that no one above the age of 18 has heard of will stick around. Gary Vaynerchuk, who bought the keyword “wine” for 10 cents on Google AdWords, built a huge YouTube audience, and started using Snapchat before it was cool, preaches this “get in early” advice to anyone who’s trying to connect with people, generate clients, and create a brand. At the same time, agents will still need to balance out the marketing mix with multiple offline tactics. Take the agent who creatively helped to sell the mansion of a motivated luxury seller. She threw an event where she displayed her company’s latest collection of diamonds, which ultimately attracted a rare buyer from London. The agent of tomorrow knows when to post a giphy and when to party like Gatsby.

Push creative bounds, but avoid tasteless stunts The web is a noisy place, and some agents have taken risks and found success with outof-the-box ideas: giant T-Rex costumes in listing photos; selling a suburban house, sex dungeon and all; or paying $50,000 for a video that spoofs “Teach me How to Dougie.” But the internet is also unforgiving. An agent who could once recover from a media slip up or comment in poor taste can’t just fade into anonymity. Instead, they will face 66 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

By the numbers: There are 2 million active real estate lecensees in the U.S. NAR, versus 1.35 million lawyers and 1.1 million doctors. Source: Pew Research Center

a more or less permanent track record on Google and suffer repercussions from their broker who is upheld to an equal standard from the public. Team Denver Homes thought its July 2019 “Fresh Prince of Bel Air” rap video would drum up positive attention. Instead people saw the lyrics they chose to insert as glorifying gentrification. The overseeing independent brokerage, Kentwood Real Estate, cut ties with the top-selling team after the video was released, saying in a statement to local Denver media outlet 9News: “We have a 38-year record of being an inclusive, equitable, professional and empathetic culture.” Brokerages and teams who prioritize diversity and consult others who challenge their own ways of thinking will be in a better position to prevent these flubs from ever happening and help separate creative ideas from offensive ones.

Throw out ‘always be closing’ for ‘always be advocating’ Whether real estate agents should be thought of as trusted advisors or salespeople is a time-honored conversation in the industry. As consumers give more weight to unskewed agent performance metrics and transparent client reviews available online, the agents of the future will have to prioritize service over sales. They won’t be able to “cheat” the system with quick and dirty tactics. If they rush a buyer to make an offer or give a seller an inflated price to “win” the listing, that karma will come back around. The top performing agents will tailor the solution they provide to the client’s needs. They’ll be able to identify which upgrades will yield the highest returns, connect clients with the best contractors in town even though nothing’s in it for them, tell a buyer that a house is out of their budget, or even step away from the sale and recommend alternative routes if a market process won’t serve the client well.

Work in harmony with iBuyers and home trade-in solutions Say a client has to move swiftly for a job relocation or is stressed over how to time the sale of their current house with the purchase of a

new one. Agents who become experts on all of a client’s available options will add value and find purpose even in a changing real estate landscape. They’ll come from a place of knowledge in the greater industry to say things such as: “Have you heard of the alternative financing options available today? I know a company that will buy the house you want and put it on reserve for you. Would you like more info?” Or “Since you’re in Atlanta, you should see what Opendoor would bid on your house. Here’s how iBuying works. I can refer you.” Agents will remain a first point of contact for many real estate consumers and those connections will help support ancillary businesses in the space. Agents should take advantage of the opportunity to earn money on the referral while knowing they put the interests of their client first.

The century of the agent 100 years of agents. Let that sink in a minute. From the Great Depression to the 2008 financial crisis, from country roads to a sophisticated highway system that paved the way for the suburbs, from word of mouth listings to Zillow.com, real estate agents were there. They’ve shuttled buyers from house to house, entered vacant homes at their own risk, and given tough love to many a seller on an unrealistic price. They’ve called contractors and scrubbed bathtubs and made store runs to pick up a new shower curtain in time for the open house. They have, over the course of an entire century, helped people of all walks of life buy and sell homes. Happy centennial birthday, real estate agents. May you take on the next 100 years with the same scrappiness, adaptability, and heart that you have shown since 1919. ABOUT THE AUTHOR: Sumant Sridharan is the COO of HomeLight. He previously served as the president of CafePress, helping take the company public in 2012. Over the last 20 years, Sumant has held leadership positions in general management, product and marketing at leading consumer Internet companies. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 67

Wholesale Lenders SPECIAL REPORT

Mortgage brokers are an increasingly important part of the mortgage ecosystem, and their wholesale lending partners are integral to their growth. Once content to play in the background, wholesale lenders are raising their profile to attract mortgage brokers who have more and more options. In this section, we focus on what sets the following 10 wholesale lenders apart and what specialties, tools and solutions brokers can expect from them. 68 HOUSINGWIRE â?ą OCTOBER/NOVEMBER 2019

CALIBER HOME LOANS / 70

HOME POINT FINANCIAL / 75

CARDINAL FINANCIAL / 71

LOANDEPOT / 76

DEEPHAVEN / 72

PRMG / 77

FINANCE OF AMERICA / 73

SIERRA PACIFIC / 78

FLAGSTAR / 74

UWM / 79

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Wholesale Lenders

S P O N S O R E D CO N T E N T

Caliber Home Loans provides local account executives across the U.S. FA S T FAC T S Caliber Home Loans, Inc. was established in 2013 by the merger of Caliber Funding, LLC and Vericrest Financial.

No.2 wholesale lender in the country based on annual volume

Licensed in all 50 states

No.1 distributed wholesale lender based on annual volume

n In 2019, the company reached $1.5 billion in May and nearly $1.8 billion in July

caliberwholesale.com

S THE WHOLESALE CHANNEL continues to flourish within the mortgage industry, Caliber Home Loans, Inc. ramps up broker investment, providing clients local account executives, tools to stay connected with past clients and a full line of loan products. With over 120 account executives across the country and five operation centers nationwide, brokers working with Caliber Wholesale benefit from local experts. “With our five operation sites spread out throughout the country, we’re able to provide our expertise in the marketplace where our brokers are for the fulfillment of the loans,” said Caliber’s Executive Vice President of Wholesale Lending John Gibson. “And I think that’s extremely important in today’s marketplace.” Brokers benefit from a relationship and expertise in a number of areas with their local account executive.

Every Caliber Wholesale account executive has: • Product expertise: Educated on all Caliber loan programs to help brokers provide the best option for each client’s home financing needs • Local market knowledge: Tenured industry experts who’ve worked in the area for years and understand this real estate market, homebuyer statistics and how home values have changed • Industry experience: Familiar with ups and downs of the cyclical mortgage business and can help brokers do the same “We have one of the most seasoned sales teams in the country and it’s a distributed sales team, so

SANJIV DAS, CHIEF EXECUTIVE OFFICER Sanjiv Das is a senior financial executive with 30 years of extensive experience in consumer banking and capital markets. Das has successfully led numerous companies in both growth and turnaround positions. Before Das’ current role as CEO of Caliber Home Loans, he served as CEO of CitiMortgage. He has leveraged his deep experience in hypercompetitive markets, consumers and regulation to position Caliber as one of the most responsible large mortgage companies in the United States.

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our salespeople are in the local marketplaces with their brokers. They’ve been in those marketplaces for a very long time — in most cases, most of their entire career. That market knowledge and expertise transfers to the efficiency of what they provide to the client,” Gibson said. Caliber Wholesale is focused on supporting purchase business. A majority of the loans they fund – often as much as 74% – are purchase loans, as of May 2019. Caliber’s wholesale business partners also benefit from the company’s product portfolio, which includes conventional, government, jumbo and an exclusive suite of non-agency options called Caliber Portfolio Loans. In continuous efforts to keep brokers connected with previous customers, Caliber created a program that provides opportunities for brokers to stay in-touch with clients, Caliber Reconnect. The Caliber Reconnect program notifies brokers when past clients list their home, are likely to purchase within 24 hours and are likely to purchase or refinance in the next 90 days. With the goal to keep business partners in touch with past borrowers, Caliber continues to evolve the Caliber Reconnect program. Earlier this year, Caliber Wholesale expanded the Reconnect program to notify business partners when their past borrowers show a propensity to refinance. “We’re excited about the growth of the wholesale sales channel within the mortgage industry, and to be a part of that,” Caliber CEO Sanjiv Das said. “We plan to grow our product portfolio and our Reconnect program. We want our product lines to be current so we can help our brokers continue to meet the needs of today’s buyers.” JOHN GIBSON, EXECUTIVE VICE PRESIDENT, WHOLESALE LENDING John Gibson is responsible for strategic planning to exceed the Wholesale division’s corporate goals while developing best-in-class sales teams. Prior to joining Caliber in 2011, Gibson held several VP and SVP positions with national banks.

Wholesale Lenders

S P O N S O R E D CO N T E N T

Cardinal Financial’s Octane provides users a high level of automation 1.

FA S T FAC T S Founded in 1987 in Warminster, Pennsylvania, as Cardinal Financial Mortgage Bankers

Launched its Wholesale channel in 2017

Licensed in all 50 states, with officers and remote employees located across the nation

n Approved to sell direct to Fannie Mae, Freddie Mac and Ginnie Mae n Authorized to sell FHA, VA and USDA loans

cardinalfinancial wholesale.com

ARDINAL FINANCIAL was founded in 1987 as

Cardinal Financial Mortgage Bankers and in 2013, the company was purchased and renamed Cardinal Financial Company, Limited Partnership. Cardinal Financial began with a handful of dayone employees and within five years, grew to be a nationwide lender. Cardinal Financial’s original plan was to build a robust consumer-direct platform and continue to leverage the thriving refinance market at the time. When rates started to rise in 2013, it became clear that it needed to diversify, and in 2016 the company was rebranded. By 2017, Cardinal Financial officially launched its wholesale channel, to reduce risk and better leverage its process, people and technology. “We believe in the success of our brokers. What fuels their business, fuels ours. We’ve heard their pain points and know their needs. Our promise is that we genuinely want them to succeed, so we’re giving them the tools, training and connections to do so,” said Vice President of Third Party Originations at Cardinal Financial Karl Benjamin. There are a lot of loan options out there, but what brokers really want is a lender to whom they can take their tough loans. Brokers trust Cardinal with trickier loans because the company not only has the options to help them stay competitive, but also the flexibility to underwrite loans that other lenders typically turn down. Cardinal is the proprietary owner and developer of Octane, its in-house loan origination system. Octane allows Cardinal to operate more efficiently, which contributes to its ability to provide great

COLIN TREEND, SVP OF WHOLESALE Colin Treend is a founding member of Cardinal Financial and the SVP of wholesale. He joined the firm due to his desire to be a part of a lender that leverages tech to lower costs and offer a sharp price while delivering great service to brokers and customers.

pricing to brokers. It’s a revolutionary platform that Cardinal believes is not only meeting but exceeding brokers’ expectations. “When we say we advocate for brokers, it’s not lip service. In fact, we’re so committed to broker advocacy that we built a loan origination platform to make their jobs easier. It’s part of our mission to 2. deliver the best end-to-end mortgage experience possible,” Benjamin said. When brokers partner with Cardinal, they receive access to Octane, which provides users total control and autonomy. Octane’s high level of automation compresses turn times, allows brokers to generate and send closing disclosures in minutes, allows instant, independent changes of circumstance, lets them send piecemeal condi3. tions and provides complete control over closing preparation. “That’s just the beginning. We believe in our technology because at the heart of it is a desire to meet brokers’ needs and put the power back in their hands,” Benjamin said. Cardinal is hyper-focused on empowering brokers by providing the tools they need to self-serve; however, top-notch technology doesn’t matter if brokers don’t know how to use it. The company is committed to training users on its technology and giving clear escalation paths so brokers can easily on-board and quickly gain business. “We believe the future of wholesale lending is rooted in technology and service,” Benjamin said. “Our technology, Octane, coupled with our desire to see brokers thrive and win, will put Cardinal Financial at the forefront of what’s to come.”

KARL BENJAMIN, VP OF WHOLESALE Karl Benjamin is VP of wholesale and a certified mortgage banker with over 20 years of experience. Named among the 2015 National Mortgage Professional Magazine’s 40 Under 40, he believes that brokers provide better service, more options and better rates than any other channel — that’s why he advocates and believes they will continue to be successful.

MICHAEL GALLO, SVP OF MORTGAGE OPERATIONS Michael Gallo is SVP of mortgage operations and a key partner in Cardinal Financial Wholesale. With over 25 years of experience, Gallo has successes in operational efficiency at nationwide firms like Caliber and Countrywide. His hope is for Cardinal to be, not the biggest, but the best in the business.

HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 71

Wholesale Lenders

S P O N S O R E D CO N T E N T

Deephaven offers attractive pricing and a range of non-QM products FA S T FAC T S n Deephaven Mortgage was founded in 2012

Leading provider of Non-QM lending solutions for brokers & bankers nationwide

Since 2012, Deephaven has purchased/originated over $5 billion in Non-QM loans

n The company has securitized over $5 billion in non-agency business, helping to restart the industry back in 2012

deephavenmortgage. com/wholesale/

EEPHAVEN MORTGAGE was founded in 2012 to

help rebuild the non-government mortgage market. At that point, mortgage credit had dramatically tightened in response to the housing crisis, and millions of credit-worthy borrowers were still locked out of the market. The company offers a wide range of non-QM products to help mortgage originators break into the non-QM market with self-employed programs, POS technology and a full-service model that delivers an unmatched level of support. Its loan programs, which cater to a broad base of lending needs, include Expanded-Prime, Near-Prime, NonPrime, Investor and Foreign National. Deephaven offers its products and services to mortgage bankers, brokers, banks and credit unions nationally. Deephaven developed a series of videos, webinars, training material and marketing materials aimed at helping the originator source new leads and referrals sources. Deephaven’s tools also provide information and depth on how to effectively prepare a closeable full package and how to close loans in 15 days or less on a non-QM basis. The company’s series of educational webinars hosted on its website provides keen insights into how to market, originate, underwrite and effectively sell Non-QM loans profitably from a secondary marketing standpoint. “With our training resources, we help brokers see the value in diversifying their business with Non-QM, helping them potentially generate substantially more new revenue annually,” said Mike Brenning, chief production officer at Deephaven Mortgage. By investing significant resources in training, LO education and point of sale tools, Deephaven

MATTHEW NICHOLS, CEO M a t t h e w Nichols is f o u n d e r and CEO of Deephaven Mortgage. Prior to Deephaven, Nichols served as a managing director at Goldman Sachs, where he ran the Residential Mortgage Loan Business for 12 years. He holds a B.A. in Biochemistry from Amherst College.

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has helped LOs add value in their local markets, diverse product offerings, and stand out in a crowded field. Their hands-on, high-touch training model gets originators into their product line and makes the transition seamless and pain-free. “Broker market share continues to climb, from the post-crisis lows of 5-6% up to 15%+ in the most recent quarter. Everything we do at Deephaven is aimed at helping broker share continue to climb. Through our partnerships with AIME and NAMB, we are constantly trying to increase awareness of the opportunities for brokers in non-QM, along with providing financial support to these and other organizations that positively affect the broker community,” Brenning said. In addition, Deephaven continues to make substantial investments in technology that can help the originator at the POS, making a non-QM loan just as efficient, consistent and fast as a conventional loan. The independent originator, through effective partnerships with the right wholesale lenders, can provide significant cost, rate and streamlining benefits for the American consumer. Brokers work with Deephaven because of its attractive pricing, well-rounded products and cutting-edge POS tools, which include AUS, Scenario Calculator, a Scenario Desk and a Bank Statement Desk, which help loan officers qualify loans at the POS. “We are an end-game decision-maker and securitizer, which allows us to make investments and loan decisions that others cannot. Deephaven is the only green-rated pure-play non-QM lender on the BRAWL/AIME ranking scale. We are committed to the success of the broker long-term, in every way,” Brenning said.

MICHAEL BRENNING, CHIEF PRODUCTION OFFICER M i c h a e l Brenning is the chief production officer of Deephaven Mortgage, where he oversees sales and client development. Prior to Deephaven, he was the VP of correspondent/wholesale and strategic partnerships at Quicken Loans.

JAY MCMILLAN, SVP, WHOLESALE Jay McMillan has spent the last 28 years in the mortgage business, serving in both operations and sales positions. He is currently the SVP of sales at Deephaven Mortgage. McMillan has spent most of his career in the wholesale channel, but began his career as a broker and also spent time as a retail loan officer.

Wholesale Lenders

S P O N S O R E D CO N T E N T

FAM’s Two-X loan products provide array of non-traditional options FA S T FAC T S Finance of America Mortgage began operations in 2015 through the acquisition of two premier mortgage companies and certain assets of a third

In 2018, the company acquired assets of Skyline Home Loans of Calabasas, CA

n Former Skyline CEO Bill Dallas was named president of Finance of America Mortgage in June 2018

famwholesale.com

INANCE OF AMERICA Mortgage Wholesale

Division is a national lender offering two channels of business — wholesale and non-delegated correspondent, with a commitment to expand its menu of non-traditional loan products for the evolving American homeowner. As brokers continue to gain a larger share of the mortgage origination market, the profile and needs of the American homeowner will continue to evolve. FAM works alongside its brokers and correspondents in serving those homeowners through its commitment to investing in customer-facing technology and expanding its menu of non-traditional loan products. “Our brokers and correspondents know they can count on their FAM account executives for accurate information,” said David Brown, director of third-party orginations at FAM. “Our account executives are knowledgeable and experienced, with well-established relationships with many of our brokers who count on them for candid communication.” The company also holds a high reputation for inhouse underwriting, providing a seamless process and allowing FAM’s skilled account executives to help brokers and correspondents structure deals that will work. FAM provides multiple monthly opportunities for brokers and correspondents to participate in FAM webinars on new products, tools and marketing strategies. The company also provides customizable marketing material that highlights its product

BILL DALLAS, PRESIDENT AND CEO Bill Dallas is known for building two mortgage companies from the ground up: First Franklin and Ownit Mortgage Solutions. He purchased Skyline Homes in 2009 and eventually joined forces with Finance of America Mortgage in 2018. Today, Dallas leads the charge at Finance of America Mortgage. His previous experience includes founder of InterThinx, MindBox, two California banks and Cloudvirga.

offerings. FAM’s variety of loan products help brokers choose the best option for their borrower. The company’s Two-X loan products provide an array of non-traditional loan products for brokers to choose from. The products include the following: • Two-X Apex — Designed to accommodate high LTV financing. This product may be ideal for clients who are well-documented, have no derogatory credit and want to put less money down when purchasing their home. • Two-X Extend — A fixed-rate second mortgage solution. • Two-X Flex — A solution for borrowers looking for jumbo financing while utilizing one year of documentation. A great option for self-employed borrowers. • Two-X Flex: Bank Statements — This proprietary loan option is a solution for self-employed borrowers, with unique income requirements. • Two-X HBX — This mortgage solution is for high balance loan amounts in counties currently restricted to conforming or high cost limits. “Our commitment to expanding our menu of non-traditional loan products sets us apart from other wholesale and correspondent lenders,” Brown said. “FAM’s commitment to investing in customer-facing technology and expansion of loan product options puts us in a position to work alongside our brokers and correspondents in serving homeowners.”

DAVID BROWN, DIRECTOR OF THIRD PARTY ORIGINATIONS David Brown is currently the director of third party originations at Finance of America Mortgage with over 30 years of diverse industry experience. Prior to his current role, Brown served in various executive roles, including; executive vice president, COO of capital markets and retail sales for Skyline Financial Corporation, senior vice president of capital markets for Freedom Mortgage and both president and senior vice president for the Financial Services Group of national homebuilder Ryland.

HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 73

Wholesale Lenders

S P O N S O R E D CO N T E N T

Flagstar’s Loantrac 2.0 provides a more efficient interface for brokers FA S T FAC T S Chartered in 1987 as a federal savings bank

Headquartered in Troy, Michigan

n 7th largest correspondent lender

2nd largest FHA Wholesale lender

n 13th largest Wholesale lender

5th largest bank mortgage originator nationally

3rd largest savings bank in the country

wholesale.flagstar.com

HARTERED IN 1987 as a federal savings bank,

Flagstar Bank is now the fifth largest bank mortgage originator nationally and the third largest savings bank in the country. Its team of financial craftsmen offer full-service banking and lending expertise with a personal focus, creating solutions tailor-fit for each customer. Flagstar pays attention to the individual needs and problems that brokers and correspondents face daily. With this in mind, the bank works to provide intuitive, easy-to-use technology that brokers and correspondents can use to better service their clients. Flagstar, known for delivering innovative technology, is committed to continuously upgrading its technology, aiming to make the most powerful lending tools available and accessible. As a result of listening to brokers and crafting solutions to meet their needs, Flagstar recently upgraded its proprietary loan origination system, Loantrac, to Loantrac 2.0 — providing a more efficient interface for brokers and correspondents. “The process of upgrading Flagstar Bank technology is never complete. We always strive for more,” said Rich Hoffmann, senior vice president and East regional director for Flagstar Bank’s third-party originations. “We listen to customers’ needs, take note of pain points throughout the process and focus on process improvements to make their experience faster, more efficient and better overall. Flagstar’s Loantrac 2.0 represents a major upgrade in technology that is focused on transparency and user-friendliness.”

KRISTY FERCHO, PRESIDENT OF MORTGAGE, FLAGSTAR BANK Kristy Fercho joined Flagstar Bank in 2017 as executive vice president and president of mortgage. In this role, Fercho is responsible for the direction and oversight of all aspects of mortgage and secondary marketing, and for the continued expansion of Flagstar’s mortgage business. Prior to Flagstar, Fercho spent 15 years with Fannie Mae, ultimately serving as senior vice president, customer delivery executive. Fercho has been named by the Mortgage Bankers Association to serve as vice chairman for the 2020 membership year.

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The new Loantrac 2.0 LOS offers delegated correspondents a registration and delivery experience molded to their needs, as well as a customizable dashboard based on customer ID, to provide an aggregate view of their pipeline in one place and in a format that works for them. This interface allows clients to see where their loan estimates are, whether borrowers e-consented and which loans are eligible for a closing disclosure. Loantrac 2.0 also simplifies document uploads with a drag-and-drop feature, allowing brokers to upload multiple documents at once and aligning the views of users and the Flagstar team. Flagstar operates 160 retail bank branches in Michigan, Indiana, California, Wisconsin and Ohio, providing a full complement of products and services for consumers and businesses. Its industry-leading mortgage division operates nationally through 78 retail locations and with a network of about 2,100 third party mortgage originators who craft financial success for borrowers one home at a time. “Flagstar Bank is well positioned to stand the tests of our industry,” said Kristy Fercho, president of mortgage at Flagstar. “We offer experienced, diverse leadership, sound and thoughtful business strategy, unparalleled service and a commitment to long-term relationships. It’s no coincidence that these are the same principles which strongly contribute to creating competitive advantage for our customers. The Flagstar team measures our success not in terms of loans, but rather in terms of the number of families whose dreams of homeownership we help make possible.”

RICH HOFFMANN, SVP AND EAST REGIONAL DIRECTOR FOR FLAGSTAR BANK THIRD PARTY ORIGINATIONS Rich Hoffmann is senior vice president and East regional director for Flagstar Bank’s TPO channel. Hoffman has 26 years of experience in the industry and is enjoying his 18th year at Flagstar Bank. Hoffmann is passionate about helping his account executives build their business, as well as forging strong partnerships with his TPO customers. He currently represents Flagstar in the Lender Landscape Correspondent Roundtable and is also Co-Chair of the MBA Wholesale Executive Forum.

Wholesale Lenders

S P O N S O R E D CO N T E N T

Home Point Financial’s partnership program helps brokers succeed

FA S T FAC T S n Focused on Third Party Originations; no distributed retail to compete with brokers

Licensed in all 50 states and retains nearly 100% of servicing

n Fastest growing non-bank mortgage lender in the U.S. according to Inside Mortgage Finance data, increasing loan volume by 98.5% from Q1 to Q2 of 2019

tpo.homepointfinancial. com

OUNDED IN 2015, Home Point Financial is a na-

tional, multi-channel mortgage originator and servicer. In four short years, the company has tripled in size and is now licensed in all 50 states. In efforts to continue its growth and provide mortgage brokers the tools to succeed, the company launched its partnership program, Customer For Life. “Our program highlights our commitment to brokers and their customers’ needs. It isn’t just lip service, it’s our entire partnership philosophy,” said Home Point’s Chief Business Officer Phil Shoemaker. “Brokers work hard to acquire their customers but sometimes aren’t able to keep them due to external forces. That’s where we step in, to help brokers keep what they’ve worked for.” Customer For Life provides brokers technology that utilizes data touchpoints to detect when a consumer is in the market for a new loan. Once identified, the technology sends the consumer’s contact information to the originating broker. Customer For Life also keeps brokers informed about their consumers’ additional financial areas of interests, including personal loans, alternate financing, homeowners insurance and utility services. “Customer For Life includes some truly revolutionary aspects, such as our Broker Connect program that puts brokers back in touch with their customers, all backed by our deep analytic insights we’re ready to share with our broker partners,” Shoemaker said. Home Point is one of the largest lenders in the

WILLIAM NEWMAN, PRESIDENT AND CEO W i l l i a m Newman joined forces with St o n e P o i n t Capital to form Home Point Capital, now Home Point Financial through the acquisition of Maverick Funding. He was one of the architects behind InterFirst Wholesale Mortgage Lending’s development, leading him to AAMG where he led development of the first internet-based wholesale lending portal.

country for conventional and government business, but its proprietary Home Point Edge and Renovation Lending products are consistently popular among brokers. Home Point partners benefit from the unique options Home Point Edge provides, helping more borrowers qualify while brokers grow their pipeline. Home Point Edge includes three tiers: Near Prime, Expanded Access and AUS Express. Partners2.who use Home Point Edge receive the following benefits: • A bank statement program to 90% LTV at $1MM • 5% down Jumbo purchase loans with near prime rates to $1.5MM • A sset utilization on purchase loans to 90% LTV at $1.5MM • AUS Express program leverages DU findings for 3. self-employed consumers “Personal attention is crucial and in our final analysis, the future for Home Point is great service,” Shoemaker said. Today’s modern borrower is tech-savvy but resistant to insincerity. Home Point meets this growing consumer base by keeping nearly 100% of servicing, forging long-term relationships with customers and as a result, helping broker partners increase recapture rates. “We care. There’s a reason that’s our company motto,” Shoemaker said. “We succeed when we help our partners grow. Our underwriters who work to get tough loan files to the table, our processors who shepherd those files from start to finish, our incredible servicing folks — we all care. Simple, but it makes a difference, and it’s how we’ve managed to grow so substantially in four short years.”

MARIA FREGOSI, CFO Maria Fregosi bring s expe rience from finance, investment banking, mortgage banking, securities and domestic to her role at Home Point Financial. Previous executive roles include chief capital markets officer for Hamilton Group Funding, and chief operating officer and chief compliance officer of Catalyst Financial. She was also EVP at ABN AMRO bank, a part of the successfull sell to Citibank.

PHIL SHOEMAKER, CHIEF BUSINESS OFFICER Phil Shoemaker joined Hom e Point Financial with a track record of building strong lending originations teams and developing proprietary tech platforms. He is responsible for TPO, customer retention and tech at Home Point as chief business officer. He served as EVP, COO for production at Caliber Home Loans, among other roles. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 75

Wholesale Lenders

S P O N S O R E D CO N T E N T

loanDepot Wholesale provides hightouch customer service FA S T FAC T S n loanDepot Wholesale/ Correspondent opened its doors in January 2014

Ranked No.3 Wholesale Lender in 2018 by Scotsman Guide

National footprint from Hawaii to New York, lending in 45 states plus Washington D.C.

ldwholesale.com

ITH THE FINANCIAL STRENGTH of parent

company, loanDepot, LLC, and a team of seasoned mortgage professionals with more than 25 years of mortgage lending experience, loanDepot Wholesale provides partners industry-leading tools, loan products, competitive rates and resources. Today, loanDepot ranks as the nation’s second largest nonbank lender and has funded more than $181 billion since the parent company’s inception in 2010. “We believe that our combination of cutting-edge mortgage technology and high-touch customer service will enable our wholesale partners to exceed their borrowers’ expectations today and well into the future,” said loanDepot Wholesale’s Senior Vice President of Sales Mike Klotz. loanDepot Wholesale helps brokers grow their business through transparent communication tactics and ongoing support in the form of weekly newsletters, programs and processes — including webinars, job aids, reference materials and training videos. As an agency direct lender, loanDepot Wholesale provides its partners with a full suite of products including Fannie, Freddie, FHA, VA, Jumbo and Renovation. The company handles each loan product with exceptional execution, underwriting and support. loanDepot Wholesale has particular expertise in common sense underwriting of government and renovation loans with specialized teams dedicated to supporting those programs. In addition to their technology offering, a key component to working with loanDepot Wholesale is the high touch customer service and communiJEFF WALSH, PRESIDENT, WHOLESALE/ CORRESPONDENT

Jef f Wal sh oversees overall strategy and operations for loanDepot’s Wholesale division. He has over 25 years of industry experience and an extensive background in both sales and operations for wholesale and retail lending.

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cation they provide throughout the loan process. Their processes and support teams are built to keep you informed from submission to funding. “At loanDepot Wholesale, we strive to build successful long-term relationships with our origination partners,” said Director of Sales Support and Marketing Carla Meyers. “Our goal is to be your lender of choice by providing an outstanding lending experience.” loanDepot Wholesale offers the following to its origination partners: • Quick, dedicated and responsive service from seasoned Account Executives to dedicated internal Account Managers • Advanced and integrated technological solutions • Competitive price and product offerings • White label marketing assets and support • Training support in the form of videos, webinars, job aids and reference documents • A Portal Support team dedicated to working with origination partners to become comfortable with the technology and moving loans to closing loanDepot accomplishes a seamless lending experience through advanced technology. Investing more than $80 million in its proprietary digital lending platform led to the industry’s first end-toend fully digital loan, mello smartloan. “Our advanced technology enables us to provide the seamless lending experience that today’s customers expect, and our high-touch customer service provides peace of mind throughout the loan process,” said Vice President of Business Innovation Richard Hernandez. “Beyond our competitive programs and pricing, we believe that building strong long-term relationships with our partners is of utmost importance.”

MIKE KLOTZ, SENIOR VICE PRESIDENT, SALES Mike Klotz leads the Wholesale division’s strategic grow th initiatives and is responsible for margin management, sales P&L management, and key initiatives spanning sales and operations.

MISTI SNOW, SENIOR VICE PRESIDENT, OPERATIONS Misti Snow leads the long-term s tr ate gi c v i sion for Wholesale, overseeing the growth and production of the division’s origination branches, as well as corporate training and development.

Wholesale Lenders

S P O N S O R E D CO N T E N T

PRMG’s marketing portal provides a robust platform for brokers 1.

FA S T FAC T S Founded in Hesperia, CA, on Sept. 4, 2001

n Along with 170 branches and 1900 employees and counting, PRMG is becoming one of the largest nationally privately held mortgage lenders in the country

PRMG has had five back-to-back months of explosive production, hitting a record of $910 million funded in the month of August 2019

PRMG.net

ARAMOUNT RESIDENTIAL MORTGAGE GROUP, INC. (PRMG) was founded in September 2001,

with a staff of three. Today, PRMG is ranked within 25 of the Top 100 Mortgage Companies in America, with over 1,900 employees and over 170 branches throughout the U.S. Fifty percent of the originations come from wholesale and correspondent while the other 50% is retail. PRMG services some originations as a direct seller/servicer with Fannie Mae and Freddie Mac. Additionally, as a Ginnie Mae issuer, PRMG can offer zero underwriting guideline overlays. PRMG prioritizes its brokers’ well-being and aims to provide better technology, better product and better service. Because PRMG was built by originators for originators, the company is not only familiar with the difficulties brokers and originators face, but is dedicated to serving their needs. “We know that being able to compete with the fintech companies and setting yourself apart from the competition in all aspects is the ultimate key to your success,” said PRMG’s Chief Lending Officer and Partner Kevin Peranio. “Looking forward, PRMG believes wholesale lending is growing because local community lending is the best option for a consumer. Wholesale lenders who embrace technology can give the broker an advantage by getting to the borrower first and ultimately retain them as a customer for life. Providing you with the latest tools and technology is our priority. In turn, your success determines our success.” Since the very beginning PRMG has operated from a place of integrity. “Along with the actions and consistent behaviors of its valued employees the company not only established a foundation of trust with its broker

PAUL ROZO, CHIEF EXECUTIVE OFFICER, FOUNDER Paul Rozo’s diverse expertise extends over 25 years in the mortgage banking space. Rozo provides exceptional leadership and oversees all facets of PRMG. During the last 18 years, Rozo has demonstrated a passion for the business and a strong commitment and dedication for his work, successfully navigating PRMG through difficult periods in the mortgage banking industry, including the financial crisis.

partnerships, it has helped to foster a culture of loyalty earned over time by all parties involved in the process.” said PRMG’s Chief Marketing Officer Paul Lucido. Recognizing the demand for non-QM rising within the mortgage industry, PRMG stays ahead of the curve by providing brokers with options that include its non-QM Conforming and Jumbo prod2. ucts series, Expanded Access, Hybrid Conforming and Jumbo. Brokers are drawn to PRMG’s Ruby Jumbo co-investment with Unison, which provides borrowers an additional way to obtain funds toward their down payment when using the product. Borrowers who use this product have part of their down payment provided by Unison with no interest or payments. Instead, Unison simply shares in any value changes when the borrower 3. sells their home. In addition, PRMG’s AMPLIFLY TPO Portal provides a robust platform that brokers can use to easily create marketing collateral from scratch or by editing the professionally designed templates provided by PRMG. “The AMPLIFLY Marketing Portal eliminates the need for hiring a market assistant or graphic designer, as the portal helps brokers take their business to the next level,” Lucido said. “Your borrowers are your ‘Clients for Life’ and we give your borrowers back every day! Whether wholesale or correspondent, PRMG is committed to maintaining a trustworthy, long-term relationship with all our partners and sellers, no matter what channel we service you in,” said PRMG’s CEO and Founder Paul Rozo. “We ensure that if a borrower comes back for a purchase or refinance, we send that borrower right back to you, the broker.”

ROBERT HOLLIDAY, CHIEF OPERATIONS OFFICER, CO-FOUNDER Robert Holliday has over 25 years of experience in the mortgage banking industry, including loan origination, operations, underwriting and production. Holliday’s expertise provides him with an in-depth understanding of all processes tied to originating, funding, shipping, accounting, profitability, staffing and third-party originations. Holliday has helped PRMG build a strong operational structure and platform that is second-to-none.

HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 77

Wholesale Lenders

S P O N S O R E D CO N T E N T

Sierra Pacific builds on its 30-year legacy, betting on brokers’ growth FA S T FAC T S n Sierra Pacific Mortgage was founded in Sacramento, CA in 1986 and remains a privately held company

Sierra Pacific was one of the original lender entrants in Third Party Originations in 1990, now serving brokers for three decades - n

Sierra Pacific offers one of the most extensive suite of product solutions to meet nearly all broker and borrower needs

Sierra Pacific is making significant investments in technology and talent to further support broker market share growth

sierrapacificmortgage. com

ODAY, SIERRA PACIFIC is a nationwide direct

lender and a top 20 national wholesale lender, that has endured through the ever-changing lending environment for over 30 years, with a long legacy of supporting the important role that mortgage brokers play in homeownership. “The Third-Party Originator model is thriving and bouncing back from post-recession levels, which is why our sole focus is to provide the best resources, tools and support our broker partners need to be successful well into the future,” said Sierra Pacific’s Executive Vice President of Third Party Originations Amy Mahar. The company believes that the broker’s reputation is directly influenced by their wholesale partners. With that responsibility, Sierra Pacific aims to help TPO clients attract, engage and delight their customers. “Brokers choose to work with us for our consistency, stability and dependability to deliver on time, every time,” Mahar said. “We’re the lender our partners count on to follow through on its promises and that is woven into our culture.” In order to be successful, mortgage brokers need a wholesale partner with a diverse array of products and guidelines that can be tailored to every borrower’s unique needs. Sierra Pacific offers an extensive suite of loan solutions to meet nearly all borrower specifications. From limited overlays on standard conventional and government loans to its non-QM, Jumbo options and renovation programs, Sierra Pacific provides a breadth of options for a diverse pool of brokers and borrowers. To further compliment the vast product offering,

JIM COFFRINI, PRESIDENT AND CEO Ser ving as a hands-on president and CEO, Jim Cof frini oversees all facets of the company’s operation. Coffrini’s entrepreneurial approach and 30+ years of experience in the industry helped him to implement his vision of Sierra Pacific as a leading national mortgage banking company in multiple origination channels, delivering diverse products and superior service to its customers. 78 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

Sierra Pacific is passionate about building long lasting, successful partnerships with its ThirdParty Originators. Understanding the often-unrealistic expectations put on mortgage brokers, Sierra Pacific is committed to driving efficiencies through automation, while never minimizing the importance of high-touch human connection, expertise and empathy. “We know that referrals are the key to your success and it’s our job to execute well to make you look good,” Mahar said. “That’s why we’re committed to providing the resources, attention and flexibility you need to win and create raving fans.” Sierra Pacific’s deep experience of the mortgage broker’s day-to-day needs provides unique insight the wholesale lender needs in order to help brokers succeed today and into the future. The company offers tools that support the broker and align with their goals; from protecting their closed loans against recapture and returning customer trigger leads, to a hyper-focus on meeting closing dates through high-touch service and execution. “Sierra Pacific has been committed to the broker community for over 30 years and this channel is significantly important to our organization,” said Chief Production Officer Jay Promisco. “We have made additional investments in the channel in order to grow our market share and are committed to providing the TPO community the service and support they deserve.” “We have a strong legacy in TPO and intend to further modernize, accelerate growth and drive an incredible experience for the broker and their entire ecosystem in order to be a formidable player in TPO,” said CEO Jim Coffrini.

JAY PROMISCO, CHIEF PRODUCTION OFFICER Jay Promisco is responsible for all marketing and production, focusing on strategies for growth. As a former broker, loan officer and account executive, he is uniquely skilled in building a successful culture around the local originator. He has also held senior leadership roles at Stearns Lending, Wells Fargo Home Mortgage, and Greenpoint Financial.

AMY MAHAR, EVP, THIRD PARTY ORIGINATIONS As the Executive Vice President of TPO, Amy Ma h a r le ad s Sierra Pacific’s TPO channel. Sierra Pacific has a strong legacy in TPO, and Mahar’s role positions the company to build on its legacy, accelerate growth and create a sustainable platform that supports the growth of the third-party originator well into the future.

Wholesale Lenders

S P O N S O R E D CO N T E N T

UWM offers a full suite of high-tech tools, including marketing materials 1.

FA S T FAC T S UWM is a family-owned company founded in 1986

UWM is the No. 1 wholesale mortgage lender and the No. 2 overall mortgage lender in the nation

UWM has been recognized as one of the fastest-growing companies in America, having grown from 2,800 people to 4,200 – a 50% increase – since the beginning of 2019

In the last year, UWM production has increased from $41 billion to an expected $100 billion by the end of 2019 – an increase of 144%

UWM has realized 35% market share in the wholesale channel

uwm.com

NITED WHOLESALE MORTGAGE is dedicated

to supporting the continued growth of the broker channel. The company strives to wow clients with elite service at every touchpoint, from a custom-built LOS that is easy to learn and use, to knowledgeable and personal support throughout the loan process from dedicated in-house account executives, underwriters and closers. UWM closes most loans in about 15 days, compared to the industry average of about 45-60. To ensure its clients receive the best and fastest service, the company developed Client Request (CR). UWM’s solution is an online portal that connects clients directly to the person who can best resolve their issue and ensures that the issue is resolved in no more than four hours — and no CR is closed until the client completes a one-question survey saying they are happy with the resolution. In addition, UWM offers a full suite of high-tech tools built from scratch and designed specifically to make the lending process easier for its brokers and their borrowers. It also provides professional marketing materials to help its brokers compete with big banks and direct retail lenders. UWM is 100% dedicated to wholesale lending, so they never compete with their broker clients. In fact, the company has numerous programs, tools and policies in place to help ensure that a client’s business stays with them, including: • UConnect, a service that monitors a broker’s past borrowers and alerts the broker when they’re back in the market • Unite, a quarterly email sent to every borrower a

MAT ISHBIA, PRESIDENT AND CEO Mat Ishbia led UWM to No. 1 by changing the game for brokers and wholesale lending. He flipped mortgage lending from a commodity to a service and arms UWM’s clients with the tools to be successful. He leads with a passion he developed while playing and coaching with Michigan State University basketball coach Tom Izzo.

broker closes with UWM that’s personalized and includes valuable information about the borrower’s home, their loan and what’s happening in their market and neighborhood – all branded with the broker’s photo and contact information • Inclusion of the broker’s name and contact information on mortgage statements to their borrowers to ensure they are kept top-of-mind for any future 2. purchases or refinances • Success Track, training courses hosted at UWM for broker owners, new and experienced LOs and processors – all at no cost to them “At UWM, what really makes us different is that we are true partners to brokers. We know that when they grow, we’ll grow, too,” said UWM President and CEO Mat Ishbia. “Which is why we spend so much time and effort 3. building best-in-class technology that allows our brokers to thrive and delivering world-class client service that helps them differentiate themselves in their market,” Ishbia continued. UWM also understands that independent broker shops are the best places for LOs to work and achieve success, thanks to more opportunities, higher compensation and greater flexibility. As a result, UWM has resources in place — including BeAMortgageBroker.com and a dedicated in-house team — that encourage and support LOs transitioning from retail to the wholesale channel. “As more and more borrowers realize that independent mortgage brokers offer more choices, lower rates and better service than big banks and direct retail lenders, UWM will continue to champion their growth by leading the way in developing technology and processes to help brokers compete – and win,” Ishbia said.

MELINDA WILNER, CHIEF OPERATING OFFICER AND CHIEF RISK OFFICER Melinda Wilner leads 3,000+ team members in underwriting, closing, risk and IT to set a new standard for excellence that is centered on client service. With extensive expertise in the mortgage industry, Wilner strives to streamline UWM operations to make the lending process faster and simpler from start to finish.

ALEX ELEZAJ, CHIEF STRATEGY OFFICER Alex Elezaj is laser-focused on growing the mortgage broker channel as a whole in order to help UWM’s broker clients grow and maintain their business. Elezaj aims to build strategic partnerships that promote mortgage brokers as the best place for loan originators to work and for borrowers to get a mortgage.

HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 79

C O M PA N Y S P O T L I G H T:

VRM | SPONSORED CONTENT

VRM Mortgage Services elevates results, impacts community VRM is committed to supporting diverse, small businesses and helping them thrive

ecently, industries across the board have been called upon to diversify from the top down. Vendor Resource Management dba VRM Mortgage Services (VRM) embraced the opportunity to embed diversity and inclusion across all business segments but also to expand the idea of what diversity is and how to deepen inclusion, leading to increased revenue and an enhanced client experience. Twice named one of the Top 25 Best Places To Work For Women And Minorities by The National Association of Minority Mortgage Bankers of America (NAMMBA), VRM is the leading service provider of real estate and mortgage solutions. From asset management, servicing coordination, property preservation and guiding investors to maximize recovery on foreclosures to expert default management – VRM hosts an efficient, scalable and cost-effective infrastructure that can support clients of all sizes, including investors, government agencies and financial institutions. VRM founder Keith D. Murray noticed the industry needed a company committed to preserving communities in every aspect of real estate servicing. As a result, VRM was established and has grown into the VRM Real Estate Alliance to provide community-centric solutions. “VRM is a solutions provider and customizes services to resolve client-specific pain points, while helping to preserve communities,” Murray said. “Using businesses located within communities is one approach VRM uses to ensure this happens.”

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TEAM WORK EQUALS SCALE VRM is an industry leader in actively pursuing diverse businesses to participate in the VRM ecosystem. To provide full-scale solutions and manage the life-cycle of an asset, VRM developed and utilizes a high-performing and diverse vendor base. Quite expansive, the VRM vendor network is capable of covering all 50 states, the District of Columbia, Puerto Rico and other U.S. territories.The VRM vendor network model also creates an environment for small and diverse companies to thrive. VRM collaborates with VRM University (VRMU) to create and offer training courses, ensuring the vendor panel is well equipped to deliver excellent service in all areas. Training also allows these suppliers to expand their own sustainability, service offerings and clientele. THINK GLOBAL, GO LOCAL While the VRM vendor network exponentially expands the reach and speed of services, VRM is intentional in using their preferred “go-local” model versus large national subcontractors. The philosophy is that because most vendors work where they live, they are as committed as VRM is to mitigating community blight, a particular mission of Murray’s. Further underscoring VRM’s commitment to supporting diverse, small businesses, this model also allows sourcing of local vendors in rural areas. VRM continuously sources to enlarge the vendor network by recruiting via industry advocacy groups, as well as identifying vendors and suppliers registered with certifying authorities, including

but not limited to: The Small Business Administration, Center for Veterans Enterprise, Minority Owned Business, Veteran-Ow ned Business, Ser v iceDisabled Veteran-Owned Business, Small Disadvantaged Business (includes Section 8(a)) and Woman-Owned and Historically Underutilized Business (HUB) Zone. Surpassing all benchmarks with the mission in mind, since 2017, VRM has achieved 240% of its subcontracting goal for engaging veteran-owned small businesses and exceeded government-established thresholds for subcontracting small, women-owned, small- disadvantaged, hub-zone and service-disabled businesses. Beyond a vision, VRM’s numbers show that diversity and inclusion is a priority. Leadership asserts that this approach will continue to remain as a foundational strategy in VRM’s future. VRM REAL ESTATE ALLIANCE (VRMREA) VRM recently launched a concept they say will stabilize neighborhoods and support veterans, all while increasing business opportunities for companies of varying sizes that vie for their share of the multi-trillion-dollar mortgage and Financial Services Industry. VRM Real Estate Alliance (VRMREA) is a community of companies in partnership to deliver services as well as key philanthropic events. Murray said the VRM Real Estate Alliance benefits both the community and business partners because solutions to each segments’ concerns are built into all of VRMREA’s processes. The VRM Real Estate Alliance includes

C O M PA N Y S P O T L I G H T:

CHERYL TRAVIS-JOHNSON Chief Operating Officer

DAWN HAGHIGHI General Counsel

Murray’s family of companies with a 35year industry track record, including PCV Murcor, VRM Mortgage Services, High Tide Settlement Services and Vendor Resource Management Investor Insurance. EXPANSION As of September 2019, investors can secure insurance for real estate purchases through Vendor Resource Management Investor Insurance Agency (VRMIIA) and its online portal. VRM’s expansion to include VRMIIA was born from VRM responding to multiple communities impacted by disasters and learning directly from investors that they were finding themselves underinsured in times of crisis. This new product further supports VRM’s commitment to preserving communities and being a topdown solutions and service provider. THE BUSINESS OF PHILANTROPHY Murray believes business and philanthropy go hand in hand. VRM hosts a veteran’s engagement program to diversify the organization’s demographics, including diversity from a cultural and experiential perspective. The corporation with a conscience, VRM has invested a staggering nearly $100 million in veteran-owned businesses since 2012. VRM also proactively seeks veterans for its vendor network and partners with organizations to recruit veterans for internships and full-time employment at its corporate headquarters. An additional effort in diversity and inclusion, VRM sponsors The Council for Inclusion in Financial Services (CIFS) and

VRM | SPONSORED CONTENT

JON VAN DEUREN Chief Financial Officer

its annual event, The National Financial Services Expo. The 4th National FinServ Expo will be held June 24-25, 2020, in the DFW Metroplex. CIFS is a nonprofit organization committed to financial literacy and educating financial professionals on the economic benefits of diversity and inclusion. LIVING THE MISSION VRM takes an organizational approach to leading by example in the diversity and inclusion space. The company leadership has implemented a diversity and inclusion strategy within the organization. Led by company management at varying levels and incorporated into the everyday workings of VRM, the strategy is executed to ensure internal processes align with VRM’s overall diversity and inclusion goals. While diverse hiring practices naturally come to mind when thinking of a corporate diversity and inclusion strategy, VRM leadership has taken a deeper approach. In addition to keeping diversity and inclusion at the core of processes for diverse hiring, internal efforts also include training and operational practices, as well as awareness education about diversity and inclusion, bias, conflict management, emotional intelligence and effective communication. COMMUNITY EDUCATION AND ENGAGEMENT VRM believes in a holistic approach to supporting communities, and training is included. Company leadership believes that the financial services industry has a responsi-

KEITH MURRAY Chief Executive Officer

bility to support and educate communities on the financial services industry and how products and services are best utilized in their everyday lives as consumers. VRM and its internal team of experts conduct multiple events each calendar year to engage and educate communities. The events are free to the public. Community engagement events include an annual financial services diversity career fair, educational webinars and financial community support. To VRM, the idea of community doesn’t end with customers. With a desire to support its community of colleagues and the entire financial services industry, VRM offers a free diversity and inclusion selfassessment to other organizations so that they can increase awareness of their organizational state of diversity and inclusiveness. VRM also notes the business case for diversity and inclusion, and says this awareness will lead to better practices and ultimately a better bottom line. The goal is to reach diversity and inclusion across the industry. From full-scale business solutions to education and training, solid diversity and inclusion practices, and a clear mission that drives it all, VRM is positioned to continue its impact as a leading service provider of real estate and mortgage solutions—perhaps the most intentionally diverse and inclusive one, at that. “We saw the need for a 360-degree solution to industry challenges, while equipping businesses to thrive in the most diverse environment our country has ever seen,” Murray said. “We are rising to meet that need.” HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 81

UNIQUE SOLUTION:

STEARNS WHOLESALE LENDING | SPONSORED CONTENT

2019: A breakthrough year for brokers Stearns Wholesale Lending delivers a strategic loan mix, innovative tech and service

esidential finance has been a tale of two extremes so far in 2019. In the first quarter, mortgage companies were dealing with significant margin compression and low volume. In the second and third quarters, low interest rates spiked an unexpected refi boom that has strained the capacity across the industry as lenders adjust their staffing levels to account for the increased production. Nick Pabarcus, executive vice president of wholesale at Stearns Lending, noted, “In the long run, 2019 might be best remembered as the year that mortgage brokers regained their foothold in the industry. Originators are transitioning to the broker model in record numbers, attracted by the product differentiation, service levels and the price position wholesale lending offers.” Brokers have access to a wider range of products than their retail counterparts, such as non-QM, jumbo, renovation or reverse, and can choose lenders based on underwriting time and overall service. And given the lower cost structure of the broker model, originators are often able to offer very competitive rates to borrowers that in many cases can be more attractive on standard and specialty product lines. “Some would argue that mortgage brokers have been put in an unenviable position over the last 15 years dealing with change after change,” said Jon McCash, executive vice president national sales at Stearns Wholesale Lending. “Our view is that the mortgage broker is thriving today due to their willingness to accept change and also having an acute focus on the client experience.” Stearns Wholesale Lending, which

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is celebrating its 30th anniversary this year, has adapted alongside those brokers, supporting them as valued partners by focusing on their client’s customer — the borrower. “Our brokers are an extension of the Stearns family and have been for 30 years. As the industry has evolved, we have worked with our brokers to ensure quality production of loans and work diligently to put more options into their hands to better serve their customers,” said Ryan Rathert, senior vice president director of wholesale at Stearns. Those options include a strategic mix of loan products, innovative tech solutions and best-in-class operational support, making it easy for brokers to grow their business. A STRATEGIC PRODUCT MIX Stearns has earned a reputation as the company that knows the wholesale business and closes its clients loans on time. Stearns offers conventional loans up to 97% LTV with the flexibility to choose between FNMA and FHLMC options, high balance conforming and super conforming, Home Possible and Home Ready. Brokers can take advantage of Stearns’ Smart Start buydown, split premium and single premium MI and transferred appraisals. For government loans, Stearns has flexible programs that feature FHA loans with 580 minimum FICO, or no-FICO non-traditional credit, USDA with 620 minimum FICO and VA up to $2 million for purchase. Stearns also offers six jumbo programs with LTVs up to 90%, with second home and investor options available. As brokers look to serve a growing

number of borrowers with non-traditional incomes or other issues, Stearns has expanded its non-QM product offerings. Stearns’ Flex Series allows FICOs down to 640, DTIs as high as 55% and derogatory credit as short as 24 months ago. Chad Schoep, senior vice president of strategic products, noted, “This wide range of products means Stearns can be a one-stop shop for brokers no matter what their buyers need.” INNOVATIVE TECHNOLOGY Consumers have come to expect transparent, seamless experiences whenever they purchase something and are often surprised and frustrated by the mortgage experience. Understanding this consumer expectation, Stearns developed its orijin platform to serve as a digital ecosystem that covers the entire mortgage process. The platform allows brokers, borrowers and other partners to collaborate in real-time, so consumers feel connected and informed at every moment. Stearns’ intuitive orijin platform allows brokers more choices while moving loans more quickly through the process because it involves less human touch. The LOS also allows for more communication points for brokers so that they know where the file is at all times during the process, creating an excellent experience for brokers while creating operational efficiencies. Stearns has deployed several applications onto the orijin platform, including SNAP 2.0, a digital applications solution that connects all of Stearns’ wholesale and non-delegated correspondents. In addition, Stearns recently introduced bSNAP, a white-label mobile mortgage app that allows borrowers to

UNIQUE SOLUTION:

complete a digital 1003, eSign forms and documents, snap photos of documents, check loan status and get direct access to their mortgage team. Over the last two years the company has utilized APIs to connect technologies to simplify the mortgage process, with Work Number Verifications Income, Day 1 Certainty, Verification of Assets, Income Calculations using optical character recognition, e-signatures and much more. Stearns has made the conscious decision to make these tools part of the external client experience. “We have been focused on making the user experience seamless, and an example of that is through the integration work we’ve done,” McCash said. “If we can improve the process of the mortgage broker or non-delegated seller, we will then have a positive impact on the borrower experience. Everyone wins!” STRONG SUPPORT At Stearns, brokers are central to the mission, and the company’s operations provide the strong support brokers need to focus their energies on growing their

STEARNS WHOLESALE LENDING | SPONSORED CONTENT

business. “Stearns provides options throughout the process to give our broker partners choices. We look at our brokers as an extension of our family and treat them as such throughout our process,” said Teresa Reber, executive vice president of fulfillment at Stearns. With its non-delegated correspondent channel, Stearns gives brokers the flexibility to choose what works best for them. Stearns allows for dual approval between NDC and broker, so if the client would like to broker certain products and be the lender on others, Stearns supports that. “If brokers want to migrate to NDC, we have the program for them to make it easy,” Schoep said. “Whether that help is just with the underwriting or if needed, assistance in the upfront disclosure or in CD and closing — we have the platform for you.” Stearns also provides many different outlets for communication. While the company provides a single point of contact, brokers can also speak directly to the underwriter or the closing team to work through situations that need a lit-

tle extra attention.Brokers can also take advantage of Stearns’ broker marketing tools to generate personalized collateral at no extra cost. 2020 AND BEYOND Even with 30 years of experience innovating in the wholsale channel, Stearns is just getting started. “The growth of the mortgage broker over the last year has been the comeback story of the decade,” McCash said. “Our view is that it would be very reasonable for wholesale to reach 25% market share in 2020, which makes our involvement in the channel very exciting.” Pabarcus reflected, “It would be hard to argue against the fact that over the last 30 years, no firm has done more for the mortgage broker than Stearns Lending. Our firm was virtually founded on wholesale lending, and through the 2008 financial crisis when many others left the space, we remained steadfast in our commitment to the broker. Stearns Lending continues to innovate the model today and will do so into the future. Exciting times are ahead!” HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 83

NEXT GEN ORIGINATION

We have revvluti nized the mmrtgage experience thanks tt ur best-in-class LOS platf rm, Blue Sage. NNbbdy riginates better frrm start tt n-time cllsing* — and that’s why we’re the hhme f mmdern riginati n. Groundbreaking LOS Our future-prrrf, cllud-based system ffers intuitive prrcesses, auttmated wwrkfl ws and superior reliability. MMdern Marketing We help get yyu the clicks, the likes, the reviews and the business yyu desire. 400+ Products It’s a whhle new level f ccnfidence knnwing yyu have ssluti ns ffr each custtmer’s situati n. Freeddm & Flexibility Build yyur business yyur way with the suppprt f cutting-edge tttls and wwrld-class perati ns. Operati nal Excellence Our industry-best underwriting, prrcessing and ps teams wwrks relentlessly ttward a seamless, n-time cllsing.

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*On time closing and fast processing is dependent on many factors including receiving timely documentation from the borrower. PrimeLending, a PlainsCapital Company (NMLS 13649), is an equal opportunity employer and ensures that all applicants will receive consideration for employment without regard to race, color, religion, gender, national origin, age, disability, genetic, pregnancy or any other status as protected by federal, state or local law. Equal Housing Lender. ©2019 PrimeLending. Equal Opportunity Employer

Technology Innovator Real Estate

86 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

DID YOU KNOW RentWire is HousingWire’s news coverage of the multifamily housing market. Go to HousingWire.com to sign up and stay informed!

RentWire

It will be another banner year in multifamily LOW RATES WILL SPUR INVESTMENTS, DRIVE UP ORIGINATIONS BY JESSICA GUERIN, KATHLEEN HOWLEY, KELSEY RAMÍREZ IT looks like the multifamily sector is set to have another strong stated. “Our expectations are for total origination volume in 2018 year thanks to a combination of factors that will fuel demand for to rise by 9.1% to $311 billion.” Steve Guggenmos, who heads Freddie Mac Multifamily’s rerental housing. According to Freddie Mac’s midyear outlook, 2019 will see a search and modeling team, said things are looking good for the robust rental market as the nation’s housing shortage, a strong multifamily sector in the year ahead. “A strong labor market and a persistent housing shortage have labor market and low interest rates create a potent recipe for mulcontinued to fuel a robust rental market,” said Guggenmos. “As of tifamily growth. While the multifamily sector’s performance had a slow first June, multifamily completions outpaced the prior two years, but quarter, activity was solid in the second quarter of 2019 and, ac- demand remains high in the majority of markets allowing them cording to Freddie, the “fundamentals are expected to remain to absorb most of the new supply.” strong throughout the rest of the year.” That said, the vacancy rate will continue to climb slowly, keep- ORIGINATIONS RISE AT HALFWAY MARK At the year’s halfway mark, originations were soaring. ing rent growth at around 4% for the year, Freddie predicted. Mortgage originations in commercial and multifamily Meanwhile, housing supply continues to lag demand, even though multifamily construction is “churning at elevated levels,” surged 10% annually in the second quarter, according to the Freddie said, with the building of five-plus-unit developments on Mortgage Banker Association’s Quarterly Survey of Commercial/ Multifamily Mortgage Bankers Originations. pace to exceed the number built in the last few years. Not only did multifamily and commercial originations increase In all, this bodes well for multifamily lending. “Multifamily originations are expected to set another record from the previous year, they also rose by 29% from the first quaryear in 2019 due to strong fundamentals, continued demand for ter of 2019. “Falling long-term interest rates and sustained strength in commultifamily investments and low interest rates,” Freddie’s report HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 87

from a rise in originations for health care, office, industrial and multifamily properties. The second quarter saw a 151% year-over-year increase in the dollar volume of loans for health care properties, a 23% increase for office properties, a 16% increase for industrial properties and a 15% increase for multifamily properties. Contrary to the trend, retail property loan originations fell 32% while hotel property lending decreased 28%. On a quarterly basis, second quarter originations for office properties increased 66% compared to the first quarter 2019. There was a 62% increase in originations for health care properties, a 32% increase for multifamily properties, an 18% increase for hotel properties and a 15% increase for retail properties. However, originations for industrial buildings declined 27% from the first quarter. Among investor types, the dollar “A strong labor market and a persistent housing shortvolume of loans originated for government-sponsored enterprises increased age have continued to fuel a robust rental market. As of by a full 19% annually, and 17% for June, multifamily completions outpaced the prior two commercial bank portfolio loans. The years, but demand remains high in the majority of marquarter saw an annual decrease of 4% in life insurance company loans, and kets allowing them to absorb most of the new supply.” a 15% decrease in the dollar volume of - Steve Guggenmos, Freddie Mac head of multifamily research commercial mortgage backed securities loans. Quarterly, the dollar volume of loans for CMBS increased 58% from the first quarter to the second, mercial real estate markets lifted commercial and multifamily mortgage originations during the second quarter,” said Jamie loans for GSEs increased 39%, originations for commercial bank Woodwell, MBA vice president of commercial real estate research. portfolios increased 35% and loans for life insurance companies “Originations for life insurance companies and for Fannie Mae increased by 9%. According to the MBA’s 2019 Commercial Real Estate Finance and Freddie Mac continued at record paces during the first half of the year, as did originations of loans backed by multifamily Outlook Survey released in January, more than half of the top commercial/multifamily originators (55%, to be exact) expect and industrial properties.” “With rates even lower during the third quarter, absent a major originations to increase in 2019. economic disruption, 2019 is shaping up to be another record year UNCERTAINTY IN SALES MARKET KEEPS RENTERS IN PLACE for commercial mortgage lending,” Woodwell said. Data from the MBA showed that commercial and multifamily The median rent for a Manhattan apartment rose to $3,595 in lending hit an all-time high in 2017, and the MBA’s latest forecast July, a 5.7% gain from a year earlier, and reached a new high of suggested that 2018 would likely be another record year for com- $3,000 in Brooklyn, up 1.7%, as potential homebuyers waited to see what effect the state’s “mansion tax” would have on New mercial and multifamily mortgage lending. The increase in second quarter lending volumes stemmed York’s real estate. 88 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

RentWire

The number of new leases in Manhattan increased 5.1% to 6,460 and gained 13% to 1,759 in Brooklyn, according to the report by Miller Samuel and Douglas Elliman Real Estate. “The rental market in Manhattan and Brooklyn continued to strengthen again this month,” said Hal Gavzie, executive manager of leasing for Douglas Elliman. “This is partly a result of the ongoing uncertainty in the sales market, with potential buyers still camping out with rentals.” New Yorkers are waiting to see what happens to real estate prices after new taxes kicked in on July 1. The new levies boosted the previous 1% fee on all sales of $1 million and above to 1.25% for sales priced above $2 million and 3.9% for a sale of $25 million or more. The transfer tax increased to 0.65% from 0.4% . In most real estate markets, an increase in taxes on homes priced above $2 million wouldn’t concern most buyers, but in Manhattan the median sale price of new development – typically

new condos – was $2.5 million in 2019’s second quarter, according to Miller Samuel. The report on July rents for New York also showed the median rent in Queens dropped 3.6% to $2,915. It may be a statistical blip based on the mix of units available for rent, said Jonathan Miller, president of Miller Samuel. The number of new leases rose 13.3% to 268, he said. “The softer market in Queens was a bit of an outlier in July, and it’s too early to call that weakness a trend,” Miller said. The vacancy rate in Manhattan shows a level of demand that landlords in the rest of the U.S. might envy. While the U.S. rental vacancy rate was 6.8% in the second quarter, matching the yearago period, the rate in Manhattan was 2%, unchanged from the prior month. The lowest national vacancy rate in more than 50 years of Census data was a rate of 4.8% in the first three months of 1979.

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FHFA flip-flops, won’t blacklist VantageScore as FICO alternative for Fannie and Freddie FHFA REMOVES PROHIBITION ON GSES USING CREDIT BUREAU-OWNED MODEL BY BEN LANE

WHEN the Federal Housing Finance Agency issued a proposed set of rules surrounding the adoption of alternative credit scoring rules last December, it looked like Fannie Mae and Freddie Mac would be sticking with the traditional FICO scoring model for quite a long time. That’s because one of those proposed rules was a provision that would have prohibited the government-sponsored enterprises from using the VantageScore credit scoring model because of conflicts of interest with the company’s backers. VantageScore Solutions, the developer of the VantageScore credit scoring model, is a joint venture between the nation’s three largest credit bureaus: Equifax, Experian and Transunion. In recent years, VantageScore, with the backing of the Big 3, has

pushed for the GSEs to explore alternatives to the classic FICO model. However, the FHFA seemingly put a stop to that effort when it announced late last year that its proposed rule “would prohibit an Enterprise from approving any credit score model developed by a company that is related to a consumer data provider through any common ownership or control.” The rule, if adopted as proposed, would have effectively blacklisted VantageScore from GSE consideration. But that all changed back in August when the FHFA surprisingly announced that it will allow Fannie Mae and Freddie Mac to consider using VantageScore as an alternative to their current FICO credit scoring model, a dramatic reversal from a proposed HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 93

and Transunion “lacked an incentive to support new entrants rule issued late last year. When the FHFA issued its final rule on the alternative credit because of their ownership of VantageScore Solutions.” But in the FHFA’s view now, there are “many other factors that scoring, missing from the rule was any mention of conflicts of interest or “credit score model developer independence,” meaning may affect the potential entrance of new credit scoring companies VantageScore is no longer subject to any potential blacklist and into the industry.” According to the FHFA’s rule, the agency concluded that “alis back on the table for the GSEs. The move was a stark turnaround from the FHFA’s previous lowing all credit score model developers to submit applications actions on the matter and further proof that FHFA Director Mark is more consistent with section 310, which does not prevent any Calabria is operating much differently than his predecessor, Mel credit score model from being considered for potential use in the mortgage market. Watt. Therefore, the final rule does not require a credit score model Last year, for example, the FHFA all but ended the idea of movdeveloper to provide a coning beyond the current FICO credflicts-of-interest certification with it scoring model used by Fannie its application.” Mae and Freddie Mac when it statBut it’s not total smooth sailed that it was ending its review of ing for VantageScore either. The potentially adding alternative FHFA rule stipulates that the credit scoring models to the GSEs’ “One of my priorities is to ensure GSEs must consider whether the underwriting practices. that the American people have use of a particular credit score At the time, the FHFA explained model “could have an impact on that it planned on shifting its a safe and sound path to suscompetition in the industry.” focus toward implementing the tainable homeownership, which Beyond that, the GSEs “must newly inacted Economic Growth, requires tools to accurately meaconsider whether such impact Regulatory Relief and Consumer is due to any ownership or other Protection Act, which passed into sure risk. The final rule we are business relationship between law in May 2018 and requires the publishing today is an important the credit score model developer regulator to establish rules, stanstep toward achieving that goal.” and any other institution,” the dards, and criteria that the GSEs FHFA said. will use to validate credit score - Mark Calabria, FHFA Director “One of my priorities is to enmodels. sure that the American people The move came after several have a safe and sound path to susyears of the GSEs looking at altainable homeownership, which ternative models. requires tools to accurately meaBut despite requesting input from interested parties on a possible change to its credit scoring sure risk,” Calabria said in a statement. “The final rule we are models and even extending the deadline for feedback, the reg- publishing today is an important step toward achieving that goal. As one might imagine, VantageScore was thrilled with the ulator eventually shut down its exploration of pushing past the FHFA’s rule change. classic FICO model. “After a 13-year campaign, VantageScore Solutions is pleased Or so it seemed…but a lot can change in a few months. In its final rule, the FHFA states that it received feedback on both that the FHFA has responded to the Congressional directive consides of the VantageScore issue, with some arguing that black- tained in Section 310 of the Economic Growth, Regulatory Relief, listing VantageScore would not be in the spirit of the Economic and Consumer Protection Act and revised its initial proposed Growth, Regulatory Relief and Consumer Protection Act, which rules on credit score model competition for the mortgage sector in a manner consistent with that law,” Barrett Burns, VantageScore dictated that the GSEs consider FICO alternatives. Other feedback argued the other side, with some commenters Solutions president and CEO, said in a statement provided to suggesting that the credit score model developer independence HousingWire. “We are grateful to FHFA, Senator Tim Scott and former Rep. stipulation is necessary to ensure fair competition. Ultimately, the FHFA chose to remove the credit score model Ed Royce, the principal authors of the law, along with the many developer independence stipulation, stating that the rule was ini- bipartisan Congressional cosponsors and supporters not just on tially designed to protect against concerns that Equifax, Experian Capitol Hill but also the many consumer, civil rights, industry 94 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

and other groups that worked to see the legislation enacted that directed FHFA to implement these new rules,” Burns continued in a statement. “With these new rules in place there now is a viable pathway for VantageScore and other new and innovative model developers to compete and elevate the predictiveness and inclusivity of credit scoring models required by the two GSEs,” Burns concluded. “Competition is critical for markets to operate efficiently and we are confident this decision will benefit consumers, lenders and the economy at-large.” Outside of the changes surrounding VantageScore, the FHFA rule lays out a four-phase process for the GSEs beginning to use an alternative credit scoring model: • Solicitation of applications from credit score model developers • Submission and initial review of submitted applications • Credit score assessment • Enterprise business assessment The rule also establishes an “aggressive” timeline for the GSEs to receive and consider new credit score proposals:. From the FHFA:

l credit score solicuired to submit its initia Each Enterprise is req date of the final 60 days of the effective itation to FHFA within prise’s solicitation and approve each Enter rule. FHFA will review sh its solicitation for terprise will then publi within 45 days. The En ation period (a futo the start of the solicit at least 90 days prior sure that applicants by FHFA). This is to en ture date determined prise application understand the Enter have sufficient time to cess prior to subation and approval pro requirements and valid solicitation period ns. Finally, the initial mitting their applicatio 120 days. ssion will be open for for application submi

From there, the GSEs would have a 180-day period to “assesses each credit score for accuracy, reliability, and integrity outside of the Enterprise’s business systems.” Then, the GSEs would have 240 days to assess each credit score model in “conjunction with the Enterprises’ business systems that condition the purchase of a mortgage loan on a borrower’s credit score. The Enterprise business assessment would evaluate accuracy and reliability within the Enterprise systems, impacts on fair lending, possible competitive effects from using a particular model, an assessment of the model provider as a potential vendor, the impact to the mortgage finance industry, and the impact on the Enterprises’ operations and risk management.” If a credit score model passes muster in all those processes, the FHFA will have 45 days to approve the use of said model, whatever it may be. All in all, the FHFA anticipates the process of approving an alternative credit score model will take as many as 26 months. But that doesn’t include the implementation of any approved model for use by the GSEs. The FHFA said that that process will likely take as much as two more years beyond that. “FHFA believes, based on years of related credit score work, that it will take the industry approximately 18-24 months to adopt a new credit score model after a model has been approved by an enterprise,” the FHFA said. Add it all up and it’s looking like it will be at least four more years until the GSEs can use a different credit scoring model, whether it’s VantageScore or something else. As for FICO, the company said it is looking forward to working with the GSEs and the FHFA on this new process, and claims it supports the competitive review of credit scores. FICO explained this will create a more level playing field. “FICO has always supported a competitive review of credit scoring models by the FHFA,” said Joanne Gaskin, FICO vice president of scores and analytics. “We applaud the FHFA for finalizing a rule that puts in place comprehensive, transparent requirements for the validation and approval of credit score models by the GSEs, and we look forward to continuing to work with them throughout this process.” “In implementing the rule, we are confident that the FHFA and GSEs will endeavor to create a level playing field to ensure that no owner of consumer data necessary to underwrite a mortgage will impair market access of any independent credit score provider,” Gaskin added. “The FICO Score has been the industry standard for credit scores for decades because it is trusted by lenders to be independent, predictive and reliable, and we are confident that it will remain the superior choice by any measure established by the GSEs,” Gaskin said. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 95

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Startups transforming the real estate industry AIMING FOR THE “FRICTIONLESS REAL ESTATE TRANSACTION” BY KATHLEEN HOWLEY, BEN LANE REAL estate startups, known as proptech, have been expanding in 2019’s second half. Flyhomes, the four-year-old startup that lets people make cash offers on homes while they work to secure a mortgage, announced a new round of funding and a new service for buyers. The Seattle-based brokerage said it raised $141 million in debt and equity that it’ll use, in part, to grow a new part of its business that targets trade-up buyers. People who use Flyhomes to buy a new property will get a guarantee that their old home will sell at an agreed-upon price within 90 days. If not, Flyhomes will buy it. If it sells above the set price during that period, the seller keeps the extra. Flyhomes makes its money from brokerage fees, not from flipping homes, said Tushar Garg, Flyhomes’ CEO and co-founder. Executive Chairman Steve Lane, Flyhomes’ other co-founder, got the idea for the company when he was buying a home in 2015. “For most people, a home is the single biggest purchase they’ll ever make, and the traditional process of making that purchase is fraught with obstacles, stress and worry,” Garg said. “We believe our approach – which supports homebuyers with a vertically integrated product offering – is the future of real estate.”

Flyhomes said $21 million of the new funding is Series B equity financing led by Canvas Ventures, with participation from existing investors Andreessen Horowitz, which gave early backing to Facebook, Airbnb, Skype, Twitter and other big-name startups. The rest is debt financing from multiple lenders, including Goldman Sachs’ Genesis Capital. REALI LAUNCHES HOME TRADE-IN PROGRAM Reali, a startup that operates in California, launched a service that allows homeowners to sell their existing home and buy a new one, all in one transaction. The company been quickly expanding for the last few years, and it looks like it has no plans of slowing down. Earlier this year, Reali launched a mortgage business, dubbed Reali Loans, by acquiring Lenda, an online mortgage lender that launched in 2013 and currently operates in 12 states. The company also raised nearly $40 million in several funding rounds over the last several years, including a $9 million raise earlier this year, a $20 million raise last year, and a nearly $10 million raise in 2017. And now, the company is growing its offerings again. Reali is launching a service that allows homeowners to sell their existing HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 97

REALI According to the company, it charges 5% of the transaction amount for the service, which includes a license real estate agent, a five-day close and a property inspection, as well as the prep and staging on the existing home.

home and buy a new one, all in one transaction. By using the program, which the company calls the “Reali Trade-In,” a homeowner can buy their new home before they sell their old one, thereby eliminating the stress and financial burden that comes from managing two home transactions at the same time. Here’s how it works, according to the company. First, Reali helps a seller find their new home and buys it with the company’s own funds on their customer’s behalf. Second, the seller moves into their new home. Third, Reali prepares the seller’s previous home for listing, cleaning the house, performing any minor repairs that are needed, and staging the home for sale. When the home sells, Reali uses the proceeds pay itself back for purchasing the new home, at no additional cost to the customer compared to a traditional real estate transaction. According to the company, it charges 5% of the transaction amount for the service, which includes a license real estate agent, a five-day close and a property inspection, as well as the prep and staging on the existing home. The company also states that customers using this program will be making use of the company’s mortgage lending arm as well. “Leveraging Reali’s full-service real estate platform, REALI Reali Trade-In customers TRADE-IN work with in-house mortgage experts to get pre-approved quickly, while Reali agents help them find a new home and sell their existing home,” the compa98 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

1st Reali helps a seller find their new home and buys it with the company’s own funds on their customer’s behalf.

2nd The seller moves into their new home.

3rd Reali prepares the seller’s previous home for listing, cleaning the house, performing any minor repairs that are needed, and staging the home for sale. When the home sells, Reali uses the proceeds pay itself back for purchasing the new home, at no additional cost to the customer compared to a traditional real estate transaction.

OpenHouse

“We reworked the process so sellers can conveniently get into the home they want first with our cash while paying a competitive price.” -Reali CEO Amit Haller

ny said in a release. While the concept is a novel one, Reali is not the first to come to market with a home trade-in program. Last year, Opendoor rolled out a similar program, although Opendoor’s is done in partnership with homebuilders and sees the homeowner selling their existing home to Opendoor and buying a newly built home. Although, it should be noted that with Opendoor, the company is buying the seller’s existing property directly, whereas Reali is simply holding the property on the seller’s behalf until the property sells. Another company, Knock, has a similar program, wherein the company buys a customer’s new home on their behalf, allows to them to move in, then the company represents them in the sale of their old home on the open market. Once it sells, Knock sells their new home to them. “With Reali Trade-In, we are simplifying two of the most stressful events in modern life: buying and selling a home,” Reali CEO Amit Haller said. “We reworked the process so sellers can conveniently get into the home they want first with our cash while paying a competitive price,” Haller added. “Then, we’ll sell their existing home for the highest price possible. Reali is the only company that offers a ‘buy before you sell’ program to sellers without charging additional fees because we believe our customers should benefit the most from their real estate transaction.” HOMELIGHT EXPANDS INTO MORTGAGE BUSINESS HomeLight, an online real estate platform that uses data and technology to connect home sellers with buyers and real estate agents, expanded into the mortgage business, following in the path blazed by companies like Zillow, Redfin, and Opendoor. But unlike Redfin and Opendoor, which each launched

their own mortgage business, HomeLight is taking the Zillow track of buying instead of building. When Zillow expanded into mortgages last year, it did so by buying Mortgage Lenders of America, which was subsequently rebranded to Zillow Home Loans. HomeLight is taking a similar approach. The company announced that it acquired Eave, a digital mortgage lending startup that launched last year. Eave began lending in Colorado in 2018, promising a “revolutionary” lending experience that digitizes and simplifies the mortgage experience by automating 70% of the mortgage process. Eave claimed that it has “re-envisioned the whole mortgage experience,” can provide a full and complete underwriting in 24 hours, and close a borrower’s loan within 21 days. Since launching in Colorado, Eave has since expanded to California, Colorado, Washington, Oregon, Pennsylvania and Texas. With the acquisition, Eave’s digital mortgage platform will power HomeLight’s home loans division, which launched in those same six states. The idea behind the expansion, according to HomeLight executives, is to make the home purchase process easier for buyers by giving them the “power and certainty of all-cash offers.” According to a post from HomeLight’s executives on the company’s blog, by giving buyers a full underwrite within 24 hours, the borrower’s offer will look much stronger than a “flimsy pre-qual or partially verified pre-approval.” HomeLight claims that Eave’s system has allowed 90% of the company’s clients to win the first offer on their home. The approach is similar to how Zillow and Redfin are looking at the mortgage business as it relates to their primary real estate focus. As former Zillow CEO Spencer Rascoff said last year, online real estate companies that also originate mortgages are able to provide “transactional lubrication” to the home buying experience. “With our mortgage and escrow services, consumers and their agents can focus on the home, and not worry about the painful details,” said Saro Vasudevan, Eave co-founder and chief operating officer. “The frictionless real estate transaction is a reality for HomeLight and Eave. And, every real estate agent is included.” Eave co-founder and CEO Jack McCambridge shared similar sentiments. “The process as it is today is bewildering and unpredictable,” he said. “It’s fundamentally broken. Together, we are making it simple, certain and less costly throughout.” HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 99

Inside Baseball

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Inside Baseball

Appraisals may soon not be required on certain home sales of $400,000 and under FDIC AND OCC APPROVED RULE CHANGE, AWAITING SIGN-OFF FROM FED BY BEN LANE

THIS Certain home sales of $400,000 and under may soon not need an appraisal, as federal regulators are close to approving a proposal to increase the threshold at which residential home sales require an appraisal for the first time since 1994. Last year, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve released a proposal that would increase the appraisal requirement from $250,000 to $400,000, meaning that certain home sales of $400,000 and below would no longer require an appraisal. Now, the proposal is just one step away from being finalized and adopted as proposed. FROM THE PROPOSAL: The OCC, Board, and FDIC (collectively, the agencies) are adopting a final rule to amend the agencies’ regulations requiring appraisals of real estate for certain transactions. The final

rule increases the threshold level at or below which appraisals are not required for 2 residential real estate transactions from $250,000 to $400,000. The final rule defines a residential real estate transaction as a real estate-related financial transaction that is secured by a single 1-to-4 family residential property. For residential real estate transactions exempted from the appraisal requirement as a result of the revised threshold, regulated institutions must obtain an evaluation of the real property collateral that is consistent with safe and sound banking practices. The final rule makes a conforming change to add to the list of exempt transactions those transactions secured by residential property in rural areas that have been exempted from the agencies’ appraisal requirement pursuant to the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final rule requires evaluations for these exempt transactions. The final rule also amends the agencies’ appraisal regulations to require regulated institutions to subject appraisals for federally relatHOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 101

Inside Baseball

“The agencies estimate that increasing the appraisal threshold from $250,000 to $400,000 would have exempted an additional 214,000 residential mortgages from the agencies’ appraisal requirement in 2017, representing 3% of total HMDA originations.” -FDIC data

ed transactions to appropriate review for compliance with the 28% would require an appraisal. According to the FDIC final rule, which was published in August, Uniform Standards of Professional Appraisal Practice. In August, the FDIC published the final rule on the matter, stat- the agencies received over 560 comments on the proposal to raise the appraisal threshold. ing that the rule is approved as proposed. As one might expect, financial institutions, financial instituThat led some to conclude that the rule is finalized, but a representative from the FDIC told HousingWire that the Federal tion trade associations, and state banking regulators “generally supported” the proposal. Meanwhile, appraisers, appraiser trade Reserve has not yet signed off the proposal. The proposal has been approved by both the FDIC and OCC, but organizations, individuals and consumer advocate groups “generally opposed” the proposal. without Fed approval, the rule cannot move forward. According to the FDIC, those commenting in support of the rule But considering that the FDIC and OCC have approved the rule, and gotten sign-off on the matter from the Consumer Financial stated that an increase would be appropriate given the increases Protection Bureau, it’s likely only a matter of time before the Fed in real estate values since the current threshold was established approves the rule, it’s entered into the Federal Register, and en- in 1994. Other commenters stated that the increase would provide “burden relief for financial institutions without sacrificing safe acted as the law of the land. Now, it’s important to note that the new rules do not apply to and sound banking practices.” On the other hand, commenters opposed to the rule change statloans wholly or partially insured or guaranteed by, or eligible for sale to, a government agency or government-sponsored agency. ed that the proposal would “elevate risks to borrowers, financial That means that loans sold to or guaranteed by the Federal institutions, the financial system and taxpayers.” According to the final rule, many commenters opposed to an Housing Administration, Department of Housing and Urban Development, Department of Veterans Affairs, Fannie Mae, or increase in the threshold argued on behalf of appraisers, stating Freddie Mac would still require an appraisal, per each agency’s that appraisers are “the only objective and unbiased party in a transaction and bring checks, balances and oversight to the mortrules. But despite that fact, the change would have a sizable impact gage lending process.” Other commenters noted that the rule could have an outsized on the real estate market, as according to the OCC, the new rules impact on certain consumer groups, such as low-income individuwould apply to approximately 40% of home sales. According to data provided by the FDIC, the agencies esti- als, members of certain minority groups, or first-time homebuyers, mate that increasing the appraisal threshold from $250,000 to because those borrowers are more likely buy homes in the lower $400,000 would have exempted an additional 214,000 residen- price range, and would therefore be more likely to buy a home tial mortgages from the agencies’ appraisal requirement in 2017, without an appraisal. Despite those comments, the agencies issued the final rule as representing 3% of total HMDA originations. On a percentage basis, under the current rules, in 2017, there initially proposed, and are now waiting for the Fed to sign off on were 750,000 transactions that were exempted from the apprais- the rule. As noted earlier, the agencies state that the CFPB was involved al requirement (56%). By increasing the threshold to $400,000, there would have been an additional 214,000 sales exempted in the process throughout and concurred with the proposal, stating that the new residential real estate appraisal threshold being from the appraisal requirement (an additional 16%). Therefore, under the proposed rules, 72% of the eligible trans- adopted provides “reasonable protection” for consumers who actions would be exempted from the appraisal requirement, while purchase 1-4 unit single-family residences. 102 HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019

Inside Baseball

The appraisal threshold was last increased in 1994 when regulators increased the threshold from $100,000 to its current level of $250,000. The regulators argue that increasing the threshold now will actually have less of an impact on the market than the 1994 change did. “When the threshold was raised in 1994, the agencies estimated that the aggregate dollar volume of exempted transactions due to the threshold increase was 85% of all new home sales, and 82% of all existing home sales,” the agencies previously said in the official notice. “Thus, the agencies expect the proposed threshold level to have a much smaller impact on the dollar volume of transactions and, therefore would be less likely to pose a safety and soundness risk than the current threshold level did when it was introduced in 1994.” According to the final rule, the change will take effect immediately after the rule is published in the Federal Register, meaning once the Fed approves the rule, it will become law likely within days. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 103

Kudos GIVING BACK • NATIONAL ASSOCIATION OF REALTORS PARTNERS WITH FOOD RECOVERY NETWORK In an effort to help combat hunger, the National Association of Realtors will begin donating surplus food from its events and meetings to those in need. Working in partnership with the Food Recovery Network, a college student-led hunger nonprofit organization. NAR recently asked all of its 1,200 local and state Realtor associations around the country to join in, “take the pledge” and work to help multi-

ply the effort. “Giving back to the community is the right thing to do, and I am proud that NAR members have a long history of helping their neighbors,” NAR CEO Bob Goldberg said. “We hope this effort will inspire other associations, organizations, businesses and individuals to fight hunger in their local communities.” The NAR commitment will add to an effort by FRN and its affiliates, which has recovered 3.9 million pounds of food, donated 3.2 million meals and prevented 7.4 million pounds of CO2 emissions since 2011. LBA WARE SUPPORTS GEORGIA-AREA FOOD BANKS Mortgage tech provider LBA Ware raised 8,582 meals to benefit the Middle Georgia Community Food Bank through its participation in Bytes for Bites, an annual food and fund drive competition among Georgia’s technology and startup community benefitting Georgia’s regional food banks. LBA Ware was recognized for making the largest contribution in the Middle Georgia region, receiving formal recognition for Most Total Points and Most Points Per Employee, where one point is earned for every pound of food donated or 25 cents raised.

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FREEDOM MORTGAGE PARTNERS WITH HABITAT FOR HUMANITY TO SUPPORT VETERANS BUILD PROGRAM Freedom Mortgage has partnered with Habitat for Humanity to support the nonprofit housing organization’s Veterans Build program, which builds, rehabilitates and repairs homes in partnership with U.S. military veterans in need of affordable housing. Freedom Mortgage will support Habitat’s Veterans Build projects in three communities in which the lender operates: Palmyra, New Jersey; Jacksonville, Florida; and Indianapolis. Freedom Mortgage’s Habitat partnership also supports the company’s recently launched

Volunteer Time Off program. The program provides Freedom Mortgage employees paid time working out of the office for approved nonprofit organizations to make a positive impact in the communities where they live and work. The partnership with Habitat will provide thousands of volunteer hours for Freedom Mortgage employees. “Habitat for Humanity does so much for families in need of decent, affordable housing,” Freedom Mortgage CEO Stanley Middleman said. “I’m very excited to be working with such an extraordinary organization to help our U.S. military veterans and their families improve their homes and living conditions. This is a great partnership that will

Kudos

continue making the dream of homeownership accessible for so many.” NTC EXPANDS PHILANTHROPIC EFFORTS NATIONWIDE IN 2019 Nationwide Title Clearing has committed to several local and national nonprofit organizations throughout 2019. For several years, NTC has been heavily involved with nonprofit organizations in the Tampa Bay area, such as the Humane Society of Pinellas, Feeding Tampa Bay and the Ronald McDonald House Charities. NTC said community involvement and support for worthy causes is core to its culture, as the company supports employees

in their charitable efforts and participates in several events throughout the year. “When people ask us why we do it, the answer is simple. It is because we care and NTC, as any established business, has a responsibility to ensure that non-profit organizations are supported and their cause disseminated,” said Danny Byrnes, vice president of Sales and Marketing. Charitable Foundation has many programs that support veterans who have sacrificed so much to ensure the safety of our nation. In August, NTC team members will volunteer at the Ronald McDonald House and prepare meals for patients. This will be the companies seventh year volunteering for this organization. NTC is sponsoring the Boys and Girls Club gala in September and will sponsor the Gramatica Kickball Foundation’s annual Kickball tournament in October. “For as long as I have worked at NTC, it has been a pleasure being as involved in our community as we have been. Each year we explore different charities and avenues of philanthropy, and I am grateful to be part of such an amazing company that is focused on giving back to our community,” NTC Marketing Director Santa Sorrentino said.

LAUNCHES • NATIONAL ASSOCIATION OF MORTGAGE BROKERS LAUNCHES NEW HEALTH PLAN FOR MEMBERS The National Association of Mortgage Brokers partnered with health care solutions provider Pendella to offer a newly developed health plan to its membership base. The NAMB health plan will provide level funded options down to groups of two employees and will help control the cost of care through many features typically only available to large employers, the association said. “Since learning of the Association Health Plan initiative released by the White House in 2018, NAMB has been working hard to bring this valuable benefit to its members” said NAMB President Rick Bettencourt. “This plan allows small businesses, individuals and sole proprietors the opportunity to come together and share the benefits that only large groups receive today.” GUARANTEED RATE CREATES INTERNAL LGBTQ+ ORGANIZATION Guaranteed Rate has established PROUD, a new internal organization aimed at promoting LGBTQ+ acceptance in the workplace. The mission of PROUD is to maintain a work environment in the mortgage industry that believes in everyone for who they are, wants them to succeed because of their talents and abilities, and makes them feel safe, welcome and most importantly, PROUD, the company said. “Our business has always been a place where everyone is welcome and respected,” said Victor Ciardelli, Guaranteed Rate founder and CEO. “With the launching of our PROUD organization, Guaranteed Rate will have an additional platform to promote workplace diversity, particularly as it relates to members of the LGBTQ community. My long-term hope is that this type of inclusionary work-place model will be adopted and embraced by all kinds of employers throughout the country.” To support continued inclusion at Guaranteed Rate, PROUD offers education, awareness and a support network for LGBTQ+ initiatives. HOUSINGWIRE ❱ OCTOBER/NOVEMBER 2019 105

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2019 NRHC OWNER OPERATOR PANEL:

Kevin Baldridge

David Singelyn

President Tricon American Homes

CEO American Homes 4 Rent

Dallas Tanner

Chaz Mueller

CEO Invitation Homes

CEO Progress Residential

Daniel Choquette Managing Director Cerberus Capital Management/ FirstKey

Call: 1-212-901-0542 | Email: amelvin@imn.org www.imn.org/SFRWest