June 2021
HOUSINGWIRE MAGAZINE ❱ JUNE 2021
2021
50 young disruptors leading the industry
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The home is an owner’s most valuable asset
Over 12% of those homeowners listed their home with the brokerage the lead was generated from in the same year, creating $21B in sales volume for our clients in 2020.
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EDITOR-IN-CHIEF Sarah Wheeler
NEWSROOM MANAGING EDITOR James Kleimann SENIOR REAL ESTATE REPORTER Matthew Blake SENIOR MORTGAGE REPORTER Georgia Kromrei MORTGAGE REPORTER Alex Roha ASSIGNMENTS REPORTER Tim Glaze LEAD ANALYST Logan Mohtashami CONTRIBUTORS Andrei Aron, Joanne Cleaver, Lesley Collins, Chris Heller, Romi Mahajan, Tracey Velt PREMIUM CONTENT/HW+ HW+ MANAGING EDITOR Brena Nath HW+ INTERN Sarahi De La Cuesta DIGITAL MEDIA MANAGER Alcynna Lloyd JUNIOR DIGITAL PRODUCER Victoria Jones CONTENT SOLUTIONS MANAGING EDITOR Maleesa Smith CONTENT EDITOR Jessica Davis ASSISTANT CONTENT EDITOR Jordan White SALES SENIOR VICE PRESIDENT OF SALES & OPERATIONS Jennifer Watson Laws DIRECTOR OF REAL ESTATE Mark Adams CALIFORNIA Christi Humphries CENTRAL Chris Anderson SOUTHEAST Tamara Wren GREAT LAKES AND NORTHEAST Michael Orme SALES STRATEGY ASSOCIATES Lindsley Harris, Amina Jahic, Amanda Luzsicza
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HW MEDIA CORPORATE CEO Clayton Collins CHIEF OPERATING OFFICER Diego Sanchez WEB DIRECTOR Brent Driggers PRODUCT MANAGER Matthew Stafford DIRECTOR OF FINANCE Andrew Key MARKETING DIRECTOR Caren Karris MARKETING COORDINATOR Katie Galbraith, Brooke Combs GRAPHIC DESIGNER Emily Carpenter CLIENT SUCCESS DIRECTOR Haley Hess CLIENT SUCCESS COORDINATOR Elizabeth Ledoux AUDIENCE DEVELOPMENT MANAGER Alyssa Stringer AUDIENCE DEVELOPMENT INTERN Sydney Smith
HOW TO REACH US LETTERS TO THE EDITOR: feedback@housingwire.com TIPS AND STORIES: editorial@housingwire.com CURRENT MEMBERSHIP / SUBSCRIPTION: hwplusmember@housingwire.com NEW MEMBERSHIP / SUBSCRIPTION: housingwire.com/membership MARKETING & ADVERTISING: jlaws@housingwire.com or (469) 893-1486 ADVERTISING CLIENT SUCCESS: clientsuccess@housingwire.com
JUNE 2021
LETTER FROM THE EDITOR
Overcoming adversity THIS ISSUE MARKS MY FIRST ISSUE overseeing
housing sector. It’s this same willpower, steadfast-
the magazine with a cover photo shoot, and wow,
ness and determination to push through adversity
Matt Jones, who is portrayed on the cover, really
that defines this year ’s winners.
set the bar high when it comes to what it means
From leading their team through a massive
to be a Rising Star. He formerly served as senior
refinance boom and quickly developing new tech-
counsel for the Senate Committee on Banking,
nology to meet the unique needs of 2021 to driv-
Housing, and Urban Affairs, and currently, he
ing the adoption of eClosings and delivering rel-
serves as senior counsel for the U.S. Senate Fi-
evant training to lenders and agents on how to
nance Committee. His list of accomplishments in-
navigate the pandemic, we’re excited to present
cludes being the principal drafter of the mortgage
this year ’s class of Rising Stars.
forbearance program enacted through the CARES Act, which reshaped the mortgage industry and enabled more than 4 million homeowners to hit the pause button on their mortgage. But it’s not simply his monumental role in creating housing relief during the COVID-19 pandemthing he did leading up to that moment that truly makes him an exemplary young influencer in the
Brena Nath HW+ Managing Editor @BrenaNath
Tweets From The Streets Post GFC in 2008, home builders retreated because of weak demand and many of them also had cash crunch issues. More recently, Covid drove commodity prices way up (lumber is up 4x in a year!) so building costs too high. 1
1
2
by @spencerrascoff
JUNE 2021
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. © 2021 by HW Media, LLC • All rights reserved
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ic that makes him a Rising Star, it’s also every-
JUNE 2021
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Photo by Steven Visneau
JUNE 2021
ALL THE TECHNOLOGY ALL THE ADVOCACY ALL THE SUPPORT ALL THE SERVICE
ALL IN When UWM asked brokers to choose between working with us or to continue funding two companies long-known for working against the broker channel, the response was admittedly mixed: Some brokers chose to stay with us for the technology we provide. Some chose us for our unparalleled speed. Some chose us for our ser vice. The one thing they all had in common? They went all in for UWM because UWM is all in for them. We are 100% dedicated to supporting and growing the broker community and to helping you deliver the best possible experience to your borrowers. We’re all in this together — and
“Ever yday [UWM] goes out knowing that they have to fight for our business ... [ Their] number one strategy is to do what’s right for the broker. Allow the broker to ser ve our clients ... And that’s how we’re able to do awesome things together. I’m super thank ful for ever y thing United Wholesale Mor tgage has done for us.”
we always will be. All In. UWM.com.
Jason Vondrak Prospect Home Finance
800.981.8898 | UWM.COM This information is provided to mor tgage and real estate professionals only and is not intended nor is it authorized for consumer distribution. NMLS #3038
People Movers
June 2021
12 Auction.com names its first-ever president, promoting Ali Haralson to the position.
Real Estate
Take 5
Local Intel
14
22
From surfing and scuba diving to building Blend’s title team, learn about Rising Star Dilly Sanborn-Marsh.
What’s happening in Atlanta is distinct, as there are few zoning restrictions in the sprawling metropolis.
Launches
16 Spruce announces a joint project to offer a fully underwritten title commitment.
Event Calendar
18 HousingWire is back for its annual engage.marketing event, focusing on the shift to purchase.
With stagnant inventory, being willing to rehab a fixer-upper could give buyers an edge.
Real Estate Brokerage
80 Trade Desk
68 From conferences to wire fraud, the CFPB, and more, these associations have a lot of updates to share.
Mortgage
72 As profit margins shrink, execs look at LO comp. The top-producing LO is often not the most profitable.
How HomeServices has methodically and anonymously stayed profitable for years.
Kudos
84 Nicknamed the “Tampa Chainsaw Man,” Aaron Davis inspires an industry to give back.
Parting Shot
86
Inside Agent
20
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Executive teams from the top residential real estate firms come together for this exclusive conference.
This ranch house in Iowa would have fetched just $300,000 last year. Guess what it is going for now?
JUNE 2021
Rising Stars
50 young leaders innovating in the housing industry. HousingWire honors the next generation of leaders.
features
52
Insights from the 2021 RealTrends 500 More than 1,750 firms qualified for the 2021 RealTrends 500 list, marking the biggest growth ever seen in the rankings.
58 Wire fraud: Are you the weakest link? Learn about the multi-million dollar cybercrime haunting consumers. As the pandemic recovery takes hold, a robust housing market has pulled fraud prevention back on track.
Real Estate Tech Solutions Special Reports
64
The two companies featured in this section offer platforms that leverage technology so real estate professionals can provide excellent customer service.
Brokerages need to look beyond commissions to lure agents
It’s time to put Computer Vision technology on your valuation radar
By Chris Heller
By Andrei Aron and Romi Mahajan
pg 24
pg 26 JUNE 2021
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f
28
PEOPLE MOVERS
Ali Haralson
| Auction.com | President
Auction.com promoted Ali Haralson to president, a new position in the company that will oversee both sales and operations. The promotion comes after Haralson served as the company’s chief business development officer since 2017. At Auction.com, Haralson has spearheaded the launch of disposition solutions that reduce friction in the distressed property marketplace. Before joining Auction, she was COO for Specialized Loan Servicing.
Patrick McEnerney |
RoundPoint Mortgage | Chief Executive Officer
RoundPoint Mortgage appointed a new CEO, naming Patrick McEnerney to the position as it prepares to ramp up its retail operations. McEnerney was a managing director at Deutsche Bank for 14 years before Freedom Mortgage brought him on in August 2020 as executive vice president. He has over three decades of experience in the mortgage banking and financial services industries, also serving as executive vice president at EverBank, president of PricelineMortgage and president of The Bank of New York Mortgage Company.
Noelle Lipscomb |
Homepoint | Chief Audit Officer
Noelle Lipscomb, who worked at Fannie Mae for nearly two decades, has joined Ann Arbor-based Homepoint as the company’s chief audit executive, where she will run point on Homepoint’s internal risk-based auditing services and controls. Lipscomb served at Fannie Mae for 17 years in various senior audit positions prior to her departure and was a senior auditor at PWC before her time with the GSE. Lipscomb is tasked with providing leadership and guidance to Homepoint's risk-based internal auditing function.
Andrew Peters |
Lenderworks | President
National mortgage services provider Lenderworks has brought on Fannie Mae‘s head of single-family strategy Andrew Peters as president. Peters served as a strategy consultant for the government-sponsored enterprise before rising to the position of vice president, head of single family strategy for nearly two years. The bulk of Peters’ 25 years of experience in the field took place at First Guaranty Mortgage Company, where he began as an underwriting manager and eventually moved up to become national wholesale sales manager.
Suzy Lindblom |
Kind Lending | Chief Operating Officer
Wholesale lender Kind Lending brought on mortgage veteran Suzy Lindblom as its chief operating officer. Lindblom has 40 years of experience in the mortgage space, most recently serving as the COO of Planet Home Lending for three and a half years. Prior to that, Lindblom served as the managing director of national fulfillment and operations at Stearns Lending — the first brainchild of Glenn Stearns, who happens to be the founder and CEO of her latest employer, Kind Lending.
Laura LaRaia |
Sprout Mortgage | EVP, General Counsel, Chief Compliance Officer
Sprout Mortgage has announced Laura LaRaia as its executive vice president, general counsel and chief compliance officer. LaRaia has been in the industry for over 20 years and was previously the chief compliance officer/deputy general counsel at Supreme Lending. In her new role, LaRaia will oversee all legal and regulatory compliance functions. LaRaia is also a member of the Mortgage Bankers Association’s Legal Issues & Regulatory Compliance Committee as well as the MBA State and Legislative Regulations Committee.
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Henry Santos |
Sprout Mortgage | EVP, Chief Information Officer
Sprout Mortgage hired Henry Santos as its new executive vice president and chief information officer. Santos had served at Infosys for two years before his latest appointment, and previously served as the North American lending executive for IBM. Santos also held various financial and executive roles at Fidelity National Information Systems, Capco and Accenture over the years. At Sprout Mortgage, Santos will be in charge of strategy, execution and performance of the company’s enterprise technology.
JUNE 2021
n M r o a b r sh n a S y
Di ll
TAKE 5
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Dilly Sanborn-Marsh’s direct impact on Blend’s consumer lending solutions is why she was named a 2021 HousingWire Rising Star. As a product manager at the digital lending software provider, Sanborn-Marsh works with a tight-knit team at Blend that operates as its own innovation incubator, conducting extensive research with Blend’s 285+ lender customers to understand their pain points and identify areas where Blend can further bring the financial services industry into the digital age. Over the last year, as the industry rapidly responded to the COVID-19 pandemic that was paired with a massive influx in housing demand, she quickly pivoted her focus to help lenders, developing Blend’s “volume control” feature, which allowed lenders to streamline leads that were most likely to be closed based on borrower intent and context. Blend’s executive team has also recognized SanbornMarsh’s work, presenting her with the annual Bailey Award – a peer-nominated recognition for employees that embody the company’s values. Sanborn-Marsh answers five questions that give an inside look at her life:
Produ ct Man at Blen ager d
1. Besides my job and family, my greatest passion is...
scuba diving. I got certified in high school and have been diving as much as possible ever since.
2. Relaxation means...
eating poke on the beach with friends after a long weekend surf session.
3. My biggest learning opportunity was...
building Blend’s Title product, team and business from scratch.
4. My morning routine looks like...
taking my dog on a walk. I usually block off time for meditation or writing.
5. My bucket list includes...
cage diving with sharks in South Africa!
JUNE 2021
LAUNCHES
Spruce SentriLock
Real estate tech company Spruce announced a joint project with insurtech platform Digital Partners and American Digital Title Insurance Company to offer a fully underwritten title commitment that it says can be completed in minutes. The new model has initially launched in Colorado and Arizona, with additional states to follow throughout 2021. Spruce said the new automated underwriting offering is part of its larger vision to enable one-click real estate transactions. The company said the new offering is enabled via a unique combination of proprietary data science, machine learning, and private and public data sources. The typical title underwriting process can take days when factoring in turn times. Spruce is promising a quicker turnaround, without sacrificing quality or security.
SentriLock, the home lockbox company wholly owned by the National Association of Realtors, announced that they created a computer and smartphone platform to help real estate agents juggle their home showing appointments. NAR-owned SentriLock spent over a year writing code and otherwise developing the new appointment handler, said company CEO Scott Fisher. The platform uses the Google Cloud, and “marries access” between the agent’s appointment page and SentriLock lockboxes. The platform, Fisher said, was created with ShowingTime in mind, which is the industry leader in the home-showing appointment realm and a company Zillow announced the $500 million purchase of in February.
Lone Wolf Lone Wolf announced the launch of a new Cloud CMA for brokers and upgraded Cloud Agent Suite. With the announcement, agents and brokers can expand their digital transaction experience from listing presentation to close due to a two-way integration between market assessment tool Cloud CMA and Lone Wolf Transactions. The new integration is only available through Cloud CMA for brokers or the full Cloud Agent Suite for agents. Lone Wolf acquired Cloud CMA last December to expand its cloud of digital solutions for agents and brokers in North America.
Weiss Analytics From thousands of feet above your home, a high-tech camera snaps pictures of your roof, the mess of debris in your yard, and that pool you hate cleaning. With ValPro+, Cape Analytics and Weiss Analytics have created what they say is the first automated home valuation engine that uses geospatial imagery and artificial intelligence to integrate current home conditions — like a damaged roof or a pool — into valuations. Cape Analytics’ AI system instantly extracts property conditions from images, which is then run through Weiss’ valuation model, Raj Dosaj, Cape Analytics’ head of real estate, explained. The systems have condition data sets for 110 million buildings across the United States.
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Pacaso Pacaso, a company founded by former Zillow executives that is focused on second-home ownership, announced a new app that features a curated selection of luxury homes in top destinations across the United States. The app is designed for home shoppers looking to purchase their second home. Through the app, users can browse a selection of homes that are available for co-ownership, share their favorite listings with family and friends and receive push notifications when new homes are listed. The app is available for free download on iOS and Android-powered smartphones and tablets.
JUNE 2021
A podcast focused on female financial empowerment featuring HousingWire's Sarah Wheeler and Brena Nath.
EVENT CALENDAR
HousingWire’s engage.marketing conference June 17, 2021 Cost to attend: $195 Presented by HousingWire
LISTEN NOW “Wells Fargo’s Kristy Fercho on big banks vs startups” BY: ALCYNNA LLOYD
LOCATION: VIRTUAL HOUSINGWIRE is back for its fourth annual engage.marketing event, following last year’s summit where attendees gained exclusive insight on how to harness their inner agile marketer to respond to the pandemic. This year’s virtual event focuses on the shift in the lending market, equipping marketing experts with the information they need to gain a competitive edge in today’s market. The theme — All Eyes on Purchase — carries through the event’s sessions, as they all tie back to the 3 P’s that housing professionals must be focused on: Process, Profitability and Purchase. PPP may have meant something different in 2020, but this year the 3 P’s are the guiding light to long-term mortgage success and domination.
ABA’s Regulatory Compliance Conference June 22 - 24, 2021 Cost to attend: Prices may vary Presented by American Bankers Association LOCATION: VIRTUAL THE AMERICAN BANKERS ASSOCIATION’S Regulatory Compliance Conference focuses on bringing compliance to the forefront of the financial conversation. The association’s three-day conference is built to keep attendees up-to-speed in a constantly changing compliance landscape. The conference is designed for experienced compliance officers and managers in the first and second lines, inhouse and outside counsel, examiners and regulators and more. The conference features more than 50 information-packed sessions, with insights that will help attendees benchmark their bank’s program against leading industry practices.
Over the last few years, the rise of the American startup has taken many industries by storm, especially in the housing finance sector as more and more fintech companies pledge to transform the way borrowers pursue the dream of homeownership. A conversation that grew out of this wave of industry disrupters is how legacy lenders can compete with startups that have created technology that embodies the agile mindset, leaving many to wonder – team startup or big bank? In a Housing News podcast episode, HousingWire Editor in Chief Sarah Wheeler sat down with Kristy Fercho, executive vice president and head of home lending at Wells Fargo, who also serves as the chairman-elect of the Mortgage Bankers Association, to answer this very question. During the interview, Fercho, who is undoubtedly on team big bank, claims what differentiates big banks from startups is the human relationships they form with their customers. According to Fercho, thanks to personal interaction, big banks have the unique opportunity to really understand the needs and wants of each customer, while learning how they think about their financial life. “I have been so blown away and impressed by how sticky the Wells Fargo relationships have been with customers,” Fercho said. “We know a lot about them and their transactions as many have direct deposits coming into Wells Fargo, as well as checking accounts, banking, credit cards, and now they’re coming in to buy housing.” Fercho believes that big banks create synergy to provide customers with a simple, predictable and personalized experience. So which team are you on? Tune into this episode to make a formal decision.
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Event TIP "I recommend getting a great camera that mounts to the top of your computer and a high-quality podcast microphone. Choose a nice background, for example at a desk with some art behind you or in a modern office space. If you don't have a presentable background, I'd recommend using Zoom's background feature to upload a professional office interior as your background. This will help ensure you appear in the best light possible." — Malte Kramer, Founder & CEO at Luxury Presence
JUNE 2021
HOUSINGWIRE Daily A deeper look into the HousingWire newsroom's most compelling stories.
Listen here: housingwire.com/podcast
INSIDE AGENT
Lance Hanson Broker/Owner of RE/MAX Concepts lance@realestateconcepts.net 7971 NW 54th Avenue Johnston, Iowa 50131 $340,000 3 bed 3 bath 1,588 sqft
WHLE THIS WOULD BE a steal in other parts of the country, $340,000 for
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this ranch house seemed unbelievable. This house on the outskirts of Des Moines, Iowa — which does feature a leafy 1.5-acre backyard — would have fetched just $300,000 last year, Lance Hanson said, noting it was bought for $205,000 back in 2011. But it came onto the market in the middle of April, and by the time you read this, will probably have received an offer beyond the listing price. “The demand is borderline bizarre,” Hanson said. A lifelong Des Moines area resident, Hanson has been a real estate agent in the market since 1987. The longtime real estate professional is now the broker/owner of a 300-person RE/MAX franchise, RE/ MAX Concepts. As other mid-sized Midwest cities have struggled the last three decades, Des Moines actually flourished. “It’s grown like crazy,” Hanson said. “Brand new neighborhoods that I used to sell homes in now have mature trees.”
JUNE 2021
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LOCAL INTEL
By: Matthew Blake
ANNAPOLIS, Maryland
Boyd Campbell, a broker at Century 21, has a somewhat reassuring perspective on the current housing market. “The demand for homes is the highest it’s been since 2006,” Campbell said. “But the distinctive difference today is the profile of the buyer. Back then, people really wanted a house but were not qualified to get a mortgage. Today, I am amazed by how many buyers are not only qualified but overqualified.” The median single-family home in Annapolis has jumped 8% in the past year to $476,000, according to numbers Zillow compiled in February. “People are getting priced out of Annapolis,” noted Campbell, who has been a real estate agent in Maryland’s capital for four decades.
DES MOINES, MOINES, Iowa
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Lance Hanson has been in residential real estate for 34 years, but he struggles to make sense of today’s market. On the one hand, homes are more expensive. Properties in Des Moines and neighboring West Des Moines and Ankeny that sold for $200,000 last year are now going for $280,000, and home renovation costs jumped 15% over that time. On the other hand, prices are apparently not going up enough, because homes leave the market after being listed for three days. The high-demand, low-inventory market creates an ethical quandary for Hanson, who manages hundreds of agents at a RE/MAX franchise office. “I get 3-15 immediate offers on each home,” Hanson said. “How do you process that? How do you do right with both the buyers’ and buyers’ agent?”
JUNE 2021
FAIRFIELD, Connecticut
Jonathan Miller, real estate appraiser at Miller Samuel and a Nutmeg State resident himself, pumps out quarterly reports on Connecticut home sales. The takeaways from Fairfield County’s first quarter 2021 report are rather jaw-dropping. The report found the highest number of sales in quarter one in more than 16 years, and the third highest average and median sales price on record. As for housing supply? The lowest level in more than 25 years. For those keeping score at home, Fairfield County’s median sales price for January through March was $489,000. The active listing inventory is 1,679 homes, down 57% from one year ago. And in the tug of war between low supply and high demand, demand for now is winning: the number of homes sold in the southwest Connecticut county were 3,045 in the first three months of 2021 – a 43% jump from one year before.
Georgia
What’s happening in Atlanta is distinct, as there are few zoning restrictions in the increasingly sprawling Southern metropolis. “Atlanta just keeps growing and growing,” said Cleve Gaddis, a RE/MAX agent in the northeast suburb of Johns Creek. Under the 1980s Steinberg Act, Gaddis explained, “The burden lies in proving why people shouldn’t build.” Still, prices are going up and buyers are competing with investors. One Atlanta agent said she’s inundated with radio and YouTube ads by national iBuying companies OpenDoor and OfferPad offering cash for Peachtree State properties.
MANCHESTER, New Hampshire
Jeff Rapson of Coco Realty represents homebuyers and sellers across New Hampshire. In March, he identified a home in Manchester listed at $250,000, as one he thought might be suited to a client, so Rapson signed up for a showing — and waited and waited for an available time. “I finally got something at 7:45 p.m. on a Sunday evening,” he said. “There were 108 showings and 50 offers.” A home that had been listed for $250,000 went for $299,000. “That’s pretty typical,” Rapson said. “Everyone is pretty desperate now. We are probably 30,000 homes behind where we should be with state inventory.”
JUNE 2021
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ATLANTA,
COMMENTARY
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B
rokerages need to look beyond commissions to lure agents Technology, affiliated services and leads all play a role By Chris Heller
The brokerage environment has never been more competitive. There are a multitude of new brokerage models, and agents are competing with online platforms and startups for clients. Brokerages and holding companies are facing increasing upward pressure on commission splits. There has never been a higher volume of venture capital and Wall Street money flowing into the residential real estate industry than in the past few years. Every week it seems like another company announces a significant funding round, goes public through an initial public offering, or through the increasingly popular special purpose acquisition company. At the same time, there are currently 1.46 million Realtors, according to the most recent data from the National Association of Realtors. That membership number is higher than at any other time since the trade association was founded more than a century ago, making competition between those agents as strong as it’s ever been. Competition is also extremely high on the back of a historically low inventory market. There are fewer homes for sale than total Realtors in the United States — and that doesn’t even count the non-NAR real estate agents looking for listings — with inventory consistently staying at record lows on the back of the headwinds created by the COVID-19 pandemic. Housing inventory at the end of February was at a record
low of 1.03 million units, down nearly 30% from the year prior with the typical home selling in 20 days, according to NAR. That represents a two-month supply pace at the February sales rate. During this current period of hyper-competition, it’s one thing to get real estate agents to hang their license with your brokerage, but it’s a whole different challenge to make sure those agents stay for a long time and consistently perform at a high level. Gone are the days where agents only care about commission split numbers. Real estate agents are focused on the complete value proposition that a brokerage can provide. When trying to choose the real estate brokerage that will help them and their business, agents in today’s atmosphere are thinking to themselves, “If I can get leads, help building my team, or better technology solutions, that’s more important than a slightly better split.” And now there are more options than ever before, with traditional brokerages, discount brokerages, 100% commission models, virtual brokerages, and platforms all competing to recruit agents. Agents leave brokerages if they feel like they are not being supported. Agents also leave people more than they leave companies. So if there’s not strong leadership that agents feel very connected to or if they don’t feel like the brokerage and management team are looking out for them, they become susceptible to being recruited away. In this current ultracompetitive environment, the best way to recruit agents is to present your value proposition in a way that an agent sees joining your brokerage as a clear advantage. They may like their current brokerage and broker, but your value proposition must offer them a whole lot more to grow their business and support them. So what should your new value proposition for 2021 look like? And how can you help agents navigate all the noise out there?
Gone are the days where agents only care about commission split numbers.
OPERATE MORE LIKE A LARGE TEAM THAN A BROKERAGE The brokerages that are thriving, and will continue to thrive, are the ones that operate more like a large team than a traditional brokerage. Traditional real estate brokerages have long focused their energy on creating a good culture and environment to make their brokerage an appealing place for agents to hang out and hang their licenses. But that’s no longer good enough in today’s competitive environment.
JUNE 2021
WHAT TECHNOLOGY SOLUTIONS SHOULD BROKERAGES PROVIDE? In operating your brokerage like a team, you also need to make sure you are focusing on providing various tools that save agents time and money, making them more efficient overall. Yes, that means spending on technology, but doing so in a way that emphasizes shared services and connectivity. There are a ton of different technology vendors out there and the industry has reached a point where agents can essentially get whatever they want, whenever they want, to serve whatever need. But with agents working from different technologies, it’s more difficult to assist and coach them. If you are going to run your brokerage more
like a large team, you want everyone using the same system and not working from different technology vendors. It’s easier to provide leads for agents, or help agents convert those leads, when you have them all using the same enterprise CRM. You can then provide support and coaching to agents, as well as streamline the process for providing that support, more easily. The brokerage also needs to get all agents onto the same type of marketing platform, so agents can market themselves in a unique way, but the brokerage can provide that crucial help. If you’re going to assist agents in setting up drip or social campaigns and templates, it’s hard to do that if they’re all using different products. Instead, you can meet the needs of more agents in a timely, more efficient manner if all of their assets are in the same system. OFFER AFFILIATED SERVICES WITH A TWIST Offering affiliated services for consumers isn’t a wholly new phenomenon — it seems like every brokerage these days has, at least, a joint mortgage venture — but growing brokerage companies like eXp Realty and Fathom Realty have put a smart twist on their offerings by marketing affiliated services to agents in a way that incentivizes them. As a broker, you can create a profit-sharing pool or a point The brokerages that system that would allow agents to keep more of the commission as are thriving, and will continue to thrive, they support other facets of the are the ones that business, like a mortgage arm, or title and escrow services. Even if operate more like you’re offering agents more and a large team than a more favorable commission splits traditional brokerage. on the surface, you’re not exactly losing out on crucial revenue because you’re creating another high-performing revenue stream for your brokerage. While you’re creating another opportunity for agents, you’re also offering more services for your clients to service them throughout the entire life of a transaction. So by incentivizing agents with profit sharing or additional money-making opportunities, you’re making sure the brokerage’s affiliated services arm has high attach rates for all of those ancillary businesses. In turn, support through the lifecycle of the transaction becomes a core piece of your value proposition and helps recruit agents and gives those agents another recruiting tool for their clients.
Bio: Chris Heller is the chief real estate officer of OJO Labs, where he’s responsible for shaping partner strategies, creating a cohesive structure between real estate professionals and OJO, and accelerating adoption in the industry.
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Real estate agents joining teams is an increasingly growing trend in the real estate industry. In 2018, NAR surveyed its members and found that more than a quarter of Realtors were part of a real estate team, with many more considering joining one. Teams can often emphasize a differentiated way for agents to share commissions and also create a more general sense of togetherness in a career often marked by being an independent contractor. If you run your brokerage like a team, it’s easier to market yourself for a specific niche, like being known as the brokerage that helps new agents succeed faster or helps experienced agents get to that next level. It could also be as simple as being able to position yourself as the brokerage that can appeal to all types of agents — but you really have to be able to showcase why you’re the perfect fit for different segments of agents. There’s tremendous value in becoming a brokerage that’s known for something specific and it’s much easier for smaller brokerages to pull this off than larger ones, which is why running your brokerage like a team makes it much easier to hone in on and promote your niche. One key area brokerages can operate more like a team is by taking the lead on lead generation. Brokerages should be outright providing their agents with leads, whether it’s through the use of a lead-referral network, which can come at no upfront cost to an agent and promises them a more well-nurtured lead, or traditional lead generation platforms, which can provide a higher number of leads. More leads means a need for a great system to nurture and incubate them. Whether this is done through proprietary processes and technology or through leveraging outside platforms, this too is a must.
COMMENTARY
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t’s time to put Computer Vision technology on your valuation radar Here’s how CV can disrupt the real estate value chain By Andrei Aron and Romi Mahajan
Nearly 200 years ago, one of the great scientists of his time, Charles Lyell, published, “The Principles of Geology.” In this influential work, Lyell extended the notion that changes in the geological record were gradual over time, giving credence to the notion of “uniformitarianism.” Uniformitarianism was cast against the notion of “catastrophism,” which held that huge changes occurred as the result of massive stimulus and were few and far between. Lyellian gradualism was canonical, even in evolutionary biology, before an intervention in the early 1970s by Niles Eldredge and Stephen Jay Gould. Eldredge and Gould posited that the geological record did not support gradualism
will create massive change over a short period in the real estate industry, similar to the punctuated equilibrium example. Computer Vision is a game-changer in the real estate value chain and the inflection point is upon us. The question has gone from theoretical to practical as the pace of innovation accelerates during this period of intense change. So what is Computer Vision, also known as CV? Powered by Machine Learning, CV is the art of teaching computers to see and interpret the same way humans do, whether it’s photos, books and documents, a dancer’s moves or the condition and desirability of a house’s interior. It has been made possible by advances in and reduced cost of computation, the ubiquity
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Computer Vision is a game-changer in the real estate value chain and the inflection point is upon us.
in evolution and, instead, suggested what they called “punctuated equilibrium” in which massive changes happened over short periods of time; in between things were static. Gradualism, they argued, was not supported by the geological record. Analogies are never perfect, but the debate over punctuated equilibrium versus gradualism reminds us of the world of technology and more specifically, of the effects advanced technology will have on the real estate industry. One of these epoch-making technological innovations is Computer Vision. Put simply, Computer Vision
of devices and sensors, cloud-computing, and innovation in software algorithms. CV at scale is only really possible now. Well and good, one might say, but what does this have to do with real estate? Let’s start with a subject at the heart of the industry: valuation. To understand how CV can radically change the valuation industry, a brief tour of existing automated valuation model strategies is valuable. Current AVM models fall on a spectrum between two extremes. On the one hand, we have pure hedonic models that take into account the ordinary property characteristics, such as the square footage and year built. Posed against that are the comparable property models that value a house based on the average of comparable house prices sold in the last couple of years in a marked radius from the subject
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property. Neither of these models captures the and bathrooms, it is possible to do detailed ROI analysis condition of either the sold properties or the on questions like, “Should I upgrade the cabinets or property being valued. countertops before selling?” or “Do other homeowners in This is where CV comes in. MLS listings my area upgrade their bathrooms before selling?” typically have about 20 interior and exterior photos of each listed house. With CV, these These are just five examples of CV at work, but the extensions photos can be quickly analyzed to detect and enhancements are endless. and classify these photos (which is a kitchen, Residential Real Estate is the world’s largest asset class. In which is a bathroom, etc.) and subsequently, the U.S. alone, it is estimated to be between $37 trillion and $40 each room type is rated by a specialized trillion. More than that, it is a bellwether sector that affects the image classifier and given a score or a signifier entire economy. Both booms and recessions occur as a result of (modern, average, dated, etc.). changes in the real estate market. As such, the industry needs CV “object detectors” can then be used to detect individual features like double-wall ovens, dated electric stoves, waterfall islands Neither of these models captures the condition of either the and other “details,” which, to a buyer or a sold properties or the property being valued. seller, are incredibly important and can affect valuation. With this detailed level of condition data, an AVM can do finegrained adjustments, as well as perform more to pull out all stops to the application of the latest technologies accurate comparable property selection and to the marketplace. valuation. Despite the enormous potential and fertile possibilities, CV CV doesn’t only improve AVMs, it also isn’t perfect. Inconsistencies in labeling, imperfections in image enhances other components of the real estate detection, or even a lack of a critical mass of data for the “machine value chain. A few examples: to learn” are issues still being worked on. The rate of innovation 1. Portfolio analysis: Imagine being able and improvement in CV is exponential so any CV solution should to analyze a portfolio of thousands of be scrutinized for extensibility. properties based on inspection or MLS CV is ushering in a new era in real estate. All industries change, photos to get a condition score for every some more rapidly than others. The real estate market is primed property. Now imagine scaling this up to for its most exciting phase ever, and CV will play a huge role in the 100+ million residential plots in the this wonderful process. U.S. 2. Appraisals: Image analysis can be used to help either automate appraisals or to flag properties that appear distressed, high-end or well-maintained. 3. Visual property search: Clustering properties by visual similarity would allow one to search properties by visual characteristics. For example, it could Bio: Andrei Aron is a data scientist at Quantarium where he builds predictive models based on images, text and answer the question, “Show me other numerical data. properties with kitchens similar to the one in the house I just saw?” 4. Satellite or aerial imagery analysis: It can help find which properties have solar panels, pools, outbuildings, or other visible characteristics. Bio: Romi Mahajan is the chief marketing officer at 5. Remodel analysis: Since CV can provide Quantarium, an AI company focused on residential real the condition of rooms such as kitchens estate data, analytics, and innovation.
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young leaders innovating in the housing industry JUNE 2021
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Honoring the next generation of leaders. 33
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Kelli Beckel Megan Bellingham Jacob Bengtzen
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Patrina Agosta
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Seth Appleton Miguel Bain Russell Barnes
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Matt Jones
Tess Bettenay Jennifer Bombardier Bobby Burns
Darcy Chapman Mike Conlon Kristen Cox
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Kirtus Dixon Josh Feinblum Angela Fumo
Matt Garcia Adam Greene Christie Grix
Jamie Kump Jennifer Leonard Britany Luth Joe Mayhew Michael Middleman Allison Mills Ryan Minard Rebecca Morphis Vijay Pandey
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Dan Habib Alec Hanson Marc Hernandez
John Hogan Amy RuthChristabel James Jess Kennedy
Matt Key Alex Khorn Malte Kramer
Jim Paolino Madisyn Rhone Amber Roy Dilly Sanborn-Marsh Nicole Steiner Jessica Thorsheim Andy Walden Breezi Webster Matt Wilson
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Josh Craig Sarah Crossley Louis DaRosa
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Photographer: Steven Visneau | Creative Direction: Emily Carpenter
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Matt Jones: Reshaping the mortgage industry HIS FINGERPRINTS ARE ALL OVER THE RECOVERY OF THE HOUSING MARKET oing into 2020, Matt Jones thought it was going to be a relatively slow year legislately. It was an election year, and typically, everyone turns to politics and campaigning instead of legislation. “Boy was I wrong,” Jones said, who served as senior counsel for the Senate Committee on Banking, Housing, and
Urban Affairs at the time. “It turned into, by far, the most consequential year of the four that I spent on the Hill,” he said. As the reports on the coronavirus started to come out in January and February of last year, it didn’t take long for the questions to start flooding in on how Congress would respond. And for housing in particular, some of the biggest questions that Jones recalls were, “What happens to the people who can’t pay their rent or mortgage?” and “How are mortgage servicers who collect the monthly payments and advance them to investors going to stay in business when they’re suddenly not collecting payments?” Those were massive, economy-wide problems that needed to be immediately addressed, he said. In the run-up to the announcement of the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, which was the government’s response to the economic fallout from the COVID-19 pandemic, Jones served as senior counsel to Senate Banking Committee Chairman Mike Crapo, R-Idaho. Looking back on that period, the CARES Act was signed into law by former President Donald Trump on March 27, 2020, and in the five or six days leading up to it becoming law, Jones could be found almost 22 of the 24 hours in a day at the office. This would turn out to be the week that Jones said he is probably most proud of in his career. Jones was the principal drafter of the mortgage forbearance program enacted through the CARES Act, which reshaped the mortgage industry and enabled more than 4 million homeowners to hit the pause button on their mortgage in the midst of a global pandemic. Drafting Section 4022 of the act, he wrote the part that covered the nationwide foreclosure moratorium and the consumer’s right to request a forbearance. And his role didn’t stop there. He followed this up by playing a key role in drafting the $25 billion emergency rental assistance program enacted this past December. But it’s not simply Jones’ monumental role in creating housing relief during the COVID-19 pandemic that makes him a Rising Star, it’s his hard work, determination and impact in the housing finance
industry even before that period, which earned him the title. Shortly after getting his undergraduate degree at the University of Michigan, Jones got involved in the mortgage business, which included working as a loan officer for a couple years at Amerifirst Home Mortgage, among other roles at the company. From there, he went to law school at Georgetown University, which brought him out to D.C. and eventually landed him an opportunity at the Mortgage Bankers Association on the residential policy team. “At that point, I had no expectation or goal of becoming a Hill staffer. It actually was not something that I was planning on doing or wanted to do,” he said. But following the 2016 election, Jones said that someone reached out and said that they were looking for someone to work on the Senate Banking Committee who knew housing and knew mortgage. “Since that happened, I’ve never looked back, and it's been a blast,” he said. When he’s not in the thick of drafting legislation, Jones spends most of his free time with his wife and four-year-old daughter, who, given the impact of the pandemic, doesn’t remember a world where her dad’s not home all the time. And as busy as D.C. has been, Jones said that he and his daughter have the same ritual every night where he helps get her ready for bed. “It's just kind of a reminder about my priorities in life. Because certainly, my job is a big, time-consuming aspect of my life, but every night, I never forget about those rituals with my daughter, and it kind of puts in perspective what's really important,” he said. Flash forward to 2021, more than a year into the pandemic and a new administration, Jones now serves as senior counsel for the U.S. Senate Finance Committee, following Sen. Crapo when he moved to the committee. Still tapping into his expertise on housing finance, he serves on the tax team where he works on anything that deals with housing, such as the mortgage interest deduction, the Low-Income Housing Tax Credit, opportunity zone implementation and more. From his work on the CARES Act to the tremendous amount of time he spent on GSE reform, Jones exemplifies what it means to be a Rising Star. And he is still just getting started when it comes to his impact in the industry. “I want to continue to be involved in the housing world,” Jones said. “I enjoy it a whole lot and enjoy the people I've gotten to work with. There have been some really cool people I've gotten to know, and want to continue to be involved in this space and keep having fun in it.”
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Matt Jones | Senior Counsel | U.S. Senate Finance Committee | 28
Rising Stars drive housing forward despite unprecedented
Patrina Agosta
challenges
VP, Lending Support United Wholesale Mortgage Age: 29
This year’s class of Rising Stars matches the recording-breaking and unparalleled year that the housing industry experienced in 2020. These 50 young disruptors come from all sectors of housing – mortgage, real estate, fintech, servicing and more – and pushed beyond the challenges the year brought. Blazing a new trail in a year that came with no road map, this class of Rising Stars tapped into their core strengths, spearheading the conversations that moved the market forward. And thanks to their dedication, hard work and drive, the housing sector is more prepared than ever before to successfully navigate 2021 and beyond. The
following
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spotlight
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HousingWire’s 2021 Class of Rising Stars and their remarkable impact on the industry.
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Patrina Agosta joined United Wholesale Mortgage in 2018 as part of UWM’s Business Innovation Group rotational program. After Agosta’s rotation, she quickly emerged as a leader within the operations team at UWM, becoming the vice president of lending support in 2020. In her role, she leads over 1,100 team members and focuses on large-scale enhancements that will take her team to the next level and keep UWM a leader in operational efficiency. Agosta leads seven different teams that support all areas of UWM, from the beginning of the loan process to the end. In every role she has held at UWM, Agosta has kept UWM’s culture at the forefront of her responsibilities, including the company’s core values. Agosta’s passion and drive to cultivate strong relationships with her team have been a key factor in her success as a leader. What is the best piece of advice you have ever received? “At UWM, I have been fortunate to be surrounded by and learn from some of the greatest leaders in the industry. I was given advice early on as a leader to invest in our team members and make them the priority each day.”
Seth Appleton President MISMO | Age: 39
What is one habit that has helped you succeed? "Always keep learning.”
Miguel Bain Managing Director, Portfolio Retention Homepoint | Age: 35 Miguel Bain joined Homepoint in August 2020, taking on the role of managing director of Portfolio Retention. Since joining the company, Bain has been keenly focused on mitigating portfolio runoff and bolstering loan recapture, which requires creativity and strategic thinking. Bain has led the charge on a multitude of IVR adjustments, resulting in a better customer experience as well as a way to accurately flag customers who would benefit from an interest rate reduction. These adjustments have enhanced Homepoint’s ability to field more customer calls and have led to a 10 percentage point increase in the company’s handled call metric. As a senior leader, Bain makes sure that his actions are aligned with the company’s overarching goals and understands the importance of flexibility to keep up with the ever-changing needs of his customers and the business. What is the best piece of advice you have ever received? “My dad once told me that no matter what secular path I pursued, I should handle my business as if I own the company. That mindset translates to being accountable, taking a vested interest in the firm’s success, and making sound, pragmatic decisions. I’ve reflected on that advice early and often throughout my career.”
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Russell Barnes Senior Product Manager Sales Boomerang Age: 29 Sales Boomerang Senior Product Manager Russell Barnes exhibits an understanding of — and passion for — the mortgage business that belies his short tenure in the industry. With Sales Boomerang’s “No Borrower Left Behind” mission as his guiding light, Barnes has helped transform the way lenders approach borrower retention and, in turn, how borrowers value their lender relationships. Barnes works diligently to advance mortgage technology and the borrower experience for the entire industry. His analytical approach to problem solving and collaborative manner is informed by a unique professional background as a licensed attorney and CPA. Today, Barnes’ valuable contributions earned him a recent promotion to a senior role on the product team. What is the best piece of advice you have ever received? “My boss told me as a product manager it is important to live in the problem space. You will be most successful if you start by gathering a deep understanding of what the user’s problems are, then pool your resources and speak with those around you to come up with the best solutions to test. If you limit where the solutions come from, or try to come up with them all on your own, you will often miss the best ideas.” 35 ❱ HOUSINGWIRE
Seth Appleton has spent his career advancing housing initiatives that benefit consumers, including on Capitol Hill as chief of staff for U.S. Congressman Blaine Luetkemeyer, a senior member of the House Financial Services Committee and former chairman of the Housing and Insurance Subcommittee and Financial Institutions and Consumer Credit Subcommittee. Appleton was unanimously confirmed by the U.S. Senate to serve as assistant secretary for policy development and research with HUD and also served as principal executive vice president of Ginnie Mae. Here he oversaw efforts to attract record capital to support affordable homeownership and rental housing opportunities for millions of Americans and advanced key modernization initiatives while steering the organization through the pandemic. Appleton is now advancing the mortgage market’s digital future by developing and promoting the adoption of industry standards for the real estate finance industry as the first full-time president of MISMO. His vision for MISMO is to deliver timely and relevant industry standards that benefit the entire mortgage finance industry. To achieve this mission to accelerate the market’s digital future, Appleton is hard at work bringing stakeholders together to solve key business challenges.
Megan Bellingham Head of Mortgage Operations Better.com | Age: 31
Kelli Beckel Branch Manager PrimeLending Age: 40 Kelli Beckel joined PrimeLending in 2015 as branch manager in the company’s Melbourne, Florida branch and quickly made her mark, successfully spreading the company’s brand in their fast-growing Southern Coastal Region. Beckel is helping pave a new digital era for others in mortgage, including her loan officers and fellow branch managers, by showing them how to embrace new processes and apply the latest digital media marketing strategies to the mortgage industry. Responsible for managing all aspects of the branch production from operations, production, P&L and recruiting, Beckel ensures her talented team of mortgage professionals have the training, resources and support needed to achieve success. In 2020, Beckel was the top producing loan originator in her region while leading her branch to a new all-time record level of production. Beckel’s personal production increased by 72% while her branch increased by nearly 60% in volume.
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What is one thing you would tell a younger version of yourself? “Never settle for ‘no.’ Redirection of ‘no’ is continual pursuit of your goals with passion driven dedication to flip the ‘no’ to a ‘yes.’ However, the game is not over at ‘yes.’ That’s when your journey to success begins.”
As one of Better.com’s first employees, Megan Bellingham built the company’s 3,000 person operations team from the ground up, joining in a customer-facing capacity and rising up into a leadership role with a team that scaled rapidly under her. Despite having a background in mortgage, she constantly pushes Better’s operations team to transcend the industry’s limitations by interweaving technology and process improvement. Bellingham is the brains behind Better’s fulfillment operation. Her skills laid the early foundations for the vast majority of the internal processes that allow Better to close significantly faster than the average lender. Under Bellingham’s leadership, the mortgage operations team grew 340% in the last year. And amid the significant demand, Better. com’s business has grown 5x and is currently funding $4 billion a month in loans and helping thousands of customers, thanks in part to Bellingham’s leadership. What is one thing you would tell a younger version of yourself? “I would tell myself to be comfortable with being uncomfortable. Being outside your comfort zone allows you to grow and to be open to a broader set of opportunities that have the potential to drive meaningful impact within an organization.”
Jacob Bengtzen Director, Strategic Programs & Chief of Staff Finicity | Age: 27 During Jacob Bengtzen’s four years at Finicity, he has grown from an inside sales representative to the CEO’s very own chief of staff, helping advise and assist with senior-level initiatives. His enthusiasm and passion for Finicity, the marketplace and better financial solutions also bring a much-desired energy to the company’s day-to-day activities. As chief of staff, Bengtzen partners closely with the executive team to ensure focus and achievement of company priorities and targets while strengthening partnerships with a select group of strategic clients. Bengtzen’s input and overall marketplace awareness are critical to driving Finicity’s growth and impact. What is one habit that has helped you succeed? “One habit that is difficult to sustain but always leads to progress is having a learning mindset. I have found that when I try to learn as much as possible from the various things I do at work and outside of work it leads to success. That doesn’t mean I avoid failure but I tend to connect more dots when meeting with partners, working with internal teams, and solving problems. I am also more optimistic, curious, and open to other points of view as I expand my abilities and knowledge through continuous learning.”
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Tess Bettenay Director, Business Operations Spruce | Age: 31
What is the best piece of advice you have ever received? “Don’t focus too much on the time it takes to achieve something – time passes no matter what! Just take small steps forward in work and in life, and eventually, you will look back and see the progress you've made.”
Jennifer Bombardier VP, Talent Acquisition Radian | Age: 39 Amid a global pandemic that required the adoption of new technology, Jennifer Bombardier led Radian in creating an agile, technology-enabled recruiting process that answers the new need for high-volume hiring across a nationwide talent pool. Despite the many unexpected challenges of recruiting in a remote environment, under Bombardier’s leadership, Radian onboarded over 575 new employees in the last year, experienced a 17.2% increase in applications, generated 260 leads via chatbot and accelerated the time to hire by 8.3 days. Bombardier also led the charge to reinvent the talent experience with virtual onboarding enhancements and the launch of an alumni network. What is the best piece of advice you have ever received? “My father gave me advice long ago that has served me well throughout my career: ‘Work hard for what you want. Good things don’t come easy.’ Both of my parents emphasized the value of hard work from a young age. While I didn’t always understand the long hours and commitment when I was younger, I now appreciate why my parents taught me to follow that mantra. It isn’t always easy, but investing the extra effort to deliver quality and meaningful work not only makes an impact, but it also feels good!”
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Bobby Burns VP, Product Management OJO Labs Age: 35 As vice president of product management at OJO Labs, Bobby Burns is ushering in a new level of transparency to the real estate industry. Over the last two years, Burns has spearheaded the development of the real estate industry’s first and only end-to-end platform for home buying and selling, providing support to consumers and real estate partners alike. A customer experience visionary, Burns has championed the company’s personalized experiences, relentlessly innovating to better serve consumer needs and preferences through solutions like Top Matches, which delivers effectual home recommendations throughout the OJO Labs platform. Throughout his tenure at the company, Burns has led the development of unprecedented products and experiences to address systemic issues directly and help consumers overcome barriers within the home-buying journey with personalized guidance and support. With his commitment to transparency and bold approach to innovation, Burns embodies the OJO Labs purpose, which is to empower every homebuyer and seller — no matter their race, class, or gender — to find the right home for them. What is the best piece of advice you have ever received? “The best computer science teacher that I ever had would say: ‘First, do the difficult. The impossible only takes a few more lines of code.’"
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A natural leader, Tess Bettenay excelled early in her career, managing a team of 25 direct reports by age 25. At Spruce, Bettenay brings a unique combination of financial and industry expertise with a natural passion for problem solving, building the process management framework at the foundation of Spruce’s core business from the ground up. Propelled by Bettenay’s organizational and strategic leadership, Spruce is building the one-click checkout for real estate transactions, shifting a historically offline ecosystem to one that is more predictable. The infrastructure built by Bettenay and her team scaled company growth 450% over the last 12 months and generated tens of thousands of transactions to date. With a deep understanding of clients and the end consumer, Bettenay’s perspective and leadership have played a critical role in executing all strategic initiatives across Spruce. From client management, regulatory changes, external partnerships and new offerings, she has translated ideas into action.
Mike Conlon Program Management Senior Tech Lead, Strategy and Solutions Division Freddie Mac Single-Family Business | Age: 34
Darcy Chapman VP, Strategic Partnerships Auction.com Age: 37
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Hired as vice president of Strategic Partnerships 13 months ago, Darcy Chapman wasn’t intimidated by the huge task of managing and building a book of clients in a challenging remote environment. Not only did Chapman grow her client base, but she has also won the confidence and trust of her peers and many others across the auction industry. With a 15 year background in the mortgage industry, Chapman forged her way through a new industry during a challenging time with grit and determination. Despite the challenges of 2020, she empowered herself to get the job done, reaching out to people to figure out who to contact to enact action. She even signed major clients during the pandemic, getting her recognition from the executive team. Chapman is also dedicated to giving back, as seen in the recent Auction.com fundraising campaign for Feeding America, where Chapman was the event’s highest fundraiser. What is one habit that has helped you succeed? “I try to always remember something personal about people I meet. Finding a connection creates the opportunity for meaningful relationships. In the last year, for example, I have met several industry colleagues who share a love for Peloton. As a result, we have been able to encourage one another, compete, and talk about classes. I have found that one of the best ways to strengthen a professional relationship is through personal connection.”
Mike Conlon has been instrumental in leading Freddie Mac's emerging and accelerating efforts to deliver API-driven services. Conlon brings a blend of business, collaboration and leadership skills to the team, which in turn drives the design and development of transformative API services. In the past year, Conlon has influenced and driven innovation while helping the Strategy and Solutions teams meet the demands of the rapidly changing market. Conlon has demonstrated excellence through his innovative thought leadership in the identification and design of services and APIs that are focused on breaking down barriers to the digital mortgage experience and ensures that these services fully align with what Freddie Mac clients are trying to achieve. What is the best piece of advice you have ever received? “Get comfortable being uncomfortable. You won’t always have a recipe or script to follow, so can you effectively work through ambiguity and manage change? This flexible mindset empowered me to tackle innovative and strategic projects with confidence that the team would reach the right destination even if we were forging a new path.”
Kristen Cox Senior Leader, Flood Solutions CoreLogic | Age: 39 Over the past 15 years, Kristen Cox has embodied CoreLogic’s spirit of intelligence and performance, continuing to challenge the status quo. Cox led the CoreLogic flood solutions division through its biggest year ever as the company addressed all-time record volumes over the course of 2020. With volumes up about 30%, Cox and her operations team delivered efficiently and enthusiastically to support their clients’ needs. Cox employs a visionary approach to creating new workflow methodologies that improve performance and enable lenders to improve their consumer experience. Cox works to adapt as clients’ needs change and evolve, creating new tools for the toolbox while staying true to CoreLogic’s goal of unrivaled intelligence and unprecedented performance What is the best piece of advice you have ever received? “Be your own advocate! Don't expect to get the things you want without asking for them. It could be asking to work on a specific project, to gain new responsibility, to secure a learning opportunity, a raise, or even a promotion. This can be uncomfortable, but if you focus and develop a plan on what the ask is, how your strengths fit, and how you will impact the organization, you will attain your goals.”
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Josh Craig Chief Revenue Officer Lima One Capital | Age: 36
What is the best piece of advice you have ever received? “One of my favorite coaches used to say ‘Speed and hard work don’t take days off.’ Growing up playing competitive baseball, you quickly learn that some days you just don’t have your best stuff and there’s nothing you can do about it, but that doesn’t mean you’re going to lose the game. Speed and hard work, if properly trained for and engrained in your approach to the game, are always there and can lift you past any shortcomings that day to victory.”
Sarah Crossley Director of Marketing FormFree | Age: 26 When Sarah Crossley joined FormFree four years ago, her gift for assimilating and communicating the fintech’s products and vision quickly earned the respect of FormFree’s executive team. Now, as director of marketing, Crossley has directed UI/UX on an upcoming product release and spearheaded its 2021 brand overhaul while directing a ground-up corporate campus build and sustaining the firm’s American Red Cross commitment. Crossley directs customer and external communications for the firm as it verifies borrower data for more than 3,000 lender clients, and over the last year, Crossley has served a central role in the firm’s highest-level projects. She also oversaw the ground-up build of FormFree’s new corporate campus, contributing to design specs, interfacing with builders, conducting on-site inspections and directing all aspects of design and decor. What is the best piece of advice you have ever received? “Cultivating deep relationships, and not drawing a strict line between business and personal. People want to work with people. Being authentic and understanding what drives my peers and excites them in their lives helps strengthen our relationships and build trust that will last a lifetime.”
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Louis DaRosa VP of Engineering ICE Mortgage Technology Age: 39 Louis DaRosa is transforming traditional retail, wholesale and correspondent lending, by enabling lenders to adopt the level of automation that they are comfortable with. Throughout the development of a recent platform that he worked on, DaRosa provided leadership to keep teams aligned, organized and progressing. DaRosa tirelessly worked with every organization involved in the project and led the way to build this solution and execute its rollout flawlessly. Regardless of "where" challenges presented along the way, and which department/team was responsible, DaRosa stepped in and brought teams together to come up with working solutions and processes. He was the mastermind behind the scenes and also served as the customer-facing voice of both planning and engineering, gaining great respect from the lender community and his internal teammates. What is one thing you would tell a younger version of yourself? “I was told that I was going to learn and grow throughout my career more from my mistakes than any of my successes. For me, this led to two key principles that I strive to always follow: The first is that I have to constantly push myself outside of my comfort zone to new challenges and know that mistakes will happen. The second, and probably most critical aspect, is shifting my personal mindset around making mistakes. The negative death spiral that can happen when we feel like we have failed is a trap."
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As chief revenue officer, Josh Craig has led Lima One Capital's sales organization to unprecedented heights despite the uncertainties caused by COVID19 and its ripple effects on the real estate investment market. Craig’s leadership has enhanced Lima One’s position as one of the top five originators in the business purpose lending space by leading a national sales team that is consistently setting records across the nation. Craig’s leadership as a member of the company’s executive team and his strategic impact span across the company, where he has introduced multiple product and process enhancements that are catapulting Lima One ahead of the competition and into the future.
Josh Feinblum Cofounder Stavvy | Age: 37
Kirtus Dixon SVP, Agent Engagement & Development eXp Realty Age: 39
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Kirtus Dixon has catalyzed the professional growth of eXp’s more than 46,000 agents as the leader of eXp’s education program by developing curricula that empowers agents to teach others and reach their top potential. Over the last 12 months, Dixon has expanded eXp’s agent development program dramatically as the program now delivers over 50 hours of live, on-demand digital training every week to eXp’s agents. Dixon also created new curricula tailored for agents’ experience levels and leveraged top agent instructors to deliver compelling content. Dixon’s approach to online education recreates the collaboration and connectivity of in-person training with the convenience of digital classes. Coupling digital and live training, Dixon helped agents grow their businesses. He’s also an active supporter of eXp’s diversity and inclusion effort, ONE eXp. What is one thing you would tell a younger version of yourself? “I would tell my younger self and anyone looking for guidance to pursue progress in all areas of life, most importantly your mindset, skillset, toolset and health. Most people strive for high performance or achievement in only one area and neglect the need for continuous personal and professional development. Build the best, most complete version of yourself. It will work out great!”
Josh Feinblum is a cofounder of Stavvy, the fully-integrated digital mortgage platform, where he leads product, engineering, people and finance. With an MBA from MIT Sloan, Feinblum has focused his career on the intersection of technology and safety, and has been responsible for building and leading teams that oversee cybersecurity, privacy, trust and safety and fraud-prevention. His teams are tasked with tackling some of the world’s most complex challenges in these areas. Feinblum’s wealth of experience and diverse skill set has culminated in the formation of a fintech solution for the real estate industry that is leading the charge in offering safe, secure, at-home closing experiences when it is more necessary than ever. Together with his team of employees, Feinblum has led the charge in positioning Stavvy at the forefront of this global transformation. His optimism, ingenuity, and perseverance in the face of an unprecedented global crisis enabled him to rise to the challenge, and his leadership skills became stronger because of it. What is one thing you would tell a younger version of yourself? “Reimagine failure. Each time you experience failure it's an opportunity to grow if you approach it from a place of vulnerability. Fail gracefully, expeditiously, and with an optimistic learning mindset.”
Angela Fumo SVP of Human Capital Wyndham Capital Mortgage | Age: 33 Having developed professionally in the mortgage industry first in operations and later in risk and then into corporate strategy, Angela Fumo has taken her experience and focused it on her company’s greatest asset – its employees. Fumo appreciates the value that employees play in a company’s achievements and has the ability to build a culture of values, diversity, inclusion and success in a rapidly growing organization. Thanks to an initiative Fumo had already begun implementing, Wyndham doubled its number of employees from 250 to 500 in 2020 and plans to hire another 400+ this year. As Wyndham Capital focused on the adoption of robotics and automation within the industry, Fumo and her team did the same to increase efficiency and enhance the employee experience. What is one habit that has helped you succeed? "Having the courage to ask questions – about myself, about others, about certain work processes – is something that plays a big part in my career. There is so much power in just a few words. How are you? How does that work? Having the courage to ask a simple question or ponder an alternative way of doing things can help you connect, find commonalities, and deepen a personal relationship with someone."
JUNE 2021
Matt Garcia Senior Loan Officer Supreme Lending | Age: 39
What is one habit that has helped you succeed? “My constant desire to improve. I've never been comfortable resting on previous success and thinking I can't continue to improve. It's what has helped me push past every goal I set for myself and exceed goals no one thought possible. My father instilled in me at a young age you can always do better. That is what has guided a lot of my success.”
Adam Greene Retail Branch Manager Sierra Pacific Mortgage | Age: 39 Adam Greene started in the mortgage business at 22 years old and for the last six years has been managing one of the most profitable branches at Sierra Pacific Mortgage. Last year Greene funded over 800 closings, of which 80% was new purchase business. He was named a top producer for 2020 and continues to expand the market for his team across the south. Greene is skilled at recruiting, training, and supporting other top producers, and staff appreciates his attentiveness and commitment to developing them personally and professionally, which in turn creates operational efficiencies from a motivated workforce. Embodying Sierra Pacific’s Pillars of Success, Greene has grown his staff and business roughly 25% per year since 2015. When he’s not at his day job, Greene is the president of the local BNI Group, a member of the 100 Men Who Care Group in Knoxville, a volunteer soccer coach, and an active participant in his church. What is one thing you would tell a younger version of yourself? “Take risks in business, put yourself out there, and don’t be afraid to fail. No one has ever made the correct decision 100% of the time. The mistakes are where we learn and improve ourselves.”
JUNE 2021
Christie Grix Head of People Ops Maxwell Age: 32 Through her strong leadership of the People Ops team at Maxwell, Christie Grix has been instrumental in growing the company’s workforce quickly and considerably over the past year. By adding over 154 employees in 2020, Grix has enabled Maxwell to scale the services it offers to its customers, resulting in more than $1 billion in loans processed and underwritten per month on the platform. At the same time, she has worked tirelessly to push forward industry-leading benefits and policies that have resulted in a high eNPS score among onboarded team members. Grix's passion for employee happiness, vibrant company culture and diversity and inclusion has created a measurable boost in worker satisfaction, with a current employee satisfaction score of over 86. What is one habit that has helped you succeed? “I’ve tried my very best to say ‘yes’ to any project or responsibility thrown my way where I had absolutely no idea what I was doing. My career so far has been in startups. Oftentimes, you get the opportunity to tackle something new simply because nobody else knows how to do it either. Candidly, it hasn’t always gone swimmingly out of the gate but saying yes to my unknowns has taught me to think on my feet and network with experts. It’s allowed me to gain new skill sets and better understand my company and industry as a whole.”
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With more than 15 years of mortgage industry experience, Matt Garcia knows the mortgage business inside and out. Armed with knowledge and experience on both the sales and operations sides of the business, Garcia closes loans better, faster and smarter than most. Garcia’s team has led Supreme Lending in production for six consecutive years, bringing in $197 million in total loan volume (nearly a 60% increase over 2019) and closing 686 home loans in 2020 alone. Garcia’s personal production in 2020 was $160 million (a 39% increase from $115 million in 2019), with 549 closed loans (a 79% increase from 435 in 2019), placing him as the third-highest producer at Supreme and among the elite mortgage originators in the country. Garcia embodies the mission of Supreme, demonstrating this on a daily basis in the extra hours and efforts he puts in to deliver the best experience possible for his customers and team.
Alec Hanson SVP Production, Pacific Southwest Division loanDepot | Age: 39
Dan Habib EVP MBS Highway Age: 34 It is hard to make your own mark as the son of Barry Habib but Dan Habib has shown that he knows the trends of the industry as executive vice president at MBS Highway. However, Habib has emerged as an industry leader in macroeconomic news, trends and communicating them in a manner that resonates with all originators. PRMG and many organizations rely on the content and knowledge provided daily by Habib and the entire MBS Highway team.
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What is one habit that has helped you succeed? “Consistency - not just in business, but across all aspects of life. We all fail at times, but effort is something that you can control. By doing the things you need to do in order to be successful on a consistent basis, you will greatly increase your chances of success. Whether it's consistency at work, in the gym, your relationships, or your diet, it all boils down to taking ownership and control over your choices and mind. A quote I love is: ‘Those that say they can't and those that say they can are both right.’ The biggest limit we often have is the limit we set on ourselves. Through consistency and belief, I believe you can achieve anything you want in life.”
Alec Hanson’s career in lending was off to a good start in 2004 as he was ranked the No. 1 rookie originator in the country by Scotsman Guide, with a personal best origination year of $185 million. Now, Hanson leads a $7 billion division for the No. 2 nonbank retail lender (No. 5 overall), is an author, podcast host and recognized thought-leader throughout the mortgage industry. Hanson leads by example, driving behavioral change and evolving the sales tactics of his team. He is also currently leading loanDepot in managing one of the largest salesforce teams, funding over $7 billion annually. Besides the coaching and mentoring, he performs for all the LOs at loanDepot, actively pushing the narrative forward publicly for all local mortgage professionals with a weekly podcast, live streaming coaching sessions and social media engagement. What is the best piece of advice you have ever received? “Someone told me one day that I was an extra in the movie of someone else's life. As a leader, that piece of advice has framed my leadership journey. When we as leaders realize it's not about us, but rather about how we enrich, support, encourage, motivate, coach and inspire those around us, we transform our personal journey.”
Marc Hernandez EVP, Retail Lending Alterra Home Loans | Age: 39 Marc Hernandez joined Alterra Home Loans in March of 2015 as an area manager in Chicago, Illinois and quickly worked his way up the ranks, which led to his most recent promotion to executive vice president of retail lending in July 2020. In his current role, Hernandez and his team are responsible for the success of more than 50 home loan branches that generate $1.2 billion in yearly loan volume. Hernandez is a passion-driven and mission-focused leader who has advanced his career by keeping true to his principles. As a Latino executive, Hernandez understands the cultural nuances of the borrowers Alterra serves. Upon being promoted, he established a management team of industry professionals with the culture competencies that fuel Alterra’s mission and purpose. Hernandez led this team through record-breaking volume in the second half of 2020, ensuring Alterra’s culture thrived while maximizing revenue and improving performance and productivity that elevated the previous standards. What is one thing you would tell a younger version of yourself? “I would tell my younger self that the extra push and long hours will pay off and the more you put in, the bigger rewards you'll reap in the future. I'm proud of my work ethic but there's always room to increase your output.”
JUNE 2021
John Hogan Senior Director, Marketing Homesnap | Age: 35
What is the best piece of advice you have ever received? “It's not how you perform when you're experiencing a peak, when things are going well, it's how you perform in the troughs, when things aren't going your way, that determines who you are as a professional and as a person.”
Amy Ruth Christabel James Director RiskSpan | Age: 37 Amy Ruth Christabel James has taken a leading role within RiskSpan as an innovator who is automating a segment of housing finance that has traditionally been mired in redundant, manual processes. James has developed several financial, reporting and MBS analytical tools using platforms, including Excel/VBA, INTEX, and Bloomberg. Her specific expertise with INTEX (an analytical platform for structuring mortgage-backed securities) also extends to its CDI Scripting Language for structured products. This broad knowledge base affords James an uncommon ability to effectively train and lead others in end-to-end valuations of MBS and other structured products. What is one habit that has helped you succeed? “The one habit that has helped me succeed is my absolute infatuation with pursuing excellence in everything I am tasked with! I have spent the vast majority of my professional career working remotely, which meant I did not have the comfort of walking over to the next cubicle if I ran into issues, was unfamiliar with a topic or did not know a subject! My thirst to excel professionally and in every task often led me wanting to understand topics conceptually and spending time reading, researching, and learning it in its entirety and not merely skimming the surface on it.”
JUNE 2021
Jess Kennedy Co-founder & COO Beeline Age: 38 After years of working as a real estate and finance lawyer, Jess Kennedy understood that getting a home loan was at best unsexy, and at worst a nightmare, which is why she jumped at the opportunity to take on the challenges of fixing it. Launching Beeline as co-founder and chief operating officer, Kennedy navigated the leap from esteemed lawyer to entrepreneur, leader and pioneer with all the determination and agility — and it paid off. A non-traditional C-suite member, Kennedy rolled up her sleeves to work side-by-side with every department to turn Beeline into a significant player in the mortgage and real estate industry, launching never before seen proprietary technology to boot, all within a year. What is the best piece of advice you have ever received? "From a very early age, my mother drilled me every day to ‘treat others the way you want to be treated.’ It has been my beacon for tethering every decision and action to empathy for others. When people feel that you understand them and will try to do the best for them, they will do the same for you and that fosters a really positive professional and personal life because ultimately people come first.”
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As senior director of marketing, John Hogan oversees Homesnap’s product, retention, acquisition and brand marketing. Hogan works to ensure Homesnap agents understand and engage with all of the value Homesnap gives them. Given that Homesnap’s core and premium products are mostly self-serve-driven, the marketing function plays an outsized role in driving results. When Hogan first joined Homesnap in February 2018, he oversaw the product marketing team which is responsible for maximizing revenue, conversion rate and retention for Homesnap’s paid products. He quickly proved his expertise and stepped in to run the entire marketing function in February 2020. Since then, Hogan has grown the team by over 60% and promoted impressive employees. In 2020 alone, the marketing team drove key initiatives that increased overall agent usage of the Homesnap app by nearly 50% and agent adoption of Homesnap Pro+ by over 300%.
Alex Khorn AVP, Margin Management First Guaranty Mortgage Corporation | Age: 35
Matt Key Director of Sales, Data Solutions First American Data & Analytics Age: 40
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Matt Key started his career with First American in 2005 in the customer retention department and worked his way up. Since then, Key has held nearly every customer-facing role in the organization. Growing up in the real estate data industry with the division that pioneered the concept of real estate data provided Key with a unique perspective and insight into customers’ needs. His insight helps drive more confident decisions and ultimately enhances customer engagement and interaction. Over the past 12 months, Key and his team have significantly grown the data licensing business in new and rapidly growing industry sectors, such as proptech. Furthermore, over the past two years, the company has doubled the number of available data sets that are offered to customers. Throughout his career, Key has leveraged his ability to get at the heart of clients’ needs to lead a team that develops customized solutions that increase client productivity and garner greater ROI. What is one thing you would tell a younger version of yourself? “Take more risks with things that are unknown and be willing to fail. I think the inability to fail, and learn from that failure, is what keeps a lot of people back. I wish I had learned that much sooner in my career.”
Alex Khorn has been at FGMC since 2009, holding several different positions ranging from operations to secondary markets. Now as assistant vice president of margin management, Khorn has made a huge impact by helping form the wholesale channel and adapting to last year’s quickly-changing market conditions. He has also been instrumental in the non-QM space. He is a true “Mortgage Maverick” because of his leadership in successful capital markets strategy and his ability to conquer projects like no other. Building an entire channel from scratch might be an overwhelming proposition for others, but Khorn was eager to jump in when FGMC announced it would be relaunching the wholesale channel. From creating the products, pricing them out, and managing partners like Optimal Blue, he was able to develop a channel positioned for strategic growth in the market. What is one habit that has helped you succeed? “Always trying to stay positive. Maintaining a positive attitude has allowed me to keep a level head during the most stressful of situations which we often come across in a volatile mortgage market. Having a positive attitude and outlook also allows me to better collaborate and build relationships with internal and external business partners within the industry.”
Malte Kramer CEO & Founder Luxury Presence | Age: 31 As the CEO and founder of one of the fastest-growing real estate tech companies in North America, German native Malte Kramer is leading the next generation of real estate software. At 31 years old, Malte is building a platform to serve the top real estate agents in the country. In 2020, Luxury Presence ranked No. 322 in the INC 5,000 list of fastest-growing companies in the U.S. In 2020 alone, the Luxury Presence team grew from 35 full-time employees to over 80. Luxury Presence also launched new partnerships with several national brokerages and released its new website platform 'Presence'. Under Kramer’s leadership, Luxury Presence has become a top marketing company for successful agents and the company's client list boasts 60 agents and teams who were named to the Real Trends “The Thousand” List. What is the best piece of advice you have ever received? “The best advice I ever received was in an article by Ben Horowitz called ‘Which Way Do You Run?’ In the article, he talks about facing your fears and worries head on. I believe this is great advice for anyone, but especially for optimistic founders and CEOs. If I know deep down that something is wrong, I force myself to confront that reality right away. It's always uncomfortable in the moment but it's a lot better than missing a threat or having a small issue linger and turn into something big.”
JUNE 2021
Jamie Kump Director of High Growth Accounts Qualia | Age: 30
What is the best piece of advice you have ever received? “Early on in my career, I had a boss that taught me the importance of always looking for new solutions in getting from point A to point B in my projects and goals. This wisdom has helped guide me throughout my career. While some strategies hold true, I have often found that as time goes on certain strategies stop working effectively and new paths need to be discovered. My goal is to find the paths that simplify the process for our customers every step of the way."
Jennifer Leonard VP of Brand Strategy Association of Independent Mortgage Experts | Age: 37 Jennifer Leonard's experience as a seasoned marketing professional has allowed her to raise AIME’s brand strategy to new heights, becoming an integral player in the mortgage industry. Since joining the broker channel, Leonard has immersed herself in all things mortgage and in the process became highly aware of the need for effective marketing to help aid the wholesale industry in growing broker market share. With over 10 years of experience in high-level marketing and communications, Leonard brings her insights in brand development, content marketing and social media to the forefront of the wholesale mortgage industry by developing communication strategies and targeted campaigns to support brokers and educate and inform consumers. What is the best piece of advice you have ever received? “The best piece of advice I've ever received is to strive for progress, not perfection. A previous mentor in my career explained that no matter how thorough, detailed and prepared you are that there is always room for improvement. But waiting to launch a project or campaign until it's perfect can be crippling to business momentum and detrimental to progress. Now I plan thoroughly, trust my team and remain agile so progress continues to move forward.”
JUNE 2021
Britany Luth SVP of Best Practices Finance of America Reverse Age: 36 From loan processor to senior vice president, Britany Luth has proved herself up the ranks to lead best practices for one of the largest reverse lenders in the industry — revolutionizing company protocols, processes, and products for customers who need them most. Luth’s ability to transform any idea into a wellplanned reality has been one of Finance of America Reverse’s secret ingredients helping make the company successful. Through her extensive product knowledge, commitment to excellence and leadership at FAR, Luth has overseen the development of five proprietary products and played a key role in FAR’s rise to industry leader and retirement solutions pioneer. Notably, her recently-released retirement mortgage, EquityAvail, provides customers with a new way to tap into home equity, providing even greater flexibility and choice to help achieve financial goals later in life. What is one thing you would tell a younger version of yourself? “You earned your seat at the table; don’t second guess your value. No one can make you feel inferior without your consent. (That’s a little quote from Eleanor Roosevelt). The fact that you’re in the room means you belong in the room.”
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As director of high growth accounts, Jamie Kump has been an instrumental part of scaling Qualia’s customer success and sales organizations from its inception. Kump’s customer-centric mentality and passion for understanding the intricacies of real estate transactions have led her to play a key part in Qualia’s overall strategy. In her current role, Kump leads a sales team that builds relationships with the largest name brands in the real estate space. Most recently, Kump led Qualia’s development of a program designed specifically to support high-growth proptech companies, such as realtor.com, Redfin, Orchard and REX. The program she helped design pulls together the various Qualia solutions she’d worked on for years in order to give companies a flexible infrastructure to meet their unique business model needs.
Michael Middleman EVP Freedom Mortgage | Age: 36
Joe Mayhew Chief Credit Officer Evolve Mortgage Services Age: 37 Joe Mayhew has transformed Evolve Mortgage Services’ underwriting channel, allowing the company to grow its business by 2000% in the past year. By finding new ways to maximize efficiency and technology, Evolve has been able to grow with its clients while keeping costs consistent and still delivering a high-quality product. A reliable leader, Mayhew has helped build and design new underwriting workflows to effectively function as an extension of his clients’ own internal systems and processes. Whether his clients originate conventional, jumbo, non-QM, or portfolio loans, Mayhew works to meet the demands, while communicating the importance of flexibility to his team. With Mayhew’s leadership, his team has been able to consistently hit its service level agreements despite the monumental growth in the past year.
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What is one thing you would tell a younger version of yourself? “No matter how busy you get, always make time for the things that nourish your soul. Your best business ideas will come spontaneously when you are doing something that you love. When your creative self is starved for stimulation, the other parts of your life will suffer for it. I've had countless eureka moments while sailing a boat or flying a plane, and almost none sitting at a desk.”
Michael Middleman joined Freedom Mortgage in 2013 and rose through the ranks to his current role where he is responsible for call center sales, call center fulfillment, marketing and information technology. Under Middleman’s leadership in call center sales, the business unit more than tripled the closed loan volume from $17.6 billion in 2019 to $73 billion in 2020 during the pandemic, all while moving his team to home offices last March. Middleman instituted programs and tools which have resulted in reduced cycle times, simplified loan sale processes and enhanced customer experience. Sales operation efficiencies improved by 20% year over year and have positioned Freedom Mortgage’s call center division to compete aggressively in the low-rate market and yield increased profitability. Middleman also guided Freedom’s Call Center through a drastic surge in production volume last year, as they nearly doubled the call center division’s employee headcount. What is the one habit that has helped you succeed? “The habit that has best helped me succeed is setting strategic and tactical goals that are outcome-based. It’s important to habitually focus on measuring progress against those goals. I’ve found it critical, as a leader, to ensure that I’m setting goals for myself and our teams that align throughout the organization, from top to bottom.”
Allison Mills Senior Director, Securitization Operations Common Securitization Solutions | Age: 34 A highly respected leader, Allison Mills has a reputation for excellence, a passion to serve her clients, and is skilled at developing strong professional relationships. In just two years, Mills has had a tremendous impact on Common Securitization Solutions, leading one of the company's digital transformations, which will redesign and automate multiple business processes to position the company for future growth. As the business initiative lead, Mills is responsible for the complex effort to redesign business processes that will reduce cost and risk and increase the ability to expand to new products and services, ultimately allowing CSS to better leverage technology to power data-driven decision-making. Mills was chosen to lead the critical effort based on her commitment to excellence in everything she does, her passion to improve the client experience with CSS’s technology platform and her ability to methodically execute intricate details of complex solutions while simultaneously managing any initiatives to achieve broader strategic objectives. What is one thing you would tell a younger version of yourself? “Believe in yourself. You'll be faced with challenges and situations in your career that will make you second guess your abilities or your purpose. Stick to your core values – they'll lead you to where you are meant to be.”
JUNE 2021
Ryan Minard Director, Customer Growth Top of Mind | Age: 36
What is one habit that has helped you succeed? “I constantly embrace my curious side. Whether that is through reading blogs or books, watching video content, listening to podcasts, or asking questions of those with more experience – this has helped me sharpen existing skills and also discover new passions and paths that I would have never imagined otherwise.”
Rebecca Morphis Senior Sales Director, Strategic Accounts Total Expert | Age: 36 Over her decade-long sales career, Rebecca Morphis has climbed the ranks as one of the top sales leaders in the mortgage industry, with her last three and a half years at Total Expert. Coming from a background in sales at a luxury travel brand and consultancy, Morphis quickly honed her experience working in a highstakes, big-ticket industry – into a strong mortgage skill set focused on listening and tending to customer needs by form-fitting mortgage technology solutions. At Total Expert, she’s forged rock-solid relationships with the largest and most noteworthy mortgage lenders in the nation, and her work directly supports more than 30,000 individual loan officers in realizing the potential for intelligent automation and strategic borrower-relationship building. Today, as senior sales director of strategic accounts, Morphis guides enterprise technology transformations for some of the most innovative housing and lending institutions. What is the best piece of advice you have ever received? “The best piece of advice I received was from my parents. They instilled a strong work ethic that was rooted in a positive mindset. Due to their advice, I wake up each morning always leading with doing what’s right, never what is easy, and to make the day, don’t let the day make you.”
JUNE 2021
Vijay Pandey AVP, Head of Mortgage Operations WIPRO Age: 37 At WIPRO, Vijay Pandey turned around performance for some of the top mortgage-lending clients by doubling their revenue stream. Pandey’s team is recognized not only within the organization for their quality and speed but also among their clients who have referred WIPRO to multiple businesses, resulting in new opportunities for the company. In the last few months, Pandey and his team had multiple organization-wide success stories published and six sigma awards on performance turnarounds. Pandey continues to stay on top of the latest technological advancements to build a deeper level of expertise within operations and develop solution capabilities right from the roots. Because of this synergy, Pandey’s operations delivery team is able to implement and embrace technological enhancements, unlike their competitors. Along with his strong background in the mortgage industry, Pandey is a leader in negotiation, organization change and development. What is one thing you would tell a younger version of yourself? “I usually tell this to most of my younger team members and it would also apply to a younger version of me: ‘Understand the importance of mentors and find your mentor early in your career. Listen more and don’t shy away from challenges – embrace risk and master it.’”
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Ryan Minard got his start in the mortgage lending industry as marketing manager at First Centennial Mortgage. During his seven-year tenure, he helped grow the retail lender into an Inc. 5000 fastest-growing company. Personally supporting the marketing needs of hundreds of LOs and helping First Centennial build out a high-performing marketing tech stack gave Minard an in-depth understanding of lenders’ needs and what it takes to build a stellar marketing department. Upon joining Top of Mind two years ago, Minard immediately put his experience and passion for lender success to good use, working hand-in-hand with clients to understand their pain points and developing custom automation workflows within Surefire to achieve their business goals. Now, as director of client success, Minard is responsible for coaching Top of Mind’s enterprise account management team as they work to ensure every lender achieves astounding ROI from their implementation of Surefire.
Madisyn Rhone Manager, Government & Industry Relations Enact Mortgage Insurance | Age: 25
Jim Paolino CEO & Founder LodeStar Software Solutions Age: 34 Over the last 12 to 18 months, Jim Paolino has doubled down on LodeStar Software Solutions as well as his commitment to streamlining the mortgage process. The result has been amazing growth for the company, which was named number 11 in the 2020 Philadelphia 100, awarded to the fastest-growing, privately held businesses in the Philadelphia region. With Paolino’s active leadership and vision, LodeStar today provides one of the industry’s most-utilized loan estimate calculators, delivering guaranteed closing cost estimates for all 50 states.
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What is the best piece of advice you have ever received? “I was at a conference in 2014, I was 27 and one year into starting LodeStar where I met someone who would become a good industry friend. I told him about my company's first year and said ‘The hard part is over.’ He quickly responded to me saying, ‘No, the first hard part is over.’ Seven years later, he could not have been more correct, every stage of growing a business is difficult in its own way, you just have to learn to embrace the challenges and the personal growth that comes from tackling them. It is never going to be easy but honestly would not be as fun and rewarding if it was!”
Since joining Genworth Mortgage Insurance’s Government and Industry Relations team in 2019, Madisyn Rhone has become a highly valued member of the team. With an unwavering zeal for housing equality and Genworth’s success, Rhone spends a significant portion of her time searching for opportunities that intersect the two. Upon joining the team, Rhone realized a gap in minority spaces from a legislative perspective and pioneered new relationships with the Congressional Black Caucus Foundation and the National Association of Real Estate Brokers. To establish relationships that were more than transactional, Rhone worked closely with the appropriate teams to develop meaningful partnerships. Through her lens, Rhone sees possibility, and that perspective has helped her excel and tackle what some may view as impossible. What is the best piece of advice you have ever received? “While I haven’t been blessed with the smooth dance moves that others in my family seem to possess so effortlessly, when I asked my Nana Pauline if I should still dance despite my questionable rhythm, she replied, ‘Baby, always dance.’ This advice, although simple, serves as a reminder of the experiences in life we miss out on when we are afraid to get out of our comfort zone or too worried about what others will think.”
Amber Roy Chief Operating Officer Triumph Business Capital | Age: 38 Amber Roy is a natural leader who encourages those around her to connect to people and departments across organizations. Roy played an instrumental part in Caliber’s record-breaking year in 2020, as she successfully managed and led others through the challenges and changes brought on by the pandemic. Roy led organizational efforts to review capacity and develop hiring strategies to add more than 1,000 people. Her vision and design strategy allowed the organization to grow and build the necessary infrastructure to align with the increased level of business, contributing to Caliber’s $80 billion in originations for the year. In April of this year, Roy took on a new role as strategic operations management at Triumph Business Capital where she is responsible for overseeing day-to-day operations, ensuring the company delivers high-quality services while being cost-effective and maintaining a positive profit margin. Roy also leads all operational functions, including underwriting and customer experience. What is the best piece of advice you have ever received? “The best pieces of advice I've ever received are to take care of the people and the people will take care of you and to share your knowledge with others so everyone can continue to learn and grow.”
JUNE 2021
Dilly Sanborn-Marsh Product Manager Blend | Age: 25
What is one habit that has helped you succeed? “My mentor always said it was important to get 8 hours of sleep. The habit has helped me make sure I start each day off with a fresh mind and perspective. As badly as I want to keep running through walls day and night, I've come to realize that stepping away from a problem for a little can help me find faster, more impactful paths forward.”
Nicole Steiner Director of Digital Product Management Rocket Pro TPO | Age: 36 In the nine years that Nicole Steiner has been with Rocket Mortgage, she has focused on improvement. In 2018, Steiner moved to the product strategy team using her critical eye to find improvements for the company’s digital experiences. Steiner’s team completely redesigned how consumers apply for a mortgage using a more conversational flow, making the application easier for clients to understand and ultimately faster for them to complete. Steiner led the team in defining the strategy and experience for the integration with the Mint app, which allowed consumers to complete the full Rocket Mortgage application inside another personal finance app for the first time. Most recently, Steiner led the team that planned the digital strategy and experience for RocketMortgage.com’s mortgage broker directory. What is one habit that has helped you succeed? “A habit that has helped me succeed is always seeking to understand first, before taking action in a situation. It’s easy to react emotionally to an action someone takes, only to learn you didn’t have the full picture. Not making assumptions or jumping to conclusions, even on the smallest interpersonal matters, ensures I make the best decision on next steps. This approach has also helped me learn and build trust when taking on new products and business areas.”
JUNE 2021
Jessica Thorsheim Managing Director, Head of SFR Portfolio Management The Amherst Group Age: 38 A disciplined steward of investment capital and advocate for stakeholders, Jessica Thorsheim balances her responsibility to unlock revenue-generating opportunities for investors while also advancing Amherst’s mission to provide safe, affordable, high-quality housing to residents across America. Since joining Amherst in September 2019, Thorsheim has designed an engagement framework to diligently connect investors and senior leadership with key information and insights about fund performance and strategic growth opportunities. Thorsheim’s efforts have resulted in the successful deployment of investor capital and continued reinvestment from capital partners while enhancing access to affordable housing opportunities for U.S. renters. Thorsheim’s ability to collaborate across teams while navigating challenges related to the pandemic contributed to Amherst’s achievement of a record-high 97% stabilized occupancy rate at the end of 2020. What is the best piece of advice you have ever received? “‘Be where your feet are.’ I received this advice earlier in my career, but it is even more applicable in today’s Zoom-filled world. To me, this statement means keeping your mind where you physically are. Being where your feet are will make you shine in all parts of your life – whether as a real estate executive or a mother of two.”
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As a product manager at Blend, Dilly Sanborn-Marsh drives solutions that impact the consumer lending industry at large. Since joining the company in 2018, Sanborn-Marsh has played an integral role in supporting the expansion of Blend’s products and services across the consumer banking ecosystem with a commitment to making homeownership more affordable and accessible. When the pandemic hit, Sanborn-Marsh quickly pivoted her focus to help lenders navigate this new economic climate. Interest rates dropped and Blend’s customers across the country experienced a surge in refinancing applications – up to 400%. Understanding the need for a digital solution, Sanborn-Marsh worked to develop Blend’s “volume control” features for lenders, which helped them streamline leads that were most likely to be closed based on borrower intent and context, and reduced processing workload by eliminating unnecessary tasks.
Breezi Webster VP, Strategic Workflow & Optimization AmeriHome Mortgage | Age: 36
Andy Walden VP of Market Research for Black Knight Data and Analytics Black Knight Age: 40 Andy Walden is regarded both inside and outside of Black Knight for his economic and market analysis, which provide value to the entire mortgage industry, national media outlets and the public at large. In his role as vice president of market research for Black Knight’s Data and Analytics division, Walden serves as the chair of Black Knight’s Editorial Board and the guiding force behind Black Knight’s Mortgage Monitor, a monthly publication that industry professionals rely on for critical insights into a variety of mortgage-finance and housing-industry trends. Walden’s unique combination of market expertise, work ethic, industry knowledge and communication skills makes him a key member of the Black Knight team, and a highly valued player throughout the mortgage industry.
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What is the best piece of advice you have ever received “There’s a quote from the legendary basketball coach John Wooden that says: ‘When you score a basket, turn around and thank your teammate for the assist, no one succeeds alone.’ I think that’s as true in our industry as it is in sports. I’m grateful to be a part of an extremely talented team at Black Knight where we all work together to drive success and innovation across the organization.”
In the 13 years that Breezi Webster has been in the financial services industry, she has been perfecting her passion for assessing companies’ needs, generating viable solutions and driving results. Webster’s niche is process improvement and workflow optimization. Webster and her Strategic Workflow & Optimization Team are instrumental in driving change and improvements across those three principles while also pushing workflow efficiencies that helped achieve the division’s goal of doubling its funding volume in the last year. Using a disciplined methodology to solve production problems and recommend workflow changes through to implementation, Webster is the division’s go-to person for results-driven change. Through her dedication to her craft, work ethic and commitment to a “people first” culture, Webster is a formidable leader and continues to grow her responsibilities. What is the best piece of advice you have ever received? "The best piece of advice I have received is to be a lifelong learner. Know your fundamentals and principles but remain open-minded for opportunities that may lead to a better or more valuable perspective. No matter what your job, you avoid having the same experience every year that way. When speaking with or taking advice from others, discern whether you are receiving 20 years of experience or one year repeated 19 times."
Matt Wilson VP of Product Development WEST, A Williston Financial Group Company | Age: 35 Matt Wilson's understanding of how the mortgage industry's ecosystem is connected led him to move his focus to solving the problems the industry faces in an increasingly virtual world, including security, transparency and greater efficiency. Wilson’s work allows WEST to tie in the different parties and products and create a framework for integration. His work is informed by a deep understanding of the processes and players in mortgage, along with the settlement services industries, where the opportunities for innovation and improvement reside. The integration fabric that WEST has created gets all parties collaborating and working together in one space, and supports a more efficient transaction and customer experience. The power of the products that Wilson integrates is multiplied on the MyHome platform, providing customer service to consumers throughout the mortgage transaction. What is the best piece of advice you have ever received? “The most important thing is to show up and do the right thing, every day. If you fall short one day, which you will, get up and hit it harder the next.”
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Recognize your organization's operational all stars Nominations close on June 25, 2021 housingwire.com/insiders
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I N S I G H T S F R O M T H E 2 0 21
500 By Tracey Velt JUNE 2021
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The biggest growth ever seen in history of rankings
WHAT STARTED AS A BOOMING YEAR
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While many brokerages witnessed huge losses in March and April, sales in May and June came back with a vengeance.
for real estate sales changed quickly when the government announced lockdowns to slow the spread of COVID-19 last year. Faced with uncertainty in the market, real estate brokers quickly slashed operating budgets, furloughed office employees and installed technology that would allow their agents to work remotely. Despite the stay-at-home mandates, many states deemed real estate essential, changing the course of the market and avoiding an industry-wide crisis. But the boom to follow was unexpected and very much welcomed. While many brokerages witnessed huge losses in March and April, sales in May and June came back with a vengeance. That fact was reflected in the 2021 RealTrends 500 (RT500) top brokerage rankings, an independently verified compilation of the nation’s leading residential real estate companies. More than 1,750 firms qualified for this year’s RT500. According to the research report, the 500 largest residential real estate brokerage firms closed more than 3.9 million residential sales transactions in 2020 – up from 3.4 million in 2019. These transactions were valued at more than $1.6 trillion (up from $1.3 trillion in 2019).
THE LEADERBOARD Once again, HomeServices of America was named the largest residential brokerage in America by transaction sides last year, followed by Realogy and eXp. However, when it came to sales volume, HomeServices ranked No. 3 behind Realogy and Compass, which were rank as No. 1 and No. 2, respectively. As recently as 2017, Realogy Brokerage Group was on top by both sides and volume. Then, HomeServices took the lead in transaction sides. For the first time in the rankings, Compass overtook HomeServices in sales volume. HomeServices of America, a subsidiary of Warren Buffett’s Berkshire Hathaway conglomerate, was involved in 343,220 brokerage sides and etched out $150.4 billion in sales
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volume. Realogy, meanwhile, participated in 333,737 deal sides but won the overall volume game with $184.6 billion in 2020 sales. Virtual brokerage eXp Realty, which experienced a massive 99.3% increase in sales volume between 2019 and 2020, ranked No. 4 by closed sales volume and No. 3 by transaction sides. Compass, which recently went public at a valuation of $7 billion – down from its initial target of $10 billion – ascended by participating in 144,784 closed sides. It notched $151.7 billion in sales volume, more than that of HomeServices of America. Top independent brokerage Howard Hanna/Allen Tate was involved in 105,455 transaction sides last year, good for $26.7 billion in sales volume, rounding out the top five. Other brokerages in the top 10 include discount brokerage Redfin at No. 6; HomeSmart, which has a 100% commission model, at No. 7; Keller Williams Realty, GO Network Offices at No. 8; Chicago-based independent brokerage @properties at No. 9; and, at No. 10, United Real Estate. United credits its growth to its proprietary, cloud-based agent and brokerage productivity platform, and its business model. However, United has also been on a buying spree, merging with Virtual Properties Realty to establish a footprint in Atlanta, Georgia, and acquiring Nashville-based Benchmark Realty. Other notable brokerages on the list include West USA Realty, which offers agents a f lexible commission structure; William Raveis, which cleans up in New England; and Douglas Elliman, a luxury brokerage with an impressive book of business in New York and South Florida. Glenn Sanford’s eXp Realty, Compass and United Real Estate were the top movers last year. They had 108,000, 60,000 and 22,000 more in closed sides than they did the prior year, respectively. RealTrends also saw a huge increase in new members to the Billionaires’ Club – the top brokerage firms that closed at least $1 billion worth of real estate in 2020 – with 46 new firms.
As always, the average home price leaders are concentrated in resort markets in Colorado, California and Hawaii, and higher price metros like LA, San Francisco, Washington D.C. and New York City. As for the top movers, the five-year lists are once again dominated by Keller Williams.
WHY THE GROWTH?
E X P LO S I V E
Using 2020 data, in the rankings overall, closed sides were up 12.5% in 2020 compared to 2019. When compared to the 5.6% national increase of existing home sales, the largest brokerage firms in the country gained market share for the fifth year in a row. Sales volume was up an astounding 22.7%. Both of these growth factors are the largest that RealTrends has ever seen in its rankings in a single year. The RT500 agents did approximately 38.5% of all brokerage-controlled sales in the country with 34.8% of all Realtors. Interestingly, this also means that the RT500 sales associates are only slightly more productive than all the other Realtors in the country. This year’s explosive growth is due to a couple of factors. First, the average sales price in 2020 skyrocketed from $376,430 to $410,512, spurring massive sales volume
growth, a 22.7% increase year-over-year for the RT500. Second, there’s been huge growth from eXp Realty (all organic) and Compass (via a combination of organic and acquisitions). eXp and Compass alone accounted for 38.6% of the growth in sides and 32.5% of the growth in volume for the rankings. In addition, firms like United Real Estate, @ properties and Latter & Blum had key acquisitions that pushed them higher. Over the past five years, companies like eXp and Compass have recorded four-digit growth in both volume percentage and transaction percentage. The leaders in the five-year mover category by volume percentage increase are eXp Realty (3,689%); Compass (2,019%); Keller Williams Realty in Mooresville, North Carolina (610%); Keller Williams Legacy Group Realty LLC in Canton, Ohio (565%) and JP and Associates (515%). Of the top 10, Keller Williams offices claim seven spots.
Using 2020 data, in the rankings overall, closed sides were up 12.5% in 2020 compared to 2019.
THE MOST PRODUCTIVE OFFICES BY CLOSED SIDES PER AGENT While the average closed sides per agent for the entire RT500 is 10.5 transactions, RealTrends looked at which offices had more
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RealTrends also saw a huge increase in new members to the Billionaires’ Club – the top brokerage firms that closed at least $1 billion worth of real estate in 2020 – with 46 new firms.
eXp and Compass alone accounted for 38.6% of the growth in sides and 32.5% of the growth in volume for the rankings.
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than 10.5 transactions per agent. Of the top five, four were RE/MAX offices, based in Colorado, Illinois, Texas and Ohio. The other was an independent, The Real Estate Group, ironically based in the same Illinois city as one of the RE/MAX offices. Colorado-based RE/MAX 4000, a firm with 82 agents at the time of our interview, had an astounding 29.5 closed sides per agent. They were the No. 1 most productive office in the RT500. The Real Estate Group, a Springfield, Illinois-based independent with 164 agents at the time of interview, ranked No. 3 with 26.5 closed sides per agent. It’s important to note that while RealTrends doesn’t verify the accuracy of agent counts, through its verification process, it believes these counts to be accurate. Why RE/MAX? It appears to have little to do with the brand name and more to do with the culture and leadership of the offices in the top five. According to Nick Bailey, chief customer officer of RE/MAX International, “RE/MAX Professionals is the only RE/ MAX office in the area. Over the years, the owners have built a strong culture of collaboration and continuous development. They run a very forward-looking office.” As for RE/MAX Universal, Bailey says, “There are two keys to Owner Matthew Guzman’s success – new construction sales and real estate teams. In this extremely low inventory market, Guzman’s office has seized on new construction as an opportunity for continued growth. He’ll often ride along with newer agents as they meet with developers to personally teach them strategies for winning new construction business.” For the other RE/MAX offices, it comes down to selective recruiting, accountability and culture. For The Real Estate Group, Broker-Owner Josh Kruse and Managing Broker Mike Buscher attribute the productivity to their business model where agents have the opportunity to be part owners in the company. Kruse says this “drives the desire to keep the motions moving forward,” which, in turn, boosts per-agent productivity. “We’re locally owned,” says Kruse. “And, while profits are, of course, important, we’re not a strictly profit-driven company. We strive to take care of the agents. We work hard to keep our agents
happy and moving forward with a positive mindset.”
A DEEPER LOOK INTO 10YEAR TRENDS From 2010 to 2020, the number of agents affiliated with RT500 brokerages doubled. Further, the number of closed transaction sides also more than doubled. What can be derived from this data? Growth appears to be most closely related to the recruitment of agents. If you look at per-agent productivity, the annual average gain in per-person productivity among the agents of these large firms grew less half a percent per year. According to Steve Murray, founder of RTC Consulting and senior advisor for HW Media, “For all the billions of dollars of investment in technology, there hasn’t been an apparent huge payoff to brokerage firms for doing so. It may be that by having a tech platform, leading brokerage firms were able to recruit and retain agents better than small- to medium-sized firms.” This is supported by the fact that from 2010 to 2020, firms on the RT500 increased their market share of Realtors from 24.1% of the total to 34.8% of the total, and increased their share of closed transactions from existing home sales from 25% to 38.5% in that same time. “Clearly, the large firms are gaining share of both agents and transactions, and their investment in technology surely plays some positive role in this trend,” says Murray.
BRANDS FIGHT FOR CORE SERVICE DOMINANCE When it comes to combating falling gross margins, brokerage firms are turning to core services such as title, mortgage, home warranty and homeowners’ insurance to boost profits. RealTrends tracks, but does not verify, core services information to help brokerages gauge market trends. In every category except for homeowners’ insurance, HomeServices and Realogy are neck and neck in performance. HomeServices
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Growth appears to be most closely related to the recruitment of agents.
“For all the billions of dollars of investment in technology, there hasn’t been an apparent huge payoff to brokerage firms for doing so. It may be that by having a tech platform, leading brokerage firms were able to recruit and retain agents better than small- to medium-sized firms.” -Steve Murray
PERFORMANCE OF INDEPENDENTS VS. FRANCHISES The long-standing competition between independents and franchises for the best model is intense. RealTrends looked at the data to determine if there was a material difference in the performance of independent brokerage firms versus those affiliated with a national brand. Franchised brokerages on the RT500 outperformed their independent peers in per-agent productivity, growing the average per-person deal by 10% over the decade, compared to 1% for independents. However, independent firms outperformed franchised brokerage firms in the growth of the average number of agents per office and total sales volume per office. “Given this data,” says Murray, “there is no convincing proof that one model is better than the other.”
LOW COST, FEE-BASED AND FLAT-FEE FIRMS Moving up the leaderboard in the RT500 are some of the low-cost, fee-based, f latfee models. Firms like JP and Associates, Fathom Realty, My Home Group, Equity Real Estate, Silvercreek Realty Group and Samson Properties all had big years and will continue to chip away at the incumbents’ market share. Eight of the top 25 brokerage firms in the country are considered low-cost, fee-based or flat-fee model firms. That’s more than ever before in the rankings and double the number from three years ago. It just goes to show that there will always be opportunities for brokerages to increase their market share. There will always be newcom-
“Clearly, the large firms are gaining share of both agents and transactions, and their investment in technology surely plays some positive role in this trend.” -Steve Murray
There will always be opportunities for brokerages to increase their market share.
ers to the real estate market. Just think, 10 years ago, Compass wasn’t even in existence, and eXp was founded in 2009. Compare that with RE/MAX, which was founded in 1973, and Keller Williams, which was founded in 1983, and you can see how quickly new real estate companies can move into and up the rankings. The RealTrends 500 brokerage rankings are published each year. To view the current rankings, go to realtrends.com. This feature is also paired with the HousingWire June Supplement, which showcases parts of the 2021 RealTrends 500. Open the supplement to learn more about the rankings and the top players in the real estate industry.
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dominates all categories in the rankings, No. 1 for mortgage closings and home warranty policies sold and No. 2 for homeowners’ insurance policies and title closings. Realogy ranks No. 1 in title closings and No. 2 in home warranties and mortgage. Other notable companies include Hanna Holdings/Allen Tate, which ranks No. 2 in homeowners’ insurance, No. 3 in home warranties and mortgage and No. 5 in title closings.
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WIRE FRAUD: Are you the weakest link? The multi-million dollar cybercrime haunting consumers JUNE 2021
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By Joanne Cleaver
JUNE 2021
IT’S THE MOMENT EVERYONE FEARS: in the frenzy to close a house sale, commitment to fraud preventions falters. Busy professionals involved in the sale override their own cautions about fending off fraud by reverting to tried-and-true email addresses to convey the most sensitive financial information. Trying to keep with the drive to the finish line, the harried consumer let down their guard. Instead of questioning email directions from their agent, title insurer or lender, the consumer hits ‘reply.’ And just like that, coordinates for a wire fraud transfer of tens of thousands of dollars —even a lifetime of home equity — disappear. A digital thief hijacked the transaction, redirected the money, and disappears, leaving the shocked consumers, real estate agent, title insurer, lender and others to pick up the pieces. Fraud prevention was slowly escalating as an industry priority when 2020’s strange confluence of factors hit. The pandemic accelerated the use of digital tools and platforms to effect closings, while a lso t a ngling ma ny house sales in a patchwork of paper and online functions. As the pandemic recovery takes hold, a robust housing market has pulled fraud prevention back on track. Houses are selling faster than ever, and for more money than ever. COVID-catalyzed changes are formalizing into new fraud prevention standards, even though some in the residential real estate industry have yet to fully come on board. Digital fraud comes at real estate transactions in several forms. Released in March, the 2020 report of the Federal Bureau of Investigations’ internet crimes operation documents significant increases in each of the categories most pertinent to residential sales:
•
The real estate industry overall, including sales and rentals, lost $213,196,082 to online fraud. This comprised 13,638 victims, up 16.8% from 2019. • In 2020, 19,369 email compromise complaints totaled losses of $1.8 billion. • Personal data breaches rose 18.6% in 2020 to 45,330 incidents • Personal identification theft rocketed 170% in 2020 to 43,330 incidents • Business email compromise -the subcategory that includes misdirecting transaction emails that include wire transfer instructions – saw 19,369 complaints with adjusted losses of over $1.8 billion The sophistication and scope of fraud evolves at lightspeed: industry experts say that it’s pointless to concentrate on just one type of fraud, as scams morph and proliferate. The latest twist is mortgage payoff fraud, in which thieves forge mor tgage payoff statements with the aim of diverting funds to themselves, not to the owner who is selling or refinancing a property. “ I t ’s a m a z i ng how sophistic a t e d s ome o f these efforts are,” said Kenneth R. Trepeta, president and executive director of the Real Estate Services Providers Council, based in Washington, D.C. Some fraud troupes involve 20 people at the ready to perpetuate the fraud when wary consumers and industry professionals try to independently confirm the validity of the information they’re receiving, said Trepeta. “They’ve got networks. You’ll have people in 15 different states involved in the same scheme and overseas, they’ve got a shop,” he said. If there’s a tinfoil lining to the pandemic of 2020, it’s that it proved the case for fully digital closing processes, said Tom Cronkright, co-founder and CEO of CertifID, a Grand Rapids-based transaction
“It’s amazing how sophisticated some of these efforts are.”
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-Kenneth R. Trepeta
JUNE 2021
rally to communicate consistently and persuasively to consumers so that they are alert, aware and activated to thwart fraud. “A lot of the fraud that occurs in a traditional paper-based closing is because of the handoffs between parties and disjointed systems,” said Pat Kinsel, founder and CEO of Boston-based Notarize. The traffic jam of players at the traditional closing
“Every title package and every email has a warning, but even with all these instructions, people make mistakes.” -Andrew Liput table is an open invitation for fraudsters, said Kinsel. “Wire fraud occurs because of the handoff. Funds are transferred and a new person is sending information, and you don’t have a secure relationship with that person,” he said, reflecting on the consumer experience of meeting a series of professionals for the first time, or only time, during the high-stakes transaction. Everyone agrees that using unsecured email to communicate sensitive transaction coordinates is the weakest link — by far. Industry professionals with deep, if antiquated, contact lists, are reluctant to shift to new systems. Players like the National Association of Realtors and American Land Title Association have public information campaigns to remind consumers that it’s
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platform. The neck-snapping pivot to distanced closings put the spotlight on gaps in the process: points where analog steps stopped digital flows. When governors in some states passed executive orders allowing teleconference notary services to be legally binding, their speedy response served as a pointed prompt to the industry, said Cronkright. “If anything, we absorbed four years of technological change in 2020,” he said. “We adopted and tried what we could via Zoom and funds protection, and we operationalized technology.” His perspective is borne of painful experience. In 2015, the title agency Cronkwright was then running was nearly taken under by wire fraud. “It was a blindsiding moment for me,” he said. “It was too easy [for the thief].” The fraud started with a routine sale of a gas station. Cronkright’s firm received a “certified check” that looked legitimate, for $185,000. The accompany directions were to wire $180,000 of the funds to an account. “It’s not uncommon. The seller wants to be sure that they at least get the earnest money,” said Cronkright. “We deposited the check, it sat in the bank for several days, and we sent the wire.” But the check was “bogus,” Cronkright said. The money disappeared into a series of accounts that Cronkright ultimately learned was operated by a Texas attorney who was the puppetmaster for numerous complicated schemes. After two years of investigations that escalated to the Federal Department of Justice, authorities convicted the attorney. Not that it helped Cronkright’s firm much. “It was almost a complete loss,” he said. Business insurance did not cover the theft, as it did not involve a breach of data. The cost of time and effort was immeasurable. The searing experience turned Cronkright into a fraud prevention ambassador and digital platform entrepreneur. Technology itself is no longer the sticking point, say transaction service executives. The industry must address legal and procedural gaps in the closing process so that transactions can be seamlessly handled via secure platforms. Laws and regulations need to be smoothed out to accommodate fully digital transactions and accompanying fraud prevention. And the industry must
imperative to triple-check every communication about transferring funds. But such efforts fall flat when industry professionals abandon fraud prevention practices at the last minute and revert to easy-to-hack, low-security antiquated email addresses. Understandable, but fatal, said Andrew Liput, president and CEO of Secure Insight, a Parsippany, N.J. service that qualifies the parties involved in real estate closings and is involved in building a transaction platform. “Every title package and every email has a warning, but even with all these instructions, people make mistakes,” he said. Liput and others in the transction-management industry said that fraudulent emails also include fraud warnings – a twist that only serves to confuse consumers more. Liput predicts that the Biden administration will propel greater accountability for the real estate industry and real estate professiona ls for protecting consumers from fraud; monitoring attempted a nd actua l f raud; a nd pu sh i ng state and local governments to align their rules and processes with secure digital processes. “C omplia nce needs a n incentive,” Liput said. ”It needs pressure. M o s t p e o ple won’t regulate themselves.” Experienced closing industry executives say that banks and realty agents and brokerages have thrown up the most resistance to consistent adoption of protected digital closings. Kinsel points to Notarize’s industry partnerships as evidence that agents are pushing for digital closings and said that banks have steadily cleared many hurdles. “The largest remaining impediment is second market investors,” he said. “They’ve
Fewer than 1% of wire fraud cases involve a breach of title agencies’ own data system.
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-Bill Burding
JUNE 2021
laid more groundwork than most people realize. Ginnie Mae, the Federal Home Loan Banks – the dominoes are falling.” The transition to digital likely will be propelled by generational changes, predicted Andy White, co-founder and CEO of ClosingLock, an Austin-based closing platform. “Buyers in their 20s and 30s don’t even have physical checkbooks,” said White. “ If you tell them you have to write a check for earnest money, they don’t know what to do and the agent has to tell them how to go to their bank and get a money order.” And they don’t want to download an app or set up an account just for the process of the transaction. They’re not going to register with five sites and go through all of that just to download or upload a document or receive wiring information.” Platforms that streamline the paperwork; give all the players a single point of communication and coordination; and that ensure digital security in the process will emerge as the industry standard, predicted White and his many competitors. Layering on yet another set of complex controls won’t help, even if the ‘fix’ is digital, said White. “The average homebuyer doesn’t know what an encrypted email looks like versus an unencrypted one and you shouldn’t have to learn that in the home-buying process,” said White. Industry leaders say that pressure is growing for stragglers to get on board with emerging industry standards. “You can’t do this on a piecemeal basis,” said Bill Burding, president of the American Land Title Association. “It requires federal intervention so the banks can feel secure that an online transaction is just the same as if they have an ink-signed document. And we have to be sure that the clerks and [county] recorders will record a remotely signed, online document.” While ALTA works with counties and states to align digital policies, it is also trying to inform consumers and real estate agents to be ever vigilant in thwarting wire fraud. Systems, governments and companies can be perfectly synchronized through fraud-deflecting technology, but it is all for naught if harried consumers and multitasking agents revert to unprotected email to communicate transaction instructions, said Burding.
“The vast majority of wire transfer fraud is when people use an open platform – free consumer email services and so on - with minimal security. That’s what fraudsters are looking for,” he said. “It’s extremely rare that a title company gets hacked. It’s the consumer or one of the other parties.” Fewer than 1% of wire fraud cases involve a breach of title agencies’ own data system, he said. Thwarting fraud requires a choreographed effort especially from the professionals working most closely with consumers…and collaboration has been slow and unsteady, say industry executives. While ALTA, the FBI and others have mounted consu mer education efforts, cautionar y messages are often lost in the blizzard of c om mu n i cation, documents, unfamiliar processes and logistical t a ngle s that of ten cha racterize selling or buying a house and moving. State licensi ng agenc ie s and boards do not require “competency in fraud prevention efforts to acquire or renew a real estate license,” according to an NAR spokesperson. “In the past, the agents didn’t want to use these platforms because if they went to another real estate brokerage they’d have to change their email address,” said Burding. “But they’re getting better and real estate companies are getting behind this.” Though RESPRO has been working on fraud prevention initiatives for over five years, the influx of newcomers to the industry means that every sector – especially brokers – must constantly refresh reminders about vigilance, said Trepeta. And realty agents and others who focus on local markets need to step up to their responsibilities to others in the transaction chain, and to be in sync with federal fraud prevention efforts, said Trepeta, echoing
the opinion of others in the title insurance and data security segments of the industry. Changing longstanding habits is hard and essential, said Maria Deligiorgis, general counsel and compliance officer with Title Alliance, a Pennsylvania title insurer. Her agency has detected the latest twist: fraudulent payoff demands. “We’d ask for a mortgage loan payoff and the mortgage company would send a letter – but it wasn’t a real letter. It was falsified, with a slightly deviated typeface and account number,” said Deligiorgis. “It was human intervention that caught it.” That incident changed how Title Alliance scouts for fraud and is instructive for the entire industry, as each category of players rises to its responsibilities in the chain of prevention, she said. Title Alliance now uses a soup - to -nut s digital por tal t ha t en su r e s pr ivacy, con trol and fraud protection, and integrated that platfor m with its closing and escrow software. But when it comes to battling fraud, there is no ‘set it and forget it,’ said Deligiorgis . “There has to be a microculture of awareness,” she said. That means vetting all partners; requiring every party in every transaction to verify every step; and auditing to make sure that new processes become new best practices. Title Alliance conducts “sniper audits” that review every step of a staffer’s process and then publicly rewards those who hit their marks consistently with a celebration and gift. “It’s repetition and muscle memory,” said Deligiorgis. “Do it not until you do it right but until you can’t do it wrong.”
“Do it not until you do it right but until you can’t do it wrong.”
Bio: Joanne Cleaver has been producing stories since 1981 and currently, manages projects to advance women in the accounting, transportation and other industries.
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-Maria Deligiorgis
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Black Knight’s REvolution suite of solutions enables a seamless appraisal process for valuation professionals
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uying and selling a home can be challenging, and the real estate process is often time-consuming and stressful. But it doesn’t have to be that way. One of the most challenging aspects in a real estate transaction is the valuation process. A simple mistake could drastically slow down the process and frustrate lenders, home buyers and sellers. And the impact of the pandemic has complicated this process even further. Black Knight’s REvolution suite provides appraisers and other valuation professionals with a seamless appraisal process from property inspection to report delivery. REvolution features several innovative solutions, including SCOUT, a cloud-based mobile property inspection app that supports safe social distancing by enabling remote property inspections. Using SCOUT, homeowners, inspectors, real estate agents and appraisers can collect property data on a mobile device. “SCOUT enables remote property inspections, which has been critical during the COVID-19 pandemic,” Black Knight’s CEO Anthony Jabbour said. “This solution and the REvolution suite’s other valuation and appraisal products help significantly streamline what is traditionally a time-consuming process.” Unlike other solutions in the industry that must be used with proprietary systems, SCOUT can be used as a standalone product or alongside Black Knight’s appraisal platform, CA REveal. The SCOUT mobile app enables the inspection data to be imported into the CA REveal platform, which is part of the REvolution suite. On the CA REveal plat-
Ben Graboske oversees Black Knight’s Data & Analytics group, which delivers the most robust mortgage and property data, and intelligent, advanced analytics used by organizations across the industry to operate efficiently and grow their businesses.
JUNE 2021
form, appraisers and other valuation experts can review the collected information, use data-rich analytical tools to analyze market activity, and produce dependable and defendable appraisal reports. The platform can produce any type of valuation, including appraisal, hybrid or broker price opinion (BPO). “These solutions, as well as the other products offered in the REvolution suite, help create efficiencies in data collection, analysis and appraisal report delivery,” said Ben Graboske, president of Black Knight’s Data & Analytics Division. “With the solutions’ innovative and flexible features, real estate professionals can easily connect to their existing workflows without missing a beat.” Other products in Black K night ’s REvolution suite can also help identify complex subject properties so users can select the appropriate valuation solution and appraisal fee upfront, helping save time, money and making the process more efficient. Black Knight’s technology automates time-consuming tasks, modernizes processes and creates efficiencies to let real estate professionals focus more of their time and resources on high-value tasks that drive more business. “Black Knight is the only company that offers end-to-end solutions across the real estate and mortgage life cycle,” Jabbour added. “This enables us to continue developing unique, integrated solutions, such as powerful real-estate-related business intelligence, that will further help companies improve the customer experience, drive strategy, manage risk and create growth opportunities.”
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s the real estate industry braces for the end of forbearance moratoriums, housing experts are anticipating an increase in foreclosures and REO activity. In preparation for that influx, asset managers, servicers and investors need to ensure they have the tools and technology to successfully navigate this unpredictable time. Pyramid Platform, Radian’s award-winning asset management technology, can help users swiftly adapt to fluctuations in the REO environment. Pyramid Platform automates and organizes every step of the REO asset management process through a secure webbased portal. Pyramid Platform users can customize their REO management workflow to trigger tasks based on their unique needs. This helps users execute and manage investment strategies, from listing to liquidation. In addition, Pyramid Platform offers users a variety of other workflows, including deed-in-lieu, short sale, acquisition, rental management, and more. “Following an unprecedented year like 2020, Radian’s Pyramid Platform allows clients to prepare for changes, as they happen in real time, through customized and intuitive workflows that help them more effectively and efficiently manage their real estate portfolios,” said Tim Reilly, EVP of Asset Management Operations. With features like drag-and-drop uploading, automatic document labeling and expense tracking, Pyramid makes managing a real estate portfolio simple and intuitive. Pyramid Platform also simplifies reporting via customizable dashboards where users can track key performance indicators, tasks, and timelines. “Clients can utilize real-time and customizable reporting, as well as direct data warehouse access,” said Rebecca Smith, VP of Sales and Business Development. “Robust, transparent reporting is essential for asset managers who want to proactively manage their portfolios and track progress.” With Pyramid Platform, clients can also:
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Access Radian’s network of thousands of vendors. Prioritize tasks with effective rolebased dashboards. Integrate with Radian’s various pricing products. Take advantage of built-in logic and validations that save time and improve data integrity. Reduce delays and navigate the real estate closing process with ease.
THE EXECUTIVES:
As the market fluctuates, servicers and asset managers need flexible tech that allows them to focus their talent on strategy rather than managing repetitive tasks. Pyramid Platform uses intelligent automation to lift the load and helps improve ROI, whether the user is managing 40 properties or 4,000. “Our customers choose P y ra mid Platform because it allows them the flexibility to design their optimal workflow, manage their real estate assets, and nimbly pivot as the needs of those portfolios may change to match market conditions,” added Smith. “The platform was designed by users in today’s ever-changing environment who understand that the most efficient and effective workflow solutions are those that can be customized quickly and adjusted easily to meet user preferences and specific client needs,” said Smith. Now is the time for savvy asset managers, servicers and investors to prepare for the anticipated wave of foreclosure activity coming and ensure they have the people, processes, and technology ready to meet the challenge ahead. “Our award-winning asset management technology is prepared to handle the influx of loss mitigation, foreclosure, eviction, and REO activity when moratoriums are lifted, and with its scalability, the system can quickly help portfolio investors, servicers and outsource providers to be prepared for the rapidly changing real estate market,” Reilly said.
Tim Reilly oversees Radian’s asset management services, including real estate owned (REO), single-family rental (SFR) and technology platforms.
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JUNE 2021
TIM REILLY, EVP, ASSET MANAGEMENT OPERATIONS
REBECCA SMITH, VP, SALES AND BUSINESS DEVELOPMENT Rebecca Smith supports business growth by managing communications, maintaining strong relationships and leading the company’s initiative of providing the highest level of client service.
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Radian’s Pyramid Platform provides real-time reporting and flexibility for REO asset management
TRADE DESK
Trade associations from across the housing industry are on the front lines of issues that lenders, real estate agents and everyone in between face every day. In these letters, they give their members an inside look at what they are working on, and the most important issues facing each industry today.
AIME......................................69 ALTA......................................69 MBA ......................................70 NAHB ....................................70 NAMMBA................................71
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NAR........................................71
JUNE 2021
TRADE DESK
AIME members, AIME has worked diligently throughout the first half of 2021 to ensure independent mortgage brokers have the resources to successfully compete against our retail counterparts. That’s why our association has made harnessing the power of data central to the future of what makes brokers the best option for consumers when looking to buy a home. We don’t just talk about navigatPresident ing data however, AIME has Association of Independent spent 2021 producing innoMortgage Experts vative content through live streams with industry leaders, webinars geared toward business development and informational content promoting integrated technology to prove our commitment. This focus has allowed the broker community to make an important leap forward in terms of making data-informed decisions that rely on streamlined integrations across several platforms such as customer relationship management, loan origination software, and lead generation systems by
Marc Summers
educating wholesale professionals on the benefits they will provide for their bottom line and ultimately contributing to a better client experience. By leaning in on the tools of tomorrow, AIME has strengthened its position as a true advocate for the independent mortgage broker. This includes retaining and growing a community of sponsor and vendor partners who have assisted brokers in gaining unprecedented access to technology advancements that allow brokers to excel in their jobs. AIME’s newly launched Mentorship and Jobs programs will allow for a new generation of brokers to benefit from the elite community we have assembled and create new opportunities for consumers. Our association has also made a bold pledge to bring underrepresented communities into our channel from retail through the Ignite mortgage training program and the Spark small business grant so we can reflect the customers we serve. As we continue to move forward into the second half of 2021, AIME is very excited to announce that it has seen record levels of interest in this year’s Fuse National Conference. Fuse is a culmination of the hard work and determination of the broker channel and the opportunity to experience in-person expert speakers, vendor, and lender partner technology along with countless networking opportunities. We look forward to giving brokers the tools needed to continue growing broker market share to 25% and beyond.
ALTA members, Although there were many benefits to being online during 2020 — running a business without virtual meetings would have been almost impossible — there was also a downside. As the country battled the Covid-19 pandemic, a record number of internet fraud complaints were reported to the FBI. According to the FBI’s 2020 Internet Crime Report, the Internet Crime Complaint Center received 791,790 complaints with reported losses exceeding $4.2 billion last year, up from $3.5 billion in reported losses in 2019. As one piece of that statistical pie, 13,638 victims of real estate wire fraud reported $213,196,082 in losses in 2020. This compares to 11,677 victims reporting losses of $221,365,911 in 2019. However, it’s important to note these statistics are only based on internet crimes that were reported. Many victims do not file FBI reports. Protecting customers from wire fraud during the closing process is a top priority for American Land Title Association members. The title and settlement industry continue to lead the charge, raising awareness about wire fraud and implementing procedures to safeguard real estate funds. Unfortunately, criminals constantly modify their tactics and prey on unsuspecting consumers. Working with our partners in the real estate transaction
and government officials, we continue to educate people about how they can protect their money when purchasing a home or refinancing a mortgage, so they continue to have confidence in our digital world. Along with founding the Coalition to Stop Real Estate Wire Fraud (stopwirefraud.org) to educate consumers about the threat of wire fraud, ALTA created many other resources, including videos about how consumers can stay safe, how ALTA members protect consumers and how to submit a wire fraud complaint with the FBI’s IC3. (Videos can be seen on ALTA’s YouTube channel, youtube.com/ALTAvideos.) ALTA also is working with policymakers to heighten the visibility of this problem across federal agencies. As scammers become increasingly sophisticated, it’s imperative everyone in the real estate transaction does their part to protect the CEO American dream.
American Land Title Association JUNE 2021
Diane Tomb
American Land Title Association
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Association of Independent Mortgage Experts
Robert Broeksmit
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President & CEO Mortgage Bankers Association
Mortgage Bankers Association
TRADE DESK
MBA members, The CFPB recently released to C ong re s s the 2020 C onsu mer Response report. While overall complaints were up 54% year-over-year, complaints against mortgage companies were up just 7.5%, and complaints against mortgage servicers were down, by 3.5%. These results are notable considering the sheer speed and impact the COVID-19 pandemic had on the mortgage finance industry a year ago. The passage of the CARES Act included mandates for forbearance, moratoriums on eviction and foreclosure, and prohibitions against adverse credit reporting. All of it was effective immediately, and servicers were asked to execute these directives with little guidance on how to ensure compliance with the new law. The servicing industry had to do this even while shifting its own workforce out of the office and into their homes. In less than 10 weeks, ser-
NAHB members, Increases in home prices and interest rates have an obvious impact on housing affordability, an issue at the core of what we do at the National Association of Home Builders. While home prices are rising due to several factors - limited inventory, a dearth of buildable lots and labor shortages rising material costs led by a record surge in lumber prices are having an immediate influence on building costs. As those costs rise, a recent NAHB study shows how even relatively small increases in the price of a home or in mortgage interest rates can prevent hundreds of thousands of households from achieving the goal of homeownership. The study found that, nationally, 75.1 million households – or roughly 60% – are already unable to afford the median price of $346,577 for a new home. But a $1,000 increase in the price of that home would further price 153,967 households out of the market at that price. In other words, based on their incomes and standard underwriting criteria, the households would be able to qualify for a mortgage to purchase the home before the price increase, but not afterward. In addition to the national numbers, the study also examines priced-out estimates for individual states and more than 300 metropolitan areas. Not surprisingly, Texas, California and Florida – largely because the three states are the top three populous ones - registered the largest number of households priced out of the market by a $1,000
vicers successfully helped 4.3 million Americans enter forbearance plans. As servicers implemented congressional and agency mandates, the industry simultaneously addressed consumers’ questions and concerns with immediate, tangible solutions. We worked with the GSEs to develop better call scripts to ensure at-risk borrowers understood their options. We supported efforts to expand the payment deferral option for borrowers, providing a streamlined exit process with no documentation. And most recently, MBA helped stand up an industry outreach campaign to connect with borrowers who have not contacted their servicers about their end-of-forbearance alternatives. The ability for the industry and mortgage servicers to overcome the obstacles created by COVID-19 will continue to depend on our ability to work together, listen and learn, and keep the best interests of the nation’s borrowers and lenders front and center.
increase in a median-priced home. The metropolitan area with the largest priced out effect is New York-Newark-Jersey City. The new analysis also includes data on housing affordability based on race and ethnicity. At the national level, the share of Black households that are able to afford a new median-priced home is substantially lower than the share of non-Hispanic white households, a reflection of underlying income disparity among race and ethnicity. Data also shows that 25 basis points added to the mortgage rate at a 30-year fixed rate of 2.8% would price out around 1.29 million households. If mortgage interest rates go up, the monthly mortgage payments will increase as well and higher household income thresholds would be needed to qualify for a mortgage loan. The full study and other NAHB economic and housing policy news are available at EyeOnHousing.org. See what NAHB is doing to address housing affordability, r i s i ng lu m b e r prices and more on NAHB.org.
National Association of Home Builders JUNE 2021
Chuck Fowke
Chairman National Association of Home Builders
Founder/CEO National Association of Minority Mortgage Bankers of America
NAMMBA members, O n M a y 5 t h, t he N a t i o n a l Association of Minority Mortgage Bankers of America held a digital town hall, opening up the opportunity for leaders in mortgage finance and real estate to take up the mission of NAMMBA in the Greater Colorado Area. NAMMBA is a national trade association dedicated to the enrichment and betterment of women and minorities who work in the real estate finance industry. We look at a diverse workforce as being a strategic step all businesses need to take to be able to compete for business in the future. That includes the real estate finance sector. If professionals decide to step forward and form a NAMMBA Chapter in the Greater Colorado Area, members will have access to networking, workshops, sales training, and
NAR members, Every June, the National Association of Realtors takes the opportunity to celebrate homeownership by showcasing individual homeowners, government officials, and various programs that protect and promote the American Dream of homeownership. Homeownership Month was created both to encourage current and future homeowners to be advocates for homeownership and also to ensure current and prospective homeowners have their voices heard at local, state, and national levels of government. To many, the very nature of owning a home offers people a sense of pride and security, and also represents a testament to one’s hard work and sacrifices. As an organization, NAR believes it is vital to take time out to observe and promote homeownership not only for the personal benefits it provides, but also because of its proven ability to strengthen American communities, offer long-term, generational building opportunities, and for the institution’s ability to stabilize and solidify America’s broader economy. To that point, real estate is an essential driver of our economic growth, accounting for more than 16% – or $3 trillion – of America’s Gross Domestic Product. In
more. Not only that, the leadership team will have a seat around the national organization’s table, allowing them to help steer the next steps for NAMMBA. As we head into the middle of the year, we want to ensure that professionals are being supported by training as well as networking, career, and growth opportunities. Each yea r we hold N A MMBA CONNECT, an industry conference designed to give trainers, partners, and stakeholders the opportunity to pitch their company culture, training, and advice to the best and brightest. The conference takes place in Atlanta, September 16-19, 2021. Registration is now open at www. nammba.org. For more infor mation a bout NAMMBA and any of its current programs, please contact us at info@ nammba.org.
the United States, home sales support more than 2.5 million private-sector jobs in an average year. And over this past year, thanks in part to millions of dedicated Realtors and countless hardworking homebuyers, the real estate industry did its part to keep the country’s economy afloat during the pandemic. A recent study from NAR – the Social Benefits of Homeow nership a nd St able Housing Report – shows that homeowners tend to be happier and healthier. On average, they vote more, volunteer more, and contribute more to their communities. And their children tend to perform better academically and socially, too. As Homeownership Month continues, NAR hopes to facilitate a nationwide conversation – engaging millions of current and future homeowners – to highlight the importance and critical benefits of homeownership in America.
Charlie Opper
President National Association of Realtors
National Association of Realtors JUNE 2021
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Tony Thompson
National Association of Minority Mortgage Bankers of America
TRADE DESK
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MORTGAGE
JUNE 2021
MORTGAGE
As profit margins shrink, mortgage execs look at LO comp THE TOP-PRODUCING LO IS OFTEN NOT THE MOST PROFITABLE BY JAMES KLEIMANN
“Trees don’t grow to the moon, and at some point volume comes off from refinances and margin will get tighter.” - Michael McCauley
executives said at a panel from the Mortgage Bankers Association‘s spring conference. “Trees don’t grow to the moon, and at some point volume comes off from refinances and margin will get tighter,” moderator Michael McCauley, principal at mortgage consultancy Garrett, McAuley & Co., told the panelists. Lenders need to prepare for margin compression “because it’s likely to be significantly worse,” McAuley said. Except this time, the lenders in 2018 who priced loans aggressively “have a lot more retained earnings and a lot more staying power,” he said. It raises the stakes for lenders who hopefully learned the hard lessons in 2018.
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“Our mistake in 2018 was trying to hold on too long without reducing margins, and while we did it
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ortgage exe c u t i ve s have a hard time forgetting 2018. The market was coming of f a refi boom, competition was fierce, and the profit margins were slim (if there were any at all). In a bid to gain market share, some of the biggest mortgage originators priced loans aggressively to keep production up and attract loan originators. It led to losses for many originators, who were slow to adjust their pricing. Now, as margins again compress due to a combination of rising interest rates, fewer refis and ballooning workforces, mortgage executives are keeping a close eye on LO comp. Keeping a staff well-fed and happy while minding the bottom line is a delicate balance, mortgage
MORTGAGE
begrudgingly, it created potential morale issues with our sales force,” said Eric Gates, president of Apex Home Loans. “They were losing a greater percentage of transactions than they typically would. For sales force retention, I think it’s important that you’re using some of the tools that are available to make sure you know where the market’s priced, where you’re priced relative to the market, and you’re gonna have to adjust and be quick to do so, so that you don’t lose that market share or have your sales team’s morale drop.”
“Our mistake in 2018 was trying to hold on too long without reducing margins, and while we did it begrudgingly, it created potential morale issues with our sales force."
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-Eric Gates
It was a similar story at California-based retail lender Guild Mortgage Company. Lenders were too slow to adjust pricing in 2018, said Terry Schmidt, president of Guild. “Once we really got those figures and had a heart-to-heart talk with regional managers and said, ‘I need to cut 25 basis points from the whole model, we need help, how are we going to get there?’ They all did it.” Ultimately, you really can’t dictate the margin overall, said Mike Fontaine, co-president and COO of Plaza Home Mortgage. “You’re going to have to be
somewhat in line with what the market is. Last year all of us were able to enjoy larger margins due to the capacity constraints but moving into this cycle we feel that there is a large capacity that’s going to be available, so unfortunately volumes slow and margins slow so you get a double whammy on it with a higher cost structure relative to the number of units you’ve able to produce in a given time.” Pricing the loans in line with the market is critical, the panelists said. And there are some technological advances that are reducing costs. The hybrid e-close has resulted in fewer errors on the postclosing side and lower costs. Fontaine said he looks to invest in automation so long as it isn’t consumer-facing. But the elephant in the room remains personnel costs in the industry, especially LO comp. According to mortgage software firm LBA Ware, the average LO commission in the fourth quarter of 2020 was 105 basis points, flat year over year. But the average individual production in the fourth quarter was $2.6 million per month, a 63% increase from $1.6 million in Q4 2019. LO headcount increased 27% year over year. If the path to achieving an acceptable margin in leaner times is reducing LO
The average LO commission in the fourth quarter of 2020 was 105 basis points, flat year over year.
JUNE 2021
“It’s hard to go to your loan officers and tell them they’ve got to reduce their commissions." -Eric Gates
comp, how will mortgage execs do that, McAuley asked. “It’s hard to go to your loan officers and tell them they’ve got to reduce their commissions,” said Gates. “There are some other tools — we implement dollar minimums and maximums with everyone. And we do have conversations and show the math on that — if they’re willing to lower their maximums then they can be more competitive on larger loans.” Apex came up with an LO comp structure where a worker receives a typical base salary plus a bonus during a busy time. When the market slows, they’ll go back to their typical levels. It’s all about transparency, according to Schmidt, whose lender’s gain-on-sale margins increased by 122 basis points in 2020 to 500 basis points but are showing signs of shrinkage. “The more transparent you are as a company, the better,” she said. “You’ve got these margins behind the scenes where it’s just to cover all of your costs. We made a change about a year or two ago where we pretty much showed our teams everything, a fully loaded transaction with fully loaded costs of running the business. We really refined what’s our target as a company, what’s the profitability mark we need to get to?
MORTGAGE
For retail it’s generally pretty similar, it’s how you present it. Sometimes you have loan originators who think they’re getting something special going somewhere else financially, when in reality it’s all the same. It just gets packaged a little differently. So we can be really transparent about that, and I think it’s helped us.”
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“It was a pretty consistent pattern that your top LO was not actually the most profitable and good at holding the margin." -Michael McAuley
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It’s not just the LOs who would need to worry about reduced compensation when leaner times arrive. Underwriters who commanded salaries north of $120,000 and landed fat signing bonuses will be in a precarious position. To a lesser extent, the same is true of processors, closers and other ops people who made top-of-market money in a very different environment. “That doesn’t seem sustainable,” said Gates. “I know that anecdotally, some of those companies who I’ve spoken to said that many of those higher cost people who are also their newest hires may be the first to go in a shrinking volume environment with a higher costs. Or maybe they’ll have to go back and renegotiate those compensation packages down to what’s been a more typical level.” The panelists also took on the subject of pricing concessions as part of LO comp. “Pricing concessions can be valuable,” said McCauley. “They’re an indicator of price discovery — if you have no pricing concessions or no request for concessions, probably too often your prices are more aggressive than the competition. On the other hand, as my partner Joe Garrett likes to say, concessions kill. I’ve run into companies where maybe 60% or 70% of their loans were getting pricing concessions in 2018. Their argument was, well at least we’re
getting a full price fat margin on the other 30%. But then the other 60%, 70% are getting pricing concessions, I think there’s some obvious some problems there.” Schmidt said Guild has a proprietary system that shows all loan officer details. A branch regional manager can see how many subsidies they’ve asked for and can determine what’s necessary. The system also requires an explanation for any subsidy. Stronger use of analytics platforms will help guide mortgage executives to determine how many concessions their LOs should be offering, McAuley said. He reviewed some lenders in the Southwest and found the top-producing LO was often not the most profitable for the company. “It was a pretty consistent pattern that your top LO was not actually the most profitable and good at holding the margin,” he said. “They were the top producer because they were getting a lot of concessions, and it was really the second producer or number three that were the most profitable to the company because they were able to hold the margins while still doing a lot of production. It’s sort of a sweet spot there.”
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REAL ESTATE
JUNE 2021
REAL ESTATE
Frustrated homebuyers turn to fixer-uppers LOW INVENTORY DRIVES HOMEBUYERS TOWARD RENO LOANS
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atrick, a 25-year old tech worker, had his heart set on buying a home in the Reading, Massachusetts area, where he grew up. He wasn’t looking for a fixer-upper. That turned out to be nearly impossible as home prices in the small town north of Boston accelerated. The first house he submitted in an offer for fetched $70,000 more than the asking price, only to be flipped for another $60,000. “They got their lunch handed to them — it was lose, lose, lose, lose,” said David Snover, the mortgage originator Patrick worked with. Patrick, a first-time homebuyer, was competing with buyers who were waiving basic contingency requirements and/or putting in offers that far exceeded the seller’s asking price. After months of slogging through a string of disappointments,
“If agents had a heart, they would say — how could we strengthen you as a buyer?” - David Snover
JUNE 2021
Patrick turned to a renovation loan and started looking at fixer-uppers. He got his house, albeit with cabinets that hadn’t been updated in 25 years. Snover said that few real estate agents suggest that buyers purchase a home with a renovation loan, sometimes because they are unfamiliar with the process — which has its complexities. Most sellers, if given the choice, would seldom choose a lengthy construction financing process to a cash offer on a dilapidated house. Most buyers want a move-in ready home, and few want to put up with the hassle of hiring a contractor. But being willing to buy a fixer-upper home with cosmetic deficiencies could allow savvy buyers to skip the bidding wars altogether. “If agents had a heart, they would say — how could we strengthen you as a buyer? One way is to stop looking at the same properties the competition is,” said Snover, a loan originator with Flagstar Bank in Andover, Massachusetts. “They’re not buying properties that don’t look good from the street,” Snover said.
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BY GEORGIA KROMREI
REAL ESTATE
With stagnant inventory and fierce competition for homes, however, being willing to rehab a fixer-upper could give buyers an edge. Lenders expect consumer interest in renovation loans to remain elevated in the near- and medium-term, especially in light of many companies’ move to keep at least some of their workforce remote.
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Even with COVID-19 shutdowns and surging construction costs, homeowners in 2020 turned to renovation loans roughly as much as they did in 2019. In 2020, lenders originated $51.7 billion in renovation loans, compared to $51.6 billion in 2019, according to an analysis of 2020 preliminary HMDA data by iEmergent. Those figures do not count the homeowners who refinanced in order to fund renovations — or the ones who put the new home office addition on a credit card. For borrowers who wish to take the fixer-upper plunge, there are two primary programs used to finance a home renovation. The 203K, administered by the FHA, covers the cost of the home plus the cost of the repair, and requires between 10% and 20% of the total loan amount be set aside as a contingency. The 203K requires a HUD inspector and consultant and can’t be used for “luxury” items such as pools. The loan requires a 1% origination fee from the borrower, who also pays closing costs of between 3-to-6%. The Fannie Mae Homestyle program, for conventional borrowers, requires that repairs be completed within 12 months. It also requires a contingency be set aside for cost overruns, but doesn’t require a HUD inspector or consultant. It similarly
In 2020, lenders originated $51.7 billion in renovation loans, compared to $51.6 billion in 2019.
JUNE 2021
requires the borrower to pay closing costs and origination fees. Both programs offer financing based on the “as completed,” or future value of the property, based on an appraisal which takes into consideration the planned additions. The Homestyle program can be used for investment properties, though the 203K loan is only for primary residences. There aren’t many limits on the types of renovation projects for a Homestyle loan, as long as they add value to the home. In both programs, the lender typically pays the contractor directly, af ter conducting inspections to make sure the renovations add value to the property. The programs, which both allow for downpayments below 5%, can be difficult to navigate during normal times, as projects grow or change mid-stream, after construction begins. There are often surprises when removing walls or floors, and that’s before factoring in rising construction costs. It’s a challenge for borrowers who must hew to a fixed budget and stick with a project plan. One major pain point is the soaring cost of building materials – wood, steel, metal, gypsum are all more expensive since the pandemic began. Lumber is up from $328 this time last year to an eye-popping $1,326, according to Chicago Mercantile Exchange random length lumber futures. Lumber alone has pushed the cost of new builds more than $24,000, according to the National Association of Home Builders. Ed Currie, a loan officer at Associated Bank, quickly rattled off the current price of lumber, which he keeps updated on his desktop computer. “It looks like a Google chart from 1999,” Currie said. So, what happens when the price of lumber doubles while you’re replacing a wall in your house? According to Currie, the borrower either has to cough up extra cash, or limit the scope of the fixer-upper
REAL ESTATE
project. Only very rarely, he said, does a borrower ask for more cash. “If you have overages, if lumber costs go up, that’s on you, you need to cover that,” said Currie. That also adds to sellers’ typical apprehension toward construction loan financing. Sellers get “a little squeamish,” Currie said, because they don’t want the transaction to be dependent on a future appraisal. Buyers are soldiering on, however. Currie said Associated Bank saw about a 50% increase in renovation loans last year, mostly driven by an influx of buyers who were turned away from larger lenders who paused construction and renovation loans in 2020. Despite the turmoil in the lumber market, no changes were made to the renovation loan programs. Contractors, who do not typically get paid until they’ve completed a portion of the construction project, have started requiring “lumber allowances” upfront. Some homebuilders are waiting out the surging lumber prices, said Nate Noel, a real estate agent at Baird & Warner, who also has a construction company, HNN Builders, in the Chicago area. “They’ve dug the foundation and clients are holding off 3-6 months in the hope that lumber prices will go down because it’s a $50,000 difference,” said Noel.
“It increases your buying power for those run-down houses that are always being bought by developers and general contractors to flip and fix or turn into rentals." -Nate Noel
complicated construction lending process, CIVIC Financial Services offers an alternative. CIVIC purchases the house on behalf of investors and handles the construction financing in-house, all without the “red tape” of the conventional lending process, said Whit McCarthy, the company’s senior vice president of correspondent lending. Whereas a typical borrower could be waiting for callbacks from contractors and municipal permits in order to close on the fixer-upper, CIVIC can close on a run-down house in two weeks. Investors are motivated by the ultimate return on the investment, which McCarthy explained is a function of “buy for X, put Y into it and sell for Z.” Disciplined investors only want transactions with a specific margin — if X and Y are too great, and Z is not enough, the deal isn’t worth it for an investor. “There are plenty of scenarios where there’s no margin in the deal,” said McCarthy. Investors constrained by their margins could still be outplayed by homebuyers willing to offer more for a fixer-upper they intend to live in. “It increases your buying power for those run-down houses that are always being bought by developers and general contractors to flip and fix or turn into rentals,” said Noel. “Homebuyers don’t need the 20% margin that developers need. They just need to live there.”
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Even for fixer-uppers, competition can come from a different profile of homeshopper — those representing investors, who wish to purchase the property, quickly renovate the home and sell it for a tidy profit (or convert it to a rental property). Where sellers are war y of the
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REAL ESTATE BROKERAGES
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REAL ESTATE BROKERAGES
Warren Buffett’s boring, dominant resi brokerage HOW HOMESERVICES HAS STAYED PROFITABLE FOR YEARS
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ino B le f ari is a pretty colorful c h a r a c t e r. T h e Berkshire Hathaway HomeServices of America CEO and chairman of Berkshire’s franchise network, HSF Affiliates, calls money “dough,” and is fond of tangents – like describing the initial reporting on the JFK assassination, and the best routes to the John Wayne Airport in Irvine, California. But while Blefari has a clearly defined personality, the residential real estate brokerage he runs doesn’t. Berkshire Hathaway HomeServices of America is not just a boring mouthful of a name, but it is a confusingly layered operation. There are corporate parents, brokerage branches, brokerage branches with their own branding, mortgage companies, mortgage companies that are joint ventures with a subsidiary brokerage, a title
“I’d like us to have more of an identity.” -Gino Blefari
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and escrow division, and an insurance division. HSF Affiliates, meanwhile, is a mélange of franchisees with and without the Berkshire name. “I’d like us to have more of an identity,” Blefari admitted. This muddle combined with the brokerage’s old-fashioned approach – Blefari is not only the rare real estate CEO who does not wax on about technology, but he actually discussed how fun it was to recently post on Facebook – underwhelms real estate observers, who can offer a fiercely opinionated response about Zillow or Compass at the drop of a hat. HomeServices is “staid” and “traditional,” said Jonathan Miller, appraiser at Miller Samuel, with “nothing earth-shattering” going on. But at the same time, Miller acknowledges, the brokerage is “well-regarded.” Indeed, bland does not mean bad. HomeServices partook in more U.S. home sales in 2020 than any other brokerage in the country, according to data reported to RealTrends.
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BY MATTHEW BLAKE
REAL ESTATE BROKERAGES
Pe rhap s m o re imp re s s ive l y, HomeServices posted a sizable profit for the third year in the row. It is the rare residential brokerage with both a nationwide presence and consistent annual profits. HomeServices does not seem to do anything tantalizingly brilliant – except perhaps realizing what a brokerage is and isn’t capable of.
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In theory, the HomeServices brand could be a person, Warren Buffett, the CEO of Berkshire Hathaway who took control of the Omaha-headquartered conglomerate in 1965 and is perhaps the most famous business mogul in the country. But the 90-year-old Buffett did not mention his real estate brokerage holdings once in a 14-page letter to Berkshire shareholders in February, a letter that managed to squeeze in a whole page about BNSF Railways plus Buffett’s penchant for risqué Mae West quotes. While the CEO, who has a net worth of $100 billion, could buy and sell the 10 biggest brokerages in the country tomorrow, there has never been talk of Buffett either spinning off HomeServices or making a more ambitious real estate brokerage play. In fact, Blefari said he hasn’t spoken to Buffett in years, and that the larger corporation’s pile of money is completely “siloed” from HomeServices’ operations. Blefari does sometimes speak with Greg Abel, the chairman and CEO of Berkshire Hathaway Energy. Just over 20 years ago, Berkshire Hathaway bought Mid-American Energy, a company that held HomeServices, a Minneapolis-based brokerage. HomeServices has remained part of
Berkshire Hathaway Energy ever since, meaning Blefari sits in on Monday conference calls with executives from the likes of Northern Natural Gas and Kern River Gas Transmission Company. “I know more about the energy business than any other CEO in real estate,” Blefari said. A B erkshire Hathaway Energy spokesperson acknowledged that “the energy industry and residential real estate market are quite different.” But the spokesperson added that like all of Berkshire Hathaway Energy’s businesses, HomeServices is locally managed, pursues growth opportunities, and “there hasn’t been a need” to change where the brokerage fits into Berkshire’s corporate hierarchy.
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Tired of work from home? HomeServices has 883 offices – physical brick-andmortar sites – and 43,258 agents at the end of 2020, according to figures the company provided to RealTrends. The brokerage was party to 343,000 home sales in 2020, which ranks first among brokerage companies in terms of transaction volume. HomeServices was third in sales volume, reporting $150 billion, which puts it behind Realogy’s $184 billion, and Compass’s $152 billion. Those numbers include a slew of brokerages that HomeServices has steadily acquired, from its purchase of Atlanta luxury firm Harry Norman Realtors in 2006 to the blockbuster acquisition of Northern Virginia’s Long & Foster Companies in 2017. The Home Services numbers do not include 370 HSF Affiliates franchisees. The franchise network racked up north of 270,000 transaction sides in total for 2020, per RealTrends.
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In 2018, Berkshire Hathaway bought out Brookfield Asset Management’s stake in HSF Affiliates, a deal that at the time valued the franchise network at $490 million. The arguably low valuation stems from HSF Affiliates mostly subsisting o n f r a n c h i s e f e e s . C o nve r s e l y, HomeServices has an array of revenue sources. “The owned brokerage contributes the lion’s share of the revenues and profit of the total enterprise for sure, especially when you consider how large HomeServices is in mortgage and title insurance,” said Steve Murray, president of RealTrends, which was acquired by HW Media in late 2020. HomeServices gets nary a passing mention in Berkshire Hathaway’s public filings, much less a breakout of its financials. But Blefari told HousingWire that the brokerage generated $5.4 billion in 2020 revenue, with the money roughly split between real estate agent sales commissions, mor tgage fees and commissions, and title and escrow transactions. HomeServices posted $345 million in net income, Blefari said, riding the wave of the extraordinary pandemic real estate and mortgage boom. But HomeServices was profitable before, claiming $160 million net income in 2019, and $145 million in 2018. Blefari puffed out his chest about the earnings. There is a “huge difference in money made,” he said, between HomeServices and Realogy, another brokerage conglomerate that includes Coldwell Banker and Century 21, and which posted a $356 million net income loss in 2020. “At least Realogy tries to make money,” Blefari said – a not too subtle dig against Compass.
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“You saw what happened with Keller Williams,” Blefari said, alluding to the franchise brokerage parting ways in February with company president Josh Team, who was tasked with developing proprietar y customer relationship management software. “All this hoopla about this great platform, and then it’s all quiet.” HomeServices has made its own techrelated announcements over the years, including a 2019 announced partnership with Oracle for a “complete suite of cloud applications” to assist agents with lead-generation along with document processing. But different HomeServices branches – and different agents at those branches – choose their own technology, which Blefari said is fine with him. “I tell agents sometimes, ‘What’s the best CRM? The one you’ve got,’” Blefari said. The hands-off approach extends to branding. When HomeServices acquired Long & Foster in 2017, Boomer Foster, president of the to-be-acquired business, prophetically told the Washington Post, “Nothing is changing at all. If we didn’t tell anybody this has happened, no one would know it happened.” Blefari, who became CEO in 2019 but headed HSF Affiliates before then, said that HomeServices learned from Realogy’s experience to let its brokerage branches be. “Realogy was buying companies and making them all ‘Coldwell Bankers’ and I think that just broke some of these brokerages,” Blefari said. The lack of brand awareness afflicts not just customers but agents. It took a second for Lance Hanson, AA managing broker at RE/MAX in Des Moines, Iowa for the last 34 years, to remember the local HomeServices companies. HomeServices’ emphasis on stability
and permanence is appealing, said Nick Solis, who in April took the position of managing broker at Drysdale Properties, an HSF Affiliates franchisee in Danville, California. “They are a real estate company, and that is not sexy press. It is sexy to say a technology company,” Solis said. “HomeServices of America hires, trains, and promotes agents that sell homes. There is flashy, and there is tried and true.”
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Steve Withrow had spent 13 years at Long & Foster when he got the big news that HomeServices was spending hundreds of millions of dollars to acquire the Washington, D.C. area’s largest brokerage. Would the move result in the belttightening? Would HomeServices give agents more office space or better electronic marketing tools? Would Warren Buf fet t himself make an appearance? Would Withrow get new business cards? No, no, no, and no. As Blefari and Boomer Foster said, even HomeServices biggest acquisitions have no discernible effect on the acquired company. And to Withrow, that was strange and disappointing. “We were told there wouldn’t be changes,” Withrow said. “That’s not necessarily what we wanted to hear.” Withrow – and several other Long & Foster agents – jumped to Compass, where he now gets a larger split of his sales commission. Compass is already a recognized consumer brand, Withrow said, adding, “You feel a lightness about it. Compass is always coming out with new and different programs, and that can make it easier
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and more exciting to do your job.” Put simply, HomeServices struggles to keep agents that want more than tried and true. Some agents described HomeServices splits – sometimes 70% agent, 30% brokerage, even for quality producers – as a relic of a different era. Even Blefari admits concern about HomeServices’ future margins. “The company dollar has eroded year after year,” Blefari said, lambasting venture capital-infused Compass for not being on a “level playing field” with that company’s bonuses and perks. Another concern for the CEO is that HomeServices’ amorphous blandness has created cost overruns. Having a more defined identity, Blefari added, could create economies of scale. Blefari spoke approvingly of Realogy brands Coldwell Banker and Better Homes and Garden coordinating “back office” work. B u t u l t i m a t e l y, B l e f a r i s a i d , HomeServices will never be much of a consumer brand. While that lack of expenditure on brand awareness turned off Withrow, it suits his former colleague, Neil Bacchus, fine. “I don’t really need anything new,” Bacchus said. “They have a good commission plan if you work for it, and there’s only so much that you can do with technology.” A real estate brokerage is obviously important to the salaried workers and executives of each respective brokerage. And outside observers, including Wall Street and the media, generally perceive brokerages to be an important part of the housing economy. But, Bacchus said, the brokerage is not that important to consumers, and it carries little weight with the seasoned agents he knows. “The company, it’s just an umbrella,” he said. “When I think about it, I don’t really need a brokerage.”
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KUDOS
Florida Title CEO spurred to action after Texas winter storms
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Nicknamed the “Tampa Chainsaw Man,” Aaron Davis inspires an industry to give back
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By Tim Glaze
After unprecedented winter storms ravaged large parts of Texas in February, Florida native Aaron Davis — always one to volunteer his time for those in need — found himself in the thick of the devastation in Harper, Texas, a decision that led eventually to national coverage of his selfless deeds. “The weight of snow and ice on trees, roofs, and structures — it was incredibly similar to a hurricane, which I’m accustomed to preparing for on a regular basis, being from Florida,” he said. “This was the equivalent of a week-long hurricane, mixed with Arctic temperatures, and no power.” Aptly nicknamed the “Tampa Chainsaw Man,” Davis, who is the CEO of AMD Enterprises, a conglomerate of title business ventures, including Florida Agency Network and Premier Data Services, was ready to help in the disaster relief efforts in Texas. “What I witnessed in Harper the day after I arrived was amazing,” he said. “Truckloads of food and supplies arriving, people from neighboring towns showing up to help their neighbors, whether to offer a shower, help cut tree limbs, donate funds, and do whatever was needed to help.” And how did Davis end up in Harper? He wanted to go somewhere he could be of use and even told his job he was “taking a month off” to volunteer in Texas. D av i s ’ g i rl friend lives in Austin, and he flew to the city following a pipe bursting in her home due to the winter storms. Once she was secure with friends and family helping, as Davis explained, he started looking for some additional opportunities in the area to volunteer. That’s when he was led to Lakeway Church, near Lake Travis
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in the Austin area. “They were collecting water, firewood, food, and other supplies,” he said. “I arrived at the church Saturday morning in a rental truck, wearing some work clothes and a Tampa Bay Buccaneers hat. Sam McGee, a volunteer associated with the church and coordinating the collection efforts, asked if I’d be willing to drive to Harper to assist in cutting some trees that had fallen, and be feet on the ground to assess the damage and needs of the community, and communicate that back to Lakeway so they can send supplies and labor.” Davis said Harper had been identified by some of the members of the church as a town in need, as most of the residents were going on eight straight days of no power — and with little support, due to the town being so remote. More than 4.5 million homes and businesses were left without power following the winter storms that hit Texas between F e b r u a r y 13 and 17. Demand for electricity in Texas hit a record of 69,150 megawatts on Febr ua r y 14 — 3,20 0 megawatts higher tha n t he prev iou s record set in January 2018, acc ord i ng t o the Electr ic Reliability Council of Texas. Water service was disrupted for more than 12 million people due to pipes freezing and bursting, with Austin Water Director Greg Meszaros saying that the city had lost more
than 325 million gallons of water due to burst pipes by February 18. But the Lakeway Church task group, with Davis included, immediately made an impact in Harper, which sits two hours away from Austin. Davis started by gathering chainsaws so that people could clear the limbs that fell. Then he started a GoFundMe to support the town. By April, the GoFundMe had raised around $70,000 for those in Harper in need. Plus, Davis himself donated supplies to Lakeway Church, wrote the church a $10,000 check, and gave church officials $1,000 in cash. Davis’ decision to support Harper also directly led to other donations pouring in to help the city. People Magazine caught wind of his efforts and interviewed him, which led to a more national audience chipping in to grow the GoFundMe. “ I ju s t felt i nc red ibly guilty sitting down in Tampa, Florida, in the sunshine watching the rest of the country suffer,” Davis told People. “I’ve weathered many storms in my life in Florida, the hurricane capital of the world. I just try to step up and do what I can. When off icials at the A mer ic a n L a nd T itle Association got word of D av i s ’ i nvolvement i n Harper, the A LTA Good Deeds Foundation donated $5,000 toward the effort.
Other industry peers, title owners, underwriters, coworkers, and friends all donated toward the effort in Harper, Davis said. Now CEO of the title company, Davis’ mother, Gail Calhoun, is who started Hillsborough Title in Plant City, Florida, in 1984. Davis grew up in the business, performing every role, he said, ultimately purchasing the company from Calhoun in September 2008. “From there, we grew a single office operation into the Florida Agency Network, which consists of numerous brands and 40-plus offices statewide,” he said. “We joined ALTA years ago and love the value they bring to us, the title agents. We also appreciate their continuous efforts to educate the greater mortgage and real estate industry of the important role title agents play in the homeownership process.” Looking back at his time volunteer ing in Texa s, Davis said, “It was truly a humbling experience and one I will never forget.”
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parting shot
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❱ GATHERING OF EAGLES CONFERENCE For over 30 years, executive leadership teams from the nation’s top residential real estate firms have come together for the Gathering of Eagles conference. Hosted by RealTrends, a HousingWire sister company, the exclusive four-day event takes place at The Broadmoor in Colorado Springs, Colorado, presenting never-beforeseen data on the competitive real estate market. After the COVID-19 pandemic canceled last year’s event, which also would have taken place at The Broadmoor, RealTrends is ready and excited to resume its long-time tradition of bringing the industry’s top masterminds under one roof. JUNE 2021
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