December 2021/January 2022
HOUSINGWIRE MAGAZINE ❱ December 2021/January 2022
What can you expect for housing in 2022?
check back next year
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HOUSINGWIRE EDITOR-IN-CHIEF SARAH WHEELER MANAGING EDITOR JAMES KLEIMANN HW+ MANAGING EDITOR BRENA NATH SENIOR REAL ESTATE REPORTER MATTHEW BLAKE SENIOR MORTGAGE REPORTERS BILL CONROY, GEORGIA KROMREI REAL ESTATE REPORTER BROOKLEE HAN MORTGAGE REPORTERS FLÁVIA FURLAN NUNES, MARIA VOLKOVA LEAD ANALYST LOGAN MOHTASHAMI MEMBERSHIP COORDINATOR SARAHI DE LA CUESTA CONTRIBUTORS CAITLIN GREEN, ROMI MAHAJAN
REALTRENDS DIRECTOR OF REAL ESTATE MARK ADAMS EDITORIAL DIRECTOR TRACEY VELT DIRECTOR OF CREATIVE SERVICES BO FRIZE PROGRAM MANAGER LIZ SMITH FINLEDGER DIRECTOR HOLDEN PAGE ASSISTANT EDITOR ALEX ROHA REPORTER JOE BURNS REVERSE MORTGAGE DAILY EDITOR CHRIS CLOW
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HW MEDIA CORPORATE CEO CLAYTON COLLINS COO DIEGO SANCHEZ DIRECTOR OF FINANCE ANDREW KEY DIRECTOR OF PEOPLE AND CULTURE AMY BEARD DIRECTOR OF GROWTH CAREN KARRIS DIRECTOR OF EVENTS TRACY GARCIA CREATIVE EMILY CARPENTER MARKETING PROGRAM MANAGER LESLEY COLLINS STRATEGIC ACCOUNT DIRECTOR HALEY HESS WEB DIRECTOR BRENT DRIGGERS PRODUCT MANAGER MATTHEW STAFFORD GROWTH COORDINATOR SYDNEY SMITH EVENTS COORDINATOR KATIE GALBRAITH CLIENT SUCCESS COORDINATORS SETH FREEDMAN, ELIZABETH LEDOUX BUSINESS ANALYST WHITNI ROWE SALES SVP SALES AND OPERATIONS JENNIFER WATSON LAWS CALIFORNIA CHRISTI HUMPHRIES SOUTHEAST TAMARA WREN GREAT LAKES & NORTHEAST MICHAEL ORME SALES MARKETING MANAGER TOD MOHNEY SALES STRATEGY ASSOCIATES AMINA JAHIC, LINDSLEY HARRIS PODCASTS AND MULTIMEDIA DIGITAL MEDIA MANAGER ALCYNNA LLOYD JUNIOR DIGITAL PRODUCER ELISSA BRANCH CONTENT SOLUTIONS MANAGING EDITOR MALEESA SMITH CONTENT EDITOR JESSICA DAVIS ASSISTANT CONTENT EDITOR JORDAN WHITE WEBINAR MANAGER ALLISON LAFORGIA
HOW TO REACH US LETTERS TO THE EDITOR EDITOR@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) 870-4572 ADVERTISING CLIENT SUCCESS CLIENTSUCCESS@HOUSINGWIRE.COM
December 2021/January 2022
LETTER FROM THE EDITOR
“Concentrate and ask again!” AS WE ENTER A NEW YEAR, let’s look at some
ing, title and secondary space.
of the events that we can look forward to in 2022.
This issue also recognizes our 2021 class of
For starters, it’s a leap year and the year the Win-
HousingWire Tech Trendsetters, as we honor
ter Olympics and FIFA World Cup will take place.
their immense accomplishments over the last
Toward the end of the year, Americans will also
12 months. These are the leaders who are inject-
be selecting the 118th Congress. But what about
ing new technology into the housing market and
what’s next for the housing industry?
pushing the envelope with tech disruption. Con-
Unlike asking a Magic 8 Ball about the future
grats to this year ’s honorees!
and crossing your fingers that you get the answer you want, this December/January issue was designed to give as much clarity and insight as possible around what to expect in housing in 2022, so you can enter the next year ready to compete. This is the second year that HW Media’s newsrooms have come together to give an inside look at what to expect across the entire housing ecobroke down some of the biggest trends to watch for in 2022 in the mortgage, real estate, servic-
Brena Nath HW+ Managing Editor @BrenaNath
Tweets From The Streets Serious question: Any chances Z starts buying homes again next Spring? If not, will they partner with other iBuyers or allow other iBuyers to advertise on Z? 8
1
11
by @NateSmoyer
December 2021/January 2022
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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system. Starting on page 30, our editorial team
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December 2021/ January 2022
People Movers
12
Mortgage
Ann Thorn, 25-year veteran of the mortgage industry, joins Wells Fargo’s Home Lending team.
70 Local Intel
22
Take 5
14 LBA Ware Founder and CEO Lori Brewer is not only a skilled entrepreneur but also an avid runner.
Can you guess which market isn’t experiencing extremely high home price appreciation?
Trade Desk
62
Launches
16
NAHB’s publishing arm just announced its first children’s book is its fastest-selling publication.
Keller Williams partnered with educational platform Kaplan to create a real estate training program.
Real Estate
66
Event Calendar
18 What does the future of the digital landscape look like? MISMO’s Winter Summit aims to address this.
Why are brokerages and mortgage lenders rushing into JVs? Here’s what industry leaders think.
Secondary Market
74 The 800-pound gorilla in the private-label space and a look into the institution behind it.
Kudos
78 NLM Lending was looking for a way to recognize service members. Here’s what they came up with.
Parting Shot
82 Recapping the HW annual event in Frisco, Texas earlier this year. Here’s what you missed.
Inside Agent
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Industry stakeholders offer up a staggering number of ideas to FHFA on equitable housing finance.
A look inside the housing market that is home to Fruit of the Loom, General Motors and Smuckers.
December 2021/January 2022
RMD Q&A
What can you expect for housing in 2022? Here are the major trends and changes to expect in each housing segment.
54
These four leaders demonstrate that they know how to actually change the game and elevate the standing of the reverse mortgage industry.
38 Tech Trendsetters Recognizing this year’s class of HousingWire Tech Trendsetters, this list of honorees represents the market disruptors who are overseeing and leading the charge when it comes to tech adoption and moving the industry forward.
60
Special Report
To address lender technology needs, Black Knight developed a point-of-sale solution that delivers a single, fully integrated and customer-facing mortgage loan application solution.
Taking stock: Your leadership approach in 2022
Pay later platforms: A superhero for the housing ecosystem?
By Caitlin Green
By Romi Mahajan
26
28 December 2021/January 2022
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features
f
30
Housing 2022
PEOPLE MOVERS
Ann Thorn
| Wells Fargo | Head of Home Lending Servicing
Wells Fargo appointed Ann Thorn as head of the company’s Home Lending servicing operations. The 25-year veteran of the mortgage industry will oversee one of the nation’s largest mortgage servicing portfolios. Most recently, she served as chief loan administration officer at Caliber Home Loans, where she was responsible for all production and servicing operations in Caliber’s four channels.
Kevin Pezanni |
Supreme Lending | Chief Operating Officer
Supreme Lending recently announced several new additions to its leadership team, including naming Kevin Pezanni as chief operating officer. With nearly three decades of his career dedicated to mortgage finance, sales, operations, risk management and regulatory compliance, Pezanni also is involved in several industry organizations, including the Mortgage Bankers Association. In his new role, he is responsible for driving operational excellence, strategy and execution.
Michael Wilson |
Plaza Home Mortgage | Chief Information Officer
National wholesale and correspondent lender Plaza Home Mortgage named a new chief information officer, appointing Michael Wilson to the position. Wilson is responsible for strategic planning and oversight of Plaza’s technology activities, along with overseeing the company’s data center and implementation of new systems and applications. Wilson’s experience includes co-founding technology startup Zense and serving as vice president of IT operations, chief information security officer at Impac Mortgage.
Gary McKiddy |
Mid America Mortgage | Chief Risk Officer
Mid America Mortgage announced Gary McKiddy has rejoined the organization as chief risk officer. In his new role, McKiddy will leverage his nearly 40 years of experience in corporate financial management across multiple verticals, including mortgage banking, to help Mid America Mortgage manage risk and improve operations amid the ongoing expansion of its product line. His prior roles include serving as chief financial officer at NTFN for 19 years.
Ryan Kerian |
Panorama Mortgage Group | Chief Compliance Officer and General
Counsel
Panorama Mortgage Group appointed Ryan Kerian as chief compliance officer and general counsel. In his new role, he taps into more than 15 years of experience, which includes a variety of leadership positions both within and outside of the mortgage industry. Kerian is responsible for aligning legal, compliance and operational functions, along with protecting the interests of both the company and its clients.
Stephanie Sailor |
Homespire Mortgage | Vice President of Secondary Marketing
Residential mortgage lender Homespire Mortgage hired Stephanie Sailor as its new vice president of secondary marketing. Bringing more than 20 years of experience to the lender, Sailor will be leading Homespire’s initiatives related to loan purchasing, sales and servicing transfers. Her background includes working with PrimeLending and Nationstar Mortgage, helping develop and support strategies for their mortgage pipelines and trading activities.
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Courtney Dec |
bundle | General Counsel
Compliant real-estate document preparation service provider bundle named Courtney Dec as general counsel, where she will report directly to the CEO and the board of directors. A recent graduate of the State University of New York at Buffalo School of Law, Dec is tasked with advising the executive management team on new and existing laws and legal rights that could impact the functionality of the business. Dec is also responsible for maintaining the relationship with all attorneys of counsel.
December 2021/January 2022
Tom Moreno
Chief Information Officer Lennar Financial Services
We celebrate you,
Tom Moreno 2021 TECH TRENDSETTER AWARD RECIPIENT
Tom, Congratulations on being named a 2021 HousingWire Tech Trendsetter! It’s because of your dedication, leadership, and forward-thinking that you’re deserving of such an honor. Always, Your Lennar Mortgage Family
TAKE 5
Lori Brewer Founder/CEO at LBA Ware
As founder and CEO at LBA Ware, Lori Brewer is not only a skilled entrepreneur, but also, she is a 2020 HousingWire Tech Trendsetter winner. Founding LBA Ware in 2008, Brewer built the company out of a desire to address mortgage lenders’ needs for custom technology solutions that automate traditionally manual processes. And now with more than 20 years of mortgage banking experience, her list of accomplishments includes LBA Ware being named to the Inc. 5000 list and conceptualizing and building CompenSafe, a mortgage-specific incentive compensation management platform. Notably, before she joined the mortgage industry, Brewer was an officer in the U.S. Air Force, where she designed an inaugural website for the C-130 Hercules, organizing and presenting crucial information for troops around the globe. Brewer answers five questions:
1. If I had picked a different career path... I would be an Architectural Engineer. This is what I went to school for but never technically worked in this career field. I like planning, designing and creating something functional and beautiful — so in a way software development has checked that box.
2. People would be surprised to know... that I
ran the Boston Marathon twice. The first time I qualified to run was in 2014, the year the bombs exploded at the finish line. I was very close to making the turn onto Boylston Street and witnessed the chaos.
3. The book I can’t stop recommending... is “The Hard Thing about Hard Things” by Ben Horowitz. I’ve read it multiple times. For a non-businessoriented book, I like to recommend reading “Hamilton” by Ron Chernow.
4. My bucket list... contains hiking the Tour du Mont Blanc trail. The hike is 100 miles long and circles the mountain. Along the way you can stay in quaint European villages and hamlets with amazing food, wine and scenery. 14 ❱ HOUSINGWIRE
5. I would tell my younger self... to quit thinking about what other people may think of you [what you wear, what you say, what you do, where you go] and just “do you.” Have confidence in your decisions and “go forth and prosper.”
December 2021/January 2022
$
T
LAUNCHES
Ocrolus and Blend Ocrolus, a financial document automation provider, and end-to-end cloud-based lending platform Blend, announced a strategic partnership that will embed Humanin-the-Loop (HITL) document analysis into Blend’s digital mortgage applications, according to a press release. The partnership will incorporate Ocrolus’s technology, which automates financial document data capture, cash flow analysis and fraud detection, into Blend’s existing digital mortgage systems. While this will start with a focus on classifying documents and capturing mortgage application data, the two companies say there is potential for expansion into other business areas in the future. “Blend is simplifying and streamlining the lending experience for consumers and bankers alike. We’re enhancing the Blend platform with Ocrolus’s automated, accurate document classification and data extraction capabilities,” Blend Manager of Business Development Jeff Braddock stated in the release.
Rocket Mortgage and Salesforce Mortgage lending titan Rocket Mortgage is bringing its tech straight to financial institutions. The lender announced a partnership with Salesforce to deliver Rocket’s mortgage origination capabilities directly to banks, credit unions and other financial institutions through Salesforce Financial Services Cloud. Rocket is now the first mortgage lender to provide an end-to-end “mortgage-as-a-service” solution through Salesforce’s financial cloud. Already the leading originator in the U.S. thanks to nearly $84 billion dollars in volume in the second quarter, Rocket sees this program as an opportunity to further increase market share. It’s a significant lending play, as many of these smaller credit unions and community banks aren’t large enough to run their own mortgage operations.
Opendoor Instant homebuyer Opendoor has acquired “tech”-focused mortgage brokerage RedDoor. Founded in 2018 and headquartered in Sacramento, RedDoor calls itself a “digital first mortgage brokerage” that can preapprove a loan applicant “within 60 seconds,” likely what was appealing to the iBuyer. The company has funded over $200 million in mortgages and partners with over 70 lenders, according to its website. RedDoor will be rebranded to become part of Opendoor, and appears to have just a handful of loan officers, who are salaried and don’t receive commission. According to a blog post from Opendoor Chief Product Officer Tom Willerer, the company first heard of RedDoor, “From someone at Opendoor who had a fantastic experience working with them — in fact, she called RedDoor ‘magical.’ We immediately reached out to co-founders Heather Harmon and Ali Mackani.”
Keller Williams and Kaplan Franchise real estate brokerage Keller Williams announced that it is partnering with educational and test prep services platform Kaplan to create the KW School of Real Estate (KSCORE). KSCORE is a fully digital real estate training program that will offer state approved pre-licensing courses, as well as continuing education opportunities for existing agents. It combines the current KW Prep program, which focuses on the skills and tools that are not taught in traditional real estate classes, and the current Kaplan Real Estate Education program. While Kaplan has had their own program for years now, this is the first time they have partnered with a real estate brokerage. Through KSCORE, prospective and existing agents can enroll in a variety of class formats including home study, asynchronous online and live online classes. Users will also have access to personalized coaching.
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Pretium Investment firm Pretium has acquired the fix-and-flip lender Anchor Loans from affiliates of Wafra Capital Partners and other owners. California-based Anchor Loans, founded in 1998, provides capital for professional residential real-estate investors through bridge and construction products. Don Mullen, CEO and founder of Pretium, said the deal improves the investment firm’s private capital solutions to the U.S. housing market during a shortage of housing supply and an insufficient stock of move-in ready homes. According to the transaction terms, American Equity Investment Life Insurance Company provided financing for the deal and acquired $1 billion of loans originated by Anchor.
December 2021/January 2022
ServiceLink congratulates Phillip Petrie on being named a 2021 HousingWire Tech Trendsetter! Phillip Petrie’s relentless pursuit of improving and enhancing the title process, deep category expertise and unmatched ability to break down complex issues with technology is helping ServiceLink revolutionize the mortgage process for its clients. Thank you, Phillip, for all that you do to move the industry forward! ServiceLink congratulates you on this well-deserved honor.
learn more at svclnk.com
EVENT CALENDAR
LISTEN NOW
MISMO Winter SUMMIT January 10-13, 2022 Cost to attend: MISMO member: $649 | Non-member: $1,049 Presented by MISMO LOCATION: CLEARWATER, FLORIDA MISMO is hosting its Winter Summit in Clearwater, Florida, gathering industry participants together to achieve a more seamless and productive digital future. The summit allows lenders, servicers, regulators, GSEs and technology providers to network with industry colleagues while learning the latest updates on mortgage industry standards. MISMO’s goal is to develop a common language for exchanging information for the mortgage finance industry, with this summit serving as a way to streamline and collaborate around the latest changes to mortgage standards.
Independent Mortgage Bankers Conference January 24-27, 2022 Cost to attend: MBA member: $1,149 | Non-member: $2,249 Presented by MBA LOCATION: NASHVILLE, TENNESSEE THE INDEPENDENT MORTGAGE BANKERS CONFERENCE offers the largest annual gathering of IMB leaders in the nation. Created for IMBs by IMBS, the conference, happening in Nashville, Tennessee, is the epicenter for IMBs of all sizes and models and their leadership teams. Attendees will hear about the latest industry solutions, receive actionable advice and get access to new data and analytics. Specially designed for IMB executives and leadership, with a specific emphasis on senior management, the conference offers customized and curated programming focused on topical issues.
Steve James on Fannie Mae’s Here to Help initiative BY ALCYNNA LLOYD As the COVID-19 pandemic continues to impact the financial health of millions of Americans across the country, the question remains of what can be done to help these vulnerable consumers. In a Housing News podcast, HousingWire Editor in Chief Sarah Wheeler sits down with Steve James, chief marketing officer at Fannie Mae, to discuss how the organization is addressing the issue. During the interview, James elaborates on Fannie’s Here to Help initiative, which aims to provide resources and information to renters and homeowners to help them remain in their apartments and homes despite their financial struggles. According to James, these efforts are essential as the housing market is still experiencing side effects of the COVID-19 pandemic. “We’re in a strange place because we’re still feeling the effects of the pandemic as a health crisis remains,” James said. “Although it’s not nearly as bad as we expected, there’s also still an economic crisis and while it seems to be getting better, the pandemic has caused a lot of damage from a housing perspective and it’s going to take years to fix.” James claims this damage has especially impacted the housing industry’s low-to-moderate income demographic, many of whom are now struggling within the market. “Prior to the pandemic, housing supply was way behind and coming into the pandemic it’s only gotten worse, especially for very low-income homeowners or people who want to buy a home,” James said. “It’s very challenging for this demographic to find a house right now.” “When you layer housing prices with low supply, in my mind, we’re still in a crisis, and we should partner with folks in the industry to help Americans get through this as it’s going to take a long time,” James said. If you are interested in learning how one of the largest organizations in housing is attempting to help American homeowners and renters, tune in to this conversation on the importance of financial relief and education. Scan the code to listen to the podcast now!
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Event TIP "Remember to use body language! People forget that their hands might be below the screen and so they end up really just looking like a talking head. Body language is a big part of how we communicate, and you can still use your hands and arms to convey points and emotion and be an engaging presence, even when you're talking through a camera." — Briana Ings, Head of product and design at Snapdocs and 2020 HW Tech Trendsetter
December 2021/January 2022
2021 C C
A
W LA
,
Christine Herman! “I care deeply about serving our diverse customers’ needs and ensuring our awesome technologists are empowered to help them. What matters most to me is working alongside colleagues who are deeply invested in one another’s success, and growing the next generation of technology leaders.” C MA EVP, Chief Technology and Security Officer
Further your career and make an impact with a company that values and invests in its people. Write your next chapter at FinanceofAmerica.com/Careers ©2021 Finance of America Companies | Equal Opportunity Employer
INSIDE AGENT
Stacey Fergerson
Coldwell Banker Legacy Group Bowling Green, Kentucky stacey@staceyfergerson.com 2111 Spring Lakes Circle Bowling Green, Kentucky, 42104 $240,000 3 bed, 2 bath 1,200 sq. ft.
“THE MOST IMPORTANT THING right now is the lack of inventory,”
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says Stacey Fergerson, who has spent the past 15 years as an agent in Bowling Green. “We were behind before COVID-19 hit and we are definitely behind now.” One specific impact is “new construction presales,” which Fergerson said she “struggled for years” to sell but are now finding buyers. Rushing Builders completed the Spring Lakes Circle home this year, and there were interested buyers before completion, Fergerson said. In October, the three-bedroom, two-bathroom, two-car garage 1,200-square-foot home was listed with an asking price of $240,000. Fergerson has recently focused on newly built homes and developed a niche for the new construction process, she said. The agent enjoys the imprecise art of real estate, and the people she meets. “Every transaction is new, and you get to see totally different people,” she said. She meets many people who are new to western Kentucky, which has at least partly continued amid the pandemic. “We have businesses like Fruit of the Loom, General Motors and Smuckers that will relocate people into the area,” Fergerson noted.
December 2021/January 2022
KRISTIE WOLFORD Chief Production Officer Synergy One Lending
TIM WAGNER Chief Marketing Officer Synergy One Lending
LOCAL INTEL
By Matthew Blake
San Diego, California San Diego’s growing economic divisions come through in the city’s housing market. A San Diego Union-Tribune story from this August noted that the city’s unemployment rate hovers around 7%, higher than the national rate of 5.2% at that time, as many leisure and hospitality workers remained sidelined. However, venture capital money is at an all-time high, specifically funding biotech and life science companies. “There’s been a real surge in life sciences and biotech,” said Ross Clark, a Compass agent based in San Diego’s tony La Jolla neighborhood. And that’s created a demand for luxury housing, Clark said, noting that San Diego home prices climbed 20% the past year as neighborhoods gentrify left and right. According to an OJO Labs study, San Diego, whose median home price was $750,000 in September, is more unaffordable to its current residents than Los Angeles.
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Honolulu, Hawaii An agent for 33 years, Anne Hogan Perry sells luxury homes in Honolulu, Maui and Kauai and says that she is enjoying an unprecedented influx of homebuyers who previously lived in New York or Los Angeles for their jobs. “We have started to see work not be so rigid and time specific,” said Perry, who is an agent at Compass. “I sold a home to a hedge fund guy in New York. Now he just gets up at 4, gets done with work at noon and goes to the beach.” The agent said rich “mainland” residents replaced international buyers, who are restricted in their travel amid the pandemic. But overall demand is on the rise. That’s reflected in home prices, where the median Honolulu home sold for $975,000 in the second quarter of 2021, according to the National Association of Realtors, a climb of 20% year-over-year.
December 2021/January 2022
Springfield, Missouri The “Queen city of the Ozarks” needs more homes. “While we have lots of new construction, there are lots of delays due to shortage of materials and also construction workers,” said Ethel Curbow, an agent at AMAX real estate. “Also, the cost of materials has prevented a lot of people from custom building.” One issue that comes from this, Curbow said, is that buyers are afraid to pursue their dream home. “People fear if they sell their home, they won’t be able to find something and get into a bidding war.” By the numbers, Springfield is dealing with a similar high-demand, low-inventory quandary as the rest of the country, though with lower prices. The median home price has gone up 17% to $182,000 from August 2020 to August 2021, according to Zillow, while nationally, median home prices climbed 15% to $356,000 in the past year.
Some tourists visit Augusta for the James Brown statue or The Master ’s golf tournament, but its economy centers around Fort Gordon, a 60,000-acre terrain that is home of the U.S. Army Cyber Command, and 25,000 employees. The high number of public sector jobs is a bulwark against economic highs and lows, said Matt Kelly, an agent at Blanchard & Calhoun. Augusta home sales this year varied due to events that happen every year such as the start of school leading to fewer sales, Kelly said. Still, Augusta home prices are not immune to national trends. The typical home value in September 2021 is $147,000, according to Zillow, up 20% from August 2020.
“If it plays in Peoria, it will play anywhere” is not true when it comes to home price appreciation. After the second quarter of 2021, the current home price went up in the central Illinois city by .2% to $129,000, according to NAR numbers. Nationally, home prices climbed 22% in the same time period. Peoria was hit hard by the departure of the Caterpillar machinery plant in 2017, but its August 2021 unemployment rate of 6.1% was higher, but not wildly higher, than the 4.8% national unemployment rate. Peoria’s affordability partly comes from a lack of outside demand. As the overall U.S. population increased 7.4% from 2010 to 2020, Peoria’s population dropped 2.5% to 182,000 residents.
December 2021/January 2022
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Augusta, Georgia
Peoria, Illinois
Congratulations, Mark Walser, on Being a HousingWire 2021 Tech Trendsetter Mark Walser, President of Incenter Appraisal Management, chose to tackle a big challenge for the industry — how to develop a remote appraisal valuation solution that keeps appraisers in control while delivering speed and efficiency to our clients. The result: the creation of a groundbreaking technology called RemoteVal™. “We brought something new to the market that allows the appraiser to control everything remotely — from taking photos to measuring GLA,” Walser said. “We can take this from a 3-4-week process to 3-4 days very consistently for most appraisals.”
RemoteVal allows appraisers to quickly inspect, photograph and measure a property via the homeowner’s smartphone and then deliver USPAP-compliant reports while lenders benefit from turn-times cut from weeks to days.
incenteram.com
COMMENTARY
T
aking stock: Your leadership approach in 2022 Has your leadership style evolved with the impact of COVID-19? By Caitlin Green
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As we turn the page on 2021, it’s important to check in with ourselves and identify what we are leaving in the past and what we are taking with us into the new year. To some, that exercise might translate to forming resolutions. I’m taking a slightly different approach, however, by opting to reflect on wise words and research that have shaped my career path and how I can draw from these in 2022. If you are a people manager or leader within your organization, you’ve likely faced new hurdles due to the pandemic; leading a transition to a fully virtual workforce, keeping the team culture alive, maintaining operations and productivity while leading with more empathy and compassion than ever before, as COVID-19 challenged everything we held dear. While weeks turned into months, we settled into a “new normal” of Zoom calls, virtual events and happy hours that were the “next best thing” to the water cooler conversations we used to have at the office. As I reflect on the past year, while looking forward with optimism and excitement for what’s to come, there are
several concepts I keep coming back to as I look to refine my own leadership approach. I’m sharing these with my fellow leaders in case they are helpful as you take inventory of your own leadership styles and what you’d like to leave behind or take with you into 2022. 1. The Athena Doctrine – Nearly 10 years ago, I was introduced to a concept that has played a role in my career growth and helped to frame what I consider to be a brand of leadership I aspire to embody and under which, I thrive. “The Athena Doctrine,” a study and book co-authored by John Gerzema and Michael D’Antonio, shows “why femininity is the operating system of 21st century prosperity.” Diving deeper: Gerzema and D’Antonio surveyed 64,000 people in 13 countries over two years. What they found from their data was that two-thirds of respondents thought the world would be a better place if men thought more like women. From there, they decided to take a closer look at masculinity and femininity and the character traits that were most valued in leaders by creating two separate studies from their global sample. In sample one, they asked 32,000 people to classify 125 traits as either masculine, feminine or neither. In sample two, another 32,000 people looked at those same traits without discussing gender but rather, how these traits translated to making the world a better place. What they found was that those skills and competencies culturally and historically identified as feminine — flexibility, collaboration, sharing credit, fairness, nurturing, etc. —
“Take inventory of your own leadership styles and what you’d like to leave behind or take with you into 2022.”
December 2021/January 2022
were increasingly important to people, which is a diversion from more traditional leadership styles of yesterday. The key takeaway: Anyone, regardless of gender, can lean into these skills and competencies as they look to hone their leadership skills in 2022.
“In August 2021 alone, more than 4 million people resigned from their current roles.”
Additionally, women have reported feelings of burnout at higher rates than their male counterparts and some women — 1.8 million of them — are exiting the workforce altogether as they often bear the brunt of managing child care, schooling from home or caring for sick or elderly family members. All of these compounding stressors on employees in the past year and a half illustrate why it is so important — crucial, even — to check in with employees and their mental health and well-being. It goes back to the first concept above — the importance of leading with empathy.
3. The Great Resignation – In August 2021 alone, more than 4 million people resigned from their current roles. It’s difficult to pinpoint, exactly, why they are leaving in droves. A lifealerting experience — like a pandemic — can cause many to rethink what is important in life and in work and serve as a catalyst to striking out on a new career path entirely. Additionally, as emerging variants threaten family health and well-being, in addition to causing some day care centers to close again due to outbreaks, this could mean that more people are taking time off to care for loved ones who need them at home. Additionally, as the economy rebounds, employees may feel more comfortable exploring their next big role as so many companies vie for talent and look to fill open requisites.
Caitlin Green leads the marketing, public relations and corporate communications teams at ServiceLink. In her spare time, Green serves as a board member of several organizations focused on racial justice, equity in the arts and the advancement of women and girls.
December 2021/January 2022
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2. Weak ties – Reflecting on my life and career, I’ve realized how important “weak ties” have been to opening doors to new opportunities and ways of thinking for me. In 1973, Mark S. Granovetter published a paper titled “The Strength of Weak Ties.” Up until then, he — like so many others — assumed that people learned of career opportunities through their inner circles of family and friends but what he discovered was actually the opposite. For new information and ideas, weak ties or casual contacts were more important than stronger ones. Granovetter surveyed nearly 300 workers and found that most (84%) got their jobs from their weak ties. While this study is over 40 years old, it has gained newfound importance during the pandemic as virtual workforces have threatened weak-tie interactions that happen more organically in traditional office settings. As leaders and people managers, we should be aware of how this can impact employees — their career growth, mental health, etc. — and think through how we can boost weak ties in authentic ways. For example: starting mentorship programs across business lines, developing virtual affinity or special interest groups or increasing team and skill-building activities (virtual or socially distant), etc.
COMMENTARY
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ay later platforms: A superhero for the housing ecosystem? Here’s where innovation is needed By Romi Mahajan
The controversial author Christopher Booker suggested in a tome-length book, that all narratives belong to one of seven types. In his conception, all of history’s fiction is reducible to seven story typologies. In other words, there are no new stories in the world, only variations on already-worn themes. The same can be said of business models. Despite the constant talk of innovation and disruption, new companies all hew to some variation of tried and tested business designs. While there are differences in degree and in execution, it is safe to say that “there is nothing new under the sun.” Fintech is rife with these stories of mimicry. And in fintech, there is no better example than “Buy Now Pay Later” (BNPL) — an idea that has taken the investment world by storm but is in fact a model as old as mankind itself. Whatever the circumstances, BNPL is a huge trend and is spawning tens of billions of dollars of investment; it is also minting new unicorns. Reality, however, is often (always?) different than advertising slogans. In addition, investors, despite their sophistication in certain aspects, are not immune to the herd mentality. Instead, they love to jump into trends just because they are, well, trends. Even in Tulip mania, mid-stage investors made money, as long as they weren’t left holding the bag (or the flower) at the end.
“Despite the constant talk of innovation and disruption, new companies all hew to some variation of tried and tested business designs.”
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THE POWER OF BNPL But cracks are appearing. In an excellent story, FinLedger’s Joe Burns quoted an executive at Credit Karma, suggesting that “debt is debt,”
even if it’s instigated by BNPL. Ultimately, in the absence of infinite credit and de minimus payment schedules — neither of which exists — the purchase itself triggers a potential avalanche of default and cascading defaults cause financial meltdowns. With the jury out on BNPL, it is worth exploring if there are ways to make the provision of liquidity sustainable, fair and overall positive for the ecosystem. Here, we can turn to the housing ecosystem as an exemplar both of what is possible but also what possibilities are being missed. A quick romance with the numbers is called for. In the U.S., the total housing stock is worth a staggering $40 trillion. In fiscal 2021, Q2 alone, total house equity increased a whopping $2.9 trillion. In some states like California and Washington, 2021 saw the average equity per home increase over $100,000. Furthermore, Goldman Sachs predicts that in the last quarter of fiscal 2021, homes will rise another 16% in value. If we consider the baseline value of $40 trillion, about 55% of that — or $22 trillion — is equity belonging to homeowners. The remaining 45% is mortgage debt. To put the $22 trillion in context,
December 2021/January 2022
December 2021/January 2022
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U.S. GDP is $21 trillion. While this number constitutes only about 17% of the total “net worth” of U.S. households, the latter number is skewed by the concentration of wealth at the top. To understand that, it is worth remembering that the median household net worth “With the jury out on BNPL, it is worth exploring if in 2020 was $121,000. For there are ways to make the provision of liquidity the average U.S. household, sustainable, fair and overall positive for the their home equity is about ecosystem.” 75% of their net-worth. A lot to digest indeed, but a very telling picture. Homeownership in the U.S. is fairly widespread and systemic provisions have been made to ensure it is so. From mortgage debt availability to the favorability of homeownership The conundrum here raises its head. Despite owning equity in the tax code, the majority of U.S. families live in their houses, American families are hard-pressed to find the in structures they at least partially own. About money to hire contractors to make the changes that will result in one-third of Americans fully own their homes. these benefits. In this conundrum lies an opportunity and a dream Still, vast swaths of the U.S. population — even — to help homeowners maximize their pay-out when selling those who “own” their homes — are cash-poor. houses while not undercutting agents and service professionals Atlantic Magazine did a sweeping survey of who together form a healthy ecosystem. Americans in 2016 and found that 50% of them The question then remains: How does one quickly, easily, suggested that they would not be able to find an securely and fairly help homeowners to get the requisite changes extra $400 in an emergency. done so that they can successfully sell their houses and realize Combining all of these into one pithy the potential of their stored equity? statement is not easy, but it suffices to say that a Re-enter BNPL, but with a twist. Can we do the “PL” without vast swath of Americans are “house poor.” the typical “BN?” In other words, can we imagine “UNPL” as Upgrade Now Pay Later? WHERE’S THE MONEY? This way, instead of increasing consumerism and debt burdens, Enter the brisk real estate market and we start to we help families in fact alleviate debt via increased realized see both a conundrum and, in that conundrum, equity in their homes. And that with no outlay of precious and an opportunity. Recent statistics show that more scarce cash resources. than half (and up to three-quarters) of houses Is UNPL the superhero that American homeowners need? I that sell were subject to bidding war price think so. escalations. In some hot markets, the demand outstrips the supply of houses by 2 to 1. It’s a sellers’ paradise in many cities. Still, despite this imbalance, real estate agents suggest that most of their listings could benefit from upgrades and refurbishments. Tomes of data indicate that upgrades to bathrooms, kitchens, cabinetry and other areas pay off handsomely at sale — not only with higher prices (often at several multiples of the invested money) but also with both increased sales velocity and demand in the house as measured Romi Mahajan is an expert in the fintech marketing space. by number of offers. His previous roles include serving as CMO at Quantarium.
What can you expect for housing in 2022?
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Here are the major trends and changes to expect in each housing segment
December 2021/January 2022
Brokerages.............pg 32 Real Estate...............pg 33 Title..........................pg 34 Servicing..................pg 35 Secondary.................pg 36 Mortgage....................pg 37
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concentrate and ask again
December 2021/January 2022
Have you clearly defined your brokerage’s value proposition? By Tracey Velt
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ome 15 years ago, real estate agents had only a few choices when deciding which real estate business model to choose. Today, the choices are abundant. From virtual, capped models to low-fee and discount, agents can pick the company that best fits their needs. Because of that, and several other reasons, gross margins for real estate brokerage firms are declining with no real end in sight. In 2015, according to RealTrends data, gross margins were at 16.4% for the largest brokerage companies in the United States. Now, they’re at 13.5% for 2020, down from 13.8% only one year ago. This is an average for a variety of business models, with some models trending lower and some higher. Why is this happening? The first cause of the decline is the growth in competition for productive agents and a variety of new brokerages. “Another factor is that leading market-share brokerage firms now get as much, or more, of their earnings from mortgage, title insurance and other core settlement services,” Steve Murray, senior advisor to RealTrends, said. “As such, their strategies often go to capturing share of the brokerage business, not just for the sake of brokerage profitability, but to drive transactional volume and profitability through these related services,” he added. This will drive the real estate brokerage of the future. A brokerage where core services are no longer value add-ons, but fundamental to the health of the firm. Here are some trends we’re seeing in the real estate brokerage industry.
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Emerging new business models The one-stop shop of today will continue to evolve as consumer demand for an easier, less stressful transaction increases. There has been an explosion of companies offering financing solutions such as bridge loans, iBuying and more. Companies such as Zillow, Redfin, Opendoor, Offerpad, Knock.com and Ribbon have put a new spin on financing services that have been around for more than 30 years. These companies have come up with innovative marketing and new delivery methods. Consumers are demanding more from real estate companies, including a mix of these services. “I think it’s a foregone conclusion that leading brokers are going to need to retrain agents on these financing services, much as they did 10 to 12 years ago to deal with distressed inventory and short sales,” Murray said. It will require a whole new skill level and different level of service to compete. Leading brokers will need to embed these financing services into the base services that all their agents are encouraged to offer.
“Partnering with other companies to offer them suffices. But we think that leading brokerage companies, or market-share leaders, will need to incorporate and embed these services in their everyday offerings to buyers and sellers,” Murray said. With that, comes a whole new level of skill, implementation and training. Segmentation in the industry The growth of teams and concentration of more market share among fewer agents may also cause a decline in gross margins. “The competition for productive agents will not cease in the years ahead and gross margins will continue to be under pressure and tend to decline further in this environment,” Murray said, which leads to segmentation in real estate brokerage. In the past, most brokerage firms were either a graduated commission plan, traditional independent, a 100% commission concept franchise or a 100% commission plan, flat-fee independent. Now, there’s an explosion of teams and new models, including salaried agents and virtual capped models. The agent offerings of traditional brokerage — technology, marketing, office space, managerial oversight, deal doctoring, coaching, mentoring — once attracted about 60% to 70% of agents who chose these companies as a place to hang their licenses. In the current market, with so many options, including numerous low-cost brokerage companies that charge either a monthly fee or a transaction fee, as well as online access to technology and marketing templates, there is a lot more competition. “Combined, these companies, including eXp Realty, Fathom Realty, United Real Estate, Real Brokerage and others, now have about 150,000 to 180,000 Realtors associated with them,” Murray said. In addition, Murray said, “Many new agents join a team, not necessarily a brokerage company.” The market is segmenting as never before. So, it’s important for real estate brokerage companies to avoid being caught in the middle without a clear differentiation in what they’re offering. What does that mean? Are you a Walmart or Amazon, or are you a Tiffanys or Neiman Marcus? Murray explained that the agents you used to appeal to are fragmented, so you must define what you offer and understand “that the audience for that may not be as big as what it once was.” In the coming years, it will be more important than ever to clearly define your brokerage’s value proposition, expand into core services and thoughtfully recruit agents. Real estate is still about relationships — with consumers and agents. Your offerings and value proposition should reflect that.
Tracey Velt is the editorial director for RealTrends, where she reports on real estate brokerage, team and agent trends. Her podcast, RealTrending, features interviews with the brightest minds in real estate offering a peek into their growth strategies and business practices. Tracey is a 30-year veteran editor and previously served as editor-in-chief of Florida Realtor magazine.
December 2021/January 2022
What’s next after a historic housing boom? By Matthew Blake boomed, seeing an over 30% price climb from the second quarter 2020 to quarter two in 2021. This includes Boise, which saw a 41% jump in median sales price during the period studied. But since June 30, prices have leveled off to about $530,000, according to data provided by Stacie Herrig, who is a Boise-based agent at Fathom Realty. “While it’s still a strong seller’s market, there just aren’t the up-to-20 offers coming in on homes anymore,” Herrig said. “Sellers aren’t getting a free puppy or pony with their buyer’s offers any longer.” “Some sort of balance or price stability is crucial,” Herrig added. Herrig hopes national homebuilders recently entering Idaho, including Shea and Lennar, can address inventory shortfalls. As agents prepare for the housing market’s next turn, they face choices about how to best do their jobs. Some heads of brokerages see a thru line from pre- and (hopefully, eventually) post-pandemic real estate. “Obviously when COVID-19 hit we had to adapt tremendously, but I don’t think the home buying process has really changed,” Golden said. The Chicago-based brokerage has added five offices amid the pandemic, swelling its physical locales to past 40. “Agents still need a space to work from,” Golden said. Lake Norman Realty, a brokerage headquartered in Cornelius, North Carolina, has also maintained its physical presence. “We anticipate more brokers to return to their office desks as COVID numbers continue to decrease in our region,” said Abigail Jennings, president of Lake Norman Realty. “I haven’t had any brokers permanently working from home, and nobody’s ready to give up their desk yet.” Other brokers, like Teri Pacitto of Sotheby’s Realty, said that while offices will remain, rituals “like long midday Wednesday meetings and breakfast being brought in” are thing of the past. U.S. real estate, however, is not known for its change. The formula for the buyers and sellers agent splitting up a commission — and charging a total of 5-6% of the home listing price — has been around since before the First World War. The Justice Department is broadly investigating NAR, stating that American home buyers and sellers spend $85 billion a year on commissions. DOJ has investigated NAR many times before. But NAR’s antagonism to federal antitrust officials — stemming from DOJ’s July 1 withdrawal from a consent decree between the parties — is unprecedented. “This has set the groundwork for several years of the DOJ and NAR not working together,” said Ken H. Johnson, a real estate professor at Florida Atlantic University. “NAR could never trust this administration’s DOJ again.”
December 2021/January 2022
Matthew Blake is HousingWire’s senior real estate repor ter, covering the people, battles and changes in one of the most elemental parts of the U.S. e c o n o m y. Before joining HousingWire, Blake reported on real estate for The Real Deal, and covered media and entertainment for the Los Angeles Business Journal. A primarily Chicago resident, Blake graduated from Grinnell College in Iowa, and is unmistakably from the Midwest.
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y the fall, real estate agents in Boise, Idaho were passing around a video they didn’t like but couldn’t resist watching. “Boise is in a full-fledged housing crash!” declared Nicholas Gerli, CEO of Reventure Consulting. Talking rapidly into the video frame, Gerli bandied about a Florida Atlantic University report that Boise homes purchased are overvalued by 80%, and city residents ought to rent. The managing partner of ACCEL Realty Partners in Boise, Steve Caporale, said that the video gave him pause, especially since, “The market has been softening a bit.” But — in the same beat — Caporale added, “There is still a massive influx of buyers, and I am not seeing a significant drop in demand.” The broker’s cautious optimism is echoed nationally. U.S. real estate in 2022 may see challenges to its biggest enterprises, including the National Association of Realtors and Zillow, and shifting adjustments to how work is done amid the coronavirus pandemic. But home sales or real estate prices dropping may not be in the cards. “We just went through one of the biggest housing booms in modern history,” said Jonathan Miller, a real estate appraiser at Miller Samuel who also produces housing market reports for Douglas Elliman. “What we’re starting to see is more of a cooling or a plateauing than a market correction.” How big? 2021 is projected to have the most home sales since the 2006 housing bubble, with the U.S. on pace for 6.29 million homes sold at the end of September, according to National Association of Realtors data. Moreover, 2021 was a historic year for home prices. By July, the median home price escalated to $362,800, up 15% from December 2020’s $309,000 median home price, which itself was up 15% from December 2019, according to NAR figures. July was the plateau. By September, home prices dipped to $352,800, per the trade group’s figures. “The frenetic pace of the market has eased,” Miller said. “There’s buyer fatigue and real questions about affordability.” Slowing down the pace, Miller said, is the average interest rate on a 30-year-fixed rate mortgage — 3.09% by late October, according to Freddie Mac, after it hovered below 3% for most of 2021. Another factor is that real estate has partly returned to seasonal cycles, including a back-to-school lull. “We’ve seen the fall be more of a normal fall,” said Mike Golden, co-CEO of @properties. Rising interest rates. Seasonal ebbs and flows. These are significant changes for real estate professionals but possible to plan for. Less predictable is what is next for 12 metropolitan areas that, per NAR numbers, really
The “Big Four” take on the upstarts By Brooklee Han
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teve Berneman is the rare startup founder who wants his industry to shrink, not grow. “One of our big goals at Blueprint Title is to shrink the title insurance business from an $18 billion business to a $10 billion business,” said Berneman, the company co-founder and CEO. “We believe that title insurance premiums are significantly too high and that if underwriters and agents were more efficient and took a different approach to the market, they wouldn’t have to charge as much.” To that end, Berneman’s Nashville-headquartered company recently launched a portal that allows real estate professionals and their clients to keep track of the title process. And Blueprint acquired an underwriter as it attempts to gain market share in an industry known for extreme barriers to entry. Blueprint may ooze ambition, but it is just one among dozens of tech-forward startups in the title industry, all of whom are competing for a slice of the 10.5% share of the market controlled by small, independent title insurance companies. For this reason, John Campbell, a title insurance industry analyst at investment bank Stephens Inc., doesn’t feel that the “Big Four,” namely Fidelity National Title, First American Financial, Old Republic Title and Stewart Title, who as of the second quarter of 2021 controlled 80.3% of the market, should be too concerned about the rise of the little guy. But they won’t be resting on their laurels, either. “A lot of the major firms are increasingly becoming more tech savvy and they are using that tech to become a bit more integrated within the broader real estate transaction ecosystem,” Campbell said. Whether big or small, title companies are deploying technology to improve the flow and ease of the entire closing process. Two of the biggest developments have been the phenomenal growth of remote online notarization (RON) and document management platforms. Stewart has worked to expand its online signing and closing capabilities, which it plans on beefing up in the new year, said company president Tara Smith. And First American has launched its own suite of digital interfaces and platforms: IgniteRE allows real estate professionals to manage all components of the transaction in one place; and Docutech, which was acquired in 2020, enables lenders to deliver a more seamless eClosing experience. Many of the larger firms are also increasing their level of automation in order to take on more volume and maintain their lead over the plucky startups. “All of the firms have become a lot more automated,” Campbell said. “I don’t think there is any way you can deliver orders with the type of
growth they have all seen relative to their head count, so due to this you are seeing a lot more automation.” First American is among the “Big Four” that has really embraced the use of automation, especially to tackle refinance transactions, which have boomed over the past year due to low interest rates. “Today, 96% of our refinance transactions run through our automated title decision engine,” Chris Leavell, the COO of First American, said. “Based on our own risk profile, we’ve achieved a fully automated underwriting decision on 50% of those orders, and we are semi-automated on an additional 40%.” Looking ahead, Leavell says that First American hopes to introduce some level of automation to purchase transactions. Although automation is helping keep up with a huge increase in title insurance premium volume, the industry is still reckoning with a talent crunch. Back in 2014 the average age of a title agent or broker, according to industry statistics, was 60. That hasn’t changed over the past seven years. Smith feels that this talent shortage is one of Stewart’s biggest challenges. “We are all competing for the same talent, so we have decided to focus on the opportunity to bring new talent into the industry,” Smith said. “We have an annual intern program in which we focus on bringing people into the organization and helping them learn the industry from the ground up.” Despite what seems like an impenetrable industry faced with numerous challenges, DOMA, formerly known as States Title, has found some success in leveraging its technology to increase market share. In its ongoing effort to consolidate and speed up the closing process, DOMA has its sights on becoming a one-stop-shop for closing a purchase. “We would like within the next five-to-10 years for somebody to be able to sign a purchase contract for a home on a Friday evening and move in on a Monday morning,” Max Simkoff, the CEO of DOMA, said in an interview. In order to achieve this goal, Simkoff is working to grow DOMA’s current technological offerings and is looking to expand into the lending and appraisal space. While this does seem like a far-off dream, Campbell believes DOMA is not alone in wanting to become a one-stop shop. Compass, the nation’s second-largest real estate brokerage, and Rocket Mortgage, easily the biggest lender, are among the massive real estate companies with growing title segments. Others are sure to follow. “Everyone is looking at that value chain in the home buying process that once looked very distinct as much as 10 years ago, but now the lines are just blurring on all sides and I think we will continue to see that,” Campbell said.
Brooklee Han is a real estate reporter focused on the real estate agent experience and the title insurance industry. Before joining HousingWire, Han was an international figure skater representing Australia at the 2014 Winter Olympics.
December 2021/January 2022
Servicers prepare to handle forbearance exits By Flávia Furlan Nunes mortgages — an indicator of future foreclosures — has also steadily declined. According to CoreLogic, the delinquency rate on all mortgages fell to 4.2% in July, a 2.3% drop year over year. Serious delinquencies, in which payments are 90 days or more past due, also fell to 2.8% in July, the lowest level since May 2020. Contributing to servicers’ optimistic forecast is the labor market recovery. The U.S. Bureau of Labor Statistics found that there were 7.7 million unemployed people in September, compared to 23 million in June 2020. In addition, according to Black Knight, homeowners had $9 trillion in tappable home equity in the second quarter of 2021, a 37% increase year over year that was driven by spiking home prices. Edward Fay, CEO at Fay Servicing, said that the delinquency rate is closely tied to unemployment and home prices — the expectation is that it will decline as the economy roars back. “Home prices are way up, so people can sell their homes in a position where they’re defaulting and still walk with cash, and people are now working and can pay their mortgages again,” he said. The big concern for servicers in the next 12 months is with regulators, notably the Consumer Financial Protection Bureau, now under the stewardship of Rohit Chopra. Over the last year, the agency has been stern with servicers who are negotiating forbearance exits with borrowers. It ordered servicers to be proactive, evaluate income “fairly,” assist borrowers with limited English proficiency, handle inquiries promptly and prevent “avoidable” foreclosures. “Our first priority is ensuring struggling families get the assistance they need,” Dave Uejio, the former acting director of the CFPB, said in April. “Servicers who put struggling families first have nothing to fear from our oversight, but we will hold accountable those who cause harm to homeowners and families.” Another regulator, the Office of the Comptroller of the Currency, has also taken an interest in mortgage servicing. In October, the OCC issued a consent order against Cenlar FSB, the nation’s second-largest mortgage servicer, over “unsafe or unsound practices” regarding its internal controls and risk management practices. “There are so many different regulatory agencies that are putting out their own rules. Servicers have to understand them while trying to figure out what’s best for the customer,” said Fay. Walsh said all the warning signs are there for servicers to “Follow the rules because there are those that are watching,” she said. “Having risk management controls in place is going to be important.”
December 2021/January 2022
Flávia Furlan Nunes is HousingWire’s mortgage reporter. Originally from São Paulo, she spent more than ten years wo r k i n g f o r prominent Brazilian economic outlets before moving to New York C i t y. F l áv i a has a mas ter ’s degree in Economics and Business Reporting from Columbia University.
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t didn’t take long for mortgage servicers to realize they had a historic challenge on their hands. As a result of the COVID19 pandemic, over 22 million Americans lost their jobs between January 2020 and April 2020, the highest level since the Great Depression. Manufacturing production declined to the lowest level since 1946 and new home construction saw the biggest decline in nearly 40 years. Servicers and politicians were both quick to say they would handle the economic crisis differently than the recession just over a decade ago, in which foreclosures were rampant. Forbearance strategies were negotiated with over 4 million borrowers, evictions were banned and strict guidelines on communiques with borrowers were established in the hopes of avoiding another national housing crisis. Servicers to date have risen to the occasion, investing in technology and hiring thousands of employees. They have massively reduced the number of forbearances in the 18 months since the CARES Act was passed. But the real test is yet to come: Most forbearance plans only just began expiring in September. Marina Walsh, the vice president of industry analysis for the Mortgage Bankers Association, is optimistic about the post-forbearance landscape. “The important item here is that we have a lot more tools in our toolkit for borrowers now than during the Great Recession,” she said. Half of the borrowers exiting forbearance are using deferrals or partial claims (until the pandemic, the option was only available during natural disasters), or are continuing their monthly payments even during forbearance, according to the MBA data. Meanwhile, as of October, close to 17% did not make all their monthly payments and exited forbearance without a loss mitigation plan. “That’s the group we’re going to be watching,” said Walsh. She added that not all of them will go through foreclosure proceedings because servicers are still formalizing post-forbearance plans. Some of these borrowers, of course, will not recover. “Going into 2022, assuming that the CARES Act does come to a conclusion, there will likely be more customers that could proceed to foreclosure than in 2020 and 2021,” said Perry Hilzendeger, president of servicing at Homepoint. Hilzendeger said that customers had not regained their pre-pandemic income levels in some unfortunate situations. “They may not qualify for loss mitigation plans because they don’t have enough income now to support the house that they’re in,” he said. The number of borrowers who are delinquent on their
The secondary market is primed to rise in 2022 By Bill Conroy
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rojecting the outlook for the housing market in the coming year, including prospects for the secondary market for mortgage-backed securities, can be an exercise in crystal-ball gazing, but one indicator key to bringing clarity to that crystal ball is the direction of interest rates. All signs point to continuing upward pressure on interest rates in 2022. Assuming COVID-19 is managed well, the overall economy is expected to continue expanding, with that growth and the still-unwinding pandemic-related supply-chain issues helping to fuel inflation. To address those pressures, the Federal Reserve has signaled it will pursue monetary policy that pushes interest rates up modestly over the course of the next year. “The economy is steadily recovering, and inflation is kicking higher,” said Lawrence Yun, chief economist at the National Association of Realtors. “Mortgage rates will steadily rise, possibly to 3.3% by the year-end [2021] and maybe even as high as 3.7% by the end of 2022.” With rates rising, housing-finance experts expect the focus to shift away from the refinance market and toward purchase loans. That bodes well for those engaged in trading whole loans and mortgage-servicing rights (MSRs), both of which are bought and sold in the secondary market. “As the economy begins to show improvement and moratoriums are lifted on foreclosures, the forecast is for the reperforming loan market to maintain a high volume for many months to come,” said Tom Piercy, managing director of Incenter Mortgage Advisors. “The jumbo-loan market has expanded too as we’ve seen property values increase nationwide. It’s difficult to quantify per se, but the appetite for jumbo loans has increased significantly.” On the MSR front, the market also is expected to remain robust as interest rates rise, which increases MSR values. That’s because loan prepayment speeds slow when refinancing ebbs. Fewer loan prepayments via refinancing ensures that MSR assets — which represent a slice of the interest on a mortgage — will have a longer cash-flow life for investors. “I believe the first and second quarters next year will be quite busy,” said Azad Rafat, MSR senior director at Mortgage Capital Trading Inc. As rising interest rates cool the refinance market, replacing that lost volume through home-purchase loan growth will be largely dependent on expanding the guardrails around mortgage origination, some industry veterans argue. John Toohig, managing director of whole loan trading at Raymond James, said as rates inch upward, closer to 4%, originators will be under pressure to find more volume outside refinancing and the conforming-loan space dominated by Freddie Mac and Fannie Mae. If that happens, Toohig said, it will provide a “natural boost for private-label securitization” — which is the private-sector secondary market that issues and sells securities without government guarantees.
“Can you find more volume in a bank-statement loan or an asset-depletion loan?” Toohig asked. “There’s non-QM, or can you go to that Jumbo 2.0 loan, and instead of a 700 FICO [credit] score, can you make it work at 660 or 680? “Are you willing to do that? Can you maybe look at 85% as opposed to an 80% loan-to-value [ratio]? That’s going to be where you’re going to have to find your loan growth if we agree that we’re in a rising-rate environment.” Overall, for investors in the secondary market as well as for the host of industry players in the owner-occupied and rental housing markets, 2022 should be a strong year, said Rick Sharga, executive vice president of marketing for RealtyTrac. It will be driven by demographics — specifically the millennials, most of whom are now coming of age as first-time homebuyers, Sharga said. But the one factor that could undermine a robust economy in 2022 is inflation. “The thing that could derail us is if we had an economic downturn, and the most likely scenario I see there is that inflation continues to run hotter than the Federal Reserve would prefer,” Sharga said. “Typically, historically, when the Fed hits the brakes, it tends not to be a smooth, controlled stop, and [the economy] can slide off to the side of the road.” The changing mortgage-finance environment and the unknowns ahead also highlight the need to address perennial issues in the housing market, chief among them risk management and housingfinance reform. “House prices have been continuing to soar, but the GSEs, still backed directly by the taxpayers, continue to dominate the secondary market,” said Ed DeMarco, president of the Housing Policy Council, a group at the center of those discussions. “The Fed also is sending signals of a general expectation of rising interest rates, which presumably will cool the refinance market… And so, you take these things together, we think that paying attention to the risks in the marketplace is essential.” Among the tools that DeMarco said will be key in dealing with the distribution of risk in the year ahead is the GSEs’ use of credit-risk transfers, as well as data standardization and transparency, the common securitization platform as well as the modernization of Ginnie Mae. And essential to promoting the future growth of a vibrant private-label market for issuing and selling residential mortgage-backed securities, DeMarco added, is getting Congress to act quickly on better defining the contours of the government’s space in the mortgage market. “Congress can set the parameters for the future — not just what is the government’s role, but where that role ends,” said DeMarco. “That will allow the private market to have greater certainty about investments that it can make in this space.”
Senior Mortgage Reporter Bill Conroy covers the secondary market and related beats. His background includes working as editor in chief of the San Antonio Business Journal from 1993-2014; managing editor and later editor in chief of Scotsman Guide Media from 2015-2019; and the managing editor of Seattle Business Magazine from 2019-2020.
December 2021/January 2022
Originators gear up for the purchase market By Maria Volkova Marina Walsh, vice president of industry analysis at the MBA, said that as production volume slumps and the market shifts toward fewer refinances and more purchase activity, “competition will further stiffen.” “In this environment, lenders can only chase market share for so long before there are substantial consequences to the bottom line,” she said. Industry experts also predict that home inventory will increase in 2022, creating more options for borrowers. “Homebuilders will have more success overcoming current building material shortages and should be able to increase the pace of construction to meet the sizable demand for buying,” Fratantoni said. He added, “More newly built homes and more homeowners listing their homes for sale should lead to some deceleration in home-price growth next year. This is good news for the many would-be buyers who are currently priced out or delaying decisions because of low supply conditions and steep home-price appreciation.” Moreover, Walsh predicts that in a purchase-heavy market lenders will turn “more heavily to their servicing business to achieve financial goals.” “Higher mortgage rates mean fewer prepayments and a longer revenue stream of servicing fees combined with higher mortgage servicing right valuations,” Walsh said. “However, the servicing outlook is more complicated today, with the expiration of many COVID19-related forbearances and the need to place borrowers into post-forbearance workouts. “Servicing costs may rise as servicers work to meet the needs and requirements of borrowers, investors and regulators,” she added. Lenders and servicers will also need to be mindful of the new regulatory climate under the Biden administration. In October, Rohit Chopra took over as director of the Consumer Finance Protection Bureau. He appeared in front of Congress a few weeks later and testified that the CFPB would be looking closely at mortgage servicing, monitoring the mortgage market and making sure that “firms can’t dodge fair lending laws and anti-discrimination laws under the guise of their secret algorithm.” “I am very worried about black-box algorithms that have no accountability for how decisions are made,” Chopra told the House Financial Services Committee. Chopra has also beefed up the agency’s enforcement division and partnered with two other regulators to target lenders engaging in what was termed by the government as “modern-day redlining.” The three agencies announced a settlement with a Mississippi-based lender who allegedly engaged in the discriminatory practice, and promised that more will follow.
December 2021/January 2022
Maria Volkova is a mortgage reporter for HousingWire, covering the colorful world of nonbank lenders and LOs. In her spare time, Maria is probably camping, hiking or kayaking somewhere on the East Coast.
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A
t the onset of the Coronavirus pandemic, the mortgage industry was preparing for absolute disaster. Mor tgage executives held emergency meetings with their creditors over worst-case scenarios. Banks and nonbanks alike discontinued programs, laid off thousands of staffers, raised credit standards for borrowers and buckled up for what they expected would be a very rocky ride. Few in mid-March could have predicted that a perfect storm of ultra-low interest rates, new migration patterns and historic government intervention wouldn’t just save them, but line their pockets with billions of dollars and change their entire trajectory. But many of those elements are fading as the industry heads into 2022. Notably, the Federal Reserve said it would begin tapering its asset purchases starting in November. The central bank is also expected to raise short-term rates in upcoming quarters. “Mortgage lenders and borrowers should expect rising mortgage rates over the next year, as stronger economic growth pushes Treasury yields higher,” said Mike Fratantoni, the chief economist at the Mortgage Bankers Association. Fratantoni’s organization is forecasting mortgage rates to gradually climb over the course of 2022, ending the year at 4%. Those higher rates will force lenders to make major operational changes. Refinancings represented nearly two-thirds of mortgage loan originations in the first three quarters of 2021, and total refi volume for the year was projected to reach north of $2.2 trillion, according to the MBA. In 2022, refi origination volume is expected to drop by 62% to about $860 billion. The name of the game in 2022 will be purchase mortgages, which the MBA projects will grow 9% to a record $1.725 trillion. But the boost in purchase business likely won’t be enough to prevent operational contraction: As margins shrink, lenders will likely have to lay off staff and renegotiate compensation. Lenders will have to “manage expenses and improve customer service in a purchase market,” Tom Wind, executive vice president of consumer lending with U.S. Bank Home Mortgage, said at the MBA Annual convention. One of the ways that lenders “manage expenses” has historically been by laying off processors and loan officers. Yearly data compiled by the MBA found that in 2014 and 2018, years with weaker origination volume, the LO turnover rate was 44% and 37%, respectively. Meanwhile, in 2020, LO turnover was the lowest in the survey’s history, at 21%, the MBA found. The second-lowest LO turnover rate was in 2003, at 31%.
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December 2021/January 2022
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December 2021/January 2022
Rizwan Akhtar Tim Anderson...............
41
Nick Baguley Ankur Bansal Rakesh Bantu Srikanth Barathan...............
Alex McGillis Jennifer Menard
Jason Bressler
Tom Moreno...............
Ken Cornelius
Qingqing Ouyang
Alok Datta William Denslow...............
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48
Phillip Petrie Cecelia Raine
Paresh Deshpande
Martina Schubert...............
Brian Donnellan
David Seong
Rahil Esmail John Fair...............
44
Tom Showalter Jeremy Sicklick
Jim Freeman
Seth Siegler...............
Josh Friend
Mike Spotten
Renee Galitis Sadie Gurley...............
45
Harish Tejwani Todd Teta
Marty Haldane
Matt Tippets...............
Imtiyaz Haque
Scott Turnquest
Katrina Helmkamp Alisande Heriyanto...............
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51
Paul Vancheri Tim Von Kaenel Angeline Vuong...............
Alan Johnson
Tim Wagner
Abe Kuruvilla...............
47
Mark Walser Shane Westra Cathy Wright...............
December 2021/January 2022
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Christine Herman
Jacob Keigan 40 ❱ HOUSINGWIRE
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Andy Mahdavi
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T
he housing industry has been working in overdrive over the last few years to shed the idea that its technology is antiquated and outdated. In today’s environment, this couldn’t be further from the truth. In fact, companies are not only injecting new technology into the home-buying buying pro-
cess, but also, they are pushing the envelope when it comes to how technology can disrupt the consumer experience, regardless of the industry. Recognizing this year’s class of HousingWire Tech Trendsetters, this list of honorees represents the market disruptors who are overseeing and leading the charge when it comes to tech adoption. These Tech Trendsetters are setting the bar when it comes to tech innovation, as their accomplishments are paving the future of the mortgage space.
Rizwan Akhtar
Tim Anderson
Realogy Holdings
Evolve Mortgage Services
Under Rizwan Akhtar’s leadership, Realogy’s technology and data organization leads efforts to make the industry more open to new ideas with the creation of Realogy’s open ecosystem backed by its data platform, which makes it easier for agents and brokers to leverage emerging technology while allowing tech startups to bring their platforms to market. Within Realogy’s Title business, Akhtar assists with the partnership between Realogy and Notarize, working to digitize the closing process and make the industry more agile. Through Akhtar, Realogy has built a training platform that encourages agents and brokers to share best practices with each other in addition to brand-led training to embrace the power of user-generated content. For Realogy’s agents, Akhtar’s leadership has helped simplify the transaction management process via proprietary tools such as MyDeals and Transaction Manager, which place the entire transaction process into a simple mobile responsive environment.
With more than 35 years of experience and a reputation as one of the industry’s first “eMortgage technology pioneers,” Tim Anderson returned to Evolve Mortgage Services as president of the eMortgage Division in June to finish the job he started more than 10 years ago: fuel mass adoption of eMortgages. Since then, he has contributed to using his knowledge and leadership experiences at Black Knight, Stewart Title, Freddie Mac, DocMagic, Docutech, Pavaso and MortgageConnect to accomplish Evolve’s goal of helping lenders achieve completely digital, paperless mortgages. Armed with a platform that supports everything electronic as well as a GSE-approved eVault and a full legal compliant library of SMART Docs, Anderson is well on his way to helping Evolve achieve this goal. A large part of Anderson’s job is educating the mortgage industry about the differences between paperless processes and eMortgages. Anderson also has a unique perspective on the digital mortgage processes, having been on both the lender and vendor sides.
President, eMortgage Division
December 2021/January 2022
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EVP, Chief Technology Officer
Nick Baguley
Ankur Bansal
Finicity
HomeLight
As vice president of data science for Finicity, a Mastercard company, Nick Baguley supports the mortgage industry through AI and machine learning solutions that have resulted in digital verification of income, employment and assets that are accepted by the GSEs and reduce the mortgage loan process by up to 12 days. In today’s highly competitive lending market, Baguley and his team have improved income identification and categorization to better recognize all income streams. These new streams are key in transforming the digital mortgage experience by helping reduce the complexity of the mortgage process using AI-powered digital verification for income, assets and employment, which enhances the entire lending process, delivers a more streamlined experience for borrowers and reduces risk while increasing ROI for lenders through Finicity Mortgage Verification Services. Baguley has been instrumental in Finicity’s success through its company-wide digital-first strategy and consumer-first experiences that accelerate growth and increase ROI.
Thanks to Ankur Bansal, president of HomeLight Closing Services, HomeLight is bringing modern, tech-enabled title and escrow services to top agents and their clients across the U.S. so that every closing can be simple, certain and satisfying. As a proven operator, entrepreneur and leader specializing in the technology sector, Bansal brings more than a decade of experience in digitizing large, outdated businesses and bringing them to modern-day technological standards with only one goal in mind: a delightful client experience. Since 2020, Bansal has been implementing the technology to innovate the archaic title and escrow industry to replace outdated processes with ease and transparency. Under Bansal, HomeLight Closing Services takes care of all of the “behind the scenes” processing needs — allowing agents to focus on communication, white-glove service and issue resolution. Bansal’s dedication to agent service has a real impact on agents and their clients.
Rakesh Bantu
Srikanth Barathan
Fannie Mae
ICE Mortgage Technology
Rakesh Bantu is on the forefront of digital transformation efforts at Fannie Mae, bringing more than 19 years of mortgage industry experience to his role. Bantu exemplifies extensive thought leadership in DevOps and has made a significant impact by defining the goals for DevSecOps. He was instrumental in building the foundation for Continuous Integration/Continuous Development (CICD) practices for microservices architecture which will be adopted and leveraged by other Fannie Mae teams, ultimately allowing the organization to better support its business and customers. Bantu has dedicated time and effort to transform Fannie Mae and the mortgage industry. Bantu leads with empathy, allowing him to overcome concerns of all stakeholders with robust, long-lasting, reliable and efficient solutions. Bantu has used his past experiences to share tools and processes designed to make a team’s software development and implementation projects more efficient both internally and externally.
Over the last 12 months as vice president of Engineering, Srikanth Barathan has contributed to improving ICE Mortgage Technology’s systems and releases. He transformed systems and created the efficient solutions the engineering organization uses today. By being an Encompass subject matter expert, Barathan contributes to the success of ICE Mortgage Technology’s leading lending platform that offers end-to-end loan origination for more than 3,000 customers. Approximately 50% of residential loans are originated, manufactured and sold through Encompass, making the mortgage journey easier and faster for the lender and borrower. Barathan has great working relationships with leaders from all functions and his collaborative nature and creativity, when faced with difficult challenges, has earned him the respect of many in his organization. He cares about the company’s products and solutions, its customers and his team, finding time to mentor others by holding knowledge transfer sessions to help educate others.
VP, Data Science
President, HomeLight Closing Services
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Director
VP, Engineering
December 2021/January 2022
Jason Bressler
Ken Cornelius
United Wholesale Mortgage
Blue Sage Solutions
Jason Bressler joined United Wholesale Mortgage in 2016 as the first-ever chief technology officer. He is responsible for overseeing all facets of technology at UWM. From functionality to innovation, he is constantly working to make enhancements to ensure UWM and their clients are always ahead of the curve. Bressler believes in a “Build vs. Buy” methodology, so his advancements in technology continue to push boundaries within the financial technology space and keep UWM at the forefront of innovation within the mortgage industry. Bressler excels in application development and enterprise implementation with a talent for putting a client-service focus on UWM’s tech procedures and guidelines. He is constantly developing intuitive technology platforms that help UWM’s clients grow their business. Since joining UWM, he has grown the IT team from 200 to 1,300 team members, with all the team members on location in Pontiac, MI. This proximity allows Jason and his team to be more agile and quick to adapt UWM’s technology based on their clients’ needs.
Ever since Ken Cornelius learned 10 years ago that it took 45 days to close a loan, he has used his natural leadership abilities and technical skills to help LOS providers build platforms that automated the mortgage process, enabling lenders to make decisions and close loans faster and more efficiently. As Blue Sage’s engineering leader, Cornelius is promoting professional growth within his team while enhancing document management capabilities that eliminate manual work processes and foster a document automation framework that drives further efficiencies for mortgage lenders. As the industry’s demand for automation and loan accuracy has evolved, Cornelius has found himself challenging and educating much larger technology providers, including Google and Amazon, on mortgage technology use cases. He also serves as a liaison between engineering and client business analysts, ensuring that all ideas are heard to find optimal approaches toward achieving quality loan production for Blue Sage and its clients.
Alok Datta
William Denslow
SLK Global Solutions
Reggora
During one of the most chaotic and challenging times in the mortgage industry, SLK Global Solutions Group President Alok Datta is helping many of the industry’s largest banks, lenders and servicers overcome obstacles to growth and accelerate their businesses. He has overseen the development of multiple ground-breaking technologies that enable lenders and servicers to mitigate risk, streamline closings and reduce costs. This includes a pre-underwriting platform that reduces mortgage closings to 16 days and automated loan testing technology that audits loans 20 times faster than human staff. While doing so, Datta has become one of the mortgage industry’s foremost experts on leveraging technology to solve the industry’s most historically complicated challenges. Datta has completely transformed SLK Global’s mortgage business from one that primarily delivered business process outsourcing services to one of the housing industry’s leading technology providers.
William Denslow, chief technology officer and co-founder of Reggora, is revolutionizing the appraisal process with a two-sided platform for mortgage lenders and appraisal vendors. Reggora’s modern technology uses advanced automation and integrates with lenders’ LOS and POS systems, streamlining the entire appraisal management process. Not only is he modernizing the experience, but Reggora’s technology is designed to reduce turn times and help the industry get closer to a one-day mortgage reality. Denslow is leading Reggora’s product innovation and development with three core focuses: shortening the overall amount of time it takes to complete an appraisal, reducing lenders’ operational costs and the amount of time spent managing the appraisal process, and creating a more transparent experience for banks and borrowers. Under Denslow’s stewardship, the Reggora team has essentially tripled in size over the last twelve months in regards to both employee headcount and lender customers.
EVP, Chief Technology Officer
Engineering Leader
CTO and Co-founder
December 2021/January 2022
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Group President
Paresh Deshpande
Brian Donnellan
Tavant
Bright MLS
Paresh Deshpande has been a key thought leader at Tavant for over six years, driving innovation and sales execution strategy for the organization as head of Proptech Innovation. Deshpande is constantly pushing the boundaries of his responsibilities within Tavant and actively seeks opportunities to vocalize his thought leadership externally to the larger proptech and Fintech communities. Deshpande is a firm believer that advances in proptech can have disruptive effects on the housing industry. As an active member of industry public forums, Deshpande regularly engages in speakership opportunities in the hopes that he can incite changes that move the housing industry forward, including web seminars, keynote sessions, roundtables and many others. Within Tavant, Deshpande’s character and work ethic epitomize the company’s vision and values. He has strong attention to detail and sensitivity to others’ wants and needs, making him an effective salesperson.
Brian Donnellan has not only played a major role in the industry’s largest MLS merger to date, but also has been an advocate of moving Bright MLS forward by sourcing and launching upgraded and innovative tools and resources with new methods of subscriber training and support. By increasing Bright subscribers’ earning potential, Donnellan works to assure that the MLS is the most vital component in subscribers’ toolkits. Shortly after the onset of the pandemic, Donnellan conceptualized an index that could provide subscribers with a forward-looking measure of housing demand rooted in the comprehensive and current housing data only a multiple listing service can provide. In 2021, Bright MLS and T3 Sixty launched the Home Demand Index providing real-time insight into homebuyer demand. Since March, real estate professionals in the Mid-Atlantic region have access to detailed homebuyer demand information down to zip-code level.
Rahil Esmail
John Fair
Orchard
Rocket Homes
Rahil Esmail joined Orchard in 2019 as head of consumer product. Since joining the team, Esmail has launched revolutionary products to personalize online home search and deliver transparency into the process of buying and selling — all of which have proven to be transformative steps forward for the industry and for consumers. Esmail saw an opportunity to create a more personalized way for consumers to search for homes. He concepted Home Match, a home search product where users can specify all the features they want in a home and designate how much they care about each of those features. This allows buyers to more easily find homes based on the unique features that matter most to them. Esmail saw the potential to use data science to create Photo Switch, an AI-driven feature that allows users to switch the default photo of all listings to the part of the home they love most so they can compare homes based on any room. Esmail and his team also created the Orchard dashboard, which gives customers full transparency into their real estate transaction.
In only 10 short years, John Fair has grown from engineer, to leader, to vice president and now to chief technology officer at Rocket Homes. Fair has led the organization through several technology acquisitions and is now leading his technology team through more change as they create the next wave of innovative products to help homebuyers. He is focused on creating an immersive technology experience that will allow clients to seamlessly navigate the complexities of buying and selling their dream home. The Rocket Homes team is building the next wave of technology to support the evolving market of real estate and PropTech. The team is committed to creating an immersive experience for all clients who are interested in buying and/or selling their home. In 2020, Rocket Homes launched its home search app that includes credit monitoring and detailed market-specific data. The number of visitors to Rocket Homes’ website increased more than 300% in the first quarter of 2021, as compared to the same quarter in 2020.
Head of Proptech Innovation
President and CEO
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Head of Consumer Product
Chief Technology Officer
December 2021/January 2022
Jim Freeman
Josh Friend
Fiserv
Insellerate
Jim Freeman has more than 25 years of technical experience and is bringing a “Silicon Valley” mentality to the mortgage industry by encouraging early adoption, speed to market and digital transformation through the development of a broader technology ecosystem. As senior director of software development at Fiserv, Freeman is responsible for leading the engineering strategy, driving technological innovation, modernizing the mortgage process and closing the loop between market demand and product engineering. With Freeman’s direction, clients are becoming early adopters and digitally transforming. Freeman drives innovation through APIs, crosscloud compatibility and agnostic frameworks, integrating them with numerous partners and vendors. Through this form of technology, users are able to share knowledge more effectively without the need to support different technology platforms. Freeman inspires his team to think differently so clients can experience faster performance and speed to market.
From his early days working at a mortgage company to eventually running a mortgage company, Josh Friend’s impact on the mortgage industry at large is unmistakable. Throughout his career, Friend has helped thousands of people realize the dream of homeownership and personally trained thousands of loan officers who are directly impacting hundreds of thousands of borrowers over the span of his 22-year career. At Insellerate, Friend dedicates his time to helping other lenders through better borrower engagement, transforming the borrower and loan officer experience. Friend and his team have developed modern-day technology customized to lenders’ needs, and the Insellerate Customer Experience Platform draws new prospects, boosts customer loyalty and helps grow revenue. With Friend’s powerful innovation, lenders can deliver timely and highly personalized communications to their employees, borrowers and referral partners for maximum impact and engagement.
Senior Director of Software Development
Founder and CEO
Sadie Gurley
Chief Information Officer
VP and GM, Maxwell Capital and Maxwell Diligence
Caliber Home Loans
Maxwell
With more than 25 years of mortgage, financial services and technology experience, Renee Galitis brings a deep strategic and technical perspective that is critical to building and growing corporate infrastructure and strategy. As chief information officer at Caliber Home Loans and leader of the enterprise-wide information technology team, Galitis is the driving force behind the company’s hyper-digital transformation and oversees implementation of new and evolving technologies that improve the customer experience through speed, convenience, personalization and transparency. Galitis’s technology blueprint for the company maintains a laser focus on a high-touch customer experience backed by a high-tech strategy that helps keep customers on the Caliber platform. She has developed technology infrastructure, including portals and proprietary systems, that eliminate manual processes through automation while allowing for more personalization, access, convenience and ease of use for each user.
Twenty-five year mortgage industry veteran Sadie Gurley joined Maxwell in 2021 after a tenured career at Digital Risk, Goldman Sachs, Fortress and Marathon. Now, Gurley is using her experience to lead solutions to empower lenders serving America’s communities. At Maxwell, she heads up its newly launched Maxwell Diligence and Maxwell Capital divisions, which work to leverage thoughtful technology and economic scale to create a disruptive financial advantage for local and regional lenders. Gurley’s experience heading up diligence services at Digital Risk and serving as a vice president on the asset-backed securities and mortgage trading desks at Goldman Sachs provided her the expertise to transform the due diligence/QC and capital market experiences for lenders on Maxwell’s point of sale. Gurley has played an integral role in enhancing Maxwell’s current services and spearheading new technologies that help lenders improve their efficiency, scale and economics throughout the loan manufacturing process.
December 2021/January 2022
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Renee Galitis
Marty Haldane
Imtiyaz Haque
Voxtur
Movoto by OJO
Marty Haldane leads the valuation technology development across all of Voxtur after the company he founded, Anow, was acquired by Voxtur in 2021. Haldane was responsible for leading the integration of Anow and Voxtur into one of the largest lenders in the U.S. Haldane helped move them from relying completely on AMCs for all of their valuations to using Anow to launch a direct-to-appraiser model using its valuation technology to decrease the time it takes to get a valuation and create a better experience for their mortgage broker channel. Anow was already used by thousands of appraisers across the world, and now lenders can integrate directly into an appraiser’s back office software to execute a faster and more transparent appraisal process. Since the acquisition, Haldane’s team built and launched the lender and AMC portal that has already launched with one of the nation’s largest lenders in summer 2021. Since being acquired by Voxtur, the monthly appraisal volume across Voxtur’s valuation technology has increased by over 80%.
As CEO of Movoto by OJO, Imtiyaz Haque is equal parts entrepreneur, product leader and technologist. Since taking on the role in 2017, he has transformed Movoto by OJO into one of the fastest-growing residential search sites in the U.S., with more than 34 million monthly visits. Most recently, he spearheaded the integration of Movoto into OJO Labs and worked alongside the OJO product team to build the platform for selling and buying real estate. Haque has an unwavering passion for scaling and nurturing high-growth products and teams and brings this ethos to Movoto to help OJO Labs achieve its purpose of leveling the playing field for all. Haque has been a key member of the Movoto team for seven years, overseeing the engineering department before taking over as CEO. During this time, he has been relentless in bringing the customer voice and their needs to the forefront. Following OJO Labs’ acquisition of Movoto in June 2020, Haque spearheaded the integration process. Under his leadership, Movoto by OJO has seen record innovation and growth.
Katrina Helmkamp
Alisande Heriyanto
Realogy Leads Group and Cartus
The Corcoran Group
Katrina Helmkamp serves as president and CEO of Realogy Leads group and Cartus Corporation. Realogy Leads Group is a dedicated organization within Realogy that focuses on delivering leads to Realogy-affiliated brokers and agents, while Cartus is Realogy’s relocation services segment. Helmkamp leads strategic planning for the referral operations, product and technology teams that support Realogy Leads Group’s commitment to introducing new tools and resources to support brokers and agents and contribute to higher conversion rates of referrals delivered to the network. Under Helmkamp’s strategic leadership, Realogy Leads Group piloted the company’s next generation of leads technology: a new proprietary web platform and integrated mobile app for agents in the Realogy Advantage Network that streamlines the way referrals are managed. Custom-built and powered by Salesforce, this technology will replace current in-house and third-party technology, while making the referral steps easier for the agents.
When Alisande Heriyanto isn’t driving the innovation behind Corcoran’s websites and productivity tools, she switches hats to lead a Technology Support team that aids the agents, clients and staff who use those very tools and sites. Over the last year, in addition to leading a huge and timely update to Corcoran.com, she fluidly transitioned her team from a traditional tech support model to one that now supports high-performing agents and staff in a variety of work environments across 25 different markets. Corcoran has experienced a lot of change since the site’s last refresh in 2018, and the website needed to reflect the new world in which they’re operating. The update included dozens of functional and aesthetic improvements that make Corcoran’s digital home faster, more intuitive and more beautiful with soft-AI touches woven throughout. The reimagined Corcoran.com removes regional landing pages and allows visitors to search across all regions cohesively, not just by individual brokerage or affiliate markets.
President, Anow & Valuation Software
CEO
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President and CEO
VP, Product and Tech Support
December 2021/January 2022
Christine Herman
Alan Johnson
Finance of America Companies
OptiFunder
Under Christine Herman’s leadership, Finance of America Companies’ Information Technology and Information Security functions fused into a single technology organization committed to delivering secure, high-quality, innovative technology solutions that meet the challenges of tomorrow. In just a year, Herman has fundamentally transformed the technology and cybersecurity culture across 24 unique Finance of America Companies, specializing in mortgage, lending services, insurance and more. Herman is evidence of a new generation of executive leadership in the housing industry, one who leverages startup-style product innovation, diverse talent recruitment and relentless delivery to rethink the customer experience. Herman translates her work at five distinct cyber startups into the technology solutions and vendors that power the housing industry. She believes that effective technology disruption is predicated on partnership with like-minded thinkers and empathy.
As chief technology officer at OptiFunder, Alan Johnson is the chief architect of a warehouse management system that optimizes and automates funding, ensuring mortgage bankers select the most optimal warehouse facility for each loan resulting in the lowest cost of capital and providing full automation to streamline every touch point of the warehouse process. The system also gives warehouse lenders automated consideration for all eligible loans in their customers’ pipelines with secure integration to enhance data integrity. Johnson is a serial entrepreneur and innovator who created one of the mortgage industry’s earliest product and pricing engines and online lead management systems as the dot-com era unfolded. His drive to advance mortgage automation combined with a passion for leveraging cutting-edge technology has been core to his industry-disrupting solutions. These efficiencies allow mortgage bankers to streamline processes and re-deploy human capital for added value.
Jacob Keigan
Abe Kuruvilla
PennyMac
CoreLogic
Jacob Keigan has spent nearly 20 years finding and implementing technological innovations for the mortgage industry. More recently, he’s been leading a large domestic and offshore team of product managers, product owners, analysts and testers who are collectively focused on delivering a superior customer experience with improved efficiency and automated controls. Keigan’s expertise allows for deep collaboration with engineering partners to ensure solutions are designed and built to meet current business needs and future growth. As one of the key product executives within the Production Business Technology department, Keigan delivers solutions that support business goals. His deep technical knowledge and passion for innovation have produced several key solutions for PennyMac in his five years with the company. Under Keigan’s leadership, PennyMac launched a new platform to support partners in the correspondent lending channel in only nine months.
Abe Kuruvilla brings more than 20 years of experience in technology and product development and a demonstrated track record of building high-performing teams that deliver results. In his role, Kuruvilla is responsible for setting the company’s global technology strategy, driving digital transformation, innovation, information security and solutions to solve the toughest challenges in the housing market that CoreLogic’s clients face. As a hands-on leader, Kuruvilla focuses on collaboration, communication and problem-solving skills that encourage new ideas within his leadership teams and foster innovation. Kuruvilla and his team have been instrumental in ideating and leading several major technology initiatives, including AutomatIQ Borrower, Digital Tax Platform, OneHome (AI-enabled consumer-facing real estate agent portal), the redesign of HomeVisit and the build-out of the Title Port solution. For the last two years, Kuruvilla has co-led the CoreLogic Operations Leadership Council, consisting of the top leaders across CoreLogic.
Chief Technology and Security Officer
CTO
Chief Information Officer
December 2021/January 2022
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EVP, Product Management
Andy Mahdavi
Alex McGillis
Doma
Rocket Pro TPO
Once an astrophysicist studying dark matter, Andy Mahdavi, chief data science officer at Doma, has applied his unique skill set and knowledge to the finance and title industries, innovating everywhere he’s been. At Capital One, Mahdavi led a team of data scientists to develop advanced machine learning algorithms to detect and prevent fraud in real time. Now, Mahdavi leds the charge on creating a property-based risk model as well as being one of the first to deploy transformer-based deep learning networks to automatically identify, process, action and respond to real estate customer communications and hundreds of document types. Before Doma was founded in 2016, issuing a title policy on a residential real estate purchase involved an agent manually searching historical documents and records for issues such as liens or back taxes. Since then, Mahdavi and his team have developed a forward-thinking, risk-based insurance model that uses a predictive algorithm to analyze millions of data points to assess the risk of a property and underwrite a policy.
As senior director at Rocket Pro TPO, Alex McGillis and his team are responsible for the creation and constant innovation of Rocket Pro TPO’s Pathfinder by Rocket. This technology tool helps mortgage brokers find all the guidance and process information in one spot so they can quickly and easily find the best loan product for their clients. McGillis built a team that can take complicated loan product guides and make them easy to read, understand, search and accessible to mortgage brokers 24/7. He and his team also make constant improvement — always updating the tool as a direct result of feedback from brokers. In September 2020, when Quicken Loans Mortgage Services became Rocket Pro TPO, it also announced Pathfinder by Rocket. This tool is the integration and reimagination of many of its most popular tools into one centralized location. It combines popular resources like Guru and The Answer into a completely new technology to put the power of thousands of underwriters into every broker’s office.
Jennifer Menard
Tom Moreno
First American Data & Analytics
Lennar Financial Services
A leading fraud and compliance technology veteran, Jennifer Menard has been responsible for setting the strategy for, and launching, several cutting-edge solutions for the mortgage industry. Her deep understanding of customer needs and product development guides her team in delivering industry-leading solutions. As senior director of product management, mortgage solutions for First American Data & Analytics, Menard leads the Fraud and Loan Quality and Regulatory Compliance product management teams and is responsible for multiple product solutions, including the FraudGuard solution. Over the past year, Menard has also spearheaded the development of the First American AppIntelligence Score, a powerful new fraud pattern-recognition scoring model. Menard and her team analyzed hundreds of thousands of loan findings to develop this highly accurate model, which significantly reduces review volume and false positives. The end result of those efforts is a truer picture of where fraud and early payment default risk are likely to occur.
Over the last year, Tom Moreno, chief information officer at Lennar Financial Services, has helped lead Lennar Mortgage to an almost fully digital platform. He’s helped add additional BOTs, increase the use of offshore resources, transition the company to a remote environment and much more. With Moreno’s foresight and leadership, Lennar Financial Services has gained efficiency, improved quality and achieved cost savings and continues to develop relationships and partnerships with vendors who are on the leading edge of technology. With Moreno at the helm, Lennar has been able to create efficiencies and enhancements such as remote online closing and Doc and Data exchanges with affiliates, which has created a unification of the single source of truth as well as minimizing manual intervention and ensuring data accuracy. By utilizing offshore resources, Moreno and his team have gained additional efficiency and improved quality by implementing 20 plus tasks. This modernization has also created an automated customer journey experience.
Chief Data Science Officer
Senior Director
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Senior Director of Product Management, Mortgage Solutions
Chief Information Officer
December 2021/January 2022
Qingqing Ouyang
Phillip Petrie
OJO Labs
ServiceLink
As executive vice president of engineering, Qingqing Ouyang is the driving force behind OJO Labs’ AI-powered technology, spearheading the ongoing development and scaling of the company’s personalized platform for home buying and selling to millions of consumers. Ouyang has concurrently grown the once-small data science and engineering teams to more than 150 skilled professionals distributed globally, while simultaneously increasing the scope and complexity of her remit. Ouyang has played a central role in driving the company’s innovation and growth to where it stands today. Since joining OJO Labs in 2018, Ouyang has helped scale the company’s product from a conversational bot to a sophisticated platform. She has spearheaded the development of an experience that equips consumers with a better understanding of their individual preferences and personal finances, empowering them to find the right home and make one of life’s most complicated decisions with confidence.
Never one to shy away from a challenge, Phillip Petrie, vice president of product development at ServiceLink, is known for digging deeper and mobilizing teams to reimagine how data science, alternate data sources, operations and client service can work in concert with one another to produce cutting-edge title products for lender clients. In his 12 years at ServiceLink, Petrie has consistently identified the potential for product and process improvements to drive business outcomes for ServiceLink and its clients. He credits his successful track record to his varied industry experiences — from roles in operations, sales, client service and IT — which help him see problems from all angles and better inform paths to solve them. In his current role, he’s able to leverage his skill set to easily bridge the gap between IT, sales leadership and other cross-functional teams to create optimum efficiency and even provides informal business coaching to IT team members. Under his leadership, ServiceLink’s EXOS Technologies division also launched an instant closing disclosure capability.
Cecelia Raine
Martina Schubert
Freddie Mac Single-Family Business
LenderClose
As vice president of servicing strategy and integration, Cecelia Raine influenced the creation of Reimagine Servicing, one of Freddie Mac’s biggest, most effective and successful recent initiatives and one of the largest investments in servicing in 10 years. She engaged the industry to gain buy-in and led Freddie Mac beyond an idea to a successful execution that included the entire servicing ecosystem. Through new technology solutions, process changes and data integration, she’s leading the way to minimize credit losses, reduce costs and support sustainable homeownership and stability in the housing market. An industry veteran, Raine leads several initiatives related to transforming Freddie Mac’s servicing experience. With the help of her team, Raine created and launched multiyear initiatives under Reimagine Servicing that tackle inefficiencies, archaic systems and disconnected stakeholders, while proactively addressing servicer and homeowner needs.
Martina Schubert has built a career in technology that is based on striving for excellence and helping other professionals succeed. As chief technology officer at LenderClose, Schubert heads research, product development and data collection and oversees LenderClose’s technology and product teams that work concurrently to create a better borrower experience. Schubert has used what she has learned during her 25 years of experience in the technology industry to create the company’s first tech incubator to attract new talent. Schubert drives innovation by ensuring that her teams are engaged, empowered and work collaboratively toward a common goal. She has been instrumental in helping transition from a small startup to an award-winning fintech provider, developing technology that digitally transforms the lending sector. Schubert is driven to enhance the user experience and provide technology that streamlines the mundane, frustrating activities of loan originators.
EVP, Engineering
Chief Technology Officer
December 2021/January 2022
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VP, Servicing Strategy and Integration
VP, Product Development
David Seong
Tom Showalter
Black Knight
Candor
David Seong’s leadership and software development has helped grow Surefire into one of the mortgage industry’s most-used CRM and marketing automation platforms. Over the 11 years he’s been with the platform, Seong has led the development of many industry-first features and blazed the trail for what a mortgage marketing platform should be. In 2012, Seong was instrumental in helping Surefire integrate with mortgage loan origination systems, enabling automation of in-process communication between loan officers and borrowers. Surefire was also one of the first CRMs to automate essential mortgage compliance capabilities such as approvals management for changes to print and digital assets, state-by-state licensing disclosures, review of rates displayed to leads and prospects, and full audit support. Seong built out the delivery system for Surefire CRM’s interactive Adobe Animate content using a method that has broken new ground with how it retrieves property data in real-time.
Candor CEO Tom Showalter has taken his expertise as a rocket scientist to the mortgage space and has spent the last 30 years solving complex problems with industry giants, revolutionizing fintech. Showalter is the architect of the company’s patent-pending Loan Engineering System and its underlying CogniTech Expert System Technology. His technology addresses the most hard-to-solve problem in mortgage manufacturing: modeling an underwriter’s critical thinking. Using this proprietary, patent-pending form of knowledge engineering, Candor successfully underwrites a loan to the highest level of integrity with virtually no human assistance. Candor’s patent-pending Loan Engineering System is an Expert System that is predicated upon that very AI technology known as knowledge engineering technology, which Candor has trademarked as CogniTech. In the last 12 months, under Showalter’s direction, Candor has completed over 1 million hands-off, autonomous underwrites and that’s just the beginning.
CTO, Surefire - Origination Technologies
CEO
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Jeremy Sicklick
Seth Siegler
Co-founder and CEO
VP, Technology Innovation & Real Estate
HouseCanary
eXp Realty
In 2008, Jeremy Sicklick, a partner and managing director at Boston Consulting Group at the time, was confronted with the fact that the residential real estate industry was in dire need of modernization given the lapses in recordkeeping and the lack of common data standards. Given the lack of transparency and data standards, Sicklick co-founded HouseCanary in 2013 to provide every player in the residential real estate space with better, more reliable data. Co-founding the company with Chris Stroud, who now serves as co-founder and chief of research, HouseCanary has been digitizing and indexing information about every home, every mortgage and every neighborhood across the country. Sicklick, who now serves as CEO, and the HouseCanary team have built a set of next-generation valuation solutions that are powerfully detailed, predictive and accurate. Sicklick drives the company’s vision, strategy and growth to identify interesting and unique ways to use data to maximize value in real estate.
As vice president of Technology Innovation & Real Estate, Seth Siegler is helping to scale eXp Realty’s innovation and technology department to better serve agents, brokers and customers. In his role, he taps into his nearly 20 years of experience building tech-focused products and companies in the real estate industry. As a serial startup founder, including two exits, Siegler has experience building companies that deliver meaningful technology. He has participated in the development of several software technology patents and continues to create products that improve the real estate transaction for agents and consumers. Siegler established the eXp Innovation Hub, a collaborative environment to create services and capabilities that make a difference in the day-to-day life of eXp real estate agents. The technology gathers agent and customer insights through virtual and in-person meetings, such as the eXp Agent Advisory Council, which ensures that the “voice of the agent” is represented.
December 2021/January 2022
Mike Spotten
Harish Tejwani
Sales Boomerang
ARIVE
As vice president of product, Mike Spotten is leading the tech disruption of mortgage lending by continuously innovating Sales Boomerang’s borrower intelligence products to deliver new competitive advantages for mortgage lenders. In his three years at Sales Boomerang, Spotten has guided the expansion of its borrower intelligence software nationwide, growing the volume of alerts delivered to lenders by 202% and increasing Sales Boomerang revenue by 280%. In the past year, Spotten’s products have identified 1.9 million overlooked loan opportunities inside lenders’ own databases and helped those same lenders turn $468 billion in potential deals into a 20-40% average lift in closed-loan volume. At the beginning of this year, Spotten spearheaded Sales Boomerang’s launch of a new product line called Prescriptive Scenarios. These smart loan scenarios are advancing the borrower retention category by triangulating multiple points of borrower intelligence to deliver opportunities that approach 100% relevance.
Harish Tejwani recently took charge of ARIVE, a digital broker origination platform that is revolutionizing the mortgage origination process in the wholesale channel. Tejwani and his team of more than 60 employees have worked non-stop this year to bring to market, at scale, a turnkey loan origination solution for mortgage brokers that is natively connected with wholesale lenders for digitally exchanging pricing and loan information. ARIVE allows brokers to source mortgage offers from hundreds of wholesale lenders without having to send applications to the individual TPO portals and calculates broker pricing according to the agreement they have with the various lenders. Since Tejwani joined the company, the ARIVE platform has taken off with nearly 300% exponential growth in broker adoption in the past six months. By the end of Q3 more than 2,000 broker shops representing north of 8,000 originators have signed up for ARIVE, with the largest lenders representing 65% of wholesale market.
Todd Teta
Matt Tippets
ATTOM
Total Expert
Todd Teta’s unique contributions to ATTOM continue to prove invaluable in ensuring the company’s ability to deliver data-driven critical insights and analytics-ready property data solutions, addressing a wide range of business needs. Under Teta’s leadership as chief product and technology officer, ATTOM — now the parent company of RealtyTrac, Homefacts, Home Disclosure, Home Junction and GeoData Plus — continues to build upon its data footprint through technology developments and strategic acquisitions. Teta remains committed to consistently delivering innovations that contribute to furthering ATTOM’s goal of bringing more comprehensive real estate data to the marketplace. Among Teta’s most recent achievements in innovation is ATTOM’s new cloud-based solution, which offers secure and direct access to ATTOM’s vast data warehouse, alleviating the burdens associated with loading, managing and integrating large datasets. Teta’s team proudly boasts that ATTOM Cloud is part of that new connected world.
A steward of organizational alignment, Matt Tippets has become a galvanizing force behind Total Expert’s scaling of talent, processes and products over the past year, drawing from his 20 years of experience in enterprise cloud-based software. In just over a year as chief product officer at Total Expert, Tippets has extended and improved upon Total Expert’s consumer-direct strategy by ramping up quality assurance, refocusing on and augmenting the design team, and rolling out several new products and integrations. Each of these moves helped equip Total Expert to meet the escalating need for digital transformation across mortgage lending organizations. As a leader, Tippets embodies Total Expert’s people-first commitment. Over the last year, he engineered a pivot to a culture that puts people into positions where they can succeed and drive product innovation further. Tippets positions himself as a team-oriented, product-focused leader Total Expert needs to provide ongoing innovation to the nation’s leading financial institutions.
VP, Product
CEO
Chief Product Officer
December 2021/January 2022
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Chief Product and Technology Officer
Scott Turnquest
Paul Vancheri
Promontory MortgagePath
LoanLogics
Recognizing technology’s role as a differentiator in today’s mortgage market, Scott Turnquest, chief technology officer at Promontory MortgagePath, has made it his mission to apply the lessons learned at other fintech innovators to enable community bank and credit union mortgage lenders to compete efficiently and effectively. By curating a tech stack of best-in-breed providers and Promontory MortgagePath’s proprietary POS, Turnquest is helping to deliver large-scale digital mortgage automation to community lenders across the nation. A relative newcomer to the world of mortgage technology, Turnquest has already made a major impact, bringing to bear his more than 20 years of experience in security, process improvement, scaling consumer-facing applications and organizational design developed in fintech. Since joining Promontory MortgagePath last year, Turnquest has overseen strategy and development to help lenders leverage dynamic technology to engineer a faster, simpler, more-inclusive mortgage process.
As executive vice president of Technology, Paul Vancheri oversees the development and delivery of all software and the overall technology strategy for LoanLogics. Over the past year, Vancheri has led the release of several offerings and product enhancements to help lenders and servicers lower their costs through automation and integrate technology into their workflows. This includes LoanLogics’ API portal, where clients can find everything they need to implement document processing into any part of the origination process. Vancheri has also helped LoanLogics develop a stronger, more disciplined approach to product development with continuous, high quality technology releases that satisfy client needs and security requirements. In April, Vancheri led the launch of LoanLogics’ IDEA for MSR Transfer, which streamlines the acquisition of mortgage servicing rights by normalizing document naming and stacking orders across loan sellers, creating automated processes for onboarding loans.
Tim Von Kaenel
Angeline Vuong
Sagent
Opendoor
The most significant mortgage trend of the last six years was the digitization of the trillion-dollar origination sector, and Tim Von Kaenel helped set and advance this trend as chief product officer for two highly influential organizations. First, Von Kaenel brought push-button, phone-based mortgages to millions of consumers — and thousands of retail, broker and consumer-direct loan officers — at loanDepot. He then delivered this same modernization to the industry at pointof-sale pioneer CloudVirga. Now, as chief innovation officer of servicing fintech leader Sagent, he’s again setting this consumer-first modernization trend in the highly technical $12 trillion servicing industry, where lifetime consumer relationships are managed and grown. Since joining Sagent last June, Von Kaenel and his teams have overhauled Sagent’s scale performing, nonperforming and consumer platforms without disrupting the daily, real-time servicing operations for Sagent’s clients.
At Opendoor, Angeline Vuong is in charge of buyer product innovation and is focused on making buying a home simple, affordable and enjoyable. This past year, she was promoted to head of buyer product for her work and leadership on Opendoor Backed Offers — Opendoor’s cash offers program that launched in March 2021 — which empowers buyers with the freedom to move, and win, their dream home in this historically competitive market. Delivering a complete, end-to-end buyer experience is central to Vuong’s work. Currently, Opendoor customers can use the app to browse homes, schedule tours, get pre-qualified and close on the home of their dreams. But Vuong is leading her team to innovate and create even more products and features that will continue to deliver a seamless experience for home buyers. In March 2021, Vuong and her team launched Opendoor Backed Offers, making it possible for anyone to reap the benefits of being a cash buyer.
Chief Technology Officer
EVP, Technology
52 ❱ HOUSINGWIRE
Chief Innovation Officer
Head of Buyer Product
December 2021/January 2022
Tim Wagner
Mark Walser
Synergy One Lending
Incenter Appraisal Management
As chief marketing officer at Synergy One Lending, Tim Wagner has created and scaled a wide variety of digital and tech tools, strategies and partnerships that have elevated the overall consumer experience in mortgage lending. Wagner has built and scaled best-in-class resources to help individual loan officers scale their local visibility and repeat and referral business while innovating the tools and products loan officers have at their disposal to support their clients. Over the last 12 months, Wagner led several projects, including a blockchain partnership to provide homeowners with access to equity in as little as 5 days. This partnership resulted in five-minute online applications and secure blockchain transactions, all with online support to assist borrowers with a resource unavailable with traditional lenders. Wagner also rolled out and scaled a fintech partnership to provide better than cash offers for Synergy’s clients and referral partners. The platform has allowed new homebuyers to access financing that helped them beat aggressive cash offers.
As president of Incenter Appraisal Management, Mark Walser spearheaded the creation of RemoteVal technology, dramatically streamlining one of the biggest bottlenecks in mortgage lending: appraisals. RemoteVal creates a whole new class of appraiser-centric inspection technology that shortens the process while meeting the stringent accuracy guidelines appraisers must follow. Incenter Appraisal Management believes that over time, it will become the de facto standard for how remote appraisals are conducted, and bring the digital mortgage process closer to reality. Walser, who joined Incenter Appraisal Management in October 2020, chose to tackle a big challenge for the housing industry — the increased demand for valuation reports at a time when the appraiser population is shrinking, which has led to three to four week backlogs in many areas. This led to the creation of RemoteVal—which enables appraisers to complete thorough, compliant appraisal inspections without ever leaving their desks for many of the property types.
Shane Westra
Cathy Wright
SimpleNexus
Clear Capital
Shane Westra has spearheaded growth and technical innovation in the digital home-buying arena. Westra was promoted from vice president of product to chief product officer of SimpleNexus in October 2020 and continues to lead the way as a passionate, forward-thinking leader. His innovative and out-of-the-box perspective is unmistakably present in SimpleNexus’s company culture, which was ranked number 47 on Fast Company’s list of the world’s 100 Best Workplaces for Innovators this summer. Westra’s talents for engineering and development have also helped the SimpleNexus platform earn a place on the Inc. 5000 list of America’s fastest-growing private companies for the fourth consecutive year. As a result of the strategies Westra has put in place, SimpleNexus has become a category leader that exceeds expectations. One of Westra’s most notable contributions in the past year was his management and rapid build-out of Nexus Closing, the electronic closing component of the SimpleNexus platform.
As vice president of product management, Cathy Wright brings more than 20 years of technology, data and product experience to the Clear Capital executive leadership team. She’s led high-performing product teams at startups and Fortune 1000 companies alike, guiding the development of incredible products and ensuring the voice of the customer is at the decision-making forefront. At Clear Capital, Wright leads a robust team of product managers to grow current offerings and ensure Clear Capital remains on the cutting edge of ways to help its customers. In addition, she works closely alongside the ClearLabs division to support the launch of new, innovative products and drive strategic initiatives. Wright has played an integral role in Clear Capital’s efforts to drive business performance and innovation among its client base. In June, Clear Capital announced a partnership with Recursion, the country’s preeminent provider of analytic data tools in the mortgage industry, to produce more accurate valuation models and solutions.
Chief Marketing Officer
President
VP, Product Management
December 2021/January 2022
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Chief Product Officer
Here are the leaders elevating the reverse mortgage landscape Introducing the 2021 class of Reverse Mortgage Daily Changemakers By Chris Clow
In 2020, Reverse Mortgage Daily introduced our inaugural class of Changemakers. This is a group of industry leaders who do more than just speak about the necessity for change, and instead demonstrate that they know how to actually change the game and elevate the standing of the reverse mortgage industry. From the regulatory landscape to product adaptations and sales and marketing techniques, reverse mortgage leaders need to confront one constant year over year: change. Today, the need for transformative leadership in reverse mortgage lending remains more critical than ever in a rapidly changing home equity access environment. After careful consideration, RMD has identified four individuals who have successfully and demonstrably helped change the landscape of the reverse mortgage industry of late. Recognizing their dedication to moving the reverse space forward, the following Q&As feature Changemakers Harlan Accola, national reverse mortgage director at Fairway Independent Mortgage Corporation; Shelley Giordano, director of Enterprise Integration at Mutual of Omaha Mortgage and Co-founder of the Academy for Home Equity in Financial Planning at the University of Illinois Urbana-Champaign; Scott Gordon, CEO of Open Mortgage; and Kristen Sieffert, president of Finance of America Reverse. Harlan Accola, national reverse mortgage director at Fairway Independent Mortgage Corporation
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RMD: Do you think that the reverse mortgage industry is conducive on its own to change? Or as a company leader, do you find that you have to exert pressure to try and make it change? Harlan Accola: People are naturally resistant to change. They get to a certain comfort level. But this industry, I believe, and I’ve been in it since 2003-2004 — has been incredibly resistant to any kind of change. And because of that, not only have we not grown, we’ve contracted, and some people are OK with that. And so I have to admit, I’m deeply disappointed right now in the willingness of the industry to change the way that they do things.
You know, we’re still doing 50% HECM-to-HECM refinances, churning the same stuff over and over again to the detriment of the industry. Everybody somehow thinks that’s OK, instead of reaching out to new referral partners and new groups of people and new frontiers, whether it’s real estate, attorneys, financial advisors, 55-plus communities, whatever it may be. They’re just going back to the old direct-mail days, when you can mail X number of pieces, you get X number of prospects, and then you target these people that might have a higher interest rate and do a bunch of refinances. This industry has been more resistant to change than most other industries. RMD: Obviously, there have been external realities that have forced the industry to change, maybe kicking and screaming. But in terms of the current landscape, do you think that the reverse mortgage industry is changing fast enough today? HA: Yeah, not even close. Until everybody understands that this product makes sense for everybody, we’ll remain stagnant. I will turn 62 myself next year, and the day I turn 62 I’ll be getting a reverse mortgage. There’s a whole bunch of people in leadership positions at reverse mortgage companies that are over 62, and who have not gotten their own reverse mortgage or have not gotten one for their parents. There are people over 62 at the National Reverse Mortgage Lenders Association (NRMLA) that have not gotten a reverse mortgage. That’s ridiculous. Until we change that mindset, how are you going to sell it to the masses, if you’re not even doing it yourself? And not even talking to your own parents? That’s the biggest thing that has to change. It’s that mindset that says “We’re going to sell that to people.” A guy just told
December 2021/January 2022
me that he really doesn’t understand what he’s selling, and there’s a lot of people in this industry that don’t realize it, either. It’s not just about getting one to be an example, but understanding it well enough that you can even explain to your spouse why you’re getting one. I mean, my wife has to sign the papers, too. I need to be able to at least sell it to my wife to say, “We’re doing this because we can use it for tax purposes,” or “We can use it for increasing our Roth conversions.” We need to be able to sell this to our own spouses, and our own parents. My wife’s parents are still alive, and they still got a reverse mortgage because I explained to them how great it was 10 years ago. Not because I wanted another sale, but because I wanted to take care of my own family. I don’t want this to come across as negative, but I bet if you did a poll of the number of people that either did a reverse mortgage, or their parents did one, it might even fall below 50% within the industry. I could be completely wrong, and I hope that I am. But why aren’t you using your own product? I mean, Ronald McDonald does not shop at Burger King. We’ve got a picture of that in our training material. Ronald McDonald eats as long as he’s hanging out at McDonald’s. I mean, if we’re not eating our own product, why didn’t we get that?
RMD: On that point about the idea of industry leaders who aren’t engaging with the product themselves: Do you think that it’s important that they do in order to set an example to their peers, or to communicate to the broader audience of borrowers that this is something that is worthy of exploration? Or, is it all of the above? HA: It’s all of the above. The reverse mortgage has been referred to a lot of times as the “Swiss Army knife” of retirement. Some people say that they don’t need it yet because they’re not broke, so why should they get a reverse mortgage? Many clients have told us that some people inside the industry are telling them the same thing. There’s a guy who called me up a few years ago, I’ll never forget it. I asked him just what his future plans were right after he turned 62. He said he’d probably work for another seven or eight years, and then he’d hang it up. And I said, “Well, fortunately, you can ride off into the sunset with your own reverse mortgage. When did you get yours?” He said, “As many people as I’ve helped with this thing, I sure as hell hope I’m never going to need one.” Well, that just blew me away. It just communicated to
HA: I think it’s primarily one thing, and that’s the true thought process that this is a product that can work for most people. This is for more than 90% of people when they turn 62, and most people don’t believe that. Even people inside the industry will question me on that. One of our branch managers in Colorado, Christine Johnson, will consistently tell financial advisors, “I dare you to send me a client who’s over 62 that I can’t help a little bit or a lot.” That’s the attitude the industry has to have, and they don’t. I think that is the single biggest thing holding us back is a lack of belief that this product works for a lot of people. There’s a bunch of people that did not believe that electricity should be put into houses, because it could cause fires. Sure it can, but that doesn’t mean that you shouldn’t put it in every house. A lot of people were against that change of mass electrification. And yet, obviously, that’s a pretty significant thing at this point. It was the same thing with cars. When those started being sold, others said that people were better off with horses, because horseless carriages were a problem and they broke down all the time. “Horses are more reliable,” they said. I just don’t think that people have enough of a
December 2021/January 2022
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me this week, “You know, Harlan, it’s a lot easier to sell a reverse mortgage to somebody with a 600 credit score than to someone with an 800 credit score.” Well, yeah, it’s a lot easier to sell a sandwich to a starving man, too. But it’s probably a good idea to collect the benefits of your sandwich, so you can sell it to people that are not necessarily starving.
RMD: Is there any one thing that you think might be holding the industry back from embracing some of the changes that might be necessary, at least from your perspective? Or, do you think that there’s just a broader-based institutional attitude that might be holding the industry back in several areas? Is it just one thing, or is it many?
belief in our product. So, it really comes down to this idea that we’re missing that solid, unwavering belief that our product is way better than even we think it is.
his parents or grandparents, usually parents into it, or are getting one themselves. And we run into that a lot. So, you make a presentation about reverse mortgages, and then, particularly if it’s with a Realtor group, they come over and they want to get a reverse mortgage themselves. So, there’s that epiphany when you get belly-to-belly to people and start talking about it, and they can start applying it to their own situation. It entrenches the whole thing in their minds. RMD: In terms of all of the changes that have been applied to the industry that come from both within and outside, do you think the reverse mortgage industry is changing fast enough today?
Shelley Giordano, director of enterprise integration at Mutual of Omaha Mortgage and co-founder of the Academy for Home Equity in Financial Planning at the University of Illinois Urbana-Champaign
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RMD: I spoke to another member of this year’s Changemakers class, and he said that not enough people in the industry are actually getting reverse mortgages when they qualify. I’m paraphrasing what he said, but he feels that separates people within the industry too much from the product that they are trying to sell. What do you think about that? Shelley Giordano: I think that’s perfectly valid. Yes, absolutely. You know, something much better when you have to go through the whole process yourself. I know quite a few reverse mortgage folks who have reverse mortgages, and quite a few of them have used the HECM for Purchase. I don’t know what percentage it is, but I can tell you that I was with some folks in Omaha a couple of weeks ago who are on the forward side, who just spontaneously said to me, “The minute I turn 62, I’m getting one of these things!” I think a good example of buying into it is when you actually run into a financial advisor, who is either guiding
SG: I would say we’ve made strides, but there are probably folks who are still too focused on the “last resort” aspect, [that idea which says reverse mortgages should only be used when all other options are exhausted], which I am always uncomfortable talking about. That’s because I never want to appear like we don’t want to help people who are in that low-to-moderate income threshold. I notice that when we go to industry meetings that the regulators seem to have a tremendous amount of focus on that low-to-moderate scale of income. For us to be a big industry, we need to be able to appeal to the mainstream. And in order to do that, we’ve got to continue to knock down those ideas that continuously say that “reverse mortgages are only for people who are cash poor, and house rich.” We want people to be thinking about reverse mortgages as a way to protect their other assets. Barry Sacks and Wade Pfau in particular have done such a spectacular job of demonstrating that. The idea that having that HECM line of credit in place and that it is going to continue to grow in value regardless of what the market does, or what the housing market does. It’s still there. So, I guess the answer is that we’re feeling some change. It’s gratifying to see other players in the industry being able to talk beyond merely keeping a borrower out of foreclosure or ahead of bankruptcy. All of those things are great because we want to help people. But again, in order for us to be an industry that is not just a niche mortgage, we need to be able to be ready and able to be part of what people expect to do when they hit retirement. It’s still just astounding to me that financial advisors are forbidden to have conversations about the housing asset. It’s just wrong. I used to be more reluctant to be so forward, but just because financial advisors don’t get paid on reverse mortgages doesn’t mean that it’s not something that they should discuss with their clients. To be forbidden from having a conversation is wrong. [The housing asset makes up two-thirds of the average client’s net worth in America.) RMD: About a decade ago, when the major lending institutions started getting out of the reverse mortgage business, it seems that there were a lot of people in general that left, too. Did you
December 2021/January 2022
SG: I’ve been in the business uninterrupted, except for six months when I took time off to make a big move. I’ve been in the reverse mortgage business my whole career. And from the very beginning, I’ve just believed in it. From the first time I heard of a reverse mortgage, probably in the 1970s where it was just described to me as someone putting money into their house, and then they hit retirement and the money starts coming back to them, to me that was just the most brilliant path. The whole concept of it, I’ve just always appreciated and understood that it could make a difference in people’s lives, and that it just seemed like a rational approach. But even since then, over the years with the work that the folks at the Academy for Home Equity in Financial Planning have done, I’m even more rabidly enthusiastic, because now there’s math behind it. As Barry Sacks said to me one time: you’ve got all these assets, and you’ve got your house. And when you take out a reverse mortgage, you’re using up some of your equity. But he said, “Just think about it: you still get to live in the whole house.” It’s not like if you’re using up your home equity in a way that allows somebody to come in and cut off your spare bedroom, and then the next year cut off your third bathroom, and then the next year, the garage. You get the full use of the house! That’s kind of like the essential difference between using a reverse mortgage and spending down your housing equity, versus spending down something else. Because, once you spend another asset down, it’s gone for good. I just think that people need to be thinking about it. Not that they have to have a reverse mortgage (even if I think most people would be well served to at least set up that line of credit) but to not think about it at all, because you’ve got a negative, you know, connotation from it because of a joke on The Kominsky Method, they don’t even know what they’re talking about. They have no idea. There’s also another element to this I wanted to be sure to mention. Women are disproportionately affected in retirement. They make less money, they get less social security. They take time out from their careers to take care of children and other family members. They take care of their husbands when their husbands are sick. And then when they’re widows, there’s nobody there to take care of them in many cases, plus you have phenomena like the “pink tax,” and they’re shy investors. They only want to invest in stuff that that is really safe and doesn’t offer the kind of returns that will keep them in good shape for a long retirement. So, I do wish that our industry would pay more attention to women. I’m not a marketer so I don’t know how to how to do that, but it seems to me that they’re the ones who need to understand how a reverse mortgage works, and how it can help them.
Scott Gordon, CEO at Open Mortgage RMD: What’s one change that you feel should be being made in the reverse mortgage industry that is not being done currently? Scott Gordon: Improvements to the way we interface to clients, and specifically, the hybrid of high tech and high touch. How do you use tech to enable personal relationships? Because everything starts with personal relationships. Across our forward and reverse channels, we want to enable what I would call “big fish in little ponds,” loan originators who are in communities and have relationships in those communities. So, we look for how tech can help people grow their business in their local community because that’s relationships and that’s where they are. Certainly, compared to some loan originators probably on both sides, many want to buy a bunch of leads and do loans all over their state. But buying leads in that way to me feels like a hamster wheel compared to building up the relationships in your community. RMD: Does that tend to go toward the idea that grassroots work in terms of facilitating those kinds of connections just tends to forge stronger bonds with clients? SG: Yeah, for sure. And I think another influence for me is the question, “What are you building?” So if you’re just doing $5 in and $5 out, and you’re buying and working leads, are you really building anything? So we try to think
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ever consider getting out at that time? Or, were you pretty resolved to stick with it for the long haul?
the forward and reverse sides of the mortgage business? How do you guys tend to approach that travel distance between the forward and reverse sides at your business? SG: We have, and I’m sure, a bunch of companies have, a program where if you’re a forward loan originator, someone else can help you get the loan done. You shouldn’t go help a client without being really knowledgeable about how to do that. So, we have the range to say that we can just do it for you. Or, we can have somebody help you, and can help bring you up to speed if you want to do more of a particular kind of loan. I think the difference between forward and reverse comes down to where you go hang out to find more clients, it’s different between the two. Some people might say “Well, it’s just a different product, so why not do reverse as well as FHA, 203K, conventional, etc.?” The idea that “it’s just one more thing.” But where you go find all those borrowers is different. You want to build up momentum in a flywheel hanging out in the right places, communicating with the right people doing the right things, and that’s different for forward and reverse. So if you try to do both, it can water down each other. The two halves can water down each other. I think that’s maybe the rub, and why you don’t see too many people who do both at the same time. of what we want Open Mortgage to be, so that we can build that or fund it. Where do we want it to be? If we’re just doing a product to do the product, but we’re not building anything, that doesn’t seem like a good idea.
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RMD: Do you feel like that is a business that is conducive to change? Or as an industry leader? Do you find that you and others maybe have to exert a little too much pressure to try and force change out of it? SG: My quick answer is yes. Is it harder to change things in the reverse space? I don’t know if that’s really true. I’ve started eight or nine companies and been in different industries, and there’s always some impediment to change. I want to be careful not to sound ageist, but a lot of reverse mortgage loan officers tend to be closer in age to their clients. So, some of them are less excited about innovations that come from technology. These days, a lot of changes simply come from tech: it’s platforms, IT systems, social media, so sometimes it feels a little like people are happy enough to keep doing what they’ve been doing. So, you have to build up a little energy around it. That’s all great, but what else could we do? How could we make this better? And not just for borrowers, but also so changes can be better for the loan officer. There, we look at how we can make the pipeline go faster, and how we can make the loan officers’ lives simpler so they can go originate more loans if they want to. RMD: Do you think there should be more solid walls between
Kristen Sieffert, president at Finance of America Reverse RMD: The reverse mortgage industry itself seems to change so much largely because of the HECM program primarily. Do you find that the pace of change that can often be dictated to you in the industry by entities like HUD and FHA makes the idea of introducing change yourself easier or harder? Kristen Sieffert: I think as an industry, we’ve been slower to create our own change, perhaps slower than other industries. But, I think that’s due exactly to what you mentioned, which is that we’ve had so many different regulations and program updates forced upon us year after year that it’s really hard to push parallel tracks of supporting those changes that we have no control over, that we must accommodate within the business, and then also having our own track of future-looking business change. I think also operating within the niche and industry that we’re in has some drawbacks and limitations. Just specifically, as it relates to modern tech that’s made available to traditional mortgage companies, most times those tools just aren’t built to support what we do. Those things aside, we are definitely not in the business of waiting for things to happen to us at FAR. If we and by extension our industry want to build sustainable companies, we really believe we have to chart our own path, we have to push innovation forward. I talk to my team all the time about looking 5-10 years out from today and trying to anticipate what the customer
December 2021/January 2022
RMD: When the company is constructing proprietary products, do you find that it’s beneficial from a market recognition perspective to mirror components of the HECM? KS: That’s a good question. I think it’s tough to answer in the sense that HECM really was the product that all of the different state regulations were modeled after. So, in order to be assessed as a reverse mortgage for certain state regulatory purposes, you do have to maintain some of those core components relating to how the HECM operates. And so, when we’re building products, we look first and foremost at “whether or not.” Do we want this product to be considered a reverse mortgage so that we can benefit from some of the regulatory items that don’t apply to HECMs? Or, like [our proprietary hybrid forward/reverse product] EquityAvail, do we think there’s an opportunity to break outside of the definition of reverse mortgages to provide a better benefit to borrowers? I think with the HomeSafe suite, we really leveraged a lot that the HECM program had built within its core. And then the things that don’t, really are the things that aren’t conducive to a really good borrower experience as it relates to HECM. Those are the things within the HomeSafe suite that we were really able to hone in on and improve the customer experience by improving those items. Most of those things come to the servicing side. The servicing process for HECMs is really so rigid, and there is a lot of downside for servicers if we don’t comply directly with the rules as they’re written. On the proprietary side, we have a lot more flexibility to create paths for borrowers to have really good outcomes, even if it’s not to the letter of the guideline written. RMD: What was your career path like before you made it to the leadership position at FAR? What was that path like that ultimately led you there?
KS: Well, I’ve basically grown up in this industry. I fell into it right out of college at a fairly entry-level role at Financial Freedom. It was supposed to be a summer stopgap while I figured out what I really wanted to do. I was debating going to law school, I had these big visions of what my future would look like. And then I started working at Financial Freedom in this very small industry. I had no idea what a reverse mortgage was. But I remember my first job was working in lender support. And we — me and [now-AAG SVP of Wholesale] Kim Smith, actually, it was just she and I handling all of the wholesale accounts west of the Mississippi, to train them on reverse mortgages. And so, I learned a lot very fast because I had to educate other people. From there, I started to climb the ladder relatively quickly. I held many positions within this industry and then in 2012, I was hired to be CEO at this company, which then was called Urban Financial. I really had no idea where that part of my journey would take me beyond Tulsa, Oklahoma. I traveled to Tulsa every Monday through Thursday, for three years, for probably 40-45 weeks a year. This was before I had kids, so it was manageable. And then I remember being in the airport, 36 weeks pregnant with my first kid and thinking, “I don’t think I can go to Tulsa as much anymore.” But I loved the CEO position, I really felt comfortable. I felt like I was utilizing all the skills that I had built over the years. So when I was offered the opportunity to be president, my first reaction was a little bit of fear. I asked myself, “Am I really cut out for this?” But as a young woman, I felt like it was something I absolutely had to do. There aren’t any female leaders of lenders, especially in our specific industry. So, that really carried a big responsibility. I wanted to show that somebody like me could create success for our company, because there hadn’t been somebody like me in a president role in our industry before. I’m so grateful that I was given the opportunity, I have been having so much more fun in this role than I ever thought could be possible. It really has allowed me to focus on the things that I’m most passionate about, which at the end of the day, are people. Really figuring out how we can show up for our employees to build the best culture ever, and asking how we can make this place the last company they ever want to work for. Or, asking how we can inspire them to want to go out and do that thing that they’ve got burning in their soul that they’ve always wanted to do. I love that, finding ways to create happiness at work so that when our team is interacting with our clients and our borrowers, they can spread that happiness out, and really create a beautiful ripple effect of kindness. So it’s been really fun, because we have an incredibly talented, committed, resilient, innovative team, all of whom care so much about doing the right thing. Helping find ways to make customers’ lives better, and to improve retirement outcomes. I wake up every day feeling so very fortunate to have this opportunity.
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needs are going to be then, because we really have to start building the infrastructure to support those things today. So, when I look back at FAR and the success we’ve had, I think we’ve had tremendous success especially with our HomeSafe [proprietary reverse mortgage] suite. That’s because we built and launched that product well before the market was really ready for it, or knew that it was needed. When we look at the volume trajectory tied to HomeSafe, it took almost three years before we had any real momentum with production in HomeSafe. But the moment that there were shifts in the HECM program and in the larger market — which we anticipated might happen — at some point, we already had a couple of years under our belt of market experience with a proprietary product. We already had the operational machinery really dialed in. And so, we were able to support what ultimately was a massive shift in the industry, for our borrowers and for our partners, by having that product ready to go already.
Point-of-sale Solutions Special
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Report
December 2021/January 2022
Sponsored Content
Black Knight’s Borrower Digital POS solution simplifies the mortgage loan application process for borrowers with a leading product and pricing engine and Empower, Black Knight’s comprehensive loan origination system (LOS). Borrower Digital was designed based on specific borrower personas and scenarios. Only relevant information is required, which helps streamline processing and improve the experience. The solution validates both data and documents and alerts the borrower of immediate next steps, which helps reduce cycle times and backand-forth between the borrower and their loan officer. “Black Knight is leveraging the power of innovative and integrated technologies to not only simplify the mortgage application and approval process for borrowers, but to also improve the back-end process for loan officers too,” said Rich Gagliano, president of Origination Technologies at Black Knight. “With a quick implementation process and pre-configured connectivity with the LOS, Borrower Digital is helping lenders gain a competitive edge by providing superior mortgage experience for their customers.” The product is complemented by Loan Officer Digital, Black Knight’s digital platform which is designed specifically for loan officers (LOs) to manage the details of each application. With an intuitive dashboard and on-the-go design, Loan Officer Digital enables LOs to easily lead the consumer through the mortgage application process and respond to borrower questions. The combination of these powerful technologies provides an enhanced experience for borrowers throughout the mortgage loan application process. “Borrower Digital’s robust self-service functionality, advanced automation capabilities and seamless integrations result in an unmatched consumer experience from start to finish,” Gagliano said.
THE EXECUTIVES:
ANTHONY JABBOUR, CHAIRMAN AND CEO Anthony Jabbour leads the company’s overall vision and direction to provide Black Knight’s premier solutions and services for many of the nation’s largest lenders and servicers.
JOE NACKASHI, PRESIDENT, BLACK KNIGHT Joe Nackashi provides overall strategic direction for Black Knight’s operating groups to maintain a laser focus on clients and deliver the solutions that help them achieve greater success.
RICH GAGLIANO, PRESIDENT, ORIGINATION TECHNOLOGIES Rich Gagliano is responsible for the overall strategy and product direction of Black Knight Origination Technologies. 61 ❱ HOUSINGWIRE
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enders have come to appreciate the benefits technology can bring — but those benefits are only useful if the implementation of new tools doesn’t make the loan process more complicated. Many mortgage lenders want to reduce the work involved with integrating third-party applications, as well as identify other ways to better streamline their operations and improve the customer experience. To address these needs, Black Knight developed Borrower Digital — a point-of-sale solution that delivers a single, fully integrated and customer-facing mortgage loan application solution. Borrower Digital streamlines and simplifies the loan application process for the borrower by guiding them through the pre-qualification, pre-approval and refinance processes. Once a consumer finds a home and engages with a lender, Borrower Digital walks the borrower through the loan application process, which is based on each lender’s configurations and is accessible via a responsive mobile design or dynamic web application. Borrowers can continue to use Borrower Digital to track their application process, as well as communicate with their loan officer, helping to reduce processing delays and enhance the overall mortgage loan experience. Additionally, the solution leverages artificial intelligence (AI) to guide borrowers through the mortgage application process. Borrowers can upload identification and other supporting documents, and Borrower Digital identifies that the appropriate documents are received — saving valuable time for lenders. Information is routed from the borrower to the loan origination system and vice versa, with the solution providing prompt feedback. Borrower Digital also includes integrations
BLACK KNIGHT www.blackknightinc.com
December 2021/January 2022
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......................................63 ALTA......................................63 MBA ......................................64 NAHB ....................................64
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NAR.......................................65
December 2021/January 2022
TRADE DESK
Marc Summers
President Association of Independent Mortgage Experts
AIME members, The last two years have been busy for the entire mortgage industry and especially mortgage brokers. Incredibly low interest rates created the perfect market conditions for a refinance boom that has been good for the entire mortgage industry. Countless brokers were doing record business by helping borrowers both refinance their homes and purchase new ones. Now, as we head into the new year, rates are beginning to rise again marking an end to the refinance boom and the beginning of a purchase-focused market. During that transition, brokers need to capitalize on the productive year they’ve seen to build on their success. Now is the time to start investing in your team, in your shop and in yourself. It might seem counterintuitive to spend as interest rates begin to rise again, but now really is the perfect time to invest in your future success. In a purchase market,
brokers are uniquely positioned with our superior technology, varied lender partners and unique mix of loan products to show consumers why we are the best option for their mortgage. We know it, now we must demonstrate it to consumers. As we enter 2022, our hope is that all brokers take a moment to reflect on the changes the industry has faced over the last year and thoughtfully consider how they plan to scale and grow in the year ahead. Our continued growth is the key to the wholesale channel’s success. AIME is doubling down on its commitment to protect, support and grow the channel by charging forward with key initiatives to strengthen our channel and unite the industry including the Spark Small Business Grant Program, AIME member-driven committees and the AIME Member Portal. These initiatives are just the beginning of AIME’s commitment to the broker channel.
Association of Independent Mortgage Experts ALTA’s online Elevate Learning Center to help members navigate the changing workplace. We will draw a roadmap to help members navigate the digital environment. ALTA will advocate for legislative initiatives that advance industry adoption of digital closings. We will provide education, such as the ALTA, MBA and MISMO Digital Closing and eMortgage Boot Camps, to highlight how emerging technologies can enhance consumer experience. ALTA will address threats to customers’ privacy and investment. ALTA will educate members about cybersecurity threats to businesses, including through the Coalition to Stop Real Estate Wire Fraud. Finally, we will drive real estate industr y collaboration. Recently, we updated the ALTA Policy Forms with feedback from industry partners. ALTA will lead conversations across the real estate, title and lending industries on marketplace developments.
American Land Title Association December 2021/January 2022
Diane Tomb
CEO American Land Title Association
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ALTA members, In October, the American Land Title Association’s strategic priorities for 2022 were introduced during our annual conference, ALTA ONE in New Orleans. ALTA President Daniel Wold noted these priorities are all equally important. Taking what we’ve learned from a historic pandemic and significant changes of an evolving world, ALTA will focus on six priorities. ALTA will help members serve our communities with purpose. ALTA will advocate for public policies that expand homeownership and protect against predatory practices. We will support their community investment, such as through the ALTA Good Deeds Foundation. We will show members how to tell our story. ALTA will continue to communicate with target audiences describing who we are, the value of title insurance and opportunities the industry provides. We will build upon our existing program, noting the importance of title insurance on ALTA’s YouTube channel, youtube.com/altavideos. Attracting, developing and retaining talent remains a top priority for our industry. We will continue to develop programming to help members recruit talent reflective of the diversity of their markets. We will provide training through
Robert Broeksmit President & CEO Mortgage Bankers Association
Mortgage Bankers Association
TRADE DESK
MBA members, The time is now for the housing and mortgage industry to strive to ensure equal access and opportunity for all Americans who aspire to be homeowners. Underlying racial inequalities have plagued our communities for generations. White households have been able to leverage financial advantages through generations of government-sanctioned programs, incentives and corporate practices that have not always been available to minorities. MBA wants your help and commitment. Last September, under the leadership of 2021 MBA Chairman Susan Stewa r t, we launched Building G ene r a t iona l We a lt h T h r oug h Homeownership, a policy initiative providing industry leadership and direction for reducing the racial homeownership gap by developing and supporting policies that support sustainable homeownership for communities of color. Through advocacy, partnerships, and connections within the indus-
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NAHB members, A shortage of skilled workers is consistently one of the biggest challenges facing the residential construction industry, according to an annual survey by National Association of Home Builders of its members. As NAHB chairman, addressing the skilled labor shortage through workforce development efforts is a top priority for me. This year I’m extremely proud of a new, exciting way NAHB’s publishing arm has worked to make strides in those efforts. The House That She Built is the first children’s book published by NAHB’s BuilderBooks and is its fastest selling publication to date. The success of this book is especially exciting because the proceeds support workforce development efforts in our industry. Based on a real-life project in Utah built by an all-female team, the book tells the story of 18 construction-related careers through the tradeswomen who completed the collective project — a new home. The book was written by NAHB member Mollie Elkman, who was a proud participant in The House That SHE Built project. Elkman, along with the book’s illustrator Georgia Castellano, created the overall branding and marketing for the project. They were so inspired by the
try, the campaign strives to 1) raise awareness of homeownership opportunities for minority borrowers; 2) expand homeownership readiness to future borrowers; and 3) assist current homeowners with maintaining and maximizing the benefits of homeownership. More recently, in October at MBA’s A nnua l C onvent ion a nd Expo, 2022 MBA Chairman Kristy Fercho launched the Home for All Pledge, an MBA member company action pledge to promote minority homeownership; affordable rental housing; and company diversity, equity, and inclusion. The pledge must be signed by the CEO or a senior executive of an organization. Their signature represents the entire company’s commitment to advancing equality in our industry. Nearly 100 companies signed up within the first week, and the count continues to grow. Now that work continues. It is up to us as an industry to come together and make a long-term commitment to promote and ensure greater racial equity and inclusion in housing.
mission that they created the book to continue sharing this important story long after the home was sold. The book gives children, and their parents and teachers, a good sense of the different career paths involved in home building. It facilitates conversation about construction trades while debunking stereotypes, demonstrates the impact that women can have on housing, and aims to inspire more women to choose a career in the trades. Bringing more women into the industry represents an opportunity to fill many of the open jobs in the field. Industry leaders 84 Lumber and Andersen Corporation are sponsors of the book and support its mission to further workforce development by generating awareness of the skilled trades to underrepresented communities. This message has resonated with both parents and industry professionals.
National Association of Home Builders December 2021/January 2022
Chuck Fowke
Chairman National Association of Home Builders
TRADE DESK
NAR members, Real estate’s outlook for the year ahead is exciting and promising. First, the National Association of Realtors recognizes we must continue to improve our industry. In recent years, NAR has lobbied Congress and been a crusader for diversity in real estate. While we are proud to have been a voice in this conversation, especially over the last year, more importantly, we will remain an advocate on this front. NAR will champion Fair Housing rules and standards and fight to ensure that homeowners are in a position that allows them to fully benefit from homeownership. We will expand housing opportunity by way of policies and programs that aid our members in providing equal opportunity to all homebuyers, and enable more families to build wealth through homeownership, as well as foster diversity, equity and inclusion in our communities and within
the Realtor organization. I encourage everyone to take three NAR Fair Housing training programs: Fairhaven, implicit bias, and At Home With Diversity. Secondly, I am making “sustainability” an NAR priority for 2022. We must make sure our national infrastructure meets the needs of the present without sacrificing the ability of future generations to meet their needs. Our Code of Ethics states, “under all is the land.” We will do all that we can to live up to this code and help increase inventory so that everyone who wants a home can take part in that American Dream. Lastly, I am asking all Realtors to keep their security and well-being top of mind. It’s all about helping our members protect themselves on the job, so that every Realtor comes home safely every night.
National Association of Realtors
Leslie Rouda Smith President National Association of Realtors
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December 2021/January 2022
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REAL ESTATE
December 2021/January 2022
REAL ESTATE
Why brokerages and mortgage lenders are rushing into JVs THE RISE OF MORTGAGE-INFUSED BROKERAGES
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he excited and at times nervous firsttime homebuyers tha t J am e s D unn often represents ask him how that whole process of taking out a mortgage works, and Dunn, a Los Angelesbased real estate agent with eXp, replies with a few trusted names. “There are probably three or four people that I work with,” Dunn said. “Anyone that’s a great communicator will get my attention.” Two hours south in San Diego, clients ask eXp agent Alanna Strei for a mortgage reference. And, after years “looking for the right mortgage partner,” Strei now confidently directs clients to mortgage broker Tim Joy at the Joy of Lending. In July, Dunn and Strei’s real estate brokerage eXp declared that it had formed a mortgage partnership, or joint venture, with the mortgage lender, Kind
“Everybody in this industry either has or should have a mortgage business.” - Ryan Schneider
Lending. Under the business marriage, eXp and Kind Lending each own half of a mortgage company scheduled to launch by the end of the year, titled “Success Lending.” Dunn and Strei are not obliged to refer clients to their employer’s joint venture — such a requirement would be a violation of federal law. Strei is aware of the joint venture but sees “no reason to stray” from Joy, “Who I truly feel gets the best for my clients.” Dunn, meanwhile, is only vaguely familiar with the fledging joint venture, whose formation was the talk of eXp’s most recent earnings call. “It has not been discussed among my network,” Dunn said. Joint ventures are suddenly stitched into the fabric of national brokerages eXp, Realogy and Compass plus several regional outfits. Meanwhile, national mortgage lenders — most prolifically Guaranteed Rate and NewRez — are methodically trying to capture market share one joint venture at a time. “Everybody in this industry either has or should have a mortgage business,” said Ryan Schneider,
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BY MATTHEW BLAKE
REAL ESTATE
CEO, and president of Realogy during his companies’ latest earnings call. But the idea of the joint venture collides with the loose, informal networks that color the American housing economy.
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It was in October of 1992, the month George H.W. Bush, Bill Clinton and Ross Perot convened in the first ever three-person presidential debate, that Congress passed, and Bush signed, an amendment to the 1974 Real Estate Settlement Procedures Act, or RESPA. A vestige of the business reforms that swept Washington in the late 1960s and early 1970s, RESPA banned referral kickbacks between real estate agents, mortgage lenders, title insurers, appraisers and mortgage insurers. “There had been very abusive practices where a lender might say, ‘Hey, Realtor, send me all your business, and if you do, I’ll let you use my car for a year,’” said Troy Garris, a law partner at Garris Horn in Dallas who advises companies on RESPA compliance. By the early 1990s, banks — still licking various savings & loan crisis wounds — trekked down new alleyways to invigorate their revenue. This included lobbying to let a real estate brokerage shuttle clients to a joint venture partly owned by the agent’s brokerage, and partly owned by a bank, explained Holly Spencer Bunting, a lawyer at Mayer Brown who counsels on RESPA issues. Under the relaxed rules that have continued to today, the broker cannot receive a quid pro quo kickback. But they can snare a cut of the joint venture’s total profits, Spencer Bunting said. About 1,100 miles northwest of the D.C. beltway, Richard Kovacevich had in 1993 ascended to CEO of Norwest, a regional,
Minneapolis-based bank. “The beginning of mortgage joint ventures was primarily driven out of Minneapolis by Norwest,” recalled Stephen Baird, longtime CEO of Chicago-based brokerage Baird & Warner. Norwest later merged with San Francisco-based Wells Fargo, and the consolidated bank, “easily formed over a 100 JVs across the country,” Baird said.
“There is a clear move by brokerage firms of all sizes and brands to enter into mortgage." - Steve Murray
But, as with many other matters, banks rethought joint ventures after the 2008 economic freefall, which prompted additional disclosure requirements under RESPA and the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. In 2011, Wells Fargo began withdrawing from its joint ventures with brokerages. By 2013, Wells Fargo hammered a few final nails in its joint venture coffin, disbanding eight of its largest JV partnerships. New government oversight, the company bemoaned in a press release, “increased the complexity and difficulty of joint ventures.” What would happen nex t with
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mortgage joint ventures had little to do with the interests of bank lenders and a lot to do with the pressure points on real estate brokerages locked in arms races to cut overhead and woo top producing agents. “There is a clear move by brokerage firms of all sizes and brands to enter into mortgage,” said Steve Murray, senior adviser of RealTrends. Ownership at Keller Williams acquired Ohio-based lender Fearon Financial in 2015, which they later renamed Keller Mortgage, and is now part of the KwX holding company. (Earlier this year, Keller Mortgage laid off 150 people of its approximately 1,000-person workforce, according to Inman News.) A year after that, RE/MAX launched Motto Mortgage, a franchise network of mortgage brokers. The Warren Buffettowned HomeServices of America bought Prosperity Mortgage, a deal that was finalized in 2018 as part of its Long and Foster purchase. Along came the JVs. Realogy and Guaranteed Rate partnered in 2017. Guaranteed Rate and @properties combined forces three years later. Then, Guaranteed Rate and Compass. Two days after that, eXp and Kind Lending. Meanwhile, Newrez was quietly incorporating 19 joint ventures, 14 of them with regional brokerages. “It is definitely becoming a common playbook for brokerages and lenders to formalize a partnership to the benefit of both parties,” said Thomas McJoyntGriffith, equity finance researcher at Keefe Bruyette & Woods. One company responsible for writing — and then furiously rewriting — the joint venture playbook is Madison, New Jerseyheadquartered brokerage conglomerate Realogy.
REAL ESTATE
The pandemic damaged Realogy, the company behind Coldwell Banker, Century 21, Sotheby’s and Better Homes and Gardens. In March 2020, Realogy CEO Ryan Schneider stated that the majority of his employees would see their pay cut. Despite the housing market’s resurgence in the second half of 2020, Realogy posted a $356 million loss in annual net income. But along the way something good transpired, the maturation of the Realogy/ Guaranteed Rate JV. “I think we’ve all been impressed with the outperformance of mortgage,” Jack Micenko, an analyst then at Susquehanna, told Schneider on the company’s annual earnings call in February. Realogy owns 49.9% of its joint venture with Guaranteed Rate, called Guaranteed Rate Affinity. In 2018, in the first full year of formation, Realogy lost $8 million equity in earnings from Guaranteed Rate Affinity. That changed in 2019 when the brokerage posted $15 million equity in earnings, and it changed dramatically in 2020 when Realogy reported $126 million in JV equity in earnings thanks to $13.4 billion in mortgage loan volume. Were it not for Guaranteed Rate Affinity, Realogy’s 2020 would have been much worse. By late July, Realogy was a profitable company again, newfangled Compass and eXp were copying old-timey Realogy’s strategy, and CEO Schneider trumpeted his success. “The $126 million we made last year, I think kind of speaks for itself,” Schneider said on an earnings call this July, when asked about Compass and eXp entering the joint venture fray, adding, “I’ll be more interested in your question when there’s other people making $100 million plus in mortgage.” How Realogy made that $126 million may surprise you.
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the investment bank KBW. “But it actually had a similar refi-to-purchase mix as the rest of the industry — 70% refi, 30% purchase — in 2020.” Instead of being uniquely situated to cash in on Realogy’s real estate deals, Guaranteed Rate Affinity was positioned as another mortgage company riding the refinance wave. By 2020, Guaranteed Rate Affinity had over 500 loan officers and a 24-hour call center. “2020 was unprecedented,” said a Realogy spokesperson. “We were very fortunate that we had built and scaled the JV to seize the moment.” Now back to those coveted attach rates. “We estimate that the Realogy-owned brokerages have a roughly 10% attach rate of mortgage through its Guaranteed Rate Affinity,” said McJoynt-Griffith. “We’ve heard industry figures saying closer to 20% but have never seen the math or disclosures supporting that.” For all the talk of attach rates, McJoyntGriffith and other analysts, as well as companies, were uncertain as to what an industry average rate was, though the consensus for real estate/mortgage joint ventures specifically is less than 20%. With perhaps just 10% of Realogy’s buy-side business coming their way, a figure that Realogy would not comment on, the access even profitable JVs have to a distinctive referral pool appears limited. “People are focused on the margins within the mortgage industry from 2020,” said Gino Blefari, CEO of HomeServices of America. “However, as refinancing continues to subside and margins compress, you could see growth in the JV market slow, with some people exiting JVs all together.”
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The guiding principle of the JV is that the brokerage’s agents refer clients to the joint venture. This is good for the brokerage because it gets half the JV’s eventual profits, while relying on their mortgage partner for myriad logistics. And it ’s good for the mortgage company because they are intertwined with a brokerage generating referrals toward purchase business, a more lucrative source than refinancings. “A lot of companies are racing into the JV space because it provides you access to the customer,” said Brian Hale, the founder of consultancy DCMG and the former CEO of Stearns Lending. The holy grail of a strong joint venture is a high “attach rate,” meaning the rate of homebuyers utilizing both the brokerage and mortgage partner. Attach rates vary wildly in the mortgage industry — many homebuilders sport attach rates in the 80% range, while the mortgage arms of iBuyers are typically below 10%. In discussing its joint venture during an August earnings call, Compass CEO Robert Reffkin said the JV, “Aims for an attach rate at or above industry averages of eligible transactions in the next three to five years.” So, with all that in mind, Guaranteed Rate Affinity must have made money from loaning to the homebuyers who used a Realogy agent, correct? In the words of the late John McLaughlin, “Wrong!” Just 30% of all of Guaranteed Rate Affinity loans in 2020 were to homeowners who worked with a Realogy agent, a Realogy spokesperson confirmed. In fact, Guaranteed Rate Affinity in 2020 made its money like virtually every other mortgage company in America: refinancing a homeowner’s existing mortgage. “Interestingly, I had previously assumed the Guaranteed Rate Affinity joint venture was 100% purchase transactions,” said McJoynt-Griffith, the investor analyst at
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MORTGAGE
December 2021/January 2022
MORTGAGE
Industry and housing groups expect big things from FHFA THE FAST-APPROACHING GSE DEADLINE
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When the Federal Housing Finance Agency (FHFA) in September directed Fannie Mae and Freddie Mac to come up with equitable housing finance plans by the end of the calendar year, it asked for feedback. In the six weeks that followed, industry stakeholders and housing groups offered up a staggering number of ideas, ranging from eliminating loan-level price adjustments, incorporating cash-flow or childcare payment data into underwriting, or spurring a new secondary market for acquisition, development and construction loans. The FHFA, as both regulator and conservator of
"... it's time for some new ideas."
the government sponsored enterprises, shapes the conforming mortgage market. The GSEs’ influence also extends “beyond the conforming mortgage market to which their acquisitions are limited,” the National Association of Home Builders wrote. In their comments , numerous industr y stakeholders, as well as affordable and fair housing groups, said that it’s time for some new ideas. Underwriting processes don’t adequately capture today’s borrowers, who may have multiple streams of income and little traditional credit. The racial homeownership gap has not budged in decades. Even if Congress were to grant $100 billion in down payment assistance advocates seek, it would only return Black homeownership to its pre-2008 levels, the Center for Responsible Lending wrote. Enter the FHFA. While not a cabinet-level agency, it is effectively one due to a Supreme Court decision allowing the president to fire the director at-will. Acting FHFA Director Sandra Thompson, appointed by Biden, has not been coy about addressing racial equity, and has already undone many of the previous
December 2021/January 2022
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BY GEORGIA KROMREI
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administration’s efforts to reduce the footprint of the GSEs. Evidently, housing advocates see those initial steps as a good start, and industry stakeholders, expectant of more change, want to log their viewpoints. What could be next at the FHFA?
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Numerous commenters supported a reevaluation of loan-level price adjustments. Suggestions varied from eliminating them altogether, to making them more transparent. The National Fair Housing Alliance argued that the current business rationale for LLPAs “do not hold up under scrutiny,” because low credit scores and smaller down payments, which today trigger the extra fees, were largely unrelated to the massive defaults of the foreclosure crisis. Risky lending practices — poor underwriting, little or no documentation, high fees, exploding interest rates, risk layering, and negative amortization — not risky borrowers, were to blame, the National Fair Housing Alliance contends. “Moreover, the LLPA pricing framework is inherently unfair as it places the burden of the GSEs’ financial recovery and future catastrophic risk on Black, Latino, Asian American and Pacific Islander, and Native American borrowers, even though they were the victims of the financial crisis, not the cause,” the National Fair Housing Alliance wrote. Thompson hinted in a recent interview with the National Housing Conference that the GSEs would be taking a hard look at the fees the agencies tack onto loans it considers riskier. But at a more recent address at the Mortgage Bankers Association expo in San Diego, Thompson did not broach the subject.
"Many commenters asked the FHFA to bring back a key mechanism for trying out new ideas before committing to fully implementing them: pilot programs."
There were numerous pointed requests for the FHFA to release data on appraisals, especially as regulators take steps to address bias in valuations. To what extent appraiser bias is present, and where and how it manifests, is not part of the public record. Media reports of appraisal bias, self-reported values, proprietary data and Freddie Mac’s recent analysis of some appraisals form the basis for public understanding of appraisal bias. R o cket M or tgage argue d that for regulators to have a uniform understanding of those data, the GSEs should share their “unprecedented trove of valuable mortgage and property data.” Organizations including the National Community Reinvestment Coalition, as well as the Housing Policy Council, which represents large mortgage lenders, called on FHFA to fork over the GSE appraisal data. The Urban Institute, which has also asked the GSEs to release the appraisal data, suggested the GSEs make an “equity finance-focused public use database,” to reveal gaps in equity and increase transparency.
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Many commenters asked the FHFA to bring back a key mechanism for trying out new ideas before committing to fully implementing them: pilot programs. A rule the FHFA proposed in 2020 under Trump appointee Mark Calabria would require Fannie Mae and Freddie Mac to obtain prior approval for any new activities — including pilots — and before launching new products. While the move did not explicitly bar pilots, it sent a strong
December 2021/January 2022
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Fannie Mae made waves earlier this year when it incorporated positive rental payment history into its underwriting system. Yet both of the GSEs rely on a traditional credit scoring model that excludes rental payments, and numerous commenters, including the National Association of Realtors, suggested an alternative is warranted. The FHFA is currently considering whether to allow the GSEs to use a credit scoring model other than the traditional FICO score, but “there has been little progress in adopting new scores,” wrote the National Association of Realtors. “Until these models are updated, the benefits of underwriting with alternative data such as rent will be limited.” In addition to an updated credit scoring
model, the Housing Policy Council suggested that the FHFA continue to find additional data sources that provide a clearer picture of a borrower’s creditworthiness. The FHFA could start by looking at bank account information. “ This data has the potential to present a more reliable assessment of a borrower’s ability to satisfy housing expenses and other obligations, such as monthly telecommunications, healthcare, childcare, or other reoccurring bills,” the Housing Policy Council wrote. The Department of Veterans Affairs already uses a residual income analysis, but the Housing Policy Council noted that it is “operationally difficult.” Capturing borrowers’ cash-flow information could also allow the enterprises to ser ve those who, increasingly, don’ t resemble the traditional profile the mortgage was meant to serve. “Further, a cash-flow methodology could also position the Enterprises (and thus the rest of the housing finance ecosystem) to serve the borrowers of the future, who are more reliant on irregular non-W-2 income sources of income, but who nonetheless responsibly manage their obligations,” the Housing Policy Council wrote.
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signal that the FHFA would consider pilot programs suspect rather than encourage them. Even before the proposed rule, both of the GSEs had abruptly ceased years-long efforts to launch pilot programs for chattel loan financing, without explanation. Commenters urged the FHFA to suspend the proposed rule and issue a new interim final rule that encourages pilots. “Pilot programs are the best tool the Enterprises have in determining which products, services, and research can best move their numbers forward and reach the goals set in these plans,” the National Housing Conference wrote. Pilot programs could let the GSEs experiment with offering products that the market does not, like small-balance loans. Commenters also suggested pilots to finance acquisition, development and construction loans or to explore nontraditional credit criteria.
December 2021/January 2022
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SECONDARY MARKET
December 2021/January 2022
SECONDARY MARKET
J.P. Morgan, the 800pound gorilla in the private-label space THE BANK HAS BUILT A RELIABLE SECURITIZATION CONDUIT BY BILL CONROY
"The private-label residential mortgage-backed securities market has been resurrected from its near-death..."
and nonprime private-label deals tracked by Kroll Bond Rating Agency. The tally for that segment of the entire private-label market, as of the same point in the year, Kroll’s data shows, exceeds 150 privatelabel deals backed by some $67 billion in mortgage volume, which means J.P. Morgan accounted for 19% of the total private-label volume over the period. The investment bank expects to maintain a healthy share of the private-label market through the balance of this year, according to Marc Simpson, managing director, non-agency whole loan and RMBS trading at J.P. Morgan. So, its share of the market is likely to grow.
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he privatelabel residential m o r t g a g e backed securities market has been resurrected from i t s n e a r- d e a t h following the global financial crisis a decade and a half ago. This year it is on track to securitize loan volume approaching or even exceeding $100 billion, and driving a healthy share of that secondary market business is J.P. Morgan, the investment bank side of New York-based banking holding company J.P. Morgan Chase & Co. J.P Morgan, through its private-label conduit, J.P. Morgan Mortgage Trust, or JPMMT, year to date through the end of September has delivered a total of 16 private-label deals to the market backed by loan pools with an aggregate unpaid principal balance of nearly $13 billion, according to prime
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"The private-label market proved that it could, in many cases, better price liquidity than the GSE market." - Marc Simpson
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In fact, Kroll expects private-label issuance volume for RMBS 2.0 (defined as prime, nonprime and credit-risk transfer transactions) to reach $96 billion by year’s end, which would be a 170% increase year-over-year from 2020. Private-label RMBS, or bonds backed by residential mortgages, are not insured or guaranteed by the governmentsponsored enterprises (GSEs) Ginnie Mae, Fannie Mae or Freddie Mac. “The private-label market proved that it could, in many cases, better price liquidity than the GSE market,” Simpson said. “We [at J.P. Morgan] have a very robust [private-label] issuance calendar planned all the way through the end of this year.” Key to J.P. Morgan’s market dominance has been its mortgage-loan conduit. To
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pursue securitizations at a high level, one needs a steady pipeline of quality loans as the collateral backing private-label deals. For J.P. Morgan, one of those major conduits is the broad universe of nonbank lenders that now account for the bulk of new mortgage originations in the nation. A recent report from the Federal Deposit Insurance Corp., or FDIC, states that “nonbanks now originate a majority of residential loans, accounting for 68.1% of mortgage originations by the top 100 lenders in 2020, up from 58.9% in 2019.” In the case of J.P. Morgan’s private-label conduit, there are a host of nonbanks feeding into the loan supply chain. The dominant players in recent deals involving the JMPPT conduit, according to Kroll’s data, are the following three lenders: United Wholesale Mortgage (UWM), Guaranteed Rate and loanDepot.
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UWM year to date through September has participated as a leading mortgage originator for J.P. Morgan’s private-label transactions via six deals, four as the top nonbank originator, Kroll’s data show. Guaranteed Rate over the same period participated in nine deals, five as the top nonbank originator. LoanDepot also participated in nine deals, four as the top originator. UWM, however, participated at a much higher level in terms of loan production than the others. They are the only lender to have originated 100% of the loans — in the case of one J.P. Morgan privatelabel transaction, according to Kroll’s tracking data. Its other loan-origination participation rates in JPMMT deals ranged from 11.1% to 65.3%. Guaranteed Rate’s par ticipation rates ranged from 7.4% to 30% while loanDepot’s origination-volume participation for JPMMT deals ranged from 8.4% to 20%. “We don’t see United Wholesale as a large contributor to any other issuers besides their own shelf (private-label transactions) or J.P. Morgan (JPMMT) so far in 2021,” said Jack Kahan, senior managing director of RMBS at Kroll Bond Rating Agency. “They were also a frequent contributor/seller to JPMMT prior to 2021 but were also present in a handful of other shelves.”
"We don’t see United Wholesale as a large contributor to any other issuers besides their own shelf (private label transactions) or J.P. Morgan (JPMMT) so far in 2021."
issuances are only part of the picture. Another factor is the loan-trading platform MAXEX — in which J.P. Morgan recently made a “strategic investment.” The amount, however, was not disclosed. Simpson declined to comment on MAXEX for this story. In announcing the J.P. Morgan investment in June, MAXEX said it had tripled its loan-trade volume since 2019, and as March 31 of this year had “exceeded $20 billion in aggregate tradelock volume since launching the platform.” MA XE X bills itself as providing transparency and liquidity to an otherwise fragmented part of the mortgage market — as well as employing standardization to reduce the reams of paperwork involved in the bilateral loan-trading process. It operates as an exchange platform that allows mortgage originators to look for the best and most efficient pricing from a variety of investors. “We are eager to see continued growth at MAXEX as they build a more liquid marketplace for trading mortgage loans,” Simpson said at the time J.P. Morgan’s investment in the loan-trading platform was announced.
- Jack Kahan
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The larger nonbanks helping to feed J.P. Morgan’s loan conduit for private-label
December 2021/January 2022
KUDOS
Here’s how one mortgage lender gives back to service members The NFM Salute honors fallen soldiers
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By Sarahi De La Cuesta
kud
About five years ago, Linthicum, Maryland-based NLM Lending was looking for a way to shift from sporadic donations to service members to a dedicated effort that regularly recognized their sacrifice. Their answer was the creation of the NLM Salute, an initiative in which one military member or veteran is selected each month to be honored as the “Salute of the Month.” worried. Like any deployment, as a mother, you Selected from nominations on the NFM Salute worry. But he would FaceTime over there and website, the honorees receive a thank-you gift he would say it was very and have a $2,500 donacalm. So I learned how tion made in their name to to live with it. But once a military-focused charity. “THE RISKS THESE he moved to Afghanistan Gregory Sher, chief busifor that week, we were ness development officer AMERICANS TAKE just counting the days for of NFM Lending, emphaSHOULD NEVER BE August 31 when they were sized the importance of TAKEN FOR GRANTED all coming back,” Holguin this initiative, say ing, AND SHOULD ALWAYS said. “So much is sacrificed by During the interview, those who serve. The vow BE HONORED. WE Holgu in honored the our service members take MUST DO OUR PART.” memory of her son, sharto protect our freedom - GREGORY SHER ing her son’s passion for above all else is the most the military. “He made me sacred vow. so proud, always did. He’s “ The r isk s these my American hero. He was doing what he loved Americans take should never be taken for so I can’t be prouder than that,” she said. granted and should always be honored. We “He loved it, he embraced [being a Marine]. must do our part,” Sher added. You know what he did, and so as parents, we couldn’t be prouder of him,” Dominguez said. THE SALUTE OF THE MONTH “I know the situation that happened is not what you would expect as a parent, but knowing he lived and did what he loved, that means a lot For the October Salute of the Month, the inito us.” tiative honored the mother and stepfather of Espinoza was posthumously awarded fallen U.S. Marine Corps Lance Corporal David the Purple Heart, Combat Action Ribbon, Lee Espinoza. As part of the initiative, the famAfghanistan Campaign Medal, Sea Service ily chose to donate the $2,500 to the Gary Deployment Ribbon, and Global War on Sinise Foundation, which gives aid to those Terrorism Service Medal. wounded in combat, on behalf of Espinoza. Espinoza was one of 13 U.S. servicemen and women killed on August 26, when a suicide THE IMPACT bomber detonated an explosive device at the Kabul International Airport. In an interview with Espinoza’s mother, According to Sher, the families are not the only Elizabeth Holguin, and his stepfather, Victor ones impacted by the salutes but so is the NLM Dominguez, for NFM TV, a media division of Lending staff. “Probably the biggest surprise NFM Lending, Holguin expressed that her level around the salutes is just how many of our of anxiety was elevated leading up to the day employees have a close connection to service of the bombings. members,” he said. “When he was in Jordan, of course, I was It fosters a “common admiration and inter-
December 2021/January 2022
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makes me feel like we’re not alone. I don’t want est that shows up in various ways, like when to say that it’s upsetting, but people can just go employees nominate salutes and volunteer to through their normal day,” Lisa Houck said durgo to the airport to welcome back plane loads ing the interview with NFM TV. “It’s hard to go of troops and hand out goodie bags,” he said. through our normal day because it’s a loss, it’s In addition to the NFM Salute, NFM Lending a heartache that will never heal. You try to find has been sending troop boxes overseas to solthings that make you happy and it’s really hard diers for 13 years. to because you’re just missing such a love that Each box is filled with snacks and nonwas a part of you. It will never heal…but Eric’s perishable foods, with the money for the alive in us, because we contents donated by the have him in our heart.” company’s employees. Houck posthumous“We never once in 13 years “YES, WE ARE A MORTly earned the Bronze across multiple initiatives GAGE LENDER, AND WE St a r Meda l, P ur ple have asked for any business DO VETERAN LOANS, Heart, Combat Action or tied the two together in Badge, a nd A r my any way.” Sher continued. BUT WE’RE GRATEFUL Commendation Medal “Yes, we are a mortgage AMERICANS FIRST.” with a second oak leaf lender, and we do veteran - GREGORY SHER cluster for his end-ofloans, but we’re grateful tour awards. Americans first.” Reflecting on the imWhen asked which salute pact of the NFM Salute, Sher said, “We have stood out the most, he recalled the February worked very hard to make sure the stories we 2020 NFM Salute. That month featured fallshare are impactful to our audience and to en Army Sgt. Eric Houck, who was killed in those we honor.” Afghanistan in 2017 when Houck and two fel“The biggest impact we’ve made is on the low soldiers were gunned down by an insider families who have lost their loved ones while attack in Afghanistan. Houck’s family also serving,” he said. “They tell us there’s a certain choose to donate the $2,500 to the Gary Sinise peace that comes with being able to share the Foundation on his behalf. legacy of their fallen heroes.” Prior to the interview with NFM TV, Eric Houck’s father, Mike Houck, went to meet Sher and his team at the NFM headquarters. “When Mike was taking the tour of our building, many of our employees rose up out of their chairs…some applauded, while several others embraced him,” said Sher. “We all cried together. It was one of the most pure displays of compassion you’ll ever see.” Discussing why his son chose to join the army, Mike Houck stated, “He could probably have achieved anything he wanted to, but he felt this was his way to take care of his family.” “Sometimes I honestly still feel like we are alone, but when people like you and your organization decide to honor Eric, that
December 2021/January 2022
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KUDOS
eMortgage Quick Start Program
From rocket scientist to Tech Trendsetter. Congratulations, Thomas Showalter! It took a former rocket scientist to build a platform able to autonomously manufacture a high profit, zero defect, 1 underwriter touch loan at supersonic speed. Your brainchild, a Loan Engineering System, established a new product category and prepares lenders for future economies. You truly are a Tech Trendsetter.
CandorTechnology.com
Photo credit: Wide Eyed Creative
parting shot
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❱ ALL THINGS HOUSING HousingWire brought hundreds of housing professionals together under one roof for its first HousingWire Annual event in Frisco, Texas. Under the theme “All Things Housing,” professionals from the title, appraisal, mortgage, real estate and technology space talked through the biggest challenges facing the industry, what the future holds and how the industry can work together to create needed change. Hosted at The Star in Frisco, home of the Dallas Cowboys’ practice facility, this picture spotlights a session with Tim Mayopoulos, president and director at Blend and former president and CEO of Fannie Mae. Clayton Collins, founder and CEO of HW Media, sat down with Mayopoulos for a Q&A on the digital mortgage landscape and the innovations that will define the next year.
December 2021/January 2022
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