Aug. 21: Vendors raising money; Letters on MLO comp & small loans, recruiting 101, and career advice from women & people of color

Under the banner of “notes from brokers that they wish reached the eyes of decision makers,” I received this one yesterday. “I saw your note of FHFA’s affordable housing goals moving forward. Personally I think it’s great. Homeownership is, in my opinion, an excellent manner for the general public to grow wealth while having a safe place to live. But I’m hearing politicians or regulators would like to require nonbanks and TPO to be included in the requirements. I’m not opposed to the requirement, but the MLO Comp Rule and many state-level high-cost lending laws severely restrict mortgage brokerage companies from earning a viable living doing the smaller loans. In my area it’s getting to be loans under $220k are the initial impact point. At the $220k point the lenders application fees must be rolled into the interest rate for the 3% rule. This often excludes buyers and becomes a snowball against qualifications. As I see it, Things could be done, but getting FHFA CFPB and all the states onboard is going to be tough, unfortunately.”

New company and vendor chatter

Denver’s Accept, Inc. (previously known as BoardRE) allows buyers to submit cash offers to secure sales contracts. Management just raised $90M in capital/debt. Accept, Inc. “levels the playing field in residential real estate by giving homebuyers and their agents the power to make the strongest all-cash offers anywhere.”

And there’s Ribbon, providing buyers the ability to purchase homes with cash. “Ribbon is where real estate professionals go to write and manage all their offers.” Users pay a 3.4% upfront payment from the buyer to Ribbon. Ribbon funds the money to create a quick purchase in cash, and the buyer has a certain number of days to secure financing to pay Ribbon’s loan off. If the buyer can’t secure financing, Ribbon keeps the full 3.4% and takes ownership of the house. One wrote to me saying, “Realtors are beginning to encourage loan officers to work with Ribbon if they want to keep relationship with the realtor.”

Candor has secured $12.5M in a Series A investment led by Arthur Ventures. “The investment will further enhance the company’s patent-pending Loan Engineering System™, the only machine that autonomously makes income, asset, and lending decisions that are backed by a defect policy… Candor’s Loan Engineering System (LES) has been turning chaos into consistency. The consistency of Candor’s LES is due to a unique innovation: Candor’s Mortgage Decision Science Technology™ which is a machine intelligence platform. Using Candor’s LES, achieving borrower surety has been transformed from a queue-based, human-touch, error-prone process into a fully automated decisioning process driven by science.”

Spruce’s $60M Series C funding round was announced. “Doing business in 48 U.S. states, Spruce’s industry advancements to date include up to 40% faster closing times, enables up to 20% savings on closing costs, and can fund transactions outside of restrictive Federal hours. Spruce’s offerings include nationwide title insurance, closing, escrow, and recording services through proprietary technology and centralized teams.”

Home finance platform Lower has been fueled by a $100M series A round. “Lower’s goal is to be the leading digital lender in the United States in the next five years. With billions in mortgages already funded for thousands of individuals and families, the profitable company is growing fast and has over 16,000 reviews averaging 5-stars.” Lower offers a mortgage with a streamlined “…process so you get lower rates, lower fees, and lower payments when you buy a home with Lower. And Refi: Lower your rate, change your term, take cash out to pay off debt – no matter which option you choose, refinancing with Lower can save you money. Insurance: Lower is an independent broker, working with 35 major carriers, from Allstate to State Farm, Nationwide, Progressive, GEICO and others, to provide average annual savings of $894. Savings: Lower offers the only matched account to save for a down payment – earn up to $1,000 toward your closing costs. Buy/Sell: Lower recruits the top real estate agents across the country and matches buyers with one in their area to provide expert local knowledge to help them win the house.”

First American Docutech announced the integration of its ConformX® loan document generation technology and Solex® eSignature solution with SimpleNexus’ homeownership platform. SimpleNexus and First American Docutech can now provide their borrowers with the ability to eSign initial mortgage disclosures through a single sign-on experience.

Oaktree Funding is integrating LoanScorecard’s technology into its broker portal to help brokers quickly determine whether non-QM loan scenarios meet Oaktree’s guidelines. “As liquidity and innovation return to the non-QM market, leading leaders, like Oaktree, are turning to LoanScorecard to help their brokers determine program eligibility and to test specific scenarios,” said Allen Meigide, Director of Operations at LoanScorecard.

ICE Mortgage Technology^TM released additional enhancements to the Encompass® platform supporting the recently updated General Qualified Mortgage (QM) final rule. Lenders can seamlessly calculate eligibility for QM loans using the new price-based thresholds. The new enhancements offer the flexibility for lenders to use both existing and new QM rules before the mandatory switch (October 1, 2022) to accommodate GSE and investor requirements.

Arc Home successfully implemented Indecomm’s BotGenius™ suite of middle office automation solutions, a critical tool to help ensure a positive and holistic borrower experience for Arc Home customers. BotGenius™ is a collection of software robots pre-built to emulate human computer interaction for specific, standardized middle office tasks, processes, and workflows in the mortgage industry.

Letters from women and people of color in our biz

Tolerance is in the press, but we often hear about how we need to be more “equal.” Despite the progress we’ve made in the residential lending industry, many believe that there still exists a divide that is totally unwarranted when it comes to minorities and women. Women are underrepresented at many levels. As a society we are still largely segregated, but that that doesn’t mean lenders can’t take the lead in continuing to press for equality. “The best person for the job, regardless of race or gender.” What could be simpler?

There is indeed movement. But I asked people of color and women in the industry about their early careers, and appreciate the time they spent responding. I will happily circulate more responses if you care to write, and have more already to publish. “What do you think the best advice you can give women starting out in the mortgage industry?” or “What is the boldest move you made that helped advance your career?” or “What do you wish someone would have told you about being successful in this industry?”

Suzette Sanders, SVP Bond and Housing with Fairway Independent Mortgage Corporation, wrote, “The best advice that I can give women starting out in the mortgage industry is to always be willing to listen, learn more and expand your knowledge. Joining a company that had core values and a great management team is the best and boldest move that I ever made. A management team that provided the tools and unwavering support and who also believed in my contributions. And those new to our industry should always be open to an ever-changing environment.  Embrace the challenges, as the knowledge you gain and the experiences you encounter along the way will help in your path to success.”

Marina Walsh, VP, Industry Analysis, Research and Economics with the Mortgage Bankers Association, advised, “First, know that your career is a marathon and not a sprint. That means that the pace in which you work, and your career ambitions, may ebb and flow depending on your other priorities and needs. Accept it as part of the process. Second, try to be a continuous learner. Read industry publications, pursue your CMB or CFA, take a class, keep learning. For those who are aren’t natural networkers, educational opportunities are also great ways to meet people in the industry. Finally, if you don’t like the mortgage business, get out. It can really be a tough business given its innate cyclicality and you have to be of a certain mindset to deal with the highs and the lows.”

Tammy Golden, Account Manager for Arch MI in Oregon, SW Washington, and Hawai’i, opined, “As my career has progressed my confidence level has increased. Arch MI has been very open to providing career paths for women and minorities, and frankly, I’ve gotten good at going after what I want. I have no problem contacting senior management at Arch with any suggestions or frustrations.

“As far as the gender gap goes, I was jealous for a very long time of the male relationships at the senior management level, those that golf together and share fine scotch and novelty cigars.  While I know that I occasionally struggle to be taken seriously with some clients, I also know that I make a very fast connection with the ops staff and most of my client’s LOs.  Which in a lot of instances are the gateways to making things happen, for me and for Arch.

“I think most women come across various impediments but I try not to focus on it too much. Arch has provided a fine place of employment for minorities and women: we have a millennial in Southern California who is part of our diversity and inclusion group, as well as market leaders who are women and who have been able to compete and overcome challenges to make it there.”

(More next Saturday!)

Recruiting 101

Tom Seelbinder, Head of Customer Success & Product at Model Match, sent over a note best titled, “The Numbers Behind the Numbers: Leveraging Data and Metrics for Maximum Recruiting Results.” “In the mortgage industry, most people want one of two things: a way to do the same level of business in less time, or a way to do more business in the same amount of time. At the same time, as much as technology has found its way into just about every aspect of our modern lives (and in increasingly advanced ways), technology at its core is essentially about creating and building efficiencies into everyday tasks. At the intersection of these two concepts is where Model Match was born – and where it continues to live and thrive.

“Thanks to the refinancing boom of 2020, most mortgage companies have plenty of capital to reinvest. But also plenty of questions about how to invest it. In a business that’s mostly about creating relationships, it’s hard to go wrong investing in people, especially if and when they can recruit the types of producers who can help carry on that same hockey stick trajectory that they grew accustomed to in 2020. By harnessing technology to manage their recruiting pipeline and treating potential recruits just as they would a loan flowing through their LOS, mortgage companies can not only track all of their recruiting efforts, but they can better forecast, gain a deeper understanding of what success looks like and bring their team into in one collaborative space.

“Model Match has found that forward-thinking organizations in this space are becoming increasingly focused on not only bringing a higher level of organization to their pipelines, but also providing their teams with the ability to be more effective and strategic in their daily actions. It’s extremely exciting to see the lightbulb go off when you dive deep with organizations and show them the available tools that allow them to expand their footprint with a data-driven process and strategy.

“At its core, an effective software platform will allow a company to break down its recruiting pipeline contacts into five distinct stages: Prospects, candidates, meetings, offers, and hires.

“What makes a good recruiter a truly great recruiter is the ability not only to use data at their disposal to make more impactful decisions, but also the ability to look back and understand where their resources and time are being spent and where they may need to pivot. Using data to drive your strategy is not only going to help your organization gain a new-found focus, but it’s also going to help with segmenting and organizing your pipeline, which also allows your team to create a space where collaboration can elevate. All of this ultimately cuts down on a lot of the administrative work that is required when we’re dealing with a traditional database. We spend a tremendous amount of time shifting through the haystack just to find the handful of targets that we want to focus on. This is where we need to be leaning on technology to help drive our focus so that we can spend less time working just to start working. From self-accountability tools like activity trackers and reporting to playbooks, we can get to work faster and remain consistent throughout our efforts.

“Part of this playbook should involve the segment of data that tend to be near and dear to the heart of most mortgage companies: volume. The right platform can give you access to the most up-to-date volume data and go deeper to show you the full picture. For instance, we want to avoid looking at a small segment like just the last year of volume. We want to dive deeper and go as far back as possible to gain a deeper understanding of how our candidates are progressing in their careers. Either way, it is always important to be able to make a determination with as much data as possible, so that those decisions can be made in terms of their potential value to the organization.

“Of course, data is only as good as the metrics used to analyze it. A proper reporting dashboard allows users to access real-time activity analysist, understand the value of their talent pipelines, forecast success, and identify areas for improvement. Recruiting teams are able to analyze the most important actions taking place in the app, drill down into metrics and share their progress with leadership teams.

“Overall, mortgages companies that integrate their recruiting efforts with a collaborative software platform can elevate their ability to understand activity taking place across their pipelines and increase efficiencies. Combined with a philosophy of treating recruiting as an ongoing process and a focus on work-life balance, companies that begin managing their recruiting pipelines using platforms like these will have a significant advantage over those still using traditional and outdated methods.” Thank you, Tom! (Model Match is an award-winning, innovative platform that supports individual and team hiring goals in the mortgage and financial services industries. It incorporates processes, best practices, and proven methodologies for sourcing, attracting, hiring, onboarding, and retaining production talent enabling clients to manage infilling and strategic growth initiatives efficiently and effectively by leveraging their best resources, their managers, leaders, and internal recruiting departments.)

A woman was having a passionate affair with an Irish inspector from a pest-control company. One afternoon they were carrying on in the bedroom when her husband arrived home unexpectedly.

‘Quick,” said the woman to the lover, “Into the closet!” and she pushed him in the closet, stark naked.

The husband, however, became suspicious and after a search of the bedroom discovered the man in the closet. “Who are you?” he asked him.

“I’m an inspector from Bugs-B-Gone,” quickly replied the “exterminator.”

“What are you doing in there?” the husband asked.

“I’m investigating a complaint about an infestation of moths,” the man replied.

“And where are your clothes?” asked the husband.

The man looked down at himself and cried, “Those little b@st@rds!”

Visit www.robchrisman.com for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Ignorance of the Law is No Excuse.”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is designed for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2021 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)