June 15: Why are car and housing markets different? Compliance news; story about home plate; Saturday Spotlight: OptiFunder

Tomorrow is Father’s Day, here in Chicago and the United States! “What do you call a fake dad? A faux pas.” It is hard for me to “fake” work. First of all, I only have one boss: Myrtle, my cat. And she is rarely interested in my productivity, other than how it impacts her supply of line-caught salmon. Faking work is becoming a little harder, and Wells Fargo just fired 12 people over the practice. It was ten days ago that I wrote about how ActivTrak figures out your employee’s productivity and engagement by watching mouse & keyboard movements and the software that simulates (not stimulates!) mouse movements that employees can purchase or download. “It all turns into a game of cat and mouse!” While we’re on software, not that I track expense reimbursement programs, but it seems Concur ranks pretty highly with some lenders despite not being perfect or cheap. But let’s jump into lending!

Saturday Spotlight: OptiFunder

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“Revolutionizing Warehouse Management for Mortgage Lenders”

Describe your company (when was it founded and why, what it does, recent growth and plans for near-term future growth).

OptiFunder, the pioneer of the Warehouse Management System (WMS), was founded in 2018 to bring optimization and automation to warehouse lending. An award-winning mortgage software company, OptiFunder announced a revolutionary software for warehouse lenders, called Greyhound by OptiFunder, featuring the same scalability, security, and automation from its flagship solution.

Over the last five years, OptiFunder has developed the most comprehensive warehouse management system for mortgage originators. With 40 percent of top IMBs on OptiFunder’s roster, 1 in every 7 loans funded across IMBs go through the OptiFunder system. Built by a team of mortgage professionals, the OptiFunder software not only reduces risk, but the user-friendly system condenses hours of manual work into automated tasks. From funding through loan sale, OptiFunder has automated the entire process for many originators. OptiFunder’s innovative solutions and remarkable growth earned it a top 100 spot on Inc5000’s Fasting Growing Private Companies in 2023. From 2020 – 2024, HousingWire has named OptiFunder a Tech100 Mortgage Winner, and in 2023 and 2024 OptiFunder was recognized as a Progress in Lending Innovations Winner.

 

Describe any new products or solutions and how they will bring positive change to the industry.

“We wanted to create a platform for warehouse lenders that would run independent of OptiFunder but leverage the same technology and incredible team,” said CEO Michael McFadden. “While Greyhound represents a new brand, the underlying software, configurability, and proven rules engine have already routed and funded nearly a million loans with over 70 warehouse lenders.”

Greyhound provides new options for warehouse lenders looking for alternatives to legacy solutions. With its security-first design, highly configurable workflow, seamless integrations, and unparalleled efficiency, Greyhound is an ideal fit for warehouse lenders looking to grow market share in today’s challenging environment. With effortless client onboarding, robust reporting, and simple loan ingestion from originators, warehouse lenders of all sizes can easily scale their business with minimal cost and complexity.

 

Tell us about your team (what types of volunteer work are employees encouraged to engage in, how does your company help elevate growth, how does your company maintain culture in a work-from-home environment?)

OptiFunder appreciates its highly experienced team of professionals with over 125 years of mortgage banking experience, offering generous flexibility for work/life balance and volunteer work. Being part of OptiFunder means being first to market with breakthrough solutions.

 

Things you are most proud of that don’t have to do with sales.

OptiFunder is most proud of its customers’ experiences and positive feedback with not only the software, but with the whole team. “We’re a technology company,” said McFadden, “but it’s the direct feedback I get around our people at OptiFunder that means the most to me.”

Is there anything else you’d like to share along these lines?

OptiFunder releases a monthly newsletter reporting on warehouse lending trends, available the second Tuesday of every month. Sign up here.

(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)

Why is a house not like a car?

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Okay, this is not a funny riddle. I was in Florida this week and spent some time with Tobias Peter, Senior Fellow & Codirector at the AEI Housing Center, and put forth an interesting tale about cars, housing, and affordable housing, and how we shouldn’t jump to the conclusion that politicians should direct more money toward “affordable” housing.

“Before concluding, however, that we need to spend more money on ‘affordable’ housing, let’s first consider another version of a simplified, yet functioning market: the car market. Just like new and existing homes, there are new and used cars. Some people own cars or homes, others lease or rent them.

“In this market, the impact of regulations on car manufacturing is more limited (although with EV mandates that is certainly changing). Cars, unlike houses, are generally affordable to broad swaths of people.

“In this functioning car market, we build a few very expensive cars for upper income people, and a lot of moderately priced cars for middle-income people, and no cars for lower income people.

In such a functioning market, no one would propose a tax credit for car manufacturers to build cars for lower income people. It is preposterous because of filtering: the concept where older used goods are passed down the income ladder as newer and more technologically advanced goods become available.

“With cars, as middle-income people buy new cars, they sell their older, still serviceable cars to someone of lesser means, and so forth until everyone, including someone of low-income owns a serviceable, but not a new car.

“The difference between the housing and car market is that car manufacturers are still able to build new cars at moderate price points allowing them to meet demand. Therefore, the root cause of housing unaffordability is government regulatory failure that has made land scarce and home building expensive.” (Mr. Peter’s full testimony can be found here.)

Ignore compliance at your own risk

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The big news this month (month’s only half over) is when the Consumer Financial Protection Bureau issued a Final Rule requiring non-bank consumer financial services companies to register court orders or government agency orders in its Nonbank Registry. This Rule is the “Repeat Offender” registration requirement and the effective compliance date is September 16, 2024.

The CFPB has had a Repeat Offender Unit since 2022. It was set up specifically to focus on reviewing and monitoring the activities of repeat offenders, identifying the root cause of recurring violations, pursuing and recommending solutions and remedies that hold entities accountable for failing to comply with Federal consumer financial law consistently, and designing a model for order review and monitoring that reduces the occurrences of repeat offenders. In effect, it is a deterrence strategy that actively ensures a company, its senior management, and its board of directors are not treating any orders as mere suggestions.

The CFPB will make the Registry publicly accessible. The plan here is to facilitate the ability of consumers to identify the entities that are registered with the Bureau, with the goal of enhancing “the ability of investors, research organizations, firms conducting due diligence, and the media to locate, review, and monitor orders enforcing the law. The administrative challenge does not stop with the foregoing filing requirements. There is an annual filing requirement, too, in the form of a written statement. In effect, this is an attestation, which, along with all supporting documentation, must be retained for five years. On an annual basis, you’ll need to review and submit, as applicable, certain additional information regarding covered orders with an effective date on or after the beginning of their applicable implementation submission period.

The Conference of State Bank Supervisors (CSBS), which oversees NMLS through the State Regulatory Registry LLC, announced a six-year plan to enhance and modernize NMLS in stages. CSBS outlined its agenda for phase 1 and phase 2 occurring over the next two years. Phase one, which begins this year, will eliminate the need to call the NMLS Call Center to reset a password (the NMLS log-in site will soon have a “Password Reset” functionality), establish a single log-in per individual user (multiple accounts by the same individual will be consolidated under one profile with a single log-in), reduce duplication of individual records, introduce survey and system usage tracking, and update NMLS’ design and improve navigation.

Phase 2, which will commence next year, will, license workflow changes in an effort to make NMLS more intuitive, implement enhanced integration (for example, ensure all license requirements can be found in one location rather than having to review checklists, statutes, etc.), and provide more robust data validations and accuracy checks when completing the MU-4 form to help prevent incomplete applications. CSBS launched a new NMLS Modernization site, which provides helpful information about upcoming changes and which will be used to collect industry feedback and provide demonstrations on new and/or proposed NMLS features.

“17 INCHES”
You will not regret reading this an excellent article to read from beginning to end. As it goes…

Nearly 30 years ago, in Nashville, Tennessee, during the first week of January, 1996, more than 4,000 baseball coaches descended upon the Opryland Hotel for the 52nd annual ABCA’s convention.
While I waited in line to register with the hotel staff, I heard other more veteran coaches rumbling about the lineup of speakers scheduled to present during the weekend. One name kept resurfacing, always with the same sentiment: “John Scolinos is here? Oh, man, worth every penny of my airfare.”
Who is John Scolinos, I wondered. No matter: I was just happy to be there.
In 1996, Coach Scolinos was 78 years old, and five years retired from a college coaching career that began in 1948. He shuffled to the stage to an impressive standing ovation, wearing dark polyester pants, a light blue shirt, and a string around his neck from which home plate hung… A full-sized, stark-white home plate.
Seriously, I wondered, who is this guy? After speaking for twenty-five minutes, not once mentioning the prop hanging around his neck, Coach Scolinos appeared to notice the snickering among some of the coaches. Even those who knew Coach Scolinos had to wonder exactly where he was going with this, or if he had simply forgotten about home plate since he’d gotten on stage.

Then, finally, “You’re probably all wondering why I’m wearing home plate around my neck,” he said, his voice growing irascible. I laughed along with the others, acknowledging the possibility. “I may be old, but I’m not crazy. The reason I stand before you today is to share with you baseball people what I’ve learned in my life, what I’ve learned about home plate in my 78 years.”
Several hands went up when Scolinos asked how many Little League coaches were in the room. “Do you know how wide home plate is in Little League?”
After a pause, someone offered, “Seventeen inches?,” more of a question than answer.
“That’s right,” he said. “How about in Babe Ruth’s day? Any Babe Ruth coaches in the house?” Another long pause.
“Seventeen inches?” a guess from another reluctant coach.
“That’s right,” said Scolinos. “Now, how many high school coaches do we have in the room?” Hundreds of hands shot up, as the pattern began to appear. “How wide is home plate in high school baseball?”
“Seventeen inches,” they said, sounding more confident.
“You’re right!” Scolinos barked. “And you college coaches, how wide is home plate in college?”
“Seventeen inches!” we said, in unison.
“Any Minor League coaches here? How wide is home plate in pro ball?”

“Seventeen inches!”
“RIGHT! And in the Major Leagues, how wide home plate is in the Major Leagues? Seventeen inches!”
“SEV-EN-TEEN INCHES!” he confirmed, his voice bellowing off the walls. “And what do they do with a Big League pitcher who can’t throw the ball over seventeen inches?” Pause. “They send him to Pocatello!” he hollered, drawing raucous laughter.

“What they don’t do is this: they don’t say, ‘Ah, that’s okay, Jimmy. If you can’t hit a seventeen-inch target? We’ll make it eighteen inches or nineteen inches. We’ll make it twenty inches, so you have a better chance of hitting it. If you can’t hit that, let us know so we can make it wider still, say twenty-five inches.’”
Pause. “Coaches… what do we do when your best player shows up late to practice? Or when our team rules forbid facial hair, and a guy shows up unshaven? What if he gets caught drinking? Do we hold him accountable? Or do we change the rules to fit him? It’s 1996… Do we widen home plate?”

The chuckles gradually faded as four thousand coaches grew quiet, the fog lifting as the old coach’s message began to unfold. He turned the plate toward himself and, using a Sharpie, began to draw something. When he turned it toward the crowd, point up, a house was revealed, complete with a freshly drawn door and two windows. “This is the problem in our homes today. With our marriages, with the way we parent our kids. With our discipline.
“We don’t teach accountability to our kids, and there is no consequence for failing to meet standards. We just widen the plate!”
Pause. Then, to the point at the top of the house he added a small American flag. “This is the problem in our schools today. The quality of our education is going downhill fast, and teachers have been stripped of the tools they need to be successful, and to educate and discipline our young people. We are allowing others to widen home plate! Where is that getting us?”
Silence from the crowd in 1996. He replaced the flag with a Cross. “And this is the problem in the Church, where powerful people in positions of authority have taken advantage of young children, only to have such an atrocity swept under the rug for years. Our church leaders are widening home plate for themselves! And we allow it.”
“And the same is true with our government here in 1996. Our so-called representatives make rules for us that don’t apply to themselves. They take bribes from lobbyists and foreign countries. They no longer serve us. And we allow them to widen home plate! We see our country falling into a dark abyss while we just watch.”
I was amazed. At a 1996 baseball convention where I expected to learn something about curve balls and bunting and how to run better practices, I had learned something far more valuable.
From an old man with home plate strung around his neck, I had learned something about life, about myself, about my own weaknesses and about my responsibilities as a leader. I had to hold myself and others accountable to that which I knew to be right, lest our families, our faith, and our society continue down an undesirable path.
“If I am lucky,” Coach Scolinos concluded, “you will remember one thing from this old coach today. It is this: “If we fail to hold ourselves to a higher standard, a standard of what we know to be right; if we fail to hold our spouses and our children to the same standards, if we are unwilling or unable to provide a consequence when they do not meet the standard; and if our schools & churches & our government fail to hold themselves accountable to those they serve, there is but one thing to look forward to …”
With that, he held home plate in front of his chest, turned it around, and revealed its dark black backside, “…We have dark days ahead!.”
Note: Coach Scolinos died in 2009 at the age of 91, but not before touching the lives of hundreds of players and coaches, including mine. Meeting him at my first ABCA convention kept me returning year after year, looking for similar wisdom and inspiration from other coaches. He is the best clinic speaker the ABCA has ever known because he was so much more than a baseball coach. His message was clear: “Coaches, keep your players, no matter how good they are, your own children, your churches, your government, and most of all, keep yourself at seventeen inches.”
“And this, my friends, is what our country has become in 1996 and what is wrong with it today, and now go out there and fix it! Don’t widen the plate!”

Author Unknown 

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 titled, “Catastrophe and Climate Risk Is Only Increasing”. The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).

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Rob Chrisman