Daily Mortgage News & Commentary

Nov. 6: Letter on AMC accountability; vendor soundbites; Saturday Spotlight: Indecomm; consulting humor

Not everyone has a mortgage, but everyone is impacted by time and the sun. Come tomorrow, Sunday at 2:00 a.m. EST, Daylight Saving Time is coming to an end. An hour repeats because the in 1966 the federal government decided it should. The government first implemented Daylight Saving Time during World War I to save on energy but, in this year alone, 33 states introduced Daylight Saving Time-related legislation to end the cycle of changing the time, according to the National Conference of State Legislatures. Many states want to adopt “Daylight Saving Time,” the time standard of summer, permanently, rather than switch to “Standard Time,” the name for the wintertime system that sets us back an hour. States can get out of the change by choosing Standard Time, not year-round Daylight-Saving Time, and the only states and territories which picked this option are sunny ones: Hawaii, most of Arizona (except for the Navajo Nation), American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands. It isn’t so bad in the autumn when we “gain an hour,” but in mid-March of 2022 when we “spring forward” we’ll hear the yearly grousing. On to mortgages!

Saturday Spotlight: Indecomm Mortgage Services, simplifying the complexities of the mortgage lifecycle

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In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth).

Indecomm enables mortgage companies to optimize and modernize their operations. We integrate our human, digital and automation capabilities to enable a fast, efficient, and compliant workflow for our mortgage clients. Our out of the box solutions are honed over 25+ years of experience in the mortgage industry. Our automation platforms incorporate thousands of business rules and decisioning logic, resulting in solutions designed to bridge the gap between systems of record and workflows. Our solutions help mortgage companies reduce turnaround times, improve borrower satisfaction, increase compliance, all of which results in a reduction of cost per loan. We are headquartered in New Jersey with four operations centers around the world and over 1,500 employees.

Indecomm provides a deeply integrated middle-office automation solution that serves as the connective tissue for the mortgage industry. We have a proven track record of developing and deploying innovative solutions that bring humans and technology together to rapidly solve customer pain points. In FY20-21, Indecomm’s automation business realized a record-breaking business growth of 300%, managed the process of over 4M loans, and touched over $8B in mortgage loan originations. This technology innovation has spurred Indecomm’s growth in recent years, with a 44% revenue growth. Backed by our core mortgage expertise, we continue to focus on developing innovative digital services in response to industry trends and forecasts.

Tell us about what type of volunteer work employees are encouraged to engage in, or charities your company supports, and why.

Indecomm’s commitment to partnerships at work encompasses relationships with clients, business partners, employees, and within the community. For example, to support the community of our St. Paul, Minnesota office, Indecomm participates in the local Step Up” initiative for youth in Minneapolis. Step Up connects young people with jobs in the Twin Cities. In a typical year, Step Up trains and places 1,400 youth in paid internships with over 200 employers and 15 industries. Through this program, Indecomm provides mortgage industry and technology internship opportunities to students who come from challenging socio-economic backgrounds.

 

What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, in-house training. How does the company help people develop?

Indecomm is committed to striving for excellence with the core of our operations, our employees. To support this goal, the company launched its Indecomm University training initiative. This program focuses on hiring college graduates and putting them through an intensive 6-month training program to prepare them for careers in the mortgage industry. The program launched in May 2021 with the goal of 100 graduates during the first year alone.

 

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

In response to the global COVID-19 pandemic, Indecomm evaluated business processes and transitioned the staff working at our US and India locations to a work from home model. This was a global team effort performed diligently by our Operations, IT, and Human Resources teams. The transition was completed with no downtime, while maintaining business continuity and production levels for our clients. This quick response helped ensure the health and safety of our 1,500+ employees and led to winning client confidence – all during a time of record mortgage volumes.

 

Fun fact about Indecomm.

In June 2020, Indecomm launched a new brand and website to reflect the evolution of our technology solutions and services. The new logo needed to personify Indecomm’s core values and strengths, including ingenuity, agility, innovation, reliability, knowledge, and integrity. When redesigning the logo, we chose to incorporate the lotus flower into the brand to help reflect these attributes. The lotus flower represents renewal, wisdom, purity, enlightenment, growth, and transformation.

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

Appraisal thoughts

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Appraisals are near the top of any list of current lender and borrower complaints about the processing of mortgages.

This week I received this note from Mike Simmons, Co-President of AXIS AMC. “I’ve heard of something overhanging the appraisal industry. Namely, that appraisers are ghosting (abandoning) orders and are beyond accountability. Part of my responsibility at AXIS Appraisal Management Solutions is to attend lender conferences and talk about the appraisal industry, and addressing difficult topics centered around our industry. Despite the enjoyment of being together again in person, this year the energy at all the conferences felt more negative than usual. The voices were louder, and different. Not so much over new issues, because the issues really aren’t new, but there’s more anger now. And some of us in our industry share that frustration.

“Part of everyone’s frustration is the feeling that appraisers aren’t subject to any oversight or can be held accountable by anyone. Except that’s not true. Every State has a Board or Commission (or some Agency) that serves as an overseer for appraisers. They test & license appraisers and have the responsibility to discipline them. The problem is that their rules, regulations, laws and statutes are, if you’ll pardon the expression, all over the map. So I made a promise to the attendees at NAMB’s annual conference who heard me speak at an appraisal panel there, and again on a CAMP podcast, that I would take those concerns to a place where those who hold the responsibility for overseeing appraisers and AMCs would be the audience.  That place was the Fall AARO Conference (Association of Appraiser Regulatory Officials) in Washington DC. AXIS is an affiliate member of AARO. Over the years we’ve found the presentations, conversations, and relationships valuable and important. This year I went with an agenda; to challenge the Regulators and other valuation industry leaders to re-look at the current plate of solutions.

 

“I want to clarify something: while the issue causing most of the heartburn only involves a small percentage of appraisers, it’s spreading and eroding the public’s trust in all appraisers. The goal is to find ways to change the behavior of those few outliers that are causing all the noise.

“What some Regulators didn’t recognize, is that telling an AMC that it’s their choice not to engage an appraiser who has abandoned an order, or failed to deliver a report anywhere near an agreed upon timeline and without explanation, doesn’t constitute a solution. That policy will have no impact on that same appraiser getting orders from any of 100, or 200, or 300 other AMCs in that State and repeating that same behavior. Ok, so what. The ‘what’ is that failing to meet a contractual deadline, in a worst case, can cause a borrower (and Real Estate Agent & Mortgage Lender) to lose a purchase transaction. In other instances, a borrower may have to pay a rate lock extension fee (sometimes in the thousands of dollars) to keep their rate. I suspect that many Regulators and Appraisers weren’t aware of the potential ramifications that can occur when an appraisal is late or abandoned. One state, for example felt an appraiser should have 15 days to return a lender’s revision request. Given what they now know, they’re returning to their State Board to re-examine that policy.

“Let’s take a simple case of an appraiser who makes a commitment to deliver an appraisal by a specific date … and then fails to do that. Let’s compound the situation by having the appraiser go dark; not respond to emails, texts, or phone calls for a week or more. That’s a prime example of an appraiser ghosting (or abandoning) an assignment. As an AMC, when confronted with such an event, we have appealed to State Boards and been told that’s a ‘service issue’ and not part of the Board’s purview. We’re told that we, as the AMC, need to make a business decision, and we can choose not to engage that appraiser again. Except that’s not a right answer, nor does if fulfill the obligation of an oversight agency to protect the Public Trust.

 

“This entire conversation went viral at the conference. One of the other affiliate members of AARO is REVAA (Real Estate Valuation Advocacy Association. Side note: AXIS is also a member of REVAA.). Mark Schiffman, REVAA’s Executive Director committed to creating a survey to capture all the varying policies, rules, and laws of every state to better understand the current state-specific guidelines and for us to be able to lobby those states that could do more to (1) protect their citizens and (2) protect the good appraisers who, like the agencies and boards that oversee them, also have the duty to protect the public trust. But the biggest lift of all came from those Regulators there who offered to share their (successful) policies for dealing with these issues and add their voices to potential solutions.”

Mike’s note wrapped up with, “But to be effective, all stakeholders need to participate. AMCs need to lodge complaints when appraisers ghost an assignment, lenders need to add their voice if a Board elects not to address these issues … and all the good appraisers out there need to remind their brethren that, while their role is independent from the rest of us, it’s not done in a vacuum. We are all accountable. Collectively, we must re-direct this frustration with a few appraisers to create a different tipping point. As Malcom Gladwell noted in his Keynote conversation at the recent Annual MBA conference, a crisis is a terrible thing to waste.”

Vendor bites

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Insellerate has introduced its Customer for Life Program. In today’s mortgage market, borrowers will get on average of seven to eleven loans over their lifetime, but unfortunately, only 15% go back to their original lender for those additional loans.  Lenders can gain a significant lift in production by strategically marketing to their past clients.  To assist lenders with this challenge and opportunity, Insellerate has introduced its Customer for Life Program that includes direct mail, gifts, emails, monthly newsletters, and home reports to transform the customer journey from transaction to customer for life. For more information click here.

Secure Insight recently announced strategic partnerships with CoreLogic, DocMagic, and Lenders One, which together with options for customized LOS integration, offer potential clients a variety of means and methods to obtain their risk reports. Secure Insight announced that as of November 1st it has passed one million data points verified and monitored. The milestone reflects the depth of predictive risk assessment that makes the company’s settlement agent risk reports the most reliable in the mortgage industry. February 2022 will mark the tenth anniversary since Secure Insight began vetting attorneys, title agents, escrow officers and notaries, the first company to address mortgage lender closing table risk. Besides assisting lenders in preventing losses from wire fraud, the company’s analytical model addresses insurance, licensing, internal controls, corporate identity, owner and key employee identity, and significant background assessments which allow them to assign a risk rating that attaches to each entity and individual and which changes with any shift in risk of potential fraud harm.

Partners Credit recently released Score Protection, a tool to protect your borrower’s credit scores, and potentially save your loan in the process. Following the completion of a bureau tradeline update, Partners Score Protection allows users to merge scores across different credit reports, pulled for the same borrower. Reports pulled within 30 days of each other can be merged with this game-changing new tool at a click of a button. Avoiding hard inquiries for unnecessary additional pulls can help avoid drops in credit scores that can impact your borrower and change the direction of the loan. With changing rates and volumes, it is more important than ever to stand out from your competitors and utilize tools that can help improve not only your borrower’s scores, but their experience. Partners credit remains committed to developing solutions with your customers in mind. If you are interested in Partners’ products or learning more about our webinars regarding scores and score improvement, please contact our team.

Candor Technology announced an additional dimension to its Loan Engineering System: The Candor Metascore. The patent pending Metascore indicates the overall quality of a loan manufactured by Candor’s machine: all loan data is first run through a dynamic 45,733 pivot point architecture to accurately assess investor guideline eligibility, then through a corroboration engine that conducts >1,100 crosschecks to identify and mitigate defects. For never-before transparency all underlying metadata used during the autonomous process are saved to a Blockchain-type database. A Metascore of 85 or higher triggers eligibility for a defect insurance policy from a major international insurer. “Candor’s is the only solution able to autonomously conduct detailed, nuanced crosschecks across a vast and complex set of dynamic data. The painstaking corroborations exceed guideline requirements and mirror those conducted by seasoned underwriters. Except, Candor’s crosschecks are conducted in seconds, not weeks.”

DocMagic, Inc. announced the official launch of its eSign 3.0 platform, introducing new tools and features designed to enable lenders to easily facilitate remote online notarization (RON) for paperless eClosings. Among new features is a secure eClose portal that enables notary and settlement service providers to access and update closing document packages. The eSign 3.0 platform leverages the company’s suite of eMortgage solutions, including components of its end-to-end Total eClose™ platform, dynamic document and MISMO Category 1 SMART Doc® eNote generation, automatic eNote registration with MERS®, and secure storage within its certified eVault. eSign 3.0 also incorporates DocMagic’s AutoPrep™ technology.

Snapdocs announced a new program to help Lenders more easily adopt eMortgages. Snapdocs eMortgage Quickstart Program, supported by Freddie Mac, provides technology, implementation framework and support to help empower lenders to more readily adopt eMortgages, or mortgages with electronic promissory notes (eNotes). Freddie Mac will work with Snapdocs to help lenders with their digital implementation and delivery efforts.

(Thank you to Michigan’s Don C. for this timeless lesson on how consultants can make a difference for an organization.)

Last week, we took some friends out to a new restaurant, and noticed that the waiter who took our order carried a spoon in his shirt pocket. It seemed a little strange, but I ignored it. But when the busboy brought out water and utensils, I noticed he also had a spoon in his shirt pocket, then I looked around the room and saw that all the staff had spoons in their pockets.

When the waiter came back to serve our soup I asked, “Why the spoon?”

“Well,” he explained, “the restaurant’s owners hired Boston Consulting, experts in efficiency, in order to revamp all our processes. After several months of statistical analysis, they concluded that the spoon was the most frequently dropped utensil. This represents a drop frequency of approximately 3 spoons per table per hour. If our personnel are prepared to deal with that contingency, we can reduce the number of trips back to the kitchen and save 15 man-hours per shift.

As luck would have it, I dropped my spoon and he was able to replace it with his spare spoon. “I’ll get another spoon next time I go to the kitchen instead of making an extra trip to get it right now.” I was rather impressed.

A short while later I noticed that there was a very thin string hanging out of the waiter’s fly. Looking around, I noticed that all the waiters had the same string hanging from their flies. My curiosity got the better of me and before he walked off, I asked the waiter, “Excuse me, but can you tell me why you have that string right there?”

“Oh certainly!” he answered, lowering his voice. “Not everyone is as observant as you. That consulting firm I mentioned also found out that we can save time in the restroom.”

“How so?” I asked.

“See,” he continued, “By tying this string to the tip of your ‘you know what,’ we can pull it out over the urinal without touching it and that way eliminate the need to wash the hands, shortening the time spent in the restroom by 76.39 percent.”

Curious, I asked “After you get it out, how do you put it back?”

“Well,” he whispered, lowering his voice even further, “I don’t know about the others, but I use the spoon.”

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, “Grow Your Business But Don’t Step Over a Dollar to Save a Dime.” 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 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.)