Oct. 1: Letter on truthful broker model; start-up and existing vendor product news; Saturday Spotlight: Built

We find ourselves in October (I know this because of my calendar and also the spate of pumpkins in front yards everywhere), and residential lending veterans rarely look forward to the Autumn and Winter months of any year. In the conferences that I have attended in recent months, many lenders would be happy to break even in 2022 and not eat too much into the income saved from the glory years of 2020 and 2021. For many it will be a daunting task, and cutting costs fast enough has been a challenge both logistically and emotionally. For some good news, lumber costs, which many use as a bell weather of builder challenges, are coming down. Lumber futures on Monday finished at $410.80 per thousand board feet, a downright reasonable amount of money, down a third from a year ago and down 70 percent from the maddening highs as of March. That’s entering the territory of pre-COVID normalcy, so much so that lumber mills in western Canada are actually starting to cut back output, given they tend to have a breakeven point of around $500 per thousand board feet.

Saturday Spotlight: Built, unlocking deal and draw management

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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).

Founded in 2014, Built’s mission is to transform construction lending and spending by accelerating the flow of capital throughout the construction ecosystem. Construction loans are notoriously risky. Construction payments are time-consuming and tedious. Built is specifically designed to manage risk, while maximizing productivity and customer experience for lenders, borrowers, contractors, inspectors, and more. As the company continues to grow and the industry continues to evolve, Built is providing solutions to borrowers and lenders in the construction industry.

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

Chase, CEO, and co-founder of Built, committed the Built team early on to participate in Habitat for Humanity on an ongoing basis. Last year, Built constructed a portion of the Sherwood Commons, an energy-efficient community of townhomes in the Nashville area in partnership with Habitat for Humanity. Built employees regularly participate in local area organization events, including a group of Built employees who marched in the 2022 Nashville Pride Parade.

 

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

Built offers hybrid and remote work, flexible working hours, and uncapped paid time off. This helps employees ensure work-life balance and makes the company an appealing place to work for working parents, people with disabilities, and talent located far from traditional tech hubs.

Built has a Diversity & Inclusion Committee dedicated to dismantling discriminatory barriers, facilitating meaningful conversations and education, and celebrating the company’s diversity. Special D&I focus areas include Strategic Initiatives, Education, Hiring, Community, and a D&I Book Club. Employee Resource Groups (ERGs) include Pride, Womxn at Built, Black at Built, and Grief in Common among other support networks at the company.

Built can only stay on the cutting-edge if its employees are always learning. The company offers learning grants to support employee growth, in addition to formal and informal mentorship. Learning grants include certifications, college courses, books or reading materials, webinars, conferences, training, etc. Individuals can apply for learning grants to support professional development on a quarterly basis.

Tell us how your company maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.

Built has a hybrid working model that is collaboration-forward. Built’s company culture is founded on eleven “guiding principles” that dictate how they work—and how they hire. While the majority of the Built team is located in and around the Nashville area, its focus is on recruiting top talent, wherever that talent may be. By taking a collaboration-forward approach, Built finds opportunities for all team members to connect and collaborate no matter where they are located physically.

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

Built has grown to support more than 220 North American lenders, spanning in excess of 200,000 commercial, homebuilder, land development, and consumer residential projects. In the past fiscal year, Built managed more than $200 billion in total construction value. To support this growth, Built doubled its talent pool and brought on senior executives across every piece of its business, attracting many of these candidates from well-known global companies. The team attracted $125M in Series D funding in late 2021 from both existing and new investors, including several customers. This led to a valuation of $1.5B and unicorn status. This type of success is rarely seen among companies developing a niche product and located outside of a major technology or financial hub.

As Built continues to grow at a rapid clip, so has its headcount. Last year, Built doubled its talent pool to 330 employees and brought on senior executives across every piece of its business, attracting many of these candidates from well-known global companies. In June 2022, Built brought on one new employee every day of the month. And, with the recent acquisition of Nativ, their headcount now exceeds 445.

 

Fun fact about Built.

 

Much of Built’s leadership consists of individuals who have spent years in the industries that Built is now trying to serve. Their innate understanding of how these businesses are run, what solutions are pertinent to the problems they are trying to solve, and how best to engage with these industries. Now, more than 220 lenders use the Built platform and in 2021 there were over 130,000 loans and over 200,000 inspections were performed.

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

Thoughts on a truthful broker model

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From Oregon, Andy Harris, wrote, “Man-o-man do we have some corruption in wholesale today that goes against everything an independent mortgage broker and small business should be.”

Andy followed it with, “There is a lot of phony and fraudulent Mortgage ‘Brokers’ that are giving us a bad name ‘again’ by misusing our title. We dealt with this before the financial crisis, but now again today with a level of non-compliance and violations we’ve never seen post-Dodd-Frank regulations. This is concerning when these companies or groups certainly are not and don’t represent Mortgage Brokers or small businesses. We certainly do not want consumers in the public or regulators misguided by anyone abusing titles.

“These companies and individuals simply need to stop using our Mortgage ‘Broker’ name and lying to the public with efforts to turn wholesale into retail and eliminate local small businesses serving their communities (which is what wholesale has always been about). Ethics are sadly at an all-time low. The worst part is that most are not even aware and blindly walk toward rhetoric and salespeople who are financially incentivized by their ignorance.”

“How to spot the fraud and fake ‘brokers’ violating everything independents hold dear. Mini-correspondent and non-delegated line steering. Massive compensation, anti-steering, and QM violations by the most ignorant and desperate companies greasing margin even after a significantly clear and documented warning from the CFPB in 2014. Those using these lines are the most fraudulent companies in history using the broker title as the exact opposite.

“Lying to the public and consumers that they are a broker and shop hundreds or dozens of lenders when the data is clear they steer and use few lenders or just one. Far from fiduciary actions and signs of the inexperienced and captive. Non-producing retail-style desperate recruiting multi-State managers and owners trying to turn brokers into a 2009 style net branch chain of sheep… to make margin off of others. Corruption, manipulation, sham and shell companies and organizations created for special interests and steering.

“Violating identically fixed compensation and anti-steering regulations to the company and originators that are directly related and documented. Listen. True independent Mortgage Brokers are experienced, local, compliant, small businesses, generally owner-producing, serving their local communities.

“We have had enough with these new and misinformed ignorant groups of people (intentionally or unintentionally) that fail to self-educate and use common sense and ethics. The market will remove most, but we will continue to protect consumers and Veterans using facts and math. We can do better. Let’s defend small businesses and the advantages they will always have over these others for the consumer. Let’s fight for what matters in wholesale lending. Originator independence and lender competition.” Thank you, Andy.

Vendor, third-party provider news

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Christy Soukhamneut sent, “On Wednesday, The Mortgage Collaborative Tech Fund held its second Pitch Day. Six early to late-stage startups made it to the final round and pitched TMC’s Chi-Town attendees.

 

“Going first was Halcyon who is creating a diversified annuity for lenders while serving customer’s needs. ‘Halcyon uses cutting edge technology to diversify revenue and dramatically cut the costs of doing business through IRS tax services and RIA brokerage services; two businesses that are immune to rising interest rates. Their value prop is faster, better, cheaper. They have built a direct integration to the IRS and can provide the past three years and also five years into the future of tax, income, and event data in a matter of minutes. Data is provided in PDF and JASON formats with zero human intervention. They also offer lender partners the opportunity to offer tax preparation services and facilitate the connection between clients and zero commission financial advice through their RIA (registered investment advisor) services providing a revenue share that can also be split with loan officers.’

“Second was Senso which ‘enables mortgage originators and services to monitor existing customer behavior and optimize revenue using predictive insights. Senso’s goal is to use existing customer data to predict homeowner intent by monitoring an existing servicing portfolio or other internal database (think bank customers here) to provide predictive alerts and digital nurturing. The goal is to have you 3-6 months ahead of a buying decision and to be able to take action when it matters.’ They do have an integration with Total Expert. Getting the most out of the system usually takes 4-6 months as you work together to train the AI.

“Up next was Polly ‘transforming the mortgage industry with its modern, data-driven capital markets ecosystem. It is optimizing the capital markets data chain with the dual goals of increasing GOS and reducing expenses by using the least amount of human capital to execute in minutes not hours or days. Polly offers both a pricing engine and a trading platform with analytics sitting on the top. You are able to use the pricing engine and trading platform individually. The analytics come either way. This is one system and is fluid, not using multiple tabs. They are integrated with a variety of POS, LOS, and CRM systems.

“Going fourth was OrangeGrid which is focused on being mortgage servicing’s solution for consolidating fragmented software applications and streamlining exception management. It has a big focus on servicing, specifically on default servicing. Their system is “no-code;” allowing the business units to make changes without significant IT support. Deployment time is approximately 90 days. Believe they can be ready to move into the origination space in 4-6 months as a lot of the plumbing is already there.

“Up next was Whisp. With a patent protected process (17 patents pending and 14 already approved), Whisp technology creates the absolute simplest form of a lead opt in. No more Mickey Mouse entries. The lead scans the Whisp (think QR code meets text messaging), they receive your contact information in the form of a V-card (you set up what they get and it can include a picture), then you get an email with their information or it goes directly into your CRM. The first-round information comes from cell phone records, meaning seeing correct last name, address, phone number, but first name and email are my husband’s. Whisp says it is accurate 70-75% of the time, but clearly, I fall into the 25-30% that isn’t quite there yet. The same thing could happen for kids on their parents cell phone bills. There is a validation page giving you the ability to get the information accurate. Whisp has lots of marketing applications including partnerships with Realtors.

The last presenter of the day was Obie. Obie is reinventing the insurance process for landlords and rental property investors. It is an embedded insurance solution for originators that makes getting quotes and coverage simple. Obie writes its own insurance product and isn’t dependent on other carriers, and having electronic COI delivery with forms that can be populated with data from the LOS. Obie has have written $10B in insurance in the last 12 months.”

Christy’s note wrapped up with the tally. “The TMC team in the room voted and the winners were 1st Whisp, 2nd Halcyon, and 3rd Polly. If you are interested in getting more involved in with fintech and innovation, please contact Jonathan Freed at the TMC Tech Fund.” Thank you, Christy!

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MISMO®, the real estate finance industry standards organization, is seeking public comment on Version 3.6 of the MISMO Reference Model , which includes new data points and structures related to a number of important industry business, regulatory, and investor changes. Version 3.6 of the MISMO Reference Model is the culmination of a multi-year collaborative effort amongst hundreds of volunteer contributors from across the mortgage industry ecosystem. The 90-day public comment period will run through December 16, 2022.

Paymints.io, a secure, digital, white-label SaaS platform that allows parties to collect earnest money as well as transfer and disburse funds for real estate transactions, has integrated with First American Title Insurance Company’s PRISM® digital platform for title agents. The PRISM platform, which combines automation and marketing tools, allows First American policy-issuing title agents to offer valuable products and services directly to their customers via any computer or mobile device at any time. The paymints.io integration with the PRISM platform enables both title and real estate agents to request and receive earnest money and cash-to-close funds from home buyers once a buyer estimate is prepared. By allowing title and real estate agents to trigger funding requests within the same platform, the PRISM platform helps enhance the efficiency of the settlement process.

Indecomm, a leading provider of lending automation and mortgage services, launched its next-generation version of its loan quality control technology, AuditGenius. The upgraded version leverages the company’s “Genius” tech stack, an interconnected and proprietary blend of technology, to help AuditGenius users to meet exceedingly stringent QC requirements while significantly reducing the need for excessive manual reviews and re-reviews. AuditGenius already helps lenders efficiently manage unlimited QC workflows and boasts an estimated 75,000 users with over 200 active loan reviews and audits.

From Michigan Don C. writes:

When Peters, the star running back, was injured the week before the homecoming game, the Campus Gazette ran the story with the headline “Team to Play Without Peters.”

The dean was less than pleased, and ordered the editor to revise the headline for the next week’s edition.

The editor cheerfully obliged, and the second story ran with the headline “Team Will Play with Peters Out.”

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. Secondary Marketing: What They Do All Day” is the current blog. 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 2022 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.)

 

Rob Chrisman