Sep. 18: Thoughts on equity & default, advice for minorities; vendor updates: Saturday Spotlight: Service 1st

Arrgh…. Everyone knows that Talk Like a Pirate Day is tomorrow. Why couldn’t the pirates play cards? Because the captain was standing on the deck! Here in Los Angeles at TMC’s Reunited 2021 event near Los Angeles, there aren’t many playing cards, and the general consensus is that lender staffing levels are generally okay (an improvement from 2020) but that appraisal issues continue to plague the industry. Is someone, who is considering becoming an appraiser, going to be encouraged to go into a field by talk that technology will soon replace them? In general, the hallway chatter indicates that volume is down, and sure enough, according to Curinos, August 2021 mortgage rate-lock volume was down 47% YoY and 41% MoM across all channels, while funded volume decreased 42% YoY and 40% MoM. (Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures; this data further dissected here.)

Saturday Spotlight: Service 1st Information Solutions, LLC, where service is first for credit and verification solutions. 


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).  


Service 1st, originally the Credit Bureau of Santa Maria in 1926, was acquired by the Knuth family in 2019.  The Redding, CA company was rebranded Service First Information Solutions (dba Service 1st — or S1 for short). S1 is the information services affiliate to NCS (National Credit-reporting System, Inc).  S1 distributes credit reporting and verification solutions directly to End Users while NCS is a distinctly separate entity distributing verification solutions through a reseller channel.  This August, S1 opened a new back-office fulfillment entity for participants in the mortgage industry.


S1 is now expanding its operations center in Redding, CA.  Additionally, in November S1 will relocate from Egg Harbor City, NJ into newly purchased and renovated space in Hammonton, NJ.  We’re excited to participate in our new community — and other local industry events like the Regional Conference of MBAs  (visit Booth 507, Oct 3-7). Hammonton is a great story of how a small town, main street locale can be revitalized with leadership, community buy-in and sticking to a vision. Take a look!


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


We prefer to not publicize our corporate charitable efforts. We are very proud, however, of our employees who volunteer to feed/clothe the homeless in a variety of missions throughout our country.


Our California office in Redding, CA is near the epicenter of the Dixie Fire. This fire has destroyed small towns and as of early September, is nearing the record to become California’s largest wildfire in recorded history. Here’s a local news story with links to charitable organizations.


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?  


S1 leverages LinkedIn for continuing education and reinforcing business concepts such as the S.M.A.R.T. goal system. Managers work with employees on career goals and specialization certificates selected by both prior to reviews.  Employees may also participate in S1’s education reimbursement plan when pursuing college and industry certificates and diplomas.


We encourage employee’s participation in our trade associations and attendance at industry events, such as the upcoming MBA Annual conference.


Tell us how your company maintains its culture in the office, or in a work-from-home environment, if applicable.  


Our industry has been challenged to hire new associates during the pandemic. S1 hiring goals remain unchanged into 2022. Corporate leaders must carry the flag for culture at S1, especially as new associates come aboard. Accountability and community are core tenants of our culture. Accountability drives ownership, which fosters pride in our work product. Community places a sturdy backstop when times are personally or corporately tough and a great family to celebrate with when attaining your goals.


Fun fact about S1.  


During moving preparations, we discovered multiple vendor agreements from our service providers, including the credit bureaus from 1980 and prior. Would you believe they were a single page in length? Of course, the option to e-sign closing documents poolside, while listening to Coldplay on your AirPods and paying for a refresh of your piña colada using Google Pay, likely warrants some additional agreement language (not that we condone consuming adult beverages while signing closing documents as they’re hard enough to understand).


Speaking of mortgage documentation, keep an eye out for processing changes effecting the IRS form 4506-C this fall on our blog page.


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

Default trouble? 

Nate Johnson, EVP Mortgage Banking at SLK Global Solutions, writes, “Rob, now that the government’s eviction and foreclosure moratorium is coming to an end, many servicers are developing strategies for a wave of anticipated defaults. But market conditions are significantly different than 10 years ago. Today’s borrower is likely sitting on a growing pile of equity, while a decade ago many were upside down. Also different is the regulatory environment, with servicers required to take specific loss mitigation steps within a set time frame and document their trail. In addition, interest rates are far lower than a decade earlier. Read about SLK Global Solutions.

Advice for minorities entering our business

It’s one thing for a company leader to engage in diversity initiatives with the intent of improving an organization, as has fortunately been the case more often in real estate finance lately. It’s another thing entirely, however, to be recognized as the best CEO by the organization’s employees of color and women. But that is exactly what happened to CIVIC Financial Services President Bill Tessar, who, according to Insider, was ranked among the top 15 Best CEOs by employees of color, and was ranked by COMPARABLY as No. 3 among the Best CEOs for Women 2021.

I asked people of color and women in the industry about their early careers & advice for new entrants, 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 those 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?”

Paul Campbell, EVP of Lending at Kwik Mortgage & Co-Founder Equilibrium Technology Solutions, observed, “We minorities must continuously source ‘Allies’ with whom we can align with to ensure that we can share our thoughts, dreams, and aspirations without fear of being discouraged, blocked or shut down. Organizations must fight to root out ‘Snipers’ who are often leaders that appear to appreciate and support diversity to propel their own agenda but who unfortunately attrit out minorities through constant attempts to expose their weaknesses while continuously creating opportunities for non-minorities thus reducing opportunities for minorities. We people of color must always strive to seek skill training to facilitate our own personal development and take on stretch opportunities such as Interim Leader to accelerate preparedness and next level future growth opportunities both inside and outside of our current organization.

“Have you ever heard she/he who has the ‘MIC’ has the Power? To succeed one must pursue visibility through projects, boards, committees, and industry events to help gain network access and confidence. Many individuals utilize such activities to grow their sphere of influence, elevate their profiles and shape their career. Read, read, read. Though I am not fond of reading I have read many books and I constantly read the industry RAGS to help ensure my mental rolodex is full enough to engage in conversations about the mortgage industry and the U.S. economic and political scenes, which help highlight my business acumen and capacity to participate. U.S.-based firms are being more intentional in their diversity and inclusion efforts due to the current social minority climate in America, that said minorities must impose their “will” to gain a stronger foothold during this time. We all have some work to do to support diversity and inclusion!

There is much work to be done in the US regarding minority employee inclusion to reach a state of equality. Surveys show us how the biggest and the best financial services company(s) in America represent ethnicity. Boards of directors, operating committees, and executive committees are predominantly white. In the ranks of senior management, mid-management, and professionals the White numbers far outweigh Asian, Black, Native American, and Pacific Islanders. What do you think the numbers would look like in organizations’ peer groups and in mid-size to small institutions that have far less structure and visibility?

“In closing, every day is an opportunity to be successful. Every day you have to put the work in to grow! You must control your own outcomes and you must own your destiny! Don’t worry about mistakes or failures they help you grow. Don’t get conned into thinking that you made a ‘Fatal Error’ and know that ‘Flaws’ are correctable if you stay aware, open and honest. Always believe that there is greatness waiting for you! Never expect loyalty. Always strive to be aware of your surroundings and do your best, that is my formula for success! Sometimes you get down but don’t ever get out! Know that the minority in the room has the best perspective and read on how the group and individuals operate.

“Do companies know how long must minorities wait to be included? How long is ‘over time’ to achieve equilibrium? What is the measure of accountability? We can level the playing field together, all of us no matter what color, race, or creed, No Matter What! Trust me it’s not where you are from it is where you are at! We know there’s room for improvement when it comes to the diversity of our workforce, especially our leadership team, and by providing this data publicly on an annual basis, we hold ourselves accountable to shifting these percentages over time.”

Residential vendor updates

On September 15, 2021, Enact Holdings, Inc. (“Enact”) (formerly Genworth Mortgage Holdings, Inc.) announced the pricing of its initial public offering of 13,310,400 shares of common stock at a price to the public of $19.00 per share. The shares began trading on the Nasdaq Global Select Market on September 16, 2021, under the ticker symbol “ACT.” The offering is expected to close on September 20, 2021, subject to customary closing conditions. All of the shares are being offered by the selling stockholder, Genworth Holdings, Inc. (“GHI”), a wholly owned subsidiary of Genworth Financial, Inc., and Enact will not receive any proceeds from the sale of shares by GHI.

Opendoor, the online real estate giant that lets people directly buy and sell homes online, has acquired Seattle-based startup and San Francisco-based Skylight. Terms of the deals were not disclosed. Both platforms, which offered digital home improvement services, will be discontinued. “The additions of the Skylight and teams will bring on like-minded founders and teammates who care deeply about transforming housing,” Opendoor CEO Eric Wu wrote in a blog post. “While their platforms will be sunsetted, the talent and technology of each team will help us scale and accelerate our roadmap.”

LoanLogics released a white paper demonstrating how mortgage industry participants can maximize the relationship between their people, technology, and the mortgage process.

The Double Act of Human & Machine – A Relationship Story,” explains how machine learning and other technologies can be used to manufacture higher-quality loans, ensure consistency of data across documents and systems, optimize margins when selling loan assets, and automate manual work to complement and enhance the value of human teams. A copy of LoanLogics white paper is available for download.

ClosingCorp estimated, as of September 2nd, more than 8,270 pending mortgage transactions currently in progress in Louisiana are in jeopardy, as a result of Hurricane Ida. The files, which are being originated by more than 120 different lenders, have a combined value of more than $1.7 billion. ClosingCorp based its estimate on “in-flight” mortgage applications in 62 counties that are due to close between now and the end of the year. Orleans County, which includes New Orleans, is the county with the most mortgage transactions at risk ($245 million), followed by Jefferson County ($200 million) and Saint Tammany County ($190 million). ClosingCorp is proactively notifying its lender clients about which loans within these counties may be affected and will be working with them on expanded reviews as requested.

For more information, or to speak with a ClosingCorp executive, contact Amanda Gonzalez.

Service Credit Union (SCU), provider of full range of personal and mortgage related services to current and former members of the U.S. Armed Services, has selected Covius Settlement Services as its single source for valuations, title reports and closings for SCU’s home equity lines of credit. “Providing our members with the highest quality customer service at the fairest price is always our number one goal at Service Credit Union,” said Michael Mulhern, Assistant Vice President of Real Estate Lending. “When we looked at our home equity offering, we realized that by consolidating our settlement services with a single, tech-enabled provider, like Covius, we could significantly take time, cost and anxiety out of the process. In fewer than 60 days, we have been able to increase our HELOC volume by more than 100%.”

MISMO’s Private Label RMBS Valuation workgroup collaborated with a variety of stakeholders from the real estate finance industry to develop its private label securitization (PLS) data exchange standard which facilitates the electronic exchange of mortgage asset data to credit rating agencies.  MISMO is seeking public comment on its new standardized dataset. The

90-day public comment period which runs through November 5, 2021, also provides those who developed the standard formal notification prior to final release to review and disclose any applicable Patent Rights (as defined by MISMO’s 2018 Intellectual Property Rights Policy).

Black Knight’s technology ecosystem, which includes the LoanSifter PPE, which gives brokers access to thousands of loan products from hundreds of investors, and it is widely used among the broker community, increased with the launch of LoanCatcher, a comprehensive, end-to-end cloud-based LOS for mortgage brokers, with integrations into the wider Black Knight solution ecosystem, including both LoanSifter and the Surefire marketing automation platform for the mortgage industry. Rich Gagliano, president of Black Knight Origination Technologies, noted, “Entrepreneurial brokers have been driving an increasing share of mortgage lending, and Black Knight is committed to serving that community and further enabling their growth. By providing anytime, anywhere access to advanced LOS technology, LoanCatcher meets brokers when and where they are, giving them the freedom to expand their business and better serve their customers.”

A pirate walks into a bar with a big ships wheel down his pants.

The bartender says, “Excuse me, sir, but do you know you have a ship’s wheel down the front of your pants?”

The pirate replies, “Aaargh, it’s driving me nuts!!”

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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 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.)

Rob Chrisman