NEW MEDIA for the Mortgage Industry
EDITOR COMENTS INDUSTRY NEWS SPOTLIGHT TECHNOLOGY NEW MEDIA CLIENT STORY PARTNERS PODCAST BIN NEWS BRIEFS
What makes a good story? The meteoric rise of the mortgage industry during the first few years of this century made for some great stories. Not just because the business was so good, but because it was too good. The industry was struggling to find more capable workers, experienced executives and mortgage technology integrators. The infrastructure the industry had been depending upon was no longer sufficient and those companies that were able to move the fastest to implement new tools and techniques ultimately came out ahead. Conflict is what makes good stories. There is no good drama without it. It’s about the struggle that pits man against the elements in his environment that oppose his will, whether that be other humans, the environment itself or the gods. We love to hear about those that rise above adversity to succeed. Today’s environment is full of great stories. Even as we’ve watched hundreds of companies fail out of the business over the past few months, and tens of thousands of executives leave the industry in search of gainful employment elsewhere, there are still companies that are marshaling their resources, unwilling to give up. It’s to those companies and the executives and employees that are struggling against great odds to keep them alive that we dedicate this publication.
EDITOR COMMENTS Rick Grant
The U.S. government has formed what it calls the “Hope Alliance,” consisting of companies: Citigroup, Countrywide Financial, Washington Mutual and Wells Fargo, with the purpose of making a rate freeze program in order to lighten the load on sub-prime borrowers in 2008. The program will offer a specific group of homeowners a five year rate freeze on ARM loans in hopes of alleviating pressure from a tense economy.
INDUSTRY NEWS Jonathan Swadley
Homeowners are calling on Washington to pass a two year economic stimulation plan to beat back recession and curb foreclosures. The American Homeowners Grassroots Alliance hopes to unite the parties by seeking new spending and tax cuts as well as nonbudget features designed to lower the risk of recession. The group says the government’s actions should include a freeze on subprime rates at the introductory level. US mortgage woes have reached Asia. Markets in Hong Kong, Japan, and Korea have all slumped recently. The Hong Kong market suffered after it was learned that Bank of China would announce fourth quarter losses due to its investment in subprime US mortgages. The number of adjustable rate mortgages issued declined in 2007, according to Freddie Mac‘s annual ARM survey. Last year also saw delinquency rates for ARM’s overtake those of traditional fixed rate mortgages. According to the survey, few if any lenders are offering discount rates on ARM loans.
The mortgage industry may not seem like the best place to launch a new business initiative, but itâ€™s when times get tough that companies are in most need of expert help, especially when that support is geared at increasing their bottom line profit. Now is the time for innovative thinking and clear communication. In any market, you are defined by the stories you tell and the stories others tell about you. With the right stories, companies are revealed as industry standards, brands are seen as cultural icons and executives are recognized as the visionary thought leaders they truly are. Rick Grant & Associates (RGA) exists to craft and disseminate those stories. The company was founded by Rick Grant, former editor of Real Estate Technology Insight and managing editor of Mortgage Technology magazine. After writing stories about this industry for a decade, Grant still believes there are great stories to tell. As companies emerge from this downturn, there will be more. The company will serve mortgage lenders, and the technology and settlement services companies that serve them, with content that clearly positions the clients as the leading firms they are, their products as best-of-breed solutions and their executives as thought leaders who are changing the industry for the better. Grant says his team will only serve companies that fit that description. RGA consists of Rick Grant, Allison Smith, Chet Smith and Lysa Grant. In addition, the company has attracted a number of industry leaders and insiders who are working with the core team on special projects, as advisors and mentors.
SPOTLIGHT Introducing RGA
In a downturn, the first things that slam shut are the checkbooks, followed abruptly by some of the first that served the industry. We’ve already seen that storyline start to take shape in the mortgage technology business with Portellus and ARC Systems two recent examples. But then, life has always been pretty hard for these players. I remember MBA’s Doug Duncan once pointing out that the mortgage industry spends about one-tenth what other industries do on R&D and technology.
TECHNOLOGY Tech Not Dead Yet
There can be no doubt that 2008 will see more technology firms leave the industry. But after reporting on this part of the business for many years, I expect that we’ll see some interesting surprises as well. There are some very, very clever executives working in the mortgage technology business. I am looking forward to telling stories about how they made the best of the current situation and built their businesses despite the adversity. What companies am I watching? For that, you should turn to my blog at rickgrant.blogspot.com. But I will tell you that there are certain sectors that will do well despite the downturn and others that are already going away. Most of you are industry watchers and know that technology specifically built for subprime lending will suffer, unless it can be positioned to serve an emerging market. You, like me, probably also expect to see fewer product and pricing engines as the menu of available programs continues to shrink. I’m going to keep my eyes on the industry, with a particular focus on any technologies that allow trusted financial advisors to sell loans like brokers for Wall Street firms directly. It will be awhile before the big depositories trust themselves enough to open up their wholesale channels again. But Wall Street firms are just hungry enough (and clever enough) to find a way to make third-party loan origination work. I’ll let you know what I find out.
There has never been a better time to dust off your rolodex of industry contacts than now. With industrywide upheaval, none us can say for certainty that we’ll be working here for long. Of course, certainty is over rated. I doubt many of you are still using the old card filing systems that put all of your contacts on a wheel that took up a quarter of your desk. Today, we keep them in .CSV files or online on a site like LinkedIn. In fact, if you haven’t already started taking advantage of online social media sites, like LinkedIn, FaceBook or MySpace, you should. Originally aimed at college students, social media sites make it easier to interact with your contacts online. You can use a single webpage to track activity in your network, share files and communicate. LinkedIn is one of the more successful social media sites aimed at business professionals and I’ve found it quite useful over the years. But it’s still playing catch-up with some of the sites aimed at younger audiences because it doesn’t make it as easy to share information. Having a page on a social media or networking site is an important first step, but to make it really work for you, you must load that site with content. The more information you can put online about who you are and what you want, the more likely you are to come into contact with someone who can help you get to your goal. For too many in our industry today, the goal is to find gainful employment. If that’s the goal, executives should load their social media sites with plenty of reasons for a company to want to hire them. Think “thought leadership.” And then, get social.
NEW MEDIA Getting Social
Veros Real Estate Solutions, Santa Ana, Calif., has released some results of the company’s quarterly review of their forecasts for the nation’s residential real estate markets. The forecasts, based upon the VeroFORECAST models, reflect projected market gains and declines for single family residences in most major metropolitan areas and some non-metro areas, reflecting 75 percent of the nation’s population.
The predicted five strongest markets are Wichita, Kansas, up four percent; Raleigh/Cary, North Carolina, Sioux Falls, South Dakota, Fargo, North Dakota, and Tulsa, Oklahoma, all up three percent. The markets with the greatest declines are: Sacramento/ Roseville, California, down 12 percent; Cape Coral/ Ft. Myers, Florida, down 13 percent; Palm Bay/Melbourne/Titusville, Florida, down 14 percent; and the Riverside/San Bernardino and Modesto, California markets are both down 15 percent. Document Systems Inc., Carson, Calif., has made the new Home Asset Planning Interview (HAPI) available as an integrated module to its LoanMagic loan marketing and presentation software. HAPI was developed by the Home Asset Advisor Academy, an organization that trains mortgage and other financial services professionals to become Home Asset Advisors. With the addition of HAPI, mortgage originators will now be empowered to take their discussions with borrowers to a higher level, helping them fully leverage their most valuable asset at the same time they help homeowners fully understand the risks involved in complicated financial instruments and complex loans. The company will offer a series of educational webinars on the new functionality. Innovative Relevance®, Cleveland, Ohio, has released its sector report “Mastering Survival Integration for the Mortgage Industry.” Covering over 200 enterprise and transactional processes within eight functional classifications, this detailed sector report provides the framework for sustainable operational improvements that must be made by organizations seeking survival integration answers, while incorporating downstream financial implications. RGA is co-author of the report.
Rick Grant & Associates and Innovative Relevance have jointly announced the release of a new report on the mortgage lending business that promises to shed light on over 200 individual functions that might be sourced beyond the enterprise by companies in this space in the near future as they work to become more competitive. Innovative Relevance is the consultancy run by former Ocwen CTO Mark Dangelo. Today, Dangelo is an author and speaker that is often featured in stories carried by the Mortgage Bankers Association’s Newslink online publication. This is the second industry report that the two firms have authored under a new alliance. The first report, sponsored by WNS, examined the state of mortgage process outsourcing (MPO), with an in-depth exploration of over 75 transaction-related processes typically sourced to partners by companies operating in the mortgage space. The new report, entitled “Mastering ‘Survival Integration’ for the Mortgage Industry,” is available now.
“Mark is the most prolific writer anywhere when it comes to the issues of integration, outsourcing, and everything related to the remediation and restructuring of troubled initiatives and operations,” said Rick Grant. “He has an uncanny way of translating current business statistics into business graphics that really bring home key messages and lessons learned. Working with him has been great.” The companies will be selling the report through their individual websites. They are also making the report available to sponsors who want to make it available to their customers and prospects in an effort to benefit them by shedding light on these critical topics. Sponsors will be offered the opportunity to write a special introduction that will be made a part of the independent report that is sent to their lists. For more information, contact them at firstname.lastname@example.org.
PARTNERS New Mortgage Report
Short audio programs produced for the Internet, or podcasts, are becoming more popular as people learn to get their news and information in new ways. These On Demand information tools provide a more effective way for companies to engage their prospects more effectively.
Podcasts can be particularly effective for developers of mortgage technology. These companies are often forced to struggle through a long sales cycle in order to fully explain the value of their complicated offerings to business buyers. “To really understand many of these products, you have to be a technologist yourself,” said Rick Grant, principal at RGA. “Business executives need to make good decisions about the technologies they invest in, but they don’t necessary have to know exactly how they work, just that it does. Podcasts are a great way of providing the kind of information these buyers need without bogging them down.” The first shows in the new series are already in production. They include: --Consultant to the real estate brokerage industry Ken Jenny talks about software for listings --eLynx vice president of marketing Robert Nilsson talks about expedite --Vuecentric CEO Jorge Sauri talks about new tools mortgage brokers can offer FSBO sellers RGA is currently seeking guests to appear on the podcasts. Guests will be provided with three questions in advance. Answers will be recorded live and the finished program will be edited down to five minutes. For more information about promoting your company through this free program, contact RGA at grant@rickgrant. net.
Veros Software, San Diego, has signed a 12-month contract with RGA to help the company disseminate its research, promote its annual Predictive Methods Conference and interface with the media. Document Systems Inc., owner of both the DocMagic and the LoanMagic brands, has retained RGA on an indefinite basis to provide written content to support its new public and media relations agency run by former Northpointe Communications executive Mary Jo Coiffi. Jeff Schurman, executive director of the Title/Appraisal Vendor Management Association (TAVMA) has retained RGA to help promote its upcoming annual convention and provide support for its electronic newsletter. Rick Grant has been asked to reprise his role as Master of Ceremonies for IdeaWorks, the annual users conference and brainstorming meeting for eLynx, Cincinnati, Ohio. This will be the second time Grant has served as host of the event, which will again be held in Las Vegas next month. Mark Dangelo has been invited to speak about Mortgage Process Outsourcing at Source Media’s Mortgage Technology conference in ChampionsGate, Florida on January 27-29. Mark will be speaking again on the topic at the Mortgage Bankers Association’s Technology in Mortgage Banking conference held in Dallas in March. Paul Jackson, well-known industry blogger and founder of HousingWire.com, says he will take his blog to the next level in February. He is in talks with potential site sponsors now and says he has plans for more indepth coverage of industry events. Keith Gregory is developing a great site for industry bloggers. He has been inviting bloggers from around the business to create their own blogs on his site for free. Gregory, who most recently served as director of online sales for Source Media, hasn’t said how long he will make these opportunities available for free, but said he still has room for more people interested in submitting columns about the industry.
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Call RGA: 800-979-9049