HousingWire Magazine, June 2019 - Rising Stars, 50 Young Leaders Energizing the Industry

HOUSINGWIRE MAGAZINE ❱ JUNE 2019

GSE REFORM The Trump administration begins to focus on housing finance reform.

P.60

HECM SOLUTIONS AAG, Altisource, Quantarium

P.66 HOUSINGWIRE MAGAZINE ❱ JUNE 2019

2019

50 young leaders energizing the industry p.32 Christopher Avallone and Joe Negri

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BEHIND THE

SCENES

After selecting two stars from Amherst Residential, Christopher Avallone and Joe Negri, to be our cover subjects, our interactions with them gave us an even deeper understanding of just what made these two men Rising Stars. Their accomplishments speak for themselves, but we also learned of the hard work and dedication it took each of them to rise to their current positions – which included a lot of long nights and early mornings. Here are a few pictures from behind the scenes at the photoshoot, a slight peek behind the curtain of their world.

Read more about Avallone, Negri and our other Rising Stars on page 32.

JOE NEGRI Co-head of institutional single family residential platform

CHRISTOPHER AVALLONE Co-head of institutional single family rental, head of capital management

4 HOUSINGWIRE ❱ JUNE 2019

HOUSINGWIRE JUNE 2019 EDITORIAL

CONTENT SOLUTIONS

EDITOR-IN-CHIEF Jacob Gaffney

MANAGING EDITOR Sarah Wheeler

EDITORS Ben Lane Jessica Guerin

DIGITAL CONTENT STRATEGIST Alyssa Stringer

REAL ESTATE EDITOR KK Howley

CREATIVE

ASSOCIATE EDITOR Kelsey Ramírez

GRAPHIC DESIGN Traci Cortez

REPORTER Alcynna Lloyd CONTRIBUTORS Danny Gardner

SALES

CORPORATE

NATIONAL SALES DIRECTOR Jennifer Watson Laws jlaws@HousingWire.com

PRESIDENT AND CEO Clayton Collins

CHIEF REVENUE OFFICER Diego Sanchez CALIFORNIA MARKETING MANAGER Christi Lingard Caren Karris clingard@HousingWire.com MARKETING CENTRAL COORDINATOR Mark Adams Lauren Neaves madams@HousingWire.com CLIENT SUCCESS SOUTHEAST MANAGER Tamara Wren Haley Hess twren@HousingWire.com AD OPERATIONS GREAT LAKES COORDINATOR Lorena Leggett Matthew Stafford lleggett@HousingWire.com CLINT SUCCESS SALES COORDINATOR COORDINATOR Emilio Flores Talio Quigley CONTROLLER Michelle Monroe

ROOM TO GROW AS THE mortgage market goes, HousingWire tends to follow, and vice versa.

Our Rising Stars award is now a force to content with; winners reap all the spoils. And the talent pool continues to grow. For this issue we chose two cover subjects that are doing great things at Amherst, based out of Austin, Texas.

Our cover stars Chris and Joe helped expand the Amherst portfolio to include more than 23,000 single-family rental homes and the company now employs 650 people working in 26 national markets.

That’s huge. This year’s list is the best yet!

Speaking of moving forward, how many times have you read about the “return of subprime” in the national press? If you’ve heard it even once, that’s wrong! There is no return to the subprime of the past, according to a viewpoint by our own Editor Ben Lane.

Yet, keeping that in mind, the non-QM credit box keeps opening a little more each month, Lane argues we will need to stay vigilant.

“The last thing the housing industry need is another foreclosure crisis. So while it makes sense to see lending standards expand beyond the government and GSE standard, it must be done smartly,” Lane argues.

Also of note, check out our feature on reverse mortgages. As those who actively work in that sector know, it’s been a tough two years. Our reverse mortgage editor Jessica Guerin, tells us why and whether or not we should hope for a turnaround in that market!

Jacob Gaffney Editor-in-Chief @jacobgaffney

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The information contained within should not be construed as a recommendation for any course of action regarding legal, financial or accounting matters. All written materials are disseminated with the understanding that the publisher is not engaged in rendering legal advice or other professional services. HW Media does not guarantee the accuracy of information provided, and is not liable for any damages, losses or other detriment that may result from the use of these materials.

Tweets From The Streets How to bring a dose of reality to future #college students considering how much #debt to use? First, have them check the median salaries for their future profession, then show them this. After debt exceeds their median (or even 1st year salary), it becomes increasingly onerous.

© 2019 by HW Media, LLC • All rights reserved

by @RobertFrickNFCU

HOUSINGWIRE ❱ JUNE 2019 5

JUNE ‘19

32

RISING STARS 50 young professionals moving the housing industry forward.

54

60

66

70

REVERSE MORTGAGES

GSE REFORM

HOME EQUITY SOLUTIONS

COMPANY SPOTLIGHT

Is the reverse mortgage space a thing of the past, or about to take off?

Reform may finally be coming to the secondary market– but what will it look like?

Altisource and AAG provide innovative home equity solutions and services.

Quantarium leverages expertise in computer science and quantitative genetics.

By: Jessica Guerin

By: Kelsey Ramírez

By: Alyssa Stringer

By: Sarah Wheeler HOUSINGWIRE ❱ JUNE 2019 9

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CONTENTS 14

BACK DEPARTMENT 72 RENTWIRE

THE LINEUP

The White House reveals long-awaited updates to Opportunity Zone rules.

15

76 LENDINGLIFE

ON THE SHELF

In How to Win in a Winner-Take-All World, Neil Irwin presents a guide to

finding success in today’s economy.

80 REVERSEREVIEW 16 DISPATCH Auction.com continues to support Puerto Rico’s recovery from Hurricane Maria with distressed asset auctions.

76 VIEWPOINTS

Change abounds as the mortgage market adjusts to shifting landscape.

Homeowners have record amounts of housing wealth, why are they reluctant to use it?

84 TAKE 5

18 DISPATCH

Sensing the need for inclusionary spaces, Molly Dowdy co-created NEXT.

The disruption of the secondary market relies on efficiencies that can scale.

86 OPENHOUSE

20 UNIQUE SOLUTIONS

Real estate commission splits are in the spotlight as two new lawsuits allege price fixing.

TurboTenant automates the process of finding, screening and managing rental tenants.

90 CFPB WATCH

22 HOT SEAT David Schroeder of Quicken Loans on what mortgage brokers should look for when choosing who to work with.

A kinder, gentler CFPB? The bureau announces new enforcement rules.

94 BY THE NUMBERS Companies are beginning to create digital mortgages that are faster than ever before.

28 NON-QM How do today’s non-QMs compare to the subprime loans of the past?

30 AFFORDABLE LENDING The future of affordable lending: the process of modernizing the mortgage process.

24 A-LIST

96 KUDOS

The characteristics of first-time homebuyers and how they have changed over time.

98 Q&A 1

26 HOT OR NOT

Computer vision research led to SoftWorks AI’s Trapeze for Mortgage Automation.

Rental growth is on the rise; home remodeling activity is expected to cool down.

99 Q&A 2 Citadel’s non-QM commercial product expands opportunities for brokers and correspondents.

30

100 WHITEPAPER Plaid: Reduce the risk for fraud through digital asset verification.

THE LINEUP 12

LoanLogics was a sponsor of the American Cancer Society’s South Jersey Hope Gala.

PEOPLE MOVERS

102 WHITEPAPER

LRES announced it appointed Scott Spencer as its new chief technology officer.

Informative Research: Going beyond data to analytics.

14 EVENT CALENDAR

104 COMPANIES/PEOPLE INDEX

American Legal Financial Network hosts ALFN Answers 2019 in Lake Tahoe Resort.

80

106 PARTING SHOT HOUSINGWIRE ❱ JUNE 2019 11

Scott Spencer LRES

S

erviceLink appointed Tim Gillis as its new vice president of capital market sales. Gillis joins the company with more than 25 years of experience in the mortgage services and origination space.

Before joining ServiceLink, Gillis held executive roles at BSI Financial Services, Aurora Loan Services, and GB Home Equity.

ComplianceEase promoted Dan Smith to the position of senior vice president of government relations.

Smith has been with company for 14 years, previously serving as its senior vice president of sales and client success. In Smith’s absence, Shelia Meagher has been appointed to his former role. Meagher has more than 20 years of sales and marketing experience, previously serving as vice president of national sales at Pro Teck Valuations.

Nationwide Mortgage Bankers recently named Robert Jayne as the company’s executive vice president of sales. Jayne has more than 25 12 HOUSINGWIRE ❱ JUNE 2019

JAYNE

LUNDEEN

HESS

MOATS

KEHOE

GILBERT

MEAGHER

Prior to joining the company, Spencer served as the vice president and divisional chief technology officer of First American Mortgage Solutions.

He also served at CoreLogic, where he served as a senior vice president.

years of experience in the reverse mortgage industry, most recently serving as the vice president of InterContinental Capital Group.

Merchants Capital appointed Lisa Lundeen and Toni Gilbert to newly created roles. Lundeen joins Merchants Capital as its vice president of government-sponsored enterprise portfolio management and Gilbert joins as the vice president of insurance compliance. Lundeen has over 12 years of multifamily servicing and asset management experience, and Gilbert has over 16 years of experience in both insurance compliance and multifamily escrow.

ARMCO hired Kyle Kehoe as the company’s new chief revenue officer.

Kehoe has 20 years of experience as an executive and revenue leader. In his years inthe industry, he previously held leadership roles at various companies including CRIF Lending Solutions, MeridianLink, Yodlee and Equifax.

Radian Debra Hess to its board

of directors. Hess most recently served as the chief financial officer of NorthStar Asset Management Group and NorthStar Realty Finance Corp. Prior to her role with NorthStar, Hess was a managing director of Fortress Investment Group where she also served as chief financial officer of Newcastle Investment Group.

LoanCare named Sudhir Nair as its executive vice president and chief information officer. Nair has more than two decades of experience in the mortgage and consumer lending industry, most recently serving as the executive vice president and chief information officer at Xome.

HouseCanary welcomed Niti Bashambu to the company as its new chief product officer. Prior to joining HouseCanary, Bashambu served as the chief analytics officer at IAC Applications.

Simplifile promoted Mark Moats to vice president of national accounts. Moats has worked with the company for nearly 13 years, most recently serving as a regional sales director. Overall, Moats has more than 20 years of experience in title-related fields, previously serving as the president and owner of MortgagePro Financial Services.

WFG National Title Insurance Company hired Julie Curlen to lead its New York agency team. Curlen has more than 30 years of experience in the title insurance industry, working previously as chief financial officer and agency district manager for Stewart Title Insurance Company.

EVENT CALENDAR

ALFN ANSWERS 2019 JULY 21-24, 2019 Host: American Legal Financial Network Location: Hyatt Regency Lake Tahoe Resort, Spa & Casino Cost: $2,500 On the agenda: This annual invitation-only conference attracts more than 300 senior level leaders from across the mortgage servicing industry. Now in its 17th year, ALFN Answers will continue to provide attendees with up-to-date education, allowing them to build better businesses and improve their experiences. alfn.org

INCLINE VILLAGE, NEVADA: This year, ALFN Answers will take place in Incline Village, Nevada. Not only is the city known for its mountains, but it is also known for its skiing.

Conference goers wanting to experience the thrill of skiing in a beautiful landscape should visit the Diamond Peak Ski Resort. Here, they will be able to enjoy all that nature has to offer. diamondpeak.com

CMBA WESTERN SECONDARY MARKET CONFERENCE JULY 15-17, 2019 Host: California Mortgage Bankers Association Location: Westin St. Francis Hotel Cost: $595 - $745 On the agenda: The California MBA’s annual conference provides professionals with the timely and critical information they need to navigate the residential and commercial real estate finance industries. Now in its 47th year, the conference continues to bring together secondary market leaders, decision makers and vendors. westernsecondary.com 14 HOUSINGWIRE ❱ JUNE 2019

SAN FRANCISCO: This year’s Western Secondary Market Conference takes place in San Francisco. While in the Golden City, make sure you head down to San Francisco Bay to reward yourself with a day of sailing. There you will find USA 76, an international America's Cup Class racing yacht that will allow you to gaze at the bay’s spectacular views. getyourguidec.com

ON THE SHELF How to Win in a WinnerTake-All World: The Definitive Guide to Adapting and Succeeding in High-Performance Careers

BY NEIL IRWIN ST. MARTIN'S PRESS

In this book, Irwin presents a guide to finding success in today's economy when the notion of the “job” is shifting.

Through original data, analysis, case studies, Irwin explains the 21st century economic landscape and its implications for ambitious people seeking a lifetime of professional success.

Range: Why Generalists Triumph in a Specialized World

BY DAVID EPSTEIN RIVERHEAD BOOKS

David Epstein examined the world’s most successful athletes, artists, musicians, inventors, forecasters and scientists and discovered that in most fields that generalists, not specialists, are poised to succeed. Epstein's book focuses on the idea that those who think broadly and embrace diversity will increasingly thrive as experts silo themselves further while computers continue to master more specialist skills.

AUCTION.COM | SPONSORED CONTENT

Auction.com helps speed Puerto Rico's recovery Bringing distressed assets to market quickly and efficiently

T

he effects of Hurricane Maria only exacerbated Puerto Rico’s already-weak economy. To help accelerate recovery from the recent storm, Auction.com and other leaders from the mortgage and housing industries came together in San Juan, Puerto Rico, November 14 to 16, for the Five Star PR18 leadership summit. This industry think tank, of which Auction.com was a host sponsor, discussed solutions to help accelerate the recovery and revitalization of Puerto Rico.

In addition, right before PR18 started, Auction.com held a special online auction of Puerto Rico properties. Auction.com Cares, a program which helps communities thrive by supporting efforts that help stabilize neighborhoods, then gave $10,000 of the proceeds to Pitch In for Baseball. This organization helps children in Puerto Rico, as well in other places around the world, to escape the loss and sadness of disasters through baseball.

Before Hurricane Maria, during the crippling financial crisis that started in 2007, Auction.com began helping to revitalize Puerto Rico’s neighborhoods through the auction process. Selling distressed properties quickly to investors and owner-occupants helps boost the local economy and protect communities from blight. New owners will typically rehab homes, infusing the local economy with capital for the labor and resources needed for improvements.

Since the crisis, Auction.com has held dozens of auctions for Puerto Rican property, as well as educational events. The result has been hundreds of Puerto Rican properties sold on the Auction.com platform, with many being rehabilitated using local resources and materials. But after years of financial hardship, nothing could prepare Puerto Rico for Hurricanes Irma and then catastrophic Maria, leaving the island desperate for help.

Hurricane Maria's sweep across Puerto Rico in the fall of 2017 was disastrous: Property damage affected more than 250,000 housing units — of which approximately 35,000 remain uninhabitable. A little over a year later, recovery and rebuilding remain tedious.

Dave Lee, Auction.com's Business Development and Sales Vice President, has been with the family of companies since 2004.

Lee grew up in Puerto Rico and has worked extensively on the island for Auction.com. He owns property on the island and plans to retire there. Like Auction.com, he has a vested interest in the island that goes beyond buying and selling property. He wants to see the people prosper and the island's financial stature become healthy again.

"Where there are vacant homes, there are problems," he said.

"Auction.com is able to get people back into homes. Owneroccupants and investors from the island and the contiguous United States are stabilizing factors for Puerto Rico’s communities."

16 HOUSINGWIRE ❱ JUNE 2019

Along with the benefits of rehabilitating properties, Auction. com's marketing efforts help spread the word worldwide about Puerto Rico’s plight. Auction.com’s extensive buyer database allows heavy targeting in areas with high concentrations of Puerto Ricans, such as New York and Florida. And that interest in Puerto Rican assets culminated with an October online auction that resulted in 87% of assets having two or more bidders. By attracting more buyers to participate in the auctions, Auction.com helps speed the recovery. Sellers also benefit by Auction.com's commitment to the island. In the same October Puerto Rico real estate auction: • 40% of assets were sold • Winning assets sold on average at 114% of reserve What’s more, after the hurricanes — during periods of chaos — sellers can find it difficult to place a value on island properties.

But since Auction.com can bring distressed properties to market quickly and efficiently, the competition ensures that sellers are able to get a good read on what the market will bear and find the market rate for assets.

"It's been a year since Hurricane Maria," said Lee. "Although the island may have fallen out of the headlines, Auction.com is keeping laser-focused attention on Puerto Rico with the auctions we are holding."

Lee recently met a local Puerto Rican woman during an on-island auction educational seminar. Coincidently, the woman's name is Maria. Maria still lived at home with her family and wanted to buy her own place. Her mother's house was heavily damaged by the hurricane, and her family had been without power for about six months.

Maria and her mother were first-time auction participants who responded to local Auction.com advertising. She was interested in buying a home in San Juan but didn't think she could afford anything currently on the market. Maria and her mother attended the auction educational seminar. They were nervous, but Lee helped build trust and confidence in the process.

Lee remembers getting a call after the auction. It was Maria letting him know that her dream of homeownership had come true: She won her auction. Maria then thanked Lee for helping her understand the process and Auction.com for offering the opportunity. Lee also connects with local investors who are using Auction.com as a conduit to build their business in Puerto Rico.

Whether owner-occupied or a fix and flip, a repaired Puerto Rico home that’s reintroduced into the neighborhood helps feed the local economy and lift the spirit of the community. Using the auction process alongside industry efforts such as PR18, we can put families back into homes and Puerto Rico back on the path to growth and success.

Founded in 2013, HouseCanary is a real estate technology company providing the most accurate home valuations to drive smarter decisions across the real estate ecosystem. Clients include leading institutional investors and enterprise lenders who trust HouseCanary’s products to fuel acquisition, portfolio management, underwriting, and other processes. HouseCanary can be found at www.housecanary.com.

OPTIMAL BLUE | SPONSORED CONTENT

The disruption of the secondary mortgage market relies on efficiencies that can scale Resitrader by Optimal Blue connects lenders and investors in real time

F

or the last several years, the mortgage industry has experienced a disruptive wave of technology innovation by vendors aiming to improve results and lower costs. Until recently, the vast majority of these innovations have focused on automating the front-end of the digital mortgage loan process, leaving significant opportunities to automate post-closing processes such as whole loan pricing and loan trading.

Now, Optimal Blue has upended the status quo in the mortgage industry by building a revolutionary digital marketplace that is transforming the way loans are bought and sold in the secondary market.

Optimal Blue’s recent acquisition of market leader Resitrader created the largest loan trading platform in the industry. In the last year, Resitrader saw a 350% increase in the number of sellers and more than 300% growth in loan trading volume, while also increasing the offer-to-purchase rate for sellers on the platform.

“Given Optimal Blue’s unique and strong market share position, the acquisition put us in the front seat to create an industry-standard platform for whole loan pricing and trading,” explained John Ardy, vice president of Resitrader by Optimal Blue.

By connecting lenders and investors in real time, Resitrader automates what used to be a manual, email-based trading process and makes it incredibly scalable. Besides the immediate time savings, the Resitrader platform fosters real relationships between engaged buyers and sellers, which is mutually beneficial to both sides.

On the sell side, Resitrader empowers the lender to optimize true best execution by offering loans to an entire marketplace of buyers instead of the four or five investors they are used to dealing with. Originators can connect with new investors almost instantly and accelerate the traditionally protracted, difficult shadow bidding process, so what used to take weeks is now accomplished in seconds by clicking on someone’s name to view their pricing.

The transparency of pricing within the platform creates the opportunity for sellers to find investors quickly and provides investors with valuable insight into the competitiveness of their bids.

Resitrader reports this information automatically, so investors can see why they won or lost certain bids and adjust their strategy accordingly.

“Resitrader takes a function that was manual from end to end and fully automates all of it,” continued Ardy. “It streamlines communication and eliminates the latency that occurs with the manual process. It’s very exciting — in an area that was never very exciting.”

Understanding their critical role as investors, Optimal Blue has

18 HOUSINGWIRE ❱ JUNE 2019

paid special attention to streamlining connections with Fannie Mae and Freddie Mac. The company completed an early integration with Fannie Mae’s Pricing and Execution – Whole Loan application last year and was first to integrate with Freddie Mac’s Loan Selling Advisor in August.

Because Optimal Blue operates in a SaaS environment, Resitrader clients had full access to the new capabilities on the same day.

The integration with Loan Selling Advisor allows the user to seamlessly acquire Freddie Mac pricing data and compare against alternative executions, such as bulk bids. It also enables the automated commitment of Freddie Mac loans by returning trade confirmations directly back to the Resitrader user, so they don’t have to use multiple systems to conduct a single transaction.

Optimal Blue then followed up with an enhanced integration that fully automates the cash pricing and commitment process to include cash pay-ups for fixed-rate mortgages across all specified loan attributes. Prior to this integration, sellers would have to download and print a PDF from Freddie Mac and calculate these loan details. Now, that data pull takes seconds.

Once buyers and sellers see the ability to interact at such a fast rate, the platform quickly becomes indispensable to their business model.

Jim Glennon is the director of secondary services at Optimal Blue and he noted a major gain in efficiencies using Resitrader for Optimal Blue’s full-service hedge advisory clients.

“As we add new layers of innovation to our core platform, we are giving lenders and investors incredible new opportunities to get things done faster and better. This is part of the mortgage process that no one spent much time on, and now it has caught up to the rest of the digital mortgage process,” Glennon said.

As significant as the evolution of the Resitrader platform is individually, the seamless integration of Optimal Blue’s solutions across the entire secondary market platform is the true game changer.

“When Resitrader operated independently, we were able to grow to $2 billion a month,” said Ardy. “Now, backed by the power of Optimal Blue’s Digital Mortgage Marketplace, our growth rate will accelerate and catapult Resitrader into the largest industry destination for digital loan trading and bring considerable value to platform participants.”

As adoption of these interactive loan trading platforms flourish, Optimal Blue aims to continue looking toward the future of the industry with an ongoing commitment to deliver market-leading mortgage automation.

UNIQUE SOLUTIONS

TURBOTENANT

SPONSORED CONTENT

TurboTenant automates the process of managing rental tenants Streamlined solutions free up landlords and property managers One of the biggest pain points of owning or managing rental property is the never-ending task of finding, screening and approving new tenants. Turnover is natural, but vacancies represent a real risk of lost income and have to be handled quickly and efficiently.

This is even more critical for part-time landlords, who can’t drop what they’re doing to post ads, take applications or do individual screening.

Fortunately, TurboTenant provides automation for some of the most difficult parts of rental management, including marketing and lead gen, online rental application, tenant screening, renter’s insurance, lease management and electronic signatures. By bringing all of these functions together in one place, TurboTenant makes it easy for landlords and property managers to handle all essential job functions.

TURBOTENANT AUTOMATION INCLUDES: Rental marketing Rental marketing requires a comprehensive approach that includes everything from a digital presence on the most popular rental sites to physical assets like flyers and a “For Rent” sign.

The first step is posting your property on TurboTenant’s eye-catching listing page, which entices renters with photos, a description and a list of amenities. Once your property is listed, you can share out to social channels with one click and instantly advertise on dozens of rental listing websites like Apartment.com and Rent.com.

Then the real magic happens. TurboTenant can ask each person visiting the listing page or your ads about their move-in date, household size, employment, and even pets, generating and tracking high-quality leads you can easily reach out to. Instead of wasting time chasing down potential contacts only to find they aren’t ready to rent in the near-term or have five dogs, you can connect with renters who are most likely to sign a lease for your specific property.

Online rental application Renters are used to Amazon-like efficiency, and TurboTenant lets you meet their expectations with a mobile-friendly rental application that can be filled out 24/7 from any device. Renters can take a picture of their important documents, which are instantly uploaded to their application, saving them from having to find a fax

20 HOUSINGWIRE ❱ JUNE 2019

machine or drop off papers in person.

The online rental application covers all standard questions but can also be customized to fit your specific property or renting requirements. One of the most time-saving functions of the online application is the automatic references feature, which instantly reaches out to past landlords to get a rental history of the applicant, including whether they paid on time or violated a lease.

Tenant screening One of the frequent “black holes” in rental management is the screening process, which can eat up precious time using a manual process, frustrating potential renters and delaying the date they start paying rent.

By partnering with TransUnion, TurboTenant smooths the process with a report that lists not just their credit score, but any criminal history, past evictions, outstanding loans and more. However, that quality doesn’t come at the cost of speed. Once renters approve the screening request as part of their application, you get the report back instantly. In addition, the credit report only counts as a soft credit inquiry, making it painless for the renter and saving landlords the hassle of complying with extensive hard-pull regulations.

Forms and documents Making sure you have every form you need is a daunting task, especially if you are renting properties in more than one state.

TurboTenant offers more than 45 essential rental forms and has partnered with LawDepot to provide state-specific leases.

TurboTenant extends its automation through the rental process, with an electronic signature feature that makes it simple to send and receive documents, even following up with automated reminders.

All of the automation TurboTenant provides has a double benefit — making the rental process experience better for both landlords and renters. The same online app that makes it easy for renters to apply and upload documents anytime, anywhere also frees you from set hours or the confines of a desk. Quick screening means the renter gets a fast answer, while you can ensure safety and gain peace of mind. The result is less hassle and more opportunity.

HOTSEAT

SPONSORED CONTENT

David Schroeder Senior Vice President

Quicken Loans Mortgage Services

M

ortgage brokers have a lot at stake when they choose which lender to work with. We sat down with David Schroeder, Quicken Loans Mortgage Services (QLMS) Senior Vice President, to talk about the experience brokers receive by partnering with QLMS. We’ve seen tremendous growth in the condominium business. What is Quicken Loans Mortgage Services’ approach to handle condos?

Our goal is to always give our partners the right resources, technology and products to provide their clients with the products and service they are looking for — and that includes the booming condo sector. Last year alone there were 53,000 new condos built, and it’s already clear that number will be even higher in 2019.

As a result, QLMS introduced a new condo construction product called CondoMAXimum to reduce the pain points in condo financing. CondoMAXimum benefits include no non-warrantable pricing adjustment, a 25% pre-sale requirement versus 50% required by most lenders and we’ve relaxed our construction completion requirements. Brokers now have more options and flexibility for their clients.

In addition, QLMS just launched new technology that’s adding speed and certainty to condo closings and creating more repeat business. Condo Simply, our new tech-driven tool, can eliminate nearly two weeks out of the condo financing process. Our partners have access to a database that compiles every condo that QMLS has approved. Our partners’ clients don’t need to submit a condo questionnaire – saving them an average of $450. No need for a second approval, either.

Q&A

Q. In what ways does QLMS technology allow you to pass savings along to your partners’ clients?

One of QLMS’ newest tools is Value Genius. It adds speed and certainty to the appraisal process and of22 HOUSINGWIRE ❱ JUNE 2019

fers cost-savings advantages, too. We run both Fannie and Freddie’s underwriting engines simultaneously, and if our partner doesn’t receive a property inspection waiver or automated collateral evaluation, we determine that the property may be Value Genius-eligible.

Next, we send an individual to the property to collect data. No licensed appraiser is needed, which is a cost-savings for our partners’ clients. Then, we provide a property valuation waiver or request a desktop appraisal. No property revisit is needed.

The entire process can be completed in four days or less, which is a game-changer. We just launched Value Genius nationwide, giving more partners the opportunity to use this powerful technology.

Q. If we asked your partners what sets QLMS apart, what do you think they’d point to?

You would definitely get a wide variety of responses including our incredibly responsive support team, our innovative technology and our award-winning servicing platform — but one key point is important to all of our partners: saving their clients money.

Saving money makes homebuyers happy, keeps them going back to their mortgage broker and keeps the broker coming back to us. This is why our new Power MI offering is so exciting. Power MI makes our industry-leading mortgage insurance rates even lower, giving our partners the ability to save their clients nearly $5,000 without competing on rates and fees.

Here’s a scenario I use: if your client is taking out a $300,000 loan, with a 95 LTV and they have a 740 FICO – their BPMI payment will only be $80 per month instead of the $120 industry average. That can save them $4,680 by the time their mortgage insurance falls off.

Not only are our partners saving their clients money every month, but they can qualify more clients because the reduction in MI payments leads to a lower DTI. I encourage all our partners to leverage Power MI. If another lender has a lower interest rate, our MI can make up the difference in many cases.

When you partner with QLMS, you get the resources, products, technology and MI to take your business to the next level.

QL® MORTGAGE SERVICES

Michael Bertolami Loan Officer Monument Mortgage Company, Inc. Lexington, MA Mike Kot QLMS Account Executive

Call (888) 762-5035 QLMortgageServices.com/StrongerTogether Equal Housing Lender. Licensed in all 50 states. NMLS #3030

FIRST-TIME

HOMEBUYERS

#

We now know that first-time homebuyers are not, in fact, being shut out of the housing market as some had feared, thanks to a recent study by the Federal Reserve Bank of New York. Rather, their share of market participation has remained stable over time, rising and falling slightly over the last 17 years in

Here’s what it found:

3

1

First-time buyers have

TAKE OUT SMALLER MORTGAGES

2

First-time buyers traditionally have

LOWER CREDIT SCORES than repeat buyers

24 HOUSINGWIRE ❱ JUNE 2019

4 First-time buyers are

SMALLER STUDENT GETTING YOUNGER every year LOAN BALANCES

First-time buyers generally

than repeat buyers

response to market conditions, but averaging about 45% of the overall market. And a second part of that study aims to pinpoint the characteristics of these first-time buyers and note how they have changed over time.

than repeat buyers

5 First-time buyers are purchasing homes in

CHEAPER NEIGHBORHOODS than repeat buyers

47th Annual

Western Secondary Market Conference #mortgageinnovators19

Presented by

The Mortgage Innovators Conference is a premier mortgage industry 3-day event featuring speakers and companies that will provide practical innovation and improvement strategies for mortgage banking and digital mortgage implementation. This is the only industry conference that highlights all innovators!

July 15-17

Westin St. Francis San Francisco

Hear Innovative Tech Talks on: GSE Innovations, including latest

on Day 1 Certainty How to Best Utilize the Latest Artificial Intelligence Technology Digital Loan Applications/Point of Sale Systems for Loan Originators Block Chain Technology and how it may influence the mortgage, escrow and title industry

Technology Companies Entering

the Mortgage Space The "e" space: eNotes / eClosing / eNotary Big Data and how to Create Actionable Intelligence Data/Syber Security, including a "live hack" Millenials and the Future of Customer Experience

Who Should Attend?

Mortgage banking leaders who are responsible for process improvements, customer satisfaction and overall profitability of their organizations.

Featuring Insights from Bill Dallas and Dave

Zitting, Fannie Mae and Freddie Mac

Over 30 on-stage product

Monday night Mortgage Mavericks on the Midway event with live music, dancing, costume contest, Top Gun theme with a Tom Cruise look-a-like, light appetizers and plenty of 80s music!

Maximize your conference experience with our new connection-focused app,

www.WesternSecondary.com demonstrations Investors, warehouse and vendor partners all in one place Innovation Lab – Casual technology meeting place to discuss customized ideas with vendors and partners

Register now at www.mortgageinnovators.com

Hot SIZZLE? Not FIZZLE? 1 1 WHY THE

WHY THE

RENTAL GROWTH



Some experts are questioning if the recent surge in rental growth is an indicator of tightening rental markets. In March, rental growth increased to 3.7% from last year, a 12-month high, according to the latest Consumer Price Index. According to a new report from Capital Economics, analysts are optimistic about the rental market’s outlook but were surprised at the boost in growth. So, what’s behind this acceleration and will it continue? Capital Economics said it suspects the recent rise in earnings growth may be the cause.

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2

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3

ZERO DOWN MORTGAGES Zero down payment loans are back, but this time for real estate investors only. Hard Money Sources announced that real estate investors can get a loan to cover the entire value of their investment. The zero down payment hard money loan is actually a combination of two loans. The first loan is a personal loan based on the borrower’s individual creditworthiness and covers the down payment itself. The second loan is a traditional hard money loan that is backed by equity of the property being financed.

MULTIFAMILY SPACES IN DYING MALLS As major anchor retailers at malls continue to shut their doors — Macy’s, J.C. Penney, Sears — those properties are finding a common ground to repurpose the space. A popular solution favors converting retail space into multifamily, mixed-use developments.

And it’s finding big backers with even bigger pockets, as three deals emerged in one recent week alone! For example, Merlone Geier Partners unveiled its updated plan for the former Laguna Hills Mall during a recent Town Hall. Two anchor stores going vacant last year freed up more areas for development.

26 HOUSINGWIRE ❱ JUNE 2019

HOME REMODELING



Home remodeling activity is expected to cool down considerably in 2020 as the economy slows. Gains on home improvement and repair spending are projected to continue to decline through early next year, according to the latest from the Joint Center for Housing Studies of Harvard University. The center’s Leading Indicator of Remodeling Activity index predicts homeowner remodeling spending will fall from 7% to 2.6% in the first quarter of 2020. This is well below the historical average of 5%, the report points out, and a low the market hasn’t seen since 2013.

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2

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3

THE ECONOMY As the housing market continued its recovery over the last several years, home prices have risen. But after a five-year run, it appears things are cooling off – and fast. It’s a strong sign that the economy is slowing down, just as many analysts have predicted. But the quick change of pace may mean that it’s slowing faster than expected. Homeowners and investors are pulling back on their housing-related spending.

According to a recent report by BuildFax, single-family housing authorizations are down a full 8.4% from last year.

MULTIFAMILY HMDA DATA Multifamily lenders are required by the Home Mortgage Disclosures Act to report data to regulators on the number of units in a property. But the Consumer Financial Protection Bureau discloses only vague ranges of unit totals and income-restriction units. The Urban Institute said the vague reporting of HDMA data is a roadblock that prevents analysts from understanding how well a lender is serving its community. The problem is particularly poignant in multifamily lending as its lenders are more concentrated in individual communities.

KEEP UP WITH THE PULSE OF THE HOUSING ECONOMY HOUSINGWIRE MAGAZINE. PRINT AND DIGITAL.

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VIEWPOINTS

By Ben Lane

Non-QM lending is on the rise, but here’s why it’s not the subprime of the past Rules prevent a return of the subprime boom, but cracks are appearing

There were many causes of the housing crisis, but near the top of the list (if not at the top) was the rise of subprime lending and its subsequent impact on the secondary mortgage market.

At the height of the subprime boom, there were approximately $625 billion in subprime mortgages originated in one year (2005). And that doesn’t even factor in Alt-A loans, which saw their popularity rise in tandem with subprime.

In fact, there were more than $1 trillion in subprime and Alt-A mortgages origi-

28 HOUSINGWIRE ❱ JUNE 2019

nated in 2005 and 2006. That’s roughly equivalent to how many purchase mortgages originated in all of last year.

Eventually, as we all know, the bubble burst and subprime lending all but disappeared, driven into exile by new regulations like the Qualified Mortgage and Ability-to-Repay rules.

In recent years, non-QM loans have been on the rise as lenders and investors become more comfortable with loans that do not fit into the stringent government orgovernment-sponsored enterprise credit boxes.

Recently, New American Funding and Plaza Home Mortgage increased their offerings and expanded into non-QM lending, joining a growing group of lenders that are offering mortgages to “non-traditional” borrowers.

NewRez and LoanStream Mortgage also increased their presence in the non-QM lending space.

Alarm bells went off in April when 360 Mortgage Group announced that it was launching a no-income, no-asset mortgage pilot program. The loan program, which the Austin, Texas-based mortgage banking firm calls the “Agency NINA,” does not require borrowers to prove their income or assets in order to be approved for the loan.

The loan is also available for borrowers with FICO scores as low as 620, which would firmly put the loan in the subprime range, as Experian considers subprime to be borrowers with FICO scores below 670.

Despite the name of the loan, neither Fannie Mae nor Freddie Mac is backing these loans. And key to the development is that the loans are only available for investors. The Agency NINA is not available for owner-occupied properties.

And that’s the main difference between that loan and the ones that came before it.

Same with today’s non-QM loans.

These aren’t the types of loans that got us in trouble in the last decade, but that doesn’t mean we don’t need to keep our eyes open.

A recent analysis of the rise of non-QM lending from DBRS sheds some light on

Ben Lane is the Editor for HousingWire. In this role, he helps set a leading pace for news coverage spanning the issues driving the U.S. housing economy and helps guide HousingWire’s overall direction. Previously, he worked for TownSquareBuzz, a hyper-local news service. He is a graduate of University of North Texas.

why things are different now.

“Given the frequently weaker credit profiles of non-QM borrowers, some market participants have equated them to pre-crisis Alt-A or subprime mortgages,” DBRS’ analysts said in the report.

“However, DBRS deems the credit quality of non-QM securitizations issued to date to be considerably improved from pre-crisis standards based on three key factors: ATR rules, tighter underwriting and independent appraisal process, and robust loan attributes.”

As DBRS notes, today’s non-QM loans are underwritten with different rules than what happened in the 2000s. In most cases, non-QM loans are underwritten in accordance with the ATR, except for investor loans. Hence where 360 Mortgage Group’s loan fits in.

According to DBRS, the presence of the ATR rule, along with income verification and adherence to debt-to-income ratio thresholds, improves borrower affordability and protects both the borrower and the lender.

“This represents a significant improvement from the pre-crisis era,” DBRS said.

Along those same lines, DBRS notes that underwriting is “much tighter” than it was during the housing bubble.

“Income verification for salaried borrowers usually requires two years of W-2 forms and the most recent pay stub,” DBRS states. “For self-employed borrowers, some lenders may ask for two years of personal and business tax returns, but most programs employ bank statement underwriting.”

“While bank statements may be a more accurate reflection of income for these borrowers, the experience level and resources required to perform proper underwriting is often more advanced for such loans,” DBRS continues. “That said, the bank statement programs generally seen at nonQM lenders do verify income based on a review of 12 to 24 monthly deposits, which is significantly better than the verification used for stated documentation loans originated pre-crisis.”

Beyond that, lenders typically verify a borrower’s assets and employment. And depending on the loan program, borrowers must have enough liquid reserves on hand to cover at least three months to nine months of their mortgage payments.

Other factors contributing to stronger underwriting standards include FICO floors and loan-to-value caps that have been used.

Additionally, the reforms in the appraisal industry have decreased risk. In the pre-crisis days, appraisers were often part of the underwriting process and contributed to inflated loan amounts.

DBRS describes the Wild, Wild West appraisal environment with some interesting phrasing: Pre-crisis, incentives had often been misaligned, so there may have been coercion imparted on appraisers to inflate property values during the underwriting process.

That’s a fancy way of saying that some appraisers were getting money from lenders for appraising properties at higher price points, thereby leading to increased mortgage amounts.

But that doesn’t happen anymore…that we know of.

Add all that up and you get loans with more “robust attributes,” according to DBRS. “Today, lenders tend to avoid originating loans with layers of risks. FICO floor and LTV cap are often established to control risk exposure,” DBRS said. “Credit parameters gradually tighten as you move down the credit spectrum in non-QM programs, suggesting that consideration of compensating factors for riskier loans occurs.”

According to DBRS, in non-QM securitizations it reviewed, weighted-average FICO score “rarely” falls below 690 and the WA LTV ratio is somewhere between 75% and 80%.

Contrast that with the pre-crisis days of 620 FICO scores and 90% LTV ratios in many subprime securitizations.

Beyond that, today’s non-QM loan pools contain far fewer cash-out loans, which is “very different from the pre-crisis phe-

nomenon where borrowers were essentially using their homes as a cash machine to take money out,” DBRS said.

And the positive results of all of those underwriting changes are seen directly in the loan performance of the recent non-QM originations.

According DBRS’ report, the vast majority of non-QM loans have remained current since origination, with 60-day delinquencies typically remaining under 5% in rated transactions.

Voluntary prepayment rates have been higher across all non-QM pools, as DBRS notes that many non-QM borrowers tend to improve their credit and refinance into lower cost mortgages with a few years of origination, especially in the low interest rate environment of the last several years.

“Because of the fast loan seasoning and a mostly benign housing cycle, non-QM transactions have shown minimal, if any, losses to date,” DBRS notes.

But that doesn’t mean that there isn’t some risk associated with the increase of non-QM lending in the last few years.

“If the economic environment becomes more distressed, some of the non-QM borrowers, particularly those with a history of credit events, may come under pressure, although DBRS generally believes that the rated non-QM securitizations are sufficiently credit enhanced to withstand expected losses at various stress levels,” DBRS states.

DBRS there is referring to how investors will make out if there’s a downturn in the economy. And while today’s non-QM mortgage bonds may be structured so investors won’t take heavy losses, that doesn’t mean that there still won’t be losses.

And “losses” in that case means that someone is likely losing their home.

The last thing the housing industry needs is another foreclosure crisis. So while it makes sense to see lending standards expand beyond the government and GSE standard, it must be done smartly.

So far, so good, it appears. But will things stay that way when there’s money to be made? We’ll see.

HOUSINGWIRE ❱ JUNE 2019 29

VIEWPOINTS

By Danny Gardner

The future of affordable lending Modernizing the mortgage process

In 1997, a company then known as Apple Computers adopted the slogan “Think Different.” This well-regarded marketing campaign became known as a Steve Jobs classic, because it spoke to the possibilities of influencing and changing the world around us.

That’s essentially our philosophy at Freddie Mac. As the U.S. population ages and becomes more diverse, borrowers’ needs and expectations are changing.

30 HOUSINGWIRE ❱ JUNE 2019

People across the lending industry are thinking different to find solutions to issues that will benefit our neighborhoods, our industry and our country for decades

to come. The most dynamic area where that is happening is in the affordable housing space.

When I arrived at Freddie Mac in 2015, one of the questions I received most frequently was, “Why aren’t Millennials buying homes?”

Due to the market cycle at the time, most of the housing industry was focused on refinancing. Naturally, this precipitated a decline in the share of first-time

Danny Gardner is senior vice president of single-family affordable lending and access to credit at Freddie Mac. @Danny_R_Gardner

homebuyers—down to about 30% of all homebuyers.

Fast-forward to today: Nearly half of the mortgages Freddie Mac has purchased so far this year were to first-time homebuyers—a great number. But more work needs to be done.

prove incentives for this type of lending.

A new approach and a new attitude around affordable lending is required.

We are thinking different in this area and leading discussions among the affordable housing ecosystem on how to make an impact.

THE AFFORDABLE HOUSING CHALLENGE The last time the United States built a large stock of housing was after the conclusion of World War II when soldiers were returning home. A recent Freddie Mac analysis shows that the U.S. is short approximately 2.5 million homes needed to keep up with current demand. From 1968 to 2008, a span of 40 years, there was only one year in which fewer new housing units were built than in 2017. And wage growth is just now keeping up with house price appreciation, for the first time in seven years.

Moreover, existing homeowners, many of them Baby Boomers, are not looking to move up or to move out of their current homes. And frankly, for those that may want to, they face the same challenge as a Millennial looking to be a first-time homebuyer: It’s difficult to find a home they can afford that will also meet their needs.

The impact of years of low wage growth, rising home prices and increasing rents results in consumers saving less for a down payment. And when they can save money, it will not go as far in meeting minimum down payment requirements on a mortgage. Moreover, many borrowers making a lower down payment must take on the added cost of a third-party credit enhancement such as mortgage insurance.

Additionally, lenders have a disincentive to focus on more challenging borrowers with smaller loan sizes. This is because pressure has increased on the way loan officer compensation is paid, along with increased production and fixed costs of making a mortgage. If fixed costs are high, and all revenue is generally a percentage of loan balance, then lenders have considerably less margin on loans with a lower balance. Further, regulations prohibit differential compensation to loan officers, which limits an employer’s ability to im-

MORTGAGE MODERNIZATION By leveraging advanced analytics and working with financial technology companies to source data and verify information, the industry is helping to simplify the mortgage process and ensure certain and final sales in the secondary market. Any efficiency brought into the loan production process, any dollar saved, is a benefit to borrowers. And the benefit is exponentially greater when the efficiency is realized for the lower-income consumer or the inexperienced first-time homebuyer.

The utilization of new digital tools has taken off over the past few years. Every lender is trying to find new ways to control costs while looking for opportunities to better serve a changing customer base. By leveraging data analytics, the mortgage industry can more fully-digitize application processing, speed up underwriting and bring borrowers to the closing table sooner. This also translates to great efficiencies when making loans to low-to-moderate income borrowers.

Not only do these technological efficiencies reduce cost and processing time, they can also greatly reduce lender repurchases. These new technologies are promising, and many are already delivering meaningful results.

MODERNIZED HOMEBUYER EDUCATION AND PREPARATION Borrowers need and deserve education, guidance and solutions to help them prepare for becoming a homeowner. Whether it’s learning about the importance of utilizing credit as a tool, homebuyer responsibility or resources to help borrowers stay in their homes, we’re a trusted partner.

For example, down payment programs are likely to be needed more than ever in coming years as young people look to

purchase their first home. Along with our partners, we are looking at ways to simplify lender adoption, reduce lender and borrower costs, and drive stronger engagement and use of these programs.

Another promising area is leveraging one of the industry’s oldest, most trusted and most respected partners—housing counselors. By enhancing the homebuyer counseling process with digital self-service tools, prospective homebuyers could address barriers to mortgage qualification on-demand and at their convenience. This would allow housing counselors to focus more on troubled areas such as reducing debt, improving credit and establishing better budgeting behaviors. And other innovations will help bring their expertise closer to the mortgage manufacturing process.

The secondary market will be a catalyst to help the industry think different about the affordable housing ecosystem. It touches many points in the system, working with lenders, providing low down payment options for low-income and first-time homebuyers, and working closely with investors, who buy the securities.

The lending industry can also become involved with education and outreach efforts across the company. It can get involved at the community level, assisting families in markets that range from urban to rural, where lenders can work with housing groups, community organizations and everything in between.

In a well-functioning housing ecosystem, real estate professionals, housing organizations, community groups and other stakeholders work together to promote the flow of business and help expand responsible homeownership.

The future affordable lending will require that we all work together from across the ecosystem, think differently about future opportunities, and leverage new tools and resources to make home possible. Lenders should be all for building the future of home through insights, education, mortgage products and business solutions.

All of us. All in. All for home.

HOUSINGWIRE ❱ JUNE 2019 31

2019

YOUNG LEADERS

ENERGIZING THE

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INDUSTRY

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Ankur Agrawal

Bijoy John Janet Jozwik Dan Kenshalo

Lauren Pryor Jonathan Scarpati Ravi Singh

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Craig Austin Adam Baratz Rankin Blair

Boris Kogan Amber Lawrence Adam Liebross

Brad Sivert Christopher Stroud Jon Tallinger

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Melanie Boyajian Patrick Burns Joe Cabrall

Joe Lucido Jessica Maschinski Diana McKeever

Daniel Ticona Frederick Townes Joe Villani

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Joseph Cicali Ross Diedrich Kevin Elliott

Ben Miller Grant Moon Sage Nichols

David Warner Gregor Watson Rich Weidel

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Shane Erskine Jake Fehling Craig Freel

Marie O’Brien Braxton O’Neal Kevin Ortner

Dominica Groom Williams Jake Williamson Devon Yang

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Chase Gilbert Danielle Hale Alec Hanson

John Paasonen Christopher Paliska Will Pendleton

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34 HOUSINGWIRE ❱ JUNE 2019

Rising Stars lead Amherst CHRIS AND JOE WORK TOGETHER TO TAKE THE COMPANY TO NEW HEIGHTS By: Alcynna Lloyd

In just under a decade, Amherst Residential has expanded its portfolio to include more than 23,000 single-family rental homes and employed more than 650 individuals in 26 housing markets across the country.

Although Amherst’s success can be attributed to the hard work of each of its employees, the innovative strategies and guidance of both Christopher Avallone and Joe Negri have taken the company to new heights.

Avallone began his career with Amherst in 2018 as the company’s head of capital management. In less than a year, he was promoted to serve as the co-head of institutional single-family rental.

Within the same year, Avallone’s leadership was responsible for the raising of more than $3 billion of debt and equity capital for the firm, including seven new institutional credit and equity investors.

Avallone’s key to success is simple — lead by example.

“Every business must be learned from the ground up and no task is too small, whether you’re one of our senior leaders or a new analyst,” Avallone said. “This extends to showing respect, appreciation and understanding to all of our partners, both internally and externally, so that everyone our team engages with each day can achieve his or her goals.”

“I believe that the opportunity to continually work with strong leaders and strong teams is invaluable, and I aspire to pay that forward by also being a strong advocate for the junior members of the Amherst family,” Avallone continued. “To me, a successful experience is if our entire team is proud of the platform we’ve built, proud of the goals we’ve achieved together and proud of the

way we collaborated with our clients, counterparties and all team members.”

Negri has been with Amherst for nearly seven years, beginning his career as the vice president of investments for its residential main street renewal business. While in this position, Negri helped Amherst launch its single-family residential practice, aiding the company in its first acquisition of 20,000 homes in $4 billion worth of transactions.

Though Negri’s work ethic is responsible for his professional achievements, he claims his preparation for success began before he even entered the real estate industry.

“Growing up with a support structure that commanded hard work and accountability, I was taught at a young age that everything in life is earned,” Negri said. “My parents fostered an environment that promoted thoughtful decision making because big or small, all decisions matter.”

And Negri has spent his career making decisions that point him in the right direction. After all, success comes when preparation meets opportunity, according to Negri.

“I love my job and my passion for real estate has driven me to be a better observer, listener and learner so that I can improve every day to be prepared for every opportunity,” Negri said. “The last 11 years have been filled with early wake-up calls, late nights and working hard so distractions don’t derail my personal and professional progress toward achieving both personal and business goals.”

Like Avallone, Negri has displayed tenacity in a sector that often demands the nation’s best and brightest. As both of these Rising Stars continue to push the envelope, their accomplishments will truly impact the future of this thriving industry.

HOUSINGWIRE ❱ JUNE 2019 35

2019

Ankur Agrawal Director of Engineering, Tavant LENDING | AGE: 39

The Rising Stars represent the best young leaders in the mortgage industry.

They help run major corporations, and are the entrepreneurs building tomorrow’s great businesses. They work in any and every area of the housing economy: lenders, servicers, investors, and real estate. They come from diverse backgrounds but share one common trait: an outsized impact on the industry and their businesses. All of this – and they are under 40 years old! These are the shapers of our industry – the leaders of tomorrow, and of today.

36 HOUSINGWIRE ❱ JUNE 2019

Ankur Agrawal is truly a Rising Star, and is an original member of Tavant’s consumer lending practice. Agrawal is currently serving as the company’s director of engineering. For more than 17 years, Agrawal has played an instrumental role in the development of Tavant’s VELOX products. Under his leadership, Tavant has worked with lenders to build mortgage technologies including LOS, point of sale and broker and correspondent portals from the ground up. His extensive experience in this field has permitted the company to efficiently mitigate potential risks, and allowed for large scale technology projects to be delivered in a timely manner. He also has extensive team management experience, and has even led teams who have worked on integrations with most commercial LOS systems. In 2018, Agrawal was awarded the Accredited Mortgage Profession specialist designation, and was also recognized for accountability and execution at Tavant’s annual Excellence Awards.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “One habit that has helped me succeed in my career is solution focused thinking.

Instead of dwelling on the problem or the situation, and obsessing over the negatives, shift the focus away from the problems and towards useful solutions. It is easy to find reasons why thing can’t happen, but the real challenge is to discover how and why it can happen.”

Craig Austin

Senior Vice President of Sales and Business Development, ClosingCorp LENDING | AGE: 33

As senior vice president of sales and business development for ClosingCorp, Craig Austin leads the company’s sales organization. In his current role, Austin is responsible fore developing customer acquisition strategies and building and maintaining relationships with leading loan origination systems and industry settlement service portals. In less than one year, Austin closed more than a dozen high-impact deals with large lenders and partners, resulting in business and revenue momentum that has exceeded expectations and reach, both for ClosingCorp and its partners. Austin achieves this success by incorporating his product and solution knowledge to help increase efficiencies within the entire real estate ecosystem. His leadership has helped build ClosingCorp into one of the nation’s leading third-party fee provider. The company has grown to encompass more than $10 million in sales since Austin joined the company back in 2017.

Under his leadership, ClosingCorp also grew its lender client base, seeing an increase of more than 50% and a volume increase of more than 15% – all of this, even in a down market.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “To be a true leader, you must know your limitations and be able to trust the people around you. If you view others as trustworthy, chances are they’ll reciprocate. Give others all the help they need from you, then trust them to execute.”

Adam Baratz

Vice President of Customer Success, Qualia REAL ESTATE | AGE: 27

Adam Baratz joined Qualia when the company was six months old and has had the opportunity to work through every facet of the Qualia organization. Today, Baratz serves as Qualia’s vice president of customer success. In that role, he manages both Qualia’s support organization as well as engagement with Qualia’s value-added services features, Connect and Marketplace. Since launching these two services last year, they have become pivotal parts of the Qualia platform that now processes approximately 10% of all real estate transactions. Baratz’s teams are responsible for supporting the company’s customer base from the moment they sign up with Qualia. Under his leadership, Qualia has transitioned more than 1,000 title and escrow companies across the U.S. onto the Qualia platform. To ensure that its members are primed for success, Baratz oversees Qualia’s support, onboarding, account management, and renewals teams. And even outside his work with Qualia, Baratz seeks to improve the real estate industry, and co-founded the Manzanita co-op living house in San Francisco.

WHAT IS THE BEST ADVICE YOU HAVE EVER RECEIVED? “My father has always told me that real leaders cultivate people, the rest will follow suit.

One of the greatest joys of my career has been to help my peers become leaders in their own right. Identify people’s strengths and challenge them to become even better.”

Rankin Blair

Managing Director of Operations, Lima One Capital LENDING | AGE: 31

Rankin Blair started his career in the lending industry as an underwriter, and employee No. 7, at Lima One Capital back in 2013. But he quickly moved through the ranks, and within a year, was promoted to director of operations, a position he has held since as he has worked to promote visibility through internal reporting and software systems. Blair helped create a roadmap for logistics that would support the company’s growth by implementing institutional-grade policies and procedures.

He then helped design and implement Lima One’s loan origination software, before setting his sights on a custom inspection management platform for the in-house servicing of Lima One’s Fix-and-Flip loan program. Now, Blair leads a team of 33 underwriting analysts and the company credit his leadership for contributing to the 1,870% growth it has experienced since he began his operations role in 2014.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “I don’t believe there is a secret formula for success. In my experience, success has been directly related with the level of effort applied to the task. I view strategies to increase efficiency and productivity as work multipliers not shortcuts. When these strategies are coupled with low effort, it is easy to achieve average results, but when they are combined with high effort the results can be truly impressive. To build a great company and achieve huge success there is no substitute for hard work.”

HOUSINGWIRE ❱ JUNE 2019 37

Patrick Burns Co-Founder and CEO, Spruce SERVICING | AGE: 29

Melanie Boyajian Loan Officer, Academy Mortgage LENDING | AGE: 29

Over the last six years, Melanie Boyajian’s production in both volume and units has been growing exponentially. But Boyajian’s focus is not just on numbers, but on the number of lives she touches. In 2018, her first full year as an Academy Mortgage loan officer in Lacey, Washington, she helped a total of 111 families achieve the dream of homeownership in what was, at that time, a very turbulent market. Boyajian gives credit for her success to her extensive knowledge of loan products and particularly VA loans. She has worked hard over the years to earn the trust of local builders and has become a preferred lender for many of them. She devotes her time, talents and weekends to her referral partners, clients and her co-workers.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “My young age was definitely an obstacle that I had to overcome to succeed in this industry. When I was looking into becoming a loan officer at age 22—after only six months as the office receptionist straight out of college—my industry peers and upper-level management voiced mixed feelings about my ability to succeed in a fully commissioned position being so young in an older professional industry. Some saw my work ethic and ability to connect with people as a recipe for success, while others urged me not to take on the new role because they believed real estate agents, clients, and other referral sources would equate my age with lack of experience.”

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Under Patrick Burns’ leadership, Spruce has grown to a team of more than 50, raised $20 million in investment from leading investors including Bessemer Venture Partners, Omidyar Network and Collaborative Fund and opened two new offices in Texas and California – all in a little over two years. In 2018, Burns and his team introduced Spruce’s digital closing dashboard, taking a big leap towards making real estate transactions more delightful for everyone involved.

Homebuyers can read closing documents on their own time, directly link their bank account to pay closings costs, rather than dealing with risky wires or paper checks and schedule a mobile notary to sign closing documents on their schedule and at a place that’s convenient for them. On the heels of these product enhancements and the team’s commitment to a customer-centric experience, Spruce had 20% month-over-month transaction volume growth last year.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “By taking at least three customer calls a day, I stay tuned into our customer’s needs, pain points and success stories! This helps me make better high level decisions on everything from the product roadmap––such as new features to prioritize and optimize––to deciding where we need to hire or provide training to improve the customer experience. One of our core values at Spruce is collaboration.”

Joe Cabrall

Vice President of Correspondent Operations, CMG Financial LENDING | AGE: 31

Before starting his career in the mortgage industry, Joe Cabrall learned two things: how to treat people the way they would like to be treated and how to work hard. The cornerstone of the mortgage banking industry is service, and Cabrall learned early on that personal service makes all the difference. Cabrall started at CMG Financial the summer before his senior year of high school and has worked his way up in the company, now serving as the vice president of correspondent operations. He helped build out CMG’s correspondent channel to become a service-driven, well-organized, efficient channel. Correspondent owners and heads of capital markets at firms around the country trust Cabrall as the “go-to guy” to find a creative solution and an all-around mortgage consultant. In 2017, Cabrall co-founded CMG Securities, with AJ George, where he is the executive director.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “Be transparent and thoughtful in your approach. At the end of the day, we’re in a relationship business and the one way to surround yourself with great people and be successful is by being real. At CMG, we’ve always believed in the open door policy and it’s something that I’m passionate about. ‘People helping people’ is what we call it and it’s not just what you do, it’s the way you go about it.”

Joseph Cicali CEO, ARIVE

LENDING | AGE: 38

With the business transformation that Joseph Cicali sparked while at Garden State Home Loans, he was asked to represent the digital mortgage industry as a speaker and thought leader at the 2018 Salesforce Annual Conference, Dreamforce, held in San Francisco. Cicali spoke to 200,000 attendees at the conference about how his technological development has leveled the playing field for independent loan originators. As the concept of ARIVE came to life, Cicali worked closely with exclusive partner Association of Independent Mortgage Experts to provide his thought leadership as a speaker at their conferences, including AIME’s National Conference Fuse, where the audience includes thousands of independent mortgage brokers. While utilizing these conference platforms as a thought leadership space for ARIVE, Cicali’s goal is to connect with brokers on a more personal level in order to understand their needs, while also providing knowledge about their industry.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “After my six-year break, I knew that coming back would have challenges that I would need to face. This included accepting that people would have a hard time agreeing with my new ideas, I made it my goal to push through and provide hard data to prove that these ideas would further our initiatives.”

Ross Diedrich

CEO & Co-Founder, Covered Insurance Solutions SERVICING | AGE: 30

As the CEO and founder of Covered Insurance Solutions, Ross Diedrich’s high return on investment strategy has allowed the B2B2C company to serve a $100B marketplace. Under his leadership, Covered has now run 100 million home insurance estimations representing over $22 trillion. The certified financial analyst has also architected a complex multichannel product launch that has yielded world-class partners across the servicing, lending and real estate marketplaces. Diedrich’s diverse senior team of experienced insurance, startup, scale-up and insurance executives have propelled covered through a four-stage, multi-year plan. In 2019, the company was recognized as a HousingWire Tech100 winner, highlighting the success of its API and point-of-sale technology.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “Maniacal prioritization. Every night, I review team progress, issues and company milestones. From there, I create a digital task list of priorities for the next day, paying special attention to high-priority initiatives, home runs and cross-department contingencies. In the morning, I focus on the priorities I’ve determined for the day, accomplishing as much as possible before the rest of the team shows up. Once they arrive, I have a concise list of action items and cross-department dependencies that I address to enable our company to move fast and make meaningful progress.”

Kevin Elliott

Senior Vice President of Loss Mitigation and Client Relations, Rushmore Loan Management Services SERVICING | AGE: 38

Kevin Elliott started his career early in his life. He began working for HSBC at the age of just 18 while making his way through college. By the time he was 25, Elliott was managing a team of 60 employees as vice president of loss mitigation. Then, just two years later, he was overseeing a team of 90 as the vice president of the foreclosure department. In 2011, Elliott joined Rushmore Loan Management Services, where he is credited with helping build the foundation for the company’s servicing platform as it grew from just 45 employees to about 900 during Elliott’s tenure.

Today, as the senior vice president of loss mitigation and client relations, Elliott manages a team of about 130 and is instrumental in building connections with Rushmore’s third-party clients.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “The best habit I ever developed was being the first to volunteer to take on additional responsibilities when someone leaves the organization. Rather than waiting to be asked or waiting to get work reassigned, taking the initiative to raise your hand and show interest takes pressure off of your manager to cover a difficult situation and gives you a chance to grow and gain experience. By doing this throughout my career, I’ve built great relationships and learned that I had a passion for areas of this industry I might never have discovered otherwise.”

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Jake Fehling

Vice President of Marketing, Movement Mortgage LENDING | AGE: 39

Shane Erskine President, OneTrust Home Loans LENDING | AGE: 38

Within a few short years of beginning his career, Shane Erskine was already recognized as being among the top originators nationally. Fast forward to now – as a business owner, Erskine strives to set an example that employees want to follow. He not only recognizes and encourages employee accomplishments, but also provides opportunities for growth and success among his team. In 2008, Erskine began his company when he partnered with his brother to build a successful company that designed and executed custom financing platforms for homebuyers. At that time, this was a first for the market.

Soon, their creative financing solutions effectively stabilized many of these developments. And the company continued to grow despite a difficult mortgage climate, and in 2013 rebranded to become OneTrust Home Loans. Under Erskine’s leadership, OneTrust Home Loans has experienced tremendous success. Since inception, the company has seen 1160% increase in revenue and is now licensed in 35 states with 52 branch locations.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “This business is continually changing, it is vital to remain focused and not let the noise distract you. Staying focused allows you to make quick, prudent business decisions to keep things moving forward. We start with a plan, things don’t always go accordingly to plan and being able to reevaluate and shift direction is key.”

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Jake Fehling, Movement Mortgage vice president of marketing, works with the fast-growing lender’s loan officers to capitalize on their own individuality to enhance their book of business. Fehling helped launch the Movement Marketing Suite in 2018, a game-changer for the company’s loan officers. Under Fehling’s leadership, loan officers were given a robust platform of digital products for lead generation, video emails and automated social posting. Movement’s in-house marketing system, M3, provides downloadable print and digital content at a loan officer’s fingertips. Beyond collateral, Fehling understands how important personal branding can be to a loan officer’s business. Through the marketing department at Movement, loan officers can get one-on-one coaching in personal branding and social media strategy to enhance and improve their own online reputation. Fehling is also a public speaker, writer and host of multiple podcasts.

WHAT IS ONE THING YOU WOULD TELL A YOUNGER VERSION OF YOURSELF? “Take more risks/Act sooner. I tell our loan officers all the time to ‘Just press record.’

Meaning, don’t wait to start the podcast. Don’t hesitate to launch the vlog. Each day you wait, you’re losing a day of influential, entertaining or engaging content that could be in front of borrowers and agents.”

Craig Freel

Senior Vice President of Portfolio Management, RoundPoint Mortgage Servicing SERVICING | AGE: 36

Craig Freel manages RoundPoint’s MSR trading desk and its analytics and reporting team as senior vice president of portfolio management. Freel, a chartered financial analyst, has been with RoundPoint for nine years. He is the architect behind the company’s MSR Exchange, a purchase and sale agreement for flow of purchase by a REIT partner of up to $2 billion per month of conventional MSRs originated through RoundPoint’s co-issue program over the course of two years. He also manages the firm’s secondary marketing capability as it expanded into loan origination and oversees its Homeownership Marketplace, an online portal that allows customers to buy and save on home needs like insurance, home security and landscaping. Some of Freel’s recent accomplishments include a capital raise in 2018 with $94 million in successful preferred equity offering and a debt refinace in 2018, which increased MSR term loan capacity to $650 million. Freel also oversees an MSR Trading desk that is in the top five of annual co-issue volume.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “A lack of long term experience and knowledge. I came into this industry as an outsider, and there can be a big learning curve. Educating myself quickly was what helped me gain credibility in my space and succeed in the sector.”

Chase Gilbert CEO, Built Technologies LENDING | AGE: 30

Chase Gilbert co-founded Built Technologies in 2013 after discovering the frustrations, challenges and pitfalls associated with construction lending. Along with his founding partners, Gilbert saw opportunity to solve a critical problem for the trillion-dollar construction industry by simplifying the complex lending process through technology for lenders, borrowers and builders. As CEO, Gilbert led Built on a rapid rise with record growth. Since 2017, the fintech firm has more than tripled its customer base and managed over $21 billion in construction loan volume from the leading construction lenders across the nation. Under Gilbert’s leadership, Built was endorsed by the American Bankers Association. As a technology expert and entrepreneur, Gilbert is a frequent speaker at top industry events. He served as a panelist at the American Banking Association Real Estate Lending Conference and presented and won “Best in Show” at Digital Lending’s annual conference.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “One of the biggest obstacles we had to overcome in order to succeed was the initial industry education regarding the unique position we sit in. Because we created an entirely new category of technology many lenders needed to understand where we fit into their existing technology landscape and process.”

Danielle Hale Chief Economist, realtor.com REAL ESTATE | AGE: 36

Danielle Hale is a recognized expert in the residential housing market. As chief economist for realtor.com, Hale provides real estate market insight to major media outlets, translating trends to highlight how the data impacts consumers. Hale, who joined realtor.com in 2017, leads the company’s team of analysts and economists to assess and draw meaning from listing trends, search data, lending patterns, and info on demographics and consumer behavior, creating valuable market insight for the industry and the public. Hale began her career at the American Enterprise Institute before joining the National Association of Realtors, where she worked as an economist and policy researcher, overseeing the production of housing market data and managing its tax policy research.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “Tell a story that anyone can understand. Early in my career, I sent a friend a piece I’d published, and I’m sure he thought he was paying a compliment when he told me, “It was great! I didn’t understand a word of it.” I was crushed. Sure, there’s a lot of industry knowledge that I have from my years working in housing, and describing the process of how we are tying together data from a variety of sources to conduct analysis can be complex, however, the end result has to be comprehensible in order for the findings to have real impact.”

Alec Hanson

Vice President of Regional Production, loanDepot LENDING | AGE: 37

Alec Hanson is a popular and dynamic leader within the mortgage industry.

When he started as loan consultant, every year he was nationally recognized as a top 1% loan originator. Now, over his successful 15-year career, he uses his expertise, leadership and passion for the business to drive his managers and loan consultants into becoming top-performers. Most recently, Hanson was promoted to senior vice president and divisional manager of loanDepot’s newly created Pacific Southwest division. In this role, Hanson expands his duties beyond the supervision of the company’s Southern California locations to include oversight into the production and growth of the company’s Arizona, New Mexico, Colorado, Wyoming, Utah, Hawaii and southern Nevada branches. Prior to this, he led explosive growth throughout Southern California growing the mortgage volume there by over 400% in the last seven years.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “I have trouble seeing one thing I had to overcome to succeed. It’s been all the things. This industry is hard, it’s constantly changing and ever demanding. There is always something to overcome, some new challenge to take on, some new thing to learn and adapt to. But it’s what I love about the business and our industry. I had to overcome my insecurities as a 23-yearold, first-time loan officer. And all I can say, is bring on the next one!”

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Janet Jozwik

Managing Director, Head of Data Analytics and Credit Modeling, RiskSpan INVESTMENTS | AGE: 34

Bijoy John

Vice President of Retention Marketing, NewRez LENDING | AGE: 34

Named vice president of marketing in 2018, Bijoy John has been instrumental in scaling NewRez’s retention business by more than 200%. John’s insistence on viewing efforts from the customer’s perspective to drive engaging conversations has resulted in stellar results.

Under his leadership, NewRez has been able to maximize origination opportunities while delivering its best-in-class recapture results. In the last year alone, the company boarded more than 12 new loan pools and increased its lead volumes by more than 400%. Prior to joining NewRez’s team, John worked as the director of marketing at Freedom Mortgage. While with the company, John was responsible for starting and scaling a remarketing vertical, which drove record numbers to the call center while increasing efficiency by opperating at 25% of existing program costs.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “The best piece of advice I’ve ever received is to be a servant leader. The main goal of a servant leader is to serve other’s needs, especially team members, before your own.

This philosophy helps you acknowledge the perspectives of others, provide them the support they need to meet their work and personal goals, and build a sense of community. This has helped me tremendously to build higher engagement, more trust, and stronger relationships with team members and other stakeholders while developing and mentoring people to pursue excellence, innovation, and growth.”

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Janet Jozwik is quickly becoming a fixture on the structured finance conference circuit, and her vast range of specialized knowledge is solidifying her place as a thought leader in the space. With an MBA from the University of Chicago Booth School of Business and a BA in economics from Johns Hopkins University, Jozwik is a force to be reckoned with. After starting her career at Fannie Mae, where she specialized in single-family credit risk analysis, she moved on to RiskSpan five years ago, where she works as managing director and head of data analytics and credit modeling. Jozwik, who manages both the data analysis and quantitative modeling teams, has become the firm’s subject matter expert on all things related to mortgage credit risk.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “While a junior analyst, I had a manager who told me to always ask for context related to any request for analysis, whether from a customer, a colleague or even my manager himself. I needed to understand the why behind a request in order to do my job well.

Simply asking why accelerated my ability to learn from those around me – colleagues who had years of experience and a tremendous depth of knowledge about housing finance, and where our firm fit in the industry. By understanding why, I grew from simply responding to requests to focusing on problem solving.”

Dan Kenshalo

Vice President of Data Science, Black Knight LENDING | AGE: 40

As vice president of data science at Black Knight, Dan Kenshalo plays a key role in building Black Knight’s emerging data science practice and technical aspects of new data science products. In the last year, Kenshalo helped shepherd the development of Black Knight’s Rapid Analytics Platform, a virtual analytics laboratory that provides a single, workspace to source data, execute queries and train machine-learning models. Kenshalo was also responsible for the development of innovative container and analytics-based technologies for Black Knight, some of which allow Black Knight’s clients to specify and pre-install all the dependencies needed for training machine-learning applications. Kenshalo also authors an internal data science blog that helps to educate the company’s nearly 5,000 employees in the U.S. and India about this key part of Black Knight’s business.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “Change is never easy, and proposing new methods to established processes, technologies and approaches to problem-solving can be met with resistance. Cultivating relationships, developing partnerships and showing the value of new approaches through hands-on demonstrations have proven effective at building consensus.”

Boris Kogan

Senior Director and Associate General Counsel, Ellie Mae LENDING | AGE: 36

As the senior director and associate general counsel of Ellie Mae, Boris Kogan is responsible for the legal negotiation and management of Ellie Mae’s most strategic partnerships. Kogan has subject matter expertise in a wide variety of corporate matters, including SEC reporting, corporate governance, mergers and acquisition and much more. Currently, Kogan oversees a portion of the company’s commercial contracting, which consists of SaaS licensing, business development and partnership, supplier and non disclosure agreements. Prior to joining Ellie Mae, Kogan managed a legal department of a commercial-stage public medical device company. In this role he advised senior management and the company’s board of directors on matters involving corporate governance, securities regulation and risk management.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “Believe it or not, the one habit that has been most beneficial to my career is promptly responding to questions. The simple act of picking up my phone or thoughtfully replying to an email is more appreciated by colleagues, both internal and external to my business, then anything else that I do. This habit also allows me to join and influence business decisions as they happen, rather than attempting to modify or unwind them after the fact; something few business professionals enjoy from their attorney.”

Amber Lawrence

Associate Director of Education Operations and Programming Mortgage Bankers Association LENDING | AGE: 38

Amber Lawrence is the associate director of education operations and programming at the Mortgage Bankers Association. As a core member of the organization’s education leadership team, Lawrence manages its professional certification and designation programs.

Working alongside the CMB Leadership Society, Lawrence currently oversees the curriculum of more than 730 active CMBs. Additionally, Lawrence is responsible for the MBA’s other high profile residential and multifamily certification and designation programs as well as third-party certification programs. Over the past three years, the MBA has conferred 445 designations on industry professionals through these programs. Across all designation programs, Lawrence’s leadership helped MBA Education achieve a 91% satisfaction rating in 2018.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “I have been fortunate enough to be raised by a village of parents, educators, mentors and successful professionals. The resounding theme that has best shaped both my personal and professional life is that, ‘People may not remember what you said or what you did, but they will always remember how you made them feel.’ It is a solid reminder that no matter how successful you become or how many accolades you receive, you can always take the time to encourage, counsel and support the people or causes who seek your help.”

Adam Liebross

former Senior Vice President of National Sales Banc of California LENDING | AGE: 37

As the former senior vice president of national sales at Banc of California, Adam Liebross led the residential lending sales team for the bank’s wholesale, non-delegated and delegated channels. Liebross was recruited to grow the firm’s residential lending portfolio and non-QM production. With almost all of the bank’s residential loan volume coming from the retail channel, when he joined the company in 2016, Liebross was tasked with expanding and diversifying to wholesale and correspondent channels. Under his leadership, the growth was rapid. For the company, the second half of 2016 saw more non-QM production originating from the wholesale and correspondent channels than the bank’s own retail channel. And by the second half of 2017, almost all of the bank’s residential production came from broker/ banker sources. In 2018, Liebross and his sales team funded more than $1 billion in prime, non-QM loans.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “Change is the only constant in life and is exponential in the mortgage industry. At an early age, I learned this valuable lesson when Bank of America closed its Wholesale Division. I had worked hard for years to build a territory from scratch and become the top account executive on the West Coast. Overnight it came to a full stop. The the required flexibility will continue to be crucial to my success.”

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Jessica Maschinski Senior Counsel, Roostify LENDING | AGE: 32

Joe Lucido

Vice President of Closing and Client Experience, United Wholesale Mortgage LENDING | AGE: 28

United Wholesale Mortgage broke its own company record by doing $41.5 billion in loan volume in 2018. That growth was made possible by leaders like Joe Lucido, UWM vice president of closing and client experience. Lucido has experienced a meteoric rise through the company, earning five different promotions in his time at UWM. He now leads a team of 350 people with a drive and determination that serves as an example for all of UWM’s 3,000 team members. UWM’s Processor Assist tool was Lucido’s vision. Processor Assist gives brokers the ability to work more efficiently by taking time-consuming tasks off their plates. Lucido created the workflow, process and documentation for Processor Assist. He also built the Processor Assist team, which started as three people and has since grown to a team of more than 40. In 2018 alone, UWM handled more than 43,000 Processor Assist requests for its clients.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “Know where you want to go and be relentless about getting there. Early in my career, I had the relentless part down. I knew I was willing to outwork everyone, but often times my effort was scattered and pulling me in different directions. It wasn’t until I learned to have a clear vision of what I wanted for myself and my teams that I started to really become successful. There will always be distractions. The trick has been to cut through the noise and focus.”

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Jessica Maschinski moved to the Bay Area to join Roostify back in 2017. After the move she continued in her position as a compliance analyst working on her ongoing campaign to modernizing and improving accessibility. Maschinski also performed critical, foundational work that helped to create Roostify’s risk-management program. As she grew within the company, she then turned her focus to implementing third-party and privacy risk management. In her role at Roostify, Maschinski also assisted with audits and product reviews, in addition to building the internal control monitoring and testing program for the compliance team. Early on, Maschinski played a critical role in Roostify’s evolution and growth in both security and compliance. She eventually even assisted in the preparation of a series B funding request that ultimately resulted in a $25 million funding round. Her continuous contributions to Roostify resulted first in her promotion to director of compliance, and now to her position as senior counsel for the digital mortgage platform provider.

WHAT IS THE BEST PIECE OF ADVICE YOU’VE EVER RECEIVED? “Someone once said, ‘If you think you’re green you’ll grow, if you think you’re ripe you’ll rot,’ and that really stuck with me. We can always learn, develop and get out of our comfort zone – nothing good happens there anyhow.”

Diana McKeever

Vice President and Technology Product Manager, PrimeLending LENDING | AGE: 39

Diana McKeever, PrimeLending’s Vice President, Technology Product Manager, is a 16-year mortgage industry professional with a relentless focus on developing technology solutions that create a positive and uplifting home loan experience. Recently, the company made a significant investment toward this goal having agreed to work with Blue Sage Solutions to develop and implement a new loan origination system that can deliver a streamlined digital mortgage.

McKeever is an integral part of the leadership team that championed this investment and is charged with guiding PrimeLending through this game-changing transition and ensuring a successful transformation. McKeever is someone who truly cares about the positive impact PrimeLending has on the lives of others.

She offers her customers and colleagues a wonderful blend of compassion, warmth and technical prowess that inspires confidence and goodwill and she is a true emblem of PrimeLending’s people-centric and innovative culture.

WHAT’S THE BEST PIECE OF ADVICE YOU’VE EVER RECEIVED? “One of the most valuable pieces of advice I’ve received is to always remember that my job is not about the tasks involved, it’s about serving people. With the rapid advancement of technology, I feel like it’s important to continue integrating and sharing the human element in our work.”

Ben Miller

President and Chief Operating Officer, SimpleNexus LENDING | AGE: 39

Since joining SimpleNexus in 2014, Ben Miller has helped take the company to one of the top digital mortgage platforms in the industry, one that is currently used by more than 20,000 loan officers and 15 of the top 25 retail lenders in the U.S. Under Miller’s leadership, SimpleNexus’ revenue doubled in 2018 and grew 1,405% over the past three years. During 2018, SimpleNexus raised $20 million to fund the company’s growth and expansion, which Miller oversaw. That expansion included growing the number of employees at SimpleNexus from 35 at the beginning of 2018 to more than 100 by the end of the year. Miller also managed operation activities in 2018, which included the company moving into new head headquarters, announcing an official integration partnership with Ellie Mae, and adding 60 new enterprise clients. The company just wrapped up its inaugural user conference in early February of this year in which Miller delivered a major launch announcement of SimpleNexus’ new disclosure management solution. The new solution enables loan officers and borrowers to review and sign disclosure documents seamlessly through the SimpleNexus mobile platform. The new disclosure management automatically syncs in real-time with the lender’s LOS and includes disclosure tracking features.

WHAT IS ONE HABIT THAT HAS HELPED YOU TO SUCCEED? “Having the humility to appreciate I don’t know it all and constantly seeking to learn more.”

Grant Moon CEO and Founder, Home Captain REAL ESTATE | AGE: 39

Grant Moon is the founder and CEO of Home Captain, one of the fastest growing real estate technology companies in the country. Upon returning from a tour of duty in Iraq and applying for a VA loan to purchase a home, Moon recognized the difficulties facing borrowers. In an effort to address these issues, Moon created a digital platform that streamlines the origination process, aiding buyers, sellers, real estate agents and lenders in the complex process of purchasing and selling homes. Moon has since received investments from Second Century Ventures, the investment arm of the National Association of Realtors. Additionally, Moon has created national partnerships with Berkshire Hathaway, Exit Realty, Fidelity and the U.S. Department of Defense, to further consumer education and provide technology solutions.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “My first assignment after being commissioned as an officer in the Army was to lead a 40-man rifle platoon. These men had just gotten back from a deployment. The platoon sergeant, told me, ‘Sir, when you introduce yourself in front of the formation, be authentic.

Show them that you will work harder than them. Hold high standards for yourself and the platoon, and don’t ask them to do anything that you are not willing to do as well. And then, they will want to follow you instead of being ordered to follow you.’”

Sage Nichols

Senior Leader of Client and Business Development and Valuation Technology, CoreLogic SERVICING | AGE: 39

When CoreLogic acquired FNC in 2016, Sage Nichols joined the company as its vice president of sales and became a valuable team member at CoreLogic.

While in this position, Nichols was instrumental in strategizing and successfully merging the two sales team into a single division – one from CoreLogic’s acquisition of FNC in 2016 and another from its acquisition of Mercury in 2017.

Nichols developed a vision for the new line. Since then, Nichols has been promoted to the position of senior leader of client and business development and valuation technology, where she leads a sales team responsible for more than $100 million in annual revenue. As part of CoreLogic’s executive team, Nichols has played a key role in shaping the collateral valuation solutions division, and between 2017 and 2018 helped lead initiatives resulting in strong organic growth for the platform business, increasing revenues an average of 12% over the last two years.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “Assume positive intent. Although it’s a common piece of advice, a colleague said it to me while discussing a challenging situation. Ever since, it has helped me change my perception of various circumstances and allowed me to come up with more collaborative, open-minded solutions. The advice has also helped me provide more meaningful and constructive feedback to members of my team.”

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Braxton O’Neal

Senior Manager of MI Pricing, Genworth Mortgage Insurance LENDING | AGE: 30

Marie O’Brien

Director of Compliance, Senior Associate, Mortgage Quality Management & Research, Abrams Garfinkel Margolis Bergson LENDING | AGE: 36

Marie O’Brien serves as director of compliance for mortgage quality management and research and senior associate in the compliance department of Abrams Garfinkel Margolis Bergson. In her roles at MQMR and AGMB, O’Brien provides mission-critical compliance advice and guidance to mortgage lenders and brokers of all sizes on a variety of federal and state compliance, transactional and litigation matters including RESPA, Regulation Z, Regulation X, Truth in Lending Act, Fair Lending Act, Dodd Frank, loan officer compensation, predatory lending, disclosures, high-cost limitations and licensing.

Throughout her tenure, O’Brien assisted both MQMR and AGMB in building out their respective mortgage compliance platforms and offerings, which include AML audits, monthly compliance services, compliance audits, development of mortgage compliance policies and procedures and advertising and marketing compliance reviews.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “My mother once told me not to wish my life away. I think about this statement often, as it’s so simple and yet relevant to so many situations - particularly when trying to balance a professional life with a young family and worrying about future issues, events, etc. In today’s environment, it’s easy to focus on the next big thing rather than staying present.”

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In 2018, Braxton O’Neal began leading the product development team at Genworth Mortgage Insurance.

There, he championed the creation of a product development council – a cross-functional team responsible for vetting, building and launching new products and services. Under his leadership, Genworth introduced two new, transparent pricing variables to traditional rate cards: number of borrowers and debt-to-income ratio. This was the first material change to rate card pricing structures in more than five years for the company and allowed Genworth to more effectively price for the riskiness of a loan and enabled the company to offer borrowers the most accurate rates. These two variables directly impacted the pricing of roughly $60 billion of mortgages written in 2018. Midyear, O’Neal was charged with leading a newly-created pricing team. He and his team, were instrumental in the development and execution of Genworth’s overall 2018 pricing strategy and resulted in the launch of the company’s new risk-based pricing engine, GenRATE. WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “Working smarter, not harder is a frame of mind/habit I’ve practiced and preached throughout my entire career. Action for the sake of action is wasted time and energy.

Taking a step back and being deliberate about what you are doing pays dividends.”

Kevin Ortner

President and CEO, Renters Warehouse INVESTMENTS | AGE: 35

Kevin Ortner is the president and CEO of Renters Warehouse. Ortner joined the company back in 2009 when he opened the very first Renters Warehouse franchise in Phoenix. But in the years since Ortner became CEO, he did something that no other Renters Warehouse shareholder before him had ever done – he reinvented its growth and operations model to scale faster than ever before. Ortner added thousands of properties under management through strategic acquisitions, partnerships and takeovers. Today, Renters Warehouse manages more than $3 billion in residential real estate and serves more than 14,000 investors across more than 22,000 residential homes over 42 markets and 25 states. In fact, in December 2018, Renters Warehouse announced the acquisition of OwnAmerica. With this acquisition, Renters Warehouse created an entirely new category in real estate by changing how people invest. With the business now offering an end-to-end solution for real estate investors, Ortner is working to make real estate investing accessible to everyone.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “Network, network, network. This industry is a small community of great professionals.

Getting to know as many people as possible on a personal level and understanding how we can help each other and the industry grow is so important to success.”

John Paasonen Co-Founder and CEO, Maxwell LENDING | AGE: 40

John Paasonen is the co-founder and CEO of Maxwell, where he leads a VC-backed fintech team that serves over 140 mortgage lenders nationwide. Under his leadership, Maxwell has facilitated over $20 billion in mortgage volume, more than tripling the company’s size every year. Prior to Maxwell, Paasonen spent six years leading various partnerships and businesses at American Express, resulting in a 75% increase of the company’s Net Promoter Score. Additionally, Paasonon is the co-founder of Excellence in Giving, one of the nation’s first philanthropic advisory firms. Since launching in 2003, EIG has facilitated over $300 million in charitable gifts from generous families and foundations.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “We started Maxwell as borrowers who were frustrated with the experience of getting a mortgage. While I’ve spent my career in consumer credit and fintech, I was a newbie to the mortgage industry. But what started as a disadvantage ultimately became a critical component of Maxwell’s success. Very early on, I had to exhibit a high degree of empathy for loan officers, processors, underwriters and mortgage leaders because I didn’t have a deep understanding of their work. We spoke to well over 1,000 mortgage professionals before launching our software. We brought packs of Red Bull and sat side-by-side with a number of mortgage professionals to deeply understand their pain points.”

Christopher Paliska Regional Sales Manager, New American Funding LENDING | AGE: 27

One of the top loan originators in the country, Christopher Paliska has risen through the ranks quickly at New American Funding. Paliska began his career with New American in the call center as a customer service representative. But after just a few months, Paliska was quickly promoted to loan officer. In his first year of originating, Paliska funded more than $36 million in volume. Then in 2016, Paliska became co-branch manager of the company’s Anaheim branch. During his time in Anaheim, Paliska funded a total of $300 million in mortgage volume. Currently, Paliska has taken on two roles, serving as both the branch manager for the Irvine Pacifica branch as well as the regional sales manager for the Orange County region. In addition to bringing in nearly 40 new loan officers, Paliska has continued originating high volumes. In 2018, Paliska funded 138 loans for a total of $50.6 million in volume.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “Being one of the youngest people in the industry (21 when I started) was something I had to overcome in earning the trust and respect of referral partners, borrowers and especially loan officers I manage with the average age being double mine. Finding a unique value add proposition to stand out was mission critical and hard to overcome from scratch and was along development in finding that differentiator and building those systems out.”

Will Pendleton

Senior Managing Director, Non-Agency Segment Manager, Home Point Financial LENDING | AGE: 40

Will Pendleton has 16 years of diverse mortgage industry experience across all production channels. Pendleton started the retail division for CBC National Bank back in 2010, where he originated, hired and trained a team of loan officers, and became the No. 3 ranked national lender on the Zillow Mortgage Marketplace. Pendleton joined Caliber Home Loans in 2011 as a wholesale regional, covering the Southeast. He helped build a high-performing team of account executives that eventually funded $50 million a month. From that role, he transitioned to vice president of TPO Strategy where he built out the non-delegated delivery channels for mid-sized correspondent lenders, helping to establish the foundation of the platform that led to Caliber’s wholesale and correspondent growth. Pendleton joined Home Point Financial in September 2018, where he led efforts to launch Home Point Edge, the company’s non-agency lending platform in February 2019.

WHAT IS ONE THING YOU HAD TO OVERCOME TO SUCCEED IN THIS INDUSTRY? “I’ve learned to embrace change. Change management doesn’t come natural to most of us and it is an area where I’ve grown a lot over the years. Our industry is nuanced and ever evolving. Change is a constant in my life, and I most enjoy driving and participating in transformational initiatives designed to improve the customer experience.”

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Jonathan Scarpati

Vice President of Wholesale Lending, Finance of America Reverse REVERSE | AGE: 38

Lauren Pryor Partner, Mayer Brown SERVICING | AGE: 39

Lauren Pryor is a partner at the nationally renowned law firm of Mayer Brown, where she serves as co-head of the financial institutions mergers and acquisitions group. Pryor focuses her practice on counseling clients in M&A, corporate and business transactional matters in the residential mortgage industry, including advising publicly held and private companies involved in mergers, acquisitions and divestitures and transfers of assets. Pryor is a Rising Star in a legal and industry specialty that has been dominated by men for decades. There are not a lot of women running material stock and asset acquisitions in the mortgage industry – Pryor is one of them. Purchases and sales of mortgage companies in stock, asset transactions and sales of mortgage-related assets and loan servicing agreements and technology outsource transactions fall within her transactional wheel house. Recently, Pryor represented a multinational banking institution in multiple acquisitions and sales of mortgage servicing rights that totaled more than $70 billion.

WHAT IS ONE THING YOU WOULD TELL A YOUNGER VERSION OF YOURSELF? “‘OK kiddo, get comfortable being uncomfortable.’ I would advise my younger self to take more risks and reach beyond my comfort zone. Looking back, I have grown both professionally and personally when taking on new challenges that require perseverance, creativity and a willingness to be uncomfortable.”

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Jonathan Scarpati, vice president at Finance of America Reverse, is the leader of FAR’s wholesale division, which has been the top wholesale company in the reverse industry for eight years running. Scarpati’s team consists of a specialized group of high-level account executives and experienced sales support personnel, who are focused on developing strong partnerships with clients. Scarpati focuses on providing best in class operational support and bringing a white glove approach to the complex world of reverse mortgages. He has been a key instrument in the company’s overall success and his leadership within the company is a driving force behind the supportive culture that allows FAR’s team fosters. Scarpati and his team reach for the opportunity to go above and beyond for all the company’s partners. Scarpati is a 15-year veteran in the reverse mortgage industry. He created a niche for himself by training wholesale partners to become mortgage bankers for the reverse mortgage product.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “The more you listen, the more you learn. When you listen rather than talk, you are giving a gift to the person you’re engaging with. Especially when you give that person your undivided attention and retain what they are saying. Listening is a powerful relationship-building tool and helps create bonds between people.”

Ravi Singh

Chief Product and Technology Officer, Auction.com REAL ESTATE | AGE: 39

Ravi Singh is many things – a real estate investor, an entrepreneur, a technologist, a product strategist and a data expert – and he is now parlaying these specialties to elevate Auction.com’s business model. In his current position, Singh strives to help buyers and sellers to maximize their disposition returns. In the year that he has been with Auction.com as its chief product and technology officer, Singh has used his acute understanding of markets and trends to power the company’s growth. Singh also serves as a technology advisor for several companies including GrubHub, KKR and Campden partners. He has also launched a few of his own initiatives in the technology space and holds a patent for large-scale advertising deployment on Wi-Fi networks as well as a patent pending for a product that scans the web to see if a company is violating the brand standards of another entity.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “There are two habits I’ve developed that work together to help me succeed: relentless focus and consistency. Focus lets me target the right problems and opportunities, while consistency allows me to attack these challenges day-in and day-out, tirelessly.

Together they let me deliver on the maxim: Success, isn’t guaranteed – it’s earned every day.”

Brad Sivert

General Manager and Head of Mortgage, realtor.com REAL ESTATE | AGE: 39

With more than 17 years of experience in the digital lending space, product development and marketing and UI/ UX design, Brad Sivert has built his career on empowering consumers to make smart financial decisions in today’s digital age. His role as general manager and head of mortgage at realtor.com enables him to apply both his passion for innovation in the online and mobile space and his background in design thinking, UI/UX design and fintech to help people find the right home for them. While many homeowners and buyers don’t know the specific terms of the technology they are looking for from a mortgage lender, they increasingly value and require efficiency. At realtor.com, Sivert is helping create a seamless, efficient and enjoyable online experience when it comes to financing. Sivert and his team create home financing tools, resources and partnerships that are essential to supporting the company’s mission. Sivert has directed and inspired the company’s innovation in design, products and resources that empower home shoppers.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “Embrace failures and celebrate wins. Sure, the latter is easier, but embracing failure is a better trait. Everyone fails, it’s inevitable, but with every failure comes an amazing learning opportunity. So, don’t be afraid to fail, and if you do, embrace it, learn from it and move on. That is true success.”

Christopher Stroud Co-founder and Chief of Research, HouseCanary REAL ESTATE | AGE: 32

Christopher Stroud is a relatively young pioneer when it comes to the real estate industry. At only 27 years old, he partnered with CEO Jeremy Sicklick to found HouseCanary in 2014. Now, as co-founder and head of research, Stroud has led the company in creating the most accurate predictive analytics in the industry, within a 2.5% median absolute prediction error. Stroud has been instrumental in leading the development of HouseCanary’s proprietary models used to value real estate. Stroud, using his previous experience as an economist and his dissertation research on dynamic models of financial risk, led his team at HouseCanary to create and implement this technology. Stroud has grown HouseCanary’s machine learning, dynamic modeling and cloud computing capabilities to be among the most comprehensive and accurate in the industry. HouseCanary clients now include some of the largest financial institutions, including the top five buyers of residential whole loans on Wall Street, three of the largest Wall Street investment firms and four of the top five single-family rental companies.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “Life changing opportunities are rare, and should not be missed when they do come along.

Learn how to recognize these opportunities, and do not be afraid of the challenges and unknowns that will come with pursuing them.”

Jon Tallinger Chief Growth Officer, Class Valuation LENDING | AGE: 39

In 2009, Jon Tallinger was working as an independent fee appraiser in Michigan when he decided to join Class Valuation as its very first employee.

Over the last decade, he has served as chief appraiser and national sales director for the appraisal management company before assuming his current role as chief growth officer. Thanks in part to Tallinger’s commitment, Class Valuation has seen exceptional growth in recent years, growing into a top five AMC and seeing growth of 34% in 2017 and 36% in 2018 – a trend it is on pace to match this year. If fact, Class Valuation predicts it will surpass 40% growth in 2019. As Class Valuation positions itself for the future of the collateral valuation space, Tallinger is committed to carrying out excellence in customer service and speed while thoughtfully exploring new ways to innovate the space for the ultimate benefit of lenders and their borrowers. Tallinger is recognized by his colleagues for his commitment to delivering excellent and speedy customer service while thoughtfully exploring new ways to embrace innovative practices that will benefit lenders and their borrowers.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “The one habit that has helped me to succeed is to maintain a positive attitude.

Things are going to go wrong. Life throws you curveballs that you weren’t expecting.

Learning to adapt on the fly and stay positive regardless of the situation is essential.”

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Frederick Townes Chief Technology Officer, NestReady LENDING | AGE: 39

Daniel Ticona

Manager of Single-Family Affordable Lending Strategy and Policy, Freddie Mac SERVICING | AGE: 39

Daniel Ticona is the manager of single-family affordable lending strategy and policy for Freddie Mac, responsible for the design and execution of single-family activities related to affordable housing preservation under Freddie Mac’s Duty to Serve plan. With nine years of experience working at Freddie Mac and almost 20 years total working in the mortgage industry, Ticona has successfully driven large, complex projects to completion on aggressive timeframes, and requiring extensive collaboration and communication among internal and external stakeholders. In his role within the affordable lending team, Ticona exemplifies managerial behavior that is in alignment with Freddie Mac’s cultural beliefs. Communicating diplomatically and honestly to drive greater clarity and understanding on current projects, he also serves as a resource for Freddie Mac’s internal and external stakeholders.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “Silence, brevity and asking a thoughtful question are three powerful tactics to tactfully introduce new ideas effectively. She had observed my enthusiasm and eagerness to share ideas and thoughts in meetings or other discussions. I used to share ideas at every opportunity that arose. So, I adjusted my approach and I have found that others are more eager to hear your opinion when you are quiet.”

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Frederick Townes has shown his leadership an intituion in that he has founded multiple successful companies in the real estate and mortgage industries over the last decade. Townes currently serves as the chief technology officer of NestReady, a digital home buying platform for mortgage landers that he helped found. Previously, Townes was co-founder, chief technology officer and president of Placester, a marketing suite that uses property data to deliver websites, CRM, lead generation and content automation to more than 400,000 real estate agents. During his time at Placester, Townes helped lead the company to more than $100 million in funding. But Townes’ success stretches back to even before he entered the real estate industry. Townes previously helped found Mashable, one of the top independent media sites worldwide. After founding the company, as chief technology officer, Townes led Mashable to a $250 million valuation in its first four years.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “The most critical habit that has helped me over the years is to make prioritized to do lists and attack them at the very start of my day. Even if my schedule becomes unpredictable, I can look at what I’ve accomplished that day and know that I spent time on what was most important.”

Joe Villani

Senior Vice President of the Correspondent Division, TMS REAL ESTATE | AGE: 40

Since his start at TMS, Joe Villani has consistently been one of the highest, if not the highest, performer on the correspondent team every month. And when you look at yearly performance level, Villani has ranked as the highest correspondent sales performer every year for the last five years, bringing in 92% more than the next closest top performer in 2018. Villani is already nearly 300% higher than the next closest top performer this year. By learning to continuously challenge himself throughout his career, Villani has been able to apply this to TMS, becoming a key factor in TMS ranking as a top 15 correspondent investor. Villani has averaged 24 new accounts a year since he started back in 2015. He has even helped mentor and train others in the correspondent space to grow their volume. As a result, TMS is well on its way to hit its goal to be a top 10 correspondent investor. Villani learned early on in his career what it means to truly work hard and lead others since he’s started a multi million-dollar real estate investment company. To Villani, the key is to not hyper focus on the status of the market like the rest of the industry.

What is one habit that has helped you succeed?

“It is important to hold yourself accountable. Your success or failure is directly related to the effort you put in to every task. It takes years to be an overnight success.”

David Warner

Director of Underwriting, First American Mortgage Solutions LENDING | AGE: 35

David Warner has been instrumental in implementing underwriting standards that utilize data automation and technology at First American Mortgage Solutions. As director of underwriting, Warner works seamlessly across company divisions and is credited with driving technology innovation while at the same time upholding the company’s rigorous quality standards. In addition, Warner also advises the comapny on artificial intelligence projects that aim to automate manual process like legal descriptions and vesting algorithms, and serves on the team guiding eClosing and remote online notarization pilots for First American’s lender clients.

He is credited with helping establish notarization guidelines for underwriters in Texas, and with spearheading the company’s internal fraud prevention efforts.

This spring, he will assume the role of chair of First American’s Fraud Prevention Practice Group.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “It’s a little cliché, but the best advice I have received was “if you’re going to read a thing, read the whole thing.” When it comes to underwriting real estate transactions, we’re often dealing with lengthy, complex documents where the nuances can be of the upmost importance in determining whether we can proceed. In addition, as we’re now moving towards more automated processes, this same advice applies in that it becomes paramount to know all of the ins and outs as even a minor detail can have a profound impact.”

Gregor Watson Co-Founder and Chairman, Roofstock REAL ESTATE | AGE: 39

Over the last dozen years, Gregor Watson has founded, built and sold a number of successful companies. In 2015, Watson co-founded Roofstock with Gary Beasley.

The company is now the one of the largest online marketplaces for real estate investors to invest in single-family rental homes. Roofstock reached more than $1 billion in transactions within two years of launching, becoming one of the fastest growing marketplaces in the fintech industry. Watson also founded Dwell Finance, which grew into of the largest lenders specializing in short-term, single-family investor loans before being sold to a unit of Blackstone. Watson also founded 643 Capital Management, which has invested more than $1 billion in single-family homes nationally and owns over 4,000 homes across the country. Watson is also is a co-founder of 1Sharpe Capital Management, an investment firm with over $1 billion in equity that is focused on U.S. and global credit and equity markets.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “Think big! Most people limit themselves. I keep a quote on my desk that reads, “What would you attempt if you knew you could not fail?” Henry Ford said it another way: “If you think you can do a thing or think you can’t do a thing, you’re right.” Don’t be frozen in fear of doing something incorrectly, instead, take charge of what you can control – your attitude and your actions – and you’ll surprise yourself with just how much you can achieve.”

Rich Weidel CEO, Princeton Mortgage LENDING | AGE: 32

Rich Weidel started his career at Goldman Sachs with the real estate fiance group, and specialized in mortgage finance. Since then, he led Princeton Mortgage to growth since taking over as CEO in the summer of 2017. During his first year running the company, Princeton grew by nearly 400%. Weidel achieved this by focusing on four key objectives: build a culture; focus on delivering results for customers; grow and gain market share; and build a sustainable, profitable business. And in his time as CEO, Weidel achieved great success in of those areas. The company is regarded as a “great place to work,” and has also attracted talent from companies like Google and Goldman Sachs.

Weidel also launched the “Princeton Promise,” which enables customers to claim $1,000 if they’re unsatisfied with their Princeton experience. Since launching that program, less than 2% of customers have claimed it.

WHAT IS ONE THING YOU WOULD TELL A YOUNGER VERSION OF YOURSELF? “Get over yourself! Nothing beautiful comes without pain and the joy is in the journey. In order to be happy in your career focus on the well-being of others – joy comes from seeing others shine. I’ve learned from Frederick Herzberg, who asserts that the powerful motivator in our lives isn’t money; it’s the opportunity to learn, grow in responsibilities, contribute to others and be recognized for achievements. That’s why the mission at Princeton Mortgage is to ‘Help People Thrive.’”

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Jake Williamson

Vice President of Single-Family Real Estate, Fannie Mae SERVICING | AGE: 39

Dominica Groom Williams Vice President, Office of Inclusive Engagement Freddie Mac LENDING | AGE: 36

When Dominica Groom Williams joined Freddie Mac in 2017, she saw an opportunity to deliver on the inclusion ambitions of the government-sponsored enterprise by developing a board-approved strategic plan and restructuring its siloed workforce diversity, supplier diversity and community engagement efforts to create a single cross-functional cohesive unit: The Office of Inclusive Engagement. Under Williams’ leadership, her team is finding new ways to further integrate inclusion into the business and throughout the company’s culture. Additionally, she has challenged employee resource groups to provide more structured mentoring opportunities to help people grow their careers while launching the company’s first-ever pilot sponsorship program for women leaders to help them navigate the corporate landscape.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “Curiosity! A critical component of my success is having a curious mindset that is open to different perspectives and new ways of thinking which enables me to continuously learn. My curiosity pushes me to always challenge myself to grow and stretch in new ways outside of those areas where I’m “comfortable.” It’s a concept I often share with my team to help them develop and evolve both personally and professionally.”

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Jake Williamson is a dynamic leader who is a driving force of new ideas and energy in the way he and his team work, benefiting both Fannie Mae and the customer. Williamson’s current role is leading Fannie Mae’s single-family real estate team, but his unmatched commitment to all aspects of the single-family business have made him a valuable member of the company and mortgage finance industry community. Williamson was pivotal in launching Fannie Mae’s first repair recommendation decision support tool to help asset managers weigh the economics of rehabbing versus selling as-is on foreclosed properties – ultimately creating more consistency in decision-making and helping to improve the division’s return on investment. Additionally, Williamson helped to bring digitization to property preservation by leading an effort to launch a mobile inspection platform.

WHAT IS ONE HABIT THAT HAS HELPED YOU SUCCEED? “Never stop learning. Whether it’s reading books, watching TED talks, attending educational seminars, participating in executive development programs, or simply asking questions of others (technical experts, mentors, managers, etc.), a thirst to constantly learn has been beneficial in my career. It’s allowed me to grow and know when to push through challenges to be successful. I first learned this from my parents. Examples of their hard work and a dedication to learning have stuck with me.”

Devon Yang Engineering Group Manager, Blend LENDING | AGE: 30

Devon Yang is an engineering group manager at Blend.

Yang and his team of 15 build, enhance and monitor the fintech’s offerings so that it can process more than $1 billion in mortgage applications every day. At Blend, Yang helps propel the $40 trillion consumer lending industry into the digital age through partnerships with banks, lenders and other technology providers. Yang, a former Microsoft engineer who has been with Blend for six years, recently helped the company execute the rollout of a new product that allows for the seamless application of home equity loans and HELOCs. Yang is known as an effective leader who is adept at delegating tasks and mentoring team members. He is also recognized by his colleagues for uniting Blend staff across departments through engaging social activities, embracing the importance of community in the workplace. Yang has proven himself to be a formidable force on the engineering team. He’s fostered strong relationships with his co-workers and served as a mentor and advocate.

WHAT’S THE BEST PIECE OF ADVICE YOU HAVE EVER RECEIVED? “A piece of advice that continues to resonate with me through my career is to surround myself with people smarter than me. Nothing influences my ability to learn and develop more than those who challenge and inspire me on a daily basis. Ever since the early days of Blend, I have been able to work with incredibly talented individuals across the organization from a wealth of backgrounds who motivate me to be the best that I can.”

Congratulations to Manager of Single-Family Affordable Lending Strategy and Policy Dan Ticona On Being Honored with a 2019 HousingWire Rising Star Award

We’re proud of you for being a rising star in the mortgage industry.

The HousingWire Rising Star Awards recognize the best young leaders in the mortgage industry – specifically in lending, servicing, investing and real estate. Dan, thank you for working to make positive change in the industry.

At Freddie Mac, affordable lending is a centerpiece of our corporate mission to provide stability, liquidity, affordability and accessibility within the mortgage market.

Dan and the Freddie Mac Affordable Lending team continue to develop smart new ways to reimagine the mortgage experience and build on the industry’s growth. That includes creating the right products and solutions as well as offering financial literacy and homebuyer education, tools and insights to serve all qualified buyers— regardless of income, location or demographic.

Learn more about Freddie Mac’s affordable lending initiatives: freddiemac.com/singlefamily

WHAT

TO

HAPPENED REVERSE MORTGAGES

?

By: Jessica Guerin

54 HOUSINGWIRE ❱ JUNE 2019

?

F

or anyone actively working in the mortgage industry, it’s no secret that reverse mortgages have taken a brutal hit in the last two years.

The U.S. Department of Housing and Urban Development issued major

program changes at the end of 2017 that effectively limited the amount of proceeds and the number of people who could qualify for the loan.

The result had lenders across the space enduring sizable volume drops and subsequent gashes to their bottom lines.

HOUSINGWIRE ❱ JUNE 2019 55

BUT IS IT DIFFERENT THIS TIME AROUND?

Many of the professionals who have dedicated their careers to helping seniors access their home equity remain optimistic that things will turn around. After all, the demographics are on their side. But there has been little improvement so far, with recent data revealing that for several months, volume has been stuck at a near 36% low.

The current situation has some wondering what comes next.

This is an industry that is no stranger to controversy and change.

It has withstood countless guideline revisions, damaging news headlines, impactful compliance changes, powerful public misperception and misleading media coverage.

But is it different this time around? Will this once-resilient industry finally cave after government regulation has effectively rendered the business unviable?

The Federal Housing Administration has, time and again, asserted its belief that this product provides a vital service to the growing number of older Americans who may benefit from accessing their home equity to age in place. But can the lenders in this space survive under the new stipulations that the FHA has inflicted?

Will the industry find its footing so that lenders can continue to offer seniors access to their equity, or, is it in danger of facing extinction as it becomes so marginalized that it will eventually cease to exist?

THE 10/2 CHANGES In late August 2017, the FHA surprised the HECM industry by announcing considerable changes to the reverse mortgage program, designed to shore up the losses the program was causing to its flagship Mutual Mortgage Insurance Fund.

Several new rules were put into play, including a reduction in the principal limit factors that determine proceeds and an adjustment in mortgage insurance premiums that made the loan more expensive for some borrowers.

The rules took effect on October 2nd that year, and now that they’ve had two years to settle, their damage is clear.

David Peskin, president of Reverse Mortgage Funding, a topfive lender in the space, calls the new rules devastating, in part because so many changes were made at once with little time for lenders to adapt.

“This was a pretty significant hit,” Peskin said. “I mean, you had several major things happen all at the same time. You had the removal of the [interest rate] floor, which brought on margin compression, because in order to maximize proceeds to the borrower, you have to give the lowest possible margins. It took a lot of the profits out of the business while volume was dropping.”

“It was sort of a World War III, so to speak, because there were so many changes that took place all at the same time,” Peskin continued. “It was major destruction.”

Live Well Financial has ceased originating loans, the company announced on its website Friday. The homepage message said only that it would not be originating new loans as of May 3, 2019, “due to unexpected circumstances,” a surprise move that took some wholesale partners by surprise.

Live Well Financial originated traditional and reverse mortgage loans as well as FHA and VA loans. It also operates a servicing arm. No word yet on whether the company will continue to service loans or if it will sell off that business and close completely.

Virginia-based Live Well is a long-time player in the reverse mortgage space, most recently coming in at No. 7 with 305 loans year to date and 3.1%

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market share.

It is also an issuer of reverse mortgage securities, coming in No. 7 in the first quarter of 2019 with 22 pools of HECMbacked securities with an original aggregate amount of $85.6 million. But late last year, the company sold off a sizable portion of its portfolio to Reverse Mortgage Funding in what was perhaps a sign of things to come.

But the reverse mortgage industry has seen volume plummet in the last year thanks for new regulations, which no doubt had an impact on Live Well’s bottom line.

In September, Executive Vice President Bruce Barnes told HousingWire that the lender was on the brink of releasing a major upgrade to its lending platform, promising an elevat-

John Lunde, president of Reverse Market Insight – which publishes regular data tracking HECM endorsement volume – details the level of destruction.

Lunde said his analysis pinpoints a 47% drop in loan count and a 12% reduction in initial unpaid principal balances, leading to an industry-wide revenue hit that totals – or even exceeds – 50%.

“Given that the industry is largely paid on UPB and fixed rates, and with margins dropping at the same time, I’d say the initial estimate of 50% reduction in revenue for HECM business has been met or exceeded,” Lunde said. “Part of that has been offset by the increase in revenue from proprietary loans, but I’d wager we’re still at 50% or worse.”

THE REACTION Faced with a potential revenue hit this huge, each major player was forced to reassess their business models – tightening expenses, slashing budgets, retooling marketing, expanding offerings.

It’s been a master’s course in business survival, with the most able students quick to adapt, innovate, rebrand – anything to avoid going under.

When looking at the top 10 players in the market, it’s evident that each one took a unique approach.

For the top two – American Advisors Group and Finance of America Reverse – the answer was a complete rebrand, moving

tained by HousingWire, Live Well will terminate most, if not all, of its employees working in its Virginia office, including CEO Michael Hild.

The letter breaks down the eliminated employees by position, with mortgage loan originator and underwriter making up the largest number of layoffs at 10 apiece.

In the letter, Paula Foster, Live Well’s vice president, controller and human resource director, said conditions outside the lender’s control led to the decision to permanently shut down all of its operations in their entirety. Prior to this revelation, it was only clear that the company would halt origi-

nations and cease funding new loans. Now, it appears its servicing business and mortgage securities issuance will shut down as well.

“Due to sudden and unexpected developments in the markets for certain financial assets the company uses as collateral for certain credit facilities that provide this liquidity, these lenders have reduced significantly the amount of liquidity they make available to the company,” Foster said.

“This reduction in credit availability combined with challenging conditions in the markets for mortgage loans, which were conditions outside of the company’s control, along with

related regulatory issues, have resulted in the company having insufficient available cash to continue operations,” Foster continued.

“Despite the company’s exercise of commercially reasonable business judgment, it could not reasonably foresee these circumstances and therefore was unable to provide 60 or more days notice of the closing and related layoffs,” he added.

While the letter said that employees working outside of Live Well’s Virginia headquarters would be also affected, it did not provide specifics on layoffs in other states. Live Well has offices in San Diego and Lansing, Michigan.

LIVE WELL FINANCIAL SHUTTERS O R I G I N AT I O N O P E R AT I O N S

ed experience for both its customers and originators.

Barnes said the new focus on technology and mortgage automation was a bid to retain market share as business in both forward and reverse mortgages was down. But the technology never officially launched, and it appears the lender may have buckled under the pressure.

The forward and reverse mortgage lender and servicer also filed a notice with the Virginia Employment Commission informing the state of its closing and subsequent layoff of 103 employees in Richmond, Virginia.

According to a letter penned by the company to the state that was ob-

away from being a sole provider of reverse mortgages and emerging as a company that offers “holistic retirement solutions.”

As Lunde succinctly observed, the new rules “pushed more participants to re-consider whether reverse is an industry or a product,” calling this revised mindset – and subsequent step away from a reverse-only focus – “a huge shift.”

For AAG, this meant bringing on traditional mortgage products that were marketed to address the specific needs of seniors, as well as real estate services for those looking to relocate in retirement.

AAG CEO Reza Jahangiri said that while the 10/2 changes were super disruptive, they also spurred necessary change.

“It’s clear now that 10/2 was the catalyst for transforming the industry as a whole,” he said. “It underscored the need for both significant measures to reform and stabilize the economics of the HECM program, but also to create additional vehicles for home equity extraction for seniors.”

Jahangiri said AAG was discussing a change to its business model long before the new rules came into play.

“We were not achieving the velocity and market penetration needed to change seniors’ mindsets about activating their home equity by being 100% HECM-focused,” he said, adding that the company began laying plans for a new model in 2015.

“We made the decision then to transform into a product-agnostic solutions business, because of all the issues associated

HOUSINGWIRE ❱ JUNE 2019 57

with being a mono-line distributor of a government product,” he said. “Today, we offer a wide range of products and services to help seniors maintain their quality of life in retirement through the responsible use of home equity.”

Finance of America Reverse launched its own rebrand not long after.

The lender pledged a commitment to helping seniors build a financially stable retirement, announcing a partnership with Silvernest, an online service that pairs older homeowners with qualified housemates.

“In order to be a good long-term partner to our borrowers and truly change the conversation about reverse mortgages, it’s critical that we become more than a just a lender,” FAR President Kristen Sieffert said at the time.

Another major lender, Synergy One Lending – which operates under the name Retirement Funding Solutions – took a different tact altogether, announcing a merger with Mutual of Omaha Bank.

The move was widely applauded by members of the HECM space because it created a reverse mortgage channel for a major lender, potentially tapping into a greater consumer base. The reverse mortgage industry hadn’t seen a big player dip its toe in HECM waters since MetLife and Wells Fargo shuttered their reverse operations in 2012.

“Our origination force now has a clear and comparative advantage in their markets as their clients have a degree of trust around the brand,” Synergy One President and CEO Torrey Larsen told HousingWire at the time. “Mutual of Omaha Bank sees an opportunity to extend its brand, extend its capital resources and grow both the overall market as well as our company’s market share.”

THE PROPRIETARY SOLUTION Individual strategies aside, there is one common means of survival has been heralded by all reverse lenders, and that is the proprietary reverse mortgage.

Unlike the FHA-insured HECM, these privately insured reverse mortgages cater to homes with values that exceed FHA’s maximum lending limit of $726,525 – which is why they are often called jumbo reverse mortgages. And, they don’t come with the costly mortgage insurance that sometimes turns would-be borrowers off from the HECM. While proprietary reverses have been around in the past, they largely disappeared when the housing bubble burst. Only one lender – Finance of America Reverse – had a product on the market before 10/2.

But now, a wave of new products has emerged, with four more lenders bringing non-agency offerings to market, and FAR doubling down by issuing three iterations of its offering with features not seen on a HECM. For most industry observers, this proprietary market holds all the promise.

58 HOUSINGWIRE ❱ JUNE 2019

“I think it’s going to be very much like what the non-qual did for the forward market, which became a very liquid market,” Peskin said. “I think because the closing costs on proprietaries are so much less than a traditional HECM, it opens up the door to borrowers who were staying away because of those costs.”

Mark Browning, a long-term participant in the reverse mortgage space and 2018 vice chair of the National Reverse Mortgage Lenders Association, said non-FHA reverse mortgages are no doubt part of the industry’s long-term solution.

“FHA loans as a category are operationally clunky for both the consumer and lender,” Browning said.

“HECMs are no exception. Over recent years, I have tried to underscore the imperative to improve the consumer experience. New non-FHA tools are likely to be the most expedient route to that objective and to attaining growth expectations.”

While there is no cross-lender data available on just how well these proprietary loans are performing, some analysts insist their volume is growing.

Mike McCully, partner at New View Advisors – which tracks the capital market performance of HECM and proprietary reverses – said the new non-FHA products are already eating up a solid chunk of overall reverse mortgage volume.

“New View Advisors believes proprietary reverse mortgages are likely to make up HECM’s dollar volume shortfall,” McCully said. “Origination volume for 2019 is on an annual run rate of $1 to $2 billion. As much as 40% to 50% of total origination dollar volume today is in non-agency production. We only see that improving over time.”

THE ROAD TO PROPRIETARY SUCCESS Although the advent of a more robust proprietary market is welcome news for the industry, most agree we have a ways to go before it grows into solid competition for the FHA’s HECM. But the potential is there, should certain obstacles be overcome.

First, significant volume – which will create meaningful investor interest – is needed.

“I have long expected non-HECM products to be a big part of getting to a much larger volume of loans,” Lunde said. “I think eventually that will mean competing directly against HECM as forward mortgage products compete against FHA products, but I believe the path to that is to find sufficient volume outside of the HECM underwriting box to sustain investor interest.”

Lunde said that means continuing to develop proprietary reverses that fall outside the HECM’s reach, like higher home values, property types not supported by the FHA, and younger serving borrowers who are not quite old enough for HECMs. “All those things and more eventually aggregate enough consistent demand and performance history

“IF THERE’S A SILVER LINING, IT IS THAT REVERSE MORTGAGE ORIGINATORS HAVE TO BE MORE EDUCATORS THAN TRANSACTIONAL SALES PEOPLE NOW. WE HAVE A LONG WAY TO GO ON THE EDUCATIONAL FRONT.” to prove out non-HECM products for investors. At that point, there will be support for products designed to compete directly against HECM on process and eventually on pricing,” Lunde continued.

“No idea how long that whole journey takes, but it’s measured in years rather than months.”

McCully added that more successful securitizations of proprietary loans on the secondary market will spur investor interest.

“Empirical proof that non-agency proprietary reverse mortgage securitizations are successful gives confidence to investors in the asset class, which enhances bond execution,” McCully explained.

“Good bond execution passes down to originators, which in turn allows for improvement in the proprietary loan offered to consumers. Better products increase origination volume, which increases securitization frequency, which increases liquidity for investors, which helps to further improve bond execution.”

THE NEED TO EDUCATE But while proprietary products may eventually help unlock some of the reverse mortgage’s potential, the fact remains that the public is largely unaware of their existence. On top of that, long-held misperceptions about reverse mortgages in general continue to hinder public acceptance.

Without breaking through that barrier, reverse mortgages – proprietary or otherwise – won’t ever gain much traction.

Kent Kopen, a California-based Certified Reverse Mortgage Advisor with United America Mortgage, said the 10/2 changes may have forced the education issue.

“If there’s a silver lining, it is that reverse mortgage originators have to be more educators than transactional sales people now,” he said. “We have a long way to go on the educational front.”

Kopen said he frequently encounters people who have deep-seated misconceptions about the loan.

“When I tell people the government has been insuring this product for 30 years, they don’t believe me,” he said. “And if they stay engaged long enough to understand the product – at a level where they can explain it to their neighbor – their next question is always: Why don’t more people know this or why don’t more people get one?”

Dan Hultquist, VP of Organization Development at Finance of

America Reverse, said misconceptions are rampant, but the problem runs even deeper.

“Beyond the common myths that the bank gets your home and the product sticks the heirs with a bill, homeowners have always been hesitant to view housing wealth as a nest egg that can be leveraged for retirement cash flow,” Hultquist said, adding that homeowners are largely unaware that their home equity can be converted into non-taxable retirement cash flow.

But is there a way that we can get in front of the problem? One expert seems to think so.

“Education, education, education,” said Sherry Apanay, FAR’s chief sales officer.

But it won’t be easy.

“It’s going to take the industry addressing criticisms head on, acknowledging the perceived short-comings of the available reverse mortgage loan programs,” Apanay said. “And, at the same time, being able to effectively communicate the many benefits and ways a reverse mortgage can provide solutions and improve retirement outcomes for many.”

THE FUTURE Of course, tackling the industry’s long-standing education problem is easier said than done. Still, most professionals in the space hold on to an optimistic vision of the future.

“Demographics is destiny,” Kopen said. “We forget that because it moves slowly. Are all pensions soon going to be safe and fully funded? No. Are people going to live longer than they think or want? Probably. Is the majority of most peoples’ wealth their home equity? Yes. Will people want to continue living in their own home in the future? Yes.” “Wealth will get tapped, regardless of where it’s positioned,” Kopen added. “Because of that, I think the future of the reverse mortgage industry is bright.”

Peskin said it’s the possibility afforded by the non-agency market that gives him hope.

“Is it wasn’t for the proprietary product, I might have a very different outlook on the future,” he said. “I think it will take another couple of years to gain some traction and to become very liquid, but I think you’re going to start to see a very different business in the next two years because of the introduction of proprietary products and securitization of these products.”

Jahangiri agrees with the vision of a more diverse reverse mortgage market.

“We envision broader home equity extraction vehicles for seniors and greater collaboration with the financial services industry on holistic solutions specifically designed for the senior demographic as well as new forms of distribution,” Jahangiri said.

“We need to focus on new innovative technology tools, products, marketing and distribution models,” he added. “Doing the same thing we have been doing will not work.”

HOUSINGWIRE ❱ JUNE 2019 59

CALLS FOR

Trump

By: Kelsey Ramírez

Reform

Administration moves on bringing Fannie, Freddie out of conservatorship

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HOUSINGWIRE ❱ JUNE 2019 61

More than a decade ago, the U.S. economy saw its greatest fall since the Great Depression – and it came at the hands of the housing industry.

Its consequences were sweeping.

Families lost their homes, parents lost their jobs and America lost its trust in the banking system.

In an attempt to soften the fall, former President George W. Bush signed an order to bail out mortgage giants Fannie Mae and Freddie Mac, creating the phrase “too big to fail.”

Originally, the U.S. Department of the Treasury bailed out Freddie Mac for $71.3 billion and Fannie Mae for $116.1 billion.

Since then, the government-sponsored enterprises have more than paid back their debts to American taxpayers.

As of the fourth quarter of 2018, Freddie Mac has paid $116.5 billion back to the Treasury, and Fannie Mae paid made payments totaling $175.8 billion.

Now, as the housing market continues to improve, many have called on the government to release the GSEs from conservatorship.

“More than 10 years ago, Fannie Mae and Freddie Mac both failed,” former head of the Federal Housing Finance Agency Ed DeMarco said in an interview with HousingWire. “Their losses exhausted their capital and then consumed roughly $190 billion in direct taxpayer support just to remain solvent.

More than that, the GSE model embodied in their special charters failed.”

“Yet only Congress can change those charters,” DeMarco, who is now president of the Housing Policy Council, said. “Thus, it remains necessary for Congress to act. And it is urgent that 62 HOUSINGWIRE ❱ JUNE 2019

Congress acts because further delay maintains the uncertainty and market distortions posed by the conservatorships and permits the systemic and taxpayer risk embedded in these two companies to continue growing.”

And it appears the administration might be listening.

Trump calls for reform In March, President Donald Trump began officially calling for an end to the conservatorship of Fannie Mae and Freddie Mac. A statement released by the White House said that Fannie Mae and Freddie Mac have grown in size and reach, yet face no competition from the private sector, and that the U.S. Department of Housing and Urban Development programs are exposed to too much risk while relying on outdated processes.

In the announcement, Trump called for reform that “promote[s] competition in the housing finance market and create[s] a system that encourages sustainable homeownership and protects taxpayers against bailouts.”

In a memorandum, Trump tasked HUD and the U.S. Department of the Treasury with drafting proposals for reform, with the Treasury detailing Fannie and Freddie plans while HUD lays out a plan for the housing finance agencies it oversees.

Specifically, Trump’s order will direct the “relevant agencies to develop a reform plan for the housing finance system.” The reforms will “aim to end the conservatorship of Fannie Mae and Freddie Mac and improve regulatory oversight over them.”

The White House also stressed that

“There’s been a huge focus on innovation, really with both companies promoting digital lending, relying on data as opposed to paper. And that’s promoted an immense amount of transparency across the system.” -Timothy Mayopoulos

the administration will work with Congress to create a compre- board of directors.

In an interview with HousingWire, Mayopoulos explained that hensive plan for housing finance reform.

Absent concrete details for change, most groups in the housing over the past 10 years, the GSEs had already seen reform. And space applauded the president’s move as an official step forward indeed they did – opening access to credit, serving the underserved markets and much more. Now what is needed, Mayopoulos to instigating long-awaited change.

And, thus far, it appears they’re all ready to work together to argued, is housing finance reform.

“Reform of the government-sponsored enterprises has almake it happen.

Treasury Secretary Steven Mnuchin was among the first to ready happened,” he said. “What people are really talking about is housing finance system reform. It respond. is often frustrating to me that policy “I look forward to working with “More than 10 years ago, Fannie Mae and makers often don’t acknowledge that FHFA, HUD, Congress and other Freddie Mac both failed. Their losses exhaustFannie Mae and Freddie Mac are funstakeholders to address the need for ed their capital and then consumed roughly damentally different organizations housing finance reform as laid out $190 billion in direct taxpayer support just to today than they were 10 years ago,

by President Trump’s Presidential remain solvent. More than that, the GSE model before the crisis.”

Memorandum,” Mnuchin said. “We embodied in their special charters failed.” support a system that provides for He explained that over the past 10 access to lending for hardworking -Ed DeMarco years, mortgage lenders have been Americans, while also protecting very well served through changes taxpayers from risk. An effective and efficient federal housing finance system will also meaningfully from Fannie Mae and Freddie Mac. Some of the accomplishments from the GSEs over the last 10 contribute to economic growth.”

Other members of the housing industry weighed in, full of hope, years include: and willing to work with the administration on any needed re- • Expanding access to credit form. They quickly offered their insights, advice and willingness • Lowering systematic risk • Standardizing pricing to help to the administration.

• Distributing credit risk to provide capital It’s not “GSE reform” “There’s been a huge focus on innovation, really with both But reform of the government-sponsored enterprises already companies promoting digital lending, relying on data as opposed happened. to paper,” Mayopoulos said. “And that’s promoted an immense Or so says former Fannie Mae CEO Timothy Mayopoulos.

Mayopoulos served at the mortgage giant for more than 10 years amount of transparency across the system.”

He reminded us that GSE reform has already taken place – before moving on to become the president at Blend, leading its go-to market and corporate support functions and serving on the what’s needed now is housing finance reform.

HOUSINGWIRE ❱ JUNE 2019 63

“There’s been enormous GSE reform over the last 10 years,” he said. “What we’re really talking about is: Is there going to be housing finance system reform, either led by the administration or led by Congress.”

A new reality While everyone is calling for reform, there are different ideas about what that should look like. But one thing is clear – it should not look the same as it did back in 2008.

The market has changed. Fannie Mae and Freddie Mac have evolved, and whatever reform bill is decided on, it must acknowledge this new reality.

There are several changes, made during the GSEs’ conservatorship, that some experts believe should be kept in place.

DeMarco made the case that the following systems should be kept intact even amidst reform: • T he efficient forward market that allows borrowers to lock in rates before settlement, known as the To-Be-Announced market • T he standardization of data and reporting • T ransparent and consistent reps and warrants •A ttracting private capital from mortgage insurers and a range of other capital providers • T he ongoing, nationwide access to the secondary mortgage market by lenders of all sizes and types Mayopoulos agreed, saying some changes just can’t be reversed.

“There’s been a remarkable amount of consensus around 64 HOUSINGWIRE ❱ JUNE 2019

many things that would have been controversial 10 years ago,” Mayopoulos said. “For example, most people have come to accept the idea that the government will play a substantial role in the housing finance system. Perhaps not as big of a role as it plays today, but nonetheless, we’re not going to completely privatize the housing finance system.”

“There’s broad consensus that private capital should be a line of protection in front of taxpayers, and that should be substantial private capital to protect taxpayers, but also recognition that requiring the GSEs to carry too much capital will only increase the costs of borrowing for consumers,” he continued. “There’s also consensus around the fact that, if there’s going to be a government guarantee, and I think most people think there needs to be a government guarantee on at least some segment of the market, that the taxpayers should be explicitly compensated for that guarantee.”

Mayopoulos explained that these things, while agreed upon now, would have been fought over 10 years ago. But the passage of time and the dependency of the market on the new system has caused many to come to a consensus on various aspects of reform.

“The passage of time has led people to bring much more thoughtful approaches to the policy decisions that need to get made,” Mayopoulos said. “In the days immediately following the crisis, immediately following the imposition of conservatorship, I think policy makers would have been inclined to do things that would have been highly disruptive to the housing finance system and would have exacerbated many of the challenges that we were facing at the time.”

However, there are also aspects that will still be debated, and these, Mayopoulos claims, will be more politically motivated debates.

Mayopoulos pointed out that some of the debates policy makers will now have to face include: DUTY TO SERVE – Should Fannie and Freddie have some sort of responsibility to continue to serve underserved populations, and if so, what should that look like?

CORPORATE STRUCTURE – Would a shareholder-owned company become too focused on the shareholders rather than on other important constituencies?

COMPETITION – How much competition should the mortgage giants be subject to, and what would that look like?

And DeMarco also listed key changes that will be needed for any housing finance reform: • The burden the system places on taxpayers for the bulk of the capital needed to backstop mortgage credit risk • The lack of meaningful market forces in evaluating mortgage credit risk • Persistent concerns about access to and affordability of credit for consumers, despite the enormous subsidies inherent in the current system • The barriers to entry inherent in a system structured around two government-sponsored enterprises • The systemic risk that results from concentrating most mortgage credit risk on two balance sheets. This systemic risk leaves taxpayers exposed to emergency bailouts when the system fails.

“The reality is that, policy makers, in the end, are going to have to make choices about what the right tradeoffs are,” Mayopoulos said. “There are no perfect answers, there is no risk-free solution.

There is nothing that will absolutely insolate taxpayers at every turn and keep the cost of mortgage borrowing relatively low and conserve the fixed-rate mortgage.”

“There’s no solution that solves for all of those things and, in my view, the dif-

ficulty of housing finance reform is that it’s extremely difficult for people to reach compromise on these issues, try as they might,” he said.

And Mayopoulos worries that the current political environment may not lead to any lasting solutions.

“Unfortunately, and this is not a new observation by me, the environment in Washington right now is not one that actively seeks out compromise,” he said. “It’s one that tends to be driven by very strong ideological views on both sides of the aisle.

I think the political questions are very difficult and challenging, and it’s not obvious to me that policy makers are willing and able to reach those compromises.”

But DeMarco was more optimistic, saying that housing finance reform is a bipartisan issue, and changes could be close at hand.

When asked if Congress could pass reform under today’s divided political environment, DeMarco replied, “We think so and want to support bipartisan efforts.

Most stakeholders involved in this effort

want and expect a bipartisan agreement.

Divided government should not be a barrier; indeed, it may help forge a consensus.”

A new leader In April, Mark Calabria, former chief economist for Vice President Mike Pence and long-time housing expert, was voted in by the Senate as the next director of the FHFA. The nomination vote was 52 to 44, and Calabria will take over from Acting Director Joseph Otting, who has been filling the position since former FHFA Director Mel Watt’s term ended.

And the housing industry is on board, to say the least.

“MBA applauds the Senate for confirming Mark Calabria to be the next Director of the Federal Housing Finance Agency,” MBA President and CEO Robert Broeksmit said. “His knowledge and experience will serve him well as he takes over this dynamic agency at such a critical time.”

The new nomination comes at a time when the government is getting closer to looking at housing finance reform – and this is no coincidence. Calabria may be just the right man to lead the FHFA during this time.

Calabria has been very clear on his view of the conservatorship and famously called for an end to the conservatorship back in 2017.

When speaking at the CoreLogic and the Urban Institute’s Housing Finance, Affordability and Supply in the Digital Age conference in Washington, D.C. back in 2017, Calabria said the Trump administration is committed to ending conservatorship. But that also came with a warning.

“If it were easy to get GSEs out of conservatorship, it would have been done already,” Calabria said.

Housing finance reform has been an issue since the government bailed out Fannie Mae and Freddie Mac more than 10 years ago. Now, talk has picked up about reform – perhaps more than ever before.

But whether the administration can follow through – whether congressional leaders can reach a compromise – that remains to be seen.

HOUSINGWIRE ❱ JUNE 2019 65

HOME EQUITY SOLUTIONS 66 HOUSINGWIRE ❱ JUNE 2019

AS HOME PRICES CONTINUE TO RISE ACROSS THE NATION,

homeowners have accumulated record amounts of home equity. With more housing wealth to access, homeowners now have more options for tapping that equity. In this section, we highlight two companies providing home equity loan products, education and support in this growing space.

American Advisors Group P.68 Altisource P.69 HOUSINGWIRE ❱ JUNE 2019 67

HOME EQUITY SPECIAL REPORT

aag.com/wholesale

MISSION

AAG is dedicated to helping older Americans find new ways to fund a better retirement through the responsible use of home equity.

Fast Facts American Advisors Group (AAG) was founded in 2004 by CEO Reza Jahangiri in Orange County, California.

AAG has approximately 1,200 employees, a national operating footprint, and offices in California, Texas, Georgia and New York.

AAG’s brand platform is built upon its highly-recognized national advertising campaign featuring acclaimed actor Tom Selleck.

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AAG changes the conversation around the use of home equity

A

fter a steady period of increased home price appreciation, many senior homeowners now have a solid foundation of equity in their homes. For Baby Boomers entering retirement, tapping into their home equity with a Home Equity Conversion Mortgage (HECM), commonly known as a reverse mortgage loan, can enable them to stay financially secure in their current homes during a potentially long retirement.

Within AAG’s wholesale division, the feedback the company continued to hear from its brokers (some 800+ of them) is that borrowers and family members are still being influenced by old assumptions about HECM products, which have changed significantly since they were introduced by the Reagan administration in 1989. New regulations have improved standards and added safeguards, to further protect older Americans, making home equity mortgages now another option as a strategic financial planning tool for many seniors.

“There’s a broad consensus among retirement experts and academics that using home equity, responsibly and strategically on the front end of a retirement plan, produces materially better outcomes for seniors, said Reza Jahangiri, AAG Chief Executive Officer. “Proprietary products are also helping to change the perception of both reverse mortgage loans and home equity extraction.

This is leading to changes in the retirement planning model which will ultimately show the benefits of incorporating home equity early in the retirement-planning process, similar to how pensions, 401ks and Social Security are factored in now.”

Reza Jahangiri, Chief Executive Officer

Reza Jahangiri is founder and chief executive officer of AAG. Jahangiri also serves as co-chairman of the National Reverse Mortgage Lenders Association board of directors, as well as chairman of the board for Willow International, a non-profit organization dedicated to preventing and rescuing victims of human trafficking in Uganda.

In 2015, AAG transformed its business model into a product-agnostic, solutions-oriented business tightly focused on helping seniors leverage home equity to achieve financial security.

In 2018, AAG debuted a new brand message, “Retire Better,” to change the conversation — and mindset — around using home equity.

Retire Better focuses on delivering thoughtful solutions and personalized services to America’s growing senior population.

“Before Retire Better, our advertising spoke directly to those seeking more financial stability,” said Jahangiri. “Now we have broadened our appeal to anyone who can envision a better retirement — almost every retiree has their own version of ‘better.’”

As part of the transformation, AAG’s retail divisions converted to a holistic sales model which enables mortgage professionals to offer both traditional and reverse mortgage loans, as well as to refer customers to AAG Residential Services who may prefer to sell their homes.

“Similarly, within our wholesale division, we have expanded our broker solutions portfolio to include more robust option-based selling approaches, targeted education focusing on individual needs, and industry-leading marketing collateral to support a more streamlined approach to activating home equity in retirement said Kim Smith, AAG Senior Vice President of Wholesale.

In addition, AAG recently launched its new wholesale brand, AAG & You, Better Together, focusing on the company’s partner relationships and its ability to communicate and educate both retirement planning professionals, realtors and other trusted senior advisors.

Kimberly Smith, Senior Vice President, Wholesale As senior vice president of wholesale lending, Kimberly Smith is responsible for the production and growth of AAG’s wholesale division. Prior to joining AAG in January 2013, Smith was the executive vice president of sales at Generation Mortgage where she oversaw all sales operations for the top-five reverse mortgage lender.

Sponsored Content

HOME EQUITY SPECIAL REPORT

Altisource’s suite of products streamlines the HELOC process

D

espite record-high home equity levels in the fourth quarter of 2018, HELOC volume has tumbled this year. Rising interest rates and new tax laws are suppressing demand for home equity loans, further fueling the competition among lenders.

In this environment, lenders need efficient and economical HELOC solutions to compete effectively while offering the products homeowners want.

Altisource, a leading mortgage services provider, offers a suite of products, services and solutions that streamlines the HELOC process, including valuation, title, settlement, tax, endto-end loan fulfillment, loan certification and insurance — all from a single provider.

Altisource launched its hybrid HELOC valuation and title product, HomeVal, in April 2019.

HomeVal satisfies title, tax and valuation requirements by providing an alternative to traditional title insurance policies at a much lower cost.

The product also helps with margin constraints on HELOC loans.

“Originators want to speed up the underwriting process on a HELOC loan and need to keep closing costs well below traditional refinance and purchase transactions,” said Ben Hall, vice president of origination services, Premium Title at Altisource.

“HomeVal is an economical alternative to tra-

John Vella, Chief Revenue Officer John Vella began his financial career with the FDIC and Freddie Mac, later serving as chief sales officer for H&R Block’s mortgage company, CEO of Household International’s Automotive Business and president and CEO of Bear Stearns’ EMC Mortgage Company.

altisource.com

ditional title insurance policies and appraisal reports,” Hall said.

Altisource also offers a range of services to meet the evolving needs of loan originators and correspondents.

These include: Trelix Mortgage Fulfillment Services: Combines mortgage experience, customer service and tech — collaborating at key stages of the mortgage lifecycle from application through servicing.

Premium Title: Customizable title and settlement solutions, including bulk services, construction lending, HELOC, purchase and refinance and reverse mortgage loans.

Springhouse: A national appraisal management company offering a full range of valuation products and services for today’s origination, loan servicing, default, REP and secondary markets.

“Originators are looking to diversify their product offerings, moving from a fixed cost to a variable cost operating model and digitizing the loan lifecycle on a consumer-facing and selfserve platform,” Hall said. “Looking forward, our biggest opportunity will be meeting these needs through our suite of products.”

Phil Huff, SVP Professional Services Phil Huff brings experience with sales, operations, technology and strategy as CEO at mortgage technologies companies such as eLynx and Platinum Data Solutions.

Benjamin Hall, VP Origination Services, Premium Title Benjamin Hall has over 15 years of national operations experience in title and settlement, specializing in product development, centralized fulfillment, system integrations and digitized solutions.

MISSION

Altisource is an integrated service provider and marketplace for the real estate and mortgage industries.

Combining operational excellence with a suite of innovative products and scalable technology, we help solve the demands of the ever-changing markets we serve.

Fast Facts Founded in 2009, Altisource combines deep industry experience with exceptional service to deliver a full suite of services to meet the evolving needs of loan originators and correspondents.

Trelix is a leading provider of end-to-end fulfillment services for mortgage bankers and mortgage purchasers.

HOUSINGWIRE ❱ JUNE 2019 69

C O M PA N Y S P O T L I G H T:

QUANTARIUM | SPONSOR ED CONTENT

Quantarium disrupts valuation space with AI-driven innovation Neural networks that mimic biological processes deliver high level of accuracy

Q

uantarium is an unusual company in the fintech space. Its founders, who have deeply technical backgrounds in computer science and quantitative genetics, weren’t seeking to disrupt a traditionally manual industry with artificial intelligence and machine learning, although that’s what happened. In fact, Clement Ifrim and John Smintina weren’t trying to start a company at all.

Instead, the friends were comparing notes as both began considering investment properties in the Seattle area and became intrigued by the calculation of home values.

What were the critical factors determining home value, and how could you apply a consistent strategy within the context of frequent market volatility with so many variable features from one house and neighborhood to the next?

Was there a model that could predict which properties would make better investments than others?

Ifrim, a former computing research scientist and Microsoft alumnus, together with Smintina, who holds a Ph.D. in quantitative genetics and has a vast experience in data warehousing, started building innovative models, leveraging their collective expertise to analyze whether they could gain more reliable insights for addressing and resolving the multi-layered valuation challenge.

Their mutual fascination with applied artificial intelligence and genetic data modeling led them to define and deploy sophisticated machine learning techniques and even develop a prototype to rank properties according to their investment potential.

After an extended period of design, development, testing and evaluation, they realized the technology they had created for their own use had broader market

70 HOUSINGWIRE ❱ JUNE 2019

applications and they began commercial considerations for Quantarium in 2013.

The name Quantarium, relying on foundational concepts in quantum physics, reflects the company’s focus on leveraging in an initial non-discriminatory manner, all possible data, up to the smallest pieces of information available, as the starting point for its innovative products and services.

Both Ifrim and Smintina graduated from the highly regarded “Liceul Informatica Iasi,” a computer science school in Romania, before going on to get advanced scientific and technology degrees and pursuing careers in the global technology market.

Shortly after founding Quantarium, they reached out to another illustrious alumnus, Mihai Petriuc, bringing expertise in information retrieval and evolutionary computation, to serve as the chief software architect, and rounded out the leadership team with Malcolm Cannon, a veteran enterprise technology executive.

From its earliest days, Quantarium attracted a brain trust of AI scientists, ML experts, researchers with advanced degrees in mathematics, and enterprise software engineers who are now leveraging their expertise in artificial intelligence and machine learning to create compelling solutions for companies in the real estate and mortgage industries.

These solutions are constantly evolving, delivering sophisticated intelligence for better, more accurate decision-making, from valuations to portfolio services and more.

QUANTARIUM VALUATION MODEL While working on their ranking system, Ifrim and Smintina realized the rankings required an incredibly accurate valuation model, something with no more than a 5%

error rate. That level of accuracy wasn’t available outside of a very expensive commercial model, so the Quantarium team set out to design one specifically for the residential real estate market. The result, Quantarium Valuation Model or QVM, exceeded their expectations.

QVM relies on a cascade of proprietary solutions, including neural networks and genetic modeling that mimic biological processes, to get the most accurate results.

This true machine-learning approach runs hundreds of thousands of generations of property specifics and values to understand and optimize information on micro-markets at the neighborhood, ZIP code or county level.

QVM learns and self-turns to what is valuable among its robust and ever-expanding set of property data, and factors in the effects of local events like foreclosures and recent sales. QVM is continuously evaluating and learning — a process that produces further data points which become part of any new property valuation.

However, the potential roadblock in any genetic modeling approach is how to deal with outliers that can skew overall results.

Quantarium’s breakthrough in this area delivers incredible accuracy and is part of the company’s “secret sauce.”

“Artificial intelligence and machine learning aren’t just buzzwords for us — we are a true AI company. That’s one reason QVM is ranked as the No. 1 most accurate valuation model,” Ifrim said.

PORTFOLIO SERVICES After developing such an accurate valuation model, offering portfolio services was a natural next step for Quantarium.

The company leverages both its data intelligence and the proprietary national footprint “Q-Data Lake” to help companies — whether lenders, property owners

C O M PA N Y S P O T L I G H T:

or real estate agents — monitor and manage their portfolios.

Quantarium’s predictive analysis is fueled by the same innovative AI technology that drives QVM, and it also continuously evaluates, learns and improves. Understanding what is happening in the overall market and how this affects a specific portfolio of properties is not only vital to identifying potential risks, it can also help identify potential opportunities.

Mortgage servicers, for example, are using Quantarium’s portfolio services to get the visibility and corresponding insight they need to retain customers. With Quantarium, servicers can see market activity on any loan in their portfolio and reach out to borrowers as part of a proactive retention strategy.

By knowing who is likely to sell, refinance, or take cash out, servicers can engage borrowers before they have taken any action — a crucial differentiator in a low-volume purchase environment.

Intelligence from Quantarium’s portfolio services can also provide unparalleled insight into why a customer leaves, an important first step in winning them back or addressing underlying problems in the process.

DATA AND SEARCH PLATFORM Quantarium’s Data and Search Platform was built by data scientists, mathematicians and computer architects with backgrounds related to some of the most successful companies in technology, including Microsoft, Google and Amazon.

The platform features comprehensive datasets updated daily with verified data, providing a goldmine for those who want to make more informed investment decisions. Companies can access the datasets to find property ownership details, check foreclosure status, validate property value or explore transaction history.

What started as a personal quest to understand home valuations led Quantarium’s founders to develop solutions for some of the most complex questions in real estate.

Six years later, the company’s innovative approach and technology have made it a leading provider of AI-driven real estate intelligence for financial institutions, originators, servicers, large portfolio holders, investor groups, and national real estate brokerages.

QUANTARIUM | SPONSOR ED CONTENT

TIVES EXECU

CLEMENT IFRIM Chief Executive Officer, Cofounder Clement Ifrim led Quantarium’s high value AI based, multi-platform approach provided to industry stakeholders today. Ifrim, a 14-year Microsoft veteran who directed MS Office Server Products enterprise data scale and performance, has a vast background in computer science research, enterprise engineering and management, as well as entrepreneurial technology startups.

JOHN SMINTINA Chief Analytics Officer, Cofounder John Smintina was heavily involved in designing and developing the Quantarium Valuation Model (QVM) algorithms. He has been working in the big data and analytics field since 1990, where he developed various decision support systems and predictive analysis models. Smintina has a Master of Science from the University of Brasov (Romania) and a PhD in Quantitative Genetics.

MALCOLM CANNON Chief Operating Officer Malcolm Cannon was an original Quantarium start-up partner. With over 20 years’ experience, he has an extensive background in both analytical data approaches and data lakes as well as broad executive enterprise technology management, having led multiple technology companies providing mission-critical ERP applications to large customer bases.

MIHAI PETRIUC Chief Software Architect Mihai Petriuc has been instrumental in architecting the Quantarium technologies and serves as the Chief Software Architect across all platforms and products. With an impressive background in academia, Petriuc published research papers in the fields of Genetic Algorithms and Evolutionary and Parallel Computation. Specialized in large-scale, high performance solutions, Petriuc led the team responsible for the Search Engine included in multiple Microsoft products and is the author of many awarded patents.

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White House reveals long-awaited updates to Opportunity Zone rules EXPLAINS REGULATIONS TO ENCOURAGE MORE DEVELOPMENT

BY CAROLINE BASILE AND JESSICA GUERIN

After months of waiting, wary investors finally got to see the new guidelines for Opportunity Zones.

At the end of April, the U.S. Department of the Treasury released a second round of rules clarifying requirements for Opportunity Zones in a move designed to encourage more development in low-income areas.

The new rules are intended to make it easier for developers looking to take advantage of the tax breaks promised by investing in Opportunity Zones, and clear up some of the confusion that was holding investors back.

Created by the Tax Cut and Jobs Act of 2017, Opportunity Zones seek to spark economic development in distressed areas by encouraging long-term investments through significant tax breaks.

The tax incentive allows investors to defer or minimize taxes on capital gains and, when the investment remains in play for more than a decade, eliminate capital gains taxes all together.

More than 8,700 communities that are home to approximate-

ly 35 million Americans have been designated as Opportunity Zones.

But investors have been hesitant to dive in, with too many questions lingering about how, exactly, the tax breaks work and what types of developments or businesses could qualify.

This new wave of regulation is intended to clear up some of the confusion that has held investors back from taking advantage of the program, despite noted interest in the possibilities it could offer.

The new rules specify that investors can share their stakes in Opportunity Zone funds and are permitted to sell start-ups in these areas so long as they reinvest the funds in other qualifying businesses or assets. And they clarify that real estate investors can lease and refinance their properties.

The Treasury’s new guidance also makes it easier for investors looking to fund small business in these low-income areas by approving tax breaks for those exporting goods and services from HOUSINGWIRE ❱ JUNE 2019 73

“

This incentive will foster economic revitalization, create jobs and spur economic growth that will move these communities forward and create a brighter future.”

outside the zone.

One major investor concern revolved around a previous stipulation. Under this stipulation, in order to qualify, a business must have earned at least 50% of its gross income inside the zone. This left some wondering how technology companies, which sometimes drew customers from outside of the zone, fit in.

Now, the Treasury has clarified that a business qualifies if 50% of its employees’ hours or wages are from inside the zone, or if the property and managers needed to produce 50% of the revenue are from inside the zone.

Trea su r y S e c ret a r y Steven Mnuchin said President Donald Trump and his administration hope that this new wave of regulation will boost investor activity in these distressed areas.

“We are pleased to issue guidance that provides greater flexibility for communities and investors as we continue to encourage investment and development in Opportunity Zones,” Mnuchin said in statement.

“This incentive will foster economic revitalization, create jobs and spur economic growth that will move these communities forward and create a brighter future.”

Meanwhile, the U.S. Department of Housing and Urban Development issued a for ma l Request for 74 HOUSINGWIRE ❱ JUNE 2019

Information in the Federal Register that is open until June 17, 2019.

HUD announced that it is seeking input from the public on how the agency can best use its authority to maximize the impact of these tax incentives to help the distressed communities they are intended to benefit.

Investments in these areas must be made within 180 days of receiving the capital gains. These investments can come in the form of stocks, bonds, real estate or partnership interests. But the capital cannot be invested directly into a property and funds must invest 90% of their capital into Opportunity Zone properties.

Shareholders will be rewarded with tax breaks based on how long they keep the interest in the funds.

For example, those who keep their investments for five years will pay no taxes on 10% of their gains; at seven years, they will pay no taxes on 15% of gains; and if they hold their investments for a full 10 years, they pay no taxes on their gains at all.

According to a Bloomberg article, the tax opportunity has created a “frenzy” among accounting, law and real estate firms as well as private client groups, with numerous financial entities issuing white papers and hosting well-attended seminars that excitedly detailed the

RentWire

tax benefits that these Opportunity zones would provide.

But despite the avid push from developers, accountants and law firms, few investors are taking the bait.

W h i le H U D est i mates t hat Opportunity Zones could spur as much as $100 billion a year in investments, evidence suggests this potential is far from being realized.

In fact, Bloomberg noted that real estate data firm CoStar Realty Information is tracking the progress of more than 258 funds, but a database that specifically tracks these funds – OpportunityDB – reported only 88 funds that have raised a total of $26.4 billion as of April 2019.

Alfonso Costa, HUD deputy chief of staff, said the agency could not confirm any published statistics on the number of existing funds or the capital raised so far.

“There does appear to be an extreme interest both in the real property space and in the business investment space to create business and thus jobs within these economically distressed communities,” Costa said.

Costa explained that more than one third of HUD’s public housing units reside within Opportunity Zones, and that 2.4 million people living in these areas receive rental assistance from HUD. He also noted that HUD insures more than $14.5 billion worth of multifamily property mortgages in these economically distressed areas.

“We have a very large presence there and many of the people we serve are in Opportunity Zones,” Costa said. “So, we’re really focused on collaborating with the public on identifying the ways in which we can tailor our programs to not only be a catalyst for the private capital through private Opportunity funds,

but more importantly making sure that that influx of private capital reaps benefits for the people we serve and those who reside within the Opportunity Zone census tracts.”

Specifically, HUD is soliciting comments on whether the creation of an information portal would be useful; if it should focus more intently on urban areas; what types of technical assistance would be useful to participants; how the program could be used to combat homelessness; and ideas as to how the agency can ensure residents, business and community organizations benefit from the influx of investment.

Costa explained that the Request for Information is one of many things the department is doing to engage the public in the conversation about Opportunity Zones. It also has more plans in store such as hosting “listening sessions” across the country led by Scott Turner, who was recently appointed executive director of the White House Opportunity and Revitalization Council.

“We have a genuine interest in making sure that the public’s ideas are infused into the actions that we take, which we hope will complement what local and state jurisdictions adopt in their Opportunity Zone ideas and initiatives and in their economic development plans at large,” Costa said.

HUD Secretary Ben Carson also weighed in, saying HUD is looking to see how it can improve its policies.

“Through this request, we are looking to better understand how HUD can better tailor its policies and help Opportunity Zones create more positive economic outcomes for the millions of Americans that live in these areas, and for our country as a whole,” he said in a statement.

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Consolidations, cutbacks, expansions, mergers and more CHANGE ABOUNDS AS MORTGAGE MARKET ADJUSTS TO SHIFTING LANDSCAPE

BY BEN LANE

THE mortgage business is either a great business to be in, or it’s tougher than it’s ever been. Just depends on who you ask.

Every day it seems as if there’s another company launching a mortgage lending business while another shutters its lending operations.

Every day it seems as if there’s another lender expanding into new states while another contracts its business to fewer locations.

Every day it seems as if one lender is buying another to grow its business while another lays off hundreds of mortgage employees (sometimes those two are related).

No matter where one looks, the evidence is clear: the landscape of the mortgage market is changing.

In just the first few months of 2019 alone, companies like Zillow, Movement Mortgage, Redfin, Home Point Financial, Ally Financial, Planet Home Lending and Reali plotted expansions in mortgage lending, while companies like HomeStreet Bank, Provident Financial, and Live Well Financial all drastically re-

duced their lending operations.

And those are just a few examples.

Zillow, for example, officially got into the mortgage business in November 2018 when the online real estate giant bought Mortgage Lenders of America.

But earlier this year, Zillow launched its own mortgage lending operation, which it is calling Zillow Home Loans.

The company rebranded Mortgage Lenders of America to carry the Zillow name and will use the lender to finance home buying and selling through its Zillow Offers platform.

Through Zillow Offers, Zillow buys houses directly from sellers, and now, it will offer those home sellers a mortgage for their new home.

It’s a truly massive move for Zillow, which describes the change rather simply.

“Home shoppers who visit Zillow to shop for a mortgage can now get financing directly from Zillow Home Loans,” the company HOUSINGWIRE ❱ JUNE 2019 77

“

Getting a mortgage is often the hardest, most complicated part of buying a home. Since our inception, Zillow has been empowering people with information and resources to make smarter real estate decisions, including helping borrowers shop for the best lender and loan for their new home.”

- Erin Lantz

explained in a statement.

Last year, the online real estate landscape shifted dramatically when Zillow announced that it was getting into the mortgage business by buying Mortgage Lenders of America.

According to Zillow, the acquisition of Mortgage Lenders of America would allow the company to “streamline and shorten the home-buying process for consumers who purchase homes through Zillow Offers.”

The company paid $65 million to acquire Mortgage Lenders of America, and closed on the deal late last year.

“Getting a mortgage is often the hardest, most complicated part of buying a home,” said Erin Lantz, Zillow vice president and general manager of mortgages. “Since our inception, Zillow has been empowering people with information and resources to make smarter real estate decisions, including helping borrowers shop for the best lender and loan for their new home.”

“With Zillow Home Loans we are taking an incredible step forward to deliver an integrated payments platform to complete the financing for Zillow Offers that delivers a more seamless, on-demand real estate experience today’s consumers expect,” Lantz added. “We continue to offer consumers the power of choice to shop for loans directly through Zillow Home Loans or through our popular mortgage marketplace.”

Redfin beat Zillow to the mortgage punch, launching its lending platform in January 2017. Redfin Mortgage began in Texas before expanding to Georgia, Illinois, Minnesota, North Carolina, Ohio, Pennsylvania, Virginia, Washington, D.C. and Colorado.

78 HOUSINGWIRE ❱ JUNE 2019

And over the last few months, Redfin further expanded its lending business to include Florida, Maryland and Tennessee.

The company touts its technology platform and “customer-centric model” as reasons why borrowers should choose Redfin as their lender.

“Redfin Mortgage aims to be the fastest and easiest way for homebuyers to receive a quote, get pre-approved for a loan and finance their home purchase,” the company said. “Redfin Mortgage offers competitive rates and charges no lender fees, and its mortgage advisers are rewarded based on service, not just sales.”

Beyond that, Redfin said that borrowers in Florida, Maryland, and Tennessee can use Redfin Mortgage’s fully-digital mortgage closings and sign their loan documents from any device with a camera and high-speed internet connection.

Another tech-focused real estate company also expanded into mortgages when Reali, a flat-fee real estate startup that operates in California, acquired Lenda, an online mortgage lender that launched in 2013 and operates in 12 states.

With the acquisition, Reali launched Reali Loans, a mortgage lending operation of its own.

Reali’s move into mortgages is a big one for a company that’s grown quickly over the last few years.

Last year, the company secured $20 million in funding in its Series B round. That came a year after the company raised approximately $10 million.

When it raised the $20 million last year, the company said that it planned to expand beyond California, and while the company’s real estate services are still only available in the Golden State, it can now offer mortgages in the 12 states where Lenda operated.

“Our mission and vision is to simplify the home buying and selling experience for our customers by creating transparency and offering multiple services including home loans, to minimize the amount of complexity in today’s antiqued real estate process,” Reali Co-Founder and CEO Amit Haller said.

“This acquisition of Lenda into Reali Loans accelerates our company roadmap with goals to vertically integrate all parts of the home buying transaction in the near future and realize our vision for a reimagined real estate experience,” Haller added.

Home Point Financial also expanded by acquiring the wholesale lending division of Platinum Mortgage, a mortgage company based in Georgia.

According to Home Point, the acquisition includes both Platinum’s sales team and its’ Madison, Alabama-based operations group.

Movement Mortgage also expanded by acquiring a piece of Platinum’s business. In early May, Movement, a top 10 national retail mortgage lender, acquired the retail lending assets of Platinum Mortgage.

The purchase marked Movement’s second acquisition of 2019,

following the purchase of the retail mortgage assets of Eagle Home Mortgage.

Of course, on the other side of Home Point and Movement’s acquisitions was Platinum Mortgage, which minimized is mortgage business by selling off its wholesale and retail lending businesses.

Along the same lines, HomeStreet Bank, a community bank and mortgage lender that operates bank branches and stand alone home loan centers, announced this year that it was planning to shift its business away from mortgages by selling off its retail mortgage origination business and a big chunk of its mortgage servicing rights.

According to HomeStreet, the company deemed the moves necessary due to the “persistent challenges facing the mortgage banking industry.”

The bank eventually found buyers for its mortgage business: Homebridge Financial Services, New Residential Mortgage and PennyMac. According to HomeStreet, it is selling off a sizable piece of its mortgage origination business to Homebridge, while New Residential and PennyMac are buying up more than 70% of its MSR portfolio.

Provident Financial also recently moved to leave some of its mortgage business behind, when it announced this year that it plans to shutter the Provident Bank Mortgage brand.

The bank plans to continue originating mortgages through its communit y banks, but will layoff more than 120 employees as part of its mor tgage shift.

TIAA Bank also recently reduced its retail mortgage lending footprint, when it sold off some of its retails branches to U.S. Bank.

It was a swift fall for TIAA Bank.

In July 2017, TIAA was finalizing its $2.5 billion acquisition

of EverBank, touting the deal as a “significant” expansion of its retail footprint and an extension of its existing retirement, investment and advisory services.

Then, in July 2018, the company rebranded TIAA Direct and EverBank to TIAA Bank.

At the time, TIAA President and CEO Roger Ferguson explained that the combination of the two operations into one brand name would help push the company into the future and build a “different kind of bank.”

But less than a year later, TIAA Bank said that it was moving to get out of retail mortgage lending and will shift its focus to digital mortgages.

So, while some companies struggle with the mortgage market’s new normal, others are onward and upward into the future.

Whether any of these companies is positioned properly for future success is an answer only time can provide.

HOUSINGWIRE ❱ JUNE 2019 79

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ReverseReview

Why aren’t more people tapping into their home equity?

HOMEOWNERS HAVE RECORD AMOUNTS OF HOUSING WEALTH, SO WHY ARE THEY SO RELUCTANT TO USE IT?

BY JESSICA GUERIN

AS the housing market has continued its recovery, home prices have been climbing at a steady clip across the nation. And that means homeowners now have a nice stockpile of pent-up wealth in their homes.

In fact, as of the fourth quarter of last year, U.S. homeowners had a collective $5.7 trillion in tappable equity, according to Black Knight.

To break it down further, at the end of last year, homeowners amassed nearly $10,000 in equity in one year’s time, according to CoreLogic data.

But it seems fewer people are choosing to access this source of wealth.

Black Knight reported that just 1% of available equity tapped in the last quarter of 2018 –the lowest share since 2012.

That said, it is worth noting that cash-out refinances have seen

some action in the last two years.

Freddie Mac data showed that the share of refinances that involved cash extraction climbed to 77% in the second quarter of 2018. But the amount of equity cashed out totaled $15.8 billion – well below the $75-$85 billion we saw in the years leading up to the crisis.

At the same time, the options for tapping equity appear to be growing.

Of course, you have your standard HELOCs and home equity loans and – for seniors –reverse mortgages could be an option.

But now you can also take on a homeownership investor, who will pay you cash for the chance to share in your home’s appreciation. Or, you could work with a sale-leaseback company, which will buy your home but let you live there, so you can essentially access your equity without relocating.

HOUSINGWIRE ❱ JUNE 2019 81

It seems that every quarter a new startup emerges promising to disrupt the home equity space by giving homeowners a better, faster, cheaper or even debt-free way to tap into the wealth in their homes.

And yet, so many Americans appear to be reluctant to take this route.

What gives? We talked to a number of experts for their take.

RATE ROADBLOCK First, rates clearly play a role. In recent years, the Federal Reserve has nudged rates upward, and this has had an obvious chilling effect on home equity lending.

Andy Walden, Black Knight’s director of market research, said there is a very clear inverse correlation between rising rates and declining equity withdrawals.

“Over the past three years, the Fed has steadily ratcheted up short-term interest rates, which are directly related to rate offerings on home equity lines of credit,” Walden said. “In fact, the introductory rate on HELOCs has risen by more than two percentage points during that time.”

“Then, 2018 saw 30-year fixed rates rise as well,” he added.

“With borrowing costs rising, a significant number of homeowners – despite having record levels of equity – are choosing to forego equity withdrawals.”

BABY BOOMER RELUCTANCE An additional factor could be the fact that the aging of the Baby Boomer generation has meant that the homeowner population is skewing older, and older homeowners might be more reluctant to take on debt.

CoreLogic’s Chief Economist Frank Nothaft said this could be one of the reasons home equity access appears subdued.

“If you look at the age distribution of homeowners in the United States, the biggest cohort are Baby Boomers, and the median age of a Baby Boomer homeowner is about 60 years of age,” Nothaft said. “Some of them who are still working are probably thinking about retiring and they probably see the equity in their home as one of their wealth assets.”

Zillow Economist Jeff Tucker agreed that the aging homeowner population likely plays a role.

“For many older Americans, their home is their single biggest financial asset, and they may want to keep it unencumbered by loans or reverse mortgages to ensure their heirs will be able to inherit and sell their home easily after they are gone,” Tucker explained.

CULTURAL FACTORS Tucker also said there may be a cultural element at play here.

“I think American homeowners view it as a personal accomplishment and point of pride to have fully paid off their homes,” he said. “Simple ownership is very easy to understand, and many people are reasonably wary of trying to understand unfamiliar financial products such as reverse mortgages.”

Of course, a decade may have passed since the financial crisis, but the memory lingers, and this, too, could influence a homeowner’s decision to leave their equity intact.

“

Now we’re in an environment where we have a lot of young Millennials who saw what happened with the housing crash, the foreclosure crisis, the great recession, and for many of them, maybe those memories are very fresh. Now that some have transitioned into homeownership, they’re mindful of it and they may be more cautious and avoid second liens or tapping into home equity going forward.” - Frank Nothaft, Chief economist at CoreLogic

82 HOUSINGWIRE ❱ JUNE 2019

ReverseReview

“

Over the past three years, the Fed has steadily ratcheted up short-term interest rates, which are directly related to rate offerings on home equity lines of credit...

With borrowing costs rising, a significant number of homeowners – despite having record levels of equity – are choosing to forego equity withdrawals.”

-Andy Walden, director of market research at Black Knight

Home equity by the numbers

As of the fourth quarter of last year, U.S. homeowners had a collective

$5.7 trillion

in tappable equity.

At the end of last year, homeowners amassed nearly

$10,000 in equity in one year’s time.

Just 1% of available equity tapped in the last quarter of 2018 –the lowest share since 2012.

rate, and that that’s the largest delta since the crisis.

“This could cause some would-be HELOC candidates to explore a cashout refinance instead, while others may continue to forego withdrawing equity all together,” he said.

Walden said the borrowing costs for HELOCs and cash-outs may just enhance the appeal of some of the non-traditional equity products that have come to market.

“The record levels of tappable equity available, combined with rising borrowing costs for both HELOCs and cash-out refinances – up until recent interest rate declines, in any case – have certainly opened to the door for non-traditional product entrants that can offer homeowners options to tap into available equity without being tied to underlying short and long term interest rate trends.”

WHAT THE FUTURE HOLDS Nothaft pointed out that homeowners Will we see more homeowners utilizing their home equity as this memory con- are staying in their homes longer than before, and this is likely to spur remodtinues to fade? Maybe, maybe not.

Walden predicts a mixed bag in 2019 eling activity, which could certainly be based on recent interest rate movement. funded by home equity.

Tucker said it’s too hard to tell if “With 30-year rates declining in recent months, equity utilization via homeowners will warm up to the idea of cash-out refinances will likely pick up home equity access in the years ahead.

“Lower interest rates than this past steam, while the headwinds for HELOC lending have actually increased,” he winter could spur borrowing,” he said.

“But falling home value appreciation said.

Walden also noted that the average rates could revive memories of the interest rate on a HELOC is about 2.5% housing crash and make people more higher than the average 30-year fixed wary.”

“Now we’re in an environment where we have a lot of young Millennials who saw what happened with the housing crash, the foreclosure crisis, the great recession, and for many of them, maybe those memories are very fresh,” Nothaft said. “Now that some have transitioned into homeownership, they’re mindful of it and they may be more cautious and avoid second liens or tapping into home equity going forward.”

Walden said there is evidence to suggest memories of the crisis are holding back home equity lending.

“Even before we started to see borrowing costs increase, equity withdrawals as a share of available equity were well below 2004-2008 levels, and borrowers were leaving more equity on the table than they had been prior to the financial crisis,” Walden said.

HOUSINGWIRE ❱ JUNE 2019 83

Molly Dowdy NEXT Mortgage Events

Sensing the need for inclusionary spaces in a male-dominated industry, Molly Dowdy took it upon herself to co-create NEXT, the only technology-focused conference for executive women in the mortgage industry.

Dowdy played a vital role in developing NEXT’s initial concept, creating the organization’s mission, developing its go-to market strategy, establishing standards for content and customer experience and overseeing event logistics. Below, Dowdy gives an inside look at her life by answering five questions.

1. If I had picked a different career path I would be a… public servant and run for office.

2. People would be surprised to know I… starred in a music video on MTV for a very popular band. I played a hotel housekeeper magnificently! I don’t know why that wasn’t my big show biz break.

3. The last concert I attended was…

Willie Nelson. He played a great show in a small rec center in a tiny town in Oklahoma. He’s 85 years old, so I see him every chance I get.

Always amazing.

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4. I feel like a success at my job when…

I see more and more executive women in the mortgage industry get the visibility and recognition they deserve.

5. I would tell my younger self… not to assume that anyone knows more than you do. When I was younger, I sat quietly through so many exec meetings as ideas were discussed. Sometimes, I suspected these ideas were trash but I would assume they know what they’re doing since they’re older, more educated and had more experience. They didn’t. (Politely) Question everything.

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Real estate commission splits are in the spotlight TWO NEW LAWSUITS CHARGE PRICE FIXING

BY KATHLEEN HOWLEY IN the history of American real estate, one of the most notorious events occurred almost half a century ago at the Congressional Country Club, a 30-minute drive from Washington, D.C. The Bethesda golf course still exists – last year the PGA announced it will be staging eight tournaments there, including the 2036 Ryder Cup. It was a warm September evening in 1974, a month after President Richard Nixon resigned and Gerald Ford, a member of the club frequently seen on its links, had replaced him. One of the area’s most successful real estate brokers, John Foley, hosted a dinner at the clubhouse for nine of his top competitors.

At the end of the meal, Foley rose and, after some introductory remarks, announced his firm was raising its commission to 7% from 6%. Within a few months, almost all of the competitors at the dinner table had done the same.

Fast-forward three years: after being indicted by a U.S. grand jury in the district of Maryland for violations of anti-trust laws, three of the people at the dinner were found guilty of price-fixing and put on varying lengths of probation – the Justice Department requested jail time. Six companies were ordered to pay fines.

Before sentencing, Judge C. Stanley Blaire asked each defen-

dant if he had anything to say. A Washington Post article the following day recounted the reaction of the dinner host: “Foley stood mute for a few seconds, his head bowed, his silent lips moving, until Judge Blair called a recess. Afterward, Foley broke into tears. ‘I thought I was a strong man,’ he sobbed. ‘It was a nightmare. I never intended to break a law. I’ve never been in a courtroom before.’”

If you’ve ever wondered why most real estate agents take great care in the way they discuss commissions or balk at discussing the topic at all with anyone other than potential clients – they’ve likely heard that story. It has morphed into a real estate version of a true-life Aesop fable: a story about consequences.

There’s a lot at stake. Total commissions for U.S. home sales reached $163.3 billion in 2018, the highest since 2006, according to the U.S. Bureau of Economic Analysis. It was a gain of half a percentage point from 2017, the smallest increase since 1966. The all-time high in annual commissions was set in 2005 when the total reached $185.2 billion.

While some real estate agents charge a flat fee for services, most charge a negotiable commission that’s a slice of a home’s sale price. The range of commissions varies depending on area HOUSINGWIRE ❱ JUNE 2019 87

and price point – for example, at the highest end of the market, commissions tend to be smaller because sale prices are higher.

But, in most cases they’re typically between 5% and 6%. On a home selling for March’s median price of $259,400, that would be $12,700 to $15,564.

Just because there’s similarity in the commission charged by agents working at different firms, doesn’t mean there’s price-fixing going on, said housing economist Donovan Rypkema, owner of PlaceEconomics, a real estate and economic development-consulting firm. That’s the effect of competition.

“In a pure economic sense, when you have lots of providers for essentially the same service, it tends to stabilize prices at the same level,” Rypkema said. “Mobil and BP gasoline costs almost the same at the pump.”

We haven’t seen too many broad-reaching legal cases about anti-trust issues in the intervening decades since the dinner at the Congressional Country Club. There have been various challenges in state and federal courts to the use of MLS to market 88 HOUSINGWIRE ❱ JUNE 2019

homes, most unsuccessful. And, there was a 2008 consent decree between the National Association of Realtors and the Department of Justice modifying a policy about displaying MLS properties on other websites.

But now, out of the blue, there are two new anti-trust lawsuits that, if successful, would change the way the nation’s home sales are transacted. In March, a Minnesota home seller filed litigation against NAR, several multiple listing services and several brokerages charging price-fixing. In April, a Minnesota-based corporation filed a similar action.

Both are class-action suits and both challenge the legality of requiring home sellers to pay the commission for agents who represent buyers. In part, they allege NAR has driven up costs to sellers and stifled competition by requiring brokers to offer compensation to agents representing buyers when listing a property on an MLS. NAR responded in March by saying, “The complaint is baseless and contains an abundance of false claims. The U.S. Courts have

OpenHouse

“

routinely found that Multiple Listing Services are pro-competitive and benefit consumers by creating great efficiencies in the home-buying and selling process.”

To understand the suits, you have to understand the way the real estate industry uses the word “sides” when referring to commissions. Each home transaction has two sides – buyer and seller. It’s possible for one real estate agent to capture both sides by listing the home and then bringing a buyer to the table. That agent would get the whole commission, minus a small share to their brokerage.

In most transactions, though, the sides are split. One agent lists a home and a second agent brings in the buyer, often after seeing the property on a multiple listing service.

However, sellers are rarely involved with decisions about that split. When you want to sell your house, you typically sign a contract with a real estate agent that states the commission you negotiate. It’s up to the listing agent to share her commission with the other “side.”

Defendants and their coconspirators possess market power through control local MLSs, which are databases of properties listed for sale in a particular geographic region.”

The March suit alleges that the MLS providers conspired with NAR to require sellers to pay a commission to the agents representing buyers at inflated rates in violation of anti-trust laws.

“The conspiracy has saddled home sellers with a cost that would be borne by the buyer in a competitive market,” the complaint states. “Moreover, because most buyer brokers will not show homes to their clients where the seller is offering a lower buyer broker commission, or will show homes with higher commission offers first, sellers are incentivized when making the required blanket, non-negotiable offer to procure the buyer brokers’ cooperation by offering a high commission.”

The action seeks to represent any sellers who paid a broker commission during the sale of their property in the last four years in areas covered by regional MLS sites, which includes sellers in Texas, Maryland, North Carolina, Ohio, Colorado, Michigan, Florida, Nevada, Wisconsin, Minnesota, Pennsylvania, Arizona, Virginia, Utah and Washington, D.C. The second suit, filed in the Northern District of Illinois in April

by Minnesota-based corporation Sawbill Strategic, makes similar allegations: that NAR and several of the nation’s biggest brokerages violated federal antitrust laws by requiring property sellers to pay the buyer’s broker an inflated fee.

“Defendants and their co-conspirators possess market power through control local MLSs, which are databases of properties listed for sale in a particular geographic region,” the complaint states. “A majority of homes in the United States are sold on such MLSs. Through their control of the MLSs, Defendants and their co-conspirators have market power in the local markets for real estate broker services.”

NAR also said this second complaint was baseless and contains false claims.

“We think these lawsuits are anti-consumer and anti-competition, and puts the consumer at a huge disadvantage,” Mantill Williams, NAR vice president of communications, said in an interview. “The market for the brokerage of real estate is extremely competitive – to the benefit of buyers and sellers alike.”

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CFPB Watch

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CFPB Watch

A kinder, gentler CFPB? BUREAU ANNOUNCES NEW ENFORCEMENT RULES

BY BEN LANE

KATHY Kraninger may be charting a different path as director of the Consumer Financial Protection Bureau than that of her immediate predecessor, Mick Mulvaney, but one area where it appears Kraninger’s CFPB will be similar to Mulvaney’s is in the bureau’s friendlier attitude toward the companies it regulates.

To that end, the CFPB announced recently that it is making changes to its policies on Civil Investigative Demands, the tool the bureau uses to issue investigational subpoenas to companies when probing potential violations of law.

Under the newly announced policy, the CFPB will provide more information to companies about the “potentially wrongful conduct under investigation” in order to provide companies with more “transparency.”

According to the CFPB, its CIDs will now “provide more information about the potentially applicable provisions of law that may have been violated.”

Additionally, the bureau said that CIDs will also “typically specify the business activities subject to the Bureau’s authority.”

Beyond that, the CFPB said that with investigations where determining how much

authority the bureau has over a certain activity is one of the “significant” reasons for the investigation, the bureau “may specifically include that issue in the CID in the interests of further transparency.”

According to the bureau, the new policy is partially based on several recent court decisions, which held that previous CIDs were unduly extensive for certain companies to handle – a factor previously discussed by Mulvaney when he made his own changes at the bureau.

“It is not appropriate for any government entity to ‘push the envelope’ when it comes into conflict with our citizens. The damage that we can do to people could linger for years and cost them their jobs, their savings, and their homes,” Mulvaney wrote in a memo to CFPB employees in January 2018.

“If the CFPB loses a court case because we ‘pushed too hard,’ we simply move on to the next matter. But where do those that we have charged go to get their time, their money, or their good names back?,” Mulvaney continued. “If a company closes its doors under the weight of a multi-year Civil Investigative Demand, you and I will still have jobs at CFPB. But what about the workers who are laid off as a result? Where

do they go the next morning?”

During his time at the bureau, Mulvaney made several broad policy changes and signaled that the CFPB planned to rein in its enforcement actions. Namely, Mulvaney said the bureau would focus on “equally protecting the legal rights of all, including those regulated by the bureau,” and would cease to “push the envelope” when it came to new rules, regulations, or enforcement.

And while Kraninger has reversed two of Mulvaney’s most controversial decisions (changing the name of the agency to the Bureau of Consumer Financial Protection and gutting the bureau’s advisory boards), Kraninger is now keeping with Mulvaney’s policy of being a little nicer to the financial services industry.

According to the CFPB, these new policy changes also take into account reaction received from the financial services industry last year when the bureau asked about how it might alter its use of CIDs. And at least one group in the financial services industry welcomed the new enforcement policy.

“The CFPB’s policy changes to its CIDs procedures is welcomed news as credit unions will no longer be subject to ambigHOUSINGWIRE ❱ JUNE 2019 91

CFPB Watch

“We appreciate the Bureau listening to our concerns and committing itself to providing relevant parties with additional information on the purpose and scope of an investigation. Going forward, we will continue to work with the Bureau to improve confidentiality protections and allotted response time for CID recipients.”

-Carrie Hunt

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CFPB Watch

uous and vague requests for information,” National Association of Federally-Insured Credit Unions Executive Vice President and General Counsel Carrie Hunt said in a statement.

“We appreciate the Bureau listening to our concerns and committing itself to providing relevant parties with additional information on the purpose and scope of an investigation,” Hunt continued. “Going forward, we will continue to work with the Bureau to improve confidentiality protections and allotted response time for CID recipients.”

STATES FIGHT BACK But while the CFPB may be taking a more gentle approach, states are stepping in to fill the gap.

Following through on a pledge made more than a year ago, the New York Department of Financial Services is launching its own version of the Consumer Financial Protection Bureau, seeking to fill the consumer protection gaps that are beginning to appear as the Trump administration puts more of its stamp on the CFPB. Back in January 2018, when Mulvaney told the bureau’s employees the agency would be gentler towards the companies it regulates, New York’s top financial regulator said that the state would be prepared to step in to address the CFPB’s “troublesome policy shift away from consumer protection,” and will “continue to lead and take action to fill the increasing number of regulatory voids created by the federal government.”

The NYDFS now announced that it is creating a new division that will focus on consumer protection and financial enforcement. The new division combines the previously separate Enforcement and Financial Frauds and Consumer Protection divisions into one entity.

According to the NYDFS, the new Consumer Protection and Financial Enforcement Division will focus on “protecting and educating consumers and fighting consumer fraud, as well as ensuring that

regulated entities comply with New York and federal law in relation to their activities serving the public.”

The division will also work to develop “investigative leads and intelligence” that aid in the NYDFS’ efforts to enforce the state’s banking, insurance, and financial services laws; will focus on cybersecurity events; and will also aid in the development of new supervisory, regulatory, and enforcement policies.

The Consumer Protection and Financial Enforcement Division will be led by Katherine Lemire, who will serve as Executive Deputy Superintendent at the NYDFS. Lemire comes to the NYDFS from StoneTurn, an international consulting firm providing compliance and investigative services, where she was a partner.

Earlier in her career, Lemire served as an Assistant U.S. Attorney in the Southern District of New York, where Lemire investigated federal crimes, including allegations of public corruption, racketeering, fraud, and other white-collar crimes.

Lemire also served as a prosecutor in the Manhattan District Attorney’s Office.

“As a highly respected and experienced prosecutor, compliance and regulatory professional, Katie is well-positioned to successfully marshal the extensive resources of the Department’s Enforcement

and Financial Frauds and Consumer Protection divisions to deliver real results for New Yorkers,” said NYDFS Acting Superintendent Linda Lacewell.

Lacewell also laid out what the expectations are for the new NYDFS’ new consumer protection division.

“DFS’s new Consumer Protection and Financial Enforcement Division will be a powerhouse, and Katie’s knowledge and skillset will greatly strengthen the Department’s mandate to guard against financial crises and to protect consumers and markets from fraud,” Lacewell said.

Lemire said she’s looking forward to leading the state’s efforts.

“Given the paramount importance of consumer protection and regulatory oversight in the financial marketplace, I look forward to once again re-entering public service and serving the best interests of New Yorkers, while utilizing the expertise and dedication of DFS staff and resources of the Department,” Lemire said.

In her new position, Lemire will oversee several divisions including the NYFDS’ enforcement division; investigations and intelligence division; civil investigations unit; the producers unit; the consumer examinations unit; the student protection unit; and the holocaust claims processing office.

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BY THE NUMBERS

TIME TO CLOSE As the digital mortgage revolution grows, more and more companies are closing mortgages in record time. The industry average, according to data from Ellie Mae, has hovered in the mid-40 range for some time. But companies are beginning to break that mold, and some are even putting their money where their mouth is.

Caliber Home Loans loanDepot

8 days loanDepot matches borrowers through technology and high-touch customer care with the credit they need to fuel their lives.

10 days A mortgage lender created by industry experts who understand the challenges of today’s home financing market.

NewCastle

12 days Through simplicity and integrity, you’re standing keys in hand, ready to move in, in one-third the time it takes all other typical loans.

reali

14 days You deserve complete honesty in your financial decisions, and at Reali, we exist to protect your most important financial investment: your home. Our mission is to reimagine homeownership, starting with home loans.

94 HOUSINGWIRE ❱ JUNE 2019

New American Funding

14 business days Family-owned, New American Funding is an independent mortgage lender headquartered in Orange County, California, that is dedicated to helping other families and individuals improve their quality of living through homeownership.

JPMorgan Chase

21 days or you get $1,000 JPMorgan Chase is one of the oldest financial institutions in the United States with a history dating back more than 200 years.

QUOTES FROM THE EXPERTS

DID YOU KNOW AN INTERVIEW WITH ALEX FAN As some major companies expand their reach into, or deeper into, mortgage lending, one expert says they could change how the housing industry works over the next few years.

HousingWire interviewed Saxony Partners Director Alex Fan, who talked about companies who could soon bring even more disruption to the housing industry.

“You are starting to see companies like loanDepot and Quicken Loans try to vertically integrate to touch all parts of the home buying experience from home search to finding a lender to finding a moving company to getting a renovation loan. This industry went from being a highly disconnected system to one forged upon key relationships and will evolve to being completely interconnected.”

“Automation and AI are still buzzwords in the industry, but some companies have figured out how to leverage technology to streamline their processes.”

“Advances in technology and shifts in business strategy are making this possible. Amazon is also a looming reality that is already making advances towards disrupting the industry.”

“With these advances in technology, humans will be able to do more valuable work as the tedious and mundane is offloaded to the “robots.” As companies figure out how to leverage this technology, headcount will cease to scale linearly with the volume of work and start to bend downwards.”

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Kudos GIVING BACK • LOANLOGICS SPONSORS AMERICAN CANCER SOCIETY’S HOPE GALA LoanLogics was a Champion Sponsor of the American Cancer Society’s South Jersey Hope Gala in April, with CEO Brian Fitzpatrick serving as event chair.

The Hope Gala raises funds for programs and services that support cancer patients and their caregivers.

“My involvement with this event began in 2012 and it has given me the opportunity to learn more about the amazing work of the American Cancer Society,” Fitzpatrick said.

“The contributions raised from the event help support so many individuals and families, strengthening in them hope and optimism for their battle against cancer.”

• ARCH MI DONATES FUNDS TO TEACHERS Arch MI donated $14,000 to help public school teachers in North Carolina and California through donorschoose.org, which lists teacher requests in communities nationwide and enables users to seek out classroom projects in a specific city.

The schools that received the donations, which are located near Arch MI offices, teach a number of students from low-income households, the company said.

“It’s been really enjoyable to share those messages with our employees,” said Jim Jumpe, Arch MI chief marketing officer. “All of us at Arch MI are impressed by these teachers, who are making extraordinary efforts to give their students quality learning opportunities.

Many of our employees have ties to schools that received our donations, so this is a great way for companies like ours to give back and recognize the importance of education and great educators to the success of our communities.”

• BANK OF AMERICA ANNOUNCES $5 BILLION AFFORDABLE HOUSING INITIATIVE Bank of America launched a $5 billion af96 HOUSINGWIRE ❱ JUNE 2019

fordable housing initiative to assist low- to moderate-income and multicultural homebuyers and communities across the country.

The bank will distribute the funds over the next five years through its Bank of America Neighborhood Solutions program, which it says will help than 20,000 individuals achieve homeownership.

“We know many of our clients want the power to own their first home, which can sometimes be challenging,” the bank stated.

“One of the ways we’re helping is through our suite of affordable homeownership solutions and professional resources, which aid them in overcoming barriers and put sustainable homeownership within reach.”

Bank of America’s Neighborhood Solutions program offers down payment and closing cost assistance, low down payment mortgages, grants that can be applied to non-recurring closing costs, and homebuyer education and counseling.

“Today, our commitment to affordable and responsible homeownership is greater than ever, with half of our loans going to low- to moderate-income or multicultural families and communities,” said D. Steve Boland, Bank of America head of consumer lending. “We know many of our clients want the power to own their first home, which can sometimes be challenging. One of the ways we’re helping is

through our suite of affordable homeownership solutions and professional resources, which aid them in overcoming barriers and put sustainable homeownership within reach.”

• BB&T GIVES $15 MILLION TO THE FOUNDATION FOR THE CAROLINAS’ AFFORDABLE HOUSING CAMPAIGN BB&T announced it is donating $15 million to the Foundation for The Carolinas, which will be used for the Charlotte Housing Opportunity Investment Fund to support affordable housing in Mecklenburg County.

The Charlotte Housing Opportunity Investment Fund aims to develop housing that serves residents in moderate-, low- and extremely low-earning households. This includes multi- and single-family housing, workforce housing and multifamily rehabilitation projects.

BB&T’s commitment includes a $1 million grant, $4 million in fund debt or fund equity, and $10 million in below market loans.

“As part of our mission, to help make the communities where we work better places to live, we’re delighted to make this contribution to the Foundation for the Carolinas and support their affordable housing efforts throughout the Charlotte metro area,” BB&T Chairman and CEO Kelly King said.

Kudos

AWARDS

• FANNIE MAE NAMES TOP STAR PERFORMERS Fannie Mae named the winners of its Servicer Total Achievement and Rewards, or STAR, program, recognizing several leaders in the mortgage space for their industry-leading best practices.

Among the winners in the General Servicing category were Ocwen Loan Servicing, PHH Mortgage, Guild Mortgage, RoundPoint Mortgage Servicing and Colonial Savings.

RoundPoint was also recognized in the Solution Delivery category.

• PEERSTREET RECEIVES COMPARABLY’S AWARD FOR BEST PLACES TO WORK IN LOS ANGELES AND BEST COMPANY OUTLOOK PeerStreet won Comparably’s 2019 Culture Awards in multiple categories, including Best Places to Work in Los Angeles and Best Outlook for 2019.

Comparably is a compensation, culture and career monitoring

website that rates companies based on employee reviews on their outlook for the company’s future and a variety of topics relating to workplace culture.

“We are excited for what this year will bring for PeerStreet as we continue to rapidly scale our platform,” PeerStreet CEO Brew Johnson said. “We’ve now surpassed $2 billion transacted and $1 billion assets under management, and the goal is to continue the amazing work our team is doing while ensuring that PeerStreet remains a place our current and future employees enjoy and are proud to work for.”

Comparably, a compensation, culture and career monitoring website, recently released its first quarter 2019 Culture Awards.

Based on employee sentiment, these lists recognize, “The pride PeerStreet employees have for their organization is proven time and again with their positive ratings on Comparably,” Comparably CEO Jason Nazar said. “Their placement on our Best Places to Work in Los Angeles and Best Company Outlook lists is an outstanding accomplishment, and is further proof of the company’s commitment to building great workplace culture and changing the landscape of the real estate debt.”

• FLOIFY WINS INNOVATIONS AWARD Floify received an Innovations Award from the PROGRESS in Lending Association at the Mortgage Bankers Association’s 2019 Technology Solutions Conference in Dallas.

The Innovations Awards recognize solutions that changed the mortgage industry for the better, judging companies by overall industry significance, originality, positive change, hard cost, time savings and intangible efficiencies users can experience.

“PROGRESS in Lending named Floify a top industry innovation because it is a leading digital mortgage point-of-sale solution that streamlines the loan process,” said Tony Garritano, founder of the PROGRESS in Lending Association. “Prior to the days of digital mortgage automation, loan originators and other lenders in the space processed loans through traditional methods. Floify has changed that.

Through automation, Floify is saving its clients valuable time in the loan origination process and nearly doubling their productivity and profitability.”

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SPONSORED CONTENT

Ari Gross CEO, SoftWorks AI

Computer vision research led to SoftWorks AI’s mortgage automation software Trapeze for Mortgage Automation provides a high level of precision Q. The mortgage industry has been trying to automate the loan process for years, with uneven results. What factors make that ambition more urgent and possible today than ever before?

A. The biggest reason is simply the cost of doing business.

According to the MBA, it costs nearly $9,000 to process a loan.

In addition, mortgage banks are reporting a net loss of $200 for each loan that was originated in the fourth quarter of last year.

Plus, many of the first-time homebuyers entering the market are Millennials. Most are accustomed to Amazon service, which is not only fast, but delivers a superb customer experience. Lenders are beginning to realize that these buyers aren’t interested in waiting weeks or months to find out if they’ve been approved for a loan.

As a result, we’re seeing companies across the mortgage lifecycle look for reliable solutions to automate and accelerate all aspects of mortgage processing. Whether you’re in origination, mortgage insurance, or servicing, you’re feeling the pressure to bring automation into your workflow. Companies that are slow to adopt advanced technology will find it increasingly hard to compete in the mortgage industry.

Q. What is the biggest obstacle to achieving a completely automated mortgage process?

A. The biggest challenge we’re seeing across the industry is that organizations haven’t found an automation solution that is sufficiently reliable. As a result, human validation is still required at every step of the mortgage loan process, meaning someone must go back and fix mistakes that the software made. This eliminates much of the ROI that was supposed to be achieved by implementing an automation solution.

Q. How do SoftWorks AI solutions overcome that obstacle?

A. There are really two ways. First, our team has deep expertise in the mortgage industry. As a result, Trapeze for Mortgage Automation is essentially an expert system that has already been extensively trained and highly optimized on recognizing hundreds of mortgage documents and extracting thousands of data fields.

In addition, our background in OCR-based recognition and 98 HOUSINGWIRE ❱ JUNE 2019

machine intelligence allows us to extract data with a high degree of accuracy. As part of the cognitive automation process, the system assigns a precise probability to every machine operation, which lends itself to a very reliable auto-validation protocol.

This gives our mortgage automation system a detailed understanding of what the solution does and doesn’t know. From this deeper understanding, we can build an increased level of touchless automation. This enables our solution to drive higher performance across all facets of the mortgage workflow.

Q. Trapeze for Mortgage Automation has its roots in a Computer Vision and AI research lab. How did that experience help shape its development?

A. I started my research over 20 years ago in a research lab in the areas of computer vision and machine perception. Originally, the goal was to allow machines to recognize their environments and help the visually impaired better navigate their surroundings using 3D OCR. This eventually led our team towards adapting machine learning methods to develop new document understanding and data compression technology. This new technology became part of the ISO JBIG2 standard, and we later licensed this technology to industry leaders including Adobe and Panasonic.

The advanced methods we developed enabled our software to achieve a level of precision far beyond what normal OCR and RPA technology can achieve. It allows us to automate complex problems in tax, accounting and finance that are considered knowledge work. This includes reliable text extraction, classification, data extraction, footnotes, stacking and routing. We have successfully applied our tech to several verticals in fintech including the mortgage industry.

Q. What kind of results are your clients seeing by leveraging Trapeze?

A. Our automation solutions have shown over 50% cost reductions in the mortgage underwriting space. This allows underwriter productivity in the Mortgage Insurance industry to increase by over 100% with respect to loans processed daily per underwriter. Many of our origination clients have seen more than 80% reduction in their loan application processing time.

SPONSORED CONTENT

Will Fisher SVP, Citadel Servicing Corp.

Non-QM commercial product expands opportunities for brokers and correspondents Citadel Servicing’s ODF+ program is designed for multifamily properties with no lender points and DSCR of .75 to 1.0 Q. Who benefits most from the ODF+ program?

A. The primary beneficiary of Citadel Servicing Corp’s OutsideDodd Frank Plus (ODF+) program will be borrowers and real-estate investors of multi-family 5 to 35-unit properties, mixed-use, and hotel/motel properties. Our product has a unique flavor compared to what’s currently offered in the space. While most commercial lenders need a 1-to-1 or higher debt service coverage ratio (DSCR), our program will allow as low as .75 to 1.

Additionally, we’ll allow down to a 500-credit score and we’re not charging lender points for the majority of the product.

This puts the ODF+ program in the unique position to be a zebra in a heard of horses. We’ve also opened it up to commercial only brokers, this program is available for all types of licensed or unlicensed finance brokers. NMLS or no NMLS it does not matter, we abide by state specific requirements for commercial licensing.

Q. How does this differ from the original ODF program?

A. The current ODF program is geared to the 1 to 4-unit property type, and since those properties are considered residential, they require different licensing, disclosures, terms, and income documentation types. Many of the same DSCR programs were originally born from the original ODF program, as ODF+ is an extension of ODF, which was the first like it to market in 2014.

ODF was designed to be a disintermediation of hard money / private money offerings. CSC separated itself by having no lender points, no pre-pay penalties, and qualifying everything on a 30yr amortization. Some of those same attributes have continued through to ODF+. Lastly, we offered a rate that was far below the average for the space.

Q. How do Brokers or Correspondent Sellers benefit from the ODF+ program?

A. To begin commercial lending can be a disjointed process, the majority of lenders have a unique or cumbersome process that provides little to no uniformity and may require many levels of approval. We’re simply adapting this property type into our

current flow, which provides uniformity and efficiency. Most residential mortgage brokers and correspondent sellers have shied away from similar products for that reason, searching for the economies of scale that FNMA, FHA or even Non-Prime can provide.

Our offering provides a consistent framework to operate and produce volume. In that vein this is a product extension for brokers and sellers, a vast opportunity to expand their business and clientele. At the end of the day it’s about ease of use and familiarity. If a broker can figure out how to originate a Non-Prime loan, then it’s an easy extension to learn the needs of the commercial product. The familiarity is the flow and it’s appealing for traditional residential brokers. As for commercial brokers who are accustomed to limited programs, tough terms, higher rates, and lender points, this opportunity speaks for itself.

Q. What feedback have you received from customers?

A. Very positive, especially from the commercial broker community, which for this product is the gold standard seal of approval. It seemed every week since launch had commercial brokers inquiring when could they sign up.

A few weeks ago, opened the product up to non-NMLS commercial brokers, looking at the competition to find where the most value could be provided.

Q. What does the future look like for Citadel in the non-prime / nonQM space?

A. In a word… innovative. For the last six years CSC has introduced new products into the space and watched them all grow in popularity and watched our competition try to imitate/ replicate.

CSC only puts out products that make sense for a borrower and the lender.

The loans we make need to fill a specific consumer demand and have a high ability to perform or repay. Using this as a cornerstone when moving a lending product from ideation to production has served well and should continue into the future.

The trick is to stick to our knitting.

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Knowledge

Center

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W H I T E PA PE R: P l a id | SP ONSOR E D CON T E N T

Knowledge Center

Reduce the risk for fraud through digital asset verification WITH FINANCIAL DATA FRAUD ON THE RISE, LENDERS NEED TO ARM THEMSELVES WITH SMART TECH SOLUTIONS

MORTGAGE lending has always been a prime target for fraudsters, THE RISK and the prevalence of fraud is now at its highest level since the The lending business, by its very nature, is vulnerable to theft Recession and is increasing 12.4% year over year. While the types and fraud. Today’s theft usually happens through a keyboard — of fraud are limited only by the human imagination, the condi- whether from a complicated phishing scheme deployed by a lone tions of this housing market are spawning a very particular kind criminal mastermind, or state-sponsored hackers stealing wire of fraud: misrepresentation of income on mortgage applications transfers. But in 2018, the fraud trend growing the fastest seemed to be sparked by the very real desire to own a home in a housing was up 22.1% in the second quarter of 2018.

Much of this kind of fraud is not being perpetrated by career market that has seen home prices skyrocket.

As Zillow stated in its Q3 2018 Home Price Expectations Survey, criminals as much as potential homebuyers who have been shut out of the market, according to Bridget Berg, CoreLogic’s principal “Annual home-value appreciation has been faster in 2018 than it was in 2017, and inventory has fallen on a year-over-year basis of fraud solutions strategy.

“Because home prices are rising, and demand is strong, most for 42 consecutive months.”

Although there are areas of the country where home price mortgage fraud in this type of market is motivated by bona fide borrowers trying to qualify for a mortgage,” Berg said. “Undisclosed growth is slowing, it will take years before those lower prices are real estate liabilities, credit repair, questionable down payment felt broadly. ”Conditions are starting to show signs of easing up, sources and income falsification are the most likely misrepresen- but the effects of years of limited construction still linger,” said tations.” Unfortunately, this type of fraud costs lenders millions Aaron Terrazas, Zillow senior economist. and adds to the due diligence necessary for every loan.

This white paper outlines the fraud risks around employment, income and asset verification and how lenders can arm To read the entire white paper, visit the Knowledge Center at knowledge.housingwire.com. themselves with the right technology to reduce their liability.

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Knowledge

Center

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W H I T E PA PE R: Infor m ati v e R ese a rch | SP ONSOR E D CON T E N T

Knowledge Center

Going beyond data: What lenders should expect from data analytics UNDERSTANDING THE CRITICAL ROLE OF AI AND MACHINE LEARNING TO GET MORE PROFITABLE LENDING

MORTGAGE originators are feeling the pressure of compressed margins as purchase demand continues to fall. After reporting net losses in the first quarter of 2018, lenders were able to squeeze out modest origination profits in the second and third quarters, but no one is predicting a banner year in 2019.

In Fannie Mae’s Q3 2018 Mortgage Lender Sentiment Survey, lenders reported a negative profit margin outlook for the eighth consecutive quarter. “On net, lenders’ profit outlook this quarter was worse than the outlooks reported last quarter and one year ago, with ‘competition from other lenders’ once again cited by survey participants as the top reason for continued margin compression.”

Without a doubt, competition is fierce in the current market.

Lenders are looking for efficiencies in every area, but in addition to reducing overhead and costs, mortgage companies who hope to stay ahead must use business analytics to become smarter and more strategic. The ability to glean critical insights from business intelligence is far greater today than even a few years ago, but lenders may be operating on an outdated understanding. This white paper outlines what lenders should expect from a truly evolved business analytics program.

WHAT BUSINESS ANALYTICS MEANS NOW In the past, “analytics” was practically synonymous with “data,” but in today’s mortgage ecosystem, data is just the beginning.

PwC notes that many financial institutions still don’t understand how to translate the data they have worked so hard to get into something useful for their bottom line.

“Obtaining a single view of the customer has been the Holy Grail for financial institutions for decades. While they continue to collect more data, their ability to synthesize data into information and information into insight is still lacking.

“For example, we often see analyses that are not directly connected to the activities that touch the customer. This amounts to wasted efforts, because it’s performed offline for general insights and not operationalized as part of the business model.”

To get these insights, a truly evolved business analytics system should leverage not just data, but also technology, data modeling, machine learning and artificial intelligence.

To read the entire white paper, visit the Knowledge Center at knowledge.housingwire.com.

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HOUSINGWIRE MAGAZINE ❱ JUNE 2019

INDEX

GSE REFORM TThe Trump administration begins to focus on housing finance reform.

P.62

HECM SOLUTIONS AAG, Altisource, Quantarium

P.68 HOUSINGWIRE MAGAZINE ❱ JUNE 2019

RISING STARS

50 young stars making a difference

2019

50 young leaders energizing the industry p.32 Christopher Avallone and Joe Negri

COMPANIES

DBRS......................................................28-29

Lenda.............................................................78

#

E

Lima One Capital.....................................37

360 Mortgage Group.....................28-29

Ellie Mae.......................................43, 45, 94

A

Experian......................................................28

Live Well Financial....................56-57, 77 LoanCare......................................................12 loanDepot....................................41, 94-95

P PeerStreet...................................................97 PlaceEconomics......................................88 Plaid..............................................................101 Planet Home Lending...........................77

F

LoanLogics.................................................96

...........................................................................46

Fannie Mae......................................................

LoanStream Mortgage.......................28

Ally Financial..............................................77

............18, 28, 42, 52, 62-65, 97,103, 106

M

PrimeLending...........................................44

Maxwell........................................................47

Princeton Mortgage................................51

Abrams Garfinkel Margolis Bergson

Altisource..........................................1, 67, 69

Federal Housing Administration....56

American Advisors Group....57, 67-68

Federal Housing Finance Agency........

American Cancer Society ������������������96

...........................................................62, 65, 106

American Legal Financial Network

Federal Reserve...............................24, 82

..............................................................................14

Finance of America Reverse ..................

Amherst Residential.........................4, 35

.............................................................48, 57-59

Apple.............................................................30

First American Mortgage Solutions

Arch MI.........................................................96

........................................................................12, 51

ARIVE............................................................39

Floify..............................................................97

Auction.com....................................... 16, 48

Fortress Investment................................12

Aurora Loan Services.............................12

Freddie Mac.................................................18, 28, 30-31, 50, 52, 62-65, 69, 81, 106

Plaza Home Mortgage........................28 Premium Title..........................................69

Mayer Brown.............................................48

Provident Financial.........................77, 79

Merchants Capital....................................12

Q

Merlone Geier Partners........................26 MetLife.........................................................58 Microsoft........................................ 52, 70-71 Mortgage Bankers Association.............

Qualia............................................................37 Quantarium......................................1, 70-71 Quicken Loans...................................22, 95

...............................................................14, 43, 97

R

Mortgage Lenders of America...77-78

Radian............................................................12

MortgagePro Financial Services......12

Reali................................................. 77-78, 94

Mortgage Quality Management &

realtor.com...........................................41, 49

Research......................................................46

Redfin.....................................................77-78

G

Movement Mortgage.............40, 77-78

Renters Warehouse...............................46

BB&T.............................................................96

Garden State Home Loans ���������������39

N

Resitrader.................................................... 18

Bessemer Venture Partners �������������38

GB Home Equity........................................12

Black Knight................................42, 81-83

Genworth Mortgage Insurance.......46

Blend..............................................44, 52, 63

Google......................................................51, 71

BSI Financial Services.............................12

Guild Mortgage.........................................97

BuildFax.......................................................26

H

Nationwide Mortgage Bankers.........12

Hard Money Sources.............................26

NestReady.................................................50

B Bank of America............................. 43, 96

Built Technologies................................... 41 C

HouseCanary......................................12, 49

Caliber Home Loans......................47, 94

Housing Policy Council........................62

Capital Economics.................................26

HSBC.............................................................39

Class Valuation........................................49

I

National Association of Realtors ........ ..............................................................41, 45, 88 National Reverse Mortgage Lenders Association........................................58, 68

New American Funding........28, 47, 94 Newcastle Investment Group............12 NewRez................................................28, 42

Reverse Market Insight.........................57 Reverse Mortgage Funding ��������������56 RiskSpan..................................................... 42 Roofstock.....................................................51 Roostify.......................................................44 RoundPoint Mortgage Servicing ......... .................................................................... 40, 97 Rushmore Loan Management Services.......................................................39

New View Advisors................................58

S

New York Department of Financial

Saxony Partners.....................................95

IAC Applications........................................12

Services........................................................93

Sears.............................................................26

Informative Research..........................103

Niti Bashambu...........................................12

ServiceLink...................................................12

InterContinental Capital Group.........12

NorthStar Asset Management

SimpleNexus............................................. 45

Comparably................................................97

J

Group..............................................................12

Simplifile.......................................................12

ComplianceEase.......................................12

J.C. Penney.................................................26

NorthStar Realty Finance Corp.........12

SoftWorks..................................................98

Consumer Financial Protection Bu-

Joint Center for Housing Studies of

O

Springhouse..............................................69

reau.....................................................26, 91, 93

Harvard University..................................26

Ocwen Loan Servicing..........................97

CoreLogic................ 12, 45, 65, 81-82, 101

JPMorgan Chase.....................................94

Omidyar Network..................................38

L

OneTrust Home Loans.........................40

ClosingCorp.................................................37 CMG Financial...........................................38 Collaborative Fund................................38 Colonial Savings.......................................97

Covered Insurance Solutions �����������39 D 104 HOUSINGWIRE ❱ JUNE 2019

Optimal Blue.............................................. 18

Spruce..........................................................38 Stewart Title Insurance.........................12 Synergy One Lending...........................58 T

INDEX Tavant..........................................................36

Carson, Ben.................................................75

Jayne, Robert..............................................12

Ortner, Kevin......................................33, 46

TMS...............................................................50

Cicali, Joseph......................................33, 39

Jobs, Steve.................................................30

Otting, Joseph..........................................65

Trelix Mortgage Fulfillment Services

Costa, Alfonso...........................................75

John, Bijoy............................................33, 42

.............................................................................69

Curlen, Julie..................................................12

Johnson, Brew...........................................97

P

TurboTenant..............................................20

D

Jozwik, Janet......................................33, 42

U

DeMarco, Ed..............................................62

Jumpe, Jim.................................................96 K

Paasonen, John.................................33, 47 Paliska, Christopher.........................33, 47 Pence, Mike................................................65

United Wholesale Mortgage �����������44

Diedrich, Ross....................................33, 39

Urban Institute..................................26, 65

Dowdy, Molly............................................84

Kenshalo, Dan...................................33, 42

U.S. Bureau of Economic Analysis..87

E

King, Kelly...................................................96

Petriuc, Mihai.......................................70-71

Kogan, Boris.......................................33, 43

Pryor, Lauren......................................33, 48

Kopen, Kent...............................................59

S

U.S. Department of Housing and Urban Development...............55, 62, 74 U.S. Department of the Treasury...62 W Wells Fargo................................................58 WFG National Title Insurance............12 X

Elliott, Kevin.......................................33, 39 Epstein, David.............................................15 Erskine, Shane.................................. 33, 40 F

Sivert, Brad.........................................33, 49

Larsen, Torrey...........................................58

Smintina, John....................................70-71

Lawrence, Amber............................33, 43

Smith, Dan...................................................12

Lee, Dave..................................................... 16

Smith, Kimberly.......................................68

Lemire, Katherine................................... 93

Spencer, Scott............................................12

Liebross, Adam.................................33, 43

Stanley Blaire, C........................................87

G

Lucido, Joe...........................................33, 44

Steve Boland, D.......................................96

Garritano, Tony.........................................97

Lunde, John................................................57

Stroud, Christopher........................33, 49

Gilbert, Chase..................................... 33, 41

Lundeen, Lisa.............................................12

T

Gilbert, Toni.................................................12

M

Fitzpatrick, Brian.....................................96 Ford, Gerald................................................87

Agrawal, Ankur.................................33, 36 Apanay, Sherry.........................................59

Schroeder, David..................................... 22

Lantz, Erin....................................................78

Fehling, Jake...................................... 33, 40

Z

A

Scarpati, Jonathan.........................33, 48 Sieffert, Kristen........................................58

Fan, Alex......................................................95

Foley, John..................................................87

PEOPLE

L

Peskin, David.............................................56

Lacewell, Linda........................................ 93

Xome..............................................................12

Zillow................................47, 77-78, 82, 101

Kraninger, Kathy....................................... 91

Pendleton, Will..................................33, 47

Freel, Craig.......................................... 33, 40

Gillis, Tim.......................................................12 Glennon, Jim............................................... 18 Groom Williams, Dominica........ 33, 52

Tallinger, Jon.......................................33, 49

Maschinski, Jessica.........................33, 44

Ticona, Daniel....................................33, 50

Mayopoulos, Timothy.......................... 63

Townes, Frederick...........................33, 50

McKeever, Diana..............................33, 44

Trump, Donald.................................. 62, 74

H

Meagher, Shelia.........................................12

Tucker, Jeff..................................................82

Avallone, Christopher...................1, 4, 35

Hale, Danielle...................................... 33, 41

Miller, Ben............................................33, 45

Turner, Scott...............................................75

B

Hall, Benjamin..........................................69

Mnuchin, Steven.............................. 63, 74

V

Ardy, John.................................................... 18 Austin, Craig.........................................33, 37

Baratz, Adam.....................................33, 37 Berg, Bridget.............................................101 Blair, Rankin.........................................33, 37 Boyajian, Melanie............................33, 38 Broeksmit, Robert..................................65 Browning, Mark.......................................58

Haller, Amit.................................................78 Hanson, Alec....................................... 33, 41

Moats, Mark.................................................12 Moon, Grant.......................................33, 45

Hess, Debra..................................................12

Mulvaney, Mick.......................................... 91

Huff, Phil......................................................69

N

Hultquist, Dan..........................................59 Hunt, Carrie................................................ 93

Nair, Sudhir...................................................12 Nazar, Jason...............................................97

Burns, Patrick.....................................33, 38

I

Negri, Joe.............................................1, 4, 35

Bush, George W.......................................62

Ifrim, Clement......................................70-71

Nelson, Willie............................................84

C

Irwin, Neil......................................................15

Cabrall, Joe..........................................33, 38

J

Calabria, Mark.................................65, 106

Jahangiri, Reza..................................57, 68

Cannon, Malcolm..............................70-71

Nichols, Sage.....................................33, 45 Nixon, Richard...........................................87

Vella, John..................................................69 Villani, Joe............................................33, 50 W Warner, David..................................... 33, 51 Watson, Gregor.................................. 33, 51 Watt, Mel....................................................65 Weidel, Rich......................................... 33, 51 Williams, Mantill.....................................89 Williamson, Jake.............................. 33, 52

Nothaft, Frank..........................................82

Y

O

Yang, Devon....................................... 33, 52 HOUSINGWIRE ❱ JUNE 2019 105

PARTING SHOT ❱ NEW LEADER Mark Calabria was sworn in as the next head of the Federal Housing Finance Agency on April 15, 2019. As he took the helm, Calabria doubled down on talk about reforming the government-sponsored enterprises and taking Fannie Mae and Freddie Mac out of conservatorship.

106 HOUSINGWIRE ❱ JUNE 2019

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