St. Louis Loan Originator Bets On FinKube To Help Increase Home Finance Business

FinKube, a company that provides AI-powered Platform-as-a-Service solutions for a range of industries, announced that St. Louis-based LenderCity has successfully deployed ELSA, FinKube’s Electronic Loan Services Assistant. The mortgage industry’s first chatbot is already interacting with prospective borrowers on the LenderCity website.


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“Consumers want immediate answers to their home finance questions and ELSA is smart enough to provide the information they need and gather the information we need to prequalify the borrower,” said Gregg Harris, principal at LenderCity. “We know we need to respond very quickly to borrower requests for information, but we also want to capture as much information from them as we can, without taking up the loan officer’s time. FinKube’s ELSA is the answer.”


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ELSA is an intelligent assistant that uses AI and machine learning to enhance the origination process from origination to close. Her AI is powerful enough to gather borrower information, render decisions, automate time-consuming tasks and help lenders produce fully compliant mortgage loans in as few as 20 days, though she is well versed in any form of consumer lending.


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“American home buyers still want to visit with a live loan officer before signing on a new mortgage, but it’s not efficient to spend the loan officer’s time in conference with borrowers who do not qualify,” said Jorge Sauri, founder and CEO of FinKube. “At the same time, those borrowers who do qualify expect to have their questions answered immediately. They don’t want to wait for a call back. They want to feel like they are in control. Most chatbot technology cannot offer that, but ELSA does.”


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With ELSA, LenderCity is able to hyper personalize the home finance transaction at every stage. Studies have shown that this:

>>Reduces customer acquisition costs by 50-80%

>>Increases engagement and conversion by 500%

>>Reduces customer service costs by 50-80%

>>Increases loan retention by a factor of 6

As an A.I. powered virtual assistant, ELSA works 24/7/365 pre-qualifying leads, communicating with customers and synchronizing outreach across chat, text, voice, email, and mobile wallet. In addition, FinKube can deploy ELSA ten times faster than generic chatbots that can’t speak mortgage out of the box.

Big Secondary Market Acquisition

American Mortgage Consultants, Inc. (“AMC”) has acquired Meridian Asset Services, LLC (“Meridian”), joining two of the premier service providers in the residential secondary mortgage market. Here’s what this will mean for the mortgage industry:


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The transaction will unite Meridian’s leading collateral, curative and title QC capabilities with AMC’s third-party review services and technology to support rated private-label securitization transactions, due diligence and quality control.


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“This transaction further highlights AMC’s commitment to being the foremost one-stop-shop for mortgage due diligence, consulting, advisory services and technology,” said AMC CEO Michael Franco. “We are excited to significantly enhance our service offerings through Meridian, a firm known for their quality and expertise. We expect this transaction to streamline operations for existing AMC and Meridian clients by centralizing activities, increasing transparency, and reducing cycle time.”


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Meridian will operate as a subsidiary of AMC and retain its branding and senior management team. Meridian will continue to be overseen by Karen Riffe who is joining AMC as the President, Meridian Asset Services. Brian Hansen will also join AMC as the Director, Strategic Relationships & Initiatives. Through the acquisition, AMC will add approximately 250 full-time employees in the greater Tampa area.


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“AMC’s commitment to the secondary market space and focus on continued investment in Meridian’s capabilities and offerings will create unique and differentiated services,” said Riffe. “We are excited to join AMC and look forward to working with AMC’s existing management team.”

Keefe, Bruyette & Woods served as financial advisor to Meridian.

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LendingQB

LendingQB is a provider of Lean Lending solutions for residential mortgage banking organizations. The Lean Lending solution consists of a 100 percent web browser-based, end-to-end loan origination system, best of breed integrations with key industry partners and ‘adoptimization’ services that result in faster cycle times and lower costs per loan. For more information, please call 888.285.3912 or visit http://www.lendingqb.com.

Here’s Why Modernization Is Important

Some times it’s important to take a page from other industries. For example, Syntel, Inc., a global provider of digital modernization, information technology and knowledge process services, finds that U.S. insurance companies are increasingly joining the digital revolution in response to a growing number of consumers who prefer to use mobile phones and other digital devices for their insurance needs.

Research from PwC has revealed that 71% of consumers have used some form of digital research before buying an insurance policy. The report also found that approximately 25% of consumers currently purchase their plans online. This number is expected to grow, particularly among the millennial generation.

While most insurance companies are focused on leveraging an eCommerce model to sell their traditional offline services in an online storefront, others are developing deeper, more personal and longer-lasting relationships by utilizing digital capabilities to improve their customers’ knowledge base.

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According to Nitin Rakesh, CEO and President of Syntel, “It is very clear that, like other industries, insurance is subject to the need for digital modernization, brought on by the demands of digital native consumers. Digital natives expect an omni-channel experience with greater accessibility and anytime, anywhere services —something that may be difficult for traditional insurers to deliver.”

Rakesh also asserts that engaging customers through social media channels enables insurers to uncover business insights that help them understand consumer sentiment, preferences, and behavior,all of which are vital components to making good business decisions.

recent report from IDC highlights the impact of emerging technologies on the highest levels in senior management decision-making. The report said that two-thirds of CEOs will be focused on digital transformation strategies throughout 2016. In the past, transformation has more traditionally been the dominion of CIOs, which underscores the increasing importance and business critical nature of these decisions.

“In a competitive market environment, speed and agility are vital for insurance companies to survive and grow,” said Rakesh. “Because CEOs are now being measured on their ability to quickly adapt to the changing digital landscape, it is vital to seek out a trusted service provider with the necessary expertise.”

Mr. Rakesh’s company, global IT and business solutions provider Syntel, offers a suite of digital modernization solutions that reduce the run the business cost and provide the efficiency and agility to increase speed to market, andenable businesses to funnel the savingsinto new innovations.

Rakesh states that it is crucial to embrace automation as part of this process.

“With many insurers stuck with business-critical legacy systems, the biggest challenge is to keeppace with digital innovations while maintaining and automating business-critical legacy systems,” he said.“Automation allows for faster and more cost-efficient transformations to take place.”

According to a recent report by Vertafore, insurers that do not automate their services face a significant decrease in customer satisfaction when it comes to customer experience. The report also found that 67% of insurance consumers are open to the idea of bypassing traditional insurers to purchase plans, looking instead to digital leaders like Amazon and Google for services.

As more non-traditional players enter the marketplace, 66% of the insurers surveyed recognize the threat and attribute it to the proliferation of Big Data. Those companies adapting to the need to digitize are seeing positive results. Of those companies employing marketing automation as a strategy, 77% observed increased conversation rates, while 80% saw an increase in leads.

“Digital modernization is the final frontier for insurers,” added Rakesh. “Automating and modernizingoutdated systems frees up the resources required to forge ahead with new innovations andexciting products that meet the needs of the more demanding 21stcentury consumer.”

Sound familiar? It should.

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New Study Shows That Lenders Are Ready To Invest In Technology

Lenders that rely more on purchase loan volume and retail channels are poised to rebound from a challenging 2015 due in part to planned technology investments, according to a survey released today by Velocify.

Based on the responses of more than 500 mortgage professionals, the survey, “Growth in a Changing Mortgage Market,” found lenders that relied more heavily on consumer direct channels made greater investments in marketing and sales technology and were more likely to experience high growth. In comparison, lenders that relied more on retail channels were less likely to invest in marketing and sales technology and less likely to experience growth.

“We found the results to be a wakeup call for retail lenders,” said Chris Backe, financial services director at Velocify. “Putting all of your eggs into the loan officer basket and referral strategy is not a sound approach without marketing support and state of the art technology.”

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According to the study findings, however, retail lenders may be prepared to do just that. Survey respondents with substantial retail channels and high purchase volume said they plan to increase their technology investments going forward. And what’s more, investment is being focused on technology that will drive growth, process improvement, and customer retention. Compliance is on the list, but ranks number four behind these top three drivers.

“We have seen how sales and marketing technology has helped with growth in our consumer direct channel and are planning to invest in technology to help drive growth in our retail channel as the purchase market continues to heat up,” said Tony Pietrocola, the Senior Vice President at vLoan, an online mortgage lending platform backed by 40 years of mortgage experience from Union Home Mortgage Corp.

Other findings of the report include:

>> Lenders experienced significant growth in 2015; 88% percent of respondents reported their loan volume grew at least 5% since 2014.

>> Mortgage lenders that rely more heavily on purchase loans and retail channels are not growing as fast as those relying on refinance business and consumer direct channels.

>> Growing lenders were noticeably more likely to spend 10-20% of their revenue on marketing and also more likely to reinvest more than 20% of their revenue on marketing.

>> Lenders with more than 200 salespeople were almost 30% more likely to report growth than were lenders with 10 or fewer salespeople.

>> Lenders with high growth and higher marketing investments were most likely to be above average adopters of technology.

>> For lenders that plan to significantly increase their technology investment, business is 22% more likely to come from purchase loans.

>> Lead management, referral partner management, analytics, and marketing automation software were perceived to have the greatest impact on growth.

“With the purchase market finally starting to take charge, we were curious what strategies lenders were pursuing to take advantage of the current environment,” Backe said. “We found consumer direct lenders are poised to leverage the strategies developed during the refi boom to sell purchase loans. But there is no reason why retail lenders can’t use these very same strategies to close their sales gaps and boost conversion rates. At the end of the day, lenders that invest in technology to meet changing borrower expectations are more likely to succeed.”

The study was based on survey respondents from more than 500 mortgage professionals of all types, representing mortgage bankers, brokers, correspondents, wholesale lenders, banks and credit unions. The survey was conducted in collaboration with Velma, a world-class provider of mortgage marketing automation, and Mortgage Coach, a leader in mobile mortgage technologies. Download the full study, Growth in a Changing Mortgage Market.

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Clean Workflows Are No Longer Optional

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Regulation is forcing cleaner workflows and massive changes to the way we “used” to do business! It can seem quite overwhelming at times, because numerous required changes are hitting our industry so rapidly. Many are trying to fit the round peg into the proverbial square hole when making business decisions. As most are finding out, this increases costs and reduces profitability through redundancy and manual tasking that could be automated, as well as a lack of communication between business units and a failure to be compliant. No business can sustain this type of dysmorphic behavior for too long.

The main objective is simple — Build a workflow that is compliant, efficient, decreases costs, and increases profit.

Step One: The regulators are concerned about how our industry treats consumers, so you’ll need to start here.

>> What does your company look like to the consumer?

>> Is your message consistent (marketing, social media, LO Pages)?

>> Are consumers receiving accurate information?

>> Is this information being delivered on a timely basis?

>> Are you compliant?

Step Two: In order to accomplish your goals, your systems have to work toward that goal.

Is your data organized, scrubbed, and consistent throughout your two databases of record (PPE/LOS)?

>> Do you have a proper integration for accurate data flow (Push/Pull Integrations)?

>> Can you demonstrate consistent and compliant pricing?

>> Is your LO Compensation being monitored?

>> Do you have the ability to produce historical pricing data electronically?

Step Three: Because compliance flows through every piece of your company workflow, this is an overlay to demonstrate monitoring, in addition to standard workflows. Doing this without the assistance of technology is considered by the experts to be impossible, because regulations overlap into each area of your workflow. Proper technology can remove redundancy.

>> How are you monitoring each piece of the workflow for consumer experience and compliance?

>> How will you be dealing with the intricacies of documentation and timing on TRID?

>> How does each piece of your workflow affect your companies’ Fair Lending and Disparate Impact results?

>> What other workflows do you have to monitor for all additional regulations?

Step Four: At the end of the day, you have to maintain customer service and satisfy the customer so much that they send their friends and family!

>> How do you monitor that your products and pricing are competitive, and keep the clients from going to another lender?

>> How do you ensure that you are meeting customer deadlines?

>> What do you do to ensure that the customer experience was a good one, and how do you manage what needs to be changed based on consumer feedback?

Step Five: And finally the “Piece de resistance” or the prize; how is your company going to continue to make money and do all of this? After all, you are in business to make a profit and these next items are the test of your workflow.

>> Are you maximizing every little basis point when selling your loans to the secondary market?

>> Have you streamlined the workflow to increase both profit and efficiency?

>> Are you avoiding operational mistakes through strong monitoring?

>> Are you perfecting profit potential in all areas?

>> Do your clients sing your accolades?

This is tough stuff, but a little bit of effort in researching solutions, you can quickly get your company where you want and need to be!

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Executive Spotlight: Ed Skornik of LRES

Ed-SkornikThis week, the spotlight shines on Ed Skornik, the new regional vice president of sales for the Dallas/Fort Worth office at LRES.

Q: TRID has been in effect for nearly a month. What measurable impact has TRID placed on today’s lending environment?

Ed Skornik: While it is still very early to confidently comment on TRID’s measureable impact on the industry at this time, it is important for lenders and technology vendors to keep in mind that the overarching goal of the regulation is to create more transparency in the lending process. More transparency leads to higher customer satisfaction.

Q: What is the current state of the Dallas-Fort Worth housing market? And where do you see it heading in 2016?

Ed Skornik: The housing market in the DFW metro-plex continues to climb at a steady rate. The four major DFW counties (Collin, Denton, Dallas, and Tarrant) continue to benefit from national corporations moving to North Texas. Most recently, Toyota Corporation, Facebook, State Farm Insurance, and Liberty Mutual have made major announcements regarding moving and/or opening operations here. These corporations are bringing thousands of jobs and ancillary business opportunities to North Texas.

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The Home Sales Index and NAR’s sales report for new home construction indicates the housing market activity in North Texas continues to rise and appreciate in value. Developers and home builders are doing well keeping up with the housing demand. Also, resales of existing homes have seen a significant spike in the past 13 months. Multiple offers on well-priced homes below $350,000 are becoming a common occurrence in several established neighborhoods. Higher priced homes have cooled off with the typical seasonal adjustments and upcoming holiday season.

Overall, the quality of life, no state income tax, climate, family oriented, and affordable housing has made North Texas a top 10 destination for Industry and employment opportunities in the country.

Q: In your new role at LRES, what are your priorities and goals?

Ed Skornik: My priorities and goals run concurrently within our business culture. LRES provides property valuations, asset management, HOA, insurance and technology solutions to financial institutions, loan servicers, investment firms, credit unions, and community banks throughout the country. Our priorities to each of our clients are to add value to their operations and successfully deliver efficiencies and productivity in making their businesses run seamlessly.

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Building long-term relationships with my clients involves more than simply understanding and meeting their needs. My primary goal in delivering value to our clients will require a high level understanding of what areas of their business has underperformed. It could be the client does not have adequate staffing or expertise in a particular area. I would discuss their workflows, systems and technology as well as assist in identifying any weaknesses and shortfalls. We will also look to fill gaps and provide a “relief value” to their business units’ daily activities. Our firm possesses specialized expertise that can easily be translated into added value.

I want to build a strategic relationship with my clients based on creating solutions. Whether it’s our sales department, client relations, operations, or our state of the art technology, my goals are focused on customer satisfaction and optimum service. My desires are for each client recognizing LRES as their “go to” company for real estate services. At the end of the day, LRES is playing a significant role in our clients’ successes.

Q: What do you see as the major issues that will shape the housing market – both in your area and nationally – in the coming year?

Ed Skornik: Employment and the economy remains at the top of the list for a majority of the country that has suffered downturns the past few years. 2016 will be a major turning point for national employers to focus and return to profitability with added and continued growth within their respective industries. Bringing back the manufacturing sector and growth of small business ownership will play key roles in the re-shaping the economy. Of course, the housing market will rely on continued economic growth and will be dependent on household incomes, low interest rates, consumer confidence, mortgage availability, and the housing supply in 2016.

Lastly, there are ongoing concerns in the financial markets. The current uncertainty of a slowing U.S. economy may cause buyers to remain on the fence regarding home purchases as well.

Spreadsheets And Business Intelligence

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eletter-jon-maynellMortgage business intelligence (MBI) seems to be getting more than its fair share of press lately. Is it really the next must-have platform, or is it just a fad? Let’s get to the bottom of what MBI is supposed to do, and how it does it.

MBI enhances an activity that all mortgage companies are already engaged in. That activity is analytics, and the vast majority of mortgage companies measure and track their business using some combination of spreadsheets and reports. Spreadsheets and reports comprise a toolset that has stood the test of time. The mortgage industry has been running on this toolset for decades. Simply put, MBI is a better toolset for analytics. Some say a much better toolset, akin to using a lighter if you’ve grown accustomed to rubbing two sticks together.

Is it really worth all the hype? A closer examination of MBI reveals a number of differences. The biggest and ironically the least obvious is that MBI platforms come with their own data management engines. It is said that 75% of any MBI undertaking resides here, where a lender’s production data is copied and reassembled into a high performance database. Although transparent to the user, this high performance data model is critical to carrying out the functions that users employ on the run side of an MBI platform.

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The most obvious difference is how data is presented, where the focus is on how much information can be absorbed at a glance, how the eye scans a page or screen for information, and what shapes, sizes, colors and groupings make information easy to read, understand, and retain. As users of MBI have much more data at their disposal than ever before, an interface that takes human cognitive science into account is considered paramount.

But does this foster efficiency? Data presentation alone may not, but it’s the constant stream of data that can. MBI data visualizers are updated in near-real time, every couple of minutes. It is here that we’re introduced to the power of persistent situational awareness, as opposed to the periodic situational awareness provided by running periodic reports or spreadsheets.

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A few minutes after a report or spreadsheet is assembled, awareness decays until another report is run. With persistent situational awareness, the energy within an organization can change. We’ve all seen and felt the ebb and flow of operational focus that corresponds to the rhythm at which management reports are run. Persistent situational awareness keeps this focus in place, and this can have a profound effect on production. Even a modicum of increased focus, if persistent, can transform any operation that involves manual tasks.

MBI is beginning to prove itself out. The pervasive human element within mortgage lending operations does seem to lend itself particularly well to optimization through MBI, if the rave reviews of CEOs across the country are to be believed. At the very least, itís worth a closer look.

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