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The M&As Continue

We’ve seen big technology acquisitions when Ellie Mae bought Velocify and CoreLogic bought Mercury Network, but let’s not forget to look at the lending side of the business, as well. For example, Thomas H. Lee Partners, L.P. (“THL”), a premier private equity firm investing in middle market growth companies, acquired a majority interest in Ten-X, LLC (the “Company” or “Ten-X”), the nation’s leading online real estate marketplace. Members of Ten-X’s senior management team, Stone Point Capital, and CapitalG (formerly Google Capital), among others, will continue to hold minority positions in the Company. Terms of the transaction were not disclosed.

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Founded in 2007 and headquartered in Irvine and Silicon Valley, California, Ten-X provides an online real estate marketplace that allows individuals and investors to buy and sell residential and commercial real estate properties using both desktop and mobile channels. By leveraging its market-leading technology platform and extensive international network of buyers, Ten-X empowers consumers, investors and real estate professionals with unprecedented levels of flexibility, control and simplicity to easily complete real estate transactions online. Since its inception, Ten-X has enabled over $50 billion of residential and commercial property sales on its platform.

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The recapitalization will ensure Ten-X has the resources it needs to build on its proven platform, pursue additional monetization opportunities, and execute on its growth objectives. The Company will retain its corporate headquarters in Irvine and Silicon Valley, and will continue to be led by Chief Executive Officer Tim Morse along with other members of its senior management team.

“This investment gives us the scale and resources to accelerate our growth and further expand our platform and product offerings,” said Mr. Morse. “With the support of THL as a partner going forward, we can fully execute on our vision, build on our position as a leader in the online real estate market, and continue to provide our customers innovative products and services.”

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“We are very excited to be partnering with Ten-X, a clear market leader in the real estate industry,” said Jim Carlisle, Managing Director at THL. “We are looking forward to working closely with Tim and the talented management team at Ten-X to further enhance its leadership position and maximize this incredible growth opportunity.”

Wells Fargo Securities LLC and J.P. Morgan Securities LLC acted as financial advisors and Kramer Levin Naftalis & Frankel LLP acted as legal advisor to Ten-X. Guggenheim Securities acted as financial advisor and Kirkland & Ellis LLP acted as legal advisor to THL.

I’m sure we’ll see more deals like this before the year closes. Stay tuned …

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Fiserv To Acquire The Assets of PCLender

Fiserv has acquired the assets of PCLender, LLC, a leader in next generation enterprise internet-based mortgage software and mortgage lending technology solutions. This acquisition will enhance the Fiserv suite of mortgage origination services, which enable Fiserv clients to deliver the experience today’s consumers and mortgage lenders expect. Financial terms will not be disclosed.

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Mortgage lenders operate in an evolving marketplace in which they are challenged to deliver a more efficient lending process in tandem with a compelling borrower experience. Fiserv is working to simplify today’s lending experience for financial institutions and borrowers, delivering powerful tools to originate, process, underwrite and deliver loans in a secure, paperless environment.

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“Rapidly evolving consumer expectations require a seamless approach to banking experiences, including mortgage origination,” said Jeffery Yabuki, President and Chief Executive Officer, Fiserv. “PCLender provides Fiserv with a full digital suite of mortgage origination solutions for banks, credit unions and mortgage lenders. We welcome the existing clients and talented team members to our company.”

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A complement to the existing Fiserv lending solution suite, these assets provide a set of simple, easy-to-use internet-based mortgage solutions for banks, credit unions and mortgage lenders. This fully managed, end-to-end solution simplifies origination, document collection and compliance reporting, streamlining consumer direct and retail mortgage and HELOC loan origination. The technology offers a feature-rich user experience and improved operational efficiency for mortgage lenders with existing resources. Supporting lenders of all sizes, PCLender provides solutions for lenders funding up to 5,000 loans per month.

“Joining Fiserv accelerates our ability to scale our solution, while simplifying solutions for every phase of the loan process to benefit our clients,” said Lionel Urban, Chief Executive Officer, PCLender. “We look forward to leveraging our combined expertise to deliver greater client value and an enhanced experience for their customers.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

An Acquisition That Makes Sense

As vendors look to serve an evolving mortgage market, they have to broaden their scope of services and their reach. Good vendors are going down this road as we speak. For example, Optimal Blue has just acquired Comergence Compliance.

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Comergence is a provider of third-party oversight solutions in the mortgage industry. Founded in 2008, Comergence provides an array of third-party originator (TPO), appraiser, and social media risk management solutions that verify third-party compliance in real-time, a capability unmatched in the industry.  Comergence has been widely recognized by the industry for its innovations in due diligence automation and ongoing surveillance services. No sale price was disclosed.

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“We are thrilled to welcome Comergence to the Optimal Blue family and we are looking forward to extending their network management platform to our customers,” said Scott Happ, CEO of Optimal Blue. “Comergence solutions help build trust and confidence among marketplace participants by verifying third-party compliance in real-time, a capability unmatched in the industry.”

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“We provide the best due diligence and ongoing surveillance services in the industry,” noted Greg Schroeder, President of Comergence. “We believe that by being part of Optimal Blue we can bring the benefits of our technology and expertise to an even larger segment of the mortgage marketplace.”

Michael Stallings, Executive Vice President of Comergence said, “Recent Comergence innovations, including an analytics tool to help account executives identify new TPO opportunities and a breakthrough solution for social media risk monitoring, strongly complement Optimal Blue’s existing product offering.”

“Optimal Blue and Comergence are well-aligned around our principal mission of facilitating transactions between buyers and sellers of loans,” added Scott Happ. “We are very pleased that Greg, Michael, and the entire Comergence team will be joining Optimal Blue as we execute our shared growth plans.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

New Valuation Acquisition

Require Holdings, LLC, has completed its acquisition of Service 1st Valuation and Settlement Services, Inc.

Service 1st is a leading provider of valuation risk management services, including: desk reviews, valuation risk analysis, field reviews and market data.

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The Company will be a wholly-owned subsidiary of Require Holdings, joining their portfolio of companies, which include: reQuire Real Estate Solutions, Covius Technology Solutions and Covius Real Estate Services.

Service1st will remain under the leadership of current President and CEO, Mark Oliver, who will report to Require Holdings CEO, Al Will.

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“I am absolutely thrilled about this deal,” Oliver said.

He added, “It is very rare that one company in our space can be acquired by another, where all of our services are complementary, and few redundancies. This is definitely a case where the sum of the whole is far greater than the sum of the parts.”

The Require Holdings CEO echoed Oliver’s excitement.

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“Service 1st has proven itself to be a leader in objective valuation risk management solutions, and also an invaluable resource to clients by providing extraordinary service in a complex regulatory environment,” Will said.

“Their commitment to customer satisfaction isn’t just a part of their name, but it is reflected in all that they do. We share their commitment and are pleased to have found a like-minded partner to further our growth in technology enabled real estate transaction services,” he continued.

The acquisition comes a year after Require Holdings’ acquisition of Covius.

About The Author

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The Place For Thought Leaders And Visionaries

Mortgage Cadence Benefits From Big Acquisition

PROGRESS in Lending has learned that Accenture has extended the capabilities of its Mortgage Cadence subsidiary with the acquisition of BeesPath Inc.’s ClosingBridge platform, which facilitates simple, secure communications and file exchange for real estate finance transactions. Here’s why this acquisition is significant:

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The ClosingBridge platform will be provided under the Mortgage Cadence product suite and will be branded as Collaboration Center. In its first phase, the platform — which manages the communications between borrowers, co-borrowers, real estate agents, sellers, attorneys, lending staff, title agents and settlement agents on mortgage transactions — will be offered as a standalone product. In subsequent releases, Collaboration Center will be incorporated into Mortgage Cadence’s existing product portfolio.

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Todd Hougaard, president of BeesPath, will be joining the Mortgage Cadence team to help speed the integration and rollout of the solution and to spearhead product advancement going forward.

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“Taking an innovative approach to a long-standing challenge in mortgage — unsecure communications involving borrower data and information — BeesPath has created an elegant, all-digital solution that securely connects all parties involved in the closing process,” said Michael Detwiler, Mortgage Cadence’s chief executive officer. “ClosingBridge is another strategic addition to our forward-looking Mortgage Cadence platform.”

Founded in 2004, BeesPath provides web-based tools designed to bring all the people, workflow and information related to a loan transaction into one secure place, facilitating the efficient closing of loans by enabling easy communication, delivery, sharing and tracking of all loan details. BeesPath developed and released the ClosingBridge platform in 2015 to facilitate simple, secure communications and data exchange for real estate finance transactions.

“We are proud to welcome Todd and the Collaboration Center technology to the Mortgage Cadence product suite with near-immediate client availability,” said Trevor Gauthier, Mortgage Cadence’s president and chief operating officer. “Thanks to this exciting acquisition, our lenders will be able to provide their borrowers with the peace of mind that all collaboration regarding their transaction is being handled swiftly and securely for better compliance, efficiency and structured communication between all parties. In addition to accelerating our digital strategy, this asset acquisition puts more functionality into our clients’ hands sooner, enabling them to close loans more quickly while having the assurance that the loan communications are secure.”

Since the TILA-RESPA Integrated Disclosure (TRID) Rule took effect in October 2015, the added time needed to ensure the borrower has its closing disclosures within three business days of closing has created new pressure for lenders, title agents, and settlement agents. The acquisition of BeesPath’s ClosingBridge platform brings an immediate solution to the Mortgage Cadence product suite to help address the need for these parties to securely communicate, share documents and transfer data.

“Collaboration Center is highly complementary with Mortgage Cadence’s successful loan origination technology suite, and Mortgage Cadence is the company best positioned to get this into the hands of lenders and title agents, who will benefit tremendously from this solution,” Hougaard said. “I’m thrilled to be a part of this talented team and help drive this user-friendly and secure solution forward.”

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The Place For Thought Leaders And Visionaries

Mercury Network Announces Another Big Acquisition

After recently acquiring Platinum Data Solutions, Mercury Network continues to complete strategic acquisitions. Now, Mercury Network, the valuation technology company used by more than 800 lenders and Appraisal Management Companies (AMCs), announced it has acquired Appraisal Scope, Inc., a fast-growing provider of valuation management software. Here’s what this acquisition means for the mortgage industry:

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“The nation’s housing economy depends on efficient, accurate valuation operations,” said Will Clemens, CEO of Mercury Network. “The acquisition of Appraisal Scope, combined with our expanded investments in R&D, allows us to offer lenders and AMCs of all sizes the most innovative collateral valuation tools from a single provider.”

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Jennifer Miller, President of Mercury Network, added, “With this acquisition the combined companies now have more than 45 staff members dedicated to product development and IT. Both platforms, Mercury Network and Appraisal Scope, will continue to be offered, and we plan to continue our investment into both.”

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“We feel great alignment with Mercury’s culture and mission,” said Jordan Rothstein, Founder of Appraisal Scope. “The combination of the two companies will allow Appraisal Scope customers to benefit from Mercury’s greater scale and infrastructure. We will thrive and continue to grow and innovate as part of Mercury.”

No sale price was disclosed. Appraisal Scope, Inc. is a leading provider of valuation management software for appraisers, BPO providers, AMCs and mortgage lenders. The company’s technology is integrated with more than 40 industry vendors and offers a single destination for AMCs and lenders, no matter how complex their valuation management needs. Appraisal Scope, Inc. is based in Baltimore, and was founded in 2011.

Mercury Network now serves almost 1,000 lenders and AMCs with six core valuation technology solutions, including the two leading appraisal management platforms, as well as Add-on modules for commercial appraisal, appraisal quality control, alternative valuations, and additional closing services such as flood certificates and income verification.

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The Place For Thought Leaders And Visionaries

Big Appraisal Technology Acquisition

Mercury Network, the valuation vendor management platform used by more than 700 lenders and Appraisal Management Companies (AMCs), has entered into a definitive agreement to acquire Platinum Data, a leading provider of valuation data and analytics solutions headquartered in Aliso Viejo, CA.

The country’s top 10 mortgage lenders already rely on Platinum Data’s analytical tools for appraisal quality control, and the two companies have offered an integrated solution serving the industry since beginning a partnership in January, 2015. No sale price was disclosed.

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“Appraisal quality is an increasingly important compliance requirement and the addition of Platinum Data’s technology will expand the suite of services available to both companies’ customers,” said Will Clemens, CEO of Mercury Network. “Platinum pioneered automated appraisal underwriting and quality control, and expanding these tools in Mercury Network will help the industry enhance appraisal quality and gain efficiency.”

“Mercury Network and Platinum Data customers will have even more options”, said Jennifer Miller, President of Mercury Network. “Both companies already have integrations with other quality control solutions and appraisal management systems, and those relationships will continue. Our goal is to make it as easy as possible for lenders, AMCs, credit unions, servicers, investors and their vendors to choose the best suite of services for their business.”

“This is one of those ideal situations where one plus one equals three,” said Phil Huff, president and CEO of Platinum Data Solutions. “We can do more together than we could individually. It’s an exciting time for both companies. Everyone—customers, partners and employees of both Platinum and Mercury—will benefit from the innovation and growth this venture will bring going forward.”

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Lance Fenton, Partner at Mercury’s primary investor, Serent Capital, noted, “Mercury’s growth over the past year has exceeded all our expectations, and this acquisition positions the company to rapidly expand their transaction footprint in the mortgage cycle. We look forward to working with the entire team to help deliver unmatched value to all customers.”

Platinum Data Solutions provides valuation data and analytics technologies that help mortgage lenders, servicers, investors, AMCs and their vendors value collateral, identify potential collateral weaknesses and manage collateral risk. The company’s online platform and analytical tools protect the country’s top 10 mortgage lenders and help hundreds of companies to perform due diligence and prevent collateral-based loss. Each year, Platinum Data protects billions of dollars in assets across the U.S. against collateral-based non-compliance, buybacks and other risks.
The company’s RealView system pioneered computer-assisted appraisal underwriting. Its valuation analytics channel provides the industry’s only turnkey services that assure the responsible use of AVMs. Platinum Data Solutions is based in Aliso Viejo, California and was founded in 2002.

“Going forward both companies will operate with open systems that collaborate with competitors in some cases,” added Clemens. “For lenders, we now have two other Platinum Data Solutions applications that we can offer them. For example, some of our lenders may want to use AVMs for HELOCs. We can now offer that service. We also have a bigger organization as compared to Platinum Data Solution so we can invest in Platinum and advance their systems faster.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

The Industry Is Advancing

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Yes, getting a mortgage is still an antiquated process. But advances have been made and more are on the way. How do I know? Just look at what happened to MERS. A big name company just acquired them with the intent of modernizing their technology and supporting eNotes.

Specifically, Intercontinental Exchange (ICE), will acquire a majority equity position in MERSCORP Holdings, Inc., owner of Mortgage Electronic Registrations Systems, Inc. (collectively “MERS”). In addition, ICE and MERS have entered into a software development agreement to modernize and enhance the MERS System.

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MERSCORP Holdings owns and operates the MERS System, a national electronic registry that tracks the changes in servicing rights and beneficial ownership interests in U.S.-based mortgage loans. ICE is a leading operator of global exchanges and clearing houses and provider of data and listings services.

“This transaction underscores MERSCORP Holdings’ efforts to strengthen the value to its member institutions and continue to support MERS’ role as a national mortgage registry,” said Kurt Pfotenhauer, Chairman of MERSCORP Holdings. “The investment of capital and resources from ICE will enhance the effectiveness and efficiency of MERS for our more than 5,000 member organizations.”

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“This agreement brings the strengths of our organizations together to benefit the U.S. residential mortgage finance market,” said Jeffrey C. Sprecher, ICE Chairman and CEO. “It also complements our data and technology expertise in diverse, regulated markets. We are pleased to bring our strong track record of innovation, governance and operational execution to MERS, and look forward to contributing to the evolution of mortgage market infrastructure.”

Benefits of this transaction will include:

>> A commitment by a leading market infrastructure operator with global experience in complex, regulated financial environments;

>> A state-of-the-art MERS System with dynamic, world-class data and transaction management that strengthens value to stakeholders, including home-buyers and regulators; and

>> Continued support of eNotes, which are electronic promissory notes, and electronic processing that serves lenders and consumers.

The transaction is expected to close at the end of June. Under the agreements, ICE will rebuild the MERS System infrastructure and is expected to shift its operation to an ICE data center in the first half of 2018. Price and terms of the transaction are immaterial to ICE, and were not disclosed.

In response to this news I say: Thank God, it’s about time.

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Optimal Blue Transitions To New Ownership

Optimal Blue has been acquired by GTCR, a private equity firm. It was also announced that Founders and co-CEO’s, Larry Huff and Ivan Darius, will be transitioning leadership of Optimal Blue to Scott Happ, Founder and former CEO of Mortgagebot. Happ will join Optimal Blue as Chief Executive Officer at close. Sue Baker, a former Senior Vice President at Mortgagebot, will join Happ as Vice President of Product. The management team will stay in place.

GTCR will work with Happ, Baker and Optimal Blue’s management team to expand the Company’s strong network offerings and further invest in its technology. The transaction is expected to close in the next four weeks. Huff and Darius will remain involved with Optimal Blue as consultants and ensure a seamless transition to Happ.

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GTCR has committed up to $350 million of equity capital to the investment, to pursue growth initiatives at Optimal Blue, as well as complementary acquisitions to provide information and other digital services to the mortgage marketplace.

“I’ve had the great fortune to work with and serve the best customers, employees and partners one could imagine,” said Larry Huff, Co-Founder and Co-CEO. “I also would like to recognize the great partners we have at Serent Capital. Kevin Frick, Lance Fenton, and the others have been incredibly supportive partners and invaluable to the success at Optimal Blue. It has been an incredibly rewarding experience, and I look forward to my continued involvement.”

“Adding industry veterans Scott and Sue and the GTCR resources will turbo-charge the performance of the incredibly talented team assembled at Optimal Blue,” added Ivan Darius, Co-Founder and Co-CEO.

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

LERETA Advances The Cause Of Automation With Acquisition

LERETA, a leading national real estate tax services and flood service provider, has acquired American Property Guard (APG). APG is a Dallas-based company that offers tax certificate and homeowners association reports to the title industry.

“As the founder of APG, I could not be more pleased than to team up with LERETA,” said Andrew Kernan, founder of APG. “Introducing a disruptive technology to the origination property tax space has been an exciting accomplishment that has been very well received in the title industry. With the support of LERETA, our technology will now be able to reach its full potential and expand to additional verticals in the housing sector.”

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APG was founded in 2012 to automate property tax data inquiries. Three years ago, APG developed and launched a new application that automates the location of a property’s county account information and acquire associated data from taxing authorities. Through this proprietary process, APG has the unique ability to deliver real-time tax information as part of an automated and integrated origination workflow. APG is integrated with one of the nation’s largest title origination software platforms, allowing for the ordering of tax information directly within the title origination workflow.

“We’re excited about the acquisition of APG,” said John Walsh, LERETA CEO. “First, we gained great staff and exciting new technology. Second, this acquisition will helps us to expand into the title services business. We view the APG acquisition as another step forward in our commitment to providing better solutions to the tax service industry.”

Progress In Lending
The Place For Thought Leaders And Visionaries