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LendersOne Endorses Optimal Blue

The Lenders One Mortgage Cooperative, a national alliance of community mortgage bankers, correspondent lenders and suppliers of mortgage products and services, recently announced the selection of Optimal Blue as a new preferred vendor. Optimal Blue, a cloud-based provider of enterprise lending solutions to the mortgage industry, provides mortgage banks, community banks and credit unions the ability to navigate the complex mortgage process from capital markets, to consumers, and back.

“Lenders One is focused on delivering opportunities for our members to be innovative in the communities they originate in and with the borrowers they serve. Optimal Blue fulfills that with its highly-regarded suite of technology offerings that’s been proven to simplify the origination process for borrowers and help attract more customers,” said Jeff McGuiness, CEO of Lenders One.

Optimal Blue offers a suite of innovative services that help mortgage banks, credit unions and community banks improve efficiencies, manage compliance, reach consumers and boost secondary market performance. Consumers are looking for a new approach to the lending process according to recent study from PwC’s Experience Radar research group, which found that more than one-fourth of consumers (28%) are looking for a purely online mortgage experience. Meeting that demand is the cloud-based eOriginations platform that extends the simplification of mortgage originations to consumers through an online mortgage application experience, providing transparency and greatly reducing the time and effort required from prospective borrowers.

“Optimal Blue’s innovative technology greatly improves a lender’s ability to originate compliant mortgages efficiently, and to engage consumers who are increasingly interested in applying for mortgages online,” said Larry Huff, Co-CEO of Optimal Blue. “We look forward to working with Lenders One to help its members become more efficient, competitive, profitable, and equipped for success in today’s evolving mortgage origination market.”

Reaching Out To Brokers And Other TPOs

Altisource Portfolio Solutions S.A. has launched Wholesale One, a new cooperative for the wholesale mortgage industry. The organization will provide a platform for mortgage brokers, wholesale lenders and related vendors to provide quality loans to consumers nationwide. Here’s how it will work:

The new cooperative will assist mortgage brokers and other third-party originators with tools to improve their businesses. Cooperative benefits are designed to help lower costs for third-party services and streamline the financial execution of a wide variety of loan products.

“The cooperative model is a proven structure for supporting efficient business practices, consistently helping deliver compliant solutions and bringing best practices to the forefront of the industry,” commented Joseph Davila, President of Altisource Mortgage Services. “Our unique ability to connect buyers with services along with our expertise in process solutions lend themselves well to the cooperative environment. The launch of Wholesale One is an exciting new way for Altisource to further develop our mortgage marketplace.”

Altisource has tapped mortgage industry veteran, Greg Murray, to lead the new cooperative as Chief Executive Officer. Wholesale One will benefit from Murray’s extensive background in the third-party originations space and decades of leadership experience at Citigroup, Wells Fargo and JPMorgan Chase & Co.

“This $100 billion market is facing a variety of funding, compliance and operational challenges, so the timing is ideal to step in and deliver a crisp, streamlined execution platform to help ensure product diversity remains available for today’s home buyers while enabling compliant growth for the mortgage broker community,” commented Murray.  “The proprietary technology and originations expertise at Altisource, combined with the collective buying power inherent in a cooperative, means there is truly an opportunity to help third-party originators navigate an evolving market while helping to alleviate business process and compliance challenges.”

Altisource acquired mortgage cooperative Lenders One, servicing technology provider Equator and LOS Mortgage Builder. So, this combined portfolio coupled with their prior internal resources, makes this expansion a next logical step for the company. Personally, I expect to see the company make more similar moves as time goes by.

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Servicing Vendor Expands Its Compliance Footprint

Everyone has their eye on compliance these days. For example, mortgage servicing software provider Equator has enhanced its product suite with its new Loan Management module to assist mortgage loan servicers with compliance and transparency across their businesses and technologies.

The new Loan Management module strengthens a mortgage servicer’s existing technology, making it easier to administer rules, assign loans, reconcile portfolios and take snapshots of decisions. The module simplifies compliance for mortgage servicers by creating detailed audit trails and compliance checks that are documented, stored and easily accessible for review. It can be used throughout the entire lifecycle of default from delinquency through liquidation.

“Our new Loan Management module makes it easier and faster for mortgage servicers to comply with the changing regulatory environment by providing a transparent, flexible process which is based on our deep industry experience developed over the last ten years,” said John Vella, Chief Operating Officer of Equator­, an Altisource business. “We are excited to have a customizable solution that can span the servicing spectrum and integrate with all the existing servicing systems.”

Equator supports a wide range of servicers, asset managers, real estate agents and vendors in the mortgage industry with over 40% of all distressed real estate processed through its platform. The Loan Management module is the latest product delivered by Equator, expanding Equator’s end-to-end platform including Loan Modification, Short Sale, Deed in Lieu, Foreclosure, Bankruptcy and REO modules.

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Moody’s Downgrades Ocwen Loan Servicing

Moody’s Investors Service has downgraded Ocwen Loan Servicing, LLC’s servicer quality (SQ) assessments as a primary servicer of subprime residential mortgage loans to SQ3+ from SQ2- and as a special servicer of residential mortgage loans to SQ3+ from SQ2-. Both assessments remain on review for further downgrade. The ratings agency also lowered the company’s component assessment for loan administration to average from above average.

Moody’s SQ assessments represent its view of a servicer’s ability to prevent or mitigate asset pool losses across changing markets. Moody’s servicer assessments are differentiated in the marketplace by focusing on performance management. The assessment scale ranges from SQ1 (strong) to SQ5 (weak).

In Moody’s last SQ assessment of Ocwen, on 21 August 2013, Moody’s maintained the company’s SQ2- assessment as a primary servicer of subprime loans and its SQ2- assessment as a special servicer of residential mortgage loans. Both SQ assessments remained on review for downgrade owing to concerns about Ocwen’s rapid portfolio growth and the challenges of integrating the acquired servicing platforms and managing the additional distressed loan portfolios.

The assessment action reflects the heightened regulatory scrutiny of Ocwen Financial Corp. by the US Securities and Exchange Commission (SEC) and the New York Department of Services (NYDFS). Based on their findings, these agencies could restrict Ocwen’s activities, levy monetary fines, or take additional actions that could negatively affect the company’s financial strength and servicing stability.

The assessment action follows Ocwen Financial Corp’s announcement on 18 August 2014 that it had received a subpoena from the SEC in June seeking documents related to its business dealings with corporate affiliates and a probe related to the interests of the executives in the companies. The NYDFS on 4 August 2014 also issued a letter to Ocwen that raises concerns about potential conflicts of interest and potentially inconsistent statements and representations regarding corporate governance.

Moody’s also lowered the company’s component assessment for loan administration to average from above average based on regulatory concerns regarding force-placed insurance fees and the role of Altisource Portfolio Solutions, S.A. in the planned implementation of Ocwen’s new force-placed insurance program. Ocwen also has embarked on an initiative to review all loan-related imaged documents to identify duplicate documents, index documents that are not appropriately classified and reimage documents, which are not legible. Ocwen expects the effort, which should improve the quality of servicing, to be completed in approximately one year.

The review for downgrade for the special servicer and the subprime servicer assessments reflects Moody’s continuing concerns about Ocwen’s challenges integrating the acquired servicing platforms and managing the distressed loan portfolios. It also reflects uncertainty regarding the impact of the regulatory scrutiny and possible regulatory actions on the company’s servicing stability.

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LOS Leaders Are Emerging

You Can Download This Full Article As A PDF HERE

TME-TGarritanoI always used to wonder how the mortgage space could support 50, 60 different loan origination system (LOS) providers. I guess when you operate in a loosely regulated space with lots of investors, lots of volume and lots of mortgage bankers and brokers, there’s enough to go around for all of these LOS companies to survive. Today all of those conditions have disappeared so we’re seeing a lot of shifts in the LOS space.

So, who are the leaders in the midtier LOS space? A slew of recent acquisitions has brought three LOS companies to the front of the line in my view. The LOS in first place has to be Ellie Mae. In a move to bolster its content and services offering, Ellie Mae signed a definitive agreement to acquire AllRegs, an information provider for the mortgage industry.

AllRegs information management solutions are used by more than 3,000 companies representing every facet of mortgage banking: major lenders and investors, regulators, Federal and State agencies, brokers, mortgage services vendors and law firms. AllRegs product offerings include education and training, loan product and guideline data and analytics, and the AllRegs online reference library that includes investor underwriting and insuring guidelines, federal and state statutes and regulations, Mortgage Mentor “how to” guides and plain language interpretation and analysis.

“AllRegs has built a strong reputation as the industry’s source for investor guidelines, compliance resources and education,” said Sig Anderman, chief executive officer of Ellie Mae. “With the acquisition of AllRegs, Ellie Mae will expand its customer base and add a broad array of content and services that complement our portfolio of product offerings. This strategic acquisition enhances Ellie Mae’s compliance leadership and furthers our goal to be the company that powers the entire mortgage industry.”

AllRegs extensive content library spans nearly every aspect of the mortgage industry. Relied upon by virtually all of the top 100 lenders in the country, AllRegs is the exclusive electronic publisher of underwriting and loan product guidelines for Fannie Mae, Freddie Mac, Wells Fargo Home Mortgage, Citigroup, JPMorgan Chase, the Federal Home Loan Bank of Chicago, U.S. Bank Home Mortgage and Flagstar Bank, N.A.

The transaction is expected to close within 90 days and is subject to customary closing conditions. Under the terms of the agreement, Ellie Mae will acquire AllRegs for $30.0 million in cash, subject to certain purchase price adjustments, including for working capital.

So, who can challenge Ellie Mae? The Altisource acquisition of Mortgage Builder puts them in strong contention. However, several times in the past we’ve seen good midtier technology companies that offer quality service and have a decent market share get acquired by larger companies. What happens next? The midtier company loses its identity and struggles in most cases. Is this what’s in store for Mortgage Builder now that they have been acquired by Altisource?

I don’t think so. The Altisource acquisition of Mortgage Builder has the beginnings of a great success story. For Altisource, they are getting more involved in the mortgage space. They want to have an end-to-end LOS. They want to control the entire mortgage lifecycle. That’s a good thing for Mortgage Builder because they will be the only LOS in the Altisource portfolio and Altisource doesn’t know much about the LOS, so Keven M. Smith, Chief Executive Officer of Mortgage Builder, will remain a big player. He’s not looking for an exit strategy.

“I built the company from the ground up,” he said. “Being privately held has been great, but some of the acquisitions that we want to do and the extensions to our product require that a bigger company be behind us. There are also offerings within Altisource like Lenders One, for example, that we look forward to being more involved with.

“This is not a cash-out deal, this is the next step in the lifecycle of Mortgage Builder,” Smith continued. “All of the staff are being brought over. As time goes on we are looking to expand. We will add more staff and look to get more entrenched in Altisource offerings. Altisource doesn’t have an LOS so the fact that we would be here long term running the company was a selling point for them.”

In fact, if you look the Equator acquisition, Altisource has a clear track record established. The Equator staff and corporate identity remains in tact. The company was acquired for its expertise in loss mitigation and its involvement with Altisource has enabled the Equator staff to grow their business.

“It’s harder to grow as a privately held LOS,” noted Smith. “We at Mortgage Builder are looking to be a larger company and grow. I don’t have a rich uncle to go to and get money from to do the acquisitions that we want to do. We want to be the premier LOS player.”

Mortgage Builder recently acquired a PPE/CRM provider and a servicing software provider. Now that the company has Altisource behind it more acquisitions will undoubtedly follow. Mortgage Builder will also be able to accelerate plans to improve its existing technology to prepare lenders for what comes next in the world of mortgage lending. All indications are that the acquisition was a good fit for a larger company looking to offer a complete lending technology solution and a solid midtier LOS looking to grow.

Lastly, PCLender, LLC has acquired the PCLender loan origination system back from Black Knight Financial Services and formed a new company that will focus on providing turnkey mortgage technology solutions for midsized mortgage bankers. No sale price was disclosed.

PCLender, LLC has been heavily capitalized to expand the system functionality and implement automation solutions for lenders requiring increased compliance and workflow efficiencies. The system currently supports banks and credit unions with consumer point-of-sale, loan processing, automated underwriting, loan closing, integrated imaging, secondary marketing, trade management, warehouse management and interim servicing. PCLender’s retail and wholesale platform will now be expanded to support correspondent lending and include automated loan audit and post-closing review support. Additionally, an emphasis will be made to refine vendor integrations and build out fulfillment services that streamline lender operations.

Lionel Urban, president and CEO of PCLender, LLC said the management team will initially focus on strengthening customer relationships and pursue customer collaboration to speed the pace of design enhancements. “I believe the PCLender customer base has some very valuable feedback and we intend to implement that into our development road map. I think that was a strength of the organization early on and we are excited to reengage with the customer base in a collaborative manner.”

PCLender, LLC will continue to build on the scalable architecture and security that is currently inherent in the system. PCLender, LLC anticipates the development and support resources dedicated to the LOS will increase by over 60 percent in the next 12 months to support the new growth initiatives.

PCLender, LLC will focus on workflow and configuration defaults that will enable lenders to implement the LOS within 30 days using industry best practices. Mr. Urban believes that the small to midsized mortgage lenders are an underserved market and plans to offer a more robust solution that will require less administrative support by the lenders.

All three of these companies have emerged as LOS leaders that will be around for the long haul.

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What’s Next For Mortgage Builder?

Several times in the past we’ve seen good midtier technology companies that offer quality service and have a decent market share get acquired by larger companies. What happens next? The midtier company loses its identity and struggles in most cases. Is this what’s in store for Mortgage Builder now that they have been acquired by Altisource?

I don’t think so. The Altisource acquisition of Mortgage Builder has the beginnings of a great success story. For Altisource, they are getting more involved in the mortgage space. They want to have an end-to-end LOS. They want to control the entire mortgage lifecycle. That’s a good thing for Mortgage Builder because they will be the only LOS in the Altisource portfolio and Altisource doesn’t know much about the LOS, so Keven M. Smith, Chief Executive Officer of Mortgage Builder, will remain a big player. He’s not looking for an exit strategy.

“I built the company from the ground up,” he said. “Being privately held has been great, but some of the acquisitions that we want to do and the extensions to our product require that a bigger company be behind us. There are also offerings within Altisource like Lenders One, for example, that we look forward to being more involved with.

“This is not a cash-out deal, this is the next step in the lifecycle of Mortgage Builder,” Smith continued. “All of the staff are being brought over. As time goes on we are looking to expand. We will add more staff and look to get more entrenched in Altisource offerings. Altisource doesn’t have an LOS so the fact that we would be here long term running the company was a selling point for them.”

In fact, if you look the Equator acquisition, Altisource has a clear track record established. The Equator staff and corporate identity remains in tact. The company was acquired for its expertise in loss mitigation and its involvement with Altisource has enabled the Equator staff to grow their business.

“It’s harder to grow as a privately held LOS,” noted Smith. “We at Mortgage Builder are looking to be a larger company and grow. I don’t have a rich uncle to go to and get money from to do the acquisitions that we want to do. We want to be the premier LOS player.”

Mortgage Builder recently acquired a PPE/CRM provider and a servicing software provider. Now that the company has Altisource behind it more acquisitions will undoubtedly follow. Mortgage Builder will also be able to accelerate plans to improve its existing technology to prepare lenders for what comes next in the world of mortgage lending. All indications are that the acquisition was a good fit for a larger company looking to offer a complete lending technology solution and a solid midtier LOS looking to grow.

When asked where he sees Mortgage Builder in the next five years, Mr. Smith replied, “We want to be in first place by a mile and a half. We want a more robust end-to-end solution with increased market share. We want to grow.”

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LOS Acquisition Goes From Rumors To Fact

Rumors have circulated back since before the MBA Technology Show that LOS Mortgage Builder has been for sale. I heard those rumors personally, but have held back reporting until they become fact. As we all know, acquisitions can fall apart. Today I can report that Altisource has announced its intent to buy Mortgage Builder. Here’s why:

With this deal Altisource will further diversify its customer base by providing software solutions to leading mortgage banks, credit unions and financial institutions in the United States. Altisource recently also acquired Equator. The acquisition is expected to close within 30 days and is subject to customary closing conditions. No sale price was disclosed.

William B. Shepro, Chief Executive Officer of Altisource said in a prepared statement, “The addition of Mortgage Builder’s loan origination, servicing and electronic document management software enhances Altisource’s current portfolio which provides customers with one of the most comprehensive real estate and mortgage lifecycle management platforms and services marketplaces available. Mortgage Builder will join the Altisource family of businesses and operate within our Technology Services segment. Together, we will continue to develop innovative technology solutions that meet the evolving needs of the real estate and mortgage marketplaces.”

Keven M. Smith, Chief Executive Officer of Mortgage Builder said in a prepared statement, “Mortgage Builder and Altisource share a commitment to delivering a modern technology platform that enhances compliance while improving loan processing efficiency in both the retail and wholesale production channels.  Joining Altisource will enable us to combine forces toward the common vision of developing the industry’s most advanced and effective real estate and mortgage lifecycle management platform and marketplace. Going forward, our customers and partners will continue to experience the same dedication to innovation and customer support that they have come to expect from Mortgage Builder, enhanced by Altisource’s financial strength, stability and global resources.”

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A New Take On Moving Lending Online

*A New Take On Moving Lending Online*
**New Product Hits The Market**

***Here’s a new twist on online transparency: Altisource launched Hubzu, an online residential real estate marketplace. Hubzu improves the online home buying and selling experience by making it easier, more efficient and transparent from start to finish. Hubzu puts the entire experience online – from searching and bidding to financing and closing. Effective today, Hubzu replaces GoHoming, Altisource’s current online marketplace for real estate.

****Hubzu is live at Hubzu.com and includes all real estate inventory that was previously on GoHoming.com, along with an enhanced user experience and expanded functionality. The launch capitalizes on Altisource’s position as a global leader in high-value, technology-enabled residential real estate solutions.

****“We’ve had a lot of success with GoHoming, facilitating nearly 60,000 home sales to date,” commented Scott Wielar, General Manager of Hubzu. “However, to stay at the forefront of the market, our brand experience and scope of services needed to evolve. We listened to our customers and redesigned the user experience to make the entire real estate transaction process easier for home buyers and sellers. With the new features and functionality, we are further extending our efficiency and transparency in facilitating the home buying and selling process,” continued Wielar.

****Buyers can search for homes, bid to buy homes via auction or the traditional offer process, or use the “Own It Now” feature to edge out competing bidders and win an auction immediately. The website then guides buyers through the contracting and financing process in one centralized online location. For sellers, Hubzu offers faster, easier sales through increased marketing visibility and the ability to track bids and respond to offers online. In 2012 and early 2013, Hubzu plans to roll out functionality enhancements, new features and additional inventory for sale.