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Millennial Home Purchases Continue To Rise

Mortgages to Millennial borrowers for new home purchases continued their ascent in June, accounting for 91 percent of closed loans, according to the latest Ellie Mae Millennial Tracker report. In May, 90 percent of closed mortgages to members of the generation were for new home purchases, up from April’s 89 percent, and January’s annual low of 81 percent. This is in correlation with the Census Bureau’s latest quarterly homeownership and vacancy report that shows homeownership across Millennials age 35 and younger increased slightly, representing 36.5 percent of all homeowners, compared to 35.3 percent in the first quarter of 2018.

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Conventional loans remained attractive among Millennials, representing 69 percent of all loans closed in June, a slight uptick from 68 percent in May. FHA loans represented 27 percent of all closed loans to this generation, down one percentage point from the month prior. This is significantly higher than the Ellie Mae June Origination Insight Report data which showed FHA loans represented 20 percent of closed loans in the month for borrowers of all ages.

Average Millennial borrower FICO scores across all loan types rose slightly in June to an average of 723, up from 721 which held steady March through May. For purchases, the average FICO score was 746 for a conventional loan, 681 for an FHA loan and 744 for a VA loan.

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“As it remains a competitive, purchase-centric market, we will continue to keep a close eye on the purchase trends amongst Millennials,” said Joe Tyrrell, Ellie Mae’s executive vice president of corporate strategy. “This new generation of homebuyers wants the capability of an on-demand mortgage, and we are working to provide borrowers a convenient and secure digital mortgage offering that makes the homebuying process a seamless experience.”

Across all loan types, it took Millennials an average of 42 days to close on their loans in June, a day longer than in March, April and May. Purchases took an average of 41 days and refinances took an average of 45 days.

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In June, the hottest housing markets for Millennials were primarily in the Midwest. The top markets by percentage of Millennial loans closed included Clarksburg, W.Va. (65 percent), Watertown, S.D. (65 percent), Boone, Iowa (64 percent), and Dickinson, N.D. (61 percent).

The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 80 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass mortgage management solution.

Banking Compliance Index Nearly Doubles In Q2

The Banking Compliance Index (BCI) nearly doubled from Q1 2018 to Q2 2018, revealing the significant impact of regulatory relief bill S.2155, which contained over 50 separate regulatory changes. This BCI increase reinforces that any change, whether adding or reducing regulations, translates to extra work for institutions. Also, the agencies have now filled their vacant leadership positions, which reduced some of the regulatory uncertainty experienced last quarter and may have contributed to a warmer enforcement climate.

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“It’s not unusual to experience an uptick in regulatory activity from Q1 to Q2, but this is a more substantial jump than we’ve seen in years past,” stated Donna Cameron, Continuity’s director of regulatory I/O. “We’re just starting to see the impact of the regulatory relief bill on banks, credit unions and lenders. The bill added a significant number of pages and material that organizations had to read, interpret and decide on appropriate action forward. This increase in activity is only expected to continue as the agencies issue implementing regulations and guidance documents.”

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The Banking Compliance Index, published quarterly by Continuity’s Regulatory Operations Center® (ROC) quantifies the incremental burden on financial institutions in keeping up with regulatory changes. The typical community financial institution needed more than one full-time employee (1.11) just to keep pace with regulatory changes. This score doesn’t include the resources institutions are already dedicating to regulatory and compliance efforts.

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There were 61 issuances delivered between April 1 and June 30, 2018, up from 50 issuances the previous quarter. Compliance costs increased from $10,776 in Q1 2018 to $19,114 in Q2 2018, and hours required to comply per institution went from 219 hours in Q1 2018 to 369 hours in Q2 2018, a 68-percent increase.

Cameron added, “When any change occurs, institutions must make significant modifications such as retraining staff, upgrading technology, reevaluating risk and tweaking operational procedures. This is why it’s critical for institutions to have a strong, comprehensive change management system in place to help them quickly and efficiently navigate the impact of regulatory activity, especially now in the wake of regulatory relief.”

Reinstatement of the Protecting Tenants at Foreclosure Act was a significant change during Q2 2018. The act, which was terminated in December 2014, was reinstated by the regulatory relief bill, effective June 23, 2018. Other notable provisions of the bill were changes to the ways reciprocal deposits and High Volatility Commercial Real Estate are calculated and reported. These amendments were effective on the day the regulatory relief act was enacted, May 24, 2018.

“We can expect to see a more active second half of the year in regards to regulatory activity and issuances,” Cameron explained. “Agencies have made it clear that they plan to accelerate regulatory relief activity and provide guidance as soon as possible. Financial service organizations must proactively work with their regtech partners to help them automate compliance processes, interpret regulations and centralize efforts to prepare for the upcoming changes.”

The Banking Compliance Index (BCI) is a quarterly tracking index published by Continuity’s Regulatory Operations Center. It measures the incremental cost burden on financial institutions to keep up with regulatory changes.

Pavaso And Carlisle Title Collaborate For Digital Closings

Pavaso has partnered with Carlisle Title, a Dallas-Fort Worth based company offering title and settlement services. Pavaso, a mortgage technology provider, is the developer of an end-to-end digital closing platform.

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Carlisle Title delivers a wide range of settlement services and products, including residential and commercial title insurance; closing services as well as specialized offerings for the mortgage industry.  Grounded in the belief that the real estate transaction should be easy, Carlisle Title is streamlining the closing process and providing consumers visibility into their transactional documents prior to signing, enabling the ease and simplicity of a digital closing experience.

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“Carlisle Title is committed to innovation that advances the real estate transaction while creating amazing experiences for our customers,” said Tara Williams, President, Carlisle Title. “We are thrilled to partner with Pavaso in providing an e-closing solution that will allow our customers to access and review their closing documents before signing, along with the convenience of digitally signing the documents at the time and location of their choice. In partnership with Pavaso, we’re streamlining the real estate transaction for all parties; allowing for closings to become less about signing paperwork and more about the celebration.”

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Pavaso’s technology allows lenders and title companies to deliver a complete, transparent loan package to borrowers, allowing them (or their REALTORs or loan officers) to access the closing documents anywhere, on any device, prior to closing. Pavaso’s Digital Close platform is capable of producing hybrid closings (digital closings which meet state requirements that some documents be “wet signed”), as well as complete eNote and eVault transactions.

“Consumers no longer hope for an easier closing process—they now demand it,” said Nancy Pratt, Vice President of Partner Relations and Government Affairs, Pavaso. “The digital closing is the new standard by which title companies (and even mortgage lenders) are being judged. For Carlisle Title, which has always focused on making the closing process one of transparency and simplicity, moving to the fully digital closing is a natural evolution, and one which confirms its place as a leading-edge settlement services provider.”

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Altisource Names Justin Vedder COO Of Origination Solutions

Altisource Portfolio Solutions S.A. (“Altisource” or the “Company”) (NASDAQ: ASPS), a provider of services and technologies to the mortgage and real estate industries, announced the appointment of Justin Vedder as Chief Operating Officer, Origination Solutions.

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In his new role, Mr. Vedder will be responsible for the growth of Altisource’s Origination Solutions business which brings together the integrated and consultative products, services and solutions needed by mortgage market participants of all sizes throughout the loan origination and secondary market execution process. Lenders and investors can leverage Altisource’s full suite of data-enabled products and solutions as well as the insights of an experienced team to help maximize efficiency and gain a competitive edge in today’s increasingly competitive loan origination marketplace. Altisource’s integrated end-to-end solutions are built on a scalable platform aimed to help businesses improve controls and drive efficiencies.

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Altisource’s Origination Solutions Platform includes Trelix Mortgage Fulfillment Services, CastleLine Insurance Services, the Lenders One cooperative, Granite Risk Management, Mortgage Builder Loan Origination System, Springhouse Valuations, and Premium Title and Settlement Services.

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Previously, Mr. Vedder served as Vice President of National Sales, Origination Solutions where he was instrumental in growing the Origination Solutions customer base and driving long-term strategic client relationships. Prior to joining Altisource, he was the Executive Vice President of CastleLine where he assisted in the development and launch of the Certified Loan Program. He is a renowned thought leader in the industry and has spoken nationally on various topics including mortgage fraud, loan production and defects, repurchase management, auditing of lenders, insurance and various other mortgage banking-related matters. Mr. Vedder’s appointment follows the departure of Bryan Binder and Jason Garmise, who joined Altisource in 2015 through the acquisition of CastleLine. Mr. Binder and Mr. Garmise will be leaving the company to pursue a new business venture.

“With over 17 years of sales and management experience in the mortgage and insurance industries, Justin has a proven track record of driving business development, innovating new solutions for large and sophisticated clients, and exceeding revenue targets,” said William Shepro, Chief Executive Officer of Altisource. “Justin’s business acumen, combined with his indispensable role in shaping the way customers leverage Altisource’s extensive offerings by utilizing the ‘One Altisource’ model, are great indicators of the potential growth he can help deliver while leading the Origination Solutions initiative.”

IndiSoft Taps Mark Sweeney For Chief Technology Officer

IndiSoft, a provider of technology solutions for the financial services industry, has tapped Mark Sweeney for the chief technology officer position. He is responsible for all technical and product strategy, development and support.

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“We are excited to have someone of Mark’s caliber join the IndiSoft team,” said Hans Rusli, CEO of IndiSoft. “We felt that Mark is a great fit for this role based on his experience and commitment to the evolution of technology in business. He is an innovative leader recognized for establishing and continually improving client relationships and developing application strategies.”

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Sweeney has more than 30 years of experience in the technology industry. He was previously senior vice president of service delivery at Bank of America and executive vice president of applications development at Countrywide Home Loans. Sweeney has proven experience in managing large technology organizations and delivering enterprise systems.

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“Mark’s organizational leadership, experience with governance processes, employee satisfaction and organizational metrics programs makes him ideal for this position,” said chairman and founder of IndiSoft, Sanjeev Dahiwadkar.

STRATMOR Explores The Practical Applications Of Blockchain

In the mortgage industry, one of the most talked about technologies of the last twelve months is Blockchain. In the July issue of STRATMOR’s Insights report, STRATMOR principal Andrew Weiss analyzes Blockchain’s potentially disruptive impact and its practical applications.

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In his article, “Connecting the Blocks: Practical Applications of Blockchain for the Mortgage Industry,” Weiss explains Blockchain through mortgage-related examples, including one that pictures the competitive landscape in 2026 if Blockchain is widely adopted. He illustrates this example with a graphic showing a future Blockchain origination workflow.

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“Proponents of Blockchain tell us that its potential to disrupt current mortgage business processes is just about limitless,” says Weiss. “For the mortgage lender, it presents four primary opportunities. It can improve data security. It could improve lender operational efficiencies. It could help lenders improve the borrower’s experience. And, for lenders that are early adopters, it could gain them a significant competitive edge through gains in operational efficiencies and cycle times.”

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“The mortgage industry is filled with inefficient and arcane processes to collect, verify, and securely transmit the information that makes up a mortgage,” says Weiss. “Today, the average loan takes 45-50 days to close from initial application by the borrower and an additional 20 days to be fully accepted and funded by the investor. Each added day in this process increases costs and the risk of a failed transaction; and these costs are ultimately passed on to the borrower in the form of higher interest rates and closing fees.

“While technology is often employed to streamline and increase the productivity of the mortgage origination process, the nature of the existing collection and verification of all the required information has made those attempts fail. In fact, the cost of origination has more than doubled in the last ten years, while productivity has significantly diminished,” says Weiss. “Especially, in a slow growth environment, as the cost to originate a loan goes up, profit margins compress and the industry pressure to implement new technologies that change how we do business continues to rise. Blockchain may be that technology.”

Because Blockchain is a potential disruptor, “mortgage executives need to know where to place their bets,” says Weiss. “While the upside payback potential for an early investment in Blockchain is real, such an investment is not without its downsides” and Weiss points out potential risks with the technology. These risks include “mustering the cooperation of participants, the potential for hidden flaws that typically exist in any relatively-new technology and the possibility that a new and better technology may come along relatively early.” “Nonetheless,” say Weiss, “there is also a real opportunity cost for watching Blockchain development from the sidelines; namely missing out on gaining a potentially large competitive advantage.”

In a second article, “The Borrower Experience: Ethnic Diversity Matters,” STRATMOR Senior Partner Dr. Matt Lind draws on data from a variety of sources, including STRATMOR’s MortgageSAT National Benchmark data, to offer lenders growth strategy ideas that center on borrower diversity in relation to the borrower experience. “Improving the borrower’s experience and creating an origination strategy that includes targeting emerging markets such as ethnically-diverse groups is a winning growth opportunity for lenders,” says Lind. To capitalize on this opportunity, Lind offers lenders six ideas for improving connections with borrowers.

Click here to download the July 2018 edition of STRATMOR Insights for much more. To sign up to receive the report each month, please click here.

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Partnership Delivers A Relationship-Driven Digital Mortgage Experience

HomeServices Lending, LLC — a subsidiary of HomeServices of America, a Berkshire Hathaway Affiliate — selected Maxwell as their technology partner to streamline the mortgage lending process and provide a relationship-driven digital mortgage experience for the hundreds of loan officers, thousands of real estate agents, and tens of thousands of homebuyers who are served by HomeServices of America every year.

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“We started by looking for an online application tool with secure document upload capabilities. What we uncovered was a partner that has a much larger vision to transform mortgage lending. Now that we’re working with Maxwell, we’re excited to bring attention to how HomeServices intends to differentiate ourselves in the marketplace,” said HomeServices Lending president and CEO, Maureen Sammon.

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With this strategic partnership, HomeServices Lending reaffirmed their commitment to meet the evolving needs of homebuyers, needs that have mortgage lenders across the country scrambling to adapt to the demand for a more efficient, relationship-driven digital process.

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“Our teams are doing a better job of meeting clients’ needs with Maxwell. Consumers require more help from us than ever before and that relationship goes beyond being a mere transaction,” said Harris Laskey, vice president of national sales at HomeServices Lending. “Maxwell’s solution naturally complements HomeServices’ offerings by powering our front-line loan officers and their teams to deliver a fast and delightful experience that outshines the competition.”

Maxwell empowers mortgage lenders across the nation with a modern digital workspace that digitizes and automates the home-buying experience, integrating with thousands of financial institutions and leading mortgage technology providers to streamline the lending process and offer a hassle-free experience for every homebuyer on any device.

“We are beyond pleased to partner with the outstanding team at HomeServices,” said John Paasonen, CEO and Co-Founder of Maxwell. “We built Maxwell on the premise that technology should empower humans, not replace them — a mantra that HomeServices not only believes in, but uses to guide their own business. In every relationship, we go beyond the typical vendor-client relationship to establish partnerships with mortgage lenders, like HomeServices Lending, who share our dedication to working together to craft an experience that’s truly exceptional.”

MISMO To Create Standards For Business To Consumer Transactions

MISMO, the mortgage industry’s standards organization, is seeking participants to develop standards for conducting consumer transactions on mobile devices. This initiative will focus on identification, description and facilitation of consumer facing transactions in the lending life cycle.  Those interested in collaborating with MISMO are invited to join MISMO’s new Business to Consumer (B2C) Development Workgroup.

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“As the mortgage industry pursues digital transformation, using industry-wide standards to communicate will be critical to our success,” said Shelley Leonard, Chief Product Officer at Black Knight, Inc.

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This initiative is expected to be the first of many MISMO initiatives where JSON will be utilized. JSON is short for JavaScript Object Notation, a lightweight language for structuring data that is frequently used on mobile platforms.  Lenders’ use of JSON has grown as more borrowers have begun researching and applying for mortgages on their phones and other smart devices. However, no standards exist for using smartphone devices or JSON in the mortgage process. The new MISMO workgroup will create a business reference model for borrower communications in addition to decision rules, engineering guidelines and a white paper on the impact of smart devices in the mortgage life cycle.

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“A growing number of lenders are already using JSON to collect information and conduct business with consumers via smartphones, including mortgage preapprovals,” said MISMO Executive Vice President and MBA Vice President of Industry Technology Rick Hill. “Unless standards are developed as smart devices are deployed for mortgage transactions, adoption of these technologies could become very fragmented and lead to miscommunication between lenders and third parties. By collaborating with industry experts, MISMO hopes to bring consistency to B2C transactions and help more lenders take advantage of these exciting innovations.”

Specifically, the B2C Community of Practice will be tasked with:

>>Identifying required and optional B2C transactions taking place throughout the mortgage life cycle

>>Identifying and implementing the business drivers for creating technical specifications for consumer transactions

>>Creating JSON language specifications for required consumer transactions and possibly for optional transactions

By joining the MISMO B2C Development Workgroup, participants will be able to access resources and expertise on leveraging smart technology to serve borrowers while simultaneously pursuing digital mortgages. Those interested in participating in this collaborative, industry-wide effort should send an email titled “Join MISMO B2C Group” to info@mismo.org by Friday, August 3, 2018.

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ATTOM Data Solutions Integrates Enhanced Boundary Data

ATTOM Data Solutions has integrated expanded boundary data into its U.S. property data warehouse. The expanded boundary data features parcel boundaries for 155 million U.S. parcels along with school attendance zone boundaries for more than 67,000 schools in more than 13,000 school districts and neighborhood boundaries for more than 166,000 neighborhoods.

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“Boundary data is a useful and often necessary complement to the foundational tax, deed, mortgage and neighborhood data in the ATTOM Data Warehouse,” said Rob Barber, CEO of ATTOM Data Solutions. “We’ve made some key strategic moves over the past few months to obtain the best boundary data available and fully integrate it into our data warehouse so that we can provide a one-stop shop for clients that want to combine these datasets.”

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The parcel boundary data is available in a bulk file format adhering to the industry standard ESRI shape data. ATTOM offers two versions of the parcel boundary data: An Essential version that includes the shape file data for the parcel boundaries along with basic tax assessor information for each parcel; and the Plus version with additional assessor information for each parcel including beds, baths, square footage, year built, lot size, most recent sale date and amount, and much more.

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“We’ve included basic assessor property data in our standard parcel boundary file because most use cases benefit from some level of assessor data,” said Todd Teta, chief technology officer at ATTOM Data Solutions. “We also include our unique ATTOM ID for every parcel so that additional data from the ATTOM Data Warehouse such as sales history, mortgage and foreclosure data, or natural hazard risk can easily be joined with the parcel boundaries.”

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Lender Optimizes Account Onboarding And Consumer Loan Experiences

West Jordan, Utah-based Mountain America Credit Union, has selected Docutech’s ConformX dynamic document generation engine, Solex eSign and eClose, and print fulfillment services to streamline new account onboarding, and consumer, home equity and short-term mortgage refinance lending process for its branches across the U.S.

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Through Docutech’s ConformX, Mountain America Credit Union will be able to dynamically generate document and disclosure packages for their new account and consumer loan offerings including personal accounts, trusts, business accounts, credit cards, auto loans, student loans, home equity, and short-term mortgage refinance products. Through Solex, the credit union will also be able to offer the convenience of eSign and eClose capabilities online and via in-branch signature pads. The use of these technologies will better enable Mountain America to deliver robust omni-channel financial services, optimize member experience and increase operational efficiency.

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“Docutech understands the legal and compliance nuances of each state,” said Bret Butterfield, VP of Home Equity lending at Mountain America. “Because Docutech will have our member’s loans covered from a compliance standpoint, including eClose and electronic notary services, we can concentrate more of our time on satisfying and elevating our member’s experience.”

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Jade Beckman, VP of Consumer Loans at Mountain America added, “Docutech took much of our regulatory and compliance burden from us by streamlining the document process. This tool has made the whole process much simpler. Document updates that used to take weeks to change are now updated in a day.”

“Mountain America is one of the largest credit unions in the U.S. and given its passion for improving the lives of its membership, we are honored to stand by Mountain America in this pursuit. Docutech is most known in the industry for our ability to streamline and improve compliance for the mortgage lending process. However, our ability to improve the account onboarding and consumer lending process is of increasing interest as credit unionscontinue to diversify their offerings,” said Amy Brandt, CEO of Docutech. “Though Docutech’s technology, Mountain America’s members will be able to reduce the amount of time spent from application to closing – it’s an efficient and enjoyable experience for both the member and thecredit union.”