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Millennial Homebuyers Exercised Their Purchase Power

Millennial homebuyers across the country exercised their purchase power in April as competition for limited housing inventory continued. Eighty-nine percent (89 percent) of mortgage loans made to Millennial borrowers during the month were for new home purchases, up one percentage point from the month prior, and the highest percentage since May 2017, according to the latest Ellie Mae Millennial Tracker.

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Interest rates also continued to rise in April to 4.73 percent, on average, up from 4.63 percent the month prior. This is the highest interest rate recorded since Ellie Mae began tracking Millennial loan data in January 2014.

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As interest rates crept up, average loan amounts to Millennials fell. The average amount was $194,300 in February, $192,055 in March and $188,171 in April.

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“Most Millennials are buying a house because there are major changes happening in their lives such as starting a family, getting a new job, or because they’ve decided that they want to build equity and stop renting,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “We believe Millennial home purchases will continue to climb this summer and while interest rates may slightly impact the size of homes borrowers can get for their money, we don’t foresee it impacting their desire to buy.”

Overall, conventional loans represented 67 percent of all closed loans to Millennial borrowers, while FHA loans held steady at 29 percent from the previous month. VA purchase loans for Millennial borrowers represented 79 percent of all VA closed loans in April, steady from the month prior, and up from 66 percent in February.

The time it took for Millennial homebuyers to close a loan remained flat month-over-month. Purchase loans took an average of 39 days to close and refinance loans took an average of 44 days. FHA purchase loans took an average of 40 days to close, compared to 41 days in March. VA purchase loans averaged 49 days-to-close, compared to 45 days the month prior.

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.

Credit Interlink Integrates Income Verify With LendingQB For Faster Verifications

Credit Interlink, a provider of SaaS mortgage origination technology solutions, has integrated its Income Verify, with LendingQB, a provider of SaaS loan origination technology solutions, to facilitate quicker and more efficient 4056-T verifications.

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Thanks to certification through Fannie Mae’s Day One Certainty, Income Verify has direct access to tax transcript verifications through the IRS in order to expedite the time needed to process requests within LendingQB’s LOS. Likewise, the solution better prevents the risk of fraud through its secure interface, creating a more cost-effective way to collect borrower data.

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“In a world growing more dependent on digital technology, borrowers have come to expect the lending process to replicate experiences they experience in other areas,” said Mark Yoder, Vice President of Business Development, Credit Interlink.  “With Income Verify, borrowers are able to provide their information up front and loan officers are able to verify it without adding unnecessary delay to the origination process, all in a secure manner.”

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LendingQB’s web browser platform provides mortgage lenders with core LOS capabilities using modern web-optimized technology, enabling robust integrations to other web platforms such as Credit Interlink. Using LendingQB’s API framework, Credit Interlink is able to extend the capability of lenders, expediting the origination process and allowing more direct interaction with borrowers and other parties to the loan.

“Credit Interlink’s streamlined approach to data verification, credit and fraud is innovative and perfectly fits the ever-changing mortgage industry,” said David Colwell, vice president of strategy at LendingQB. “By utilizing Income Verify, our lenders are able to verify borrower data in a fast and safe manner, enabling them to reduce the time needed and the overall cost to originate loans.”

Enhanced Offering Provides Much-Needed Differentiator For Lenders

Mortgage Coach, creator of point-of-sale borrower conversion software, has partnered with Optimal Blue, a provider of secondary marketing automation. Through direct integration with Optimal Blue’s API platform, every Mortgage Coach application now seamlessly connects real-time, compliant product and pricing data with the compelling financial analyses Mortgage Coach is known for.

Through this collaborative effort and newly expanded product offering, Mortgage Coach and Optimal Blue enhance their long-standing strategic partnership and take their industry value proposition to a whole new level.

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“Without ever leaving the Mortgage Coach app on their mobile device, loan officers can create informative, side-by-side comparisons highlighting multiple loan programs and comprehensive pricing information in just seconds,” explained Bob Brandt, Vice President of Marketing & Strategic Alliances for Optimal Blue. “Combining the sophisticated product and pricing data at the heart of every mortgage transaction with a compelling user experience — and doing so whenever, wherever it matters most — is a game changer for the industry.”

The benefits are not exclusive to lenders and loan officers. Today’s consumers immerse themselves with the details behind major financial decisions and pride themselves on deeply understanding their alternatives. Mortgage financing is no exception. When provided with a comparative, in-depth analysis of the financial impact of their best financing alternatives in a highly consultative environment, consumers are more engaged with their loan officers and more likely to move forward with a loan.

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“In today’s price compression marketplace, converting every prospect into a borrower is the most important aspect of achieving increased profits for mortgage lenders,” said Joe Puthur, President of Mortgage Coach. “This new innovation gives lenders the instantaneous benefit of earning more commitments at a lower cost of acquisition.”

Mortgage Coach, the company’s flagship platform, is the technology behind the Total Cost Analysis (TCA), a report that illustrates the long and short-term impact of any loan program on the borrower’s financial situation. The TCA incorporates real time rates, fees, closing costs, and program information and presents its findings using simple yet powerful graphical elements like charts and graphs. The TCA provides a level of clarity that is virtually impossible to achieve without the Mortgage Coach platform.

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“The difference between using a TCA to explain mortgage options and using any other method is like the difference between having a film described to you versus watching it in high definition with Dolby sound,” explained Mike Hardwick, President of Churchill Mortgage. “Having been in partnership with Mortgage Coach and Optimal Blue for several years now, we’re happy to have helped thousands of borrowers make a better, more informed decision. These new capabilities will provide greater clarity, transparency, and confidence to any borrower – in a way that is faster for every loan professional.”

An LOS To Satisfy All Lenders

Most loan origination or LOS offerings look to target specific size lenders with different offerings for a top 50 lenders vs. a smaller lender, for example. Wipro Gallagher Solutions (WGS), a Wipro Limited company and provider of loan origination software solutions, has launched its NetOxygen SaaS loan origination solution for mortgage lenders of all shapes and sizes.

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NetOxygen SaaS brings the power of NetOxygen, an enterprise class loan origination system that helps lenders reduce origination costs and boost production efficiency through automation.  NetOxygen connects to a front end portal and fintech offerings thus providing seamless interactions to improve borrower experience. NetOxygen SaaS enables quicker deployment and scalability to match business growth with an all-inclusive, per transaction pricing, which is based on business outcomes.

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NetOxygen SaaS provides comprehensive product coverage across mortgage, home equity, HELOC (home equity line of credit) and unsecured credit lines origination. The platform integrates an extensive vendor ecosystem which provides multiple options for standard services like credit, appraisals, fraud checks, etc. NetOxygen SaaS supports retail, correspondent and wholesale markets, and also enables niche offerings like construction lending for one close, multiple close, homestyle renovation and FHA construction.

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Key features of NetOxygen SaaS include:

>>Sophisticated workflow engine, allowing lenders to implement distinct lending policies and procedures;

>>Automated underwriting for improved efficiency;

>>Comprehensive pool of rich APIs, to enable easy integration with other applications;

>>Advanced feature supporting ADR and OCR capabilities;

>>Self-service tools to enable lenders to perform more tasks, with ease and speed.

“NetOxygen SaaS offers an extensible and scalable platform that caters to lenders’ ever-changing business needs and provides an all-encompassing solution to improve end-to-end loan origination,” said Scott Dunn, Head Product Management, Strategy and Compliance, Wipro Gallagher Solutions. “Among the platform’s many differentiators, what stands out is the ability to quickly configure business rules, products, fees and deliver industry leading functionality  for compliance, imaging, reporting, and documents generation in combination with best-in-class providers.”

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.

Mortgage Firm Gets On FinTech Listing

Indecomm Global Services, a leader in business process outsourcing, learning, and technology solutions, announces that it has been recognized in the 2016 IDC Financial Insights FinTech Rankings for the fourth year in a row. The annual IDC FI FinTech Rankings are the most comprehensive vendor ranking in the financial services industry. They are based on 2015 calendar year revenues of hardware, software and IT services to financial institutions.

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“Technological change seems to be the greatest challenge in the industry but we consider it to be a significant business opportunity,” said Naresh Ponnapa, Group CEO and Managing Director, Indecomm Global Services. “Software as a Service (SaaS) and Outsourced Product Development (OPD) are the strategies which Indecomm uses to help its customers address these challenges. Our rise in the rankings is a harbinger of good things to come.”

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The providers listed in the IDC Financial Insights FinTech Rankings offer proprietary platforms and services in technology, which span the ever changing need for IT in the financial services industry. Global spending on IT is a rapidly growing market, expected to reach half a trillion dollars by 2018.

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“Being positioned on the IDC Financial Insights FinTech Rankings demonstrates a fintech company’s commitment to the financial services industry and the success achieved at their financial institution clients,” states Karen Massey, senior analyst at IDC Financial Insights. “The IDC Financial Insights FinTech Rankings, now in its 13th year, is the global industry standard who’s who of financial services technology providers, and we congratulate the 2016 winners.”

These rankings serve as a barometer of innovation in technology and help identify the sources who can deliver it. In addition, on a more micro level, these rankings can provide a key input to strategic and operational planning, especially in the build or buy decision.

For a detailed report on the finding, view or download here.

For more information about the rankings, see here.

New FinTech Firm Aims To Improve Loan Portfolio Management

FinTech analytics platform dv01 has debuted its portfolio management software for marketplace loans. To date, institutional investors have used dv01’s cloud-hosted web application to gain real-time insight into $23.5 billion worth of marketplace loans. Here’s how it works:

Founded in 2015 by Perry Rahbar, dv01 has raised $7.5 million of seed funding from Quantum Strategic Partners Ltd., Leucadia National Corporation, and Pivot Investment Partners. The company has applied the funding toward expanding its engineering team and launching its portfolio management software. It will now focus on its securitization offering and scaling its solution to expand into the $12 trillion consumer and mortgage lending markets.

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“Our mission is to bring a higher degree of transparency to lending markets,” said Perry Rahbar, CEO, dv01. “We take data out of archaic databases and transform it into something flexible and dynamic. As an impartial party, we deliver an unbiased view that benefits all market participants: borrowers, lenders, and investors.”

dv01’s current technology aggregates performance data from lenders including Lending Club, Prosper, Marlette Funding, and CommonBond. By normalizing data across lenders, dv01 simplifies comparison and analysis, enabling institutional investors to study individual loan performance and quickly detect issues within portfolios.

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“dv01’s analytics platform brings needed transparency to a rapidly evolving market,” said Brian McGrath, Managing Director at Jefferies, a subsidiary of Leucadia National Corporation. “We look forward to using dv01’s offerings to inform future analysis and investment.”

“We’re excited to support a company that is building technology to modernize the capital markets,” said Dinkar Jetley, co-founder of Pivot Investment Partners. “dv01 offers a reporting and analytics platform that streamlines workflows for institutional investors, making analysis of loan level data faster and more accurate than previously possible.”

Rahbar founded dv01 to solve challenges he encountered during his decade-long career trading mortgage bonds at Bear Stearns and J.P. Morgan. The team bridges Wall Street and Silicon Valley, fusing an insider’s understanding of incumbent financial processes with an uncompromising focus on technology. dv01’s investors have decades of experience in private and public financial sectors and will play an active role in helping prioritize features and growing the customer pipeline.

Why Do Fintech Startups Fail?

There was a lot of talk at a recent technology conference about the power of fintech startups these days. However, a lot of these startups fail. So, what makes for a successful fintech startup these days? William Mills Agency, a financial public relations and content marketing services company, released a white paper detailing the top factors leading to failure for fintech startups and how to avoid them. Here’s what they found:

You can download the full white paper: 10 Reasons Why Fintech Startups Fail.

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The white paper, written by WMA executive vice president Kelly Williams, is a compilation of the most frequent “fintech startup killers” that Williams and his WMA management associates have observed during almost four decades in the financial industry. A few of the deadly mistakes cited in the white paper include: underfunding the fintech startup; underestimating length of fintech sales cycles; not understanding the fintech customer markets; no relations with the bank core providers and poor fintech sales and marketing strategies.

“It would seem that these mistakes are failures to follow common business sense, but they happen so often that we felt compelled to address them,” said Williams, executive vice president, William Mills Agency. “This white paper is a useful resource for fintech startups because it also gives simple advice on how to steer clear of these mistakes altogether and to become successful, profitable companies.”

“There are lots of great innovations happening in fintech, but it’s a tough and unforgiving environment for startups,” said WMA CEO, William Mills III. “Given the concerns regarding financial regulations, cybersecurity, and the entrenched legacy technologies and processes of this industry, there is little room for error – especially for startups. We hope fintech executives will use this document as a guide to keep them on the road to successful company launches and beyond.”

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 FinTech Advisory Firm Launches

Raymond Chandonnet, a well-respected longtime bank strategist, has launched Second Act Capital Partners, a new advisory firm focused on providing advice to banks and select Financial Technology (FinTech) companies.   The new firm, which began operations in October 2015, was co-founded by Chandonnet, a former partner at Sandler O’Neill who has headed the bank balance sheet strategy effort at numerous firms over his 30 year banking career, including JPMorgan and Lehman Brothers, and Gerard Colaluca, himself a 30+ year banking industry veteran as a senior member of the treasury management team at BNY / Mellon.

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According to Chandonnet, Second Act Capital’s focus is twofold:  They deliver targeted consulting expertise in financial, regulatory, and operational matters to banks, with a focus on balance sheet management – an expertise for which Chandonnet is renowned in banking circles.  They also deliver advisory and business development services to companies (predominantly FinTech-related) seeking to introduce products and services to banks.

“Second Act fills a niche with our bank advisory practice,” said Chandonnet. “There are relatively few options for banks seeking our level of financial, capital markets, accounting and regulatory expertise that don’t require a transactional relationship of some kind. Our clients have frequently expressed a desire for independent qualified expertise, and the number of invitations we have received to present at industry conferences reinforces that.” Chandonnet cited offering expertise on Dodd-Frank Act-mandated stress testing of Bank Owned Life Insurance assets, and hedging of mortgage servicing rights as examples of current engagements in his firm’s bank advisory practice.

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In the FinTech space, Second Act Capital sees an even greater opportunity to create value for banks. “Many banks are concerned that FinTech is ‘out to get them’ and don’t realize, or have the resources to explore, the opportunities to partner with FinTech companies to improve their results,” said Chandonnet. For their part, FinTech companies face challenges designing and delivering products to banks, according to Second Act Capital’s principals.  “As I saw during my years in bank treasury management, many companies seeking to sell products to banks haven’t adequately considered all the regulatory, accounting, tax, risk management, and operational issues,” said Colaluca. Chandonnet added that, “Many emerging FinTech companies don’t have the relationships and marketing expertise in banking to successfully roll out products. Our firm addresses both the product design and business development issues.”

Chandonnet cited work the firm is doing to connect banks with FinTech companies to improve results in the areas of customer foreign currency payments, retail deposit-gathering, asset-based lending, and Bank-Owned Life Insurance as examples of current engagements in his firm’s FinTech business development practice.

Second Act Capital Partners is located in Summit, NJ and provides services to bank clients and FinTech companies across the United States as well as to foreign banks doing business in the U.S.